Bridget A. Macaskill
President and
Chief Executive Officer OppenheimerFunds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048-0203
800 525-7048
April 20th, 1998
Dear Oppenheimer Quest Officers Value Fund Shareholder:
One of the things we pride ourselves on at OppenheimerFunds, Inc. is our
commitment to searching for new investment opportunities for our shareholders. I
am writing to you today to let you know about one of those opportunities -- a
positive change that has been proposed for Oppenheimer Quest Officers Value
Fund.
After careful consideration, the Board of Trustees concluded that it would
be in the best interest of shareholders of Oppenheimer Quest Officers Value Fund
to reorganize into another Oppenheimer Quest fund, Oppenheimer Quest Value Fund,
Inc. A shareholder meeting has been scheduled for June 9th, and all Oppenheimer
Quest Officers Value Fund shareholders of record on April 1st are being asked to
vote either in person or by proxy. Enclosed, you will find a notice of the
meeting, a ballot card, a proxy statement detailing the proposal, an Oppenheimer
Quest Value Fund, Inc. prospectus and a postage-paid return envelope for your
use.
Why does the Board of Trustees recommend this reorganization? The Trustees
considered that the Funds have the same investment objective
and employ substantially similar investment techniques and strategies. Pursuant
to the reorganization, shareholders of Oppenheimer Quest Officers Value Fund
would be invested in a comparable fund with a substantially larger asset base
over $1.3 billion in assets - and would likely incur lower transfer agency and
other non-management and distribution expenses. The Trustees considered the
future viability of Officers Fund due to its small size - under $8 million in
assets - and that its prospects for increasing its asset base to achieve
efficiencies of scale is uncertain due to, among other things, below-average
performance. The reorganization would be implemented without sales charges and
is expected to be a tax-free reorganization. The enclosed proxy statement
contains further discussion.
How do you vote?
No matter how large or small your investment, your vote is important, so
please review the proxy statement carefully. To cast your vote, simply mark,
sign and date the enclosed proxy ballot and return it in the postage-paid
envelope today. Remember, it can be expensive for Officers Fund -- and
ultimately for you as a shareholder -- to remail ballots if not enough responses
are received to conduct the meeting.
If you have any questions about the proposal, please feel free to contact
your financial advisor, or call us at 1-800-525-7048.
As always, we appreciate your confidence in OppenheimerFunds and look
forward to serving you for many years to come.
Sincerely,
[BAM signature]
Enclosures
hoff\298-qof.wpd
<PAGE>
OPPENHEIMER QUEST OFFICERS VALUE FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 9, 1998
To the Shareholders of Oppenheimer Quest Officers Value Fund:
Notice is hereby given that a Special Meeting of the Shareholders of Oppenheimer
Quest Officers Value Fund ("Officers Fund"), a series of Oppenheimer Quest For
Value Funds (the "Trust"), a registered management investment company, will be
held at 6803 South Tucson Way, Englewood, Colorado 80112 at 10:00 A.M., Denver
time, on June 9, 1998, or any adjournments thereof (the "Meeting"), for the
following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization between the
Trust, on behalf of Officers Fund, and Oppenheimer Quest Value Fund, Inc.
("Value Fund"), and the transactions contemplated thereby, including the
transfer of substantially all the assets of Officers Fund to Value Fund in
exchange for Class A shares of Value Fund, the distribution of such Class A
shares of Value Fund to the Class A shareholders of Officers Fund in complete
liquidation of Officers Fund and the cancellation of the outstanding shares of
Officers Fund (the "Proposal").
2. To act upon such other matters as may properly come before the Meeting.
Shareholders of record at the close of business on April 1, 1998 are entitled to
notice of, and to vote at, the Meeting. The Proposal is more fully discussed in
the Proxy Statement and Prospectus. Please read it carefully before telling us,
through your proxy or in person, how you wish your shares to be voted. The
Trust's Board of Trustees recommends a vote in favor of the Proposal. WE URGE
YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
April 6, 1998
- -----------------------------------------------------------------------
Shareholders who do not expect to attend the Meeting are requested to indicate
voting instructions on the enclosed proxy and to date, sign and return it in the
accompanying postage-paid envelope. To avoid unnecessary duplicate mailings, we
ask your cooperation in promptly mailing your proxy no matter how large or small
your holdings may be.
229
<PAGE>
Oppenheimer Quest Officers Value Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT
Oppenheimer Quest Value Fund, Inc.
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROSPECTUS
This Proxy Statement of Oppenheimer Quest Officers Value Fund ("Officers Fund")
relates to the Agreement and Plan of Reorganization (the "Reorganization
Agreement") and the transactions contemplated thereby (the "Reorganization")
between Oppenheimer Quest For Value Funds (the "Trust"), on behalf of its
series, Officers Fund, and Oppenheimer Quest Value Fund, Inc.("Value Fund").
This Proxy Statement also constitutes a Prospectus of Value Fund included in a
Registration Statement on Form N-14 (the "Registration Statement") filed by
Value Fund with the Securities and Exchange Commission (the "SEC"). Such
Registration Statement relates to the registration of Class A shares of Value
Fund to be offered to the shareholders of Officers Fund pursuant to the
Reorganization Agreement. Officers Fund is located at Two World Trade Center,
New York, New York 10048-0203 (telephone 1-800-525-7048).
This Proxy Statement and Prospectus sets forth concisely information about Value
Fund and the Reorganization that shareholders of Officers Fund should know
before voting on the Reorganization. A copy of the Prospectus for Value Fund,
dated February 27, 1998, is enclosed and incorporated herein by reference. The
following documents have been filed with the SEC and are available without
charge upon written request to OppenheimerFunds Services, the transfer and
shareholder servicing agent for Value Fund and Officers Fund (the "Transfer
Agent"), at P.O. Box 5270, Denver, Colorado 80217, or by calling the toll-free
number shown above: (i) a Prospectus for Officers Fund, dated January 26, 1998;
and (ii) a Statement of Additional Information about Officers Fund, dated
January 26, 1998 (the "Officers Fund Additional Statement"). The following
documents have been filed with the SEC, are incorporated herein by reference and
are available without charge upon written request to the Transfer Agent or by
calling the toll-free number shown above: (i) a Prospectus for Value Fund, dated
February 27, 1998; and (ii) a Statement of Additional Information relating to
the Reorganization described in this Proxy Statement and Prospectus (the
"Additional Statement"), dated April 6, 1998 and filed as part of the
Registration Statement, which Additional Statement includes, among other things,
the Prospectus for Officers Fund, the Officers Fund Additional Statement and a
Statement of Additional Information about Value Fund, dated February 27, 1998
(the "Value Fund Additional Statement") which contains more detailed information
about Value Fund and its management.
Investors are advised to read and retain this Proxy Statement and Prospectus for
future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated April 6, 1998.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
Page
Introduction............................................................1
General..............................................................1
Record Date; Vote Required; Share Information........................2
Proxies..............................................................3
Costs of the Solicitation and the Reorganization.....................3
Comparative Fee Tables..................................................4
Synopsis................................................................7
Purpose of the Meeting...............................................7
Parties to the Reorganization........................................7
The Reorganization .............................................7
Reasons for the Reorganization.......................................8
Tax Consequences of the Reorganization...............................8
Investment Objectives and Policies...................................8
Investment Advisory and Distribution and Service Plan Fees...........9
Purchases, Exchanges and Redemptions................................10
Principal Risk Factors.................................................11
Approval of the Reorganization (The Proposal)..........................13
Reasons for the Reorganization......................................13
The Reorganization..................................................15
Tax Aspects of the Reorganization...................................15
Capitalization Table (Unaudited)....................................17
Comparison Between Officers Fund and Value Fund........................18
Investment Objectives and Policies..................................18
Investment Restrictions.............................................22
Description of Brokerage Practices..................................24
Expense Ratios and Performance......................................25
Shareholder Services................................................26
Rights of Shareholders..............................................27
Organization and History............................................28
Management and Distribution Arrangements............................28
Purchase of Additional Shares.......................................31
Dividends and Distributions.........................................31
Method of Carrying Out the Reorganization .............................31
Additional Information.................................................33
Financial Information...............................................33
Public Information..................................................33
Other Business.........................................................34
Exhibit A - Agreement and Plan of Reorganization by and between
Oppenheimer Quest For Value Funds, on behalf of Oppenheimer Quest
Officers Value Fund, and Oppenheimer Quest Value Fund, Inc. ..........A-1
Enclosure - Prospectus of Oppenheimer Quest Value Fund, Inc. dated February
27, 1998.
<PAGE>
Oppenheimer Quest Officers Value Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT
Oppenheimer Quest Value Fund, Inc.
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROSPECTUS
Special Meeting of Shareholders to be held June 9, 1998
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the shareholders of
Oppenheimer Quest Officers Value Fund ("Officers Fund"), a series of Oppenheimer
Quest For Value Funds (the "Trust"), a registered management investment company,
in connection with the solicitation by the Board of Trustees of the Trust (the
"Board") of proxies to be used at the Special Meeting of Shareholders of
Officers Fund to be held at 6803 South Tucson Way, Englewood, Colorado 80112, at
10:00 A.M., Denver time, on June 9, 1998, or any adjournments thereof (the
"Meeting"). It is expected that the mailing of this Proxy Statement and
Prospectus will commence on or about April 20, 1998.
At the Meeting, shareholders of Officers Fund will be asked to approve an
Agreement and Plan of Reorganization (the "Reorganization Agreement") between
the Trust, on behalf of Officers Fund, and Oppenheimer Quest Value Fund, Inc.
("Value Fund"), and the transactions contemplated thereby (the
"Reorganization"), including the transfer of substantially all the assets of
Officers Fund to Value Fund in exchange for Class A shares of Value Fund, the
distribution of such Class A shares of Value Fund to the shareholders of
Officers Fund in complete liquidation of Officers Fund and the cancellation of
the outstanding shares of Officers Fund. A copy of the Reorganization Agreement
is attached hereto as Exhibit A and is incorporated by reference herein. As a
result of the proposed Reorganization, each shareholder of Officers Fund will
receive that number of Class A shares of Value Fund having an aggregate net
asset value equal to the net asset value of such shareholder's shares of
Officers Fund. This transaction has been structured in a manner intended to
qualify as a tax-free reorganization for federal income tax purposes. See
"Approval of the Reorganization".
Value Fund currently offers Class A, Class B, Class C and Class Y shares. Class
A shares are generally sold with a sales charge imposed at the time of purchase;
however certain purchases of Class A shares aggregating $1 million or more
($500,000 or more as to purchases by certain retirement plans) are not subject
to a sales charge, but may be subject to a contingent deferred sales charge
("CDSC") if redeemed within 12 calendar months (18 calendar months if shares
were purchased prior to May 1, 1997) of the date of purchase. Class B shares are
sold without a front-end sales charge but may be subject to a CDSC if redeemed
within six years of the date of purchase. Class C shares are sold without a
front-end sales charge but may be subject to a CDSC if not held for one year.
Class Y shares are offered at net asset value without sales charge only to
certain
-1-
<PAGE>
institutional investors. As a result of the Reorganization, shareholders of
Officers Fund will receive Class A shares of Value Fund and no sales charge will
be imposed on the Value Fund Class A shares received by Officers Fund's
shareholders in the Reorganization. Because Officers Fund has only Class A
shares outstanding, Value Fund will not issue Class B, Class C or Class Y shares
in the Reorganization. Accordingly, complete information on Class B, Class C and
Class Y shares of Value Fund is not included in this Proxy Statement and
Prospectus, and no offering of Class B, Class C or Class Y shares is made
hereby. Additional information with respect to Value Fund and fees and expenses
is set forth herein, in the Prospectus of Value Fund accompanying this Proxy
Statement and Prospectus and in the Value Fund Statement of Additional
Information ("Value Fund Additional Statement"), both of which are incorporated
herein by reference.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on April 1, 1998 as the record date
(the "Record Date") for the determination of shareholders entitled to notice of,
and to vote at, the Meeting. An affirmative vote of a majority of the Class A
shares of Officers Fund, represented in person or by proxy at the Meeting and
entitled to vote at the Meeting, is required to approve the Reorganization. Each
shareholder will be entitled to one vote for each share and a fractional vote
for each fractional share held of record at the close of business on the Record
Date. Only shareholders of Officers Fund will vote on the Reorganization. The
vote of shareholders of Value Fund is not being solicited.
At the close of business on the Record Date, there were 478,480.793 Class A
shares of Officers Fund issued and outstanding. Although Officers Fund is
authorized to issue Class B and Class C shares, no such shares have been issued
as of this date. At the close of business on the Record Date, there were
63,188,510.138 shares of Value Fund issued and outstanding, consisting of
38,844,991.597 Class A shares, 18,822,525.455 Class B shares, 5,297,856.090
Class C shares and 223,136.996 Class Y shares. The presence in person or by
proxy of the holders of a majority of the shares of Officers Fund constitutes a
quorum for the transaction of business at the Meeting. To the knowledge of
Officers Fund, as of the Record Date, no person owned of record or beneficially
5% or more of its outstanding shares except for: (i) CIBC Oppenheimer Capital
(Accumulation Plan Omnibus Account), Oppenheimer Tower, 1 World Financial
Center, New York, New York 10281-1003 which owned of record 173,147.199 Class A
shares (approximately 36.18% of the Class A shares then outstanding); and (ii)
CIBC Oppenheimer Corp. (for the benefit of a customer), P.O. Box 3484, Church
Street Station, New York, New York 10008-8484 which owned of record 25,177.418
Class B shares (approximately 5.26% of the Class B shares then outstanding). As
of the Record Date, to the knowledge of Value Fund, no person owned of record or
beneficially 5% or more of its outstanding shares except for: (i) Unified
Advisers Inc. (as agent for Value Fund), 429 N. Pennsylvania Street,
Indianapolis, Indiana 46204-1873 which owned of record 2,665,733.480 Class A
shares (approximately 6.86% of the Class A shares then outstanding); (ii)
Merrill Lynch Pierce Fenner & Smith (for the sole benefit of its customers),
4800 Deer Lake Drive E., Flr 3, Jacksonville, Florida 32246-6484 which owned of
record 953,981.296 Class B shares (approximately 5.07% of the Class B shares
then outstanding) and owned of record 623,103.488 Class C shares (approximately
11.75% of the Class C shares then outstanding); and (iii) Massachusetts Mutual
Life Insurance Company, 1295 State Street, Springfield, Massachusetts which
owned of record 223,121.603 Class Y shares (approximately 99.95% of the Class Y
shares then outstanding). Massachusetts Mutual Life Insurance Company is
affiliated with the Manager, as described below. In addition, as of the
-2-
<PAGE>
Record Date, the Trustees and officers of the Trust and the Directors and
officers of Value Fund, in each case, owned less than 1% of the outstanding
shares of Officers Fund and Value Fund, respectively.
Proxies
The enclosed form of proxy, if properly executed and returned, will be voted (or
counted as an abstention or withheld from voting) in accordance with the choices
specified thereon, and will be included in determining whether there is quorum
to conduct the Meeting. The proxy will be voted in favor of the Proposal unless
a choice is indicated to vote against or to abstain from voting on the Proposal.
Shares owned of record by broker-dealers for the benefit of their customers
("street account shares") will be voted by the broker-dealer based on
instructions received from its customers. If no instructions are received, and
the broker-dealer does not have discretionary power to vote such street account
shares under applicable stock exchange rules, the shares represented thereby
will be considered to be present at the Meeting for purposes of determining the
quorum, but will have the same effect as a vote "against" the Proposal. If a
shareholder executes and returns a proxy but fails to indicate how the votes
should be cast, the proxy will be voted in favor of the Proposal. The proxy may
be revoked at any time prior to the voting thereof by: (i) writing to the
Secretary of Officers Fund at Two World Trade Center, New York, New York
10048-0203 (if received in time to be acted upon); (ii) attending the Meeting
and voting in person; or (iii) signing and returning a new proxy (if returned
and received in time to be voted).
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing and mailing
this Proxy Statement and Prospectus, will be borne by Officers Fund and is not
expected to exceed $25,000. Any documents such as existing Prospectuses or
annual reports that are included in that mailing will be a cost of the fund
issuing the document. In addition to the solicitation of proxies by mail,
proxies may be solicited by officers of Officers Fund or officers and employees
of OppenheimerFunds Services, personally or by telephone or telegraph; any
expenses so incurred will be borne by OppenheimerFunds Services. Proxies may
also be solicited by a proxy solicitation firm hired at Officers Fund's expense
for such purpose. Brokerage houses, banks and other fiduciaries may be requested
to forward soliciting material to the beneficial owners of shares of Officers
Fund and to obtain authorization for the execution of proxies. For those
services, if any, they will be reimbursed by Officers Fund for their reasonable
out-of-pocket expenses.
With respect to the Reorganization, Officers Fund and Value Fund will bear
equally the cost of the tax opinion. Any other out-of-pocket expenses of
Officers Fund and Value Fund associated with the Reorganization, including
legal, accounting and transfer agent expenses, will be borne by Officers Fund
and Value Fund, respectively, in the amounts so incurred by each.
-3-
<PAGE>
COMPARATIVE FEE TABLES
Officers Fund and Value Fund each pay a variety of expenses for management of
their assets, administration, distribution of their shares and other services,
and those expenses are reflected in each fund's net asset value per share.
Shareholders pay other expenses directly, such as sales charges. The following
table is provided to help you compare the direct expenses of investing in
Officers Fund with the direct expenses of investing in Value Fund. Pro forma
transaction charges for the combined fund after giving effect to the
Reorganization will be the same as the charges noted below for Value Fund.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
Officers Fund Value Fund
Class A Class B Class C Class A Class B Class C Class Y
Shares Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charg 5.75% None None 5.75% None None None
on Purchases (as
a % of
offering price)
- ------------------------------------------------------------------------------
Maximum
Deferred Sales None(1) 5% in thee 1% if None(1) 5% in the 1% if None
Charge (as a % first year shares first year shares are
of the lower declining are declining redeemed
of the original to 1% in redeemed to 1% in within 12
purchase price the sixth within 12 the sixth months of
or redemption year and months of year and purchase
proceeds) eliminated purchase eliminated
thereafter thereafter
- ------------------------------------------------------------------------------
Maximum
Sales Charge on None None None None None None None
Reinvested Dividends
- ------------------------------------------------------------------------------
Exchange Fee None None None None None None None
- ------------------------------------------------------------------------------
Redemption Fee None None None None None None None
(1) If you invest $1 million or more ($500,000 or more for purchases by
"Retirement Plans," as defined in "Class A Contingent Deferred Sales Charge" in
each fund's Prospectus) in Class A shares, you may have to pay a sales charge of
up to 1% if you sell your shares within 12 calendar months (18 months for shares
purchased prior to May 1, 1997) from the end of the calendar month during which
you purchased those shares.
</TABLE>
-4-
<PAGE>
Expenses of Value Fund and Officers Fund; Pro Forma Expenses
The following tables are the operating expenses of Class A shares of Officers
Fund and the operating expenses of Class A shares of Value Fund and are based on
expenses for the funds' fiscal year ended October 31, 1997. All amounts shown
are a percentage of net assets of Officers Fund and of Class A shares of Value
Fund. Pro forma expenses for the surviving Value Fund after giving effect to the
Reorganization do not differ from the fees indicated for Value Fund.
Value Fund and Pro Forma
Officers Fund Surviving Value Fund
Class A Class A
Management Fees 0.66% (with waiver) 0.94%
12b-1 Plan Fees None (with waiver) 0.50%
Other Expenses 0.63% 0.16%
Total Fund Operating
Expenses 1.29% (with waivers) 1.60%
The 12b-1 fees for shares of Officers Fund and Value Fund are service fees and
asset-based sales charges. The service fees are a maximum of 0.25% of average
annual net assets of Class A shares of each fund and the asset-based sales
charge for Class A shares is 0.25% of average annual net assets of that class.
The Management Fees, 12b-1 Plan Fees and Total Fund Operating Expenses for
Officers Fund in the table above reflect fee waivers by the Manager and the
Distributor that are currently in effect and are expected to be in effect for
the current fiscal year. These fee waivers, which are described in "Investment
Advisory and Distribution and Service Plan Fees", lowered Officers Fund's
overall expense ratio. Without such fee waivers, Management Fees, 12b-1 Plan
Fees and Total Fund Operating Expenses for Officers Fund would have been 1.00%,
0.50% and 2.13%, respectively.
Examples
To try and show the effect of these expenses on an investment over time, the
hypotheticals shown below have been created. Assume that you make a $1,000
investment in Class A shares of Officers Fund, Class A shares of Value Fund or
Class A shares of the pro forma surviving Value Fund, and that the annual return
is 5% and that the operating expenses for each fund are the ones shown in the
chart above. If you were to redeem your shares at the end of each period shown
below, your investment would incur the following expenses by the end of each
period shown.
-5-
<PAGE>
1 year 3 years 5 years 10 years
Oppenheimer Quest
Officers Value Fund
Class A Shares* $70 $ 96 $124 $204
Oppenheimer Quest
Value Fund, Inc. and Pro Forma
Surviving Fund
Class A Shares* $73 $105 $140 $237
* Expenses for Officers Fund and Value Fund include the Class A initial sales
charge. Currently, only Class A shares of Officers Fund are offered and only to
certain individuals and entities that qualify for a waiver of the Class A
initial sales charge. The expenses in the table above for Officers Fund without
giving effect to the Class A initial sales charge would be $13, $41, $71 and
$156 for the 1 year, 3 years, 5 years and 10 years, respectively. Pro forma
expenses for the surviving Value Fund after giving effect to the Reorganization
do not differ from the fees indicated for Value Fund.
The 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 funds,
all of which may be more or less than the amounts shown.
-6-
<PAGE>
SYNOPSIS
The following is a synopsis of certain information contained in or incorporated
by reference in this Proxy Statement and Prospectus and presents key
considerations for shareholders of Officers Fund to assist them in determining
whether to approve the Reorganization. This synopsis is only a summary and is
qualified in its entirety by the more detailed information contained in or
incorporated by reference in this Proxy Statement and Prospectus and by the
Reorganization Agreement which is Exhibit A hereto. Shareholders should
carefully review this Proxy Statement and Prospectus and the Reorganization
Agreement in their entirety and, in particular, the current Prospectus of Value
Fund which accompanies this Proxy Statement and Prospectus and is incorporated
herein by reference.
