Registration No. 2-69719
File No. 811-3105
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. __ / /
POST-EFFECTIVE AMENDMENT NO. 32 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 26 / X /
OPPENHEIMER TARGET FUND
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/ / On ______________, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ X / On November 1, 1995, pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On _____________, pursuant to paragraph (a)(2) of Rule 485
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the
Registrant's fiscal year ended December 31, 1994 was filed on February
27, 1995.
<PAGE>
FORM N-1A
OPPENHEIMER TARGET FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
- --------- ------------------
1 Front Cover Page
2 Expenses; Brief Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; How the Fund is Managed -- Organization
and History; Investment Objective and Policies
5 How the Fund is Managed; Back Cover; Expenses
5A Performance of the Fund
6 How the Fund is Managed -- Organization and History; The
Transfer Agent; Dividends, Capital Gains and Taxes
7 Shareholder Account Rules and Policies; How to Buy Shares;
How to Exchange Shares; Service Plan for Class A Shares;
Distribution and Service Plan for Class B Shares;
Distribution and Service Plan for Class C Shares; Special
Investor Services; How to Sell Shares
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information
- --------- ----------------------------------------------
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment
Techniques and Strategies; Additional Investment
Restrictions
14 How the Fund is Managed - Trustees and Officers of the
Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and Service Plans
17 Brokerage Policies of the Fund
18 Additional Information About the Fund
19 Your Investment Account - How to Buy Shares; How to Sell
Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund;
Additional Information About the Fund
22 Performance of the Fund
23 *
_______________
* Not applicable or negative answer.
<PAGE>
O P P E N H E I M E R
Target Fund
Prospectus dated November 1, 1995
Oppenheimer Target Fund is a mutual fund that seeks capital
appreciation as its investment objective. The Fund emphasizes
investment in securities of "growth-type" companies, and cyclical
industries that the Fund's investment manager believes have
opportunities for capital growth. The Fund does not invest to earn
current income to distribute to shareholders.
The Fund invests mainly in common stocks, preferred stocks, and
convertible securities. The Fund also uses "hedging" instruments, to
seek to reduce the risks of market fluctuations that affect the value
of the securities the Fund holds.
Some investment techniques the Fund uses may be considered to be
speculative investment methods that may increase the risks of investing
in the Fund and may also increase the Fund's operating costs. You
should carefully review the risks associated with an investment in the
Fund. Please refer to "Investment Objective and Policies" for more
information about the types of securities the Fund invests in and the
risks of investing in the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep
it for future reference. You can find more detailed information about
the Fund in the November 1, 1995, Statement of Additional Information.
For a free copy, call Oppenheimer Shareholder 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)
Because of the Fund's investment policies and practices, the Fund's
shares may be considered to be speculative.
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
Page
ABOUT THE FUND
4 Expenses
6 A Brief Overview of the Fund
7 Financial Highlights
10 Investment Objective and Policies
16 How the Fund is Managed
18 Performance of the Fund
ABOUT YOUR ACCOUNT
21 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
29 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
31 How to Sell Shares
By Mail
By Telephone
32 How to Exchange Shares
34 Shareholder Account Rules and Policies
36 Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services,
and those expenses are subtracted from the Fund's assets to calculate
the Fund's net asset value per share. All shareholders therefore pay
those expenses indirectly. Shareholders pay other expenses directly,
such as sales charges. The following tables are provided to help you
understand your direct expenses of investing in the Fund and your share
of the Fund's operating expenses that you will bear indirectly. The
calculations are based on the Fund's expenses during its fiscal year
ended December 31, 1994.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to pages 21 through 37 for an
explanation of how and when these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None None
Sales Charge on Reinvested Dividends None None None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds) None(1) 5% in the first 1% if shares
year, declining are redeemed
to 1% in the within 12 months
sixth year and of purchase(2)
eliminated
thereafter(2)
Exchange Fee None None None
<FN>
______________________
(1) If you invest $1 million or more ($500,000 or more for purchases by
OppenheimerFunds prototype 401(k) plans) in Class A shares, you may
have to pay a sales charge of up to 1% if you sell your shares within
18 calendar months from the end of the calendar month in which you
purchased those shares. See "How to Buy Shares -- Class A Shares,"
below.
(2) See "How to Buy Shares - Class B Shares" and "How to Buy Shares -
Class C Shares," below, for more information on the contingent deferred
sales charges.
