Registration No. 2-65223
811-2944
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ___ / /
POST-EFFECTIVE AMENDMENT NO. 38 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 41 / X /
OPPENHEIMER QUEST VALUE FUND, INC.
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(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
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(Address of Principal Executive Offices)
(212) 323-0200
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(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / Immediately upon filing pursuant to paragraph (b)
/ / On ___________, 1996 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ X / On December 16, 1996, pursuant to paragraph (a)(1)
/ / 75 days after filing, pursuant to paragraph (a) (2)
/ / On _________, pursuant to paragraph (a)(2)
of Rule 485.
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Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended October 31, 1996, will be filed no later than December
__, 1996.
<PAGE>
CROSS REFERENCE SHEET
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses; A Brief Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and
Policies; How the Fund is Managed--Organization
and History
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 How the Fund is Managed--Organization and
History; The Transfer Agent; Dividends, Capital
Gains and Taxes
7 How to Buy Shares; How to Exchange Shares;
Special Investor Services; Service Plan for
Class A Shares; Distribution and Service Plans
for Class B and Class C Shares; How to Sell
Shares; Shareholder Account Rules and
Policies
8 How to Sell Shares; How to Exchange Shares;
Special Investor Services
9 *
Part B of
Form N-1A Heading in Statement of
Item No. Additional Information
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other
Investment Techniques and Strategies; Other
Investment Restrictions
14 How the Fund is Managed - Directors and Officers
of the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and
Service Plans; Additional Information About the
Fund; Back Cover
17 Brokerage Policies of the Fund
18 Additional Information about the Fund
19 About Your Investment Account-How to Buy Shares;
How to Sell Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of
the Fund; Additional Information About the Fund
- The Distributor; Distribution and Service
Plans
22 Performance of the Fund
23 Financial Statements
______________________________________
* Not applicable or negative answer.
<PAGE>
Oppenheimer Quest Value Fund, Inc.
Prospectus dated December 16, 1996
Oppenheimer Quest Value Fund, Inc. is a mutual fund that seeks
capital appreciation through investment in securities (primarily equity
securities) of companies believed by the Manager to be undervalued in the
marketplace in relation to factors such as the companies' assets,
earnings, growth potential and cash flows. Equity securities in which the
Fund may invest are common stocks and preferred stocks; bonds, debentures
and notes convertible into common stocks; and depository receipts for such
securities. Please refer to "Investment Policies and Strategies" for more
information about the types of securities in which the Fund invests and
refer to "Investment Risks" for a discussion of the risks of investing in
the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the December 16, 1996 Statement of Additional Information. For
a free copy, call OppenheimerFunds Services, the Fund's Transfer Agent,
at 1-800-525-7048, or write to the Transfer Agent at the address on the
back cover. The Statement of Additional Information has been filed with
the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
(OppenheimerFunds logo)
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
A Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
Investment Risks
Investment Techniques and Strategies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class Y Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
Appendix A: Special Sales Charge Arrangements for
Shareholders of the Former Quest for Value Funds
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of
its assets, administration, distribution of its shares and other services,
and those expenses are subtracted from the Fund's assets to calculate the
Fund's net asset value per share. All shareholders therefore pay those
expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's business operating expenses that you
will bear indirectly. The numbers below are based on the Fund's expenses
during its last fiscal year ended October 31, 1996.
- Shareholder Transaction Expenses are charges you pay when you
buy or sell shares of the Fund. Please refer to "About Your Account,"
from pages through , for an explanation of how and when these charges
apply.
<TABLE>
<CAPTION>
Class Class Class Class
A Shares B SharesC Shares Y Shares
<S> <C> <C> <C> <C>
Maximum Sales Charge
on Purchases
(as a % of
offering price) 5.75% None None None
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Deferred Sales
Charge (as a % of
the lower of the
original offering
price or redemption
proceeds) None(1) 5% in the first1% ifNone
year, decliningredeemed
to 1% in thewithin 12
sixth yearmonths of
and eliminatedpurchase(2)
thereafter(2)
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Maximum Sales Charge
on Reinvested
Dividends NoneNoneNoneNone
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Exchange Fee NoneNoneNoneNone
<FN>
(1) If you invest $1 million or more ($500,000 or more for purchases by "Retirement Plans," as defined
in "Class A Contingent Deferred Sales Charge" on page ___) in Class A shares, you may have to pay
a sales charge of up to 1% if you sell your shares 18 calendar months from the end of the calendar
month during which you purchased those shares, depending upon when you purchased such shares.
See "How to Buy Shares - Buying Class A Shares," below.
(2) See "How to Buy Shares - Buying Class B Shares" and "How to Buy Shares - Buying Class C Shares"
below, for more information on the contingent deferred sales charges.
</TABLE>
- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, OppenheimerFunds,
Inc. (referred to in this Prospectus as the "Manager"). The rates of the
Manager's fees are set forth in "How the Fund is Managed," below. The
Fund has other regular expenses for services, such as transfer agent fees,
custodial fees paid to the bank that holds its portfolio securities, audit
fees and legal expenses. Those expenses are detailed in the Fund's
Financial Statements in the Statement of Additional Information.
Annual Fund Operating Expenses (as a Percentage of Average Net
Assets)
Class Class Class Class
A Shares B Shares C Shares Y Shares
- ------------------------------------------------------------------------
Management Fees ____% ____% ____% ______%
- ------------------------------------------------------------------------
12b-1 Distribution
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Plan Fees ____% ____% ____% None
- ------------------------------------------------------------------------
Other Expenses ____% ____% ____% ____%
- ------------------------------------------------------------------------
Total Fund Operating
Expenses ____% ____% ____% ____%
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The numbers in the chart above are based upon the Fund's expenses
in its last fiscal year ended October 31, 1996. These amounts are shown
as a percentage of the average net assets of each class of the Fund's
shares for that year. The 12b-1 Distribution Plan Fees for Class A shares
are service fees (the maximum fee is 0.25% of average annual net assets
of that class) and the asset-based sales charge of 0.25% of the average
annual net assets of that class. For Class B and Class C shares, the 12b-
1 Distribution Plan Fees are the service fees (the maximum fee is 0.25%
of average annual net assets of those classes) and the annual asset-based
sales charge of 0.75% of the average annual net assets of the class.
These plans are described in greater detail in "How to Buy Shares."
The actual expenses for each class of shares in future years may
be more or less than the numbers in the chart, depending on a number of
factors, including changes in the actual value of the Fund's assets
represented by each class of shares. Class Y shares were not available
during the fiscal year ended October 31, 1996. Accordingly, the Annual
Fund Operating Expenses shown for Class Y shares are estimates based on
amounts that would have been payable in that period assuming that Class
Y shares were outstanding during such fiscal year.
Class Class Class
A Shares B Shares C Shares
Management Fees % % %
12b-1 Distribution
Plan Fees % % %
Other Expenses % % %
------ ------- ------
Total Fund Operating
Expenses % % %
- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples shown
below. Assume that you make a $1,000 investment in each class of shares
of the Fund, and the Fund's annual return is 5%, and that its operating
expenses for each class are the ones shown in the Annual Fund Operating
Expenses table above and that Class B shares automatically convert into
Class A shares six years after their purchase. If you were to redeem your
shares at the end of each period shown below, your investment would incur
the following expenses by the end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years*
Class A Shares $ $ $ $
Class B Shares $ $ $ $
Class C Shares $ $ $ $
Class Y Shares $ $ $ $
If you did not redeem your investment, it would incur the following
expenses:
Class A Shares $ $ $ $
Class B Shares $ $ $ $
Class C Shares $ $ $ $
Class Y Shares $ $ $ $
*In the first example, expenses include the Class A initial sales
charge and the applicable Class B or Class C contingent deferred sales
charge. In the second example, Class A expenses include the initial sales
charge, but Class B and Class C expenses do not include contingent
deferred sales charges. The Class B expenses in years 7 through 10 are
based on the Class A expenses shown above, because the Fund automatically
converts your Class B shares into Class A shares after 6 years. Because
of the effect of the asset-based sales charge and the contingent deferred
sales charge imposed on Class B and Class C shares, long-term holders of
Class B and Class C shares could pay the economic equivalent of more than
the maximum front-end sales charge allowed under applicable regulations.
For Class B shareholders, the automatic conversion of Class B shares to
Class A shares is designed to minimize the likelihood that this will
occur. Please refer to "How to Buy Shares - Buying Class B Shares" for
more information.
These examples show the effect of expenses on an investment, but are
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which may be more or less than those
shown.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below,
with references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing in the Fund. Keep the Prospectus
for reference after you invest, particularly for information about your
account, such as how to sell or exchange shares.
- What is the Fund's Investment Objective? The Fund seeks capital
appreciation through investment in securities (primarily equity
securities) of companies believed by the Manager to be undervalued in the
marketplace in relation to factors such as the companies' assets,
earnings, growth potential and cash flows.
- What Does the Fund Invest In? The equity securities in which the
Fund invests are common stocks and preferred stocks; bonds, debentures and
notes convertible into common stocks; and depository receipts for such
securities. To provide liquidity, the Fund typically invests a part of
its assets in various types of U.S. government securities and money market
instruments. For temporary defensive purposes, the Fund may invest up to
100% of its assets in such securities. These investments are more fully
explained in "Investment Policies and Strategies," starting on page .
- Who Manages the Fund? The Manager supervises the Fund's
investment program and handles its day-to-day business. The Manager
(including a subsidiary) manages investment company portfolios having over
$55 billion in assets as of September 30, 1996. The Manager is paid an
advisory fee by the Fund, based on its net assets. The Fund's sub-adviser
is OpCap Advisors (the "Sub-Adviser"), which is paid a fee by the Manager,
not the Fund. The Sub-Adviser provides day-to-day portfolio management
of the Fund. The Fund's portfolio manager is employed by the Sub-Adviser
and is primarily responsible for the selection of the Fund's securities.
The Fund's Board of Directors, elected by shareholders, oversees the
Manager, the Sub-Adviser and the portfolio manager. Please refer to "How
the Fund is Managed," starting on page for more information about the
Manager, the Sub-Adviser and their fees.
- How Risky is the Fund? All investments carry risks to some
degree. It is important to remember that the Fund is designed for long-
term investors. The Fund's investments in stocks and bonds are subject
to changes in their value from a number of factors such as changes in
general stock and bond market movements, or the change in value of
particular stocks or bonds because of an event affecting the issuer.
Changes in interest rates can affect stock and bond prices. These changes
affect the value of the Fund's investments and its price per share.
Investments in foreign securities involve additional risks not associated
with investments in domestic securities, including risks associated with
changes in currency rates.
While the Manager tries to reduce risks by diversifying investments,
by carefully researching securities before they are purchased for the
portfolio, and in some cases by using hedging techniques, there is no
guarantee of success in achieving the Fund's objective, and your shares
may be worth more or less than their original cost when you redeem them.
Please refer to "Investment Risks" starting on page for a more complete
discussion of the Fund's investment risks.
- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through
OppenheimerFunds Distributor, Inc., (the Distributor) by completing an
Application or by using an Automatic Investment Plan under AccountLink.
Please refer to "How To Buy Shares" on page __ for more details.
- Will I Pay a Sales Charge to Buy Shares? The Fund offers Class
A, Class B and Class C shares to the individual investor. All classes
have the same investment portfolio but have different expenses. Class A
shares are offered with a front-end sales charge, starting at 5.75%, and
reduced for larger purchases. Class B and Class C shares are offered
without a front-end sales charge, but may be subject to a contingent
deferred sales charge if redeemed within six years or 12 months,
respectively, of buying them. There is also an annual asset-based sales
charge which is higher on Class B and Class C shares. Please review "How
To Buy Shares" starting on page for more details, including a
discussion about factors you and your financial advisor should consider
in determining which class may be appropriate for you.
- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How To Sell Shares" on page . The Fund also
offers exchange privileges to other Oppenheimer funds, described in "How
to Exchange Shares" on page .
- How Has the Fund Performed? The Fund measures its performance
by quoting its average annual total return and cumulative total return,
which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds
may have different objectives, investments, and levels of risk. The
Fund's performance can also be compared to a broad-based market index,
which we have done on pages __ and __. Please remember that past
performance does not guarantee future results.
<PAGE>
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data, expense ratios and
other data based on the Fund's average net assets. This information has
been audited by Price Waterhouse LLP, the Fund's current independent
auditors, whose report on the Fund's financial statements for the fiscal
year ended October 31, 1996 is included in the Statement of Additional
Information. KPMG Peat Marwick LLP previously served as the Fund's
independent auditors.
<PAGE>
Investment Objective and Policies
Objective. The Fund seeks capital appreciation through investment in
securities (primarily equity securities) of companies believed by the
Manager to be undervalued in the marketplace in relation to factors such
as the companies' assets, earnings, growth potential and cash flows.
Investment Policies and Strategies. The Sub-Adviser manages the
portfolio of the Fund in accordance with the Fund's investment objective
and policies pursuant to a Subadvisory Agreement with the Manager.
The equity securities in which the Fund invests are common stocks
and preferred stocks; bonds, debentures and notes convertible into common
stocks; and depository receipts for such securities. To provide liquidity
for the purchase of new instruments and to effect redemptions of shares,
the Fund typically invests a part of its assets in various types of U.S.
government securities and high quality, short-term debt securities with
remaining maturities of one year or less such as government obligations,
certificates of deposit, bankers' acceptances, commercial paper, short-
term corporate securities and repurchase agreements ("money market
instruments"). For temporary defensive purposes, the Fund may invest up
to 100% of its assets in money market instruments. At any time that the
Fund for temporary defensive purposes invests in such securities, to the
extent of such investments, it is not pursuing its investment objective.
- Can the Fund's Investment Objective and Policies Change? The
Fund has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those investment policies. Except as indicated, the
investment objective and policies described above are fundamental
policies; the Fund's investment policies and practices described elsewhere
in this Prospectus or in the Statement of Additional Information are not
"fundamental" unless stated to be "fundamental".
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's Board
of Directors (the "Board of Directors") may change non-fundamental
policies without shareholder approval, although significant changes will
be described in amendments to this Prospectus.
- Foreign Securities. The Fund may purchase foreign securities
that are listed on a domestic or foreign securities exchange, traded in
domestic or foreign over-the-counter markets or represented by American
Depository Receipts. There is no limit to the amount of such foreign
securities the Fund may acquire. The Fund may buy securities in any
country, including emerging market countries. The Fund will hold foreign
currency only in connection with the purchase or sale of foreign
securities.
- Investment in Convertible Securities. The Fund invests in
convertible fixed income securities to seek its investment objective.
Such convertible securities are bonds, debentures or notes that may be
converted into or exchanged for a prescribed amount of common stock of the
same or a different issue within a particular period of time at a
specified price or formula. The Fund considers convertible securities to
be "equity equivalents" because of the conversion feature, and the
security's rating has less impact on the investment decision than in the
case of non-convertible securities.
The Fund's investments may include securities rated lower than
"Baa3" by Moody's Investors Service, Inc. ("Moody's") or "BBB-" by
Standard & Poor's Corporation ("Standard & Poor's")(commonly known as
"junk bonds"), or having comparable ratings by another nationally
recognized statistical rating organization, although it is the present
intention of the Fund to invest no more than 5% of its assets in
securities rated lower than Baa3/BBB-. High yield, lower-grade securities
often have speculative characteristics and special risks that make them
riskier investments than investment grade securities. The Fund may invest
in securities rated as low as "C" or "D". The Fund does not intend to
invest in bonds that are in default. See the Appendix to the Statement
of Additional Information for a more complete general description of
Moody's and Standard & Poor's ratings.
- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund ordinarily does not engage in
short-term trading to try to achieve its objective. As a result, the
Fund's portfolio turnover (excluding turnover of securities having a
maturity of one year or less) is not expected to be more than 100% each
year. The "Financial Highlights" table above shows the Fund's portfolio
turnover rate during past fiscal years.
Portfolio turnover affects brokerage costs, dealer markups and other
transaction costs, and results in the Fund's realization of capital gains
or losses for tax purposes. It may also affect the Fund's ability to
qualify as a "regulated investment company" under the Internal Revenue
Code for tax deductions for dividends and capital gains distributions the
Fund pays to shareholders. The Fund qualified in its last fiscal year and
intends to do so in the coming year, although there is no guarantee that
it will qualify.
Investment Risks
All investments carry risks to some degree, whether they are risks that
market prices of the investment will fluctuate (this is known as "market
risk") or that the underlying issuer will experience financial
difficulties and may default on its obligation under a fixed-income
investment to pay interest and repay principal (this is referred to as
"credit risk"). These general investment risks and the special risks of
certain types of investments that the Fund may hold are described below.
They affect the value of the Fund's investments, its investment
performance and the prices of its shares. These risks collectively form
the risk profile of the Fund.
Because of the types of securities the Fund invests in and the
investment techniques the Fund uses, the Fund is designed for investors
who are investing for the long term. It is not intended for investors
seeking assured income or preservation of capital. While the Manager tries
to reduce risks by diversifying investments, by carefully researching
securities before they are purchased, and in some case by using hedging
techniques, changes in overall market prices can occur at any time, and
because the income earned on securities is subject to change, there is no
assurance that the Fund will achieve its investment objective. When you
redeem your shares, they may be worth more or less than what you paid for
them.
- Stock Investment Risks. Because the Fund normally invests a
substantial portion of its assets in stocks, the value of the Fund's
portfolio will be affected by changes in the stock markets. At times, the
stock markets can be volatile and stock prices can change substantially.
This market risk will affect the Fund's net asset value per share, which
will fluctuate as the values of the Fund's portfolio securities change.
Not all stock prices change uniformly or at the same time and not all
stock markets move in the same direction at the same time. Other factors
can affect a particular stock's prices, such as poor earnings reports by
an issuer, loss of major customers, major litigation against an issuer,
or changes in government regulations affecting an industry. Not all of
these factors can be predicted.
The Fund attempts to limit market risks by diversifying its
investments, that is, by not holding a substantial amount of the stock of
any one company and by not investing too great a percentage of the Fund's
assets in any one company. Because changes in market prices can occur at
any time, there is no assurance that the Fund will achieve its investment
objective, and when you redeem your shares, they may be worth more or less
than what you paid for them.
- Foreign securities have special risks. For example, foreign
issuers are not subject to the same accounting and disclosure requirements
as U.S. companies. The value of foreign investments may be affected by
changes in foreign currency rates, exchange control regulations,
expropriation or nationalization of a company's assets, foreign taxes,
delays in settlement of transactions, changes in governmental economic or
monetary policy in the U.S. or abroad, or other political and economic
factors. The Fund may invest in emerging market countries; such countries
may have relatively unstable governments, economies based on only a few
industries that are dependent upon international trade and reduced
secondary market liquidity. More information about the risks and potential
rewards of investing in foreign securities is contained in the Statement
of Additional Information.
- Risks of Fixed-Income Securities. In addition to credit risks,
described below, debt securities are subject to changes in their value due
to changes in prevailing interest rates. When prevailing interest rates
fall, the value of already-issued debt securities generally rise. When
interest rate rise, the values of already-issued debt securities generally
decline. The magnitude of these fluctuations will often be greater for
a longer-term debt securities than short-term debt securities. Changes
in the value of securities held by the Fund mean that the Fund's share
prices can go up or down when interest rates change because of the effect
of the change on the value of the Fund's portfolio of debt securities.
Credit risk relates to the ability of the issuer to meet interest or
principal payments on a security as they become due. Generally, higher-
yielding lower-grade bonds, are subject to credit risks to a greater
extent than lower-yielding, investment-grade bonds.
- Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than what is
required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce the Fund's return. The Fund could also
experience losses if the prices of its futures and options positions were
not correlated with its other investments or if it could not close out a
position because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If a covered call written by the Fund is exercised on an
investment that has increased in value, the Fund will be required to sell
the investment at the call price and will not be able to realize any
profit if the investment has increased in value above the call price. In
writing a put, there is a risk that the Fund may be required to buy the
underlying security at a disadvantageous price. The use of forward
contracts may reduce the gain that would otherwise result from a change
in the relationship between the U.S. dollar and a foreign currency. These
risks are described in greater detail in the Statement of Additional
Information.
Investment Techniques and Strategies
The Fund may also use the investment techniques and strategies
described below. These techniques involve certain risks. The Statement
of Additional Information contains more information about these practices,
including limitations on their use that may help to reduce some of the
risks.
- Investing in Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies that have
been in continuous operation for less than three years, counting the
operations of any predecessors. Securities of these companies may have
limited liquidity (which means that the Fund may have difficulty selling
them at an acceptable price when it wants to) and the prices of these
securities may be volatile. The Fund may not invest more than 15% of its
total assets in securities of small, unseasoned issuers. See "Investing
in Small, Unseasoned Companies" in the Statement of Additional Information
for a further discussion of the risks involved in such investments.
- Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, forward contracts, and options on
futures and broadly-based stock indices. These are all referred to as
"hedging instruments." The Fund does not use hedging instruments for
speculative purposes, and has limits on the use of them, described below.
The hedging instruments the Fund may use are described below and in
greater detail in "Other Investment Techniques and Strategies" in the
Statement of Additional Information.
The Fund may buy and sell options, futures and forward contracts for
a number of purposes. It may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or
to establish a position in the securities market as a temporary substitute
for purchasing individual securities. Some of these strategies, such as
selling futures, buying puts and writing covered calls, hedge the Fund's
portfolio against price fluctuations. Other hedging strategies, such as
buying futures and call options, tend to increase the Fund's exposure to
the securities market.
Forward contracts are used to try to manage foreign currency risks
on the Fund's foreign investments. Foreign currency options are used to
try to protect against declines in the dollar value of foreign securities
the Fund owns, or to protect against an increase in the dollar cost of
buying foreign securities.
- Futures. The Fund may buy and sell futures contracts that relate
to broadly-based stock indices (these are referred to as Stock Index
Futures) or foreign currencies (these are called Forward Contracts and are
discussed below).
- Put and Call Options. The Fund may buy and sell put options
(puts) and call options (calls) on broadly-based stock indices, foreign
currencies or on Stock Index Futures. All options purchased or sold by
the Fund will be traded on a U.S. or foreign commodities exchange or will
result from separate, privately negotiated transactions with a primary
government securities dealer recognized by the Board of Governors of the
Federal Reserve System or with other broker-dealers approved by the Fund's
Board of Directors.
When the Fund writes (that is, sells) a call, it receives cash
(called a premium). The call gives the buyer the ability to buy the
investment on which the call was written from the Fund at the call price
during the period in which the call may be exercised. If the value of the
investment does not rise above the call price, it is likely that the call
will lapse without being exercised, while the Fund keeps the cash premium
(and the investment). Each call the Fund writes must be "covered" while
it is outstanding. That means the Fund owns the investment on which the
call was written or the Fund owns and segregates liquid assets to satisfy
its obligations if the call is exercised.
The Fund may purchase and sell put options. Buying a put on an
investment gives the Fund the right to sell the investment at a set price
to a seller of a put on that investment. The Fund can buy only those puts
that relate to broadly-based stock indices, foreign currencies or Stock
Index Futures. The Fund can buy a put on a Stock Index Future whether or
not the Fund owns the particular Stock Index Future in its portfolio. The
Fund may write puts on broadly-based stock indices, foreign currencies or
Stock Index Futures, but only if those puts are covered by segregated
liquid assets.
- Forward Contracts. Forward contracts are foreign currency
exchange contracts. They are used to buy or sell foreign currency for
future delivery at a fixed price. The Fund uses them to try to "lock in"
the U.S. dollar price of a security denominated in a foreign currency that
the Fund has bought or sold, or to protect against possible losses from
changes in the relative values of the U.S. dollar and foreign currency.
The Fund limits its exposure in foreign currency exchange contracts in a
particular foreign currency to the amount of its assets denominated in
that currency or in a closely-correlated currency.
- Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Directors, 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 a contractual restriction on its
resale or which cannot be sold publicly until it is registered under the
Securities Act of 1933. As a matter of fundamental policy, the Fund will
not invest more than 15% of its total assets in illiquid securities,
including restricted securities. Notwithstanding the foregoing, to comply
with certain state securities laws, the Fund has agreed to limit
investments in restricted securities to 5% of its total assets, although
this restriction is not a fundamental policy of the Fund. The Fund's
percentage limitation on illiquid and restricted investments does not
apply to certain restricted securities that are eligible for resale to
qualified institutional purchasers.
- Loans of Portfolio Securities. To attempt to raise cash for
liquidity purposes, the Fund may lend its portfolio securities to brokers,
dealers and other financial institutions. The Fund must receive
collateral for loan. After any loan, the value of the securities loaned
is not expected to exceed 10% of the value of the total assets of the
Fund. Other conditions to which loans are subject are described in the
Statement of Additional Information. 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.
- Repurchase Agreements. The Fund may enter into repurchase
agreements to generate income for liquidity purposes to meet anticipated
redemptions, or pending the investment of proceeds from sales of Fund
shares or settlement of purchases of portfolio investments. In a
repurchase transaction, the Fund buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements must
be fully collateralized. However, if the vendor fails to pay the resale
price on the delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability
to do so. There is no limit on the amount of the Fund's net assets that
may be subject to repurchase agreements of seven days or less. Repurchase
agreements having a maturity beyond seven days are subject to the
limitations set forth above under "Illiquid and Restricted Securities."
- "When-Issued" and Delayed Delivery Transactions. The Fund may
purchase securities on a "when-issued" basis and may purchase or sell
securities on a "delayed delivery" basis or on a "firm commitment" basis.
These terms refer to securities that have been created and for which a
market exists, but which are not available for immediate delivery. The
Fund does not intend to make such purchases for speculative purposes.
During the period between the purchase and settlement, the underlying
securities are subject to market fluctuations and no interest accrues
prior to delivery of the securities.
Other Investment Restrictions. The Fund has other investment restrictions
which are fundamental policies. Under these fundamental policies, the Fund
cannot do any of the following:
- - With respect to 75% of its total assets, invest more than 5% of the
value of its total assets in the securities of any one issuer.
- - Purchase more than 10% of the voting securities of any one issuer (this
restriction does not apply to U.S. government securities).
- - Purchase more than 10% of any class of security of any issuer, with all
outstanding debt securities and all preferred stock of an issuer each
being considered as one class (this restriction does not apply to U.S.
government securities).
- - Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, the Fund may invest
up to 25% of its total assets (valued at the time of investment) in any
one industry classification used by the Fund for investment purposes (for
this purpose, a foreign government is considered an industry) (this
restriction does not apply to U.S. government securities).
- - Borrow money in excess of 33 1/3% of the value of the Fund's total
assets (the Fund may, but has no present intention to, borrow for
leveraging purposes).
- - Invest more than 15% of the Fund's total assets in securities of issuers
having a record, together with predecessors, of less than three years of
continuous operation.
- - Invest more than 15% of the Fund's total assets in illiquid securities,
including securities for which there is no readily available market,
repurchase agreements which have a maturity of longer than seven days,
securities subject to legal or contractual restrictions and certain over-
the-counter options (the Fund has undertaken as a non-fundamental policy,
in connection with the qualification of its shares for sale in certain
states, to limit investments in restricted securities to 5% of its total
assets). Notwithstanding this restriction on illiquid securities, the
Fund may purchase securities which are not registered under the Securities
Act of 1933 but which can be sold to "qualified institutional buyers" in
accordance with Rule 144A under that Act. Any such security will not be
considered illiquid, provided that the Sub-Adviser, under guidelines
established by the Fund's Board of Directors, determines that an adequate
trading market exists for that security.