Purpose of the Meeting
At the Meeting, shareholders of Officers Fund will be asked to approve or
disapprove the Reorganization.
Parties to the Reorganization
Oppenheimer Quest For Value Funds (the "Trust") was organized in April 1987 as a
multi-series Massachusetts business trust and Officers Fund is a non-diversified
series of the Trust. The Trust is an open-end management investment company,
with an unlimited number of authorized shares of beneficial interest. Value Fund
is a diversified, open-end management investment company that was organized in
August 1979 as a Maryland corporation.
Officers Fund and Value Fund (each referred to herein as a "fund" and
collectively referred to herein as the "funds") are located at Two World Trade
Center, New York, New York 10048-0203. OppenheimerFunds, Inc. (the "Manager"),
located at Two World Trade Center, New York, New York 10048-0203, acts as
investment adviser to the funds. OpCap Advisors (the "Sub-Adviser") acts as
sub-adviser to the funds and is located at One World Financial Center, New York,
New York 10281. The portfolio manager for Officers Fund (Jeffrey C.
Whittington), and the portfolio manager for Value Fund (Eileen Rominger) are
each employed by the Sub-Adviser. The Trustees of the Trust and the Directors of
Value Fund are the same, and oversee the Manager, the Sub-Adviser and the
portfolio managers. Additional information about the funds, the Manager and the
Sub-Adviser is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of substantially all the
assets of Officers Fund to Value Fund in exchange for the issuance of Class A
shares of Value Fund. The net asset value of Value Fund Class A shares issued in
the exchange will equal the value of the assets of Officers Fund received by
Value Fund. In conjunction with the Closing (as defined below) of the
Reorganization, presently scheduled for June 12, 1998, Officers Fund will
distribute the Class A shares of Value Fund received by Officers Fund on the
Closing Date (as defined below) to holders of Class A shares of Officers Fund.
As a result of the Reorganization, each Class A Officers Fund shareholder will
receive the number of full and fractional Class A Value Fund shares that equals
in value such shareholder's pro rata interest in the assets transferred to Value
Fund as of the Valuation
-7-
<PAGE>
Date (as defined below). The Board has determined that the interests of existing
Officers Fund shareholders will not be diluted as a result of the
Reorganization. For the reasons set forth below under "Approval of the
Reorganization - Reasons for the Reorganization," the Board, including the
trustees who are not "interested persons" of the Trust (the "Independent
Trustees"), as that term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), has concluded that the Reorganization is
in the best interests of Officers Fund and its shareholders and recommends
approval of the Reorganization by Officers Fund shareholders. The Board of
Directors of Value Fund has also approved the Reorganization and determined that
the interests of existing Value Fund shareholders will not be diluted as a
result of the Reorganization. If the Reorganization is not approved, Officers
Fund will continue in existence and the Board will determine whether to pursue
alternative actions.
Reasons for the Reorganization
The Manager proposed to the Board a reorganization into Value Fund so that
shareholders of Officers Fund may become shareholders of a substantially larger
fund, which after such reorganization is anticipated to allow Officers Fund
shareholders to participate in a fund with the same investment objective and
similar investment policies and strategies but with the potential for lower
ongoing transfer agency and other non-management and distribution expenses and,
to the extent the voluntary fee waivers of Officers Fund were terminated, lower
overall operating expenses. The Board also considered information with respect
to the historical performance of the funds. For the one and three year periods
ended October 31, 1997, the average annual total returns at net asset value were
significantly better for Value Fund than for Officers Fund. The Board also
considered that the Reorganization would be a tax free reorganization, and there
would be no sales charge imposed in effecting the Reorganization.
Tax Consequences of the Reorganization
In the opinion of Price Waterhouse LLP, tax adviser to Officers Fund, the
Reorganization will qualify as a tax-free reorganization for Federal income tax
purposes. As a result, it is expected that no gain or loss will be recognized by
either Officers Fund or Value Fund, or by the shareholders of either Officers
Fund or Value Fund, for Federal income tax purposes as a result of the
Reorganization. For further information about the tax consequences of the
Reorganization, see "Approval of the Reorganization - Tax Aspects of the
Reorganization" below.
Investment Objectives and Policies
The investment objectives and investment policies of the funds are substantially
the same. Officers Fund and Value Fund each seek capital appreciation. In
seeking this investment objective, Officers Fund and Value Fund will invest in
securities (primarily equity securities) of companies believed to be undervalued
in the marketplace in relation to factors such as the companies' assets,
earnings, growth potential and cash flows. The funds may also invest in bonds
rated below investment grade by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("S&P") or another rating organization or as
determined to be of similar quality by the Sub-Adviser. Such investment is
limited by Officers Fund to up to 25% of net assets; there is no limit as to
Value Fund,
-8-
<PAGE>
although it is the present intention of Value Fund to invest no more than 5% of
its total assets in such securities. The funds may also invest in foreign equity
and debt securities. The funds may use certain hedging instruments to try to
manage investment risks. To provide liquidity, the funds typically invest a
portion of their respective assets in various types of U.S. Government
securities and certain money market instruments; for temporary defensive
purposes, the funds may invest all of their respective assets in such
securities. One important distinction between the funds is with respect to
diversification. Officers Fund is "non-diversified", and may invest in the
securities of a single issuer without limit by the Investment Company Act; this
may result in, among other things, a greater fluctuation in the total market
value of Officers Fund's portfolio. As a result, an investment in Officers Fund
may entail greater risk than an investment in a diversified investment company,
such as Value Fund. See "Principal Risk Factors" and "Comparison Between
Officers Fund and Value Fund".
Investment Advisory and Distribution and Service Plan Fees
The funds obtain investment management services from the Manager pursuant to the
terms of investment advisory agreements that are substantially the same except
for fee amounts. The management fee payable to the Manager is computed on the
net asset value of each fund as of the close of business each day and is payable
monthly. Officers Fund pays a management fee at the annual rate of 1.0% of
average annual net assets. A voluntary waiver of a portion of this fee is
currently in effect, as described below. Value Fund pays a management fee at the
following annual rates: 1.00% of the first $400 million of average annual net
assets; 0.90% of the next $400 million; 0.85% of the next $3.2 billion; 0.80% of
the next $4 billion; and 0.75% of average annual net assets over $8 billion.
The Manager has retained the Sub-Adviser on behalf of each fund to provide
day-to-day portfolio management of the fund. For such services the Manager (not
the fund) pays the Sub-Adviser an annual fee payable monthly based on the
average daily net assets of the fund equal to 40% of the net advisory fee
collected by the Manager based on the 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, calculated after any applicable waivers. As to Officers Fund, the
Sub-Adviser voluntarily agreed to waive its entire subadvisory fee. Concurrently
with such waiver, the Manager voluntarily agreed to waive that portion of its
management fee equal to what would otherwise have been payable to the
Sub-Adviser if the Sub- Adviser had not waived its subadvisory fee. These
expense waivers are voluntary and may be modified or withdrawn at any time.
Officers Fund and Value Fund have adopted Distribution and Service Plans under
Rule 12b-1 of the Investment Company Act for Class A shares (the "Plans") to
compensate the Distributor for its services and costs in connection with the
distribution of Class A shares and the personal service and maintenance of
shareholder accounts that hold Class A shares. Under each Plan, the funds pay
the Distributor an asset-based sales charge of 0.25% per annum on Class A shares
and a service fee of 0.25% per annum on Class A shares. All fee amounts are
computed on the average annual net assets of the class determined as of the
close of each regular business day of each fund. 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%
annually for Class A shares purchased on
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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 of the funds. The
Distributor retains the balance of the asset-based sales charge to compensate
itself for its other expenditures under the Plan. As to Officers Fund, the
Distributor currently voluntarily waives all fees payable to it under the Class
A Plan. Such waiver may be terminated at any time.
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. A description of the Distribution and Service
Plans for Class B and Class C shares of the funds is set forth in their
respective Prospectuses. Class Y shares of Value Fund do not have a Distribution
and Service Plan. The Plans are compensation plans whereby payments by the funds
are made at a fixed rate as specified above and the funds' payments are not
limited to reimbursing the Distributor's costs.
Purchases, Exchanges and Redemptions
Both Officers Fund and Value Fund are part of the OppenheimerFunds complex of
mutual funds. The procedures for purchases, exchanges and redemptions of shares
of the funds are substantially the same. Shares of either fund may be exchanged
for shares of the same class of other Oppenheimer funds offering such shares.
Class A shares of Officers Fund and Value Fund are generally sold subject to a
maximum initial sales charge of 5.75%. Currently, Class A shares of Officers
Fund are only offered to a limited group of individuals and entities as
described in Officers Fund's Prospectus, and such individuals and entities
qualify for purchase of shares at net asset value without a sales charge.
Investors who purchase $1 million or more ($500,000 or more for purchases by
"Retirement Plans" as defined in "Class A Contingent Deferred Sales Charge" in
each fund's Prospectus) in Class A shares pay no initial sales charge but may
have to pay a sales charge of up to 1% if shares are sold within 12 calendar
months (18 months for shares purchased prior to May 1, 1997) from the end of the
calendar month during which shares are purchased. Class A shares of the funds
may also be purchased at reduced sales charges, or at net asset value, under
other circumstances described in the fund's Prospectus. Class B and Class C
shares of the funds generally are sold without a front-end sales charge but may
be subject to a contingent deferred sales charge ("CDSC") upon redemption. Class
Y shares are offered at net asset value without sales charge only to certain
institutional investors. See "Comparative Fee Tables" above for a complete
description of such sales charges. Class A shares of Value Fund received in the
Reorganization will be issued at net asset value and without a sales charge.
Shareholders of the funds may exchange their shares at net asset value for
shares of the same class issued by other mutual funds in the OppenheimerFunds
complex, subject to certain conditions. Class A shares of the funds may be
redeemed without charge at their respective net asset values per share
calculated after the redemption order is received and accepted; however, Class A
shares that were not subject to a front-end sales charge at the time of purchase
in amounts of $1 million or more ($500,000 or more for purchases by certain
retirement plans) may be subject to a CDSC as described above. Services
available to shareholders of both funds include purchase and redemption of
shares
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through OppenheimerFunds AccountLink and PhoneLink (an automated telephone
system), telephone redemptions, and exchanges by telephone to other Oppenheimer
funds which offer Class A, Class B and Class C shares, and reinvestment
privileges. Please see "Shareholder Services," below and each fund's Prospectus
for further information.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in Value Fund,
shareholders should carefully consider the following risk factors, the
information set forth in this Proxy Statement and Prospectus and the more
complete description of risk factors set forth in the documents incorporated by
reference herein, including the Prospectuses of the funds and their respective
Statements of Additional Information.
General
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
affect the value of both funds' investments, their investment performance, and
the prices of their shares. Because of the types of the securities in which the
funds invest, and the investment techniques they use, the funds are designed for
long-term investors. There is no assurance that either 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.
Stock Investment Risks
Because both funds usually invest a substantial portion (and from time to time
may invest all) of their assets in stocks, the value of each fund's portfolio
will be affected by changes in the stock markets. This market risk will affect
each fund's net asset values per share, which will fluctuate as the values of
the fund's portfolio securities change. Not all stock prices change uniformly or
at the same time, and other factors can affect a particular stock's price (for
example, poor earnings reports by an issuer, loss of major customers, major
litigation against an issuer, or changes in government regulations affecting an
industry). Not all of these factors can be predicted. Changes in the overall
market conditions and prices can occur at any time. Because of the types of
companies each fund invests in and the investment techniques used, some of which
may be speculative, both funds are designed for those investors who are
investing for the long-term and who are willing to accept greater risks of loss
of their capital in the hope of achieving capital appreciation. Investing for
capital appreciation entails the risk of loss of all or part of your principal.
Risks of Fixed-Income Securities
Debt securities are subject to changes in their values due to changes in
prevailing interest rates (this is known as interest rate risk). When prevailing
interest rates fall, the value of already-issued debt securities generally rise.
When interest rates rise, the values of already-issued debt securities
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generally decline. The magnitude of these fluctuations will often be greater for
longer-term debt securities than shorter-term debt securities. A 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. Debt securities
are also subject to credit risk. Credit risk relates to the ability of the
issuer to meet interest or principal payments on a security as they become due.
Each fund has the ability to invest its net assets (subject to limitations
described below) in high-yield, lower-grade debt securities commonly known as
"junk bonds". However, as of the fiscal year ended October 31, 1997, neither
fund held any high-yield securities. If a fund were to invest in high-yield
securities, those securities may be subject to greater market fluctuation and
risk of loss of income and principal than lower yielding, investment grade
securities. There are additional risks of investing in lower grade securities
that are described in the Prospectus of each fund.
Foreign Securities
There are risks of foreign investing that increase the risk of investing in both
Officers Fund and in Value Fund and also increase the operating costs of both
funds. For example, foreign issuers are not required to use generally-accepted
accounting principles. If foreign securities are not registered for sale in the
U.S. under U.S. securities laws, the issuer does not have to comply with the
disclosure requirements of U.S. laws, which are generally more stringent than
foreign laws. The values of foreign securities investments will be affected by
other factors, including exchange control regulations or currency blockage and
possible expropriation or nationalization of assets. There are risks of changes
in foreign currency values. Because Officers Fund and Value Fund may purchase
securities denominated in foreign currencies, a change in value of a foreign
currency against the U.S. dollar will result in a change in the U.S. dollar
value of securities of that Fund denominated in that currency. There may also be
changes in governmental administration or economic or monetary policy in the
U.S. or abroad that can affect foreign investing. In addition, it is generally
more difficult to obtain court judgments outside the United States if that Fund
has to sue a foreign broker or issuer. Additional costs may be incurred because
foreign broker commissions are generally higher than U.S. rates, and there are
additional custodial costs associated with holding securities abroad. More
information about the risks and potential rewards of investing in foreign
securities is contained in the Statement of Additional Information of both
funds.
Hedging Instruments
Each fund may use certain hedging instruments. 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
Sub-Adviser uses a hedging instrument at the wrong time or judges market
conditions incorrectly, hedging strategies may reduce the fund's return. Losses
could also be experienced 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 funds. There
are also special risks in particular hedging strategies. 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. To limit its
exposure in foreign currency exchange contracts, the funds limit their exposure
to the amount of its assets denominated in foreign currency.
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Non-Diversification
Officers Fund is classified as a "non-diversified" investment company under the
Investment Company Act so that the proportion of its assets that may be invested
in the securities of a single issuer is not limited by the Investment Company
Act. An investment in Officers Fund therefore may entail greater risk than an
investment in a diversified investment company, such as Value Fund, because a
higher percentage of investments among fewer issuers may result in greater
fluctuation in the total market value of Officers Fund's portfolio, and
economic, political or regulatory developments may have a greater impact on the
value of Officers Fund's portfolio than would be the case if the portfolio were
diversified among more issuers.
APPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
At a meeting held on February 18, 1998, the Board, including the Independent
Trustees, unanimously approved the Reorganization and the Reorganization
Agreement, determined that the Reorganization is in the best interests of
Officers Fund and its shareholders and resolved to recommend that shareholders
of Officers Fund vote for approval of the Reorganization. The Board further
determined that the Reorganization would not result in dilution of Officers
Funds' shareholders' interests.
In evaluating the Reorganization, the Board reviewed and discussed with
independent legal counsel the materials provided by the Manager with respect to
the proposed Reorganization. Included in the materials was information with
respect to the funds' investment objectives and policies, management fees,
distribution fees and other operating expenses, historical performance and asset
size.
The Board was advised that Officers Fund, with approximately only $7 million in
net assets as of October 31, 1997, was a small fund in terms of net assets with
higher shareholder administration, transfer agency, legal and other
non-management fee operating expenses than most other mutual funds in the
OppenheimerFunds complex. Such expenses were 0.63% at October 31, 1997. In
comparison, Value Fund had over $1 billion of net assets as of October 31, 1997,
with substantially lower non-management fee and distribution operating expenses
of 0.16% as of such date. The Board, in reviewing financial information,
considered that after giving effect to the fee waivers for Officers Fund, the
Total Fund Operating Expenses of Value Fund at October 31, 1997 (including
management fee and distribution expenses) were higher than those of Officers
Fund and would be higher on a pro forma basis after giving effect to the
Reorganization; however, without giving effect to the fee waivers for Officers
Fund, which are voluntary and can be terminated by the Manager and OFDI at any
time, the total operating expenses of Value Fund were, and after the
Reorganization would be, lower. See "Comparative Fee Tables". The Board
concluded that pursuant to the Reorganization, the shareholders of Officers Fund
would be shareholders of a substantially larger fund, with the potential to
incur lower ongoing transfer agency and other non-management and distribution
expenses and, to the extent the voluntary fee waivers of Officers Fund were
terminated, lower overall operating expenses. The Board further concluded that
economies of scale that apply to a larger mutual fund may benefit shareholders
of Officers Fund.
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The Board considered that the funds have the same investment objective of
seeking capital appreciation, that the portfolio managers employ substantially
similar investment techniques and strategies for the funds, and that the
investment policies of the funds as recited in their respective Prospectuses
with respect to purchasing portfolio securities, hedging instruments, illiquid
securities, convertible securities, warrants and rights, portfolio lending and
the borrowing of money are substantially the same. The only notable difference
between the funds regarding investment policy is with respect to
diversification; Officers Fund is a non-diversified investment company, and the
proportion of its assets that may be invested in the securities of a single
issuer is not limited by the Investment Company Act, while Value Fund is a
diversified investment company and is diversified with respect to 75% of its
total assets. Due to these similarities, the Manager advised the Boards that the
portfolio securities held by Officers Fund could be suitable for investment by
Value Fund and, pursuant to the Reorganization, would be acquired without the
payment of brokerage commissions and other fees. The Board determined that the
funds, in terms of investment objectives, techniques and strategies, were
comparable and that pursuant to the Reorganization shareholders of Officers Fund
would be invested in a comparable mutual fund.
In addition to the above, the Board also considered information with respect to
the historical performance of Officers Fund and Value Fund, including the
performance information set forth below in "Expense Ratios and Performance". The
Board was advised by the Manager that overall, the average annual return on
Class A shares for Value Fund was better than that of Officers Fund and that the
prospects for Value Fund's performance in the future were positive. By contrast,
the Board also considered the future viability of Officers Fund due to its small
size, and that its prospects for increasing its asset base to achieve
efficiencies of scale was uncertain due to, among other things, below-average
performance, as discussed below in "Expense Ratios and Performance".
The Board next considered the terms and conditions of the Reorganization,
including that there would be no sales charge imposed in effecting the
Reorganization and that the Reorganization is expected to be a tax free
reorganization.
After consideration of the above factors, and such other factors and information
as the Board deemed relevant, the Board, including the Independent Trustees,
unanimously approved the Reorganization and the Reorganization Agreement and
voted to recommend its approval to the shareholders of Officers Fund.
The Board of Directors of Value Fund, including the Directors who are not
"interested persons" of Value Fund, unanimously approved the Reorganization and
the Reorganization Agreement and determined that the Reorganization is in the
best interests of Value Fund and its shareholders. The Board of Directors
further determined that the Reorganization would not result in dilution of Value
Fund shareholders' interests. The Board of Directors considered, among other
things, that Value Fund could acquire portfolio securities without incurring
brokerage and other transaction expenses,
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and that an increase in the asset base of Value Fund could benefit Value Fund
shareholders due to the economies of scale available to a larger mutual fund.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full as Exhibit A
to this Proxy Statement and Prospectus) contemplates a reorganization under
which (i) all of the assets of Officers Fund (other than the cash reserve
described below (the "Cash Reserve")) will be transferred to Value Fund in
exchange for Class A shares of Value Fund, (ii) these Class A shares of Value
Fund will be distributed among the shareholders of Officers Fund in complete
liquidation of Officers Fund, and (iii) the outstanding shares of Officers Fund
will be canceled. Value Fund will not assume any of Officers Fund's liabilities
except for portfolio securities purchased which have not settled and outstanding
shareholder redemption and dividend checks.
The result of effectuating the Reorganization would be that: (i) Value Fund will
add to its gross assets all of the assets (net of any liability for portfolio
securities purchased but not settled and outstanding shareholder redemption and
dividend checks) of Officers Fund other than its Cash Reserve; and (ii) the
shareholders of Officers Fund as of the close of business on the Closing Date
will become holders of Class A shares of Value Fund.
The effect of the Reorganization will be that shareholders of Officers Fund who
vote their Class A shares in favor of the Reorganization will be electing to
redeem their shares of Officers Fund (at net asset value on the Valuation Date
referred to below under "Method of Carrying Out the Reorganization Plan,"
calculated after subtracting the Cash Reserve) and reinvest the proceeds in
Class A shares of Value Fund at net asset value without sales charge and without
recognition of taxable gain or loss for Federal income tax purposes (see "Tax
Aspects of the Reorganization" below). The Cash Reserve is that amount retained
by Officers Fund which is sufficient in the discretion of the Board for the
payment of: (a) Officers Fund's expenses of liquidation, and (b) its
liabilities, other than those assumed by Value Fund. Officers Fund and Value
Fund will bear all of their respective expenses associated with the
Reorganization, as set forth under "Costs of the Solicitation and the
Reorganization" above. Management estimates that such expenses associated with
the Reorganization to be borne by Officers Fund will not exceed $25,000.
Liabilities as of the
date of the transfer of assets will consist primarily of accrued but unpaid
normal operating expenses of Officers Fund, excluding the cost of any portfolio
securities purchased but not yet settled and outstanding shareholder redemption
and dividend checks. See "Method of Carrying Out the Reorganization Plan" below.
The Reorganization Agreement provides for coordination between the funds as to
their respective portfolios so that, after the closing, Value Fund will be in
compliance with all of its investment policies and restrictions. Officers Fund
will recognize capital gain or loss on any sales made pursuant to this
paragraph.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the Reorganization
Agreement, Officers Fund will pay a dividend or dividends which, together with
all previous dividends, will have the effect of
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distributing to Officers Fund's shareholders all of Officers Fund's investment
company taxable income for taxable years ending on or prior to the Closing Date
(computed without regard to any deduction for dividends paid) and all of its net
capital gain, if any, realized in taxable years ending on or prior to the
Closing Date (after reduction for any available capital loss carry-forward).