</TABLE>
- Annual Fund Operating Expenses are paid out of the Fund's
assets and represent the Fund's expenses in operating its business. For
example, the Fund pays management fees to its investment adviser,
Oppenheimer Management Corporation (which is referred to in this
Prospectus as the "Manager"). The rates of the Manager's fees are set
forth in "How the Fund is Managed," below. The Fund has other regular
expenses for services, such as transfer agent fees, custodial fees paid
to the bank that holds its portfolio securities, audit fees and legal
and other expenses. Those expenses are detailed in the Fund's
Financial Statements in the Statement of Additional Information.
The numbers in the table below are projections of the Fund's
business expenses based on the Fund's expenses in its last fiscal year.
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 the Service Plan Fees (the maximum
fee is 0.25% of average annual net assets of that class), and for Class
B and Class C shares are the Distribution and Service Plan Fees (the
maximum service fee is 0.25% of average annual net assets of that
class) and the asset-based sales charge of 0.75%. The actual expenses
for each class of shares in future years may be more or less, depending
on a number of factors, including the actual amount of the assets
represented by each class of shares. Class B shares were not publicly
offered during the Fund's fiscal year ended December 31, 1994.
Therefore, the Annual Fund Operating Expenses for Class B shares are
estimates based on amounts that would have been payable if Class B
shares had been outstanding during that fiscal year. These plans are
described in greater detail in "How to Buy Shares."
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
<S> <C> <C> <C>
Management Fees (Restated) 0.74% 0.74% 0.74%
12b-1 Distribution Plan Fees (Restated) 0.17%(1) 1.00%(2) 1.00%(2)
Other Expenses 0.30% 0.42% 0.42%
Total Fund Operating Expenses (Restated) 1.21% 2.16% 2.16%
<FN>
______________________
(1) Service Plan fees only
(2) Includes Service Plan Fees and asset-based sales charge
</TABLE>
The management fees in the chart are restated to reflect the
decrease in the management fee rate that took effect July 1, 1994,
under the Fund's investment advisory agreement with the Manager. Also,
as of July 1, 1994, a new Service Plan took effect for Class A shares
that applies to all Class A shares of the Fund, regardless of the date
on which the shares were purchased. Therefore, these fees are restated
as though the new rates had been in effect during the entire fiscal
year ended December 31, 1994. Had the fee rates not changed, the
actual management fees would have been 0.76% for Class A and the Class
A Service Plan would have been 0.10%, and total operating expenses
would have been 1.16% for Class A shares, ____% for Class B shares and
2.18% for Class C shares, respectively.
- 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 that the Fund's annual return is 5%, and that
its operating expenses for each class are the ones shown in the table
above as restated. 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:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years*
<S> <C> <C> <C> <C>
Class A Shares $69 $94 $120 $196
Class B Shares $ $ $ $
Class C Shares $32 $68 $116 $249
If you did not redeem your investment, it would incur the following expenses:
Class A Shares $69 $94 $120 $196
Class B Shares $ $ $ $
Class C Shares $22 $68 $116 $249
<FN>
_____________________
* The Class B expenses in years 7 through 10 based on Class A expenses
shown above, because the Fund automatically converts your Class B
shares into Class A after 6 years. Because of the asset-based sales
charge and the contingent deferred sales charge on Class B and Class C
shares long-term Class B and Class C shareholders could bear expenses
that would be the economic equivalent of an amount greater than the
maximum front-end sales charges permitted under applicable regulatory
requirements. For Class B shareholders, the automatic conversion of
Class B shares is designed to minimize the likelihood that this will
occur. Please refer to "How to Buy Shares" for more information.
</TABLE>
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 will vary.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below,
with references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire
Prospectus before making a decision about investing in the Fund. Keep
the Prospectus for reference after you invest, particularly for
information about your account, such as how to sell or exchange shares.
- What Is The Fund's Investment Objective? The Fund's investment
objective is to seek capital appreciation.
- What Does the Fund Invest In? To seek capital appreciation,
the Fund primarily invests in common stocks, preferred stocks, and
convertible securities. The Fund may also write covered calls and use
certain types of "hedging instruments" and "derivative investments" to
seek to reduce the risks of market fluctuations that affect the value
of the securities the Fund holds. These investments are more fully
explained in "Investment Objective and Policies" starting on page 10.