All of the percentage restrictions described above and elsewhere in
this Prospectus apply only at the time the Fund purchases a security, and
the Fund need not dispose of a security merely because the size of the
Fund's assets has changed or the security has increased in value relative
to the size of the Fund. There are other fundamental policies discussed
in the Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was incorporated in Maryland on August
6, 1979. The Fund is an open-end, diversified management investment
company.
The Fund is governed by a Board of Directors, which is responsible
for protecting the interests of shareholders under Maryland law. The
Directors meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager
and the Sub-Adviser. "Directors and Officers of the Fund" in the
Statement of Additional Information names the Directors and officers of
the Fund and provides more information about them. Although the Fund is
not required by law to hold annual meetings, it may hold shareholder
meetings from time to time on important matters, and shareholders have
such rights as are provided under Maryland law.
The Board of Directors 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 has its own dividends and distributions and pays
certain expenses which may be different for the different classes. Each
class may have a different net asset value. Each share entitles a
shareholder to one vote on matters submitted to the shareholders to vote
on with fractional shares voting proportionally. Only shares of a
particular class vote as a class on matters that affect that class alone.
Shares are freely transferrable. Please refer to "How the Fund is
Managed" in the Statement of Additional Information on the voting of
shares.
The Manager. The Fund is managed by the Manager, OppenheimerFunds,
Inc., which 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 Directors, under an Investment
Advisory Agreement with the Fund which states the Manager's
responsibilities. The Agreement sets forth the fees paid by the Fund to
the Manager and describes the expenses that the Fund is responsible to pay
to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager (including a subsidiary) currently manages investment companies,
including other Oppenheimer funds, with assets of more than $55 billion
as of September 30, 1996, and with more than 3 million shareholder
accounts. The Manager is owned by Oppenheimer Acquisition Corp., a
holding company that is owned in part by senior officers of the Manager
and controlled by Massachusetts Mutual Life Insurance Company.
The Sub-Adviser. The Manager has retained the Sub-Adviser to provide
day-to-day portfolio management of the Fund. Prior to November 22, 1995,
the Sub-Adviser was named Quest for Value Advisors and was the investment
adviser to the Fund. The Sub-Adviser is a majority-owned subsidiary of
Oppenheimer Capital, a registered investment adviser, whose employees
perform all investment advisory services provided to the Fund by the Sub-
Adviser. Oppenheimer Financial Corp., a holding company, holds a 33%
interest in Oppenheimer Capital, a registered investment adviser.
Oppenheimer Capital, L.P., a Delaware limited partnership whose units are
traded on the New York Stock Exchange and of which Oppenheimer Financial
Corp. is the sole general partner, owns the remaining 67% interest.
Oppenheimer Capital has operated as an investment adviser since 1968.
- Portfolio Manager. The Fund's portfolio manager, Ms. Eileen
Rominger, is employed by the Sub-Adviser and is primarily responsible for
the selection of the Fund's securities. Ms. Rominger, who is also a
Managing Director of Oppenheimer Capital, has been portfolio manager of
the Fund since 1988 and has been an analyst and portfolio manager at
Oppenheimer Capital since 1981.
The Sub-Adviser's equity investment policy is overseen by George
Long, Managing Director and Chief Investment Officer for Oppenheimer
Capital. Mr. Long has been with Oppenheimer Capital since 1981.
- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager an annual fee based on the Fund's daily net assets,
as follows: 1.00% of the first $400 million of average annual net assets,
0.90% of the next $400 million, and 0.85% of average annual net assets in
excess of $800 million. This management fee is higher than that paid by
most other investment companies. The Fund pays expenses related to its
daily operations, such as custodian fees, Directors' fees, transfer agency
fees and legal and auditing costs; the Fund also reimburses the Manager
for bookkeeping and accounting services performed on behalf of the Fund.
Those expenses are paid out of the Fund's assets and are not paid directly
by shareholders. However, those expenses reduce the net asset value of
shares, and therefore are indirectly borne by shareholders through their
investment. More information about the Investment Advisory Agreement and
the other expenses paid by the Fund is contained in the Statement of
Additional Information.
The Manager pays the Sub-Adviser an annual fee based on the
average daily net assets of the Fund equal to 40% of the advisory fee
collected by the Manager based on the total net assets of the Fund as of
November 22, 1995 (the "Base Amount") plus 30% of the investment advisory
fee collected by the Manager based on the total net assets of the Fund
that exceed the Base Amount.
The Sub-Adviser may select its affiliate Oppenheimer & Co., Inc.
("Opco"), a registered broker-dealer, to execute transactions for the
Fund, provided that the commissions, fees or other remuneration received
by Opco are reasonable and fair compared to those paid to other brokers
in connection with comparable transactions. When selecting broker-dealers
other than Opco, the Sub-Adviser may consider their record of sales of
shares of the Fund. Further information about the Fund's brokerage
policies and practices are set forth in "Brokerage Policies of the Fund"
in the Statement of Additional Information.
The Distributor. The Fund's shares are sold through dealers, brokers and
other financial institutions that have a sales agreement with
OppenheimerFunds Distributor, Inc., a subsidiary of the Manager that acts
as the Fund's Distributor. The Distributor also distributes the shares
of the other Oppenheimer funds managed by the Manager and is sub-
distributor for funds managed by a subsidiary of the Manager.
The Transfer Agent and Shareholder Servicing Agent. The Fund's
transfer agent and shareholder servicing agent is OppenheimerFunds
Services, a division of the Manager. It also acts as the shareholder
servicing agent for certain other Oppenheimer funds. Shareholders should
direct inquiries about their accounts to the Transfer Agent at the address
and toll-free number shown below in this Prospectus and on the back cover.
Unified Management Corporation (1-800-346-4601) is the shareholder
servicing agent for former shareholders of the AMA Family of Funds and
clients of AMA Investment Advisers, L.P. who acquire shares of the Fund,
and for former shareholders of the Unified Funds and Liquid Green Trusts,
accounts which participated or participate in a retirement plan for which
Unified Investment Advisers, Inc. or an affiliate acts as custodian or
trustee and other accounts for which Unified Management Corporation is the
dealer of record.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return" and "average annual total return" to illustrate its performance.
The performance of each class of shares is shown separately, because the
performance of each class of shares will usually be different as a result
of the different kinds of expenses each class bears. These returns
measure the performance of a hypothetical account in the Fund over various
periods, and do not show the performance of each shareholder's account
(which will vary if dividends are received in cash, or shares are sold or
purchased). The Fund's performance information may help you see how well
your investment in the Fund has done over time and to compare it to other
funds or market indices, as we have done on pages and .
It is important to understand that the Fund's total returns
represent past performance and should not be considered to be predictions
of future returns or performance. This performance data is described
below, but more detailed information about how total returns are
calculated is contained in the Statement of Additional Information, which
also contains information about other ways to measure and compare the
Fund's performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio, expenses
and which class of shares you purchase.
- Total Returns. There are different types of total returns used
to measure the Fund's performance. Total return is the change in value
of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares. The cumulative total return measures the change in
value over the entire period (for example, ten years). An average annual
total return shows the average rate of return for each year in a period
that would produce the cumulative total return over the entire period.
However, average annual total returns do not show the Fund's actual year-
by-year performance.
When total returns are quoted for Class A shares, normally the
current maximum initial sales charge has been deducted. When total
returns are shown for Class B or Class C shares, normally the contingent
deferred sales charge that applies to the period for which total return
is shown has been deducted. However, total returns may also be quoted at
net asset value, without including the sales charge, and those returns
would be less if sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended October 31, 1996,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the fiscal year
ended October 31, 1996, the Fund remained virtually fully invested in
equity securities, and participated in the domestic stock market's strong
performance. Consistent with its investment objective, the Fund sought
reasonably priced investments in companies with above-average returns that
were in strong competitive positions. The Fund's performance during the
past fiscal year benefited from its significant holdings of financial
service company stocks, one of the market's strong sectors. During the
latter part of the Fund's past fiscal year, the Fund maintained an above-
average cash position resulting from profit taking on certain stocks, and
was positioned to take advantage of attractive buying opportunities.
- Comparing the Fund's Performance to the Market. The graphs below
show the performance of a hypothetical $10,000 investment in Class A,
Class B and Class C shares of the Fund held until October 31, 1996. In
the case of Class A shares, performance is measured for the past ten
fiscal years and in the case of Class B and Class C shares, performance
is measured from the inception of the class (September 2, 1993). Class
Y shares were not publicly offered during the fiscal year ended October
31, 1996. Accordingly, no information is presented on Class Y shares in
the graphs below.
The Fund's performance is compared to the performance of the S&P 500
Index, a broad-based index of equity securities widely regarded as a
general measurement of the performance of the U.S. equity securities
market. Index performance reflects the reinvestment of dividends but does
not consider the effect of capital gains or transaction costs, and none
of the data below shows the effect of taxes. The Fund's performance
reflects the reinvestment of all dividends and capital gains
distributions, and the effect of Fund business and operating expenses.
While index comparisons may be useful to provide a benchmark for the
Fund's performance, it must be noted that the Fund's investments are not
limited to the securities in the S&P 500 Index. Moreover, the index
performance data does not reflect any assessment of the risk of the
investments included in the index.
Oppenheimer Quest Value Fund, Inc.
Comparison of Change in Value
of $10,000 Hypothetical Investments
in Oppenheimer Quest Value Fund, Inc. and
the S&P 500 Index
(Graph)
Past performance is not predictive of future performance.
Average Annual Total Returns
of the Fund at 10/31/96
Class A Shares(1)
1-Year 5-Years 10-Years
% % %
Class B Shares(2)
1-Year Life
% %
Class C Shares (2)
1-Year Life
% %
_____________________
The average annual total returns and the ending account value in the graph
reflect reinvestment of all dividends and capital gains distributions.
(1) The commencement of operations of the Fund (Class A shares) was
4/30/80. Class A returns are shown net of the current applicable 5.75%
maximum initial sales charge.
(2) Class B shares and Class C of the Fund were first publicly offered on
9/02/93. The average annual total returns reflect reinvestment of all
dividends and capital gains distributions and as to Class B shares are
shown net of the applicable 5% and 3% contingent deferred sales charges,
respectively, for the 1-year period and life-of-the-class. As to Class
C shares, average annual total returns are shown net of the applicable 1%
contingent deferred sales charge for the 1-year period; after one year,
such sales charge is not applicable. The ending account for Class B
shares value in the graph is net of the applicable 3% contingent deferred
sales charge.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers an individual investor three
different classes of shares, Class A, Class B and Class C. Only certain
institutional investors may purchase a fourth class of shares, Class Y
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will
likely have different share prices.
- Class A Shares. If you buy Class A shares, you may pay an initial
sales charge on investments up to $1 million (up to $500,000 for purchases
by "Retirement Plans," as defined in "Class A Contingent Deferred Sales
Charge on page ____). If you purchase Class A shares as part of an
investment of at least $1 million ($500,000 for Retirement Plans) in
shares of one or more Oppenheimer funds, you will not pay an initial sales
charge, but if you sell any of those shares within 18 months of buying
them, you may pay a contingent deferred sales charge. The amount of that
sales charge will vary depending on the amount you invested. Sales charge
rates are described in "Buying Class A Shares" below.
- Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within six
years of buying them you will normally pay a contingent deferred sales
charge that varies, depending on how long you have owned your shares as
described in "Buying Class B Shares" below.
- Class C Shares. If you buy Class C shares, you pay no sales
charge at the time of purchase, but if you sell your shares within 12
months of buying them, you will normally pay a contingent deferred sales
charge of 1% as described in "Buying Class C Shares" below.
- Class Y Shares. Class Y shares are sold at net asset value per
share without the imposition of a sales charge at the time of purchase to
separate accounts of insurance companies and other institutional investors
("Class Y Sponsors") having an agreement ("Class Y Agreements") with the
Manager or the Distributor. The intent of Class Y Agreements is to allow
tax qualified institutional investors to invest indirectly (through
separate accounts of the Class Y Sponsor) in Class Y shares of the Fund
and to allow institutional investors to invest directly in Class Y shares
of the Fund. Individual investors are not permitted to invest directly in
Class Y shares. As of the date of this Prospectus, Massachusetts Mutual
Life Insurance Company (an affiliate of the Manager and the Distributor)
acts as Class Y Sponsor for all outstanding Class Y shares of the Fund.
While Class Y shares are not subject to a contingent deferred sales
charge, asset-based sales charge or service fee, a Class Y Sponsor may
impose charges on separate accounts investing in Class Y shares.
None of the instructions described elsewhere in this Prospectus or
the Statement of Additional Information for the purchase, redemption,
reinvestment, exchange or transfer of shares of the Fund, the selection
of classes of shares or the reinvestment of dividends apply to its Class
Y shares. Clients of Class Y Sponsors must request their Sponsor to
effect all transactions in Class Y shares on their behalf.
Which Class of Shares Should You Choose? Once you decide that the Fund
is an appropriate investment for you, the decision as to which class of
shares is better suited to your needs depends on a number of factors which
you should discuss with your financial advisor. The Fund's operating
costs that apply to a class of shares and the effect of the different
types of sales charges on your investment will vary your investment
results over time. The most important factors 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.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We assumed you
are an individual investor, and therefore ineligible to purchase Class Y
shares. We used the sales charge rates that apply to Class A, Class B and
Class C shares, and considered the effect of the asset-based sales charge
on Class B and Class C expenses (which, like all expenses, will affect
your investment return). For the sake of comparison, we have assumed that
there is a 10% rate of appreciation in the investment each year. Of
course, the actual performance of your investment cannot be predicted and
will vary, based on the Fund's actual investment returns and the operating
expenses borne by each class of shares, and which class of shares you
invest in.
The factors discussed below are not intended to be investment advice
or recommendations, because each investor's financial considerations are
different. The discussion below of the factors to consider in purchasing
a particular class of shares assumes that you will purchase only one class
of shares and not a combination of shares of different classes.
- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, knowing how long you
expect to hold your investment will assist you in selecting the
appropriate class of shares. The effect of the sales charge, over time,
using our assumptions, will generally depend on the amount invested.
Because of the effect of class-based expenses, your choice will also
depend on how much you plan to invest. For example, the reduced sales
charges available for larger purchases of Class A shares may, over time,
offset the effect of paying an initial sales charge on your investment
(which reduces the amount of your investment dollars used to buy shares
for your account), compared to the effect over time of higher class-based
expenses on Class B or Class C shares for which no initial sales charge
is paid.
- Investing for the Short Term. If you have a short-term investment
horizon (that is, you plan to hold your shares for not more than six
years), you should probably consider purchasing Class A or Class C shares
rather than Class B shares, because of the effect of the Class B
contingent deferred sales charge if you redeem within 6 years, as well as
the effect of the Class B asset-based sales charge on the investment
return for that class in the short-term. Class C shares might be the
appropriate choice (especially for investments of less than $100,000),
because there is no initial sales charge on Class C Shares, and the
contingent deferred sales charge does not apply to amounts you sell after
holding them one year.
However, if you plan to invest more than $100,000 for the shorter
term, then the more you invest and the more your investment horizon
increases toward six years, Class C shares might not be as advantageous
as Class A shares. That is because the annual asset-based sales charge
on Class C shares will have a greater economic impact on your account over
the longer term than the reduced front-end sales charge available for
larger purchases of Class A shares. For example, Class A might be more
advantageous than Class C (as well as Class B) for investments of more
than $100,000 expected to be held for 5 or 6 years (or more). For
investments over $250,000 expected to be held 4 to 6 years (or more),
Class A shares may become more advantageous than Class C (and B). If
investing $500,000 or more, Class A may be more advantageous as your
investment horizon approaches 3 years or more.
And for most 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 for Class B shares on
$1 million or more of C shares, from a single investor.
- Investing for the Longer Term. If you are investing for the
longer-term, for example, for retirement, and do not expect to need access
to your money for seven years or more, Class B shares may be an
appropriate consideration, if you plan to invest less than $100,000. If
you plan to invest more than $100,000 over the long term, Class A shares
will likely be more advantageous than Class B shares or Class C shares,
as discussed above, because of the effect of the expected lower expenses
for Class A shares and the reduced initial sales charges available for
larger investments in Class A shares under the Fund's Right of
Accumulation.
Of course, these examples are based on approximations of the effect
of current sales charges and expenses on a hypothetical investment over
time, using the assumed annual performance return stated above, and
therefore, you should analyze your options carefully.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available for Class B or Class
C shareholders, or other features (such as Automatic Withdrawal Plans) may
not be advisable ( because of the effect of the contingent deferred sales
charge in non-retirement accounts) for Class B or Class C shareholders,
you should carefully review how you plan to use your investment account
before deciding which class of shares is better for you. For example,
share certificates are not available for Class B or Class C shares, and
if you are considering using your shares as collateral for a loan, that
may be a factor to consider. Additionally, dividends payable to Class B
and Class C shareholders will be reduced by the additional expenses borne
solely by those classes, or higher expenses, such as the asset-based sales
charges to which Class B and Class C shares are subject, as described
below and in the Statement of Additional Information.
- How Does It Affect Payments to My Broker? A salesperson, such as
a broker, or any other person who is entitled to receive compensation for
selling Fund shares may receive different compensation for selling one
class of shares than for selling another class. It is important that
investors understand that the purpose of the contingent deferred sales
charges and asset-based sales charges for Class B and Class C shares is
the same as the purpose of the front-end sales charge on sales of Class
A shares: that is, to compensate the Distributor for commissions it pays
to dealers and financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans.
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension, profit-sharing plans and 401(k) and Individual
Retirement Accounts (IRAs), you can make an initial investment of as
little as $250 (if your IRA is established under an Asset Builder Plan,
the $25 minimum applies), and subsequent investments may be as little as
$25.
There is no minimum investment requirement if you are buying shares
by reinvesting dividends from the Fund or other Oppenheimer funds (a list
of them appears in the Statement of Additional Information, or you can ask
your dealer or call the Transfer Agent), or by reinvesting distributions
from unit investment trusts that have made arrangements with the
Distributor.
- How Are Shares Purchased? You can buy shares several ways: through
any dealer, broker or financial institution that has a sales agreement
with the Distributor, directly through the Distributor, or automatically
from your bank account through an Asset Builder Plan under the
OppenheimerFunds AccountLink service. The Distributor may appoint certain
servicing agents as the Distributor's agent to accept purchase (and
redemption) orders. When you buy shares, be sure to specify Class A,
Class B or Class C shares. If you do not choose, your investment will be
made in Class A shares.
- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares. However, we
recommend that you discuss your investment first with a financial advisor,
to be sure it is appropriate for you.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member to transmit funds electronically to purchase shares, to have the
Transfer Agent send redemption proceeds, or to transmit dividends and
distributions.
Shares are purchased for your account on the regular business day
the Distributor is instructed by you to initiate the ACH transfer to buy
shares. You can provide those instructions automatically, under an Asset
Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. You should request
AccountLink privileges on the application or dealer settlement
instructions used to establish your account. Please refer to "AccountLink"
below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other Oppenheimer funds) automatically each month from your
account at a bank or other financial institution under an Asset Builder
Plan with AccountLink. Details are on the Application and in the Statement
of Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver. In most cases, to enable you to receive that
day's offering price, the Distributor or its designated agent must receive
your order by the time of day The New York Stock Exchange closes, which
is normally 4:00 P.M., New York time, but may be earlier on some days (all
references to time in this Prospectus mean "New York time"). The net
asset value of each class of shares is determined as of that time on each
day the New York Stock Exchange is open (which is a "regular business
day").
If you buy shares through a dealer, the dealer must receive your
order by the regular close of business of The New York Stock Exchange on
a regular business day and transmit it to the Distributor so that it is
received before the Distributor's close of business that day, which is
normally 5:00 P.M. The Distributor, in its sole discretion, may reject any
purchase order for the Fund's shares.
Special Sales Charge Arrangements for Certain Persons. Appendix A to this
Prospectus sets forth conditions for the waiver of, or exemption from,
sales charges or the special sales charge rates that apply to shareholders
of the Former Quest for Value Funds (as defined in that Appendix),
including the Fund.
Buying Class A Shares. Class A shares are sold at their offering price,
which is normally net asset value plus an initial sales charge. However,
in some cases, described below, purchases are not subject to an initial
sales charge, and the offering price will be the asset value. In some
cases, reduced sales charges may be available, as described below. Out
of the amount you invest, the Fund receives the net asset value to invest
for your account. The sales charge varies depending on the amount of your
purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer as commission. The current sales
charge rates and commissions paid to dealers and brokers are as follows:
- -------------------------------------------------------------------------
Front-End Sales Charge Commission
As a Percentage of as Percentage
Offering Amount of Offering
Amount of Purchase Price Invested Price
- ------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
- Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more of the
Oppenheimer funds in the following cases:
- Purchases aggregating $1 million or more.
- Purchases by a retirement plan qualified under sections 401(a) or
401(k) of the Internal Revenue Code, by a non-qualified deferred
compensation plan (not including Section 457 plans), employee benefit
plan, group retirement plan (see "How to Buy Shares - Retirement Plans"
in the Statement of Additional Information for further details), an
employee's 403(b)(7) custodial plan account, SEP IRA, SARSEP, or SIMPLE
plan (all of these plans are collectively referred to as "Retirement
Plans"); that: (1) buys shares costing $500,000 or more or (2) has, at the
time of purchase, 100 or more eligible participants, or (3) certifies that
it projects to have annual plan purchases of $200,000 or more.
- Purchases by an OppenheimerFunds Rollover IRA if the purchases are
made (1) through a broker, dealer, bank or registered investment adviser
that has made special arrangements with the Distributor for these
purchases, or (2) by a direct rollover of a distribution from a qualified
retirement plan if the administrator of that plan has made special
arrangements with the Distributor for those purchases.
The Distributor pays dealers of record commission on those purchases
in an amount equal to (i) 1.0% for non-Retirement Plan accounts, and (ii)
for Retirement Plan accounts, 1.0% of the first $2.5 million, plus 0.50%
of the next $2.5 million, plus 0.25 of purchases over $5 million. That
commission will be paid only on those purchases that were not previously
subject to a front-end sales charge and dealer commission. NO sales
commision will be paid to the dealer, broker or financial institution on
sales of Class A shares purchased with the redemption proceeds of shares
of a mutual fund offered as an investment option in a Retirement Plan in
which Oppenheimer funds are also offered as investment options under a
special arrangement with the Distributor if the purchase occurs more than
30 days after the addition of the Oppenheimer funds as an investment
option to the Retirement Plan.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge
(called the "Class A contingent deferred sales charge") will be deducted
from the redemption proceeds. That sales charge may be equal to 1.0% of
the lesser of (1) the aggregate net asset value of the redeemed shares
(not including shares purchased by reinvestment of dividends or capital
gain distributions) or (2) the original offering price (which is the
original net asset value) of the redeemed shares. However, the Class A
contingent deferred sales charge will not exceed the aggregate commissions
the Distributor paid to your dealer on all Class A shares of all
Oppenheimer funds you purchased subject to the Class A contingent deferred
sales charge. Class A shares of the Fund purchased subject to a
contingent deferred sales charge prior to November 24, 1995 will be
subject to a contingent deferred sales charge at the applicable rate set
forth in Appendix A to this Prospectus.
In determining whether a contingent deferred sales charge is payable,
the Fund will first redeem shares that are not subject to the sales
charge, including shares purchased by reinvestment of dividends and
capital gains, and then will redeem other shares in the order that you
purchased them. The Class A contingent deferred sales charge is waived
in certain cases described in "Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges
of shares under the Fund's exchange privilege (described below). However,
if the shares acquired by exchange are redeemed within 18 months of the
end of the calendar month of the purchase of the exchanged shares, the
contingent deferred sales charge will apply.
- Special Arrangements With Dealers. The Distributor may advance up
to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Until January 1, 1997, dealers whose sales of Class A shares of
Oppenheimer funds (other than money market funds) under OppenheimerFunds-
sponsored 403(b)(7) custodial plans exceed $5 million per year (calculated
per quarter), will receive monthly one-half of the Distributor's retained
commissions on those sales, and if those sales exceed $10 million per
year, those dealers will receive the Distributor's entire retained
commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of the
following ways:
- Right of Accumulation. To qualify for the lower sales charge rates
that apply to larger purchases of Class A shares, you and your spouse can
add together Class A and Class B shares you purchase for your individual
accounts, or jointly, or for trust or custodial accounts on behalf of your
children who are minors. A fiduciary can count all shares purchased for
a trust, estate or other fiduciary account (including one or more employee
benefit plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and
Class B shares of the Fund and other Oppenheimer funds to reduce the sales
charge rate that applies to current purchases of Class A shares. You can
also count Class A and Class B shares of Oppenheimer funds you previously
purchased subject to an initial or contingent deferred sales charge to
reduce the sales charge rate for current purchases of Class A shares,
provided that you still hold your investment in one of the Oppenheimer
funds. The value of those shares will be based on the greater of the
amount you paid for the shares or their current value (at offering price).
The Oppenheimer funds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Transfer Agent. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, if you purchase Class
A shares or Class A and Class B shares of the Fund and other Oppenheimer
funds during a 13-month period, you can reduce the sales charge rate that
applies to your purchases of Class A shares. The total amount of your
intended purchases of both Class A and Class B shares will determine the
reduced sales charge rate for the Class A shares purchased during that
period. This can include purchases made up to 90 days before the date of
the Letter. More information is contained in the Application and in
"Reduced Sales Charges" in the Statement of Additional Information.
- Waivers of Class A Sales Charges. The Class A sales charges are
not imposed in the circumstances described below. There is an explanation
of this policy in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers. Class A shares purchased by the following investors are not
subject to any Class A sales charges:
- the Manager or its affiliates;
- present or former officers, directors, trustees and employees (and
their "immediate families" as defined in "Reduced Sales Charges" in the
Statement of Additional Information) of the Fund, the Manager and its
affiliates, and retirement plans established by them for their employees;
- registered management investment companies, or separate accounts
of insurance companies having an agreement with the Manager or the
Distributor for that purpose;
- dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
- employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and are
identified to the Distributor) or with the Distributor; the purchaser must
certify to the Distributor at the time of purchase that the purchase is
for the purchaser's own account (or for the benefit of such employee's
spouse or minor children);
- dealers, brokers, banks or registered investment advisers that have
entered into an agreement with the Distributor providing specifically for
the use of shares of the Fund in particular investment products made
available to their clients (those clients may be charged a transaction fee
by their dealer, broker or adviser for the purchase or sale of Fund
shares);
- (1) investment advisors and financial planners who charge an
advisory, consulting or other fee for their services and buy shares for
their own accounts or the accounts of their clients, (2) Retirement Plans
and deferred compensation plans and trusts used to fund those Plans
(including, for example, plans qualified or created under sections 401(a),
403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy
shares for their own accounts, in each case if those purchases are made
through a broker or agent or other financial intermediary that has made
special arrangements with the Distributor for those purchases; and (3)
clients of such investment advisors or financial planners 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;
- employee benefit plans purchasing shares through a shareholder
servicing agent which the Distributor has appointed as agent to accept
those purchase orders;
- accounts for which Oppenheimer Capital is the investment adviser
(the Distributor must be advised of this arrangement) and persons who are
directors or trustees of the company or trust which is the beneficial
owner of such accounts;
- any unit investment trust that has entered into an appropriate
agreement with the Distributor;
- a TRAC-2000 401(k) plan (sponsored by the former Quest for Value
Advisors) whose Class B or Class C shares of a Former Quest for Value Fund
were exchanged for Class A shares of that Fund due to the termination of
the Class B and Class C TRAC-2000 program on November 24, 1995; or
- qualified retirement plans that had agreed with the former Quest
for Value Advisors to purchase shares of any of the Former Quest for Value
Funds at net asset value, with such shares to be held through DCXchange,
a sub-transfer agency mutual fund clearinghouse, provided that such
arrangements are consummated and share purchases commence by December 31,
1996.
Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions. Class A shares issued or purchased in the following
transactions are not subject to Class A sales charges:
- shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party;
- shares purchased by the reinvestment of loan repayments by a
participant in a retirement plan for which the Manager or its affiliates
acts as sponsor;
- shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds (other
than Oppenheimer Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the Distributor;
- shares purchased and paid for with the proceeds of shares redeemed
in the prior 12 months from a mutual fund (other than a fund managed by
the Manager or any of its subsidiaries) on which an initial sales charge
or contingent deferred sales charge was paid (this waiver also applies to
shares purchased by exchange of shares of Oppenheimer Money Market Fund,
Inc. that were purchased and paid for in this manner); this waiver must
be requested when the purchase order is placed for your shares of the
Fund, and the Distributor may require evidence of your qualification for
this waiver; or
- shares purchased with the proceeds of maturing principal of units
of any Qualified Unit Investment Liquid Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions. The Class A contingent deferred sales charge is also waived
if shares that would otherwise be subject to the contingent deferred sales
charge are redeemed in the following cases:
- to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value;
- involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder Account Rules
and Policies," below);
- if, at the time a purchase order is placed for Class A shares that
would otherwise be subject to the Class A contingent deferred sales
charge, the dealer agrees in writing to accept the dealer's portion of the
commission payable on the sale in installments of 1/18th of the commission
per month (and no further commission will be payable if the shares are
redeemed within 18 months of purchase);
- for distributions from a TRAC-2000 401(k) plan sponsored by the
Distributor due to the termination of the TRAC-2000 program.
- for distributions from Retirement Plans, deferred compensation
plans or other employee benefit plans for any of the following purposes:
(1) following the death or disability (as defined in the Internal Revenue
Code) of the participant or beneficiary (the death or disability must
occur after the participant's account was established); (2) to return
excess contributions; (3) to return contributions made due to a mistake
of fact; (4) hardship withdrawals, as defined in the plan; (5) under a
Qualified Domestic Relations Order, as defined in the Internal Revenue
Code; (6) to meet the minimum distribution requirements of the Internal
Revenue Code; (7) to establish "substantially equal periodic payments" as
described in Section 72(t) of the Internal Revenue Code; (8) for
retirement distributions or loans to participants or beneficiaries; (9)
separation from service; (10) participant-directed redemptions to purchase
shares of a mutual fund (other than a fund managed by the Manager or its
subsidiary) offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a special
arrangement with the Distributor; or (11) plan termination or "in-service
distributions", if the redemption proceeds are rolled over directly to an
OppenheimerFunds IRA.
- Distribution and Service Plan for Class A Shares. The Fund has
adopted a Distribution and Service Plan for Class A shares to reimburse
the Distributor for a portion of its costs incurred in connection with the
personal service and maintenance of shareholder accounts that hold Class
A shares. Under the Plan, the Fund pays an annual asset-based sales
charge to the Distributor at an annual rate of 0.25% of the average annual
net assets of the class. The Fund also pays a service fee to the
Distributor of 0.25% of the average annual net assets of the class. The
Distributor uses all of the service fee and a portion of the asset-based
sales charge (equal to 0.15% annually for Class A shares purchased prior
to September 1, 1993 and 0.10% for Class A shares purchased on or after
September 1, 1993) to compensate dealers, brokers, banks and other
financial institutions quarterly for providing personal service and
maintenance of accounts of their customers that hold Class A shares. The
Distributor retains the balance of the asset-based sales charge to
reimburse itself for its other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
The payments under the Plan increase the annual expenses of Class A
shares. For more details, please refer to "Distribution and Service Plans"
in the Statement of Additional Information.
Buying Class B Shares. Class B shares are sold at net asset value per
share without an initial sales charge. However, if Class B shares are
redeemed within 6 years of their purchase, a contingent deferred sales
charge will be deducted from the redemption proceeds. That sales charge
will not apply to shares purchased by the reinvestment of dividends or
capital gains distributions. The contingent deferred sales charge will be
based on the lesser of the net asset value of the redeemed shares at the
time of redemption or the original offering price (which is the original
net asset value). The contingent deferred sales charge is not imposed on
the amount of your account value represented by the increase in net asset
value over the initial purchase price. The Class B contingent deferred
sales charge is paid to the Distributor to reimburse its expenses of
providing distribution-related services to the Fund in connection with the
sale of Class B shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 6 years, and (3) shares held the longest during the
6-year period. The contingent deferred sales charge is not imposed in the
circumstances described in "Waivers of Class B and Class C Sales Charges"
below.
The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
Years Since Contingent Deferred Sales Charge
Beginning of Month In Which on 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. All purchases are considered
to have been made on the first regular business day of the month in which
the purchase was made.
- Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to Class
A shares. This conversion feature relieves Class B shareholders of the
asset-based sales charge that applies to Class B shares under the Class
B Distribution and Service Plan, described below. The conversion is based
on the relative net asset value of the two classes, and no sales load or
other charge is imposed. When Class B shares convert, any other Class B
shares that were acquired by the reinvestment of dividends and
distributions on the converted shares will also convert to Class A shares.
The conversion feature is subject to the continued availability of a tax
ruling described in "Alternative Sales Arrangements - Class A, Class B and
Class C Shares" in the Statement of Additional Information.
- Distribution and Service Plan for Class B shares. The Fund has
adopted a Distribution and Service Plan for Class B shares to compensate
the Distributor for distributing Class B shares and servicing accounts.
This Plan is described below under "Buying Class C Shares - Distribution
and Service Plans for Class B and Class C shares."
- Waivers of Class B Sales Charges. The Class B contingent deferred
sales charge will not apply to shares purchased in certain types of
transactions, nor will it apply to shares redeemed in certain
circumstances, as described below under "Buying Class C Shares - Waivers
of Class B and Class C Sales Charges."
Buying Class C Shares. Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are
redeemed within 12 months of their purchase, a contingent deferred sales
charge of 1.0% will be deducted from the redemption proceeds. That sales
charge will not apply to shares purchased by the reinvestment of dividends
or capital gains distributions. The contingent deferred sales charge will
be based on the lesser of the net asset value of the redeemed shares at
the time of redemption or the original offering price (which is the
original net asset value). The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price. The Class C
contingent deferred sales charge is paid to compensate the Distributor for
its expenses of providing distribution-related services to the Fund in
connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 12 months, and (3) shares held the longest during the
12-month period.
- Distribution and Service Plan for Class B and Class C Shares.
The Fund has adopted Distribution and Service Plans for Class B and Class
C shares to compensate the Distributor for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under the
Plans, the Fund pays the Distributor an annual "asset-based sales charge"
of 0.75% per year on Class B shares that are outstanding for 6 years or
less and on Class C shares. The Distributor also receives a service fee
of 0.25% per year under each plan.
Under each Plan, both fees are computed on the average of the net
asset value of shares in the respective class, determined as of the close
of each regular business day during the period. The asset-based sales
charge and service fees increase Class B and Class C expenses by up to
1.00% of the net assets per year of the respective class.
The Distributor uses the service fees to compensate dealers for
providing personal services for accounts that hold Class B or Class C
shares. Those services are similar to those provided under the Class A
Service Plan, described above. The Distributor pays the 0.25% service
fees to dealers in advance for the first year after Class B or Class C
shares have been sold by the dealer. After the shares have been held for
a year, the Distributor pays the service fees to dealers on a quarterly
basis.
The asset-based sales charge allows investors to buy Class B or Class
C shares without a front-end sales charge while allowing the Distributor
to compensate dealers that sell those shares. The Fund pays the asset-
based sales charges to the Distributor for its services rendered in
distributing Class B and Class C shares. Those payments are at a fixed
rate that is not related to the Distributor's expenses. The services
rendered by the Distributor include paying and financing the payment of
sales commissions, service fees and other costs of distributing and
selling Class B and Class C shares.
The Distributor currently pays sales commissions of 3.75% of the
purchase price of Class B shares to dealers from its own resources at the
time of sale. 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 4.00% of the purchase price. The Distributor retains the Class
B asset-based sales charge.
The Distributor currently pays sales commissions of 0.75% of the
purchase price of Class C shares to dealers from its own resources at the
time of sale. Including the advance of the service fee, the total amount
paid by the Distributor to the dealer at the time of sale of Class C
shares is 1.00% of the purchase price. The Distributor retains the asset-
based sales charge during the first year Class C shares are outstanding
to recoup sales commissions it has paid, the advance of service fee
payments it has made, and its financing costs and other expenses. The
Distributor plans to pay the asset-based sales charge as an ongoing
commission to the dealer on Class C shares that have been outstanding for
a year or more.
The Distributor's actual expenses in selling Class B and Class C
shares may be more than the payments it receives from contingent deferred
sales charges collected on redeemed shares and from the Fund under the
Distribution and Service Plans for Class B and C shares. If either Plan
is terminated by the Fund, the Board of Directors may allow the Fund to
continue payments of the asset-based sales charge to the Distributor for
distributing shares before the Plan was terminated.
- Waivers of Class B and Class C Sales Charges. The Class B and
Class C contingent deferred sales charges will not be applied to shares
purchased in certain types of transactions nor will it apply to shares
redeemed in certain circumstances as described below. The reasons for
this policy are in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers for Redemptions in Certain Cases. The Class B and Class C
contingent deferred sales charges will be waived for redemptions of shares
in the following cases:
- distributions to participants or beneficiaries from Retirement
Plans, if the distributions are made (a) under an Automatic Withdrawal
Plan after the participant reaches age 59-1/2, as long as the payments are
no more than 10% of the account value annually (measured from the date the
Transfer Agent received the request), or (b) following the death or
disability (as defined in the Internal Revenue Code ("Internal Revenue
Code")) of the participant or beneficiary (the death or disability must
have occurred after the account was established);
- redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder including a trustee
of a "grantor" trust or revocable living trust for which the trustee is
also the sole beneficiary (the death or disability must have occurred
after the account was established, and for disability you must provide
evidence of a determination of disability by the Social Security
Administration);
- returns of excess contributions to Retirement Plans;
- distributions from retirement plans to make "substantially equal
periodic payments" under Section 72(t) of the Internal Revenue Code,
provided the distributions do not exceed 10% of the account value
annually, measured from the date of the Transfer Agent receives the
request;
- shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies," below; or
- distributions from OppenheimerFunds prototype 401(k) plans: (1)
for hardship withdrawals; (2) under a Qualified Domestic Relations
Order, as defined in the Internal Revenue Code; (3) to meet minimum
distribution requirements as defined in the IRC; (4) to make
"substantially equal periodic payments" as described in Section 72(t) of
the IRC; or (5) for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
- shares sold to the Manager or its affiliates;
- shares sold to registered management investment companies or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; or
- shares issued in plans of reorganization to which the Fund is a
party.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions. These include purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges should be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges by sending signature-guaranteed
instructions to the Transfer Agent. AccountLink privileges will apply to
each shareholder listed in the registration on your account as well as to
your dealer representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank
account information must be made by signature-guaranteed instructions to
the Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be used
on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds exchange privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another Oppenheimer funds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. Each Fund has several plans that
enable you to sell shares automatically or exchange them to another
Oppenheimer funds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is $5,000 or more,
you can establish an Automatic Withdrawal Plan to receive payments of at
least $50 on a monthly, quarterly, semi-annual or annual basis. The checks
may be sent to you or sent automatically to your bank account on
AccountLink. You may even set up certain types of withdrawals of up to
$1,500 per month by telephone. You should consult the Application and
Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange an amount you establish in advance automatically for shares of
up to five other Oppenheimer funds on a monthly, quarterly, semi-annual
or annual basis under an Automatic Exchange Plan. The minimum purchase
for each other Oppenheimer funds account is $25. These exchanges are
subject to the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A or
Class B shares of the Fund, you have up to 6 months to reinvest all or
part of the redemption proceeds in Class A shares of the Fund or other
Oppenheimer funds without paying a sales charge. This privilege applies
to Class A shares that you purchased subject to an initial sales charge
and to Class A shares or Class B shares on which you paid a contingent
deferred sales charge when you redeemed them. This privilege does not
apply to Class C shares. You must be sure to ask the Distributor for this
privilege when you send your payment. Please consult the Statement of
Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment, including SAR/SEP IRAs
- Pension and Profit-Sharing Plans for self-employed persons and
small business owners
- 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares on any
regular business day. Your shares will be sold at the next net asset
value calculated after your order is received and accepted by the Transfer
Agent. The Fund offers you a number of ways to sell your shares: in
writing or by telephone. You can also set up Automatic Withdrawal Plans
to redeem shares on a regular basis, as described above. If you have
questions about any of these procedures, and especially if you are
redeeming shares in a special situation, such as due to the death of the
owner, or from a retirement plan, please call the Transfer Agent first,
at 1-800-525-7048, for assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
- Certain Requests Require A Signature Guarantee. To protect you and
each Fund from fraud, certain redemption requests must be in writing and
must include a signature guarantee in the following situations (there may
be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive
a check
- The redemption check is not payable to all shareholders listed on
the account statement
- The redemption check is not sent to the address of record on your
account statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as an
Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing as a fiduciary or on behalf of a corporation, partnership or
other business, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your account statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling
- The signatures of all registered owners exactly as the account is
registered, and
- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell shares.
Use the following address for Send courier or Express Mail
request by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record
may also sell your shares by telephone. To receive the redemption price
on a regular business day, your call must be received by the Transfer
Agent by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days. Shares held in an
OppenheimerFunds retirement plan or under a share certificate may not be
redeemed 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 wired to that bank
account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed
by telephone in any 7-day period. The check must be payable to all owners
of record of the shares and must be sent to the address on the account
statement. This service is not available within 30 days of changing the
address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH transfer to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be transferred.
Selling Shares Through Your Dealer. The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their
customers. Brokers or dealers may charge for that service. Please refer
to "Special Arrangements for Repurchase of Shares from Dealers and
Brokers" in the Statement of Additional Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
- Shares of the fund selected for exchange must be available for sale
in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class of the Fund may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you
can exchange Class A shares of this Fund only for Class A shares of
another fund. At present, Oppenheimer Money Market Fund, Inc. offers only
one class of shares, which are considered to be Class A shares for this
purpose. In some cases, sales charges may be imposed on exchange
transactions. Please refer to "How to Exchange Shares" in the Statement
of Additional Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1-800-525-7048. That list can change
from time to time.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request that is in proper
form by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days. However, either fund
may delay the purchase of shares of the fund you are exchanging into up
to seven days if it determines it would be disadvantaged by a same-day
transfer of the proceeds to buy shares. For example, the receipt of
multiple exchange requests from a dealer in a "market-timing" strategy
might require the sale of portfolio securities at a time or price
disadvantageous to the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege at
any time. Although the Fund will attempt to provide you notice whenever
it is reasonably able to do so, it may impose these changes at any time.
- For tax purposes, exchanges of shares involve a redemption of the
shares of the Fund you own and a purchase of the shares of the other fund,
which may result in a capital gain or loss. For more information about
the taxes affecting exchanges, please refer to "How to Exchange Shares"
in the Statement of Additional Information.
- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined for each class of shares
as of the close of The New York Stock Exchange that day, which is normally
4:00 P.M. but may be earlier on some days, on each day the Exchange is
open by dividing the value of the Fund's net assets attributable to a
class by the number of shares of that class that are outstanding. The
Fund's Board of Directors has established procedures to value the Fund's
securities to determine net asset value. In general, securities values
are based on market value. There are special procedures for valuing
illiquid and restricted securities and obligations for which market values
cannot be readily obtained. These procedures are described more
completely in the Statement of Additional Information.
- The offering of shares may be suspended during any period in which
the determination of net asset value is suspended, and the offering may
be suspended by the Board of Directors at any time the Board believes it
is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither it nor a Fund will be liable for
losses or expenses arising out of telephone instructions reasonably
believed to be genuine. If you are unable to reach the Transfer Agent
during periods of unusual market activity, you may not be able to complete
a telephone transaction and should consider placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients by
participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously.
- The redemption price for shares will vary from day to day because
the value of the securities in the Fund's portfolio fluctuates, and the
redemption price, which is the net asset value per share, will normally
be different for Class A, Class B, Class C and Class Y shares. Therefore,
the redemption value of your shares may be more or less than their
original cost.
- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. For accounts registered
in the name of a broker-dealer, payment will be forwarded within 3
business days. The Transfer Agent may delay forwarding a check or
processing a payment via AccountLink for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much
as 10 days from the date the shares were purchased. That delay may be
avoided if you purchase shares by certified check or arrange to have your
bank provide telephone or written assurance to the Transfer Agent that
your purchase payment has cleared.
- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $500 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
- Under unusual circumstances, shares of the Fund may be redeemed "in
kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to "How to Sell
Shares" in the Statement of Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or taxpayer identification number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of dividends.
- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described in "How To Buy Shares," you may be
subject to a contingent deferred sales charges when redeeming certain
Class A, Class B and Class C shares.
- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report to
shareholders having the same last name and address on the Fund's records.
However, each shareholder may call the Transfer Agent at 1-800-525-7048
to ask that copies of those materials be sent personally to that
shareholder.
- Transfer Agent and Shareholder Servicing Agent. The transfer agent
and shareholder servicing agent is OppenheimerFunds Services, a division
of the Manager, whose address is P.O. Box 5270, Denver, Colorado 80217.
Unified Management Corporation (1-800-346-4601) is the shareholder
servicing agent for former shareholders of the AMA Family of Funds and
clients of AMA Investment Advisers, L.P. who acquire shares of the Fund,
and for former shareholders of the Unified Funds and Liquid Green Trusts,
accounts which participated or participate in a retirement plan for which
Unified Investment Advisers, Inc. or an affiliate acts as custodian or
trustee, and other accounts for which Unified Management Corporation is
the dealer of record.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A, Class
B, Class C and Class Y shares from net investment income on an annual
basis and normally pays those dividends to shareholders following the end
of its fiscal year, which is October 31. Dividends paid on Class A and
Class Y shares generally are expected to be higher than for Class B and
Class C shares because expenses allocable to Class B and Class C shares
will generally be higher. There is no fixed dividend rate and there can
be no assurance as to the payment of any dividends or the realization of
any gains.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of dividends and capital gains following the
end of its fiscal year. Short-term capital gains are treated as dividends
for tax purposes. Long-term capital gains will be separately identified
in the tax information the Fund sends you after the end of the calendar
year. There can be no assurances that the Fund will pay any capital gains
distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a check
for all dividends and long-term capital gains distributions or have them
sent to your bank on AccountLink.
- Reinvest Your Distributions in Another Oppenheimer Fund Account.
You can reinvest all distributions in another Oppenheimer fund account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you held your
shares. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Distributions are subject to
federal income tax and may be subject to state or local taxes. Your
distributions are taxable when paid, whether you reinvest them in
additional shares or take them in cash. Every year the Fund will send you
and the IRS a statement showing the amount of each taxable distribution
you received in the previous year.
- "Buying a Dividend": When a Fund goes ex-dividend, its share price
is reduced by the amount of the distribution. If you buy shares on or
just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. Generally speaking, a
capital gain or loss is the difference between the price you paid for the
shares and the price you receive when you sell them.
- Returns of Capital: In certain cases distributions made by the Fund
may be considered a non-taxable return of capital to shareholders. If
that occurs, it will be identified in notices to shareholders. A non-
taxable return of capital may reduce your tax basis in your Fund shares.
This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.
<PAGE>
APPENDIX A
Special Sales Charge Arrangements for Shareholders of
the 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 elsewhere in this
Prospectus are modified as described below for those shareholders of (i)
Oppenheimer Quest Value Fund, Inc., Oppenheimer Quest Growth & Income
Value Fund, Oppenheimer Quest Opportunity Value Fund, Oppenheimer Quest
Small Cap Value Fund and Oppenheimer Quest Global Value Fund, Inc. on
November 24, 1995, when OppenheimerFunds, Inc. became the investment
adviser to those funds, and (ii) Quest for Value U.S. Government Income
Fund, Quest for Value Investment Quality Income Fund, Quest for Value
Global Income Fund, Quest for Value New York Tax-Exempt Fund, Quest for
Value National Tax-Exempt Fund and Quest for Value California Tax-Exempt
Fund when those funds merged into various Oppenheimer funds on November
24, 1995. The funds listed above are referred to in this Prospectus as
the "Former Quest for Value Funds."
Class A Sales Charges
- - Reduced Class A Initial Sales Charge Rates for Certain Former Quest
Shareholders
- - Purchases by Groups, Associations and Certain Qualified Retirement
Plans. The following table sets forth the initial sales charge rates for
Class A shares purchased by a "Qualified Retirement Plan" through a single
broker, dealer or financial institution, or by members of "Associations"
formed for any purpose other than the purchase of securities if that
Qualified Retirement Plan or that Association purchased shares of any of
the Former Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995. For this purpose
only, a "Qualified Retirement Plan" includes any 401(k) plan, 403(b) plan,
and SEP/IRA or IRA plan for employees of a single employer.
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
9 or fewer 2.50% 2.56% 2.00%
At least 10 but not
more than 49 2.00% 2.04% 1.60%
For purchases by Qualified Retirement plans and Associations having
50 or more eligible employees or members, there is no initial sales charge
on purchases of Class A shares, but those shares are subject to the Class
A contingent deferred sales charge described on pages __ to __ of this
Prospectus.
Purchases made under this arrangement qualify for the lower of the
sales charge rate in the table based on the number of eligible employees
in a Qualified Retirement Plan or members of an Association or the sales
charge rate that applies under the Rights of Accumulation described above
in the Prospectus. In addition, purchases by 401(k) plans that are
Qualified Retirement Plans qualify for the waiver of the Class A initial
sales charge if they qualified to purchase shares of any of the Former
Quest For Value Funds by virtue of projected contributions or investments
of $1 millon or more each year. Individuals who qualify under this
arrangement for reduced sales charge rates as members of Associations, or
as eligible employees in Qualified Retirement Plans also may purchase
shares for their individual or custodial accounts at these reduced sales
charge rates, upon request to the Fund's Distributor.
- - Special Class A Contingent Deferred Sales Charge Rates
Class A shares of the Fund purchased by exchange of shares of other
Oppenheimer funds that were acquired as a result of the merger of Former
Quest for Value Funds into those Oppenheimer Funds, and which shares were
subject to a Class A contingent deferred sales charge prior to November
24, 1995 will be subject to a contingent deferred sales charge at the
following rates: if they are redeemed within 18 months of the end of the
calendar month in which they were purchased, at a rate equal to 1.0% if
the redemption occurs within 12 months of their initial purchase and at
a rate of 0.50 of 1.0% if the redemption occurs in the subsequent six
months. Class A shares of any of the Former Quest for Value Funds
purchased without an initial sales charge on or before November 22, 1995
will continue to be subject to the applicable contingent deferred sales
charge in effect as of that date as set forth in the then-current
prospectus for such fund.
- - Waiver of Class A Sales Charges for Certain Shareholders
Class A shares of the Fund purchased by the following investors are not
subject to any Class A initial or contingent deferred sales charges:
- Shareholders of the Fund who were shareholders of the AMA Family
of Funds on February 28, 1991 and who acquired shares of any of the Former
Quest for Value Funds by merger of a portfolio of the AMA Family of Funds.
- Shareholders of the Fund who acquired shares of any Former Quest
for Value Fund by merger of any of the portfolios of the Unified Funds.
- Shareholders of the Fund that have continually owned shares of the
Fund prior to November 1, 1988.
- - Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions
The Class A contingent deferred sales charge will not apply to redemptions
of Class A shares of the Fund purchased by the following investors who
were shareholders of any Former Quest for Value Fund:
- Investors who purchased Class A shares from a dealer that is or was
not permitted to receive a sales load or redemption fee imposed on a
shareholder with whom that dealer has a fiduciary relationship under the
Employee Retirement Income Security Act of 1974 and regulations adopted
under that law.
- Participants in Qualified Retirement Plans that purchased shares
of any of the Former Quest For Value Funds pursuant to a special
"strategic alliance" with the distributor of those funds. The Fund's
Distributor will pay a commission to the dealer for purchases of Fund
shares as described above in "Class A Contingent Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge Waivers
- - Waivers for Redemptions of Shares Purchased Prior to March 6, 1995
In the following cases, the contingent deferred sales charge will be
waived for redemptions of Class A, B or C shares of the Fund if those
shares were purchased prior to March 6, 1995: in connection with
(i) distributions to participants or beneficiaries of plans qualified
under Section 401(a) of the Internal Revenue Code or from custodial
accounts under Section 403(b)(7) of the Code, Individual Retirement
Accounts, deferred compensation plans under Section 457 of the Code, and
other employee benefit plans, and returns of excess contributions made to
each type of plan, (ii) withdrawals under an automatic withdrawal plan
holding only either Class B or C shares if the annual withdrawal does not
exceed 10% of the initial value of the account, and (iii) liquidation of
a shareholder's account if the aggregate net asset value of shares held
in the account is less than the required minimum value of such accounts.
- - Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995.
In the following cases, the contingent deferred sales charge will be
waived for redemptions of Class A, B or C shares of the Fund if those
shares were purchased on or after March 6, 1995, but prior to November 24,
1995: (1) distributions to participants or beneficiaries from Individual
Retirement Accounts under Section 408(a) of the Internal Revenue Code or
retirement plans under Section 401(a), 401(k), 403(b) and 457 of the Code,
if those distributions are made either (a) to an individual participant
as a result of separation from service or (b) following the death or
disability (as defined in the Code) of the participant or beneficiary;
(2) returns of excess contributions to such retirement plans;
(3) redemptions other than from retirement plans following the death or
disability of the shareholder(s) (as evidenced by a determination of total
disability by the U.S. Social Security Administration); (4) withdrawals
under an automatic withdrawal plan (but only for Class B or C shares)
where the annual withdrawals do not exceed 10% of the initial value of the
account; and (5) liquidation of a shareholder's account if the aggregate
net asset value of shares held in the account is less than the required
minimum account value. A shareholder's account will be credited with the
amount of any contingent deferred sales charge paid on the redemption of
any Class A, B or C shares of the Fund described in this section if within
90 days after that redemption, the proceeds are invested in the same
Class of shares in this Fund or another Oppenheimer fund.
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value Fund to Quest
for Value prototype 401(k) plans that were maintained on the TRAC-2000
recordkeeping system and that were transferred to an OppenheimerFunds
prototype 401(k) plan shall be eligible for an additional one-time payment
by the Distributor of 1% of the value of the plan assets transferred, but
that payment may not exceed $5,000 as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value Fund to Quest
for Value prototype 401(k) plans that were maintained on the TRAC-2000
recordkeeping system and (i) the shares held by those plans were exchanged
for Class A shares, or (ii) the plan assets were transferred to an
OppenheimerFunds prototype 401(k) plan, shall be eligible for an
additional one-time payment by the Distributor of 1% of the value of the
plan assets transferred, but that payment may not exceed $5,000.
<PAGE>
Oppenheimer Quest Value Fund, Inc.
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Sub-Adviser
OpCap Advisors
One World Financial Center
New York, New York 10281
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 of Portfolio Securities
State Street Bank and Trust Company
P.O. Box 8505
Boston, Massachusetts 02266-8505
Independent Auditors
Price Waterhouse LLP
950 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement, and if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, OppenheimerFunds, Inc.,
OppenheimerFunds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER QUEST VALUE FUND, INC.