Such dividends will be included in the taxable income of Officers Fund's
shareholders as ordinary income and capital gain, respectively.
The exchange of the assets of Officers Fund for Class A shares of Value Fund and
the assumption by Value Fund of certain liabilities of Officers Fund is intended
to qualify for Federal income tax purposes as a tax-free reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code").
Officers Fund has represented to Price Waterhouse LLP, tax adviser to the funds,
that there is no plan or intention by any Officers Fund shareholder who owns 5%
or more of Officers Fund's outstanding shares, and, to Officers Fund's best
knowledge, there is no plan or intention on the part of the remaining Officers
Fund shareholders, to redeem, sell, exchange or otherwise dispose of a number of
Value Fund Class A shares received in the transaction that would reduce Officers
Fund shareholders' ownership of Value Fund shares to a number of shares having a
value, as of the Closing Date, of less than 50% of the value of all the formerly
outstanding Officers Fund shares as of the same date. Value Fund and Officers
Fund have each represented to Price Waterhouse LLP, that, as of the Closing
Date, it will qualify as a regulated investment company or will meet the
diversification test of Section 368(a)(2)(F)(ii) of the Code.
As a condition to the closing of the Reorganization, Value Fund and Officers
Fund will receive the opinion of Price Waterhouse LLP to the effect that, based
on the Reorganization Agreement, the above representations, existing provisions
of the Code, Treasury Regulations issued thereunder, current Revenue Rulings,
Revenue Procedures and court decisions, for Federal income tax purposes:
1. The transactions contemplated by the Reorganization Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1)(c)
of the Code.
2. Officers Fund and Value Fund will each qualify as "a party to a
reorganization" within the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of Officers Fund
upon the distribution of Class A shares of Value Fund to the shareholders
of Officers Fund pursuant to Section
354(a)(1) of the Code.
4. Under Section 361(a) of the Code no gain or loss will be recognized by
Officers Fund by reason of the transfer of its assets solely in exchange
for Class A
shares of Value Fund.
5. Under Section 1032(a) of the Code no gain or loss will be recognized by
Value Fund by reason of the transfer of Officers Fund's assets solely in
exchange for Class A shares of Value Fund.
6. The shareholders of Officers Fund will have the same tax basis and holding
period for the Class A shares of Value Fund that they receive as they had
for Officers Fund shares that they previously held, pursuant to Sections
358(a)(1) and 1223(1) of the Code, respectively.
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7. The securities transferred by Officers Fund to Value Fund will have the
same tax basis and holding period in the hands of Value Fund as they had
for Officers Fund, pursuant to Sections
362(b) and 1223(2) of the Code, respectively.
Shareholders of Officers Fund should consult their tax advisors regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing discussion relates only to the Federal income
tax consequences of the Reorganization, shareholders of Officers Fund should
also consult their tax advisers as to state and local tax consequences, if any,
of the Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of Officers Fund and Value Fund
and indicates the pro forma combined capitalization as of October 31, 1997 as if
the Reorganization had occurred on that date.
Net Asset
Shares Value
Net Assets Outstanding Per Share
Oppenheimer Quest
Officers Value Fund
Class A $ 7,465,799 538,024 $13.88
Oppenheimer Quest
Value Fund, Inc.
Class A $699,230,322 34,130,613 $20.49
Class B* $298, 348,393 14,788,764 $20.17
Class C* $ 82,098,206 4,070,613 $20.17
Class Y* $ 3,086,417 150,224 $20.55
Oppenheimer Quest
Value Fund, Inc.
(Pro Forma Surviving Fund)**
Class A $706,696,121 34,494,976 $20.49
Class B* $298,348,393 14,788,764 $20.17
Class C* $ 82,098,206 4,070,613 $20.17
Class Y* $ 3,086,417 150,224 $20.55
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* No Value Fund Class B, Class C or Class Y shares are being issued in the
Reorganization because Officers Fund does not have Class B, Class C or Class Y
shares. ** Reflects issuance of 364,363 Class A shares of Value Fund in a
tax-free exchange for the net assets of Officers Fund, aggregating $7,465,799.
The pro forma ratio of expenses to average annual net assets of the combined
funds at October 31, 1997 would have been 1.60% with respect to Class A shares.
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COMPARISON BETWEEN
OFFICERS FUND AND VALUE FUND
Comparative information about Officers Fund and Value Fund is presented below.
More complete information about Value Fund and Officers Fund is set forth in
their respective Prospectuses (which as to Value Fund accompanies this Proxy
Statement and Prospectus and is incorporated herein by reference), and
additional information about both funds is set forth in documents that may be
obtained upon request of the transfer agent or upon review at the offices of the
SEC. See "Miscellaneous - Public Information."
Investment Objectives and Policies
The investment objectives and investment policies of the funds are substantially
the same. Each fund seeks capital appreciation. In seeking this investment
objective, each fund will invest in securities (primarily equity securities) of
companies believed to be undervalued in the marketplace in relation to factors
such as the companies' assets, earnings, growth potential and cash flows. Equity
securities are common stocks and preferred stocks; bonds, debentures and notes
convertible into common stocks; and depository receipts for such securities. The
funds may invest their assets in equity securities of companies with no limit as
to market capitalization.
Additional information with respect to the funds' investments and investment
policies is set forth below. Information about the risks and potential rewards
of such investments and investment policies is described above in the section
entitled "Principal Risk Factors" and is contained in each fund's respective
Prospectus and Statement of Additional Information. Unless stated to apply on an
ongoing basis, percentage restrictions set forth below and in "Investment
Restrictions" apply only at the time the fund makes an investment, and the fund
need not sell securities to meet the percentage limits if the value of the
investment increases in proportion to the size of the fund.
Fixed-Income Securities
The funds are permitted to invest in fixed-income securities and may invest up
to 25% of net assets (as to Officers Fund) or without limit (as to Value Fund,
although it is the present intention of Value Fund to invest no more than 5% of
its total assets) in high-yield, lower-grade bonds (commonly known as "high
yield" or "junk bonds"). Such securities are rated below "investment grade,"
which means they have a rating lower than "Baa3" by Moody's or lower than "BBB-"
by S&P or similar ratings by other rating organizations, or if unrated, are
determined by the Sub-Adviser to be of comparable quality to debt securities
rated below investment grade. A reduction in the rating of a security after its
purchase by the fund will not require the fund to dispose of the security. As of
the October 31, 1997, the end of the funds' last fiscal year, neither fund held
securities rated below investment grade.
Both funds may invest in convertible fixed-income securities. These securities
are bonds, debentures or notes that may be converted into or exchanged for a
prescribed amount of company stock of the same or a different issue within a
particular period of time at a specified price or formula. The funds consider
convertible securities to be "equity equivalents" because of the conversion
feature and the
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security's rating has less impact on the investment decision than in the case of
non-convertible securities.
To provide liquidity for the purchase of new instruments and to effect
redemptions of shares, each 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").
Foreign Securities
The funds 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, European Depository
Receipts or Global Depository Receipts. There is no limit to the amount of
foreign securities the funds may acquire. Investments in securities of issuers
in underdeveloped countries or countries that have emerging markets generally
may offer greater potential for gain but involve more risk and may be considered
highly speculative. The funds will hold foreign currency only in connection with
the purchase or sale of foreign securities.
Portfolio Turnover
A change in the securities held by either fund is known as "portfolio turnover."
Neither fund ordinarily engages in short-term trading to try to achieve its
objective. As a result, each 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. For each fund's portfolio turnover rate, see "Financial
Highlights" in each fund's respective Prospectus or Annual Report. 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.
Hedging
Both funds may purchase and sell certain kinds of futures contracts, forward
contracts, and options. These are all referred to as "hedging instruments."
Neither fund uses hedging instruments for speculative purposes, and both have
limits on the use of them. Both funds may use hedging instruments for a number
of purposes. Each fund 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 funds' exposure to the securities market.
Forward contracts are used by both funds to try to manage foreign currency risks
on foreign investments.
Both funds may buy and sell futures contracts that relate to broadly-based stock
indices (these are referred to as Stock Index Futures) and foreign currencies
(these are called Forward Contracts and are discussed below). Officers Fund may
also buy and sell futures contracts that relate to commodities.
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Both funds may buy and sell exchange-traded put options (puts) and call options
(calls) on broadly- based stock indices to protect their respective assets. A
call or put option may not be purchased by either fund if the value of all of
the fund's put and call options would exceed 5% of the fund's total assets. Each
call the funds write must be "covered" while it is outstanding. That means the
fund must own other securities that are acceptable for the escrow arrangements
required for calls. After Officers Fund writes a call, not more than 25% of its
total assets may be subject to calls. Officers fund will not write a put if it
will require more than 25% of its net assets to be segregated.
Forward contracts are foreign currency exchange contracts. They are used to buy
or sell foreign currency for future delivery at a fixed price. Both funds may
use 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. Both funds limit their exposure in foreign currency exchange
contracts in a particular foreign currency to the amount of their respective
assets denominated in that currency or in a closely- correlated currency.
Loans of Portfolio Securities
To attempt to raise cash for liquidity purposes, the funds may lend their
respective portfolio securities to brokers, dealers and other financial
institutions. The fund must receive collateral for a loan. After any loan, the
value of the securities loaned is not expected to exceed 33-1/3% (as to Officers
Fund) or 10% (as to Value Fund) of the value of the total assets of the fund.
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.
Illiquid and Restricted Securities
Both of the funds may invest in illiquid and restricted securities. Investments
may be illiquid because of the absence of an active trading market, making it
difficult to value them or dispose of them promptly at an acceptable price. A
restricted security is one that has a contractual restriction on its resale or
that cannot be sold publicly until it is registered under the Securities Act of
1933. The funds will not invest more than 15% of their respective net assets in
illiquid and restricted securities, including repurchase agreements that have a
maturity of longer than seven days and certain over-the-counter options. The
funds' percentage limitation on these investments does not apply to certain
restricted securities that are eligible for resale to qualified institutional
purchasers.
Repurchase Agreements
Each of the funds 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. Neither of the funds will enter into repurchase agreements that
will cause more than 15% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. 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
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ability to do so. The funds may also enter into reverse repurchase agreements.
Under such agreements, the fund sells securities and agrees to repurchase them
at a mutually agreed upon date and price. Reverse repurchase agreements create
leverage, a speculative factor, and will be considered borrowings by the fund
for purposes of certain percentage limitations on borrowing.
"When-Issued" and Delayed Delivery Transactions
Both funds may purchase securities on a "when-issued" basis, and may purchase or
sell such 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. 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.
Borrowing
As a fundamental policy, neither fund may borrow money in excess of 33-1/3% of
the value of its total assets. Further, Officers Fund will not purchase any
securities at a time while such borrowings exceed 5% of its total assets and
will only borrow as a temporary measure for extraordinary or emergency purposes.
Value Fund may, but has no present intention to, borrow for leveraging purposes.
This investment technique may subject the funds to greater risks and costs,
including the burden of interest expense, an expense the funds would not
otherwise incur. The funds can borrow only if each maintains a 300% ratio of
assets to borrowings at all times in the manner set forth in the Investment
Company Act.
Investment in Other Investment Companies
The funds generally may invest up to 10% of their respective total assets in the
aggregate in shares of other investment companies and up to 5% of their
respective total assets in any one investment company, as long as each
investment does not represent more than 3% of the outstanding voting securities
of the acquired investment company. These limitations do not apply in the case
of investment company securities which may be purchased as part of a plan of
merger, consolidation, reorganization or acquisition. Investment in other
investment companies may involve the payment of substantial premiums above the
value of such investment companies' portfolio securities, and is subject to
limitations under the Investment Company Act and market availability. Neither
fund intends to invest in such investment companies unless, in the judgment of
the Manager, the potential benefits of such investment justify the payment of
any applicable premiums or sales charge. As a shareholder in an investment
company, the fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees. At the same time, the
fund would continue to pay its own management fees and other expenses.
Temporary Defensive Investments
In times of unstable market or economic conditions, when the Sub-Adviser
determines it appropriate to do so to attempt to reduce fluctuations in the
value of the funds' net assets, the funds may assume a temporary defensive
position and invest an unlimited amount of assets in U.S. Government securities
and money market instruments of the type identified above under "Fixed-Income
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Securities". At any time that either fund invests for temporary defensive
purposes, to the extent of such investments, it is not pursuing its investment
objective.
Investing in Small, Unseasoned Companies
Value Fund may invest up to 15% of its total assets and Officers Fund may invest
up to 5% of its total assets 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.
Warrants and Rights
Warrants basically are options to purchase stock at set prices that are valid
for a limited period of time. Rights are similar to warrants but normally have a
short duration and are distributed directly by the issuer to its shareholders.
Officers Fund may invest up to 5% of its total assets in warrants or rights.
Value Fund may not invest more than 5% of its total assets in warrants; this 5%
limitation does not apply to warrants Value Fund has acquired as part of units
with other securities or that are attached to other securities.
Investment Restrictions
Both Officers Fund and Value Fund have certain additional investment
restrictions that, together with their investment objectives, are fundamental
policies, changeable only by shareholder approval. Generally, these investment
restrictions are similar between the funds and are discussed below.
Similar investment restrictions that are fundamental policies:
Concentration: Officers Fund cannot 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);
Value Fund has the same restriction.
Borrowing: Neither fund may borrow money in excess of 33-1/3% of the value of
the its total assets
(see "Borrowing" above).
Real Estate: Officers 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;
Value Fund has the same restriction.
Underwriting: Officers Fund cannot 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
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assets in an open-end management investment company with substantially the same
investment objective and restrictions as the fund); Value Fund has the same
restriction.
Pledge Assets: Officers Fund cannot mortgage, hypothecate or pledge any of
its assets; Value Fund
has the same restriction.
Investment in Certain Issuers: Officers Fund cannot invest or hold securities of
any issuer if the officers and Trustees of the Trust or its Manager or
Sub-Adviser 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; Value Fund
has the same restriction.
Investment for Control: Officers Fund cannot 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); Value Fund has the same restriction.
Investment in Commodities: Officers Fund cannot invest in physical commodities
or physical commodity contracts; however, the fund may: (i) buy and sell hedging
instruments to the extent specified in its Prospectus from time to time, and
(ii) buy and sell options, futures, securities or other instruments backed by,
or the investment return from which is linked to changes in the price of,
physical commodities; Value Fund has the same restriction but is limited as to
(ii) to options on stock indices.
Options: Officers Fund cannot 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; Value
Fund has the same restriction.
Different investment restrictions that are fundamental policies:
Diversification: Value Fund cannot, 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 or purchase more than 10% of the outstanding voting securities of any
one issuer (other than U.S. Government securities issued or guaranteed by the
U.S. Government or any agency or instrumentality thereof) or 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); as described above,
Officers Fund is classified as a "non-diversified" investment company under the
Investment Company Act.
Set forth below are certain non-fundamental policies and guidelines of the funds
changeable without shareholder vote.
Margin and Short Sales: Officers Fund cannot purchase securities on margin, or
make short sales of securities; Value Fund has the same restriction.
Loans: Officers Fund cannot make loans to any person or individual (except that
portfolio securities may be loaned within the limitations set forth in the
Prospectus); Value Fund has the same restriction.
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Oil, Gas and Mineral Investment: Officers Fund cannot invest in interests in
oil, gas or other mineral exploration or development programs or leases; Value
Fund has the same restriction.
Description of Brokerage Practices
The brokerage practices of the funds are the same. Portfolio decisions are based
upon recommendations of the portfolio manager and the judgment of the portfolio
managers. The funds 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 funds
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 consid eration 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 funds, 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
funds will not purchase any securities from or sell any securities to an
affiliated broker-dealer 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 funds and others whose
assets it manages in such manner as it deems equitable. In making such
allocations among the funds 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
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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 funds for the fiscal years ended October 31, 1995, 1996
and 1997. Prior to November 3, 1997, Oppenheimer & Co., Inc. ("OpCo"), a
broker-dealer, was an affiliate of the Sub-Adviser.
Total Amount of
Total Transactions Where
For the Brokerage Brokerage Commissios BrokerageCommissions
Fiscal Year Commissions Paid to Opco Paid to Opco
Ended Paid Dollar Amount % Dollar Amount %
Value Fund
10/31/95 $309,310 $156,970 50.7% $ 99,572,945 52.1%
10/31/96 $387,892 $159,127 41.0 % $135,054,378 39.4%
10/31/97 $484,014 $198,916 41.1 % $198,471,852 38.4%
Officers Fund
10/31/95 $11,593 $ 4,461 38.5% $2,153,416 39.8%
10/31/96 $34,368 $13,921 40.5% $8,359,426 34.3%
10/31/97 $39,359 $13,558 34.4 % $4,535,870 20.2%
During Value Fund's fiscal year ended October 31, 1997, $50,922 was paid by
Value Fund to brokers as commissions in return for research services; the
aggregate dollar amount of those transactions was $47,589,083. During Officers
Fund's fiscal year ended October 31, 1997, $3,255 was paid by Officers Fund to
brokers as commissions in return for research services; the aggregate dollar
amount of those transactions was $1,589,791.
Please refer to the Statement of Additional Information for each fund for
further information on each fund's brokerage practices.
Expense Ratios and Performance
The ratio of expenses to average annual net assets for Class A shares of
Officers Fund for the fiscal year ended October 31, 1997 both before and after
giving effect to fee waivers was 2.13% and 1.29%, respectively. The ratio of
expenses to average annual net assets for Class A shares of Value Fund for the
fiscal year ended October 31, 1997 was 1.60%. Further details are set forth
above under "Comparative Fee Tables", and in Officers Fund's Annual Report as of
October 31, 1997 and Value Fund's Annual Report as of October 31, 1997, which
are included in the Statement of Additional Information.
The average annual total returns on an investment in Class A shares of Officers
Fund for the one year period ended October 31, 1997 and for the period from
November 8, 1994 (commencement of operations) to October 31, 1997 were (4.28%)
and 17.01%, respectively. The average annual total returns at net asset value
for Class A shares of Officers Fund for the one year period ended October 31,
1997 and for the period from November 8, 1994 through October 31, 1997 were
1.56% and
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19.36%, respectively. Total returns for Officers Fund reflect the waiver of
management fees and distribution expenses as described herein. Without such
waivers, the total returns for Officers Fund for such periods would have been
lower. These waivers became effective on August 1, 1996 and are currently in
effect.
The average annual total returns on an investment in Class A shares of Value
Fund for the one, five and ten year periods ended October 31, 1997 and for the
period from April 30, 1980 (commencement of operations) to October 31, 1997 were
18.20%, 17.42%, 15.88% and 19.02%, respectively. The average annual total
returns at net asset value for Class A shares for the one, five and ten year
periods ended October 31, 1997 and for the period from April 30, 1980 through
October 31, 1997 were 25.41%, 18.82%, 16.57% and 19.43%, respectively.
An explanation of the different performance calculations is set forth in each
fund's Prospectus.
Shareholder Services
The policies of Officers Fund and Value Fund with respect to minimum initial
investments and subsequent investments by its shareholders are the same. Both
Officers Fund and Value Fund offer the following privileges: (i) Right of
Accumulation, (ii) Letter of Intent, (iii) reinvestment of dividends and
distributions at net asset value, (iv) net asset value purchases by certain
individuals and entities, (v) Asset Builder (automatic investment) Plans, (vi)
Automatic Withdrawal and Exchange Plans for shareholders who own shares of the
fund valued at $5,000 or more, (vii) AccountLink and PhoneLink arrangements,
(viii) exchanges of shares for shares of the same class of certain other funds
at net asset value, and (ix) telephone redemption and exchange privileges.
Shareholders may purchase shares through OppenheimerFunds AccountLink, which
links a shareholder account to an account at a bank or financial institution and
enables shareholders to send money electronically between those accounts to
perform a number of types of account transactions. This includes the purchase of
shares through the automated telephone system (PhoneLink). Exchanges can also be
made by telephone, or automatically through PhoneLink. After AccountLink
privileges have been established with a bank account, shares may be purchased by
telephone in an amount up to $100,000. Shares of either fund may be exchanged
for shares of certain OppenheimerFunds at net asset value per share; however,
shares of a particular class may be exchanged only for shares of the same class
of other OppenheimerFunds. Shareholders of the funds may redeem their shares by
written request or by telephone request in an amount up to $50,000 in any
seven-day period. Shareholders may arrange to have share redemption proceeds
wired to a predesignated account at a U.S. bank or other financial institution
that is an ACH member, through AccountLink. There is no dollar limit on
telephone redemption proceeds sent to a bank account when AccountLink has been
established. Shareholders may also redeem shares automatically by telephone by
using PhoneLink. Shareholders of the funds may also have the Transfer Agent send
redemption proceeds of $2,500 or more by Federal Funds wire to a designated
commercial bank which is a member of the Federal Reserve wire system.
Shareholders of the funds have up to six months to reinvest redemption proceeds
of their Class A shares which they purchase subject to a sales charge or, as to
Value Fund, their Class B shares on which they paid a contingent deferred sales
charge, in Class A shares of the funds or other Oppenheimer funds without paying
a sales charge. Each fund may redeem accounts valued at less than $500 if the
account has fallen below such stated amount for
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reasons other than market value fluctuations. Both funds offer Automatic
Withdrawal and Automatic Exchange Plans under certain conditions.
Rights of Shareholders
The shares of each fund, including shares of each class, entitle the holder to
one vote per share on the election of Trustees of the Trust or Directors of
Value Funds, as applicable, and on all other matters submitted to shareholders
of the fund. 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 shareholder meetings.
Shareholders of Value Fund vote together, and shareholders of Officers Fund vote
together with the shareholders of other series of the Trust in the aggregate, on
certain matters at shareholder meetings, such as the election of Trustees and
ratification of appointment of auditors. Shareholders of a particular series or
class vote separately on proposals which affect that series or class, and
shareholders of a series or class which are not affected by that matter are not
entitled to vote on the proposal. For example, only shareholders of a series,
such as Officers Fund, vote exclusively on any material amendment to the
investment advisory agreement with respect to the series. Only shareholders of a
class of shares vote on certain amendments to the Distribution and/or Service
Plans if the amendments affect only that class. The Board and the Board of
Directors of Value Fund are authorized to create new series and classes of
series. The Boards may reclassify unissued shares of the funds into additional
series or classes of shares. The Boards 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 each fund. Shares do not
have cumulative voting rights or preemptive or subscription rights. Shares may
be voted in person or by proxy. Each share has one vote at shareholder meetings,
with fractional shares voting proportionately. Shares of a particular class vote
together on matters that affect that class. Most amendments to the Declaration
of Trust governing Officers Fund or the Articles of Incorporation governing
Value Fund require the approval of a "majority" of the outstanding voting
securities (as defined in the Investment Company Act) of the respective Trust or
Value Fund's shares without regard to class. Under certain circumstances,
shareholders of Officers Fund may be held personally liable as partners for the
fund's obligations, however, under the Declaration of Trust such a shareholder
is entitled to certain indemnification rights and the risk of a shareholder
incurring any such loss is limited to the remote circumstances in which the fund
is unable to meet its obligations.