- Who Manages the Fund? The Fund's investment adviser (the
"Manager") is Oppenheimer Management Corporation, which (including a
subsidiary) manages investment company portfolios currently having over
$35 billion in assets. The Manager is paid an advisory fee by the
Fund, based on its assets. The Fund's portfolio manager, who is
employed by the Manager, is primarily responsible for the selection of
the Fund's securities, is Robert C. Doll, Jr. The Fund's Board of
Trustees, elected by shareholders, oversees the investment adviser and
the portfolio manager. Please refer to "How the Fund is Managed,"
starting on page __ for more information about the Manager and its
fees.
- How Risky is the Fund? All investments carry risks to some
degree. The Fund's investments in stocks are subject to changes in
their value from a number of factors such as changes in general stock
market movements. A change in value of particular stocks may result
from an event affecting the issuer. These changes affect the value of
the Fund's investments and its share prices for each class of its
shares. In the OppenheimerFunds spectrum, the Fund is generally
considered an aggressive growth fund, considerably more aggressive than
money market or growth and income funds because it invests for capital
appreciation in common stocks emphasizing "growth" stocks that tend to
be more volatile than other investments. While the Manager tries to
reduce risks by diversifying investments, by carefully researching
securities before they are purchased for the portfolio, and in some
cases by using hedging techniques, there is no guarantee of success in
achieving the Fund's objectives and your shares may be worth more or
less than their original cost when you redeem them. Please refer to
"Investment Objective and Policies" starting on page __ for a more
complete discussion of the Fund's investment risks.
- How Can I Buy Shares? You can buy shares through your dealer
or financial institution, or you can purchase shares directly through
the Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How to Buy Shares"
on page __ for more details.
- Will I Pay a Sales Charge to Buy Shares? The Fund offers three
classes of shares. All classes have the same investment portfolio but
different expenses. Class A shares are offered with a front-end sales
charge, starting at 5.75%, and reduced for larger purchases. Class B
shares 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 one year of buying them, respectively. There is also
an annual asset-based sales charge on Class B shares and Class C
shares. Please review "How to Buy Shares" starting on page __ for more
details, including a discussion about factors you and your financial
advisor should consider in determining which class may be appropriate
for you.
- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through
your dealer. Please refer to "How to Sell Shares" on page __. The
Fund also offers exchange privileges to other OppenheimerFunds,
described in "How to Exchange Shares" on page __.
- How Has the Fund Performed? The Fund measures its performance
by quoting its average annual total return and cumulative total return,
which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other
funds may have different objectives, investments, and levels of risk.
The Fund's performance can also be compared to broad market indices,
which we have done on page __. Please remember that past performance
does not guarantee future results.
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data and expense ratios
and other data based on the Fund's average net assets. This information
has been audited by KPMG Peat Marwick LLP, the Fund's independent
auditors, whose report on the Fund's financial statements for the
fiscal year ended December 31, 1994, is included in the Statement of
Additional Information. Class B shares were not publicly offered
during the periods shown. Accordingly, no information on Class B
shares is included in the table below or in the Fund's financial
statements.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to seek capital appreciation for
shareholders. The Fund does not invest to seek current income to pay to
shareholders.
Investment Policies and Strategies. The Fund seeks its investment
objective by emphasizing investment in common stocks or other equity
securities, including convertible securities, and may hold warrants and
rights. These may include securities of U.S. companies or foreign
companies, as discussed below.
The Manager looks for securities that it believes may appreciate
in value. The Fund may invest in companies of any size and
capitalization, and at times the Manager may emphasize investment in
companies in particular ranges of size. However, in general, capital
appreciation possibilities are more likely to be found in the
securities of "growth-type" companies than in the securities of larger,
more established companies.
The Fund may also seek to take advantage of changes in the
business cycle by investing in companies that are sensitive to those
changes, if the Manager believes they present opportunities for long-
term growth. For example, when the economy is expanding, companies in
the financial services and consumer products industries may be in a
position to benefit from changes in the business cycle and may present
long-term growth opportunities.
When investing the Fund's assets, the Manager considers many
factors, including general economic conditions in the U.S. relative to
foreign economies, and the trends in domestic and foreign stock
markets. The Fund may try to hedge against losses in the value of its
portfolio of securities by using hedging strategies described below.
When market conditions are unstable, the Fund may invest substantial
amounts of its assets in debt securities, such as money market
instruments or government securities, as described below. The Fund's
portfolio manager may employ special investment techniques in selecting
securities for the Fund. These are also described below. Additional
information may be found about them under the same headings in the
Statement of Additional Information.