Graphic material included in Prospectus of Oppenheimer Quest Value
Fund, Inc.: "Comparison of Total Return of Oppenheimer Quest Value Fund,
Inc. with the S&P 500 Index - Change in Value of $10,000 Hypothetical
Investments in Class A, Class B and Class C Shares of Oppenheimer Quest
Value Fund, Inc. and the S&P 500 Index"
Linear graphs will be included in the Prospectus of Oppenheimer Quest
Value Fund, Inc. (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in the Fund.
In the case of the Fund's Class A shares, that graph will cover the
performance of the Fund for the ten fiscal years ended 10/31/96 and in the
case of the Fund's Class B and Class C shares will cover the period from
the inception of the class (September 2, 1993) through 10/31/96. The graph
will compare such values with hypothetical $10,000 investments over the
same time periods in the S&P 500 Index. Set forth below are the relevant
data points that will appear on the linear graph. Additional information
with respect to the foregoing, including a description of the S&P 500
Index, is set forth in the Prospectus under "Performance of the Fund -
Comparing the Fund's Performance to the Market."
Fiscal Year Oppenheimer S&P 500
Ended Quest Value Fund, Inc.A Index
10/31/86 $ $
10/31/87 $ $
10/31/88 $ $
10/31/89 $ $
10/31/90 $ $
10/31/91 $ $
10/31/92 $ $
10/31/93 $ $
10/31/94 $ $
10/31/95 $ $
10/31/96 $ $
Fiscal Year Oppenheimer S&P
(Period) Ended Quest Value Fund, Inc.B 500 Index
09/01/93(1) $ $
10/31/93 $ $
10/31/94 $ $
10/31/95 $ $
10/31/96 $ $
Fiscal Year Oppenheimer S & P
(Period) Ended Quest Value Fund, Inc. C 500 Index
09/01/93(1) $ $
10/31/93 $ $
10/31/94 $ $
10/31/95 $ $
10/31/96 $ $
(1) Class B and Class C shares of the Fund were first publicly offered
on September 2, 1993.
<PAGE>
OPPENHEIMER QUEST VALUE FUND, INC.
Two World Trade Center, New York, New York 10048
1-800-525-7048
Statement of Additional Information dated December 16, 1996
This Statement of Additional Information of Oppenheimer Quest Value
Fund, Inc. is not a Prospectus. This document contains additional
information about the Fund and supplements information in the Prospectus
dated December 16, 1996. It should be read together with the Prospectus,
which may be obtained upon written request 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.
Contents
Page
About the Fund
Investment Objective and Policies
Investment Policies and Strategies
Other Investment Techniques and Strategies
Other Investment Restrictions
How the Fund is Managed
Organization and History
Directors and Officers of the Fund
The Manager and Its Affiliates
Brokerage Policies of the Fund
Performance of the Fund
Distribution and Service Plans
About Your Account
How To Buy Shares
How To Sell Shares
How To Exchange Shares
Dividends, Capital Gains and Taxes
Additional Information About the Fund
Financial Information About the Fund
Independent Auditors' Report
Financial Statements
Appendix A: Description of Ratings A-1
Appendix B: Corporate Industry Classifications B-1
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Set forth below is
supplemental information about those policies and the types of securities
in which the Fund may invest, as well as the strategies the Fund may use
to try to achieve its objective. Capitalized terms used in this Statement
of Additional Information have the same meaning as those terms have in the
Prospectus.
- Foreign Securities. "Foreign securities" include equity and debt
securities of companies organized under the laws of countries other than
the United States and debt securities of foreign governments that are
traded on foreign securities exchanges or in the foreign over-the-counter
markets. Securities of foreign issuers that are represented by American
Depository Receipts or that are listed on a U.S. securities exchange or
traded in the U.S. over-the-counter markets are not considered "foreign
securities" for the purpose of the Fund's investment allocations, because
they are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held abroad.
Investing in foreign securities offers the Fund potential benefits
not available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear to
offer growth potential, or in foreign countries with economic policies or
business cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of foreign stock
markets that do not move in a manner parallel to U.S. markets. If the
Fund's portfolio securities are held abroad, the countries in which such
securities may be held and the sub-custodians or depositories holding them
must be approved by the Corporation's Board of Directors to the extent
that approval is required under applicable rules of the Securities and
Exchange Commission. In buying foreign securities, the Fund may convert
U.S. dollars into foreign currency, but only to effect securities
transactions on foreign securities exchanges and not to hold such
securities as an investment.
- Risks of Foreign Investing. Investing in foreign securities
involves special additional risks and considerations not typically
associated with investing in securities of issuers traded in the U.S.
These include: reduction of income by foreign taxes; fluctuation in value
of foreign portfolio investments due to changes in currency rates and
control regulations (e.g., currency blockage); transaction charges for
currency exchange; lack of public information about foreign issuers; lack
of uniform accounting, auditing and financial reporting standards
comparable to those applicable to domestic issuers; less volume on foreign
exchanges than on U.S. exchanges; greater volatility and less liquidity
on foreign markets than in the U.S.; less regulation of foreign issuers,
stock exchanges and brokers than in the U.S.; greater difficulties in
commencing lawsuits and obtaining judgments in foreign courts; higher
brokerage commission rates than in the U.S.; increased risks of delays in
settlement of portfolio transactions or loss of certificates for portfolio
securities; possibilities in some countries of expropriation or
nationalization of assets, confiscatory taxation, political, financial or
social instability or adverse diplomatic developments; and unfavorable
differences between the U.S. economy and foreign economies. In the past,
U.S. Government policies have discouraged certain investments abroad by
U.S. investors, through taxation or other restrictions, and it is
possible that such restrictions could be re-imposed.
Emerging Markets. The Fund may invest in emerging market countries.
Certain developing countries may have relatively unstable governments,
economies based on only a few industries that are dependent upon
international trade and reduced secondary market liquidity. Foreign
investment in certain emerging market counties is restricted or controlled
in varying degrees. In the past, securities in these countries have
experienced greater price movement, both positive and negative, than
securities of companies located in developed countries. Lower-rated high-
yielding emerging market securities may be considered to have speculative
elements.
- U.S. Government Securities. Obligations of U.S. Government
agencies or instrumentalities (including mortgage-backed securities) may
or may not be guaranteed or supported by the "full faith and credit" of
the United States. Some are backed by the right of the issuer to borrow
from the U.S. Treasury; others, by discretionary authority of the U.S.
Government to purchase the agencies' obligations; while others are
supported only by the credit of the instrumentality. All U.S. Treasury
obligations are backed by the full faith and credit of the United States.
If the securities are not backed by the full faith and credit of the
United States, the owner of the securities must look principally to the
agency issuing the obligation for repayment and may not be able to assert
a claim against the United States in the event that the agency or
instrumentality does not meet its commitment. The Fund will invest in
U.S. Government Securities of such agencies and instrumentalities only
when the Manager is satisfied that the credit risk with respect to such
instrumentality is minimal.
- Money Market Securities. As stated in the Prospectus, the Fund
typically invests a part of its assets in money market securities, and may
invest up to 100% of its total assets in money market securities for
temporary defensive purposes. Money market securities in which the Fund
may invest include the following:
- Time Deposits and Variable Rate Notes. The Fund may invest in
fixed time deposits, whether or not subject to withdrawal penalties.
However, investment in such deposits which are subject to withdrawal
penalties, other than overnight deposits, are subject to the 15% limit on
illiquid investments set forth in the Prospectus for the Fund.
The commercial paper obligations which the Fund may buy are unsecured
and may include variable rate notes. The nature and terms of a variable
rate note (i.e., a "Master Note") permit the Fund to invest fluctuating
amounts at varying rates of interest pursuant to a direct arrangement
between the Fund as lender, and the issuer, as borrower. It permits daily
changes in the amounts borrowed. The Fund has the right at any time to
increase, up to the full amount stated in the note agreement, or to
decrease the amount outstanding under the note. The issuer may prepay at
any time and without penalty any part or the full amount of the note. The
note may or may not be backed by one or more bank letters of credit.
Because these notes are direct lending arrangements between the Fund and
the issuer, it is not generally contemplated that they will be traded;
moreover, there is currently no secondary market for them. Except as
specifically provided in the Prospectus for the Fund, there is no
limitation on the type of issuer from whom these notes will be purchased.
However, in connection with such purchase and on an ongoing basis, OpCap
Advisors (the "Subadvisor") 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. The Fund will not invest more than 5%
of its total assets in variable rate notes. Variable rate notes are
subject to the Fund's investment restriction on illiquid securities unless
such notes can be put back to the issuer on demand within seven days.
- Insured Bank Obligations. The Federal Deposit Insurance
Corporation ("FDIC") insures the deposits of federally insured banks and
savings and loan associations (collectively referred to as "banks") up to
$100,000. The Fund may, within the limits set forth in the Prospectus,
purchase bank obligations which are fully insured as to principal by the
FDIC. Currently, to remain fully insured as to principal, these
investments must be limited to $100,000 per bank. If the principal amount
and accrued interest together exceed $100,000, the excess principal and
accrued interest will not be insured. Insured bank obligations may have
limited marketability. Unless the Board of Directors determines that a
readily available market exists for such obligations, the Fund will treat
such obligations as subject to the 15% limit for illiquid investments set
forth in the Prospectus for the Fund unless such obligations are payable
at principal amount plus accrued interest on demand or within seven days
after demand.
- Convertible Securities. The Fund may invest in fixed-income
securities which are convertible into common stock. Convertible
securities rank senior to common stocks in a corporation's capital
structure and, therefore, entail less risk than the corporation's common
stock. The value of a convertible security is a function of its
"investment value" (its value as if it did not have a conversion
privilege), and its "conversion value" (the security's worth if it were
to be exchanged for the underlying security, at market value, pursuant to
its conversion privilege).
To the extent that a convertible security's investment value is
greater than its conversion value, its price will be primarily a
reflection of such investment value and its price will be likely to
increase when interest rates fall and decrease when interest rates rise,
as with a fixed-income security (the credit standing of the issuer and
other factors may also have an effect on the convertible security's
value). If the conversion value exceeds the investment value, the price
of the convertible security will rise above its investment value and, in
addition, will sell at some premium over its conversion value. (This
premium represents the price investors are willing to pay for the
privilege of purchasing a fixed-income security with a possibility of
capital appreciation due to the conversion privilege.) At such times the
price of the convertible security will tend to fluctuate directly with the
price of the underlying equity security. Convertible securities may be
purchased by the Fund at varying price levels above their investment
values and/or their conversion values in keeping with the Fund's
objectives.
- Investment Risks of Fixed-Income Securities. All fixed-income
securities are subject to two types of risks: credit risk and interest
rate risk. Credit risk relates to the ability of the issuer to meet
interest or principal payments on a security as they become due.
Generally, higher yielding lower-grade bonds are subject to credit risk
to a greater extent than lower yielding, investment grade bonds. Interest
rate risk refers to the fluctuations in value of fixed-income securities
resulting solely from the inverse relationship between price and yield of
outstanding fixed-income securities. An increase in prevailing interest
rates will generally reduce the market value of already-issued fixed-
income investments, and a decline in interest rates will tend to increase
their value. In addition, debt securities with longer maturities, which
tend to produce higher yields, are subject to potentially greater changes
in their prices from changes in interest rates than obligations with
shorter maturities. Fluctuations in the market value of fixed-income
securities after the Fund buys them will not affect the interest payable
on those securities, nor the cash income from such securities. However,
those price fluctuations will be reflected in the valuations of these
securities and therefore the Fund's net asset values.
- Lower-Grade Securities. The Fund may invest up to 5% of its assets
in bonds rated below "BBB" by Standard & Poor's Corporation, or "Baa3" by
Moody's Investors Service, Inc. (commonly known as "high yield" or "junk
bonds"), or that have a comparable rating from another rating
organization. If unrated, the security must be determined by the Sub-
Adviser to be of comparable quality to securities rated less than
investment grade.
Special Risks of Lower-Grade Securities. High yield, lower-grade
securities, whether rated or unrated, often have speculative
characteristics. Lower-grade securities have special risks that make them
riskier investments than investment grade securities. They may be subject
to greater market fluctuations and risk of loss of income and principal
than lower yielding, investment-grade securities. There may be less of
a market for them and therefore they may be harder to sell at an
acceptable price. There is a relatively greater possibility that the
issuer's earnings may be insufficient to make the payments of interest due
on the bonds. The issuer's low creditworthiness may increase the
potential for its insolvency.
These risks mean that the Fund may not achieve the expected income
from lower-grade securities, and that the Fund's net asset value per share
may be affected by declines in value of these securities. However, the
Fund's limitations on investments in these types of securities may reduce
some of the risk, as will the Fund's policy of diversifying its
investments.
- Rights and Warrants. The Fund may not invest more than 5% of its
assets at the time of purchase in warrants (other than those that have
been acquired in units or attached to other securities). Of such 5%, not
more than 2% of the assets at the time of purchase may be invested in
warrants that are not listed on the New York or American Stock Exchanges.
Warrants basically are options to purchase equity securities at specific
prices valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights
with respect to the assets of the issuer.
- Investing in Small, Unseasoned Companies. The securities of small,
unseasoned companies may have a limited trading market, which may
adversely affect the Fund's ability to dispose of them and can reduce the
price the Fund might be able to obtain for them. If other investment
companies and investors that invest in this type of securities trade the
same securities when the Fund attempts to dispose of its holdings, the
Fund may receive lower prices than might otherwise be obtained, because
of the thinner market for such securities.
Other Investment Techniques and Strategies.
- Borrowing. From time to time, the Fund may increase its ownership
of securities by borrowing from banks on a unsecured basis and investing
the borrowed funds, subject to the restrictions stated in the Prospectus.
Any such borrowing will be made only from banks, and pursuant to the
requirements of the Investment Company Act, will be made only to the
extent that the value of that Fund's assets, less its liabilities other
than borrowings, is equal to at least 300% of all borrowings including the
proposed borrowing and amounts covering the Fund's obligations under
"forward roll" transactions. If the value of the Fund's assets so computed
should fail to meet the 300% asset coverage requirement, the Fund is
required within three days to reduce its bank debt to the extent necessary
to meet such requirement and may have to sell a portion of its investments
at a time when independent investment judgment would not dictate such
sale. Borrowing for investment increases both investment opportunity and
risk. Since substantially all of the Fund's assets fluctuate in value,
but borrowing obligations are fixed, when the Fund has outstanding
borrowings, its net asset value per share correspondingly will tend to
increase and decrease more when portfolio assets fluctuate in value than
otherwise would be the case.
- When-Issued Securities. The Fund may take advantage of offerings
of eligible portfolio securities on a "when-issued" basis where delivery
of and payment for such securities take place sometime after the
transaction date on terms established on such date. Normally, settlement
on U.S. Government securities takes place within ten days. The Fund only
will make when-issued commitments on eligible securities with the
intention of actually acquiring the securities. If the Fund chooses to
dispose of the right to acquire a when-issued security prior to its
acquisition, it could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation. When-issued
commitments will not be made if, as a result, more than 15% of the net
assets of the Fund would be so committed.
- Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Fund
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund purchases a security from, and
simultaneously resells it to, an approved vendor (a U.S. commercial bank
or the U.S. branch of a foreign bank or a broker-dealer with a net worth
of at least $50 million and which has been designated a primary dealer in
government securities, which must meet credit requirements set by the
Fund's Board of Directors from time to time) for delivery on an agreed-on
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. The majority of these
transactions run from day to day, and delivery pursuant to the resale
typically will occur within one to five days of the purchase. Repurchase
agreements are considered "loans" under the Investment Company Act,
collateralized by the underlying security. The Fund's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the
Manager will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the collateral's
value.
- Illiquid and Restricted Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933, the
Fund may have to cause those securities to be registered. The expenses
of registration of restricted securities may be negotiated by the Fund
with the issuer at the time such securities are purchased by the Fund,
if such registration is required before such securities may be sold
publicly. When registration must be arranged because the Fund wishes to
sell the security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would be
permitted to sell them. The Fund would bear the risks of any downward
price fluctuation during that period. The Fund may also acquire, through
private placements, securities having contractual restrictions on their
resale, which might limit the Fund's ability to dispose of such securities
and might lower the amount realizable upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions do
not limit purchases of restricted securities that are eligible for sale
to qualified institutional purchasers pursuant to Rule 144A under the
Securities Act of 1933, provided that those securities have been
determined to be liquid by the Board of Directors of the Fund or by the
Sub-Advisor under Board-approved guidelines. Those guidelines take into
account the trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's holding
of that security may be deemed to be illiquid.
- Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must at least equal the value of the
loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities).
To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund.
When it lends securities, the Fund receives amounts equal to the dividends
or interest on loaned securities and also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on 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.
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.
- Hedging With Options and Futures Contracts. The Fund may employ one
or more types of Hedging Instruments for the purposes described in the
Prospectus. When hedging to attempt to protect against declines in the
market value of the Fund's portfolio, or to permit the Fund to retain
unrealized gains in the value of portfolio securities which have
appreciated, or to facilitate selling securities for investment reasons,
the Fund may: (i) sell Stock Index Futures, (ii) buy puts, or (iii) write
covered calls (as described in the Prospectus). When hedging to establish
a position in the equity securities markets as a temporary substitute for
the purchase of individual equity securities the Fund may: (i) buy Stock
Index Futures, or (ii) buy calls on Stock Index Futures. Normally, the
Fund would then purchase the equity securities and terminate the hedging
portion.
The Fund's strategy of hedging with Futures and options on Futures will
be incidental to the Fund's investment activities in the underlying cash
market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be
subsequently developed, to the extent such investment methods are
consistent with the Fund's investment objective, and are legally
permissible and disclosed in the Prospectus. Additional information about
the hedging instruments the Fund may use is provided below.
- - Writing Call Options. As described in the Prospectus, the Fund may
write covered calls. When the Fund writes a call on an investment, it
receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment) regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing
purchase transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the premium
received on the call the Fund has written is more or less than the price
of the call the Fund subsequently purchased. A profit may also be
realized if the call lapses unexercised because the Fund retains the
underlying investment and the premium received. Those profits are
considered short-term capital gains for Federal income tax purposes, as
are premiums on lapsed calls, and when distributed by the Fund are taxable
as ordinary income. If the Fund could not effect a closing purchase
transaction due to the lack of a market, it would have to hold the
callable investment until the call lapsed or was exercised.
The Fund may also write calls on Futures without owning a futures contract
or deliverable securities, provided that at the time the call is written,
the Fund covers the call by segregating in escrow an equivalent dollar
value of deliverable securities or liquid assets. The Fund will segregate
additional liquid assets if the value of the escrowed assets drops below
100% of the current value of the Future. In no circumstances would an
exercise notice as to a Future put the Fund in a short futures position.
- - Writing Put Options. A put option on securities gives the purchaser the
right to sell, and the writer the obligation to buy, the underlying
investment at the exercise price during the option period. Writing a put
covered by segregated liquid assets equal to the exercise price of the put
has the same economic effect to the Fund as writing a covered call. The
premium the Fund receives from writing a put option represents a profit,
as long as the price of the underlying investment remains above the
exercise price. However, the Fund has also assumed the obligation during
the option period to buy the underlying investment from the buyer of the
put at the exercise price, even though the value of the investment may
fall below the exercise price. If the put expires unexercised, the Fund
(as the writer of the put) realizes a gain in the amount of the premium
less transaction costs. If the put is exercised, the Fund must fulfill
its obligation to purchase the underlying investment at the exercise
price, which will usually exceed the market value of the investment at
that time. In that case, the Fund may incur a loss, equal to the sum of
the current market value of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs
incurred.
When writing put options on securities, to secure its obligation to pay
for the underlying security, the Fund will deposit in escrow liquid assets
with a value equal to or greater than the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of investing the
segregated assets or writing calls against those assets. As long as the
obligation of the Fund as the put writer continues, it may be assigned an
exercise notice by the exchange or broker-dealer through whom such option
was sold, requiring the Fund to exchange currency at the specified rate
of exchange or to take delivery of the underlying security against payment
of the exercise price. The Fund may have no control over when it may be
required to purchase the underlying security, since it may be assigned an
exercise notice at any time prior to the termination of its obligation as
the writer of the put. This obligation terminates upon expiration of the
put, or such earlier time at which the Fund effects a closing purchase
transaction by purchasing a put of the same series as that previously
sold. Once the Fund has been assigned an exercise notice, it is
thereafter not allowed to effect a closing purchase transaction.
The Fund may effect a closing purchase transaction to realize a profit on
an outstanding put option it has written or to prevent an underlying
security from being put. Furthermore, effecting such a closing purchase
transaction will permit the Fund to write another put option to the extent
that the exercise price thereof is secured by the deposited assets, or to
utilize the proceeds from the sale of such assets for other investments
by the Fund. The Fund will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more than
the premium received from writing the option. As above for writing
covered calls, any and all such profits described herein from writing puts
are considered short-term capital gains for Federal tax purposes, and when
distributed by the Fund, are taxable as ordinary income.
- - Purchasing Puts and Calls. The Fund may purchase calls to protect
against the possibility that the Fund's portfolio will not participate in
an anticipated rise in the securities market. When the Fund purchases a
call (other than in a closing purchase transaction), it pays a premium
and, except as to calls on stock indices, has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. In
purchasing a call, the Fund benefits only if the call is sold at a profit
or if, during the call period, the market price of the underlying
investment is above the sum of the exercise price, transaction costs, and
the premium paid, and the call is exercised. If the call is not exercised
or sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the right
to purchase the underlying investment. When the Fund purchases a call on
a stock index, it pays a premium, but settlement is in cash rather than
by delivery of the underlying investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to puts
on stock indices, has the right to sell the underlying investment to a
seller of a corresponding put on the same investment during the put period
at a fixed exercise price. Buying a put on an investment the Fund owns
(a "protective put") enables the Fund to attempt to protect itself during
the put period against a decline in the value of the underlying investment
below the exercise price by selling the underlying investment at the
exercise price to a seller of a corresponding put. If the market price
of the underlying investment is equal to or above the exercise price and
as a result the put is not exercised or resold, the put will become
worthless at its expiration and the Fund will lose the premium payment and
the right to sell the underlying investment. However, the put may be sold
prior to expiration (whether or not at a profit).
Buying a put on a investment it does not own, either a put on an index
or a put on a Stock Index Future not held by the Fund, permits the Fund
either to resell the put or buy the underlying investment and sell it at
the exercise price. The resale price of the put will vary inversely with
the price of the underlying investment. If the market price of the
underlying investment is above the exercise price and as a result the put
is not exercised, the put will become worthless on its expiration date.
In the event of a decline in the stock market, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its loss on
its portfolio securities. When the Fund purchases a put on an index, or
on a Future not held by it, the put protects the Fund to the extent that
the index or Future moves in a similar pattern to the securities held.
In the case of a put on an index or Future, settlement is in cash rather
than by delivery by the Fund of the underlying investment.
Puts and calls on broadly-based stock indices or Stock Index Futures are
similar to puts and calls on securities or futures contracts except that
all settlements are in cash and gain or loss depends on changes in the
index in question (and thus on price movements in the stock market
generally) rather than on price movements of individual securities or
futures contracts. When the Fund buys a call on a stock index or Stock
Index Future, it pays a premium. If the Fund exercises the call during
the call period, a seller of a corresponding call on the same investment
will pay the Fund an amount of cash to settle the call if the closing
level of the stock index or Future upon which the call is based is greater
than the exercise price of the call. That cash payment is equal to the
difference between the closing price of the call and the exercise price
of the call times a specified multiple (the "multiplier") which determines
the total dollar value for each point of difference. When the Fund buys
a put on a stock index or Stock Index Future, it pays a premium and has
the right during the put period to require a seller of a corresponding
put, upon the Fund's exercise of its put, to deliver cash to the Fund to
settle the put if the closing level of the stock index or Stock Index
Future upon which the put is based is less than the exercise price of the
put. That cash payment is determined by the multiplier, in the same
manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock Index Future
not owned by it, the put protects the Fund to the extent that the index
moves in a similar pattern to the securities the Fund holds. The Fund can
either resell the put or, in the case of a put on a Stock Index Future,
buy the underlying investment and sell it at the exercise price. The
resale price of the put will vary inversely with the price of the
underlying investment. If the market price of the underlying investment
is above the exercise price, and as a result the put is not exercised, the
put will become worthless on the expiration date. In the event of a
decline in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its loss on
its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause
the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds is within the
Fund's control, holding a put might cause the Fund to sell the related
investments for reasons that would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys or sells a
call, put or an underlying investment in connection with the exercise of
a put or call. Those commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value of the
underlying investments and, consequently, put and call options offer large
amounts of leverage. The leverage offered by trading in options could
result in the Fund's net asset value being more sensitive to changes in
the value of the underlying investments.
- - Stock Index Futures. As described in the Prospectus, the Fund may
invest in Stock Index Futures only if they relate to broadly-based stock
indices. A stock index is considered to be broadly-based if it includes
stocks that are not limited to issuers in any particular industry or group
of industries. A stock index assigns relative values to the common stocks
included in the index and fluctuates with the changes in the market value
of those stocks. Stock indices cannot be purchased or sold directly.
Stock index futures are contracts based on the future value of the basket
of securities that comprise the underlying stock index. The contracts
obligate the seller to deliver, and the purchaser to take, cash to settle
the futures transaction or to enter into an offsetting contract. No
physical delivery of the securities underlying the index is made on
settling the futures obligation. No monetary amount is paid or received
by the Fund on the purchase or sale of a Stock Index Future. Upon
entering into a Futures transaction, the Fund will be required to deposit
an initial margin payment, in cash or U.S. Treasury bills, with the
futures commission merchant (the "futures broker"). Initial margin
payments will be deposited with the Fund's Custodian in an account
registered in the futures broker's name; however, the futures broker can
gain access to that account only under certain specified conditions. As
the Future is marked to market (that is, its value on the Fund's books is
changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures
broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may elect to
close out its position by taking an opposite position, at which time a
final determination of variation margin is made and additional cash is
required to be paid by or released to the Fund. Any gain or loss is then
realized by the Fund on the Future for tax purposes. Although Stock Index
Futures by their terms call for settlement by the delivery of cash, in
most cases the settlement obligation is fulfilled without such delivery
by entering into an offsetting transaction. All futures transactions are
effected through a clearing house associated with the exchange on which
the contracts are traded.
- - Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain guidelines and restrictions with respect to its use
of futures and options thereon as established by the Commodities Futures
Trading Commission ("CFTC"). In particular, the Fund is excluded from
registration as a "commodity pool operator" if it complies with the
requirements of Rule 4.5 adopted by the CFTC. Under this Rule, the Fund
is not limited regarding the percentage of its assets committed to futures
margins and related options premiums subject to a hedge position.
However, aggregate initial futures margins and related options premiums
are limited to 5% or less of the Fund's net asset value for other than
bona fide hedging strategies employed by the Fund within the meaning and
intent of applicable provisions of the Commodity Exchange Act and CFTC
regulations thereunder.
Transactions in options by the Fund are subject to limitations established
by option exchanges governing the maximum number of options that may be
written or held by a single investor or group of investors acting in
concert, regardless of whether the options were written or purchased on
the same or different exchanges or are held in one or more accounts or
through one or more different exchanges or through one or more brokers.