As to Value Fund, outstanding Class A, B, C and Y shares participate equally in
the fund's dividends and distributions and in the fund's net assets upon
liquidation, after taking into account the different expenses paid by each
class. Distributions and dividends for each class will be different, and Class B
and Class C dividends and distributions will be lower than Class A and Class Y
dividends. Officers Fund has one class of shares outstanding.
It is not contemplated that the Trust or Value Fund will hold regular annual
meetings of shareholders. Under the Investment Company Act, shareholders of
Officers Fund do not have rights of appraisal as a result of the transactions
contemplated by the Reorganization Agreement. However, they have the right at
any time prior to the consummation of such transaction to redeem their shares at
net asset value, less any applicable contingent deferred sales charge.
Shareholders of both of the funds have
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the right, under certain circumstances, to remove a Trustee or Director and will
be assisted in communicating with other shareholders for such purpose.
Organization and History
The Trust, Oppenheimer Quest For Value Funds, was organized in April 1987 as a
multi-series Massachusetts business trust and Officers Fund is a non-diversified
series of the Trust. The Trust is an open-end management investment company,
with an unlimited number of authorized shares of beneficial interest. Value Fund
is a diversified, open-end management investment company that was organized in
August 1979 as a Maryland corporation. The Manager acts as investment adviser to
the funds, the Sub-Adviser acts as sub-adviser to the funds and the portfolio
managers for the funds are employed by the Sub-Adviser. The Trustees of the
Trust and the Directors of Value Fund are the same, and oversee the Manager, the
Sub-Adviser and the portfolio managers.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York 10048-0203,
acts as the investment adviser to both Officers Fund and Value Fund. The terms
and conditions of the investment advisory agreement for each fund are
substantially the same. The monthly management fee payable to the Manager by
each fund is set forth under "Synopsis Investment Advisory and Distribution and
Service Plan Fees" along with the fees paid by the Manager to the Sub-Adviser
for the funds. The 12b-1 Distribution and Service Plan fees paid by the funds
with respect to Class A shares are also set forth above under "Synopsis
Investment Advisory and Distribution and Service Plan Fees."
Pursuant to each investment advisory agreement, the Manager acts as the
investment adviser for the funds and supervises the investment program of the
funds. The investment advisory agreements state that the Manager will provide
administrative services for the funds, including completion and maintenance of
records, preparation and filing of reports required by the SEC, reports to
shareholders, and composition of proxy statements and registration statements
required by Federal and state securities laws. Further, the Manager has agreed
to furnish the funds with office space, facilities and equipment and arrange for
its employees to serve as officers of the Trust (as to Officers Fund) and Value
Fund. The administrative services to be provided by the Manager under the
investment advisory agreement will be at its own expense, except that the funds
pay the Manager an annual fee for calculating their respective daily net asset
value at an annual rate of $6,000 (as to Officers Fund) and $55,000 (as to Value
Fund), plus reimbursement for out-of-pocket expenses.
The Sub-Adviser acts as the sub-adviser to the funds pursuant to the terms of a
subadvisory agreement between the Manager and the Sub-Adviser for each fund. The
Sub-Adviser previously acted as the investment adviser to the funds prior to
November 22, 1995. The terms and conditions of the subadvisory agreements for
each fund are substantially the same. The subadvisory agreements provide that
the Sub-Adviser will regularly provide investment advice with respect to the
funds, invest and reinvest cash, securities and the property comprising the
assets of each fund and perform such other duties and responsibilities as are
set forth in its contract with the Manager. The Manager, not the funds, pays the
Sub-Adviser.
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Expenses not expressly assumed by the Manager under each fund's advisory
agreement or by the Distributor under the General Distributor's Agreement are
paid by the funds. The investment advisory agreements list examples of expenses
paid by the funds, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees or Directors, legal and audit
expenses, custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including litigation
costs. The management fee paid by Officers Fund for the fiscal year ended
October 31, 1997 was $60,074 (after giving effect to fee waivers). During the
fiscal year ended October 31, 1997, Officers Fund also paid or accrued
accounting service fees to the Manager in the amount of $5,987. The management
fee paid by Value Fund for the fiscal year ended October 31, 1997 was
$7,708,982. During the fiscal year ended October 31, 1997, Value Fund also paid
or accrued accounting service fees to the Manager in the amount of $54,325.
The investment advisory agreement for Officers Fund contains no expense
limitation. However, independently of the Agreement, effective August 1, 1996,
the Manager voluntarily agreed to waive that portion of its management fee equal
to what the Manager would have been required to pay the Sub-Adviser under the
Subadvisory Agreement described below. Pursuant to the foregoing, 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 the fee waiver. Any waiver of fees
would lower Officers Fund's overall expense ratio and increase its total return
during any period in which they are in effect.
The investment advisory agreement provides that in the absence of willful
misfeasance, bad faith, or gross negligence in the performance of its duties, 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" or
"Quest For Value" 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" or "Quest For Value" as part of its name may be withdrawn.
The Manager is controlled by Oppenheimer Acquisition Corp., a holding company
owned in part by senior management of the Manager and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance company
that also advises pension plans and investment companies. The Manager has
operated as an investment company adviser since 1959. The Manager and its
affiliates currently advise investment companies with combined net assets
aggregating over $85 billion as of March 31, 1998, with more than 4 million
shareholder accounts. OppenheimerFunds Services, a division of the Manager, acts
as transfer and shareholder servicing agent for Officers Fund and Value Fund and
for certain other open-end funds managed by the Manager and its affiliates; for
its services, the funds pay the transfer agent an annual maintenance fee for
each fund shareholder account and reimburse the transfer agent for its out of
pocket expenses.
The Sub-Adviser is a majority owned subsidiary of Oppenheimer Capital, a
registered investment advisor, whose employees perform all investment advisory
services provided to the funds by the Sub- Adviser. On November 4, 1997, PIMCO
Advisors L.P. ("PIMCO Advisors"), a registered investment adviser with $125
billion in assets under management through various subsidiaries and affiliates,
acquired control of Oppenheimer Capital and the Sub-Adviser. On November 5,
1997, the
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new Sub-Advisory Agreement between the Sub-Adviser and the Manager became
effective. On November 30, 1997, Oppenheimer Capital merged with a subsidiary of
PIMCO Advisors and, as a result, Oppenheimer Capital and the Sub-Adviser became
indirect wholly-owned subsidiaries of PIMCO Advisors. PIMCO Advisors has two
general partners: PIMCO Partners, G.P., a California general partnership ("PIMCO
GP"), and PIMCO Advisors Holdings L.P. (formerly Oppenheimer Capital, L.P.), an
NYSE-listed Delaware limited partnership of which PIMCO GP is the sole general
partner.
PIMCO GP beneficially owns or controls (through its general partner interest in
Oppenheimer Capital, L.P.) greater than 80% of the units of limited partnership
("Units") of PIMCO Advisors. PIMCO GP has two general partners. The first of
these is Pacific Investment Management Company, a wholly-owned subsidiary of
Pacific Financial Asset Management Company, which is a direct subsidiary of
Pacific Life Insurance Company ("Pacific Life").
The managing general partner of PIMCO GP is PIMCO Partners L.L.C. ("PPLLC"), a
California limited liability company. PPLLC's members are the Managing Directors
(the "PIMCO Managers") of Pacific Investment Management Company, a subsidiary of
PIMCO Advisors (the "PIMCO Subpartnership"). The PIMCO Managers are: William H.
Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich, III, Brent R.
Harris, John L. Hague, William S. Thompson Jr., William C. Powers, David H.
Edington, Benjamin Trosky, William R. Benz, II and Lee R. Thomas, III.
PIMCO Advisors is governed by a Management Board, which consists of sixteen
members, pursuant to a delegation by its general partners. PIMCO GP has the
power to designate up to nine members of the Management Board and the PIMCO
Subpartnership, of which the PIMCO Managers are the Managing Directors, has the
power to designate up to two members. In addition, PIMCO GP, as the controlling
general partner of PIMCO Advisors, has the power to revoke the delegation to the
Management Board and exercise control of PIMCO Advisors. As a result, Pacific
Life and/or the PIMCO Managers may be deemed to control PIMCO Advisors. Pacific
Life and the PIMCO Managers disclaim such control.
The Distributor, under a General Distributor's Agreement for each of the funds,
acts as the principal underwriter in the continuous public offering of Class A,
Class B and Class C shares of each fund but is not obligated to sell a specific
number of shares. To date, Class B and Class C shares of Officers Fund have not
been issued. 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 Officers Fund's
fiscal year ended October 31, 1997, the aggregate amount of sales charges on
sales of its Class A shares was $1,822, none of which was retained by the
Distributor or an affiliated broker. During Value Fund's fiscal year ended
October 31, 1997, the aggregate amount of sales charges on sales of its Class A
shares was $3,638,204, of which the Distributor and affiliated brokers retained
$910,431. For additional information about distribution of the funds' shares and
the payments made by the funds to the Distributor in connection with such
activities, please refer to "Distribution and Service Plans," in each fund's
Statement of Additional Information.
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Purchase of Additional Shares
Class A shares of Officers Fund and Class A shares of Value Fund generally may
be purchased with an initial sales charge of 5.75% for purchases of less than
$25,000. The sales charge of 5.75% is reduced for purchases of either fund's
Class A shares of $25,000 or more. For purchases of $1 million or more ($500,000
or more for purchases by "Retirement Plans", as defined in each fund's
Prospectus) if those shares are redeemed within 12 calendar months (18 months
for shares purchased prior to May 1, 1997) of the end of the calendar month of
their purchase, a contingent sales charge may be deducted from the redemption
proceeds. Class A shares of Officers Fund have to date been sold to a limited
group of individuals and entities, as noted above, and who have qualified for a
waiver of the Class A sales charge as set forth in the fund's Prospectus.
Class B shares of the funds are sold at net asset value without an initial sales
charge, however, if Class B shares are redeemed within six years of the end of
the calendar month of their purchase, a contingent deferred sales charge may be
deducted of up to 5%, depending upon how long such shares had been held. Class C
shares may be purchased without an initial sales charge, but if sold within 12
months of buying them, a contingent deferred sales charge of 1% may be deducted.
The Class A shares to be issued under the Reorganization Agreement will be
issued by Value Fund at net asset value. Future dividends and capital gain
distributions of Value Fund, if any, may be reinvested without sales charge. The
initial sales charge and contingent deferred sales charge on Class A shares of
Value Fund will only affect shareholders of Officers Fund to the extent that
they desire to make additional purchases of shares of Value Fund in addition to
the shares which they will receive as a result of the Reorganization and to the
extent that they no longer qualify for a waiver of the Class A sales charge as
set forth in Value Fund's current Prospectus.
Dividends and Distributions
The funds declare dividends from net investment income on an annual basis and
normally pay those dividends to shareholders following the end of their
respective fiscal years (October 31). The funds may also make distributions
annually in December out of any net short-term or long-term capital gains, and
may make supplemental distributions of dividends and capital gains following its
fiscal year. Dividends are paid separately for each class of shares and
normally, the dividends on Class A and Class Y shares are generally expected to
be higher than for Class B and Class C shares because the expenses allocable to
Class B and Class C shares will generally be higher than for Class A and Class Y
shares. There is no fixed dividend rate for either fund and there can be no
assurance that either fund will pay any dividends or distributions.
METHOD OF CARRYING OUT THE REORGANIZATION
The consummation of the transactions contemplated by the Reorganization
Agreement is contingent upon the approval of the Reorganization by the
shareholders of Officers Fund and the receipt of the opinions and certificates
set forth in Sections 10 and 11 of the Reorganization Agreement and the
occurrence of the events described in those Sections. Under the Reorganization
Agreement, all the assets of Officers Fund, excluding the Cash Reserve, will be
delivered to Value Fund in exchange for
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Class A shares of Value Fund. The Cash Reserve to be retained by Officers Fund
will be sufficient in the discretion of the Board for the payment of Officers
Fund's liabilities, and Officers Fund's expenses of liquidation.
Assuming the shareholders of Officers Fund approve the Reorganization, the
actual exchange of assets is expected to take place on June 12, 1998, or as soon
thereafter as is practicable (the "Closing Date") on the basis of net asset
values as of the close of business on the business day preceding the Closing
Date (the "Valuation Date"). Under the Reorganization Agreement, all redemptions
of shares of Officers Fund shall be permanently suspended at the close of
business on the Valuation Date; only redemption requests received in proper form
on or prior to the close of business on that date shall be fulfilled by it;
redemption requests received by Officers Fund after that date will be treated as
requests for redemptions of Class A shares of Value Fund to be distributed to
the shareholders requesting redemption. The exchange of assets for shares will
be done on the basis of the per share net asset value of the Class A shares of
Value Fund, and the value of the assets of Officers Fund to be transferred as of
the close of business on the Valuation Date, valued in the manner used by Value
Fund in the valuation of assets. Value Fund is not assuming any of the
liabilities of Officers Fund, except for portfolio securities purchased which
have not settled and outstanding shareholder redemption and dividend checks.
The net asset value of the shares transferred by Value Fund to Officers Fund
will be the same as the value of the assets received by Value Fund. For example,
if, on the Valuation Date, Officers Fund were to have securities with a market
value of $95,000 and cash in the amount of $10,000 (of which $5,000 was to be
retained by it as the Cash Reserve), the value of the assets which would be
transferred to Value Fund would be $100,000. If the net asset value per Class A
share of Value Fund were $10 per share at the close of business on the Valuation
Date, the number of Class A shares to be issued would be 10,000 ($100,000 /
$10). These 10,000 Class A shares of Value Fund would be distributed to the
former shareholders of Officers Fund. This example is given for illustration
purposes only and does not bear any relationship to the dollar amounts or shares
expected to be involved in the Reorganization.
In conjunction with the Closing Date, Officers Fund will distribute on a pro
rata basis to its shareholders of record on the Valuation Date the Class A
shares of Value Fund received by Officers Fund at the closing, in liquidation of
the outstanding shares of Officers Fund, and the outstanding shares of Officers
Fund will be canceled. To assist Officers Fund in this distribution, Value Fund
will, in accordance with a shareholder list supplied by Officers Fund, cause its
transfer agent to credit and confirm an appropriate number of shares of Value
Fund to each shareholder of Officers Fund. Certificates for Class A shares of
Value Fund will be issued upon written request of a former shareholder of
Officers Fund but only for whole shares with fractional shares credited to the
name of the shareholder on the books of Value Fund and only of shares
represented by certificates are delivered for cancellation. Former shareholders
of Officers Fund who wish certificates representing their shares of Value Fund
must, after receipt of their confirmations, make a written request to
OppenheimerFunds Services, P.O. Box 5270, Denver, Colorado 80217. Shareholders
of Officers Fund holding certificates representing their shares will not be
required to surrender their certificates to anyone in connection with the
Reorganization. After the Reorganization, however, it will be necessary for such
shareholders to surrender such certificates in order to redeem, transfer, pledge
or exchange any shares of Value Fund.
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Under the Reorganization Agreement, within one year after the Closing Date,
Officers Fund shall: (a) either pay or make provision for all of its debts and
taxes; and (b) either (i) transfer any remaining amount of the Cash Reserve to
Value Fund, if such remaining amount is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of Officers Fund who were
such on the Valuation Date. Such remaining amount shall be deemed to be material
if the amount to be distributed, after deducting the estimated expenses of the
distribution, equals or exceeds one cent per share of the number of Officers
Fund shares outstanding on the Valuation Date. Within one year after the Closing
Date, Officers Fund will complete its liquidation.
Under the Reorganization Agreement, either Officers Fund or Value Fund may
abandon and terminate the Reorganization Agreement without liability if the
other party breaches any material provision of the Reorganization Agreement or,
if prior to the closing, any legal, administrative or other proceeding shall be
instituted or threatened (i) seeking to restrain or otherwise prohibit the
transactions contemplated by the Reorganization Agreement and/or (ii) asserting
a material liability of either party, which proceeding or liability has not been
terminated or the threat thereto removed prior to the Closing Date.
In the event that the Reorganization is not consummated for any reason, the
Board will consider and may submit to the shareholders of Officers Fund other
alternatives.
ADDITIONAL INFORMATION
Financial Information
The Reorganization will be accounted for by the surviving fund in its financial
statements similar to a pooling without restatement. Further financial
information as to Officers Fund is contained in its current Prospectus, which is
available without charge from OppenheimerFunds Services, the Transfer Agent,
P.O. Box 5270, Denver, Colorado 80217, and is incorporated herein by reference,
and in its Annual Report as of October 31, 1997, which are included in its
Statement of Additional Information. Financial information for Value Fund is
contained in its current Prospectus accompanying this Proxy Statement and
Prospectus and incorporated herein by reference, and in its Annual Report as of
October 31, 1997, which are included in its Statement of Additional Information.
Public Information
Additional information about Officers Fund and Value Fund is available, as
applicable, in the following documents: (i) Value Fund's Prospectus dated
February 27, 1998 accompanying this Proxy Statement and incorporated herein;
(ii) Officers Fund's Prospectus dated January 26, 1998, which may be obtained
without charge by writing to OppenheimerFunds Services, P.O. Box 5270, Denver,
Colorado 80217; (iii) Value Fund's Annual Report as of October 31, 1997, which
may be obtained without charge by writing to OppenheimerFunds Services at the
address indicated above; and (iv) Officers Fund's Annual Report as of October
31, 1997, which may be obtained without charge by writing to OppenheimerFunds
Services at the address indicated above. The documents set forth in (ii), (iii)
and (iv) above are included in the Additional Statement and the Additional
Statement is
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incorporated herein by reference. All of the foregoing documents may be obtained
by calling the toll-free number on the cover of this Proxy Statement and
Prospectus.
Additional information about the following matters is contained in the
Additional Statement which incorporates by reference the Value Fund Additional
Statement, the Officers Fund's Prospectus and the Officers Fund's Additional
Statement: the organization and operation of Value Fund and Officers Fund; more
information on investment policies, practices and risks; information about the
Trust and Value Fund's respective Boards and their responsibilities; a further
description of the services provided by Value Fund's and Officers Fund's
investment adviser, sub-adviser, distributor, and transfer and shareholder
servicing agent; dividend policies; tax matters; an explanation of the method of
determining the offering price of the shares and/or contingent deferred sales
charges, as applicable of Class A, Class B and Class C shares of Value Fund and
Officers Fund; purchase, redemption and exchange programs; the different
expenses paid by each class of shares; and distribution arrangements.
Value Fund and the Trust, on behalf of Officers Fund, are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and in accordance therewith, file reports and other information with the SEC.
Proxy material, reports and other information about Officers Fund and Value Fund
which are of public record can be inspected and copied at public reference
facilities maintained by the SEC in Washington, D.C. and certain of its regional
offices, and copies of such materials can be obtained at prescribed rates from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, Washington, D.C. 20549.
OTHER BUSINESS
Management of Officers Fund knows of no business other than the matters
specified above which will be presented at the Meeting. Since matters not known
at the time of the solicitation may come before the Meeting, the proxy as
solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote this proxy in accordance with their judgment on such matters.
By Order of the Board of Trustees
Andrew J. Donohue, Secretary
April 6, 1998 229
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
February 18, 1998 by and between Oppenheimer Quest For Value Funds (the
"Trust"), on behalf of its series, Oppenheimer Quest Officers Value Fund
("Officers Fund"), a Massachusetts business trust, and Oppenheimer Quest Value
Fund, Inc. ("Value Fund"), a Maryland Corporation.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type;
and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as amended
(the "Code"), of Officers Fund through the acquisition by Value Fund of
substantially all of the assets of Officers Fund in exchange for the voting
shares of beneficial interest ("shares") of Class A of Value Fund and the
assumption by Value Fund of certain liabilities of Officers Fund, which Class A
shares of Value Fund are to be distributed by Officers Fund pro rata to its
shareholders in complete liquidation of Officers Fund and complete cancellation
of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. The parties hereto hereby adopt this Agreement and Plan of
Reorganization (the "Agreement") pursuant to Section 368(a)(1) of the Code as
follows: The reorganization will be comprised of the acquisition by Value Fund
of substantially all of the assets of Officers Fund in exchange for Class A
shares of Value Fund and the assumption by Value Fund of certain liabilities of
Officers Fund, followed by the distribution of such Class A shares of Value Fund
shares to the shareholders of Officers Fund in exchange for their shares of
Officers Fund, all upon and subject to the terms of the Agreement hereinafter
set forth.
The share transfer books of Officers Fund will be permanently closed
at the close of business on the Valuation Date (as hereinafter defined) and only
redemption requests received in proper form on or prior to the close of business
on the Valuation Date shall be fulfilled by Officers Fund; redemption requests
received by Officers Fund after that date shall be treated as requests for the
redemption of the shares of Value Fund to be distributed to the shareholder in
question as provided in Section 5 hereof.
2. On the Closing Date (as hereinafter defined), all of the assets of
Officers Fund on that date, excluding a cash reserve (the "Cash Reserve") to be
retained by Officers Fund sufficient in its
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discretion for the payment of the expenses of Officers Fund's dissolution and
its liabilities, but not in excess of the amount contemplated by Section 10E,
shall be delivered as provided in Section 8 to Value Fund, in exchange for and
against delivery to Officers Fund on the Closing Date of a number of Class A
shares of Value Fund, having an aggregate net asset value equal to the value of
the assets of Officers Fund so transferred and delivered.