- What Are "Growth" Companies? These tend to be newer companies
that may be developing new products or services, or expanding into new
markets for their products. While they may have what the Manager
believes to be favorable prospects for the long-term, they normally
retain a large part of their earnings for research, development and
investment in capital assets. Therefore, they tend not to emphasize the
payment of dividends.
- Stock Investment Risks. Because the Fund can invest a
substantial portion (or all) of its assets in stocks, the value of the
Fund's portfolio will be effected by changes in the stock markets.
This market risk will affect the Fund's net asset values per share,
which will fluctuate as the values of the Fund's portfolio securities
change. Not all sock 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, changes in government regulations
affecting an industry). Not all of these factors can be predicted.
Changes in the overall market prices can occur at any time.
As discussed below, 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. Also, the Fund does not
concentrate its investment in any one industry or group of industries
- Other Investment Risks. Because of the types of securities the
Fund invests in and the investment techniques the Fund uses, some of
which may be speculative, the Fund is designed for investors who are
investing for the long-term and who are willing to accept greater risks
of loss of their capital in the hope of achieving capital appreciation.
It is not intended for investors seeking assured income and
preservation of capital. Investing for capital appreciation entails
the risk of loss of all or part of your principal. Because 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.
- Special Risks - Borrowing for Leverage. The Fund may borrow up
to 10% of the value of its assets from banks to buy securities. The
Fund will only borrow if it can do so without putting up assets as
security for a loan. This is a speculative investment method known as
"leverage." Leveraging may subject the Fund to greater risks and costs
than funds that do not borrow. These risks may include the possible
reduction of income and increased fluctuation in the Fund's net asset
value per share, since the Fund pays interest on borrowings. Borrowing
is subject to regulatory limits, described in more detail in the
Statement of Additional Information.
- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund may engage frequently in
short-term trading to try to achieve its objective. As a result, the
Fund's portfolio turnover may be higher than other mutual funds,
although it is not expected to be more than 100% each year. The
"Financial Highlights," above, show the Fund's portfolio turnover rate
during past fiscal years.
High portfolio turnover and short-term trading may cause the Fund
to have relatively larger commission expenses and transaction costs
than funds that do not engage in short-term trading. Additionally,
high portfolio turnover may affect the ability of the Fund to qualify
as a "regulated investment company" under the Internal Revenue Code for
tax deductions for dividends and capital gains distributions the Fund
pays to shareholders. The Fund qualified in its last fiscal year and
intends to do so in the coming year, although it reserves the right not
to qualify.
- 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 policies. The Fund's investment
policies and practices are not "fundamental" unless the Prospectus or
Statement of Additional Information says 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 Trustees may change non-fundamental policies without
shareholder approval, although significant changes will be described in
amendments to this Prospectus.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These techniques
involve certain risks. The Statement of Additional Information
contains more information about these practices, including limitations
on their use that are designed to reduce some of the risks.
- Warrants and Rights. Warrants and rights basically are options
to purchase stock at set prices that are valid for a limited period of
time. The Fund may invest up to 5% of its total assets in warrants and
rights in addition to warrants the Fund has acquired in units or that
are attached to other securities. No more than 2% of the Fund's assets
may be invested in warrants that are not listed on the New York or
American Stock Exchanges. For further details about these investments,
see "Warrants and Rights" in the Statement of Additional Information.
- Foreign Securities. The Fund may purchase equity (and debt)
securities issued or guaranteed by foreign companies or foreign
governments, including foreign government agencies. The Fund may buy
securities of companies or governments in any country, developed or
underdeveloped. The Fund does not have any limit on the amount of
assets that may be invested in foreign securities. However, the Fund
normally does not expect to have more than 35% of its assets invested
in foreign securities. Foreign currency will be held by the Fund only
in connection with the purchase or sale of foreign securities. If the
Fund's securities are held abroad, the countries in which they are held
and the sub-custodians holding them must be approved by the Fund's
Board of Trustees.
Foreign securities have special risks. For example, foreign
issuers are not subject to the same accounting and disclosure
requirements that U.S. companies are subject to. 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. More information about
the risks and potential rewards of investing in foreign securities is
contained in the Statement of Additional Information.