Thus the number of options which the Fund may write or hold may be
affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser
that is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Stock Index Future, the Fund will maintain, in a segregated
account or accounts with its custodian, cash or readily-marketable, short-
term (maturing in one year or less) debt instruments in an amount equal
to the market value of the securities underlying such Future, less the
margin deposit applicable to it.
- - Additional Information About Hedging Instruments and Their Use. The
Fund's Custodian, or a securities depository acting for the Custodian,
will act as the Fund's escrow agent, through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has
written options traded on exchanges or as to other acceptable escrow
securities, so that no margin will be required for such transactions. OCC
will release the securities on the expiration of the option or upon the
Fund's entering into a closing transaction. An option position may be
closed out only on a market which provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option.
When the Fund writes an over-the-counter("OTC") option, it will enter into
an arrangement with a primary U.S. Government securities dealer, which
would establish a formula price at which the Fund would have the absolute
right to repurchase that OTC option. That formula price would generally
be based on a multiple of the premium received for the option, plus the
amount by which the option is exercisable below the market price of the
underlying security (that is, the extent to which the option is "in-the-
money"). When the Fund writes an OTC option, it will treat as illiquid
(for purposes of the limit on its assets that may be invested in the
illiquid securities, stated in the Prospectus) the mark-to-market value
of any OTC option held by it. The Securities and Exchange Commission
("SEC") is evaluating whether OTC options should be considered liquid
securities, and the procedure described above could be affected by the
outcome of that evaluation.
The Fund's option activities may affect its turnover rate and brokerage
commissions. The exercise of calls written by the Fund may cause the Fund
to sell related portfolio securities, thus increasing its turnover rate
in a manner beyond the Fund's control. The exercise by the Fund of puts
on securities will cause the sale of related investments, increasing
portfolio turnover. Although such exercise is within the Fund's control,
holding a put might cause the Fund to sell the related investments for
reasons which would not exist in the absence of the put. The Fund will
pay a brokerage commission each time it buys a put or call, sells a call,
or buys or sells an underlying investment in connection with the exercise
of a put or call. Such commissions may be higher than those which would
apply to direct purchases or sales of such underlying investments.
Premiums paid for options are small in relation to the market value of the
related investments, and consequently, put and call options offer large
amounts of leverage. The leverage offered by trading options could result
in the Fund's net asset value being more sensitive to changes in the value
of the underlying investments.
- - Tax Aspects of Covered Calls and Hedging Instruments. The Fund intends
to qualify as a "regulated investment company" under the Internal Revenue
Code (although it reserves the right not to qualify). That qualification
enables the Fund to "pass through" its income and realized capital gains
to shareholders without the Fund having to pay tax on them. This avoids
a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Stock Index Futures, held for less than three
months, whether or not they were purchased on the exercise of a call held
by the Fund; (ii) purchasing options which expire in less than three
months; (iii) effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv) exercising
puts or calls held by the Fund for less than three months; or (v) writing
calls on investments held less than three months.
Certain foreign currency exchange contracts ("Forward Contracts") in which
the Fund may invest are treated as "section 1256 contracts." Gains or
losses relating to section 1256 contracts generally are characterized
under the Internal Revenue Code as 60% long-term and 40% short-term
capital gains or losses. However, foreign currency gains or losses
arising from certain section 1256 contracts (including Forward Contracts)
generally are treated as ordinary income or loss. In addition, section
1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses are
treated as though they were realized. These contracts also may be marked-
to-market for purposes of the excise tax applicable to investment company
distributions and for other purposes under rules prescribed pursuant to
the Internal Revenue Code. An election can be made by the Fund to exempt
these transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a position
making up a straddle is allowed only to the extent such loss exceeds any
unrecognized gain in the offsetting positions making up the straddle.
Disallowed loss is generally allowed at the point where there is no
unrecognized gain in the offsetting positions making up the straddle, or
the offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates that occur between the time the Fund
accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on disposition
of debt securities denominated in a foreign currency and on disposition
foreign currency forward contracts, gains or losses attributable to
fluctuations in the value of a foreign currency between the date of
acquisition of the security or contract and the date of the disposition
also are treated as an ordinary gain or loss. Currency gains and losses
are offset against market gains and losses on each trade before
determining a net "section 988" gain or loss under the Internal Revenue
Code, which may ultimately increase or decrease the amount of the Fund's
investment company income available for distribution to its shareholders.
- Additional Risk Factors in Hedging. An option position may be closed
out only on a market that provides secondary trading for options of the
same series, and there is no assurance that a liquid secondary market will
exist for any particular option. An option position may be closed out
only a market that provides secondary trading for options of the same
series, and there is no assurance that a liquid secondary market will
exist for any particular option. In addition to the risks with respect
to options discussed in the Prospectus and above, there is a risk in using
short hedging by (i) selling Stock Index Futures or (ii) purchasing puts
on stock indices or Stock Index Futures to attempt to protect against
declines in the value of the Fund's equity securities. The risk is that
the prices of Stock Index Futures will correlate imperfectly with the
behavior of the cash (i.e., market value) prices of the Fund's equity
securities. The ordinary spreads between prices in the cash and futures
markets are subject to distortions, due to differences in the natures of
those markets. First, all participants in the futures markets are subject
to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close out futures
contracts through offsetting transactions which could distort the normal
relationship between the cash and futures markets. Second, the liquidity
of the futures markets depends on participants entering into offsetting
transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures
markets could be reduced, thus producing distortion. Third, from the
point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the equity securities being hedged and movements in the price of
the hedging instruments, the Fund may use hedging instruments in a greater
dollar amount than the dollar amount of equity securities being hedged if
the historical volatility of the prices of the equity securities being
hedged is more than the historical volatility of the applicable index.
It is also possible that if the Fund has used hedging instruments in a
short hedge, the market may advance and the value of equity securities
held in the Fund's portfolio may decline. If that occurred, the Fund would
lose money on the hedging instruments and also experience a decline in
value in its portfolio securities. However, while this could occur for
a very brief period or to a very small degree, over time the value of a
diversified portfolio of equity securities will tend to move in the same
direction as the indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of individual
equity securities (long hedging) by buying Stock Index Futures and/or
calls on such Futures, on securities or on stock indices, it is possible
that the market may decline. If the Fund then concludes not to invest in
equity securities at that time because of concerns as to a possible
further market decline or for other reasons, the Fund will realize a loss
on the hedging instruments that is not offset by a reduction in the price
of the equity securities purchased.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in the
Prospectus. There are additional investment restrictions that the Fund
must follow that are also fundamental policies. Fundamental policies and
the Fund's investment objective cannot be changed without the vote of a
"majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such a majority vote is defined as the vote of the
holders of the lesser of: (i) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy, or (ii)
more than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot:
- Invest in real estate or interests in real estate (including
limited partnership interests), but may purchase readily marketable
securities of companies holding real estate or interests therein;
- Purchase securities on margin;
- Underwrite securities of other companies, except insofar as it
might be deemed to be an underwriter for purposes of the Securities
Act of 1933 in the resale of any securities held in its own portfolio
(except that the Fund may in the future invest all of its investable
assets in an open-end management investment company with
substantially the same investment objective and restrictions as the
Fund);
- Mortgage, hypothecate or pledge any of its assets;
- Invest or hold securities of any issuer if the Officers and
Directors of the Fund or its Manager or Subadvisor owning
individually more then 1/2 of 1% of the securities of such issuer
together own more than 5% of the securities of such issuer; or
- Invest in companies for the primary purpose of acquiring control
or management thereof (except that the Fund may in the future invest
all of its investable assets in an open-end management investment
company with substantially the same investment objective and
restrictions as the Fund);
- Invest in physical commodities or physical commodity contracts,
or speculate in financial commodity contracts, but may purchase and
sell stock futures contracts and options on such futures contracts
exclusively for hedging purposes;
- Write, purchase or sell puts, calls, or combinations thereof on
individual stocks, but may purchase or sell exchange traded put and
call options on stock indices to protect the Fund's assets.
In addition, the Fund may not, with respect to 75% of its assets,
invest more than 5% of the value of its total assets in the securities of
any one issuer. In connection with the registration of its shares in
certain states, the Fund has made the following undertakings. These
undertakings shall terminate if the Fund ceases to qualify its shares for
sale in that state or if the state's applicable rules or regulations are
amended. The Fund has agreed not to make loans to any person or
individual (except that portfolio securities may be loaned within the
limitations set forth in the Prospectus), not to make short sales of
securities except "against-the-box" and not to invest in interests in oil,
gas or other mineral exploration or development programs or leases.
How the Fund is Managed
Organization and History. Oppenheimer Quest Value Fund, Inc. (referred
to as the "Fund") is organized as a Maryland Corporation. This Statement
of Additional Information may be used with the Fund's Prospectus only to
offer shares of the Fund.
The Directors are authorized to create new series and classes of
series. The Directors may reclassify unissued shares of the Fund or
classes into additional classes of shares. The Directors may also divide
or combine the shares of a class into a greater or lesser number of shares
without thereby 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.
As a Maryland corporation, the Fund is not required to hold, and does
not plan to hold, regular annual meetings of shareholders. The Fund will
hold meetings when required to do so by the Investment Company Act or
other applicable law, or when a shareholder meeting is called by the
Directors or upon proper request of the 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 and entitles the holder to
one vote per share (and a fractional vote for a fractional share) on
matters submitted to their vote at shareholders' meetings. Shareholders
of the Fund vote together in the aggregate on certain matters at
shareholders' meetings, such as the election of Directors and ratification
of appointment of auditors for the Fund. Shareholders of a particular
class vote separately on proposals which affect that class, and
shareholders of a class which is not affected by that matter are not
entitled to vote on the proposal. For example, only shareholders of a
class of a series vote on certain amendments to the Distribution and/or
Service Plans if the amendments affect that class.
Directors and Officers of the Fund. The Fund's Directors and officers,
and the Fund's portfolio manager (who is not an officer), are listed
below, together with principal occupations and business affiliations
during the past five years. The address of each is Two World Trade
Center, New York, New York 10048, except as noted. All of the Directors
are also directors or trustees of Oppenheimer Quest Global Value Fund,
Inc., Oppenheimer Quest For Value Funds (collectively, the "Oppenheimer
Quest Funds") and Rochester Fund Municipals, Rochester Portfolio Series
and Bond Fund Series, Oppenheimer Bond Fund for Growth (collectively the
"Rochester Funds"). As of _______, 1996, the directors and officers of
the Fund as a group owned less than 1% of each class of shares of the
Fund. The foregoing does not include shares held of record by an employee
benefit plan for employees of the Manager for which plan one of the
officers listed below, Mr. Donohue, is a trustee, other than the shares
beneficially owned under that plan by officers of the Fund listed
below.
Bridget A. Macaskill, Chairman of the Board of Directors and
President*; Age: 48.
President, Chief Executive Officer and a Director of the Manager and
HarbourView Asset Management Corporation ("HarbourView"), a subsidiary of
the Manager; President and a Director of Oppenheimer Acquisition Corp.
("OAC"), the Manager's parent holding company, and Oppenheimer Partnership
Holdings, Inc.; Chairman and a Director of Shareholder Services, Inc.
("SSI"), a transfer agent subsidiary of the Manager and Shareholder
Financial Services, Inc. ("SFSI"); and a director of Oppenheimer Real
Asset Management, Inc.
Paul Y. Clinton, Director; Age: 65
39 Blossom Avenue, Osterville, Massachusetts 02655
Principal of Clinton Management Associates, a financial and venture
capital consulting firm; Trustee of Capital Cash Management Trust, a
money-market fund and Narraganssett Tax-Free Fund, a tax-exempt bond fund;
Director of Quest Cash Reserves, Inc. and Trustee of Quest For Value
Accumulation Trust, all of which are open-end investment companies.
Formerly: Director, External Affairs, Kravco Corporation, a national real
estate owner and property management corporation; President of Essex
Management Corporation, a management consulting company; a general
partner of Capital Growth Fund, a venture capital partnership; a general
partner of Essex Limited Partnership, an investment partnership; President
of Geneve Corp., a venture capital fund; Chairman of Woodland Capital
Corp., a small business investment company; and Vice President of W.R.
Grace & Co.
Thomas W, Courtney, Director; Age: 63
P.O. Box 580, Sewickley, Pennsylvania 15143
Principal of Courtney Associates, Inc. (venture capital firm); former
General Partner of Trivest Venture Fund (private venture capital fund);
former President of Investment Counseling Federated Investors, Inc.;
Trustee of Cash Assets Trust, a money market fund; Director of Quest Cash
Reserves, Inc., and Trustee of Quest for Value Accumulation Trust, all of
which are open-end investment companies; former President of Boston
Company Institutional Investors; Trustee of Hawaiian Tax-Free Trust and
Tax Free Trust of Arizona, tax-exempt bond funds; Director of several
privately owned corporations; former Director of Financial Analysts
Federation.
_________________________
* A Director who is an "interested person" as defined in the Investment
Company Act.
Lacy B. Herrmann, Director; Age: 67
380 Madison Avenue, Suite 2300, New York, New York 10017
President and Chairman of the Board of Aquila Management Corporation, the
sponsoring organization and Administrator and/or Sub-Adviser to the
following open-end investment companies, and Chairman of the Board of
Trustees and President of each: Churchill Cash Reserves Trust, Short Term
Asset Reserves, Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Treasuries Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust,
Prime Cash Fund, Narragansett Insured Tax-Free Income Fund, Tax-Free Fund
For Utah, Churchill Tax-Free Fund of Kentucky, Tax-Free Fund of Colorado,
Tax-Free Trust of Oregon, Tax-Free Trust of Arizona, Hawaiian Tax-Free
Trust, and Aquila Rocky Mountain Equity Fund; Vice President, Director,
Secretary, and formerly Treasurer of Aquila Distributors, Inc.,
distributor of the above funds; President and Chairman of the Board of
Trustees of Capital Cash Management Trust ("CCMT"), and an Officer and
Trustee/Director of its predecessors; President and Director of STCM
Management Company, Inc., sponsor and adviser to CCMT; Chairman, President
and a Director of InCap Management Corporation, formerly sub-adviser and
administrator of Prime Cash Fund and Short Term Asset Reserves; Director
of Quest Cash Reserves, Inc., and Trustee of Quest for Value Accumulation
Trust and The Saratoga Advantage Trust, each of which is an open-end
investment company; Trustee of Brown University.
George Loft, Director; Age: 81
51 Herrick Road, Sharon, Connecticut 06069
Private Investor; Director of Quest Cash Reserves, Inc., and Trustee of
Quest for Value Accumulation Trust and The Saratoga Advantage Trust, all
of which are open-end investment companies, and Director of the Quest for
Value Dual Purpose Fund, Inc., a closed-end investment company.
Robert C. Doll, Jr., Vice President; Age: 42
Executive Vice President and Director of Equity Investments of the
Manager; a Vice President and director of OAC an officer and Portfolio
Manager of other Oppenheimer funds.
Andrew J. Donohue, Secretary; Age: 46
Executive Vice President and General Counsel of the Manager and
OppenheimerFunds Distributor, Inc. (the "Distributor"); President and a
director of Centennial; Executive Vice President, General Counsel and a
director of HarbourView, SFSI, SSI and Oppenheimer Partnership Holdings
Inc.; President and a director of Real Asset Management, Inc.; General
Counsel of OAC; Executive Vice President, Chief Legal Officer and a
director of MultiSource Services, Inc. (a broker-dealer) an officer of
other Oppenheimer funds; formerly Senior Vice President and Associate
General Counsel of the Manager and the Distributor, partner in Kraft &
McManimon (a law firm), an officer of First Investors Corporation (a
broker-dealer) and First Investors Management Company, Inc. (broker-dealer
and investment adviser), and a director and an officer of First Investors
Family of Funds and First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age: 60
3410 South Galena Street Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President and
Treasurer of the Distributor and HarbourView; Senior Vice President,
Treasurer, Assistant Secretary and a director of Centennial Asset
Management Corporation, an investment advisory subsidiary of the Manager;
Vice President, Treasurer and Secretary of Shareholder Financial Services,
Inc. ("SFSI"), a transfer agent subsidiary of the Manager; Senior Vice
President and Secretary of SSI, Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc.; Chief Executive Officer,
Treasurer and a director of MultiSource Services, Inc. (a broker-dealer);
an officer of other Oppenheimer funds.
Robert G. Zack, Assistant Secretary; Age: 48
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other Oppenheimer
funds.
Robert J. Bishop, Assistant Treasurer; Age: 38
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager/Mutual Fund Accounting; an officer of other
Oppenheimer funds; formerly a Fund Controller for the Manager, prior to
which he was an Accountant for Yale & Seffinger, P.C., an accounting firm,
and previously an Accountant and Commissions Supervisor for Stuart James
Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age: 31
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager/Mutual Fund Accounting, an officer of other
Oppenheimer funds; previously a Fund Controller for the Manager, prior to
which he was an International Mutual Fund Supervisor for Brown Brothers
Harriman & Co. (a bank) and previously a Senior Fund Accountant for State
Street Bank & Trust Company.
Eileen Rominger, Portfolio Manager; Age: 42
Two World Financial Center, 225 Liberty Street, New York, New York 10080
Managing Director of Oppenheimer Capital.
- Remuneration of Directors. All officers of the Fund and Ms.
Macaskill, a Director, are officers or directors of the Manager and
receive no salary or fee from the Fund. The remaining Directors of the
Fund received the total amounts shown below from (i) the Fund during its
fiscal year ended October 31, 1996, (ii) for all the Oppenheimer Quest
Funds (including the Fund) and the Rochester Funds for which they served
as Trustee or Director during the fiscal year ended October 31, 1996, and
(iii) other investment companies (or series thereof) managed by OpCap
Advisors (the "Sub-Adviser") (previously named Quest for Value Advisors),
or an affiliate thereof, during the period November 1, 1995 to November
22, 1995 when OpCap Advisors, or an affiliate thereof, served as the
investment adviser to such funds (including the Fund).
<TABLE>
<CAPTION>
Pension or
Retirement
Aggregate Benefits Estimated Total
Compensation Accrued as Annual Compensation
from the Part of FundBenefits UponFrom Fund
Name of Person Fund Expenses Retirement Complex(1)
<S> <C> <C> <C> <C>
Paul Y. Clinton $ None None $
Thomas W. Courtney $ None None $
Lacy B. Herrmann $ None None $
George Loft $ None None $
</TABLE>
(1)For the purpose of the chart above, "Fund Complex" includes the Fund,
the other Oppenheimer Quest Funds, the Rochester Funds and the other
investment companies managed by the Sub-Adviser (or its affiliate).
- Major Shareholders. As of November __, 1996, no person owned of
record or was known by the Fund to own beneficially 5% or more of the
Fund's outstanding Class A, Class B or Class C shares except: (
). As of such date, the Manager was the sole record and
beneficial holder of Class Y shares.
The Manager and its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund and one of whom (Ms. Macaskill) also serves
as a Director of the Fund.
The Manager and the Fund have a Code of Ethics. In addition to
having its own Code of Ethics, the Sub-Adviser is subject to a reporting
obligation to the Manager under this Code of Ethics. The Code of Ethics
is designed to detect and prevent improper personal trading by certain
employees, including the Fund's portfolio manager, who is an employee of
the Sub-Adviser, that would compete with or take advantage of the Funds'
portfolio transactions. Compliance with the Code of Ethics is carefully
monitored and strictly enforced by the Manager.
- The Investment Advisory Agreement. The Manager acts as investment
adviser to the Fund pursuant to the terms of an Investment Advisory
Agreement dated as of November 22, 1995.
The Sub-Adviser previously served as the Fund's investment adviser from
the Fund's inception (April 30, 1980) to November 22, 1995.
Under the Investment Advisory Agreement, the Manager acts as the
investment adviser for the Fund and supervises the investment program of
the Fund. The Investment Advisory Agreement provides that the Manager
will provide administrative services for the Fund, including completion
and maintenance of records, preparation and filing of reports required by
the Securities and Exchange Commission, reports to shareholders, and
composition of proxy statements and registration statements required by
Federal and state securities laws. The Manager will furnish the Fund with
office space, facilities and equipment and arrange for its employees to
serve as officers of the Fund. The administrative services to be provided
by the Manager under the Investment Advisory Agreement will be at its own
expense, except that each class of shares of the Fund will pay the Manager
an annual fee for calculating the Fund's daily net asset value as follows:
Class A - $25,000; Class B - $18,000; and Class C - $12,000.
Expenses not assumed by the Manager under the Investment Advisory
Agreement or paid by the Distributor under the General Distributor's
Agreement will be paid by the Fund. Certain expenses are further
allocated to certain classes of shares of a series as explained in the
Prospectus and under "How to Buy Shares," below. The Investment Advisory
Agreement lists examples of expenses paid by the Fund, including interest,
taxes, brokerage commissions, insurance premiums, fees of non-interested
Directors, legal and audit expenses, transfer agent and custodian
expenses, share issuance costs, certain printing and registration costs,
and non-recurring expenses, including litigation. For the fiscal period
November 24, 1995 (when the Manager became the investment adviser to the
Fund) to October 31, 1996 (the "Fiscal Period"), the Fund paid to the
Manager $_________in management fees and paid or accrued accounting
service fees to the Manager in the amount of $____________.
The Investment Advisory Agreement contains no expense limitation.
However, independently of the Investment Advisory Agreement, the Manager
has voluntarily undertaken that the Fund's total expenses in any fiscal
year (including the investment advisory fee but exclusive of taxes,
interest, brokerage commissions, distribution plan payments and any
extraordinary non-recurring expenses, including litigation) shall not
exceed the most stringent state regulatory limitation application to the
Fund. At present, that limitation is imposed by California and limits
expenses (with specified exclusions) to 2.5% of the first $30 million of
average annual net assets, 2% of the next $70 million and 1.5% of average
annual net assets in excess of $100 million.
Pursuant to the undertaking, the Manager's fee at the end of any
month will be reduced or eliminated such that there will not be any
accrued but unpaid liability under this expense limitation. The Manager
reserves the right to terminate or amend the undertaking at any time. Any
assumption of the Fund's expenses under this undertaking would lower the
Fund's overall expense ratio and increase its total return during any
period in which expenses are limited.
The Investment Advisory Agreement provides that in the absence of
willful misfeasance, bad faith, or gross negligence in the performance of
its duty, or reckless disregard for its obligations and duties under the
advisory agreement, the Manager is not liable for any loss resulting from
good faith errors or omissions on its part with respect to any of its
duties thereunder. The Investment Advisory Agreement permits the Manager
to act as investment adviser for any other person, firm or corporation and
to use the name "Oppenheimer" in connection with its other investment
companies for which it may act as an investment adviser or general
distributor. If the Manager shall no longer act as investment adviser to
a Fund, the right of the Fund to use "Oppenheimer" as part of its name may
be withdrawn.
The Investment Advisory Agreement provides that the Manager may enter
into sub-advisory agreements with other affiliated or unaffiliated
registered investment advisers in order to obtain specialized services for
the Funds provided that the Fund is not required to pay any additional
fees for such services. The Manager has retained the Sub-Adviser pursuant
to a separate Subadvisory Agreement, dated as of November 22, 1995, with
respect to the Fund as described below.
- Fees Paid Under the Prior Investment Advisory Agreement. The Sub-
Adviser served as investment adviser to the Fund from the inception of the
Fund (April 30, 1980) until November 22, 1995. Under the prior Investment
Advisory Agreement, the total advisory fees accrued or paid by the Fund
were $2,479,887 for the fiscal year ended October 31, 1994, $2,893,435 for
the fiscal year ended October 31, 1995 and $_________ for the fiscal
period from November 1, 1995 to November 22, 1995 (the "Interim Period").
For the fiscal years ended October 31, 1994 and 1995 and the Interim
Period, the Fund paid or accrued accounting service fees to the Sub-
Adviser in the amounts of $_____, $______, and $_____, respectively. In
1993, the Fund retained the services of State Street Bank and Trust
Company ("State Street") to calculate the net asset value of each class
of shares and to prepare the books and records. For such services, the
Fund accrued or paid fees for the fiscal years ended October 31, 1994 and
1995 and the Interim Period of $____, $____, and $_____, respectively.
- - The Subadvisory Agreement. The Subadvisory Agreement provides that the
Sub-Adviser 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 Subadvisory Agreement, the Sub-Adviser
agrees not to change the Portfolio Manager of the Fund without the written
approval of the Manager and to provide assistance in the distribution and
marketing of the Fund. The Subadvisory Agreement was approved by the
Board of Directors, including a majority of the Directors who are not
"interested persons" of the Fund (as defined in the Investment Company
Act) and who have no direct or indirect financial interest in such
agreements, on June 22, 1995 and by the shareholders of the Fund at a
meeting held for that purpose on November 3, 1995.
Under the Subadvisory Agreement, the Manager will pay the Sub-Adviser
an annual fee payable monthly, based on the average daily net assets of
the Fund, equal to 40% of the investment advisory fee collected by the
Manager from the Fund based on the total net assets of the Fund as of the
effective date of the Subadvisory Agreement (the "base amount") plus 30%
of the investment advisory fee collected by the Manager based on the total
net assets of the Fund that exceed the base amount.
The Subadvisory Agreement provides that in the absence of willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations, the Sub-Adviser shall not be liable to the Manager for any
act or omission in the course of or connected with rendering services
under the Subadvisory Agreement or for any losses that may be sustained
in the purchase, holding or sale of any security.
- The Distributor. Under a General Distributor's Agreement with the
Fund dated as of November 22, 1995, the Distributor acts as the Funds
principal underwriter in the continuous public offering of its Class A,
Class B, Class C and Class Y shares of the Fund but is not obligated to
sell a specific number of shares. Expenses normally attributable to
sales, including advertising and the cost of printing and mailing
prospectuses, other than those furnished to existing shareholders, are
borne by the Distributor. During the Fund's fiscal year ended October 31,
1996, the aggregate amount of sales charges on sales of the Fund's Class
A shares was $______, of which the Distributor and an affiliated broker
retained $______ and with respect to the Interim Period, OCC Distributors,
the Fund's distributor prior to November 22, 1995, retained $________ and
its affiliated broker retained $_____. During the fiscal year ended
October 31, 1996, the Distributor received contingent deferred sales
charges of $______, upon redemption of Class B shares, and received
$_____, upon redemption of Class C shares; with respect to the Interim
Period, OCC Distributors received $_____ and $_______, respectively. For
additional information about distribution of the Fund's shares and the
expenses connected with such activities, please refer to "Distribution and
Service Plans" below.
- The Transfer Agent. OppenheimerFunds Services acts as the Fund's
Transfer Agent pursuant to a Transfer Agency and Service Agreement dated
November 22, 1995. Pursuant to the Agreement, the Transfer Agent is
responsible for maintaining the Fund's shareholder registry and
shareholder accounting records, and for shareholder servicing and
administrative functions. As compensation therefor, the Fund is obligated
to pay the Transfer Agent an annual maintenance fee for each Fund
shareholder account and reimburse the Transfer Agent for its out of pocket
expenses.
- Shareholder Servicing Agent for Certain Shareholders. Unified
Management Corporation (1-800-346-4601) is the shareholder servicing agent
of the Fund for former shareholders of the AMA Family of Funds and clients
of AMA Investment Advisers, Inc. (which had been the investment adviser
of AMA Family of Funds) who acquire shares of any Oppenheimer Quest Fund,
and for (i) former shareholders of the Unified Funds and Liquid Green
Trusts, (ii) accounts which participated or participate in a retirement
plan for which Unified Investment Advisers, Inc. or an affiliate acts as
custodian or trustee, (iii) accounts which have a Money Manager brokerage
account, and (iv) other accounts for which Unified Management Corporation
is the dealer of record.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory and Subadvisory Agreement.