3. The net asset value of Class A shares of Value Fund and the value of
the assets of Officers Fund to be transferred shall in each case be determined
as of the close of business of The New York Stock Exchange on the Valuation
Date. The computation of the net asset value of the Class A shares of Value Fund
and the Class A shares of Officers Fund shall be done in the manner used by
Value Fund and Officers Fund, respectively, in the computation of such net asset
value per share as set forth in their respective prospectuses. The methods used
by Value Fund in such computation shall be applied to the valuation of the
assets of Officers Fund to be transferred to Value Fund.
Officers Fund shall declare and pay, immediately prior to the
Valuation Date, a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to Officers Fund's shareholders
all of Officers Fund's investment company taxable income for taxable years
ending on or prior to the Closing Date (computed without regard to any dividends
paid) and all of its net capital gain, if any, realized in taxable years ending
on or prior to the Closing Date (after reduction for any capital loss
carry-forward).
4. The closing (the "Closing") shall be at the offices of
OppenheimerFunds, Inc. (the "Agent"), Two World Trade Center, 34th Floor, New
York, New York 10048, at 4:00 P.M. New York time on June 12, 1998 or at such
other time or place as the parties may designate or as provided below (the
"Closing Date"). The business day preceding the Closing Date is herein referred
to as the "Valuation Date."
In the event that on the Valuation Date either party has, pursuant
to the Investment Company Act of 1940, as amended (the "Act"), or any rule,
regulation or order thereunder, suspended the redemption of its shares or
postponed payment therefore, the Closing Date shall be postponed until the first
business day after the date when both parties have ceased such suspension or
postponement; provided, however, that if such suspension shall continue for a
period of 60 days beyond the Valuation Date, then the other party to the
Agreement shall be permitted to terminate the Agreement without liability to
either party for such termination.
5. In conjunction with the Closing, Officers Fund shall distribute on a
pro rata basis to the shareholders of Officers Fund on the Valuation Date the
Class A shares of Value Fund received by Officers Fund on the Closing Date in
exchange for the assets of Officers Fund in complete liquidation of Officers
Fund; for the purpose of the distribution by Officers Fund of Class A shares of
Value Fund to Officers Fund's shareholders, Value Fund will promptly cause its
transfer agent to: (a) credit an appropriate number of Class A shares of Value
Fund on the books of Value Fund to each Class A shareholder of Officers Fund in
accordance with a list (the "Shareholder List") of Officers Fund shareholders
received from Officers Fund; and (b) confirm an appropriate number of Class A
shares of Value Fund to each shareholder of Officers Fund; certificates for
Class A shares of Value
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Fund will be issued upon written request of a former shareholder of Officers
Fund but only for whole shares, with fractional shares credited to the name of
the shareholder on the books of Value Fund.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of Officers Fund,
indicating his or her share balance. Officers Fund agrees to supply the
Shareholder List to Value Fund not later than the Closing Date. Shareholders of
Officers Fund holding certificates representing their shares shall not be
required to surrender their certificates to anyone in connection with the
reorganization. After the Closing Date, however, it will be necessary for such
shareholders to surrender their certificates in order to redeem, transfer or
pledge the shares of Value Fund which they received.
6. Within one year after the Closing Date, Officers Fund shall (a) either
pay or make provision for payment of all of its liabilities and taxes, and (b)
either (i) transfer any remaining amount of the Cash Reserve to Value Fund, if
such remaining amount (as reduced by the estimated cost of distributing it to
shareholders) is not material (as defined below) or (ii) distribute such
remaining amount to the shareholders of Officers Fund on the Valuation Date.
Such remaining amount shall be deemed to be material if the amount to be
distributed, after deduction of the estimated expenses of the distribution,
equals or exceeds one cent per share of Officers Fund outstanding on the
Valuation Date.
7. Prior to the Closing Date, there shall be coordination between the
parties as to their respective portfolios so that, after the Closing, Value Fund
will be in compliance with all of its investment policies and restrictions. At
the Closing, Officers Fund shall deliver to Value Fund two copies of a list
setting forth the securities then owned by Officers Fund. Promptly after the
Closing, Officers Fund shall provide Value Fund a list setting forth the
respective federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to Value Fund of
record ownership thereof by The Depository Trust Company or through the Federal
Reserve Book Entry System or any other depository approved by Officers Fund
pursuant to Rule 17f-4 and Rule 17f-5 under the Act shall be endorsed and
delivered, or transferred by appropriate transfer or assignment documents, by
Officers Fund on the Closing Date to Value Fund, or at its direction, to its
custodian bank, in proper form for transfer in such condition as to constitute
good delivery thereof in accordance with the custom of brokers and shall be
accompanied by all necessary state transfer stamps, if any. The cash delivered
shall be in the form of certified or bank cashiers' checks or by bank wire or
intra-bank transfer payable to the order of Value Fund for the account of Value
Fund. Class A shares of Value Fund representing the number of Class A shares of
Value Fund being delivered against the assets of Officers Fund, registered in
the name of Officers Fund, shall be transferred to Officers Fund on the Closing
Date. Such shares shall thereupon be assigned by Officers Fund to its
shareholders so that the shares of Value Fund may be distributed as provided in
Section 5.
If, at the Closing Date, Officers Fund is unable to make delivery
under this Section 8 to Value Fund of any of its portfolio securities or cash
for the reason that any of such securities purchased by Officers Fund, or the
cash proceeds of a sale of portfolio securities, prior to the Closing Date have
not yet been delivered to it or Officers Fund's custodian, then the delivery
requirements of this Section 8 with respect to said undelivered securities or
cash will be waived and Officers Fund
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will deliver to Value Fund by or on the Closing Date with respect to said
undelivered securities or cash executed copies of an agreement or agreements of
assignment in a form reasonably satisfactory to Value Fund, together with such
other documents, including a due bill or due bills and brokers' confirmation
slips as may reasonably be required by Value Fund.
9. Value Fund shall not assume the liabilities (except for portfolio
securities purchased which have not settled and for shareholder redemption and
dividend checks outstanding) of Officers Fund, but Officers Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so far as
may be possible, prior to the Closing Date. The cost of printing and mailing the
proxies and proxy statements will be borne by Officers Fund. Officers Fund and
Value Fund will bear the cost of their respective tax opinion. Any documents
such as existing prospectuses or annual reports that are included in that
mailing will be a cost of the fund issuing the document. Any other out-of-pocket
expenses of Value Fund and Officers Fund associated with this reorganization,
including legal, accounting and transfer agent expenses, will be borne by
Officers Fund and Value Fund, respectively, in the amounts so incurred by each.
10. The obligations of Value Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of the Trust shall have authorized the
execution of the Agreement, and the shareholders of Officers Fund shall have
approved the Agreement and the transactions contemplated hereby, and Officers
Fund shall have furnished to Value Fund copies of resolutions to that effect
certified by the Secretary or the Assistant Secretary of the Trust; such
shareholder approval shall have been by the affirmative vote of "a majority of
the outstanding voting securities" (as defined in the Act) of Officers Fund at a
meeting for which proxies have been solicited by the Proxy Statement and
Prospectus (as hereinafter defined).
B. Value Fund shall have received an opinion dated the Closing Date
of counsel to Officers Fund, to the effect that (i) Officers Fund is a series of
the Trust which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with full powers to
carry on its business as then being conducted and to enter into and perform the
Agreement (Massachusetts counsel may be relied upon for this opinion); and (ii)
that all action necessary to make the Agreement, according to its terms, valid,
binding and enforceable on Officers Fund and to authorize effectively the
transactions contemplated by the Agreement have been taken by Officers Fund.
C. The representations and warranties of Officers Fund contained
herein shall be true and correct at and as of the Closing Date, and Value Fund
shall have been furnished with a certificate of the President, or a Vice
President, or the Secretary or the Assistant Secretary or the Treasurer of the
Trust, dated the Closing Date, to that effect.
D. On the Closing Date, Officers Fund shall have furnished to Value
Fund a certificate of the Treasurer or Assistant Treasurer of the Trust as to
the amount of the capital loss carry-over and net unrealized appreciation or
depreciation, if any, with respect to Officers Fund as of the Closing Date.
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E. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of Officers Fund at the close of
business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Value Fund under
the Securities Act of 1933, as amended (the "1933 Act"), containing a
preliminary form of the Proxy Statement and Prospectus, shall have become
effective under the 1933 Act not later than May 1, 1998.
G. On the Closing Date, Value Fund shall have received a letter of
Andrew J. Donohue or other senior executive officer of OppenheimerFunds, Inc.
acceptable to Value Fund, stating that nothing has come to his or her attention
which in his or her judgment would indicate that as of the Closing Date there
were any material actual or contingent liabilities of Officers Fund arising out
of litigation brought against Officers Fund or claims asserted against it, or
pending or to the best of his or her knowledge threatened claims or litigation
not reflected in or apparent from the most recent audited financial statements
and footnotes thereto of Officers Fund delivered to Value Fund. Such letter may
also include such additional statements relating to the scope of the review
conducted by such person and his or her responsibilities and liabilities as are
not unreasonable under the circumstances.
H. Value Fund shall have received an opinion, dated the Closing
Date, of Price Waterhouse LLP, to the same effect as the opinion contemplated by
Section
11.E. of the Agreement.
I. Value Fund shall have received at the Closing all of the assets
of Officers Fund to be conveyed hereunder, which assets shall be free and clear
of all liens, encumbrances, security interests, restrictions and limitations
whatsoever.
11. The obligations of Officers Fund hereunder shall be subject to the
following conditions:
A. The Board of Directors of Value Fund shall have authorized the
execution of the Agreement, and the transactions contemplated thereby, and Value
Fund shall have furnished to Officers Fund copies of resolutions to that effect
certified by the Secretary or the Assistant Secretary of Value Fund.
B. Officers Fund's shareholders shall have approved the Agreement
and the transactions contemplated hereby, by an affirmative vote of "a majority
of the outstanding voting securities" (as defined in the Act) of Officers Fund,
and Officers Fund shall have furnished Value Fund copies of resolutions to that
effect certified by the Secretary or an Assistant Secretary of the Trust.
C. Officers Fund shall have received an opinion dated the Closing
Date of counsel to Value Fund, to the effect that (i) Value Fund is duly
organized, validly existing and in good standing under the laws of the State of
Maryland with full powers to carry on its business as then being conducted and
to enter into and perform the Agreement (Maryland counsel may be relied upon for
this opinion); (ii) all action necessary to make the Agreement, according to its
terms, valid, binding and enforceable upon Value Fund and to authorize
effectively the transactions contemplated
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by the Agreement have been taken by Value Fund, and (iii) the shares of Value
Fund to be issued hereunder are duly authorized and when issued will be validly
issued, fully-paid and non-assessable.
D. The representations and warranties of Value Fund contained herein
shall be true and correct at and as of the Closing Date, and Officers Fund shall
have been furnished with a certificate of the President, a Vice President or the
Secretary or the Assistant Secretary or the Treasurer of Value Fund to that
effect dated the Closing Date.
E. Officers Fund shall have received an opinion of Price Waterhouse
LLP to the effect that the Federal tax consequences of the transaction, if
carried out in the manner outlined in the Agreement and in accordance with (i)
Officers Fund's representation that there is no plan or intention by any
Officers Fund shareholder who owns 5% or more of Officers Fund's outstanding
shares, and, to Officers Fund's best knowledge, there is no plan or intention on
the part of the remaining Officers Fund shareholders, to redeem, sell, exchange
or otherwise dispose of a number of Value Fund shares received in the
transaction that would reduce Officers Fund shareholders' ownership of Value
Fund shares to a number of shares having a value, as of the Closing Date, of
less than 50% of the value of all of the formerly outstanding Officers Fund
shares as of the same date, and (ii) the representation by each of Officers Fund
and Value Fund that, as of the Closing Date, Officers Fund and Value Fund will
qualify as regulated investment companies or will meet the diversification test
of Section 368(a)(2)(F)(ii) of the Code, will be as follows:
1. The transactions contemplated by the Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1) of the
Code, and under the regulations promulgated thereunder.
2. Officers Fund and Value Fund will each qualify as a "party
to a reorganization" within the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of
Officers Fund upon the distribution of Class A shares of beneficial interest in
Value Fund to the shareholders of Officers Fund pursuant to Section 354 of the
Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by Officers Fund by reason of the transfer of substantially all its
assets in exchange for Class A shares of Value Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Value Fund by reason of the transfer of substantially all of
Officers Fund's assets in exchange for Class A shares of Value Fund and Value
Fund's assumption of certain liabilities of Officers Fund.
6. The shareholders of Officers Fund will have the same tax
basis and holding period for the Class A shares of beneficial interest in Value
Fund that they receive as they had for Officers Fund shares that they previously
held, pursuant to Section 358(a) and 1223(1), respectively, of the Code.
A-6
<PAGE>
7. The securities transferred by Officers Fund to Value Fund
will have the same tax basis and holding period in the hands of Value Fund as
they had for Officers Fund, pursuant to Section 362(b) and 1223(1),
respectively, of the Code.
F. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of Officers Fund at the close of
business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Value Fund under
the 1933 Act, containing a preliminary form of the Proxy Statement and
Prospectus, shall have become effective under the 1933 Act not later than May 1,
1998.
H. On the Closing Date, Officers Fund shall have received a letter
of Andrew J. Donohue or other senior executive officer of OppenheimerFunds, Inc.
acceptable to Officers Fund, stating that nothing has come to his or her
attention which in his or her judgment would indicate that as of the Closing
Date there were any material actual or contingent liabilities of Value Fund
arising out of litigation brought against Value Fund or claims asserted against
it, or pending or, to the best of his or her knowledge, threatened claims or
litigation not reflected in or apparent by the most recent audited financial
statements and footnotes thereto of Value Fund delivered to Officers Fund. Such
letter may also include such additional statements relating to the scope of the
review conducted by such person and his or her responsibilities and liabilities
as are not unreasonable under the circumstances.
I. Officers Fund shall acknowledge receipt of the Class A shares of
Value Fund.
12. The Trust on behalf of Officers Fund hereby represents and warrants
that:
A. The financial statements of Officers Fund as at October 31, 1997
(audited) heretofore furnished to Value Fund, present fairly the financial
position, results of operations, and changes in net assets of Officers Fund as
of that date, in conformity with generally accepted accounting principles
applied on a basis consistent with the preceding year; and that from October 31,
1997 through the date hereof there have not been, and through the Closing Date
there will not be, any material adverse change in the business or financial
condition of Officers Fund, it being agreed that a decrease in the size of
Officers Fund due to a diminution in the value of its portfolio and/or
redemption of its shares shall not be considered a material adverse change;
B. Contingent upon approval of the Agreement and the transactions
contemplated thereby by Officers Fund's shareholders, Officers Fund has
authority to transfer all of the assets of Officers Fund to be conveyed
hereunder free and clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in
Officers Fund's Registration Statement under the 1933 Act, as amended, is true,
correct and complete, conforms to the requirements of the 1933 Act and does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, as amended, was, as of the date of the
filing of the last Post- Effective Amendment, true, correct and complete,
conformed to the requirements of the 1933 Act
A-7
<PAGE>
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
D. There is no material contingent liability of Officers Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of Officers Fund, threatened against Officers Fund,
not reflected in such Prospectus;
E. Except for the Agreement, there are no material contracts
outstanding to which Officers Fund is a party other than those ordinary in the
conduct of its business;
F. Officers Fund is a series of the Trust which is a business trust
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts; and has all necessary and material Federal and
state authorizations to own all of its assets and to carry on its business as
now being conducted; and Officers Fund is duly registered under the Act and such
registration has not been rescinded or revoked and is in full force and effect;
G. All Federal and other tax returns and reports of Officers Fund
required by law to be filed have been filed, and all Federal and other taxes
shown due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of Officers
Fund no such return is currently under audit and no assessment has been asserted
with respect to such returns and to the extent such tax returns with respect to
the taxable year of Officers Fund ended October 31, 1997 have not been filed,
such returns will be filed when required and the amount of tax shown as due
thereon shall be paid when due; and
H. Officers Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Officers Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and Officers Fund intends to meet such requirements
with respect to its current taxable year.
13. Value Fund hereby represents and warrants that:
A. The financial statements of Value Fund as at October 31, 1997
(audited) heretofore furnished to Officers Fund, present fairly the financial
position, results of operations, and changes in net assets of Value Fund, as of
that date, in conformity with generally accepted accounting principles applied
on a basis consistent with the preceding year; and that from October 31, 1997
through the date hereof there have not been, and through the Closing Date there
will not be, any material adverse changes in the business or financial condition
of Value Fund, it being understood that a decrease in the size of Value Fund due
to a diminution in the value of its portfolio and/or redemption of its shares
shall not be considered a material or adverse change;
B. The Prospectus, as amended and supplemented, contained in Value
Fund's Registration Statement under the 1933 Act, is true, correct and complete,
conforms to the requirements of the 1933 Act and does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Registration Statement, as amended, was, as of the date of the filing of the
last Post- Effective Amendment, true, correct and complete, conformed to the
requirements of the 1933 Act
A-8
<PAGE>
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
C. Except for this Agreement, there is no material contingent
liability of Value Fund and no material claim and no material legal,
administrative or other proceedings pending or, to the knowledge of Value Fund,
threatened against Value Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which Value Fund
is a party other than those ordinary in the conduct of its business;
E. Value Fund is a Maryland corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland; has all
necessary and material Federal and state authorizations to own all its
properties and assets and to carry on its business as now being conducted; the
Class A shares of Value Fund which it issues to Officers Fund pursuant to the
Agreement will be duly authorized, validly issued, fully-paid and
non-assessable, will conform to the description thereof contained in Value
Fund's Registration Statement and will be duly registered under the 1933 Act and
in the states where registration is required; and Value Fund is duly registered
under the Act and such registration has not been revoked or rescinded and is in
full force and effect;
F. All Federal and other tax returns and reports of Value Fund
required by law to be filed have been filed, and all Federal and other taxes
shown due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of Value Fund
no such return is currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with respect to the
taxable year of Value Fund ended October 31, 1997 have not been filed, such
returns will be filed when required and the amount of tax shown as due thereon
shall be paid when due;
G. Value Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Value Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and Value Fund intends to meet such requirements
with respect to its current taxable year;
H. Value Fund has no plan or intention (i) to dispose of any of the
assets transferred by Officers Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the Class A shares issued by it
in the reorganization other than pursuant to valid requests of shareholders; and
I. After consummation of the transactions contemplated by the
Agreement, Value Fund intends to operate its business in a substantially
unchanged manner.
14. Each party hereby represents to the other that no broker or finder has
been employed by it with respect to the Agreement or the transactions
contemplated hereby. Each party also represents and warrants to the other that
the information concerning it in the Proxy Statement and Prospectus will not as
of its date contain any untrue statement of a material fact or omit to state a
fact necessary to make the statements concerning it therein not misleading and
that the financial statements concerning it will present the information shown
fairly in accordance with generally
A-9
<PAGE>
accepted accounting principles applied on a basis consistent with the preceding
year. Each party also represents and warrants to the other that the Agreement is
valid, binding and enforceable in accordance with its terms and that the
execution, delivery and performance of the Agreement will not result in any
violation of, or be in conflict with, any provision of any charter, by-laws,
contract, agreement, judgment, decree or order to which it is subject or to
which it is a party. Value Fund hereby represents to and covenants with Officers
Fund that, if the reorganization becomes effective, Value Fund will treat each
shareholder of Officers Fund who received any of Value Fund's shares as a result
of the reorganization as having made the minimum initial purchase of shares of
Value Fund received by such shareholder for the purpose of making additional
investments in shares of Value Fund, regardless of the value of the shares of
Value Fund received.
15. Value Fund agrees that it will prepare and file a Registration
Statement on Form N-14 under the 1933 Act which shall contain a preliminary form
of proxy statement and prospectus contemplated by Rule 145 under the 1933 Act.
The final form of such proxy statement and prospectus is referred to in the
Agreement as the "Proxy Statement and Prospectus." Each party agrees that it
will use its best efforts to have such Registration Statement declared effective
and to supply such information concerning itself for inclusion in the Proxy
Statement and Prospectus as may be necessary or desirable in this connection.
Officers Fund covenants and agrees to deregister as an investment company under
the Investment Company Act of 1940, as amended, as soon as practicable to the
extent required, and, upon closing, to cause the cancellation of its outstanding
shares.
16. The obligations of the parties under the Agreement shall be subject to
the right of either party to abandon and terminate the Agreement without
liability if the other party breaches any material provision of the Agreement or
if any material legal, administrative or other proceeding shall be instituted or
threatened between the date of the Agreement and the Closing Date (i) seeking to
restrain or otherwise prohibit the transactions contemplated hereby and/or (ii)
asserting a material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. The Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
Agreement. The rights and obligations of each party pursuant to the Agreement
shall not be assignable.
18. All prior or contemporaneous agreements and representations are merged
into the Agreement, which constitutes the entire contract between the parties
hereto. No amendment or modification hereof shall be of any force and effect
unless in writing and signed by the parties and no party shall be deemed to have
waived any provision herein for its benefit unless it executes a written
acknowledgment of such waiver.
19. Officers Fund understands that the obligations of Value Fund under the
Agreement are not binding upon any Director or shareholder of Value Fund
personally, but bind only Value Fund and Value Fund's property.
20. Value Fund understands that the obligations of Officers Fund under the
Agreement are not binding upon any Trustee or shareholder of Officers Fund
personally, but bind only Officers Fund and Officers Fund's property. Value Fund
represents that it has notice of the provisions of the
A-10
<PAGE>
Declaration of Trust of Officers Fund disclaiming shareholder and Trustee
liability for acts or obligations of Officers Fund.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to be
executed and attested by its officers thereunto duly authorized on the date
first set forth above.
OPPENHEIMER QUEST VALUE FUND, INC.
By: /s/ Andrew J. Donohue
Andrew Donohue
Secretary
OPPENHEIMER QUEST FOR VALUE FUNDS
on behalf of
OPPENHEIMER QUEST OFFICERS VALUE FUND
By: /s/ Robert C. Doll
Robert C. Doll
Vice President
229proxy.3
A-11
Oppenheimer Quest Officers Value Fund
Proxy For Special Shareholders Meeting To Be Held June 9, 1998
The undersigned shareholder of Oppenheimer Quest Officers Value Fund, a series
of Oppenheimer Quest For Value Funds ("Officers Fund"), does hereby appoint
George C. Bowen, Andrew J. Donohue, Robert Bishop and Scott Farrar, and each of
them, as attorneys-in-fact and proxies of the undersigned, with full power of
substitution, to attend the Special Meeting of Shareholders of Officers Fund to
be held on June 9, 1998 at 6803 South Tucson Way, Englewood, Colorado at 10:00
A.M., Denver time, and at all adjournments thereof, and to vote the shares held
in the name of the undersigned on the record date for said meeting on the
Proposal specified on the reverse side. Said attorneys-in-fact shall vote in
accordance with their best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO RECOMMENDS A VOTE FOR
THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS
INDICATED ON THE REVERSE SIDE OR FOR NO CHOICE IS INDICATED.