- Small, Unseasoned Companies. The Fund may invest in securities
of small, unseasoned companies. These are companies that have been in
operation for less than three years, even after including the
operations of any predecessors. Securities of these companies may have
limited liquidity (which means that the Fund may have difficulty
selling them at an acceptable price when it wants to) and the prices of
these securities may be volatile. The Fund currently intends to invest
no more than 5% of its net assets in the next year in securities of
small, unseasoned issuers.
- Special Situations. The Fund may invest in securities of
companies that are in "special situations" that the Manager believes
present opportunities for capital growth. A "special situation" may be
an event such as a proposed merger, reorganization, or other unusual
development that is expected to occur and which may result in an
increase in the value of a company's securities regardless of general
business conditions or the movement of prices in the securities market
as a whole. There is a risk that the price of the security may decline
if the anticipated development fails to occur. There is no limit on
the amount of assets that the Fund may invest in "special situations."
- Hedging. The Fund may purchase and sell certain kinds of
futures contracts, put and call options, forward contracts, and options
on futures and broadly-based securities indices. These are all
referred to as "hedging instruments." The Fund does not use hedging
instruments for speculative purposes, and has limits on the use of
them, described below. The hedging instruments the Fund may use are
described below and in greater detail in "Other Investment Techniques
and Strategies" in the Statement of Additional Information.
The Fund may buy and sell options, futures and forward contracts
for a number of purposes. It may do so to try to manage its exposure
to the possibility that the prices of its portfolio securities may
decline, or to establish a position in the securities market as a
temporary substitute for purchasing individual securities. Some of
these strategies, such as selling futures, buying puts and writing
covered calls, hedge the Fund's portfolio against price fluctuations.
Other hedging strategies, such as buying futures and call options,
tend to increase the Fund's exposure to the securities market. Forward
contracts are used to try to manage foreign currency risks on the
Fund's foreign investments. Foreign currency options are used to try
to protect against declines in the dollar value of foreign securities
the Fund owns, or to protect against an increase in the dollar cost of
buying foreign securities. Writing covered call options may also
provide income to the Fund for liquidity purposes or defensive reasons.
Futures. The Fund may buy and sell futures contracts that relate
to broadly-based securities indices (these are referred to as Stock
Index Futures and Bond Index Futures).
Put and Call Options. The Fund may buy and sell certain kinds of
put options (puts) and call options (calls).
The Fund may purchase calls only on securities, Stock Index
Futures, broadly-based securities indices and foreign currencies, or to
terminate its obligation on a call the Fund previously wrote. The Fund
may write (that is, sell) covered call options. When the Fund writes a
call, it receives cash (called a premium). The call gives the buyer
the ability to buy the investment on which the call was written from
the Fund at the call price during the period in which the call may be
exercised. If the value of the investment does not rise above the call
price, it is likely that the call will lapse without being exercised,
while the Fund keeps the cash premium (and the investment). There is
no limit on the amount of the Fund's total assets that may be subject
to covered calls.
The Fund may purchase put options. Buying a put on an investment
gives the Fund the right to sell the investment at a set price to a
seller of a put on that investment. The Fund can purchase those puts
that relate to (1) securities the Fund owns, (2) Stock Index Futures
(whether or not the Fund owns the particular Stock Index Future in its
portfolio), (3) broadly-based stock indices, or (4) foreign currencies.
The Fund may write puts on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures. Writing puts
requires the segregation of liquid assets to cover the put. The Fund
will not write a put if it would require more than 50% of its net
assets to be segregated to cover the put obligation.
The Fund may buy and sell calls if certain conditions are met.
Calls the Fund buys or sells must be listed on a domestic or foreign
securities or commodities exchange or quoted on the Automated Quotation
System of the National Association of Securities Dealers, Inc. Each
call the Fund writes must be "covered" while it is outstanding; that
means the Fund must own the securities on which the call is written or
it must own other securities that are acceptable for the escrow
arrangements required for calls. After the Fund writes a call, not more
than 25% of the Fund's total assets may be subject to calls. In the
case of puts and calls on foreign currency, they must be traded on a
securites or commodities exchange, or quoted by recognized dealers in
these options. The Fund may also write calls on Futures Contracts it
owns, but those calls must be covered by securities or other liquid
assets the Fund owns and segregates to enable it to satisfy its
obligations if the call is exercised. A call or put option may not be
purchased if the value of all of the Fund's put and call options would
exceed 5% of the Fund's total assets.
Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills
and knowledge of investment techniques that are different than what is
required for normal portfolio management. If the Manager uses a
hedging instrument at the wrong time or judges market conditions
incorrectly, hedging strategies may reduce the Fund's return. The Fund
could also experience losses if the prices of its futures and options
positions were not correlated with its other investments or if it could
not close out a position because of an illiquid market for the future
or option.
Options trading involves the payment of premiums and has special
tax effects on the Fund. There are also special risks in particular
hedging strategies. If a covered call written by the Fund is exercised
on a security that has increased in value, the Fund will be required to
sell the security at the call price and will not be able to realize any
profit if the security has increased in value above the call price.
The use of forward contracts may reduce the gain that would otherwise
result from a change in the relationship between the U.S. dollar and a
foreign currency. To limit its exposure in foreign currency exchange
contracts, the Fund limits its exposure to the amount of its assets
denominated in the foreign currency. Interest rate swaps are subject
to credit risks (if the other party fails to meet its obligations) and
also to interest rate risks. The Fund could be obligated to pay more
under its swap agreements than it receives under them, as a result of
interest rate changes. These risks are described in greater detail in
the Statement of Additional Information.
- Illiquid and Restricted Securities. Under the policies
established by the Fund's Board of Trustees, the Manager determines the
liquidity of certain of the Fund's investments. Investments may be
illiquid because of the absence of an active trading market, making it
difficult to value them or dispose of them promptly at an acceptable
price. A restricted security is one that has a contractual restriction
on its resale or which cannot be sold publicly until it is registered
under the Securities Act of 1933. The Fund will not invest more than
10% of its net assets in illiquid or restricted securities (that limit
may increase to 15% if certain state laws are changed or the Fund's
shares are no longer sold in those states). The Fund's percentage
limitation on these investments does not apply to certain restricted
securities that are eligible for resale to qualified institutional
purchasers.
- 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. These loans are limited to not more than 25% of
the value of the Fund's net assets and are subject to the conditions
described in the Statement of Additional Information. The Fund
presently does not intend to engage in loans of securities that will
exceed 5% of the value of the Fund's total assets in the coming year.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date.
Repurchase agreements must be fully collateralized. However, if the
vendor of the securities under a repurchase agreement fails to pay the
resale price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if there is any
delay in its ability to do so. The Fund will not enter into a
repurchase agreement which causes more than 10% of its net assets to be
subject to repurchase agreements having a maturity beyond seven days.
There is no limit on the amount of the Fund's net assets that may be
subject to repurchase agreements of seven days or less.
- Short Sales "Against-the-Box". In a short sale, the seller
does not own the security that is sold, but normally borrows the
security to fulfill the delivery obligation. The seller later buys the
security to repay the loan, in the expectation that the price of the
security will be lower when the purchase is made, resulting in a gain.
The Fund may not sell securities short except in collateralized
transactions referred to as short sales "against-the-box," where the
Fund owns an equivalent amount of the securities sold short. This
technique is primarily used for tax purposes. No more than 15% of the
Fund's net assets will be held as collateral for short sales at any one
time.
- Temporary Defensive Investments. When stock market prices are
falling or in other unusual economic or business circumstances, the
Fund may invest all or a portion of its assets in defensive securities.
Securities selected for defensive purposes may include debt securities,
such as rated or unrated bonds and debentures, preferred stocks, cash
or cash equivalents, such as U.S. Treasury Bills and other short-term
obligations of the U.S. Government, its agencies or instrumentalities,
or commercial paper rated "A-1" or better by Standard & Poor's
Corporation or "P-1" or better by Moody's Investors Service, Inc.
Other Investment Restrictions. The Fund has other investment
restrictions which are fundamental policies. Under these fundamental
policies, the Fund cannot do any of the following:
- as to 75% of its assets, the Fund may not buy securities issued
or guaranteed by a single issuer if, as a result, the Fund would have
invested more than 5% of its total assets in the securities of that
issuer or would own more than 10% of the voting securities of that
issuer (purchases of securities of the U.S. government, its agencies
and instrumentalities are not restricted by this policy);
- the Fund cannot invest more than 25% of its total assets in
securities of companies in any one industry; and
- the Fund cannot invest in other open-end investment companies
or invest more than 5% of its net assets in closed-end investment
companies, including small business investment companies, nor make any
such investments at commission rates in excess of normal brokerage
commissions.