The Investment Advisory Agreement contains provisions relating to the
selection of broker-dealers ("brokers") for the Fund's portfolio
transactions. The Manager and the Sub-Adviser may use such brokers as
may, in their best judgment based on all relevant factors, implement the
policy of the Fund to achieve best execution of portfolio transactions.
While the Manager need not seek advance competitive bidding or base its
selection on posted rates, it is expected to be aware of the current rates
of most 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 and the provisions of the Investment Advisory
Agreement.
The Investment Advisory Agreement also provides that, consistent with
obtaining the best execution of the Fund's portfolio transactions, the
Manager and the Sub-Adviser, in the interest of the Fund, may select
brokers other than affiliated brokers, because they provide brokerage
and/or research services to the Fund and/or other accounts of the Manager
or the Sub-Adviser. The commissions paid to such brokers may be higher
than another qualified broker would have charged if a good faith
determination is made by the Manager or the Sub-Adviser that the
commissions are reasonable in relation to the services provided, viewed
either in terms of that transaction or the Manager's or the Sub-Adviser's
overall responsibilities to all its accounts. No specific dollar value
need be put on the services, some of which may or may not be used by the
Manager or the Sub-Adviser for the benefit of the Fund or other of its
advisory clients. To show that the determinations were made in good
faith, the Manager or any Sub-Adviser must be prepared to show that the
amount of such commissions paid over a representative period selected by
the Board was reasonable in relation to the benefits to the Fund. The
Investment Advisory Agreement recognizes that an affiliated broker-dealer
may act as one of the regular brokers for the Fund provided that any
commissions paid to such broker are calculated in accordance with
procedures adopted by the Fund's Board under applicable rules of the
Securities and Exchange Commission ("SEC").
In addition, the Subadvisory Agreement permits the Sub-Adviser to
enter into soft dollar arrangements through the agency of third parties
to obtain services for the Fund. Pursuant to these arrangements, the
Sub-Adviser 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 Fund and in compliance with applicable law.
Description of Brokerage Practices. Portfolio decisions are based upon
recommendations of the portfolio manager and the judgment of the portfolio
managers. The Fund will pay brokerage commissions on transactions in
listed options and equity securities. Prices of portfolio securities
purchased from underwriters of new issues include a commission or
concession paid by the issuer to the underwriter, and prices of debt
securities purchased from dealers include a spread between the bid and
asked prices.
Transactions may be directed to dealers during the course of an
underwriting in return for their brokerage and research services, which
are intangible and on which no dollar value can be placed. There is no
formula for such allocation. The research information may or may not be
useful to one or more of the Fund and/or other accounts of the Manager or
the Sub-Adviser; information received in connection with directed orders
of other accounts managed by the Manager or the Sub-Adviser or its
affiliates may or may not be useful to one or more of the Funds. Such
information may be in written or oral form and includes information on
particular companies and industries as well as market, economic or
institutional activity areas. It serves to broaden the scope and
supplement the research activities of the Manager or the Sub-Adviser, to
make available additional views for consideration and comparison, and to
enable the Manager or the Sub-Adviser to obtain market information for the
valuation of securities held in the Fund's assets.
Sales of shares of the Fund, subject to applicable rules covering the
Distributor's activities in this area, will also be considered as a factor
in the direction of portfolio transactions to dealers, but only in
conformity with the price, execution and other considerations and
practices discussed above. The Fund will not purchase any securities from
or sell any securities to an affiliated broker-dealer including
Oppenheimer & Co., Inc. ("Opco"), an affiliate of the Sub-Adviser, acting
as principal for its own account.
The Sub-Adviser currently 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-Adviser to cause purchase or sale transactions to be allocated among
the Fund and others whose assets it manages in such manner as it deems
equitable. In making such allocations among the Fund and other client
accounts, the main factors considered are 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 each Fund and other client
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-Adviser 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 ("free trades") usually will
have its order executed first. Purchases are combined where possible for
the purpose of negotiating brokerage commissions, which in some cases
might have a detrimental effect on the price or volume of the security in
a particular transaction as far as the Fund is concerned. 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.
The following table presents information as to the allocation of
brokerage commissions paid by the Fund for the fiscal years ended October
31, 1994, 1995 and 1996:
<TABLE>
<CAPTION>
For the Total Brokerage CommissionsTotal Amount of Transactions
Fiscal Year Brokerage Paid to Opco Where Brokerage Commissions
Ended Commissions Dollar Paid to Opco
October 31, Paid Amounts % Dollar Amounts %
<S> <C> <C> <C> <C>
1994 $318,014 $162,914 51.2% $103,314,410 53.2%
1995 $309,310 $156,970 50.7% $ 99,572,945 52.1%
1996 $________ $_______ ___% $___________ ___%
</TABLE>
During the Fund's fiscal year ended October 31, 1996, $______ was
paid by the Fund to brokers as commissions in return for research
services; the aggregate dollar amount of those transactions was
$__________.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time
to time the "average annual total return," "cumulative total return" and
"total return at net asset value" of an investment in a class of shares
of the Fund may be advertised. An explanation of how these total returns
are calculated for each class and the components of those calculations is
set forth below. No performance information is presented below for Class
Y shares because no Class Y shares were publicly offered during the fiscal
year ended October 31, 1996.
The Fund's advertisements of its performance data must, under
applicable rules of the SEC, include the average annual total returns for
each advertised class of shares of the Fund for the 1, 5, and 10-year
periods (or the life of the class, if less) ending as of the most
recently-ended calendar quarter prior to the publication of the
advertisement. This enables an investor to compare the Fund's performance
to the performance of other funds for the same periods. However, a number
of factors should be considered before using such information as a basis
for comparison with other investments. An investment in the Fund is not
insured; its returns and share prices are not guaranteed and normally will
fluctuate on a daily basis. When redeemed, an investor's shares may be
worth more or less than their original cost. Returns for any given past
period are not a prediction or representation by the Fund of future
returns. The returns of Class A, Class B and Class C shares of the Fund
are affected by portfolio quality, the type of investments the Fund holds
and its operating expenses allocated to the particular class.
- Average Annual Total Returns. The "average annual total return"
of 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") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
The average annual total returns on an investment in Class A shares
of the Fund (using the method described above) for the one, five and ten
year periods ended October 31, 1996 and for the period from April 30, 1980
(commencement of operations) to October 31, 1996 were _____%, _____%,
_____% and _____%, respectively.
The average annual total return on Class B shares for the one-year
period ended October 31, 1996 and for the period September 2, 1993
(commencement of the public offering of the class) through October 31,
1996 were _____% and _____%, respectively.
The average annual total return on Class C shares for the one-year
period ended October 31, 1996 and for the period September 2, 1993
(commencement of the public offering of the class) through October 31,
1996 were _______% and _____%, respectively.
- Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over
an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return
on an annual basis. Cumulative total return is determined as follows:
ERV-P
_____ = Total Return
P
In calculating total returns for Class A shares, the current maximum
sales charge of 5.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown at net asset
value, as described below). Prior to November 24, 1995, the maximum
initial sales charge on Class A shares was 5.50%. For Class B shares, the
payment of the applicable contingent deferred sales charge (5% for the
first year, 4% for the second year, 3% for the third and fourth years, 2%
for the fifth year, 1% for the sixth year, and none thereafter) is applied
to the investment result for the period shown (unless the total return is
shown at net asset value, as described below). For Class C shares, the
1.0% contingent deferred sales charge is applied to the investment result
for the one-year period (or less). Class Y shares are not subject to a
sales charge. Total returns also assume that all dividends and capital
gains distributions during the period are reinvested to buy additional
shares at net asset value per share, and that the investment is redeemed
at the end of the period.
The "cumulative total return" on Class A shares for the period from
April 30, 1980 (commencement of operations) to October 31, 1996 was
________%. The cumulative total return on Class B shares for the period
from September 2, 1993 (commencement of the public offering of the class)
through October 31, 1996 was _____%. The cumulative total return on Class
C shares for the period from September 2, 1993 (commencement of the public
offering of the class) through October 31, 1996 was _____%.
- Total Returns at Net Asset Value. From time to time the Fund may
also quote an "average annual total return at net asset value" or a
"cumulative total return at net asset value" for Class A, Class B, Class
C or Class Y shares. Each is based on the difference in net asset value
per share at the beginning and the end of the period for a hypothetical
investment in that class of shares (without considering front-end or
contingent deferred sales charges) and takes into consideration the
reinvestment of dividends and capital gains distributions.
The average annual total returns at net asset value on the Fund's
Class A shares for the one, five and ten year periods ended October 31,
1996 and for the period from April 30, 1980 (commencement of operations)
to October 31, 1996 were _____%, _____%, _____%, and _____%, respectively.
The cumulative total return at net asset value on the Fund's Class A
shares for the period from April 30, 1980 (commencement of operations)
through October 31, 1996 was ________%.
The average annual total returns at net asset value on the Fund's
Class B shares for the one year period ended October 31, 1996 and for the
period from September 2, 1993 (commencement of the public offering of the
class) through October 31, 1996 were _____% and _____%, respectively. The
cumulative total return at net asset value on the Fund's Class B shares
for the period September 2, 1993 (commencement of the public offering of
the class) through October 31, 1996 was _____%.
The average annual total returns at net asset value on the Fund's
Class C shares for the one-year period ended October 31, 1996 and for the
period September 2, 1993 (commencement of the public offering of the
class) through October 31, 1996 were _____% and _____%, respectively. The
cumulative total return at net asset value on the Fund's Class C shares
for the period September 2, 1993 (commencement of the public offering of
the class) through October 31, 1996 was _____%.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B, Class C or Class Y shares by Lipper
Analytical Services, Inc. ("Lipper"), a widely-recognized independent
mutual fund monitoring service. Lipper monitors the performance of
regulated investment companies, including the Fund, and ranks their
performance for various periods based on categories relating to investment
objectives. The performance of the Fund is ranked against (i) all other
funds, (ii) all other capital appreciation funds and (iii) all other
capital appreciation funds in a specific size category. The Lipper
performance rankings are based on total returns that include the
reinvestment of capital gain distributions and income dividends but do not
take sales charges or taxes into consideration.
From time to time the Fund may publish the ranking of the performance
of its Class A, Class B, Class C or Class Y shares by Morningstar, Inc.,
an independent mutual fund monitoring service that ranks mutual funds,
including the Fund, monthly in broad investment categories (equity,
taxable bond, municipal bond and hybrid) based on risk-adjusted investment
return. Investment return measures a fund's three, five and ten-year
average annual total returns (when available) in excess of 90-day U.S.
Treasury bill returns after considering sales charges and expenses. Risk
measures fund performance below 90-day U.S. Treasury bill monthly returns.
Risk and investment return are combined to produce star rankings
reflecting performance relative to the average fund in a fund's category.
Five stars is the "highest" ranking (top 10%), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is
"below average" (next 22.5%) and one star is "lowest" (bottom 10%).
Morningstar ranks the Fund in relation to other rated capital appreciation
funds. Rankings are subject to change. From time to time the Fund may
include its advertisements and sales literature performance information
about the Fund cited in newspapers and other periodicals, such as the New
York Times, which may include performance quotation s from other sources,
including Lipper.
The total return on an investment in the Fund's Class A, Class B,
Class C or Class Y shares may be compared with performance for the same
period of the S&P 500 Index as described in the Prospectus. The
performance of the index includes a factor for the reinvestment of income
dividends, but does not reflect reinvestment of capital gains, expenses
or taxes.
The performance of the Fund's Class A, Class B, Class C or Class Y
shares may also be compared in publications to (i) the performance of
various market indices or to other investments for which reliable
performance data is available, and (ii) to averages, performance rankings
or other benchmarks prepared by recognized mutual fund statistical
services.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A, Class B, Class C or Class Y shares.
However, when comparing total return of an investment in Class A, Class
B, Class C and Class Y shares of the Fund, a number of factors should be
considered before using such information as a basis for comparison with
other investment. For example investor may also wish to compare the
Fund's Class A, Class B, Class C or Class Y return to the returns on fixed
income investments available from banks and thrift institutions, such as
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, and Treasury bills are
guaranteed as to principal and interest by the U.S. government.
From time to time, the Fund's Manager may publish rankings or ratings
of the Manager (or Transfer Agent) or the investor services provided by
them to shareholders of the Oppenheimer funds, other than performance
rankings of the Oppenheimer funds themselves. Those ratings or rankings
of shareholder/investor services by third parties may compare the
Oppenheimer funds' services to those of other mutual fund families
selected by the rating or ranking services and may be based upon the
opinions of the rating or ranking service itself, based on its research
or judgment, or based upon surveys of investors, brokers, shareholders or
others.
Distribution and Service Plans
The Fund has adopted separate Amended and Restated Distribution and
Service Plans and Agreements for Class A, Class B and Class C shares of
the Fund under Rule 12b-1 of the Investment Company Act pursuant to which
the Fund will compensate the Distributor for all or a portion of its costs
incurred in connection with the distribution and/or servicing of the
shares of that class, as described in the Prospectus. No such plan has
been adopted for Class Y shares. Each Plan has been approved by a vote
of (i) the Board of Directors of the Fund, including a majority of the
Directors who are not "interested persons" (as defined in the Investment
Company Act) of the Fund and who have no direct or indirect financial
interest in the operation of the Fund's 12b-1 plans or in any related
agreement ("Independent Directors"), cast in person at a meeting on June
22, 1995 called for the purpose, among others, of voting on that Plan, and
(ii) the holders of a "majority" (as defined in the Investment Company
Act) of the shares of each class at a meeting on November 3, 1995.
In addition, under the Plans the Manager and the Distributor, in
their sole discretion, from time to time may use their own resources
(which, in the case of the Manager, may include profits from the advisory
fee it receives from the Fund) to make payments to brokers, dealers or
other financial institutions (each is referred to as a "Recipient" under
the Plans) for distribution and administrative services they perform at
no cost to the Fund. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of payments they make from
their own resources to Recipients.
Unless terminated as described below, each plan continues in effect
from year to year but only as long as such continuance is specifically
approved at least annually by the Fund's Board of Directors and its
"Independent Directors" by a vote cast in person at a meeting called for
the purpose of voting on such continuance. Any Plan may be terminated at
any time by the vote of a majority of the Independent Directors or by the
vote of the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding shares of that class. No Plan may be amended to
increase materially the amount of payments to be made unless such
amendment is approved by shareholders of the class affected by the
amendment. In addition, because Class B shares of the Fund automatically
convert into Class A shares after six years, the Fund is required to
obtain the approval of Class B as well as Class A shareholders for a
proposed material amendment to the Class A Plan that would materially
increase payments under the Plan. Such approval must be by a "majority"
of the Class A and Class B shares (as defined in the Investment Company
Act), voting separately by class. All material amendments must be
approved by the Board of Directors and the Independent Directors.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Directors at least
quarterly on the amount of all payments made pursuant to each Plan, the
purpose for which the payments were made and the identity of each
Recipient that received any such payment. The reports shall also include
the distribution costs for that quarter, and such costs for previous
fiscal periods that are carried forward, as explained in the Prospectus
and below. Those reports, including the allocations on which they are
based, will be subject to the review and approval of the Independent
Directors in the exercise of their fiduciary duty. Each Plan further
provides that while it is in effect, the selection and nomination of those
Directors of the Fund who are not "interested persons" of the Fund is
committed to the discretion of the Independent Directors. This does not
prevent the involvement of others in such selection and nomination if the
final decision on any such selection or nomination is approved by a
majority of the Independent Directors.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Directors. Initially, the Board of Directors has set
the fee at the maximum rate and set no requirement for a minimum amount.
The Plans allow the service fee payments to be paid by the
Distributor to Recipients in advance for the first year shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net assets of the Class
A, Class B and Class C shares sold. An exchange of shares does not
entitle the Recipient to an advance service fee payment. In the event
Class A, Class B or Class C shares are redeemed during the first year such
shares are outstanding, the Recipient will be obligated to repay a pro
rata portion of such advance payment to the Distributor.
Although the Plans permit the Distributor to retain both the asset-
based sales charge and the service fee, or to pay Recipients the service
fee on a quarterly basis, without payment in advance, the Distributor
presently intends to pay the service fee to Recipients in the manner
described above. A minimum holding period may be established from time
to time under the Plans by the Board. Initially, the Board has set no
minimum holding period. All payments under the Plans are subject to the
limitations imposed by the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. on payments of asset-based sales
charges and service fees.
For the Fiscal Period, (i) payments under the Plan for Class A shares
totaled $_______, all of which was paid by the Distributor to Recipients
including $______ that was paid to an affiliate of the Distributor, (ii)
payments made under the Class B Plan totalled $_______, of which $_____
was retained by the Distributor and $____ was paid to a dealer affiliated
with the Distributor and (iii)payments made under the Class C plan
amounted to $_____, of which $_____ was retained by the Distributor. The
Plans provide for the Distributor to be compensated at a flat rate,
whether the Distributor's expenses are more or less than the amounts paid
by the Fund during that period. The asset-based sales charges paid to the
Distributor by the Fund under the Plans are intended to allow the
Distributor to recoup the cost of sales commissions paid to authorized
brokers and dealers at the time of sale, plus financing costs, as
described in the Prospectus. Such payments may also be used to pay for
the following expenses in connection with the distribution of shares: (i)
financing the advance of the service fee payment to Recipients under the
Plan, (ii) compensation and expenses of personnel employed by the
Distributor to support distribution of shares, and (iii) costs of sales
literature, advertising and prospectuses (other than those furnished to
current shareholders).
- The Prior Plans. From the inception date of the Fund (on April 30,
1980) through to and including November 22, 1995, OCC Distributors
(formerly known as Quest for Value Distributors) served as Distributor to
the Fund. OCC Distributors provided distribution services for the Fund's
Class A, Class B and Class C shares pursuant to separate plans adopted for
each class under the Investment Company Act (the "Prior Plans"). The
total distribution fees accrued or paid by Class A, Class B and Class C
shares of the Fund under the Prior Plans for the Interim Period were
$_________, $________ and $______, respectively.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C Shares.
The availability of three classes of shares permits an individual investor
to choose the method of purchasing shares that is more beneficial to an
investor depending on the amount of the purchase, the length of time the
investor expects to hold shares and other relevant circumstances.
Investors should understand that the purpose and function of the deferred
sales charge and asset-based sales charge with respect to Class B and
Class C shares are the same as those of the initial sales charge with
respect to Class A shares. Any salesperson or other person entitled to
receive compensation for selling Fund shares may receive different
compensation with respect to one class of shares than another. The
Distributor will generally not accept any order for $500,000 or more of
Class B shares or $1 million or more of Class C shares on behalf of a
single investor (not including dealer "street name" or omnibus accounts)
because generally it will be more advantageous for that investor to
purchase Class A shares of the Fund instead. A fourth class of shares,
may be purchased only by certain institutional investors at net asset
value per shares (the "Class Y Shares").
The four classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class
B and Class C shares and the dividends payable on Class B and Class C
shares will be reduced by incremental expenses borne solely by that class,
respectively, including the asset-based sales charges to which Class B and
Class C shares are subject.
The conversion of Class B shares to Class A shares after six years
is subject to the continuing availability of a private letter ruling from
the Internal Revenue Service, or an opinion of counsel or tax adviser, to
the effect that the conversion of Class B shares does not constitute a
taxable event for the holder under Federal income tax law. If such a
revenue ruling or opinion is no longer available, the automatic conversion
feature may be suspended, in which event no further conversions of Class
B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a
sales charge or fee, such exchange could constitute a taxable event for
the holder, and absent such exchange, Class B shares might continue to be
subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B, Class C and Class Y shares
recognizes two types of expenses. General expenses that do not pertain
specifically to any class are allocated pro rata to the shares of each
class, based on the percentage of the net assets of such class to the
Fund's total net assets, and then equally to each outstanding share within
a given class. Such general expenses include (i) management fees, (ii)
legal, bookkeeping and audit fees, (iii) printing and mailing costs of
shareholder reports, Prospectuses, Statements of Additional Information
and other materials for current shareholders, (iv) fees to Independent
Directors, (v) custodian expenses, (vi) share issuance costs, (vii)
organization and start-up costs, (viii) interest, taxes and brokerage
commissions, and (ix) non-recurring expenses, such as litigation costs.
Other expenses that are directly attributable to a class are allocated
equally to each outstanding share within that class. Such expenses
include (a) Distribution Plan fees, (b) incremental transfer and
shareholder servicing agent fees and expenses, (c) registration fees and
(d) shareholder meeting expenses, to the extent that such expenses pertain
to a specific class rather than to the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values per
share of Class A, Class B, Class C and Class Y shares of the Fund are
determined as of the close of business of The New York Stock Exchange (the
"Exchange") on each day that the Exchange is open, by dividing the value
of the Fund's net assets attributable to that class by the total number
of Fund shares of that class 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,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. It may also close on other days. The
Fund may invest a substantial portion of its assets in foreign securities
primarily listed on foreign exchanges which may trade on Saturdays or
customary U.S. business holidays on which the Exchange is closed. Because
the Fund's net asset values will not be calculated on those days, the
Fund's net asset value per share may be significantly affected on such
days when shareholders may not purchase or redeem shares.
The Fund's Board of Directors has established procedures for the
valuation of the Fund's securities, generally as follows: (i) equity
securities traded on a U.S. securities exchange or on the Automated
Quotation System ("NASDAQ") of the Nasdaq Stock Market, Inc. for which
last sale information is regularly reported are valued at the last
reported sale price on their primary exchange or NASDAQ that day (or, in
the absence of sales that day, at values based on the last sale prices of
the preceding trading day, or closing bid and asked prices that day); (ii)
securities traded on a foreign securities generally exchange are valued
at the last sale price available to the pricing service approved by the
Fund's Board of Directors or to the Manager as reported by the principal
exchange on which the security is traded; or at the mean between "bid" and
"asked" prices obtained from the principal exchange or two active market
makers in the security on the basis of reasonable inquiry; (iii) long-term
debt securities having a remaining maturity in excess of 60 days are
valued based on the mean between the "bid" and "asked" prices determined
by a portfolio pricing service approved by the Fund's Board of Directors
or obtained by the Manager from two active market makers in the security
on the basis of reasonable inquiry; (iv) debt instruments that had a
maturity of more than 397 days or less when issued, and non-money market
type instruments having a maturity of 397 days or less when issued, which
have a remaining maturity of 60 days or less are valued at the mean
between the "bid" and "asked" prices determined by a pricing service
approved by the Fund's Board of Directors or obtained from active market
makers in the security on the basis of reasonable inquiry; (v) money
market debt securities that had a maturity of less than 397 days when
issued that having a remaining maturity of 60 days or less are valued at
cost, adjusted for amortization of premiums and accretion of discounts;
and (vi) securities (including restricted securities) not having readily-
available market quotations are valued at fair value determined under the
Board's procedures. If the Manager is unable to locate two market makers
willing to give quotes (see (ii), (iii) and (iv) above), the security may
be priced at the mean between the "bid" and "asked" prices provided by a
single active market maker.
In the case of U.S. Government Securities and mortgage-backed
securities, where last sale information is not generally available, such
pricing procedures may include "matrix" comparison to the prices for
comparable instruments on the basis of quality, yield, maturity and other
special factors involved. The Manager may use pricing services approved
by the Board of Trustees to price any of the types of securities described
above to price U.S. Government Securities, mortgage-backed securities,
foreign government securities and corporate bonds. The Manager will
monitor the accuracy of such pricing services, which may include
comparable prices used for portfolio evaluation to actual prices of
selected securities.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the Exchange.
Events affecting the values of foreign securities traded in such
securities markets that occur between the time their prices are determined
and the close of the Exchange will not be reflected in the Fund's
calculation of its net asset value unless the Board of Directors or the
Manager, under procedures established by the Board, determines that the
particular event is likely to effect a material change in the value of
such security. Foreign currency, including forward contracts, will be
valued at the closing price in the London foreign exchange market that day
as provided by a reliable bank, dealer or pricing service. The values of
securities denominated in foreign currency will be converted to U.S.
dollars at the closing price in the London foreign exchange market that
day as provided by a reliable bank, dealer or pricing service. In the
case of U.S. government securities and corporate bonds, where last sale
information is not generally available, such pricing procedures may
include "matrix" comparisons to the prices for comparable instruments on
the basis of quality, yield, maturity and other special factors involved.
The Directors will monitor the accuracy of pricing services by comparing
prices used for portfolio evaluation to actual sales prices of selected
securities.
Puts, calls and Futures are valued at the last sales price on the
principal exchanges on which they are traded or on NASDAQ, as applicable,
as determined by a pricing service approved by the Board of Directors or
by the Manager. If were no sales that day, value shall be the last sale
price on the preceding trading day if it is within the spread of the
closing bid and asked prices on the principal exchange or on NASDAQ on the
valuation date, or, if not, value shall be the closing bid price on the
principal exchange or on NASDAQ on the valuation date. If the put, call
or future is not traded on an exchange or on NASDAQ, it shall be valued
at the mean between bid and asked prices obtained by the Manager from two
active market makers (which in certain cases may be 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,
and an equivalent credit is included in the liability section. Credit is
adjusted ("marked-to-market") to reflect the current market value of the
option. In determining the Fund's gain on investments, if a call or put
written by the Fund is exercised, the proceeds are increased by the
premium received. If a call or put written by the Fund expires, the Fund
has a gain in the amount of the premium; if the Fund enters into a closing
purchase transaction, it will have a gain or loss depending on whether the
premium received was more or less than the cost of the closing
transaction. If the Fund exercises a put it holds, the amount the Fund
receives on its sale of the underlying investment is reduced by the amount
of premium paid by the Fund.
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on
shares purchased by the proceeds of ACH transfers on the business day the
Fund receives Federal Funds for the purchase through the ACH system before
the close of The New York Stock Exchange. The Exchange normally closes
at 4:00 P.M., but may close earlier on certain days. If Federal Funds are
received on a business day after the close of the Exchange, the shares
will be purchased and dividends will begin to accrue on the next regular
business day. The proceeds of ACH transfers are normally received by the
Fund 3 days after the transfers are initiated. The Distributor and the
Fund are not responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Rights of
Accumulation and Letters of Intent because of the economies of sales
efforts and reduction in expenses realized by the Distributor or dealer
or broker making such sales. No sales charge is imposed in certain other
circumstances described in the Prospectus because the Distributor incurs
little or no selling expenses. The term "immediate family" refers to
one's spouse, children, grandchildren, parents, grandparents, parents-in-
law, aunts, uncles, nieces, nephews, sons-and daughters-in-law, siblings,
a sibling's spouse and a spouse's siblings.
- The Oppenheimer Funds. The Oppenheimer funds are those mutual
funds for which the Distributor acts as the distributor or the sub-
distributor and include the following:
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer Enterprise Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Bond Fund Series - Oppenheimer Bond Fund for Growth
Rochester Portfolio Series - Limited-Term New York Municipal Fund*
Rochester Fund Municipals*
Oppenheimer Disciplined Value Fund
Oppenheimer Allocation Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer Lifespan Growth Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
________________________-
* Shares of the Fund are not presently exchangeable for shares of this
fund.