Please mark your proxy, date and sign it on the reverse side and return it
promptly in the accompanying envelope, which requires no postage if mailed in
the United States.
The Proposal:
To approve or disapprove an Agreement and Plan of Reorganization between
Oppenheimer Quest For Value Funds, on behalf of Officers Fund, and
Oppenheimer Quest Value Fund, Inc. ("Value Fund") and the transactions
contemplated thereby, including the transfer of substantially all the assets
of Officers Fund to Value Fund in exchange for Class A shares of Value Fund,
the distribution of such Class A shares of Value Fund to the Class A
shareholders of Officers Fund in complete liquidation of Officers Fund, and
the cancellation of the outstanding shares of Officers Fund.
FOR______ AGAINST______ ABSTAIN_______
Dated: _________________________________, 1998
(Month) (Day)
---------------------------------
Signature(s)
---------------------------------
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing as
custodian, attorney, executor, administrator, trustee, etc., please give your
full title as such. All joint owners should sign this proxy. If the account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give his or her title.
229merge\229.bal
Oppenheimer Quest Value Fund, Inc.
Prospectus dated February 27, 1998
Oppenheimer Quest Value Fund, Inc. is a mutual fund that seeks capital
appreciation. The Fund seeks its investment objective through investment in
securities (primarily equity securities) of companies believed by management 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 Objective and Policies" 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 February
27, 1998 Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Fund's Transfer Agent, at 1-800-525-7048, or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).
[OppenheimerFunds
logo]
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Contents
<PAGE>
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
-2-
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.
<PAGE>
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, 1997.
o Shareholder Transaction Expenses are charges you pay when you buy or
sell shares of the Fund. Please refer to "About Your Account," starting on page
___ for an explanation of how and when these charges apply.
Class Class Class Class
A Shares B Shares C Shares Y
Shares
Maximum Sales Charge
on Purchases
(as a % of
offering price) 5.75% None None None
- ------------------------------------------------------------------------------
Maximum Deferred Sales
Charge (as a % of
the lower of the
original offering
price or redemption
proceeds) None(1) 5% in the first 1% if None
year, decling redeemed
to 1% in the within 12
sixth year months of
and eliminated purchase(2)
thereafter(2)
- ------------------------------------------------------------------------------
Maximum Sales Charge
on Reinvested
Dividends None None None
None
- ------------------------------------------------------------------------------
Exchange Fee None None None
None
- ------------------------------------------------------------------------------
Redemption Fee None(3) None(3) None(3)
None
(1) If you invest $1 million or more ($500,000 or more for purchases
by
<PAGE>
"Retirement Plans," as defined in "Class A Contingent Deferred
Sales
Charge" on page ___) in Class A shares, you may have to pay a
sales
charge of up to 1% if you sell your shares within 12 calendar
months
(18 months for shares purchased prior to May 1, 1997) from the end
of
the calendar month during which you purchased those shares. See
"How
to Buy Shares - Buying Class A Shares," below.
(2) 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.
(3) There is a $10 transaction fee for redemptions paid by Federal
Funds
wire, but not for redemptions paid by ACH transfer
through
AccountLink.
o Annual Fund Operating Expenses are paid out of the Fund's assets and
represent the Fund's expenses of 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 the Fund's 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 0.94% 0.94% 0.94% 0.94%
- ------------------------------------------------------------------------------
12b-1 Distribution
Plan Fees 0.50% 1.00% 1.00% None
<PAGE>
- ------------------------------------------------------------------------------
Other Expenses 0.16% 0.16% 0.16% 0.25%
- ------------------------------------------------------------------------------
Total Fund Operating
Expenses 1.60% 2.10% 2.10% 1.19%
The numbers in the chart above are based upon the Fund's expenses in its last
fiscal year ended October 31, 1997. 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 the 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 the
actual value of the Fund's assets represented by each class of shares.
Class Y
shares were not publicly offered prior to December 16, 1996. Therefore,
the
Annual Fund Operating Expenses shown for Class Y shares are based on the
period
from December 16, 1996 until October 31, 1997.
o 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 chart above and that Class B shares
automatically convert into Class A shares six years after 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 $73 $105 $140 $237
Class B Share $71 $ 96 $133 $219
<PAGE>
Class C Share $31 $ 66 $113 $243
Class Y Shares $12 $ 38 $ 65 $144
If you did not redeem your investment, it would incur the following expenses:
1 year 3 years 5 years 10 years*
------ ------- ------- ---------
Class A Share $73 $105 $140 $237
Class B Share $21 $ 66 $113 $219
Class C Share $21 $ 66 $113 $243
Class Y Shares $12 $ 38 $ 65 $144
*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 higher 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.
-3-
A Brief Overview of the Fund
<PAGE>
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.
o What is the Fund's Investment Objective? The Fund seeks capital appreciation.
o What Does the Fund Invest In? The Fund seeks its investment objective through
investment in securities (primarily equity securities) of companies believed by
management to be undervalued in the marketplace in relation to factors such as
the companies' assets, earnings, growth potential and cash flows. 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 total assets in such securities. These investments are more fully
explained in "Investment Policies and Strategies," starting on page __.
o Who Manages the Fund? The Manager, OppenheimerFunds, Inc., supervises the
Fund's investment program and handles its day-to-day business. The Manager
(including subsidiaries) manages investment company portfolios having over
$75
billion in assets as of December 31, 1997. The Manager is paid an advisory
fee
by the Fund, based on its net assets. The Fund's 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, Eileen Rominger, 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.
o 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
<PAGE>
associated with investments in domestic securities, including risks
associated
with changes in currency rates.
While the Sub-Adviser 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 investment 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.
o 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.
o Will I Pay a Sales Charge to Buy Shares? The Fund has four classes of shares.
Each class of shares has the same investment portfolio but has different
expenses. Class A shares are offered with a front-end sales charge, starting at
5.75%, and reduced for larger purchases. Class B and Class C shares are offered
without a front-end sales charge, but may be subject to a contingent deferred
sales charge if redeemed within 6 years or 12 months, respectively, of purchase.
There is also an annual asset-based sales charge which is higher on Class B and
Class C shares. Class Y shares are offered at net asset value without sales
charge only to certain institutional investors. 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.
o 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 __.
o How Has the Fund Performed? The Fund measures its performance by quoting its
average annual total returns and cumulative total returns, which measure
historical performance. Those returns can be compared to the returns (over
similar periods) of other funds. Of course, other funds may have different
objectives, investments, and levels of risk. The 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 for each of the two years and the
period ended October 31, 1997 has been audited by Price Waterhouse LLP, the
Fund's independent accountants, whose report on the Fund's financial statements
for the fiscal year ended October 31, 1997 is included in the Statement of
Additional Information. The information provided in the table with respect to
the fiscal years ended October 31, 1995, and prior thereto, was audited by other
independent accountants.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
- ------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
1997 1996(3) 1995
1994 1993 1992
=====================================================================
===========================================
<S> <C> <C> <C>
<C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $17.30 $14.51
$12.59 $12.51 $11.71
$10.61
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .11 .08
.12(5) .09(5) .05(5) .04(5)
Net realized and unrealized gain (loss) 4.07 3.79
2.71 .50 1.34 1.77
------ ------
- ------ ------ ----- ------
Total income (loss) from investment
operations 4.18 3.87
2.83 .59 1.39 1.81
- ----------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.07) (.10)
(.08) (.04) (.05)
(.07)
Distributions from net realized gain (.92) (.98)
(.83) (.47) (.54) (.64)
------ ------
- ------ ------ ----- ------
Total dividends and distributions
to shareholders (.99) (1.08)
(.91) (.51) (.59) (.71)
- ----------------------------------------------------------------------------------------------------------------
<PAGE>
Net asset value, end of period $20.49 $17.30
$14.51 $12.59 $12.51
$11.71
====== ======
====== ====== ======
======
=====================================================================
===========================================
TOTAL RETURN, AT NET ASSET VALUE(6) 25.41% 28.39%
24.74%
5.01% 12.27% 18.45%
=====================================================================
===========================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $699,230 $412,246
$282,615 $238,085
$245,320 $142,939
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $560,582 $338,429
$257,240 $237,923
$205,074 $122,319
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.74% 0.58%
0.90% 0.72% 0.40%
0.53%
Expenses 1.60% 1.71%
1.68% 1.71% 1.75% 1.75%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 19.7% 36.0%
36.0% 49.0% 27.0%
41.0%
Average brokerage commission rate(9) $0.0573 $0.0559
- -- -- -- --
</TABLE>
1. For the period from December 16, 1996 (inception of offering) to October 31,
1997.
2. For the period from September 1, 1993 (inception of offering) to October 31,
1993.
3. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor
to
the Fund.
4. Per share data has been retroactively restated to reflect a 200% stock
dividend as of July 1, 1991.
5. Based on average shares outstanding for the period.
8
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------------
- -----------------------------------------------------------
YEAR ENDED OCTOBER 31,
1991 1990(4) 1989(4) 1988(4) 1997 1996(3)
1995 1994
1993(2)
=====================================================================
=========================================
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
$ 7.84 $9.85 $8.99 $7.94 $17.08 $14.37
$12.53 $12.51 $12.66
- --------------------------------------------------------------------------------------------------------------
.09(5) .18(5) .24(5). .09(5) .05 .05
.05(5) .02(5) (.01)(5)
2.84 (1.38) 1.09 1.38 3.97 3.71
2.69 .50 (.14)
------ ----- ----- ----- ------ ------
- ------ ------ ------
2.93 (1.20) 1.33 1.47 4.02 3.76
2.74 .52 (.15)
- --------------------------------------------------------------------------------------------------------------
(.16) (.26) (.10) (.05) (.01) (.07)
(.07) (.03) --
-- (.55) (.37) (.37) (.92) (.98)
(.83) (.47) --
------ ----- ----- ----- ------ ------
- ------ ------ ------
(.16) (.81) (.47) (.42) (.93) (1.05)
(.90) (.50) --
- --------------------------------------------------------------------------------------------------------------
$10.61 $7.84 $9.85 $8.99 $20.17 $17.08
$14.37 $12.53 $12.51
====== ===== ===== ===== ====== ======
====== ======
======
=====================================================================
=========================================
37.94% (13.43)% 15.68% 19.54% 24.71% 27.76%
24.08% 4.43%
(1.19)%
=====================================================================
=========================================
$79,914 $49,740 $77,205 $83,228 $298,348 $111,130
$38,557 $14,373
$2,015
<PAGE>
- --------------------------------------------------------------------------------------------------------------
-- -- -- -- $200,752 $ 68,175
$25,393 $ 8,341 $1,136
- --------------------------------------------------------------------------------------------------------------
1.06% 1.71% 2.31% 0.94% 0.25% 0.06%
0.36% 0.14%
(1.19)%(7)
1.83% 1.82% 1.81% 2.21% 2.10% 2.26%
2.21% 2.24%
2.27%(7)
- --------------------------------------------------------------------------------------------------------------
48.0% 51.0% 30.0% 15.0% 19.7% 36.0%
36.0% 49.0%
27.0%
-- -- -- -- $0.0573 $0.0559
-- -- --
</TABLE>
6. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
7. Annualized.
9
<PAGE>
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
CLASS C
CLASS Y
- ---------------------------------------------------- -----------
PERIOD
ENDED
YEAR ENDED OCTOBER 31,
OCTOBER 31,
1997 1996(3) 1995
1994 1993(2) 1997(1)
=====================================================================
==================================================
<S> <C> <C> <C>
<C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $17.07 $14.35
$12.52 $12.50 $12.66
$16.50
<PAGE>
- ------------------------------------------------------------------------------------------------------------------
- -----
Income (loss) from investment operations:
Net investment income (loss) .05 .04
.04(5) .01(5) (.01)(5)
.10
Net realized and unrealized gain (loss) 3.98 3.71
2.70 .51 (.15)
3.95
------ ------
- ------ ------ ------ ------
Total income (loss) from investment
operations 4.03 3.75
2.74 .52 (.16) 4.05
- ------------------------------------------------------------------------------------------------------------------
- -----
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.05)
(.08) (.03) --
- --
Distributions from net realized gain (.92) (.98)
(.83) (.47) -- --
------ ------
- ------ ------ ------ ------
Total dividends and distributions
to shareholders (.93) (1.03)
(.91) (.50) -- --
- ------------------------------------------------------------------------------------------------------------------
- -----
Net asset value, end of period $20.17 $17.07
$14.35 $12.52 $12.50
$20.55
====== ======
====== ====== ======
======
=====================================================================
==================================================
TOTAL RETURN, AT NET ASSET VALUE(6) 24.79% 27.73%
24.10%
4.45% (1.26)% 24.55%
=====================================================================
==================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $82,098 $29,256
$10,140 $3,581 $221
$3,086
- ------------------------------------------------------------------------------------------------------------------
- -----
Average net assets (in thousands) $55,969 $18,099 $
6,711 $1,725 $169
$1,372
- ------------------------------------------------------------------------------------------------------------------
- -----
Ratios to average net assets:
Net investment income (loss) 0.25% 0.06%
0.31% 0.09%
(0.90)%(7) 1.20%(7)
<PAGE>
Expenses 2.10% 2.20%
2.26% 2.28% 2.27%(7)
1.19%(7)
- ------------------------------------------------------------------------------------------------------------------
- -----
Portfolio turnover rate(8) 19.7% 36.0%
36.0% 49.0% 27.0%
19.7%
Average brokerage commission rate(9) $0.0573 $0.0559
- -- -- --
$0.0573
</TABLE>
8. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended October 31, 1997 were $387,455,107 and $129,795,392, respectively.
9. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
-5-
<PAGE>
Investment Objective and Policies
Objective. The Fund seeks capital appreciation.
Investment Policies and Strategies. The Fund seeks its investment objective
through investment in securities (primarily equity securities) of companies
believed by management to be undervalued in the marketplace in relation to
factors such as the companies' assets, earnings, growth potential and cash
flows.
Under normal market conditions, the Fund will invest at least 75% of its total
assets in equity securities. 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
<PAGE>
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 such U.S. Government
securities and money market instruments.
o 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.
The Fund's investment policies and practices are not "fundamental" unless this
Prospectus or the Statement of Additional Information states that a particular
policy is "fundamental." The Fund's investment objective is a fundamental
policy.
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.
o 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.
Foreign currency will be held by the Fund only in connection with the purchase
or sale of foreign securities.
o 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 ("S&P")(commonly known as "junk bonds"), or having comparable
ratings by another nationally recognized statistical rating organization,
<PAGE>
although it is the present intention of the Fund to invest no more than 5% of
its total 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 Appendix A to the Statement of
Additional Information for a more complete general description of Moody's and
S&P ratings.
o 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. 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. The "Financial
Highlights" table above shows the Fund's portfolio turnover rate during past
fiscal years.
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 Sub-Adviser tries to reduce risks by
diversifying investments, by carefully researching securities before they are
purchased, and in some cases by using hedging techniques, changes in overall
market prices can occur at any time, and 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.
o Stock Investment Risks. Because the Fund may invest 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
<PAGE>
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.
o Foreign Securities Have Special Risks. For example, foreign issuers may not
be 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.
o Risks of Fixed-Income Securities. In addition to credit risks, described
below, debt securities are subject to changes in their values 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 longer-term debt securities than
shorter-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.
o Special Risks of Hedging Instruments. The Fund may invest in certain
hedging
<PAGE>
instruments, as described below. 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 Sub-Adviser 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 options trading and other hedging
strategies as described 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.
o Temporary Defensive Investments. In times of unstable market or economic
conditions, when the Sub-Adviser determines it appropriate to do so to attempt
to reduce fluctuations in the value of the Fund's net assets, the Fund may
assume a temporary defensive position and invest an unlimited amount of assets
in U.S. Government securities and money market instruments of the type
identified on page __ under "Investment Policies and Strategies." At any time
that the Fund invests for temporary defensive purposes, to the extent of such
investments, it is not pursuing its investment objective.
o Investing in Small, Unseasoned Companies. The Fund may invest up to 15% of
its total assets 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. See "Investing in Small, Unseasoned Companies" in the Statement
of Additional Information for a further discussion of the risks involved in such
investments.
o Hedging. The Fund may purchase and sell certain kinds of futures contracts,
forward contracts, and options. 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
<PAGE>
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.
o Futures. The Fund may buy and sell futures contracts that relate to (1)
broadly-based stock indices (these are referred to as Stock Index Futures), and
(2) foreign currencies (these are called Forward Contracts and are discussed
below).
o Put and Call Options. The Fund may buy and sell exchange-traded put and call
options on broadly-based stock indices. A call or put may be purchased only if,
after the purchase, the value of all call and put options held by the Fund will
not exceed 5% of the Fund's total assets.
If the Fund sells (that is, writes) a call option, it must be "covered." That
means the Fund must segregate liquid assets to enable it to satisfy its
obligations if the call is exercised. For other types of written calls, a fund
must own the security subject to the call while the call is outstanding. If the
Fund writes a put, the put must be covered by segregated liquid assets.
o Forward Contracts. Forward contracts are foreign currency exchange contracts.
They are used to buy or sell foreign currency for future delivery at a fixed
price. The Fund uses them to try to "lock in" the U.S. dollar price of a
security denominated in a foreign currency that the Fund has bought or sold, or
to protect against possible losses from changes in the relative values of the
U.S. dollar and foreign currency. The Fund limits its 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.
o Illiquid and Restricted Securities. Under the policies and procedures
established by the 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
<PAGE>
that has a contractual restriction on its resale or that cannot be sold publicly
until it is registered under the Securities Act of 1933.
The Fund may not invest more than 15% of its net assets in illiquid and
restricted securities, including repurchase agreements that have a maturity of
longer than seven days and certain over-the-counter options. The Fund's
percentage limitation on these investments does not apply to certain restricted
securities that are eligible for resale to "qualified institutional buyers". The
Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
o Loans of Portfolio Securities. 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 a 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.
o Repurchase Agreements. The Fund may enter into repurchase agreements
primarily 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 on investment in
illiquid and restricted securities, discussed above.
o "When-Issued" and "Delayed Delivery" Transactions. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell such securities on
a "delayed delivery" 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.
<PAGE>
o Warrants and Rights. Warrants generally are options to purchase stock at set
prices that are valid for a limited period of time. Rights are similar to
warrants but normally have a short duration and are distributed directly by the
issuer to its shareholders. The Fund may not invest more than 5% of its total
assets in warrants. That 5% excludes warrants the Fund has acquired in units or
that are attached to other securities.
o Investment in Other Investment Companies. The Fund generally may invest up to
10% of its total assets in the aggregate in shares of other investment companies
and up to 5% of its total assets in any one investment company, as long as each
investment does not represent more than 3% of the outstanding voting securities
of the acquired investment company. These limitations do not apply in the case
of investment company securities which may be purchased as part of a plan of
merger, consolidation, reorganization or acquisition. Investment in other
investment companies may involve the payment of substantial premiums above the
value of such investment companies' portfolio securities, and is subject to
limitations under the Investment Company Act and market availability. The Fund
does not intend to invest in such investment companies unless, in the judgment
of the Manager, the potential benefits of such investment justify the payment of
any applicable premiums or sales charge. As a shareholder in an investment
company, the Fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees. At the same time, the
Fund would continue to pay its own management fees and other expenses.
Other Investment Restrictions. The Fund has other investment restrictions
that are fundamental policies. Under these fundamental policies, the Fund
cannot do any of the following:
o 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.
o Purchase more than 10% of the voting securities of any one issuer (this
restriction does not apply to U.S. Government securities).
o 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).
o Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, the Fund may invest less
than 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).
<PAGE>
o 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). With
respect to this fundamental policy, the Fund can borrow only if it maintains a
300% ratio of assets to borrowings at all times in the manner set forth in the
Investment Company Act.
Unless this Prospectus states that a percentage restriction applies on an
ongoing basis, it applies only at the time the Fund makes an investment, and the
Fund need not sell securities to meet the percentage limits if the value of the
investment increases in proportion to the size of the Fund. Other investment
restrictions are listed in "Investment Restrictions" in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was 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. Only certain institutional investors may elect to purchase Class Y
shares. 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 for more 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
<PAGE>
Board of Directors, under an Investment Advisory Agreement with the Fund which
states the Manager's responsibilities. The Investment Advisory 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 subsidiaries) currently manages investment companies, including other
Oppenheimer funds, with assets of more than $75 billion as of December 31,
1997,
and with more than 3.5 million shareholder accounts. The Manager is owned by
Oppenheimer Acquisition Corp., a holding company that is owned in part by senior
officers of the Manager and controlled by Massachusetts Mutual Life Insurance
Company.
The management services provided to the Fund by the Manager, and the services
provided by the Distributor and the Transfer Agent to shareholders, depend on
the smooth functioning of their computer systems. Many computer software systems
in use today cannot distinguish the year 2000 from the year 1900 because of the
way dates are encoded and calculated. That failure could have a negative impact
on the handling of securities trades, pricing and account services. The Manager,
the Distributor and the Transfer Agent have been actively working on necessary
changes to their computer systems to deal with the year 2000 and expect that
their systems will be adapted in time for that event, although there can be no
assurance of success.
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 advisor, whose employees perform all investment
advisory
services provided to the Fund by the Sub-Adviser.