All of the percentage restrictions described above and elsewhere
in this Prospectus and in the Statement of Additional Information
(other than the percentage limits that apply to borrowing, described in
the Statement of Additional Information) apply only at the time the
Fund purchases a security, and the Fund need not dispose of a security
merely because the Fund's assets have changed or the security has
increased in value relative to the size of the Fund. There are other
fundamental policies discussed in the Statement of Additional
Information.
How the Fund is Managed
Organization and History. The Fund was originally incorporated in
Maryland in 1980 but was reorganized in 1987 as a Massachusetts
business trust. The Fund is an open-end, diversified management
investment company, with an unlimited number of authorized shares of
beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible
for protecting the interests of shareholders under Massachusetts law.
The Trustees meet periodically throughout the year to oversee the
Fund's activities, review its performance, and review the actions of
the Manager. "Trustees and Officers of the Fund" in the Statement of
Additional Information names the Trustees and provides more information
about them and the officers of the Fund. 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
the right to call a meeting to remove a Trustee or to take other action
described in the Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder approval,
to divide unissued shares of the Fund into two or more classes. The
Board has done so, and the Fund currently has three classes of shares,
Class A, Class B and Class C. All classes invest in the same
investment portfolio. Each class has its own dividends and
distributions and pays certain expenses which may be different for the
different classes. Each class may have a different net asset value.
Each share has one vote at shareholder meetings, with fractional shares
voting proportionally. Only shares of a particular class vote together
on matters that affect that class alone. Shares are freely
transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting
the Fund's investments and handles its day-to-day business. The
Manager carries out its duties, subject to the policies established by
the Board of Trustees, under an investment advisory agreement which
states the Manager's responsibilities. The agreement sets forth the
fees paid by the Fund to the Manager and describes the expenses that
the Fund pays to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager (including a subsidiary) currently manages investment
companies, including other OppenheimerFunds, with assets of more than
$35 billion as of June 30, 1995, and with more than 2.6 million
shareholder accounts. The Manager is owned by Oppenheimer Acquisition
Corp., a holding company that is owned in part by senior officers of
the Manager and controlled by Massachusetts Mutual Life Insurance
Company.
- Portfolio Manager. The Portfolio Manager of the Fund is Robert
C. Doll, Jr. He has been the person principally responsible for the
day-to-day management of the Fund's portfolio effective May 1, 1994.
He previously served as the Fund's portfolio manager from September
1988 to October 1992. Mr. Doll is an Executive Vice President and
Director of Equity Investments of the Manager. He is also the portfolio
manager of Oppenheimer Growth Fund.
- Fees and Expenses. Under the investment advisory agreement,
the Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 0.75% of the first $200 million of
aggregate net assets, 0.72% of the next $200 million, 0.69% of the next
$200 million, 0.66% of the next $200 million, and 0.60% of aggregate
net assets over $800 million. The Fund's management fee for its last
fiscal year was 0.76% of average annual net assets for Class A shares
and 0.76% for Class C shares. These rates have been restated in the
"Annual Fund Operating Expenses" chart on page __ to reflect the fact
that the fee rates were reduced effective July 1, 1994.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and
auditing costs. Those expenses are paid out of the Fund's assets and
are not paid directly by shareholders. However, those expenses reduce
the net asset value of shares, and therefore are indirectly borne by
shareholders through their investment. More information about the
investment advisory agreement and the other expenses paid by the Fund
is contained in the Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers
are selected for the Fund's portfolio transactions. When deciding
which brokers to use, the Manager is permitted by the investment
advisory agreement to consider whether brokers have sold shares of the
Fund or any other funds for which the Manager serves as investment
adviser.
- The Distributor. The Fund's shares are sold through dealers
and brokers that have a sales agreement with Oppenheimer Funds
Distributor, Inc., a subsidiary of the Manager that acts as the
Distributor. The Distributor also distributes the shares of other
mutual funds managed by the Manager (the "OppenheimerFunds") and is
sub-distributor for funds managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
account to the Transfer Agent at the address and toll-free numbers
shown below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms
"cumulative total return" and "average annual total return" to
illustrate its performance. These terms are used to show the
performance of each class of shares 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. This performance
information may be useful to help you see how well your investment has
done and to compare it to other funds or market indices, as we have
done below.