There is an initial sales charge on the purchase of Class A shares
of each of the Oppenheimer funds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent ("Letter") is the investor's
statement in writing to the Distributor of the intention to purchase Class
A and Class B shares (or shares of either class) of the Fund (and other
eligible Oppenheimer funds) during the 13-month period from the investor's
first purchase pursuant to the Letter (the "Letter of Intent period"),
which may, at the investor's request, include purchases made up to 90 days
prior to the date of the Letter. The Letter states the investor's
intention to make the aggregate amount of purchases (excluding any
purchases made by reinvestment of dividends or distributions or purchases
made at net asset value without sales charge), which together with the
investor's holdings of such funds (calculated at their respective public
offering prices calculated on the date of the Letter) will equal or exceed
the amount specified in the Letter. This enables the investor to count
the shares to be purchased under the Letter of Intent to obtain the
reduced sales charge rate 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 public offering price (including the
sales charge) that applies to a single lump-sum purchase of shares in the
amount intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the
Transfer Agent will not hold shares in escrow. If the intended purchase
amount under the Letter entered into by an Oppenheimer funds 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.
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 applicable prospectus, the sales charges
paid will be adjusted to the lower rate, but only if and when the dealer
returns to the Distributor the excess of the amount of commissions allowed
or paid to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such
purchase, promptly after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in value
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 public offering price adjusted for a
$50,000 purchase). Any dividends and capital gains distributions on the
escrowed shares will be credited to the investor's account.
2. If the total minimum investment purchase amount specified under
the Letter is completed within the thirteen-month Letter of Intent period,
the escrowed shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the
holding of which may be counted toward completion of a Letter) include (a)
Class A shares sold with a front-end sales charge or subject to a Class
A contingent deferred sales charge, (b) Class B shares acquired subject
to a contingent deferred sales charge, and (c) Class A or Class B shares
of other Oppenheimer funds acquired in exchange for either (i) Class A
shares of one of the other Oppenheimer funds that were acquired subject
to a Class A initial or contingent deferred sales charge or (ii) Class B
shares of one of the other Oppenheimer funds that were acquired subject
to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as described
in the section of the Prospectus entitled "How to Exchange shares" and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "Shareholder Account Rules and Policies" in the Prospectus.
Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves
to use those accounts for monthly automatic purchases of shares of up to
four other Oppenheimer funds.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
Retirement Plans. In describing certain types of employee benefit
plans that may purchase Class A shares without being subject to the Class
A contingent differed sales charge, the term "employee benefit plan" means
any plan or arrangement, whether or not "qualified" under the Internal
Revenue Code, including, medical savings accounts, payroll deduction
plans, or similar plans in which Class A shares are purchased by a
fiduciary or other person for the account of participants who are
employees of a single employer or of affiliated employers, if the Fund
account is registered in the name of the fiduciary or other person for the
benefit of participants in the plan.
The term "group retirement plan" means any qualified or non-qualified
retirement plan (including 457 plans, SEPs, SARSEPs, 403(b) plans, and
SIMPLE plans) for employees of a corporation or a sole proprietorship,
members and employees of a partnership or association or other organized
group of person (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 the plan purchase Class A shares of the Fund
through a single investment dealer, broker or other financial institution
designated by the group.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
- Involuntary Redemptions. The Fund's Board of Directors has the
right to cause the involuntary redemption of the shares held in any Fund
account if the aggregate net asset value of those shares is less than $200
or such lesser amount as the Board may fix. The Board of Directors will
not cause the involuntary redemption of shares in an account if the
aggregate net asset value of the shares has fallen below the stated
minimum solely as a result of market fluctuations. Should the Board elect
to exercise this right, it may also fix, in accordance with the Investment
Company Act, and the provisions of Maryland law, the requirements for any
notice to be given to the shareholders in question (not less than 30
days), or the Board may set requirements for granting permission to the
Shareholder to increase the investment, and set other terms and conditions
so that the shares would not be involuntarily redeemed.
Reinvestment Privilege. Within six months of a redemption, a shareholder
may reinvest all or part of the redemption proceeds of (i) Class A shares
that you purchased subject to an initial sales charge, or (ii) Class B
shares on which you paid a contingent deferred sales charge when you
redeemed them. This privilege does not apply to Class C shares. The
reinvestment may be made without sales charge only in Class A shares of
the Fund or any of the other Oppenheimer funds into which shares of the
Fund are exchangeable as described below, at the net asset value next
computed after the Transfer Agent receives the reinvestment order. The
shareholder must ask the Distributor for that privilege at the time of
reinvestment. Any capital gain that was realized when the shares were
redeemed is taxable, and reinvestment will not alter any capital gains tax
payable on that gain. If there has been a capital loss on the redemption,
some or all of the loss may not be tax deductible, depending on the timing
and amount of the reinvestment. Under the Internal Revenue Code, if the
redemption proceeds of Fund shares on which a sales charge was paid are
reinvested in shares of the Fund or another of the Oppenheimer funds
within 90 days of payment of the sales charge, the shareholder's basis in
the shares of the Fund that were redeemed may not include the amount of
the sales charge paid. That would reduce the loss or increase the gain
recognized from the redemption. However, in that case the sales charge
would be added to the basis of the shares acquired by the reinvestment of
the redemption proceeds. The Fund may amend, suspend or cease offering
this reinvestment privilege at any time as to shares redeemed after the
date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of any class at the time of transfer to
the name of another person or entity (whether the transfer occurs by
absolute assignment, gift or bequest, not involving, directly or
indirectly, a public sale). The transferred shares will remain subject
to the contingent deferred sales charge, calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at
the same time as the transferring shareholder. If less than all shares
held in an account are transferred, and some but not all shares in the
account would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, the priorities described in the Prospectus under
"How to Buy Shares" for the imposition of the Class B or 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: (i) state the
reason for the distribution; (ii) state the owner's awareness of tax
penalties if the distribution is premature; and (iii) conform to the
requirements of the plan and the Fund's other redemption requirements.
Participants, other than self-employed persons maintaining a plan account
in their own name, in OppenheimerFunds-sponsored prototype pension or
profit-sharing or 401(k) plans may not directly redeem or exchange shares
held for their account under those plans. The employer or plan
administrator must sign the request. Distributions from pension plans or
401(k) profit sharing plans are subject to special requirements under the
Internal Revenue Code and certain documents (available from the Transfer
Agent) must be completed before the distribution may be made.
Distributions from retirement plans are subject to withholding
requirements under the Internal Revenue Code, and IRS Form W-4P (available
from the Transfer Agent) must be submitted to the Transfer Agent with the
distribution request, or the distribution may be delayed. Unless the
shareholder has provided the Transfer Agent with a certified tax
identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have
tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not
be responsible for any tax penalties assessed in connection with a
distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers on behalf of their customers. The
shareholder should contact the broker or dealer to arrange this type of
redemption. The repurchase price per share will be the net asset value
next computed after the Distributor receives the order placed by the
dealer or broker, except that if the Distributor receives a repurchase
order from the 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
customer prior to the time the Exchange closes (normally, that is 4:00
P.M., but may be earlier on some days) and the order was transmitted to
and received by the Distributor prior to its close of business that day
(normally 5:00 P.M.). Ordinarily, for accounts redeemed by a broker-
dealer under this procedure, payment will be made within three business
days after the shares have been redeemed upon the Distributor's receipt
of the required redemption documents in proper form, with the signature(s)
of the registered owners guaranteed on the redemption document as
described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the
Fund valued at $5,000 or more can authorize the Transfer Agent to redeem
shares (minimum $50) automatically on a monthly, quarterly, semi-annual
or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
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
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an Automatic
Withdrawal Plan. Class B and Class C shareholders should not establish
withdrawal plans because of the imposition of the contingent deferred
sales charges on such withdrawals (except where the Class B or the Class
C contingent deferred sales charges are waived as described in the
Prospectus under "Waivers of Class B and Class C Sales Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such plans,
as stated below and in the provisions of the OppenheimerFunds Application
relating to such Plans, as well as the Prospectus. These provisions may
be amended from time to time by the Fund and/or the Distributor. When
adopted, such amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other Oppenheimer funds automatically
on a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional
Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment. It may not be
desirable to purchase additional Class A shares while making automatic
withdrawals because of the sales charges that apply to purchases when
made. Accordingly, a shareholder normally may not maintain an Automatic
Withdrawal Plan while simultaneously making regular purchases of Class A
shares.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the "Planholder")
who executed the Plan authorization and application submitted to the
Transfer Agent. Neither Transfer Agent nor the Fund shall incur any
liability to the Planholder for any action taken or omitted by the
Transfer Agent in good faith to administer the Plan. Certificates will
not be issued for shares of the Fund purchased for and held under the
Plan, but the Transfer Agent will credit all such shares to the account
of the Planholder on the records of the Fund. Any share certificates held
by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may
be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or ACH transfer payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use 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 because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be exchanged
only for shares of the same class of other Oppenheimer funds. Shares of
the Oppenheimer funds that have a single class without a class designation
are deemed "Class A" shares for this purpose. All of the Oppenheimer
funds 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, Centennial Money Market Trust,
Centennial America Fund, L.P., and Daily Cash Accumulation Fund, Inc.,
which only offer Class A shares and Oppenheimer Main Street California
Tax-Exempt Fund which only offers Class A and Class B shares (Class B and
Class C shares of Oppenheimer Cash Reserves are generally available only
by exchange from the same class of shares of other Oppenheimer funds or
through OppenheimerFunds sponsored 401(k) plans). A current list showing
which funds offer which classes can be obtained by calling the distributor
at 1-800-525-7048.
For accounts established on or before March 8, 1996 holding Class M
shares of Oppenheimer Bond Fund for Growth, Class M shares can be
exchanged only for Class A shares of other Oppenheimer funds, including
Rochester Fund Municipals and Limited Term New York Municipal Fund. Class
A shares of Rochester Fund Municipals or Limited Term New York Municipal
Fund acquired on the exchange of Class M shares of Oppenheimer Bond Fund
for Growth may be exchanged for Class M shares of that fund. For accounts
of Oppenheimer Bond Fund for Growth established after March 8, 1996, Class
M shares may be exchanged for Class A shares of other Oppenheimer funds
except Rochester Fund Municipals and Limited-Term New York Municipals.
Exchanges to Class M shares of Oppenheimer Bond Fund for Growth are
permitted from Class A shares of Oppenheimer Money Market Fund, Inc. or
Oppenheimer Cash Reserves that were acquired by exchange from Class M
shares. Otherwise no exchanges of any class of any Oppenheimer fund into
Class M shares are permitted.
Class A shares of Oppenheimer funds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
Oppenheimer funds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of Oppenheimer
funds subject to a contingent deferred sales charge). However, shares of
Oppenheimer Money Market Fund, Inc. purchased with the redemption proceeds
of shares of other mutual funds (other than funds managed by the Manager
or its subsidiaries) redeemed within the 12 months prior to that purchase
may subsequently be exchanged for shares of other Oppenheimer funds
without being subject to an initial or contingent deferred sales charge,
whichever is applicable. To qualify for 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, and, if requested, must supply proof of entitlement to this
privilege.
Shares of the Fund acquired by reinvestment of dividends or
distributions from any other of the Oppenheimer funds (except Oppenheimer
Cash Reserves) or from any unit investment trust for which reinvestment
arrangements have been made with the Distributor may be exchanged at net
asset value for shares of any of the Oppenheimer funds. No contingent
deferred sales charge is imposed on exchanges of shares of any class
purchased subject to a contingent deferred sales charge. However, when
Class A shares acquired by exchange of Class A shares of other Oppenheimer
funds purchased subject to a Class A contingent deferred sales charge are
redeemed within 18 months of the end of the calendar month of the initial
purchase of the exchanged Class A shares, the Class A contingent deferred
sales charge is imposed on the redeemed shares (see "Class A Contingent
Deferred Sales Charge" in the Prospectus). The Class B contingent
deferred sales charge is imposed on Class B shares acquired by exchange
if they are redeemed within six 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 and Class C contingent deferred sales charges
will be followed in determining the order in which the shares are
exchanged. Shareholders should take into account the effect of any
exchange on the applicability and rate of any contingent deferred sales
charge that might be imposed in the subsequent redemption of remaining
shares. Shareholders owning shares of more than one class must specify
whether they intend to exchange Class A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than one account.
The Fund may accept requests for exchanges of up to 50 accounts per day
from representatives of authorized dealers that qualify for this
privilege. In connection with any exchange request, the number of shares
exchanged may be less than the number requested if the exchange or the
number requested would include shares subject to a restriction cited in
the Prospectus or this Statement of Additional Information or would
include shares covered by a share certificate that is not tendered with
the request. In those cases, only the shares available for exchange
without restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either have
an existing account in, or obtain and acknowledge receipt of a prospectus
of, the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction
for corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by
the Fund which may qualify for the deduction is limited to the aggregate
amount of qualifying dividends that the Fund derives from its portfolio
investments that the Fund has held for a minimum period, usually 46 days.
A corporate shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less. To the extent the
Fund's dividends are derived from gross income from option premiums,
interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for
the deduction.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from January
1 through December 31 of that year and 98% of its capital gains realized
in the period from November 1 of the prior year through October 31 of the
current year, or else the Fund must pay an excise tax on the amounts not
distributed. While it is presently anticipated that the Fund will meet
those requirements, the Board of Directors and the Manager might determine
in a particular year that it would be in the best interest of shareholders
for the Fund not to make such distributions at the required levels and to
pay the excise tax on the undistributed amounts. That would reduce the
amount of income or capital gains available for distribution to
shareholders.
If the Fund 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 distribution. The Fund qualified
during its last fiscal year, and intends to qualify in current and future
years, but reserves the right not to do so. The Internal Revenue Code
contains a number of complex tests to determine whether the Fund will
qualify, and the Fund might not meet those tests in a particular year.
For example, if the Fund derives 30% or more of its gross income from the
sale of securities held less than three months, it may fail to qualify
(see "Tax Aspects of Covered Calls and Hedging Instruments," above). If
it did not so qualify, the Fund would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for payments made to
shareholders.
The amount of a class's distributions may 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, as
described in "Alternative Sales Arrangements -- Class A, Class B and Class
C Shares," above. Dividends are calculated in the same manner, at the
same time and on the same day for shares of each class. However,
dividends on Class B and Class C shares are expected to be lower as a
result of the asset-based sales charge on Class B and Class C shares, and
Class B and Class C dividends will also differ in amount as a consequence
of any difference in net asset value between the classes.
Dividends, distributions and the proceeds of the redemption of Fund
shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of Oppenheimer Money
Market Fund, Inc., as promptly as possible after the return of such checks
to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect
to reinvest all dividends and/or capital gains distributions in shares of
the same class of any of the other Oppenheimer funds listed in "Reduced
Sales Charges," above, at net asset value without sales charge. To elect
this option, a shareholder must notify the Transfer Agent in writing and
either must have an existing account in the fund selected for reinvestment
or must obtain a prospectus for that fund and an application from the
Distributor to establish an account. The investment will be made at the
net asset value per share in effect at the close of business on the
payable date of the dividend or distribution. Dividends and/or
distributions from certain of the Oppenheimer funds may be invested in
shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. State Street Bank and Trust Company acts as custodian
of the assets of the Fund. The Fund's cash balances in excess of $100,000
are not protected by Federal deposit insurance. Such uninsured balances
may be substantial.
Independent Accountants. Price Waterhouse LLP serve as the Fund's
independent auditors. Their services include examining the annual
financial statements of the Fund as well as other related services. KPMG
Peat Marwick LLP previously served as the independent auditors of the
Fund.
<PAGE>
Appendix A
DESCRIPTION OF RATINGS
Bond Ratings
- - Moody's Investors Service, Inc.
Aaa: Bonds which are rated "Aaa" are judged to be the best quality and to
carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal
is secure. While the various protective elements are likely to change,
the changes that can be expected are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group, they comprise what are generally
known as "high-grade" bonds. They are rated lower than the best bonds
because margins of protection may not be as large as with "Aaa" securities
or fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than those of "Aaa" securities.
A: Bonds which are rated "A" possess many favorable investment attributes
and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated "Baa" are considered medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and have speculative characteristics as well.
Ba: Bonds which are rated "Ba" are judged to have speculative elements;
their future cannot be considered well-assured. Often the protection of
interest and principal payments may be very moderate and not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.
B: Bonds which are rated "B" generally lack characteristics of desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated "Caa" are of poor standing and may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated "Ca" represent obligations which are speculative
in a high degree and are often in default or have other marked
shortcomings.
C: Bonds which are rated "C" can be regarded as having extremely poor
prospects of ever retaining any real investment standing.
- - Standard & Poor's Corporation
AAA: "AAA" is the highest rating assigned to a debt obligation and
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated "AA" also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority
of instances they differ from "AAA" issues only in small degree.
A: Bonds rated "A" have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to adverse effects of change
in circumstances and economic conditions.
BBB: Bonds rated "BBB" are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the "A" category.
BB, B, CCC, CC: Bonds rated "BB," "B," "CCC" and "CC" are regarded, on
balance, as predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms
of the obligation. "BB" indicates the lowest degree of speculation and
"CC" the highest degree. While such bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
C, D: Bonds on which no interest is being paid are rated "C." Bonds rated
"D" are in default and payment of interest and/or repayment of principal
is in arrears.
- - Fitch Investors Service, Inc.
AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated "AAA." Because
bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issuers is generally rated "F-1+."
A Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than for
bonds with higher ratings.
BB Bonds are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service
requirements.
B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited
margin of safety and the need for reasonable business and economic
activity through the life of the issue.
CCC Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires
an advantageous business and economic environment.
CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C Bonds are in imminent default in payment of interest or principal.
DDD, DD, and D Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of
their ultimate recovery value in liquidation or reorganization of the
obligor. "DDD" represents the highest potential for recovery of these
bonds, and "D" represents the lowest potential for recovery.
Plus (+) Minus (-) Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the "DDD," "DD," or "D"
categories.
Short-Term Debt Ratings.
- - Moody's Investors Service, Inc. The following rating designations for
commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are judged by Moody's to be
investment grade, and indicate the relative repayment capacity of rated
issuers:
Prime-1: Superior capacity for repayment. Capacity will normally be
evidenced by the following characteristics: (a) leveling market positions
in well-established industries; (b) high rates of return on funds
employed; (c) conservative capitalization structures with moderate
reliance on debt and ample asset protection; (d) broad margins in earning
coverage of fixed financial charges and high internal cash generation; and
(e) well established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.
Moody's ratings for state and municipal short-term obligations are
designated "Moody's Investment Grade" ("MIG"). Short-term notes which
have demand features may also be designated as "VMIG". These rating
categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by
established cash flows, superior liquidity support or demonstrated
broadbased access to the market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although not
so large as in the preceding group.
- - Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of
no more than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to
possess extremely strong safety characteristics are denoted with a plus
sign (+) designation.
A-2: Satisfactory capacity for timely payment. However, the relative
degree of safety is not as high as for issues designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics
will be given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand
or double feature as part of their provisions. The first rating addresses
the likelihood of repayment of principal and interest as due, and the
second rating addresses only the demand feature. With short-term demand
debt, S&P's note rating symbols are used with the commercial paper symbols
(for example, "SP-1+/A-1+").
- - Fitch Investors Service, Inc. Fitch assigns the following short-term
ratings to debt obligations that are payable on demand or have original
maturities of generally up to three years, including commercial paper,
certificates of deposit, medium-term notes, and municipal and investment
notes:
F-1+: Exceptionally strong credit quality; the strongest degree of
assurance for timely payment.
F-1: Very strong credit quality; assurance of timely payment is only
slightly less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for timely
payment, but the margin of safety is not as great as for issues assigned
"F-1+" or "F-1" ratings.
- - Duff & Phelps, Inc. The following ratings are for commercial paper
(defined by Duff & Phelps as obligations with maturities, when issued, of
under one year), asset-backed commercial paper, and certificates of
deposit (the ratings cover all obligations of the institution with
maturities, when issued, of under one year, including bankers' acceptance
and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources
of funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk
factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk factors are
very small.
Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors
are small.
- - IBCA Limited or its affiliate IBCA Inc. Short-term ratings, including
commercial paper (with maturities up to 12 months), are as follows:
A1+: Obligations supported by the highest capacity for timely repayment.
A1: Obligations supported by a very strong capacity for timely repayment.
A2: Obligations supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in business,
economic, or financial conditions.
- - Thomson BankWatch, Inc. The following short-term ratings apply to
commercial paper, certificates of deposit, unsecured notes, and other
securities having a maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety regarding
timely repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety
regarding timely repayment of principal and interest is strong, the
relative degree of safety is not as high as for issues rated "TBW-1".
<PAGE>
Appendix B
Corporate Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
<PAGE>
Food
Gas Transmission*
Gas Utilities*
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
* For purposes of the Fund's investment policy not to concentrate in
securities of issuers in the same industry, gas utilities and gas
transmission utilities each will be considered a separate industry.
<PAGE>
Oppenheimer Quest Value Fund, Inc.
Two World Trade Center
New York, NY 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Sub-Advisor
OpCap Advisors
One World Financial Center
New York, New York 10281
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 of Portfolio Securities
State Street Bank and Trust Company
P.O. Box 8505
Boston, Massachusetts 02266-8505
Independent Auditors
Price Waterhouse LLP
950 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement, and if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, OppenheimerFunds, Inc.,
OppenheimerFunds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
<PAGE>
OPPENHEIMER QUEST VALUE FUND, INC.
Part C
Other Information
Item 24. Financial Statements and Exhibits
- ------- ---------------------------------
(a) Financial Statements:
--------------------
(1) Financial Highlights - See Parts A and B: To be filed by
Amendment.
2) Independent Auditors' Report - See Part B: To be filed by
Amendment.
(3) Statement of Investments - See Part B: To be filed by
Amendment.
(4) Statement of Assets and Liabilities - See Part B: To be
filed by Amendment
(5) Statement of Operations - See Part B: To be filed by
Amendment.
(6) Statement of Changes in Net Assets - See Part B: To be filed
by Amendment.
(7) Notes to Financial Statements - See Part B: To be filed by
Amendment.
(8) Independent Auditors' Consent: To be filed by Amendment.
(b) Exhibits:
--------
(1)(a)Articles of Incorporation: Filed as Exhibit 1 to the original
Registration Statement on Form N-1 filed on August 10, 1979, and refiled
with Post-Effective Amendment No. 37, 2/13/96, pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(b) Amendment to Articles of Incorporation: Filed herewith.
(2) By Laws: Filed as Exhibit 2 to the original Registration
Statement on Form N-1 filed on August 10, 1979, and refiled with Post-
Effective Amendment No. 37, 2/13/96, pursuant to Item 102 of Regulation
S-T and incorporated herein by reference.
(3) Not Applicable.
(4) (i) Specimen Class A Share Certificate: Filed with Post-
Effective Amendment No. 37, 2/13/96, and incorporated herein by reference.
(ii) Specimen Class B Share Certificate: Filed with Post-
Effective Amendment No. 37, 2/13/96, and incorporated herein by reference.
(iii) Specimen Class C Share Certificate: Filed with Post-
Effective Amendment No. 37, 2/13/96, and incorporated herein by reference.
(iv) Specimen Class Y Share Certificate: Filed herewith.
(5)(a)Investment Advisory Agreement: Filed with Post-Effective
Amendment No. 37, 2/13/96, and incorporated herein by reference.
(b)Subadvisory Agreement: Filed with Post-Effective Amendment No.
37, 2/13/96, and incorporated herein by reference.
(6)(a) General Distributor's Agreement: Filed with Post-Effective
Amendment No. 37, 2/13/96, and incorporated herein by reference.
(b)(1) Form of Dealer Agreement of OppenheimerFunds Distributor,
Inc.: Filed with Post-Effective Amendment No. 14 of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(2) Form of OppenheimerFunds Distributor, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14 of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(3) Form of OppenheimerFunds Distributor, Inc. Agency Agreement:
Filed with Post-Effective Amendment No. 14 of Oppenheimer Main Street
Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein by
reference.
(4) Broker Agreement between OppenheimerFunds Distributor, Inc.
and Newbridge Securities dated 10/1/86: Filed with Post-Effective
Amendment No. 25 of Oppenheimer Special Fund (Reg. No. 2-45272), 11/1/86,
refiled with Post-Effective Amendment No. 45 of Oppenheimer Special Fund
(Reg. No. 2-45272), 8/22/94, pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(7) Not Applicable.
(8) Custody Agreement: Previously filed as Exhibit 8 to Post-
Effective Amendment No. 17, and refiled with Post-Effective Amendment No.
37, 2/13/96, pursuant to Item 102 of Regulations S-T, and incorporated
herein by reference.
(9) Not Applicable.
(10) Opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will when sold be
legally issued, fully paid and non-assessable: Filed as Exhibit 10 to
Pre-Effective Amendment No. 1.
(11) Not Applicable.
(12) Not Applicable.
(13) Copy of Investment Letter: Filed as Exhibit 1 to Post-
Effective Amendment No. 1.
(14) (i) Form of Individual Retirement Account Trust Agreement:
Filed as Exhibit 14 of Post-Effective Amendment No. 21 of Oppenheimer U.S.
Government Trust (Reg. No. 2-76645), 8/25/93, and incorporated herein by
reference.
(ii) Form of prototype Standardized and Non-Standardized Profit-
Sharing Plan and Money Purchase Pension Plan for self-employed persons and
corporations: Filed with Post-Effective Amendment No. 3 of Oppenheimer
Global Growth & Income Fund (File No. 33-33799), 1/31/92, and refiled with
Post-Effective Amendment No. 7 to the Registration Statement of
Oppenheimer Global Growth & Income Fund (Reg. No. 33-33799), 12/1/94,
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(iii) Form of Tax-Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-exempt organizations:
Filed with Post-Effective Amendment No. 47 to the Registration Statement
of Oppenheimer Growth Fund (Reg. No. 2-45272), 10/21/94, and incorporated
herein by reference.
(iv) Form of Simplified Employee Pension IRA: Filed with Post-
Effective Amendment No. 42 to the Registration Statement of Oppenheimer
Equity Income Fund (Reg. No. 2-33043), 10/28/94, and incorporated herein
by reference.
(v) Form of SAR-SEP Simplified Employee Pension IRA: Filed with
Post-Effective Amendment No. 15 to the Registration Statement of
Oppenheimer Mortgage Income Fund, (File No. 33-6614), 2/20/94, and
incorporated herein by reference.
(vi) Form of Prototype 401(k) plan: Filed with Post-Effective
Amendment No. 7 to the Registration Statement of Oppenheimer Strategic
Income & Growth Fund (33-47378), 9/28/95, and incorporated herein by
reference.
(7) Prototype Trust Consultants, Inc. 401(k) Plan: To be filed
by Amendment.
(15) (a) Amended and Restated Distribution and Service Plan and
Agreement with respect to Class A shares: Filed with Post-Effective
Amendment No. 37, 2/13/96, and incorporated herein by reference.
(b) Amended and Restated Distribution and Service Plan and
Agreement in respect of Class B shares: Filed with Post-Effective
Amendment No. 37, 2/13/96, and incorporated herein by reference.
(c) Amended and Restated Distribution and Service Plan and
Agreement with respect to Class C shares: Filed with Post-Effective
Amendment No. 37, 2/13/96, and incorporated herein by reference.
(16) Performance Computation Schedule: To be filed by Amendment.
(17) (1) Financial Data Schedule for Class A shares: To be filed
by Amendment.
(2) Financial Data Schedule for Class B shares: To be filed
by Amendment.
(3) Financial Data Schedule for Class C shares: To be filed by
Amendment.
(18) Oppenheimer Funds Multiple Class Plan under Rule 18f-3
dated 10/24/95: Filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer California Tax-Exempt Fund (33-
23566), 11/1/95, and incorporated herein by reference.