On November 4, 1997, PIMCO Advisors L.P. ("PIMCO Advisors"), a registered
investment adviser with $125 billion in assets under management through various
subsidiaries and affiliates, acquired control of Oppenheimer Capital and the
Sub-Adviser. On November 5, 1997, a new sub-advisory agreement between the
Sub-Adviser and the Manager, on terms identical to the prior sub-advisory
agreement, became effective. The new sub-advisory agreement had been approved by
shareholders of the Fund on June 2, 1997. On November 30, 1997, Oppenheimer
Capital merged with a subsidiary of PIMCO Advisors and, as a result, Oppenheimer
Capital and the Sub-Adviser became indirect wholly-owned subsidiaries of PIMCO
Advisors. PIMCO Advisors has two general partners: PIMCO Partners, G.P., a
California general partnership, and PIMCO Advisors Holdings L.P. (formerly
Oppenheimer Capital, L.P.), an NYSE-listed Delaware limited partnership of which
<PAGE>
PIMCO Partners, G.P. is the sole general partner.
o Portfolio Manager. The Fund's portfolio manager, Eileen Rominger, is employed
by the Sub- Adviser and is primarily responsible for the selection of the Fund's
portfolio 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, who
is
the Chairman, Chief Executive Officer and Chief Investment Officer
for
Oppenheimer Capital. Mr. Long has been with Oppenheimer Capital since 1981.
o Fees and Expenses. Under the Investment Advisory Agreement, the Fund pays the
Manager a monthly fee at the annual rates hereinafter set forth, which decline
on additional assets as the Fund grows. Effective October 22, 1997, the annual
management fee is as follows: 1.00% of the first $400 million of average annual
net assets, 0.90% of the next $400 million of average annual net assets, 0.85%
of the next $3.2 billion of average annual net assets, 0.80% of the next $4
billion of average annual net assets; and 0.75% of average annual net assets
over $8 billion. Prior to October 22, 1997, the annual management fee was 1.00%
of the first $400 million of average annual net assets, 0.90% of the next $400
million of average annual net assets, and 0.85% of average annual net assets
over $800 million. The Fund's management fee for its last fiscal year was 0.94%
of average annual net assets for its Class A, Class B, Class C and Class Y
shares.
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 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
net assets of the Fund that exceed the Base Amount.
Information about the Fund's brokerage policies and practices is set forth in
"Brokerage Policies of the Fund" in the Statement of Additional
Information.
That section discusses how brokers and dealers are selected for the
Fund's
<PAGE>
portfolio transactions. When deciding which broker to use, the Manager and the
Sub-Adviser are permitted by the Investment Advisory Agreement to consider
whether brokers have sold shares of the Fund or any other funds for which the
Manager serves as investment adviser.
The Distributor. The Fund's shares are sold through dealers, brokers and other
financial institutions that have a sales agreement with OppenheimerFunds
Distributor, Inc., a subsidiary of the Manager that acts as the Fund's
Distributor. The Distributor also distributes the shares of 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 investment (which will vary if dividends are
received in cash, or shares are sold or additional shares are 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, as we have done on
pages and , a broad-based market index.
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
<PAGE>
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.
o Total Returns. There are different types of total returns used to measure the
Fund's performance. Total return is the change in value of a hypothetical
investment in the Fund over a given period, assuming that all dividends and
capital gains distributions are reinvested in additional shares. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show the Fund's
actual year-by-year performance.
When total returns are quoted for Class A shares, normally the current maximum
initial sales charge has been deducted. When total returns are shown for
Class B
or Class C shares, normally the contingent deferred sales charge that applies to
the period for which total return is shown has been deducted. However, total
returns may also be quoted at "net asset value", without considering the effect
of the sales charge, and those returns would be lower 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, 1997, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
o Management's Discussion of Performance. During the fiscal year ended October
31, 1997, the Fund remained virtually fully invested in equity securities. The
Fund participated in the domestic stock market's strong performance and
performed ahead of the average for its peer group for the year. Two of the
Fund's substantial investments, both in the insurance industry, significantly
contributed to the Fund's strong performance during the past fiscal year. During
the 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, seeking investments in quality undervalued
stocks of issuers with potential for profitability, growth and stability; the
Fund did not seek investment in specific industries or business sectors. Due to
a perceived overvaluation of securities in the marketplace, however, the Fund
mainly increased the size of existing holdings that it believed were positioned
for long term capital appreciation. The Fund's portfolio holdings, allocations
and strategies are subject to change.
<PAGE>
o 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,
Class C
and Class Y shares of the Fund held until October 31, 1997. In the case of Class
A shares, performance is measured for the past ten fiscal years, in the case of
Class B and Class C shares, performance is measured from the inception of those
classes on September 1, 1993 and in the case of Class Y shares, from inception
of the class on December 16, 1996.
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.
-6-
<PAGE>
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Value Fund, Inc. (Class A) and the S & P 500 Index
[Graph]
Average Annual Total Returns of Class A Shares of the Fund at 10/31/971
1 Year 5 Years 10 years
18.20% 17.42% 15.88%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Value Fund, Inc. (Class B) and the S & P 500 Index
<PAGE>
[Graph]
Average Annual Total Returns of Class B Shares of the Fund at 10/31/972
1 Year Life of Class
19.71% 18.38%
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Value Fund, Inc. (Class C) and the S & P 500 Index
[Graph]
Average Annual Total Returns of Class C Shares of the Fund at 10/31/973
1 Year Life of Class
23.79% 18.66%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Value Fund, Inc. (Class Y) and the S & P 500 Index
[Graph]
Average Annual Total Returns of Class Y Shares of the Fund at 10/31/974
Life of Class
24.55%
Total returns and ending account values in the graphs show change in share value
and include reinvestment of all dividends and capital gains distributions. The
performance information for the S & P 500 Index begins on 11/1/87 for
Class A
shares, 8/31/93 for Class B and Class C shares and 1/1/97 for Class Y shares.
1The inception date of the Fund (Class A shares) was 4/30/80. Class A returns
are shown net of the applicable 5.75% maximum initial sales charge.
2Class B
shares of the Fund were first publicly offered on 9/1/93. Returns are shown
net
of the applicable 5% and 2% contingent deferred sales charges, respectively,
for
the one year period and the life-of-class. The ending account value for
Class B
shares in the graph is net of the applicable 2% contingent deferred
sales
charge. 3Class C shares of the Fund were first publicly offered on 9/1/93.
The
1-year return is shown net of the applicable 1% contingent deferred
sales
charge. 4Class Y shares of the Fund, first publicly offered on 12/16/96,
are
<PAGE>
currently offered at net asset value without sales charges to
certain
institutional investors. Past performance is not predictive of
future
performance. Graphs are not drawn to same scale.
-7-
<PAGE>
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.
o Class A Shares. If you buy Class A shares, you may pay an initial sales charge
on investments up to $1 million (up to $500,000 for purchases by "Retirement
Plans," as defined in "Class A Contingent Deferred Sales Charge on page
- ----).
If you purchase Class A shares as part of an investment of at least $1 million
($500,000 for Retirement Plans) in shares of one or more Oppenheimer funds, you
will not pay an initial sales charge, but if you sell any of those shares within
12 months of buying them (18 months if the shares were purchased prior to May 1,
1997), you may pay a contingent deferred sales charge. The amount of that sales
charge will vary depending on the amount you invested. Sales charge rates are
described in "Buying Class A Shares" below.
o Class B Shares. If you buy Class B shares, you pay no sales charge at the time
of purchase, but if you sell your shares within six years of buying them you
will normally pay a contingent deferred sales charge that varies, depending on
how long you have owned your shares as described in "Buying Class B Shares"
below.
o Class C Shares. If you buy Class C shares, you pay no sales charge at the
time of purchase, but if you sell your shares within 12 months of buying them,
you will normally pay a contingent deferred sales charge of 1% as described in
"Buying Class C Shares" below.
o Class Y Shares. Class Y shares are offered only to certain institutional
investors that have special agreements with the Distributor.
<PAGE>
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 higher annual 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.
o 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.
o 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
<PAGE>
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 Class B). If
investing $500,000 or more, Class A may be more advantageous as your investment
horizon approaches 3 years or more.
And for 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 of Class B shares or $1 million or more of
Class C shares, from a single investor.
o 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.
o 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
<PAGE>
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.
o 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.
The Distributor may pay additional periodic compensation from its own resources
to securities dealers or financial institutions based upon the value of shares
of the Fund owned by the dealer or financial institution for its own account or
for its customers.
How Much Must You Invest? You can open a Fund account with a minimum initial
investment of $1,000 and make additional investments at any time with as little
as $25. There are reduced minimum investments under special investment plans:
o With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7) custodial plans
and military allotment plans, you can make initial and subsequent investments of
as little as $25; and subsequent purchases of at least $25 can be made by
telephone through AccountLink. o Under pension, profit-sharing and 401(k) plans
and Individual Retirement Accounts (IRAs), you can make an initial investment of
as little as $250 (if your IRA is established under an Asset Builder Plan, the
$25 minimum applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying shares by
reinvesting dividends or distributions 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.
o 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,
<PAGE>
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.
o Buying Shares Through Your Dealer. Your dealer will place your order with
the
Distributor on your behalf.
o 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.
Payment by Federal Funds Wire: Shares may be purchased by Federal Funds wire.
The minimum investment is $2,500. You must first call the Distributor's Wire
Department at 1-800-525-7041 to notify the Distributor of the wire, and receive
further instructions.
o 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 to your bank account.
Shares are purchased for your account on AccountLink 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.
o Asset Builder Plans. You may purchase shares of the Fund (and up to four
other Oppenheimer funds) automatically each month from your account at a bank or
other financial institution under an Asset Builder Plan with AccountLink.
Details are in the Statement of Additional Information.
o At What Price Are Shares Sold? Shares are sold at the public offering
price
<PAGE>
based on the net asset value (and any initial sales charge that applies) that is
next determined after the Distributor receives the purchase order in
Denver,
Colorado, or the order is received and transmitted to the Distributor by an
entity authorized by the Fund to accept purchase or redemption orders. The Fund
has authorized the Distributor, certain broker-dealers and agents or
intermediaries designated by the Distributor or those broker-dealers to accept
orders. In most cases, to enable you to receive that day's offering price, the
Distributor or an authorized entity must receive your order by the time of day
The New York Stock Exchange closes, which is normally 4:00 P.M., New York time,
but may be earlier on some days (all references to time in this Prospectus mean
"New York time"). The net asset value of each class of shares is determined as
of that time on each day The New York Stock Exchange is open (which is a
"regular business day"). If you buy shares through a dealer, the dealer must
receive your order by the close of The New York Stock Exchange on a regular
business day and normally your order must be transmitted to the Distributor so
that it is received before the Distributor's close of business that day, which
is normally 5:00 P.M. The Distributor, in its sole discretion, may reject any
purchase order for the Fund's shares.
Special Sales Charge Arrangements for Certain Persons. Appendix A to this
Prospectus sets forth conditions for the waiver of, or exemption from, sales
charges or the special sales charge rates that apply to shareholders of one 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 net asset value. In some cases, reduced sales charges
may be available, as described below. Out of the amount you invest, the Fund
receives the net asset value to invest for your account. The sales charge varies
depending on the amount of your purchase. A portion of the sales charge may be
retained by the Distributor and allocated to your dealer as commission. The
current initial 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%
<PAGE>
$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.
o Class A Contingent Deferred Sales Charge. There is no initial
sales
charge on purchases of Class A shares of any one or more of the
Oppenheimer
funds in the following cases:
o Purchases by a retirement plan qualified under Section 401(a) of the
Internal Revenue Code if the retirement plan has total plan assets of
$500,000
or more.
o Purchases aggregating $1 million or more.
o Purchases by a retirement plan qualified under sections 401(a) or 401(k)
of the Internal Revenue Code, by a non-qualified deferred compensation plan,
employee benefit plan, group retirement plan (see "How to Buy Shares Retirement
Plans" in the Statement of Additional Information for further details), an
employee's 403(b)(7) custodial plan account, SEP IRA, SARSEP, or SIMPLE plan
(all of these plans are collectively referred to as "Retirement Plans"); that:
(1) buys shares costing $500,000 or more or (2) has, at the time of purchase,
100 or more eligible participants, or (3) certifies that it projects to have
annual plan purchases of $200,000 or more.
o Purchases by an OppenheimerFunds Rollover IRA if the purchases are made
(1) through a broker, dealer, bank or registered investment adviser that has
made special arrangements with the Distributor for these purchases, or (2) by a
direct rollover of a distribution from a qualified retirement plan if the
administrator of that plan has made special arrangements with the Distributor
for those purchases.
<PAGE>
The Distributor pays dealers of record commissions on those purchases in an
amount equal to (i) 1.0% for non-Retirement Plan accounts, and (ii) for
Retirement Plan accounts, 1.0% of the first $2.5 million, plus 0.50% of the next
$2.5 million, plus 0.25% of purchases over $5 million and calculated on a
calendar year basis. That commission will be paid only on those purchases that
were not previously subject to a front-end sales charge and dealer commission.
No sales commission will be paid to the dealer, broker or financial institution
on 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 purchased prior to May 1, 1997 within 18
months of the end of the calendar month of their purchase, a contingent deferred
sales charge (called the "Class A contingent deferred sales charge") will be
deducted from the redemption proceeds. A Class A contingent deferred sales
charge may be deducted from the redemption proceeds of any of those shares
purchased on or after May 1, 1997 that are redeemed within 12 months of the end
of the calendar month of their purchase. That sales charge may be equal to 1.0%
of the lesser of (1) the aggregate net asset value of the redeemed shares (not
including shares purchased by reinvestment of dividends or capital 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 amount of the commissions the
Distributor paid to your dealer on all Class A shares of all Oppenheimer funds
you purchased subject to the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable, the
Fund will first redeem shares that are not subject to the sales charge,
including shares purchased by reinvestment of dividends and capital gains, and
then will redeem other shares in the order that you purchased them. The Class A
contingent deferred sales charge is waived in certain cases described in
"Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges of
shares under the Fund's exchange privilege (described below). However, if the
shares acquired by exchange are redeemed within 18 months of the end of the
calendar month of the purchase of the exchanged shares, the contingent deferred
sales charge will apply.
o 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
<PAGE>
Builder Plans for their clients.
Reduced Sales Charges for Class A Share Purchases. You may be eligible to
buy
Class A shares at reduced sales charge rates in one or more of the
following
ways:
o 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 Distributor will add the value,
at current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The Oppenheimer funds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the Transfer
Agent. The reduced sales charge will apply only to current purchases and must be
requested when you buy your shares.
o 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.
o Waivers of Class A Sales Charges. The Class A sales charges are not
imposed in the circumstances described below. There is an explanation of this
policy in "Reduced Sales Charges" in the Statement of Additional Information. In
order to receive a waiver of the Class A contingent deferred sales charge, you
must notify the Transfer Agent as to which conditions apply.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain
<PAGE>
Purchasers. Class A shares purchased by the following investors are not
subject
to any Class A sales charges:
o the Manager or its affiliates;
o present or former officers, directors, trustees and employees (and their
"immediate families" as defined in "Reduced Sales Charges" in the Statement of
Additional Information) of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees;
o registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the Distributor for
that purpose;
o dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for their
employees;
o employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered into
sales arrangements with such dealers or brokers (and are identified to the
Distributor) or with the Distributor; the purchaser must certify to the
Distributor at the time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor children);
o dealers, brokers, banks or registered investment advisers that have
entered into an agreement with the Distributor providing specifically for the
use of shares of the Fund in particular investment products 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);
o (1) investment advisers and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an advisory,
consulting or other fee for their services and buy shares for their own accounts
or the accounts of their clients, (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 investment advisers or financial
planners (that have entered into an agreement for this purpose with the
Distributor) who buy shares for their own accounts may also purchase shares
without sales charge but only if their accounts are linked to a master account
<PAGE>
of their investment adviser or financial planner on the books and records of the
broker, agent or financial intermediary with which the Distributor has made such
special arrangements (each of these investors may be charged a fee by the
broker, agent or financial intermediary for purchasing shares);
o directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit sharing or
other benefit plan which beneficially owns shares for those persons;
o employee benefit plans purchasing shares through a shareholder servicing
agent which the Distributor has appointed as agent to accept those purchase
orders;
o accounts for which Oppenheimer Capital is the investment adviser (the
Distributor must be advised of this arrangement) and persons who are directors
or trustees of the company or trust which is the beneficial owner of such
accounts;
o any unit investment trust that has entered into an appropriate agreement
with the Distributor;
o 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
o qualified retirement plans that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for Value Funds at
net asset value, with such shares to be held through DCXchange, a sub-transfer
agency mutual fund clearinghouse, provided that such arrangements are
consummated and share purchases commenced by December 31, 1996.
Waivers of Initial and Contingent Deferred Sales Charges in
Certain
Transactions. Class A shares issued or purchased in the following
transactions
are not subject to Class A sales charges:
o shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party;
o shares purchased by the reinvestment of loan repayments by a participant
in a retirement plan for which the Manager or its affiliates acts as sponsor;
o shares purchased by the reinvestment of dividends or other distributions
reinvested from the Fund or other Oppenheimer funds (other than Oppenheimer Cash
Reserves) or unit investment trusts for which reinvestment arrangements have
<PAGE>
been made with the Distributor;
o shares purchased and paid for with the proceeds of shares redeemed in
the prior 30 days from a mutual fund (other than a fund managed by the Manager
or any of its subsidiaries) on which an initial sales charge or contingent
deferred sales charge was paid (this waiver also applies to shares purchased by
exchange of shares of Oppenheimer Money Market Fund, Inc. that were purchased
and paid for in this manner); this waiver must be requested when the purchase
order is placed for your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver; or
o shares purchased with the proceeds of maturing principal of units of
any
Qualified Unit Investment Liquid Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions. The Class A contingent deferred sales charge is also waived if
shares that would otherwise be subject to the contingent deferred sales charge
are redeemed in the following cases:
o to make Automatic Withdrawal Plan payments that are limited annually
to
no more than 12% of the original account value;
o involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and
Policies,"
below);
o if, at the time of purchase of shares (prior to May 1, 1997) the dealer
agreed in writing to accept the dealer's portion of the sales commission in
installments of 1/18th of the commission per month (and no further commission
will be payable if the shares are redeemed within 18 months of purchase);
o if, at the time of purchase of shares (if purchased during the period
May 1, 1997 through December 31, 1997) the dealer agreed in writing to accept
the dealer's portion of the sales commission in installments of 1/12th of the
commission per month (and no further commission will be payable if the shares
are redeemed within 12 months of purchase);
o for distributions from a TRAC-2000 401(k) plan sponsored by the
Distributor due to the termination of the TRAC-2000 program;
o for distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes: (1) following
the death or disability (as defined in the Internal Revenue Code) of the
participant or beneficiary (the death or disability must occur after the
<PAGE>
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
subsidiaries) offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a special
arrangement with the Distributor; or (11) plan termination or "in-service
distributions", if the redemption proceeds are rolled over directly to an
OppenheimerFunds IRA;
o for distributions from Retirement Plans having 500 or more eligible
participants, except distributions due to termination of all of the Oppenheimer
funds as an investment option under the Plan; and
o for distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing this
waiver.
o Distribution and Service Plan for Class A Shares. The Fund has adopted a
Distribution and Service Plan for Class A shares to compensate the Distributor
for its services in connection with the distribution of shares and the personal
service and maintenance of shareholder accounts that hold Class A shares. Under
the Plan, the Fund pays an 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% annually 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 compensate
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.
<PAGE>
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 compensate the Distributor for
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 and (2) 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. Class B shares held for a period greater than 6 years
automatically convert to Class A shares.
The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
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.
o Automatic Conversion of Class B Shares. 72 months after you
purchase
Class B shares, those shares will automatically convert to Class A shares.
This
<PAGE>
conversion feature relieves Class B shareholders of the asset-based sales charge
that applies to Class B shares under the Class B Distribution and Service
Plan,
described below. The conversion is based on the relative net asset value of the
two classes, and no sales load or other charge is imposed. When Class B shares
convert, any other Class B shares that were acquired by the reinvestment of
dividends and distributions on the converted shares will also convert to Class A
shares. The conversion feature is subject to the continued availability of a tax
ruling described in "Alternative Sales Arrangements - Class A, Class B and Class
C Shares" in the Statement of Additional Information.
Buying Class C Shares. Class C shares are sold at net asset value per share
without an initial sales charge. However, if Class C shares are redeemed within
12 months of their purchase, a contingent deferred sales charge of 1.0% will be
deducted from the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based on the lesser
of the net asset value of the redeemed shares at the time of redemption or the
original offering price (which is the original net asset value). The contingent
deferred sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial purchase price.
The Class C contingent deferred sales charge is paid to compensate the
Distributor for 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.
o Distribution and Service Plans for Class B and Class C Shares. The Fund
has adopted Distribution and Service Plans for Class B and Class C shares to
compensate the Distributor for its services and costs in distributing
Class B
and Class C shares and servicing accounts. Under the Plans, the Fund pays
the
Distributor an annual "asset-based sales charge" of 0.75% per year on
Class B
shares that are outstanding for 6 years or less and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under each Plan.
Under each Plan, both fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The asset-based sales charge and service
fees increase Class B and Class C expenses by up to 1.00% of the net assets per
year of the respective class.
The Distributor uses the service fees to compensate dealers for
providing
<PAGE>
personal services for accounts that hold Class B or Class C shares. Those
services are similar to those provided under the Class A Distribution and
Service Plan, described above. The Distributor pays the 0.25% service fees to
dealers in advance for the first year after Class B or Class C shares have been
sold by the dealer and retains the service fee paid by the Fund in that year.
After the shares have been held for a year, the Distributor pays the service
fees to dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B or 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 may pay the Class B service fee and the asset-based sales charge
to the dealer quarterly in lieu of paying the sales commission and service fee
advance at the time of purchase.
The Distributor currently pays sales commissions of 0.75% of the purchase
price of Class C shares to dealers from its own resources at the time of
sale.
Including the advances 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 advances 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 may pay the Class C service fee and
asset-based sales charge to the dealer quarterly in lieu of paying the sales
commission and service fee advance at the time of purchase.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plans for Class B and Class C shares. At October 31, 1997, the end of
the Class B Plan year, the Distributor had incurred unreimbursed expenses in
<PAGE>
connection with sales of Class B shares of $7,193,352 (equal to 2.41% of
the
Fund's net assets represented by Class B shares on that date). At October 31,
1997, the end of the Class C Plan year, the Distributor had incurred
unreimbursed expenses in connection with sales of Class C shares of
$740,978
(equal to 0.90 % of the Fund's net assets represented by Class C shares on
that
date).