-- Powers of Attorney and Certified Board Resolutions signed by
Registrant's Trustees: Filed with Post-Effective Amendment No. 36,
11/24/95, and incorporated herein by reference.
Item 25. Persons Controlled by or Under Common Control with Registrant
- ------- -------------------------------------------------------------
No person is presently controlled by or under common control with
Registrant.
Item 26. Number of Holders of Securities
- ------- -------------------------------
Number of Record
Holders as of
Title of Class November__, 1996
- -------------- -----------------
Shares of Beneficial Interest
Class A ______
Class B ______
Class C ______
Class Y ______
Item 27. Indemnification
- ------- ---------------
Reference is made to the provisions of Article SEVENTH of
Registrant's Articles of Incorporation filed as Exhibit 24(b)(1) to this
Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing provisions
or otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(a) OppenheimerFunds, Inc. is the investment adviser of the
Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts
A and B hereof and listed in Item 28(b) below.
(a1) The directors and executive officers of OpCap Advisors, their
positions and their other business affiliations and business experience
for the past two years are listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of OppenheimerFunds, Inc. is, or at any time during
the past two fiscal years has been, engaged for his/her own account or in
the capacity of director, officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Name & Current Position Other Business and Connections with OppenheimerFunds,
Inc. During the Past Two Years
- --------------------------- -------------------------------
<S> <C>
Mark J.P. Anson,
Vice President Vice President of Oppenheimer Real Asset Management, Inc.
("ORAMI"); formerly Vice President of Equity Derivatives at
Salomon Brothers, Inc.
Peter M. Antos,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; a Chartered Financial Analyst; Senior Vice President of
HarbourView; prior to March, 1996 he was the senior equity
portfolio manager for the Panorama Series Fund, Inc. (the
"Company") and other mutual funds and pension funds
managed by G.R. Phelps & Co. Inc. ("G.R. Phelps"), the
Company's former investment adviser, which was a subsidiary
of Connecticut Mutual Life Insurance Company; was also
responsible for managing the common stock department and
common stock investments of Connecticut Mutual Life
Insurance Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; formerly a Vice President and Senior Portfolio Manager
at First of America Investment Corp.
Ellen Batt,
Assistant Vice President None
Kathleen Beichert,
Assistant Vice President Formerly employed by Smith Barney, Inc.
David Bernard,
Vice President Previously a Regional Sales Director for Retirement Plan
Services at Charles Schwab & Co., Inc.
Robert J. Bishop,
Vice President Assistant Treasurer of the Oppenheimer Funds (listed below);
previously a Fund Controller for OppenheimerFunds, Inc. (the
"Manager").
George Bowen,
Senior Vice President & Treasurer Treasurer of the New York-based Oppenheimer Funds; Vice
President, Assistant Secretary and Treasurer of the Denver-
based Oppenheimer Funds. Vice President and Treasurer of
OppenheimerFunds Distributor, Inc. (the "Distributor") and
HarbourView Asset Management Corporation
("HarbourView"), an investment adviser subsidiary of the
Manager; Senior Vice President, Treasurer, Assistant Secretary
and a director of Centennial Asset Management Corporation
("Centennial"), an investment adviser subsidiary of the
Manager; Vice President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and Shareholder Financial
Services, Inc. ("SFSI"), transfer agent subsidiaries of the
Manager; Director, Treasurer and Chief Executive Officer of
MultiSource Services, Inc.; Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc.; President,
Treasurer and Director of Centennial Capital Corporation; Vice
President and Treasurer of Main Street Advisers.
Scott Brooks,
Assistant Vice President None.
Susan Burton,
Assistant Vice President Previously a Director of Educational Services for H.D. Vest
Investment Securities, Inc.
Michael A. Carbuto,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; Vice President of Centennial.
Ruxandra Chivu,
Assistant Vice President None.
O. Leonard Darling,
Executive Vice President Formerly Co-Director of Fixed Income for State Street
Research & Management Co.
Robert A. Densen,
Senior Vice President None.
Robert Doll, Jr.,
Executive Vice President and
Director An officer and/or portfolio manager of certain Oppenheimer
funds.
John Doney,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Secretary of the New York-basedOppenheimer Funds; Vice
President and Secretary of the Denver-based Oppenheimer
Funds; Secretary of the Oppenheimer Quest and Oppenheimer
Rochester Funds; Executive Vice President, Director and
General Counsel of the Distributor; President and a Director of
Centennial; Chief Legal Officer and a Director of MultiSource
Services, Inc.; President and a Director of Oppenheimer Real
Asset Management, Inc.; Executive Vice President, General
Counsel and Director of SFSI and SSI; formerly Senior Vice
President and Associate General Counsel of the Manager and
the Distributor.
George Evans,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Scott Farrar,
Vice President Assistant Treasurer of the New York-based and Denver-based
Oppenheimer funds.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of OppenheimerFunds
Distributor, Inc.; Secretary of HarbourView Asset Management
Corporation, MultiSource Services, Inc. and Centennial Asset
Management Corporation; Secretary, Vice President and
Director of Centennial Capital Corporation; Vice President and
Secretary of ORAMI.
Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division An officer, Director and/or portfolio manager of certain
Oppenheimer funds. Formerly Chairman of the Board and
Director of Rochester Fund Distributors, Inc. ("RFD"),
President and Director of Fielding Management Company, Inc.
("FMC"), President and Director of Rochester Capital
Advisors, Inc. ("RCAI"), Managing Partner of Rochester
Capital Advisors, L.P., President and Director of Rochester
Fund Services, Inc. ("RFS"), President and Director of
Rochester Tax Managed Fund, Inc.
John Fortuna,
Vice President None.
Jon S. Fossel,
Chairman of the Board Director of OAC, the Manager's parent holding company;
President, CEO and a director of HarbourView; a director of
SSI and SFSI; President, Director, Trustee, and Managing
General Partner of the Denver-based Oppenheimer Funds;
President and Chairman of the Board of Main Street Advisers,
Inc.; formerly Chief Executive Officer of the Manager.
Patricia Foster,
Vice President An officer of certain Oppenheimer funds; Secretary and
General Counsel of Rochester Capital Advisors, L.P. and
Secretary of Rochester Tax Managed Fund, Inc.
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds; Vice President and Counsel of OAC;
formerly he held the following positions: Vice President and a
director of HarbourView and Centennial, a director of SFSI
and SSI, an officer of other Oppenheimer Funds.
Linda Gardner,
Assistant Vice President None.
Janelle Gellerman,
Assistant Vice President None.
Jill Glazerman, None.
Assistant Vice President
Ginger Gonzalez,
Vice President, Director of
Marketing Communications Formerly 1st Vice President / Director of Graphic and Print
Communications for Shearson Lehman Brothers.
Mildred Gottlieb,
Assistant Vice President Formerly served as a Strategy Consultant for the Private Client
Division of Merrill Lynch.
Caryn Halbrecht,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; formerly Vice President of Fixed Income Portfolio
Management at Bankers Trust.
Barbara Hennigar,
Executive Vice President and
President and Chief Executive
Officer of OppenheimerFunds
Services, a division of the Manager President and Director of SFSI; President and Chief Executive
Officer of SSI.
Dorothy Hirshman,
Assistant Vice President None.
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President None.
Jane Ingalls,
Assistant Vice President Formerly a Senior Associate with Robinson, Lake/Sawyer
Miller.
Ronald Jamison,
Vice President Formerly Vice President andAssociate General Counsel at
Prudential Securities, Inc.
Frank Jennings,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds. Formerly a Managing Director of Global Equities at
Paine Webber's Mitchell Hutchins division.
Heidi Kagan,
Assistant Vice President None.
Thomas W. Keffer,
Vice President Formerly Senior Managing Director of Van Eck Global.
Avram Kornberg,
Vice President Formerly a Vice President with Bankers Trust.
Paul LaRocco,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds. Formerly a Securities Analyst for Columbus Circle
Investors.
Michael Levine,
Assistant Vice President None.
Stephen F. Libera,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; a Chartered Financial Analyst; a Vice President of
HarbourView; prior to March, 1996 he was the senior bond
portfolio manager for Panorama Series Fund, Inc., other
mutual funds and pension accounts managed by G.R. Phelps;
was also responsible for managing the public fixed-income
securities department at Connecticut Mutual Life Insurance Co.
Mitchell J. Lindauer,
Vice President None.
Loretta McCarthy,
Executive Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director President, Director and Trustee of the New York-based and the
Denver-based Oppenheimer funds; President and a Director of
OAC, HarbourView and Oppenheimer Partnership Holdings,
Inc.; Director of ORAMI; Chairman and Director of SSI; a
Director of Oppenheimer Real Asset Management, Inc.
Timothy Martin,
Assistant Vice President Formerly Vice President, Mortgage Trading, at S.N. Phelps &
Co.,Salomon Brothers, and Kidder Peabody.
Sally Marzouk,
Vice President None.
Lisa Migan,
Assistant Vice President, None.
Robert J. Milnamow,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds. Formerly a Portfolio Manager with Phoenix Securities
Group.
Denis R. Molleur,
Vice President None.
Kenneth Nadler,
Vice President None.
David Negri,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Robert E. Patterson,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
John Pirie,
Assistant Vice President Formerly a Vice President with Cohane Rafferty Securities,
Inc.
Tilghman G. Pitts III,
Executive Vice President Chairman and Director of the Distributor.
Jane Putnam,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds. Formerly Senior Investment Officer and Portfolio
Manager with Chemical Bank.
Russell Read,
Vice President Consultant for Prudential Insurance on behalf of the General
Motors Pension Plan.
Thomas Reedy,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds. Formerly a Securities Analyst for the Manager.
David Robertson,
Vice President None.
Adam Rochlin,
Vice President Formerly a Product Manager for Metropolitan Life Insurance
Company.
Michael S. Rosen
Vice President; President:
Rochester Division An officer and/or portfolio manager of certain Oppenheimer
funds. Formerly Vice President of RFS, President and Director
of RFD, Vice President and Director of FMC, Vice President
and director of RCAI, General Partner of RCA, an officer
and/or portfolio manager of certain Oppenheimer funds.
David Rosenberg,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; formerly Vice President and Portfolio Manager/Security
Analyst for Oppenheimer Capital Corp., an investment adviser.
Lawrence Rudnick,
Assistant Vice President Formerly Vice President of Dollar Dry Dock Bank.
James Ruff,
Executive Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Stephanie Seminara,
Vice President Formerly Vice President of Citicorp Investment Services.
Diane Sobin,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; formerly a Vice President and Senior Portfolio Manager
for Dean Witter InterCapital, Inc.
Richard A. Soper, None.
Assistant Vice President
Nancy Sperte,
Executive Vice President None.
Donald W. Spiro,
Chairman Emeritus Vice Chairman and Trustee of the New York-based
Oppenheimer Funds; formerly Chairman of the Manager and
the Distributor.
Arthur Steinmetz,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Ralph Stellmacher,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
John Stoma,
Senior Vice President,
Director Retirement Plans Formerly Vice President of U.S. Group Pension Strategy and
Marketing for Manulife Financial.
Michael C. Strathearn,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; a Chartered Financial Analyst; a Vice President of
HarbourView; prior to March, 1996 he was an equity portfolio
manager for Panorama Series Fund, Inc. and other mutual
funds and pension accounts managed by G.R. Phelps.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee, Director or Managing Partner of
the Denver-based Oppenheimer Funds; President and a
Director
of Centennial; formerly President and Director of OAMC, and
Chairman of the Board of SSI.
James Tobin,
Vice President None.
Jay Tracey,
Vice President Vice President of the Manager; Vice President and Portfolio
Manager of Oppenheimer Discovery Fund, Oppenheimer
Global Emerging Growth Fund and Oppenheimer Enterprise
Fund. Formerly Managing Director of Buckingham Capital
Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant Treasurer Assistant Treasurer of the Distributor and SFSI.
Ashwin Vasan,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Valerie Victorson,
Vice President None.
Dorothy Warmack,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds.
Jerry A. Webman,
Senior Vice President Director of New York-basedtax-exempt fixed income
Oppenheimer Funds; FormerlyManaging Director and Chief
Fixed Income Strategist atPrudential Mutual Funds.
Christine Wells,
Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; a Chartered Financial Analyst; Vice President of
HarbourView; prior to March, 1996 he was an equity portfolio
manager for Panorama Series Fund, Inc. and other mutual
funds and pension funds managed by G.R. Phelps.
William L. Wilby,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; Vice President of HarbourView.
Carol Wolf,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; Vice President of Centennial; Vice President, Finance
and Accounting and member of the Board of Directors of the
Junior League of Denver, Inc.
Robert G. Zack,
Senior Vice President and
Assistant Secretary Associate General Counsel of the Manager; Assistant Secretary
of the Oppenheimer Funds; Assistant Secretary of SSI, SFSI;
an officerof other Oppenheimer Funds.
Arthur J. Zimmer,
Vice President An officer and/or portfolio manager of certain Oppenheimer
funds; Vice President of Centennial.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer Funds,
Oppenheimer Quest Funds, the Denver-based Oppenheimer Funds, and the
Rochester-based Oppenheimer Funds, set forth below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer Asset Allocation Fund
Oppenheimer California Municipal Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer New York Municipal Fund
Oppenheimer Fund
Oppenheimer Series Fund, Inc.
Oppenheimer Target Fund
Oppenheimer Municipal Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Oppenheimer Quest Funds
- -------------------------
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest For Value Funds
Denver-based Oppenheimer Funds
- ------------------------------
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Municipal Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Rochester-based Oppenheimer Funds
- ---------------------------------
Bond Fund Series - Oppenheimer Bond Fund For
Growth
Rochester Fund Municipals
Rochester Portfolio Series - Limited Term
New York Municipal Fund
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer Funds, the Oppenheimer Quest Funds, OppenheimerFunds
Distributor, Inc., HarbourView Asset Management Corp., Oppenheimer
Partnership Holdings, Inc., and Oppenheimer Acquisition Corp. is Two World
Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., OppenheimerFunds
Services, Centennial Asset Management Corporation, Centennial Capital
Corp., Oppenheimer Real Asset Management, Inc., MultiSource Services, Inc.
and Oppenheimer Real Asset Management, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
The address of the Rochester-based funds is 350 Linden Oaks,
Rochester, New York 14625-2807.
Name & Current Position with Other Business andConnections
OpCap Advisors During the Past Two Years
- ------------------------ ----------------------------------
[S] [C]
Robert J. Bluestone,
Director of Fixed Income
Management Managing Director of Oppenheimer Capital;
Director of
Oppenheimer Capital Trust Company.
Eugene D. Brody,
Director of Options and
Futures Management Managing Director of Oppenheimer Capital.
Thomas E. Duggan,
General Counsel & Secretary Managing Director & General Counsel of
Oppenheimer Capital;
Assistant Secretary of
Oppenheimer Financial Corp.
Linda S. Ferrante,
Portfolio Manager Senior Vice President of Oppen-heimer
Capital.
Bernard H. Garil,
President Senior Vice President of Oppen-heimer Capital and
Oppenheimer & Co., Inc; Director of Oppenheimer
Capital
Trust Company.
John Giusio,
Portfolio Manager Vice President of Oppenheimer Capital.
Richard J. Glasebrook, II,
Portfolio Manager Managing Director of Oppenheimer Capital.
Colin Glinsman,
Portfolio Manager Senior Vice President of Oppen-heimer
Capital.
Louis Goldstein,
Assistant Portfolio Manager Senior Vice President of Oppen-heimer
Capital.
Matthew Greenwald,
Portfolio Manager Vice President of Oppenheimer Capital.
Vikki Y. Hanges,
Portfolio Manager Vice President of Oppenheimer Capital.
Jenny Beth Jones,
Portfolio Manager Senior Vice President of Oppen-heimer
Capital.
Joseph M. LaMotta,
Chairman President of Oppenheimer Capital; Director
& Executive Vice
President of Oppenheimer Financial Corp.
and Oppenheimer
Group, Inc.; General Partner
of Oppenheimer & Co., L.P.;
Director of Oppenheimer Capital
Trust Company; Director
and President of Oppenheimer Capital Limited.
George A. Long,
Director of Research Managing Director of Oppenheimer Capital.
Elisa A. Mazen,
Portfolio Manager Vice President of
Oppenheimer Capital
International Division.
Timothy McCormack,
Portfolio Manager Vice President of Oppenheimer Capital;
formerly Assistant
Vice President of Oppenheimer Capital.
Susan Murphy,
President, Quest Cash
Mgmt. Services President of Quest Cash Management
Services and
Oppenheimer Capital Trust Company;
Senior Vice President
of Oppenheimer Capital.
Eileen Rominger,
Portfolio Manager Managing Director of Oppenheimer Capital.
Sheldon M. Siegel,
Treasurer and Chief Financial
Officer Managing Director/Treasurer/Chief
Financial Officer of
Oppenheimer Capital;
Director of Oppenheimer Capital Trust
Company; Treasurer and Chief
Financial Officer of
Oppenheimer Capital Limited.
Bruce E. Ventimiglia,
Chief Operating Officer General Partner of Saratoga
Capital Management; Senior Vice
President/Agent of OCC Distributors.
Jeffrey Whittington,
Portfolio Manager Senior Vice President of
Oppenheimer Capital.
The address of OpCap Advisors is 200 Liberty Street, New
York, New York 10281.
For information as to the business, profession, vocation or
employment of a substantial nature of the officers and trustees
of Oppenheimer Capital, Oppenheimer Capital Trust Company,
Oppenheimer Capital Financial Corp., Oppenheimer Group, Inc.,
Oppenheimer & Co., L.P. and Oppenheimer Capital Limited,
reference is made to Form ADV filed by OpCap Advisors, under the
Investment Advisers Act of 1940, which are incorporated herein
by reference.
Item 29. Principal Underwriter
- -------- ---------------------
(a) OppenheimerFunds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which OppenheimerFunds, Inc.
is the investment adviser, as described in Part A and B of this
Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
Susan P. Bader ++ Assistant Vice President None
Christopher Blunt Vice President None
38954 Plumbrook Drive
Farmington Hills, MI 48331
George Clarence Bowen+ Vice President & Treasurer Vice President
and Treasurer
of the NY-base
d Oppenheimer
funds / Vice
President,
Secretary and
Treasurer of
the Denver-
based Oppen-
heimer funds
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Maryann Bruce* Senior Vice President - None
Director - Financial
Institution Div.
Robert Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Bill Coughlin Vice President None
34251/2 Irving Avenue So.
Minneapolis, MN 55408
Mary Crooks+ Senior Vice President None
Paul Delli-Bovi Vice President None
750 W. Broadway
Apt. 5M
Long Beach, NY 11561
E. Drew Devereaux ++ Assistant Vice President None
Andrew John Donohue* Executive Vice Secretary of
President, General the New York-
Counsel and Director based Oppen-
heimer funds /
Vice President
of the Denver-
based Oppen-
heimer funds
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding++ Vice President; Chairman:
Rochester Division None
Reed F. Finley Vice President - None
320 E. Maple, Ste. 254 Financial Institution Div.
Birmingham, MI 48009
Wendy Fishler* Vice President - None
Financial Institution Div.
Ronald R. Foster Senior Vice President None
139 Avant Lane
Cincinatti, OH 45249
Patricia Gadecki Vice President None
3906 Americana Drive
Tampa, FL 3334
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
111 Rexford Court
Summerville, SC 29485
Mark D. Johnson Vice President None
7512 Cromwell Dr. Apt 1
Clayton, MO 63105
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Ilene Kutno* Vice President - None
Director - Regional Sales
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
John McDonough Vice President None
P.O. Box 760
50 Riverview Road
New Castle, NH 03854
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Timothy G. Mulligan ++ Vice President None
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Wendy Murray Vice President None
114-B Larchmont Acres West
Larchmont, NY 10538
Joseph Norton Vice President None
2518 Fillmore Street
Apt. 1
San Francisco, CA 94115
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
1777 Larimer St. #807
Denver, CO 80202
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.,
Director -
Key Accounts
Minnie Ra Vice President - None
0895 Thirty-First Ave. Financial Institution Div.
Apt. 4
San Francisco, CA 94121
Michael Raso Vice President None
30 Hommocks Road
Apt. 30
Larchmont, NY 10538
John C. Reinhardt ++ Vice President None
Ian Robertson Vice President None
4204 Summit Way
Marietta, GA 30066
Michael S. Rosen++ Vice President, President:
Rochester Division None
Kenneth Rosenson Vice President None
3802 Knickerbocker Place
Apt. 3D
Indianapolis, IN 46240
James Ruff* President None
Timothy Schoeffler Vice President None
1717 Fox Hall Road
Wasington, DC 20007
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
3114 Hickory Run
Sugarland, TX 77479
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker ++ Vice President None
Michael Stenger Vice President None
8572 Saint Ives Place
Cincinnati, OH 45255
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
David G. Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
</TABLE>
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
++ 350 Linden Oaks, Rochester, NY 14625-2807 (the "Rochester
Division")
(c) Not applicable.
Item 30. Location of Accounts and Records
- -------- --------------------------------
The accounts, books and other documents required to be maintained
by Registrant pursuant to Section 31(a) of the Investment Company Act of
1940 and rules promulgated thereunder are in the possession of both
OppenheimerFunds, Inc. at its offices at 3410 South Galena Street, Denver,
Colorado 80231 and MassMutual at its offices at 1295 State Street,
Springfield, Massachusetts 01111.
Item 31. Management Services
- ------- -------------------
Not Applicable.
Item 32. Undertakings
- ------- ------------
(a) Registrant hereby undertakes to assist shareholder communication
in accordance with the provisions of Section 16 of the Investment Company
Act of 1940 and to call a meeting of shareholders for the purpose of
voting upon the question of removal of a Trustee or Trustees when
requested in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest.
(b) Not applicable.
(c) Registrant hereby undertakes to file a post-effective amendment
containing financial statements for any series portfolio of Registrant,
which need not be certified, within four to six months from the effective
date of the registration statement with respect to such portfolio under
the Securities Act of 1933.
(d) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report
to shareholders upon request and without charge, if the information called
for by Item 5A of Form N-1A is contained in the latest annual report to
shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 14th day of October, 1996.
OPPENHEIMER QUEST VALUE FUND, INC.
By: /s/ Bridget A. Macaskill
----------------------------------
Bridget A. Macaskill
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Bridget A Macaskill Chairman of the Board, October 14, 1996
- ----------------------- President (Principal
Bridget A. Macaskill Executive Officer) and
Director
/s/ George C. Bowen Treasurer (Principal October 14, 1996
- ----------------------- Financial and Accounting
Officer)
/s/ Paul Y. Clinton Director October 14, 1996
- -----------------------
Paul Y. Clinton
/s/ Thomas W. Courtney Director October 14, 1996
- -----------------------
Thomas W. Courtney
/s/ Lacy B. Herrmann Director October 14, 1996
- -----------------------
Lacy B. Herrmann
/s/ George Loft Director October 14, 1996
- -----------------------
George Loft
<PAGE>
OPPENHEIMER QUEST VALUE FUND, INC.
Registration No. 2-65223
Post-Effective Amendment No. 38
Index to Exhibits
Exhibit
Number Description
- ------- -----------
24(b)(1)(b) Articles of Amendment to the Articles of Incorporation
24(b)(4)(iv) Specimen Share Certificate for Class Y Shares
OPPENHEIMER QUEST VALUE FUND, INC.
ARTICLES SUPPLEMENTARY
Oppenheimer Quest Value Fund, Inc., a Maryland corporation, having
its principal office in Baltimore City, Maryland (the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: Prior to the date hereof, the charter of the Corporation
provided for three classes of common stock, designated "Class A,"
"Class B, " and "Class C", each class consisting, until further
changed, of the lesser of (x) 35,000,000 shares or (y) the number of
shares that could be issued by issuing all of the shares of Common
Stock less the total number of shares of all classes of Common Stock
then issued and outstanding.
SECOND: Pursuant to the authority of the Board of Directors to
classify and reclassify common stock, the Board of Directors has
classified and created a fourth class of common stock, designated as
"Class Y" common stock, which shall represent the same interest in the
Corporation, and have identical voting, dividend, liquidation, and
other rights with all other shares of Common Stock, subject to such
variations in expenses and voting rights of the Class Y Common Stock as
are provided in paragraphs (c)(3) and (c)(4) of Article FIRST of the
Articles of Amendment of the Corporation dated July 13, 1993, which are
hereby incorporated by reference into these Articles Supplementary and
made applicable to the Class Y Common Stock as fully as if such
provisions were set forth herein.
THIRD: As a result of these Articles Supplementary, the
authorized capital stock of the Corporation shall remain unchanged at
35,000,000 shares, and such capital stock is hereby divided into four
classes of common stock, designated "Class A," "Class B," "Class C" and
"Class Y", each class consisting, until further changed, of the lesser
of (x) 35,000,000 shares or (y) the number of shares that could be
issued by issuing all of the shares of Common Stock less the total
number of shares of all other classes of Common Stock then issued and
outstanding.
FOURTH: These Articles Supplementary do not increase the
aggregate authorized capital stock of the Corporation.
<PAGE>
IN WITNESS WHEREOF, Oppenheimer Quest Value Fund, Inc. has caused
these presents to be signed in its name and on its behalf by its Vice
President and witnessed by its Secretary on , 1996.
WITNESS: OPPENHEIMER QUEST VALUE FUND, INC.
By: By:
Secretary Vice President
THE UNDERSIGNED, Vice President of Oppenheimer Quest Value Fund,
Inc., who executed on behalf of the Corporation Articles Supplementary
of which this Certificate is made a part, hereby acknowledges in the
name and on behalf of said Corporation the foregoing Articles
Supplementary to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein with respect to
the authorization and approval thereof are true in all material
respects under the penalties of perjury.
By:
Vice President
Exhibit 24(b)(4)(iv)
OPPENHEIMER QUEST VALUE FUND, INC.
Class Y Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box, Class Y SHARES
below cert. no.)
(centered
below boxes) Oppenheimer Quest Value Fund, Inc.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP ____________
(at left) is the owner of
(centered) FULLY PAID AND NON-ASSESSABLE Class Y SHARES OF
CAPITAL STOCK WITH THE PAR VALUE OF $.10 EACH OF
Oppenheimer Quest Value Fund, Inc.
hereinafter called the "Corporation", transferable only on
the books of the Corporation by the holder hereof in
person or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate and
the shares represented hereby are issued and shall be held
subject to all of the provisions of the Articles of
Incorporation of the Corporation to all of which the
holder by acceptance hereof assents. This certificate is
not valid until countersigned by the Transfer Agent.
<PAGE>
WITNESS the facsimile seal of Corporation and the
signatures of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ George C. Bowen /s/ Bridget Macaskill
_______________________ ___________________
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
Oppenheimer Quest Value Fund, Inc.
SEAL
1979
Maryland
(at lower right, printed
vertically) Countersigned
OPPENHEIMERFUNDS SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................ hereby sell(s), assign(s), and
transfer(s) unto
<PAGE>
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
_______________________________________________________________________
(Please print or type name and address of assignee)
______________________________________________________
________________________________________________Class Y Shares of capital
stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer
the said shares on the books of the within named Corporation with full
power of substitution in the premises.
Dated: ______________________
Signed: __________________________
___________________________________
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) face of the certificate in every particular
without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Corporation.
The Corporation will furnish to any stockholder, on request and without
charge, a full statement of the designations and any preferences,
conversion and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of the
stock of each class which the Corporation is authorized to issue.
<PAGE>
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this "four hands"
watermark: logotype
___________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
edgar\225cert.y