If either Plan is terminated by the Fund, the Board of Directors may allow
the Fund to continue payments of the service fee and/or asset-based sales charge
to the Distributor for distributing Class B and Class C shares, as appropriate,
before the Plan was terminated.
o Waivers of Class B and Class C Sales Charges. The Class B and Class C
contingent deferred sales charges will not be applied to shares purchased in
certain types of transactions nor will it apply to Class B and Class shares
redeemed in certain circumstances as described below. The reasons for this
policy are in "Reduced Sales Charges" in the Statement of Additional
Information. In order to receive a waiver of the Class B or Class C contingent
deferred sales charge, you must notify the Transfer Agent as to which conditions
apply.
Waivers for Redemptions in Certain Cases. The Class B and
Class C
contingent deferred sales charges will be waived for redemptions of shares
in
the following cases:
o distributions to participants or beneficiaries from Retirement Plans, if
the distributions are made (a) under an Automatic Withdrawal Plan after the
participant reaches age 59-1/2, as long as the payments are no more than 10% of
the account value annually (measured from the date the Transfer Agent receives
the request), or (b) following the death or disability (as defined in the
Internal Revenue Code) of the participant or beneficiary (the death or
disability must have occurred after the account was established);
o redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder including a trustee of a
"grantor" trust or revocable living trust for which the trustee is also the sole
beneficiary (the death or disability must have occurred after the account was
established, and for disability you must provide evidence of a determination of
disability by the Social Security Administration);
o returns of excess contributions to Retirement Plans;
o distributions from retirement plans to make "substantially equal
periodic payments" as permitted in Section 72(t) of the Internal Revenue
Code,
<PAGE>
provided the distributions do not exceed 10% of the account value annually,
measured from the date of the Transfer Agent receives the request;
o shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies," below; or
o distributions from OppenheimerFunds prototype 401(k) plans and from
certain Massachusetts Mutual Life Insurance Company prototype 401(k) Plans:
(1)
for hardship withdrawals; (2) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (3) to meet minimum distribution
requirements as defined in the Internal Revenue Code; (4) to make "substantially
equal periodic payments" as described in Section 72(t) of the Internal Revenue
Code;(5) for separation from service; or (6) for loans to participants.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent
deferred sales charge is also waived on Class B and Class C shares sold
or
issued in the following cases:
o shares sold to the Manager or its affiliates;
o shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager or the
Distributor for that purpose;
o shares issued in plans of reorganization to which the Fund is a
party; or
o distributions from 401(k) plans sponsored by broker-dealers that have
entered into a special agreement with the Distributor allowing this waiver.
Buying Class Y Shares. Class Y shares are sold at net asset value per share
without sales charge directly to certain institutional investors, such as
insurance companies, registered investment companies and employee benefit plans,
that have special agreements with the Distributor for this purpose. These
include Massachusetts Mutual Life Insurance Company, an affiliate of the
Manager, which may purchase Class Y shares of the Fund and other Oppenheimer
funds for asset allocation programs, investment companies or separate investment
accounts it sponsors and offers to its customers. Individual investors are not
able to invest in Class Y shares directly.
While Class Y shares are not subject to initial or contingent deferred
sales charges or asset-based sales charges, an institutional investor buying the
shares for its customers' accounts may impose charges on those accounts. The
procedures for purchasing, redeeming, exchanging, or transferring the Fund's
other classes of shares, and the special account features that apply to those
<PAGE>
shares described elsewhere in this Prospectus (other than provisions as to the
timing of the Fund's receipt of purchase, redemption and exchange orders) in
general do not apply to Class Y shares.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send money
electronically between those accounts to perform a number of types of account
transactions. These include purchases of shares by telephone (either through a
service representative or by PhoneLink, described below), automatic investments
under Asset Builder Plans, and sending dividends and distributions or Automatic
Withdrawal Plan payments directly to your bank account. Please call the Transfer
Agent for more information.
AccountLink privileges should be requested on your dealer's settlement
instructions if you buy your shares through your dealer. After your account is
established, you can request AccountLink privileges by sending
signature-guaranteed instructions to the Transfer Agent. AccountLink privileges
will apply to each shareholder listed in the registration on your account as
well as to your dealer representative of record unless and until the Transfer
Agent receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the Transfer
Agent signed by all shareholders who own the account.
o 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.
o PhoneLink. PhoneLink is the OppenheimerFunds automated telephone system
that enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the special PhoneLink number: 1-800-533-3310.
o Purchasing Shares. You may purchase shares in amounts up to $100,000 by
phone, by calling 1-800-533-3310. You must have established AccountLink
privileges to link your bank account with the Fund, to pay for these
purchases.
o Exchanging Shares. With the OppenheimerFunds exchange privilege,
described below, you can exchange shares automatically by phone from your Fund
account to another Oppenheimer funds account you have already established by
calling the special PhoneLink number. Please refer to "How to Exchange Shares,"
<PAGE>
below, for details.
o Selling Shares. You can redeem shares by telephone automatically by
calling the PhoneLink number and the Fund will send the proceeds directly to
your AccountLink bank account. Please refer to "How to Sell Shares," below, for
details.
Shareholder Transactions by Fax. Requests for certain account transactions may
be sent to the Transfer Agent by fax (telecopier). Please call 1-800-525-7048
for information about which transactions are included. Transaction requests
submitted by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
OppenheimerFunds Internet Web Site. Information about the Fund, including your
account balance, daily share prices, market and Fund portfolio information, may
be obtained by visiting the OppenheimerFunds Internet Web Site, at the following
Internet address: http://www.oppenheimerfunds.com. In 1998, the Transfer Agent
anticipates offering certain account transactions through the Internet Web Site.
To find out more information about those transactions and procedures, please
visit the Web Site.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable
you to sell shares automatically or exchange them to another Oppenheimer
funds
account on a regular basis:
o Automatic Withdrawal Plans. If your Fund account is worth $5,000 or more,
you can establish an Automatic Withdrawal Plan to receive payments of at least
$50 on a monthly, quarterly, semi-annual or annual basis. The checks may be sent
to you or sent automatically to your bank account on AccountLink. You may even
set up certain types of withdrawals of up to $1,500 per month by telephone. You
should consult the Statement of Additional Information for more details.
o 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
<PAGE>
shares on which you paid a contingent deferred sales charge when you redeemed
them. This privilege does not apply to Class C shares. You must be sure to ask
the Distributor for this privilege when you send your payment. Please consult
the Statement of Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your retirement
plans. If you participate in a plan sponsored by your employer, the plan trustee
or administrator must make the purchase of shares for your retirement plan
account. The Distributor offers a number of different retirement plans that can
be used by individuals and employers:
o Individual Retirement Accounts including rollover IRAs, for individuals
and their spouses and SIMPLE IRAs offered by employers
o 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
o SEP-IRAs (Simplified Employee Pension Plans) for small business owners
or people with income from self-employment, including SAR/SEP IRAs
o Pension and Profit-Sharing Plans for self-employed persons and other
employers
o 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents,
which
contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account by selling (redeeming)
some or all of your shares on any regular business day. Your shares will be sold
at the next net asset value calculated after your order is received and accepted
by the Transfer Agent. The Fund offers you a number of ways to sell your shares:
in writing or by telephone. You can also set up Automatic Withdrawal Plans to
redeem shares on a regular basis, as described above. If you have questions
about any of these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525- 7048, for assistance.
o 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,
<PAGE>
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.
o Certain Requests Require A Signature Guarantee. To protect you and the
Fund from fraud, certain redemption requests must be in writing and must include
a signature guarantee in the following situations (there may be other situations
also requiring a signature guarantee):
o You wish to redeem more than $50,000 worth of shares and receive a check
o The redemption check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to a Fund account with a different owner
or name
o Shares are redeemed by someone other than the owners (such as an
Executor)
o 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:
o Your name
o The Fund's name
o Your Fund account number (from your account statement) o The dollar
amount or number of shares to be redeemed o Any special
payment
instructions o Any share certificates for the shares you are selling o
The
signatures of all registered owners exactly as the account is
registered,
and o Any special requirements or documents requested by the
Transfer
Agent to
assure proper authorization of the person asking to sell shares.
Use the following address for Send courier or Express Mail
request by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
<PAGE>
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.
o To redeem shares through a service representative, call
1-800-852-8457 o
To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds wired to that bank account.
-8-
<PAGE>
o 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.
Shareholders may also have the Transfer Agent send redemption proceeds of
$2,500 or more by Federal Funds wire to a designated commercial bank
account.
The bank must be a member of the Federal Reserve wire system. There is a $10 fee
for each Federal Funds wire. To place a wire redemption request, call the
Transfer Agent at 1-800-852-8457. The wire will normally be transmitted on the
next bank business day after the shares are redeemed. There is a possibility
that the wire may be delayed up to seven days to enable the Fund to sell
securities to pay the redemption proceeds. No dividends are accrued or paid on
the proceeds of shares that have been redeemed and are awaiting transmittal by
wire. To establish wire redemption privileges on an account that is already
established, please contact the Transfer Agent for instructions.
o Telephone Redemptions Through AccountLink or by Wire. 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
<PAGE>
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.
Shareholders may also have the Transfer Agent send redemption proceeds of
$2,500 or more by Federal Funds wire to a designated commercial bank
account.
The bank must be a member of the Federal Reserve wire system. There is a $10 fee
for each Federal Funds wire. To place a wire redemption request, call the
Transfer Agent at 1-800-852-8457. The wire will normally be transmitted on the
next bank business day after the shares are redeemed. There is a possibility
that the wire may be delayed up to seven days to enable the Fund to sell
securities to pay the redemption proceeds. No dividends are accrued or paid on
the proceeds of shares that have been redeemed and are awaiting transmittal by
wire. To establish wire redemption privileges on an account that is already
established, please contact the Transfer Agent for instructions.
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 call your dealer for more
information about this procedure. Please refer to "Special Arrangements for
Repurchase of Shares from Dealers and Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence
o The prospectuses of this Fund and the fund whose shares you want to buy
must offer the exchange privilege
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them; after the account is open 7 days, you
can exchange shares every regular business day
o You must meet the minimum purchase requirements for the fund you
purchase by exchange
o Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class of the Fund may be exchanged only for shares
of the same class in the other Oppenheimer funds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At present,
Oppenheimer Money Market Fund, Inc. offers only one class of shares, which are
<PAGE>
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:
o 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."
o 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:
o 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 7 days if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For example,
the receipt of multiple exchange requests from a dealer in a "market-timing"
strategy might require the sale of portfolio securities at a time or price
disadvantageous to the Fund.
o Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request that
will disadvantage it, or to refuse multiple exchange requests submitted by a
shareholder or dealer.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund will attempt to provide you notice whenever it is
reasonably able to do so, it may impose these changes at any time.
<PAGE>
o 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.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will be
exchanged.
The Distributor has entered into agreements with certain dealers and
investment advisers permitting them to exchange their clients' shares by
telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a result,
those exchanges may be subject to notice requirements, delays and other
limitations that do not apply to shareholders who exchange their shares directly
by calling or writing to the Transfer Agent.
Shareholder Account Rules and Policies
o 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 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.
o 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.
o 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.
<PAGE>
o The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs,
and by confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither the Transfer Agent nor the Fund will be
liable for losses or expenses arising out of telephone instructions reasonably
believed to be genuine. If you are unable to reach the Transfer Agent during
periods of unusual market activity, you may not be able to complete a telephone
transaction and should consider placing your order by mail.
o 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.
o Dealers that can perform account transactions for their clients by
participating in NETWORKING through the National Securities Clearing Corporation
are responsible for obtaining their clients' permission to perform those
transactions and are responsible to their clients who are shareholders of the
Fund if the dealer performs any transaction erroneously or improperly.
o 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.
o Payment for redeemed shares is made ordinarily in cash and forwarded by
check or through AccountLink (as elected by the shareholder under the redemption
procedures described above) within 7 days after the Transfer Agent receives
redemption instructions in proper form, except under unusual circumstances
determined by the Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer, payment will
be forwarded within 3 business days. The Transfer Agent may delay forwarding a
check or processing a payment via AccountLink for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much as 10
days from the date the shares were purchased. That delay may be avoided if you
purchase shares by federal funds wire, certified check or arrange to have your
bank provide telephone or written assurance to the Transfer Agent that your
purchase payment has cleared.
o Involuntary redemptions of small accounts may be made by the Fund if
the
<PAGE>
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.
o 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.
o "Backup Withholding" of Federal income tax may be applied at the rate of
31% from taxable dividends, distributions and redemption proceeds (including
exchanges) if you fail to furnish the Fund a correct and properly certified
Social Security or Employer Identification Number when you sign your
application, or if you underreport your income to the Internal Revenue Service.
o The Fund does not charge a redemption fee, but if your dealer or broker
handles your redemption, they may charge a fee. That fee can be avoided by
redeeming your Fund shares directly through the Transfer Agent. Under the
circumstances described in "How To Buy Shares," you may be subject to a
contingent deferred sales charge when redeeming certain Class A, Class B and
Class C shares.
o To avoid sending duplicate copies of materials to households, the Fund
will mail only one copy of each annual and semi-annual report to shareholders
having the same last name and address on the Fund's records. However, each
shareholder may call the Transfer Agent at 1-800-525- 7048 to ask that copies of
those materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A, Class B,
Class C and Class Y shares from net investment income 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
<PAGE>
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:
o 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.
o 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.
o 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.
o Reinvest Your Distributions in Another Oppenheimer Fund Account. You
can
reinvest all distributions in the same class of shares of another
Oppenheimer
fund account you have established.
Taxes. If your account is not a tax-deferred retirement account, you should be
aware of the following tax implications of investing in the Fund. Long-term
capital gains are taxable as long-term capital gains when distributed to
shareholders. It does not matter how long you have 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. So that the Fund will
not have to pay taxes on the amounts it distributes to shareholders as dividends
and capital gains, the Fund intends to manage its investments so that it will
qualify as a "regulated investment company" under the Internal Revenue Code,
although it reserves the right not to qualify in a particular year.
o "Buying a Dividend". If you buy shares on or just before the ex-dividend
date, or just before the Fund declares a capital gains distribution, you will
pay the full price for the shares and then receive a portion of the price back
as a taxable dividend or capital gain.
<PAGE>
o 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.
o 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.
-9-
<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 of the Fund 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
<PAGE>
o Reduced Class A Initial Sales Charge Rates for Certain Former Quest
Shareholders
o Purchases by Groups, Associations and Certain Qualified Retirement Plans. The
following table sets forth the initial sales charge rates for Class A shares
purchased by a "Qualified Retirement Plan" through a single broker, dealer or
financial institution, or by members of "Associations" formed for any purpose
other than the purchase of securities if that Qualified Retirement Plan or that
Association purchased shares of any of the Former Quest for Value Funds or
received a proposal to purchase such shares from OCC Distributors prior to
November 24, 1995. For this purpose only, a "Qualified Retirement Plan" includes
any 401(k) plan, 403(b) plan, and SEP/IRA or IRA plan for employees of a single
employer.
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible 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 __ and of this Prospectus.
Purchases made under this arrangement qualify for the lower of the sales
charge rate in the table based on the number of eligible employees in a
Qualified Retirement Plan or members of an Association or the sales charge rate
that applies under the Rights of Accumulation described above in the Prospectus.
In addition, purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they qualified to
purchase shares of any of the Former Quest For Value Funds by virtue of
<PAGE>
projected contributions or investments of $1 million or more each year.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations, or as eligible employees in Qualified Retirement Plans
also may purchase shares for their individual or custodial accounts at these
reduced sales charge rates, upon request to the Fund's Distributor.
o Waiver of Class A Sales Charges for Certain Shareholders
Class A shares of the Fund purchased by the following investors are not subject
to any Class A initial or contingent deferred sales charges:
o Shareholders of the Fund who were shareholders of the AMA Family of
Funds on February 28, 1991 and who acquired shares of any of the Former Quest
for Value Funds by merger of a portfolio of the AMA Family of Funds.
o Shareholders of the Fund who acquired shares of any Former Quest for
Value Fund by merger of any of the portfolios of the Unified Funds.
o Shareholders of the Fund that have continually owned shares of the
Fund
prior to November 1, 1988.
o Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions
The Class A contingent deferred sales charge will not apply to redemptions of
Class A shares of the Fund purchased by the following investors who were
shareholders of any Former Quest for Value Fund:
o Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship under the Employee Retirement
Income Security Act of 1974 and regulations adopted under that law.
o Participants in Qualified Retirement Plans that purchased shares of any
of the Former Quest For Value Funds pursuant to a special "strategic alliance"
with the distributor of those funds. The Fund's Distributor will pay a
commission to the dealer for purchases of Fund shares as described above in
"Class A Contingent Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge Waivers
o Waivers for Redemptions of Shares Purchased Prior to March 6, 1995
<PAGE>
In the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of the Fund if those shares
were purchased prior to March 6, 1995: in connection with (i) distributions to
participants or beneficiaries of plans qualified under Section 401(a) of the
Internal Revenue Code or from custodial accounts under Section 403(b)(7) of the
Code, Individual Retirement Accounts, deferred compensation plans under Section
457 of the Code, and other employee benefit plans, and returns of excess
contributions made to each type of plan, (ii) withdrawals under an automatic
withdrawal plan holding only either Class B or Class C shares if the annual
withdrawal does not exceed 10% of the initial value of the account, and (iii)
liquidation of a shareholder's account if the aggregate net asset value of
shares held in the account is less than the required minimum value of such
accounts.
o Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but
Prior to November 24, 1995.
In the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of the Fund 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 Class C shares)
where the annual withdrawals do not exceed 10% of the initial value of the
account; and (5) liquidation of a shareholder's account if the aggregate net
asset value of shares held in the account is less than the required minimum
account value. A shareholder's account will be credited with the amount of any
contingent deferred sales charge paid on the redemption of any Class A, Class B
or Class C shares of the Fund described in this section if within 90 days after
that redemption, the proceeds are invested in the same Class of shares in this
Fund or another Oppenheimer fund.
A-1
<PAGE>
<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 10/31/97, in the case of the Fund's Class B and Class
C shares will cover the period from the inception of those classes on 9/1/93
through 10/31/97 and in the case of the Fund's Class Y shares will cover the
period from the inception of the class on 12/16/96 through 10/31/97. The graph
will compare such values with hypothetical $10,000 investments over the time
periods indicated below 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(1)
10/31/87 $ 9,425 $10,000
10/31/88 $11,267 $11,476
10/31/89 $13,033 $14,501
10/31/90 $11,284 $13,416
10/31/91 $15,564 $17,899
10/31/92 $18,436 $19,680
10/31/93 $20,697 $22,680
10/31/94 $21,736 $23,486
10/31/95 $27,113 $29,689
10/31/96 $34,813 $36,838
10/31/97 $43,659 $48,663
Fiscal Year Oppenheimer S&P
(Period) Ended Quest Value Fund, Inc. B 500 Index(2)
<PAGE>
09/01/93 $10,000 $10,000
10/31/93 $ 9,882 $10,128
10/31/94 $10,319 $10,519
10/31/95 $12,805 $13,297
10/31/96 $16,359 $16,499
10/31/97 $20,203 $21,796
A-2
<PAGE>
Fiscal Year Oppenheimer S & P
(Period) Ended Quest Value Fund, Inc. C 500 Index(2)
09/01/93 $10,000 $10,000
10/31/93 $ 9,874 $10,128
10/31/94 $10,313 $10,519
10/31/95 $12,798 $13,297
10/31/96 $16,347 $16,499
10/31/97 $20,400 $21,796
Fiscal Year Oppenheimer S&P
(Period) Ended Quest Value Fund, Inc. Y 500 Index(3)
12/16/96 $10,000 $10,000
10/31/97 $12,455 $12,531
(1) Performance information for the S & P 500 Index begins on 11/1/87 for Class
A shares.
(2) Performance information for the S & P 500 Index begins on 8/31/93 for Class
B and Class C shares.
(3) Performance information for the S & P 500 Index begins on 1/1/97 for Class Y
<PAGE>
shares.
A-3
<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
OppenheimerFunds Internet WebSite:
http://www.oppenheimerfunds.com
Custodian of Portfolio Securities
State Street Bank and Trust Company
P.O. Box 8505
Boston, Massachusetts 02266-8505
<PAGE>
Independent Accountants
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 Statement of Additional Information, and if given or
made, such information and representations must not be relied upon as having
been authorized by the Fund, OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any state to any person to whom it is unlawful to make such an
offer in such state. PRO225.001.0298 Printed on recycled paper prosp\225PSP.#6
OPPENHEIMER QUEST VALUE FUND, INC.
Two World Trade Center, New York, New York 10048
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
April 6, 1998
-----------------------------------
This Statement of Additional Information of Oppenheimer Quest Value
Fund, Inc. (the
"Registrant") consists of this cover page and the following documents:
1. Statement of Additional Information of Oppenheimer Quest Value Fund,
Inc. dated
February 27, 1998: incorporated herein by reference to the Registration
Statement on
Form N-14 of Registrant (Reg. No.: 333-47435) filed March 6, 1998.
2. Prospectus of Oppenheimer Quest Officers Value Fund dated January 26,
1998: incorporated herein by reference to the Registration Statement on
Form N-14 of Registrant (Reg. No.: 333-47435) filed March 6, 1998.
3. Statement of Additional Information of Oppenheimer Quest Officers Value
Fund dated January 26, 1998: incorporated herein by reference to the
Registration Statement on Form N-14 of Registrant (Reg. No.: 333-47435)
filed March 6, 1998.
4. Annual Report of Oppenheimer Quest Value Fund, Inc. as of October 31,
1997: incorporated herein by reference to the Registration Statement on
Form N-14 of Registrant (Reg. No.: 333-47435) filed March 6, 1998.
5. Annual Report of Oppenheimer Quest Officers Value Fund as of October 31,
1997: incorporated herein by reference to the Registration Statement on
Form N-14 of Registrant (Reg. No.: 333-47435) filed March 6, 1998.
This Statement of Additional Information is not a Prospectus. This
Statement of Additional
Information should be read in conjunction with the Proxy Statement and
Prospectus, which may be
obtained by written request to OppenheimerFunds Services ("OFS"), P.O. Box
5270, Denver,
Colorado 80217, or by calling OFS at the toll-free number shown above.
MERGE\225#2.ptb