It is important to understand that the Fund's total returns
represent past performance and should not be considered to be
predictions of future returns or performance. This performance data is
described below, but more detailed information about how total returns
are calculated is contained in the Statement of Additional Information,
which also contains information about other ways to measure and compare
the Fund's performance. The Fund's investment performance will vary,
depending on market conditions, the composition of the portfolio,
expenses and which class of shares you purchase.
- Total Returns. There are different types of total returns used
to measure the Fund's performance. Total return is the change in value
of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares. The cumulative total return measures the change in
value over the entire period (for example, ten years). An average
annual total return shows the average rate of return for each year in a
period that would produce the cumulative total return over the entire
period. However, average annual total returns do not show the Fund's
actual year-by-year performance.
When total returns are quoted for Class A shares, normally they
include the payment of the current maximum initial sales charge. Total
returns may also be quoted "at net asset value," without including the
sales charge, and those returns would be reduced if sales charges were
deducted. When total returns are shown for Class B shares, they
reflect the effect of the contingent deferred sales charge that applies
to the period for which total return is shown. When total returns are
shown for a one-year period for Class C shares, they include the effect
of the contingent deferred sales charge. They may also be shown based
on the change in net asset value, without including the contingent
deferred sales charge, and those returns would be reduced 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 December 31, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the Fund's past
fiscal year, the Manager positioned the Fund's portfolio more
defensively. In response to the rising interest rates during the first
six months of the year and the negative effect of those rate increases
on stock prices, the Manager caused the Fund to move out of cyclical
stocks and to focus on financial, technology and healthcare issues.
During the last six months of the fiscal year, the Manager placed
greater emphasis on consumer and industrial companies because they
were viewed as having strong earnings power and as selling at
relatively low prices. The Fund also sought to take advantage of the
growth in the international markets by increasing its holdings in
technology and other companies that derive a third to a half of their
earnings from sales outside of the U.S. Additionally, in order to
remain poised to take advantage of new investment opportunities, the
Fund increased its cash position.
- Comparing the Fund's Performance to the Market. The graphs
below shows the performance of a hypothetical $10,000 investment in
Class A and Class C shares of the Fund at December 31, 1994: in the
case of Class A shares, over a ten-year period, and in the case of
Class C shares from the inception of the Class on December 1, 1993.
Class B shares were not publicly offered during the fiscal year ended
December 31, 1994. Accordingly, no performance information is
presented on Class B shares in the graphs below.
The performance of each class of the Fund's shares 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. Also, the Fund's performance reflects 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, which tend to be securities of larger, well-capitalized
companies, as contrasted to the smaller growth-type companies in which
the Fund principally invests. Moreover, the index data does not
reflect any assessment of the risk of the investments included in the
index.
Class A Shares
Comparison of Change in Value
of $10,000 Hypothetical Investment in
Oppenheimer Target Fund Class A Shares
and the S&P 500 Index
(Graph)
Class C Shares
Comparison of Change in Value
of $10,000 Hypothetical Investment in
Oppenheimer Target Fund Class C Shares
and the S&P 500 Index
(Graphs)
Past performance is not predictive of future performance.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors three different
classes of shares. The different classes of shares represent
investments in the same portfolio of securities but are subject to
different expenses and will likely have different share prices.
- Class A Shares. If you buy Class A shares, you may pay an
initial sales charge on investments up to $1 million (up to $500,000
for purchases by OppenheimerFunds prototype 401(k) plans). If you
purchase Class A shares as part of an investment of at least $1 million
($500,000 for OppenheimerFunds prototype 401(k) plans) in shares of one
or more OppenheimerFunds, you will not pay an initial sales charge, but
if you sell any of those shares within 18 months of buying them, you
may pay a contingent deferred sales charge. The amount of that sales
charge will vary depending on the amount you invested. Sales charge
rates are described in "Class A Shares" below.
- Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within six
years, you will normally pay a contingent deferred sales charge, that
varies depending on how long you own your shares. Please refer to
"Class B shares" below.
- Class C Shares. If you buy Class C shares, you pay no sales
charge at the time of purchase, but if you sell your shares within 12
months of buying them, you will normally pay a contingent deferred
sales charge of 1%. Please refer to "Class C Shares" below.
Which Class of Shares Should You Choose? Once you decide that the
Fund is an appropriate investment for you, the decision as to which
class of shares is better suited to your needs depends on a number of
factors which you should discuss with your financial advisor. The
Fund's operating costs that apply to a class of shares and the effect
of the different types of sales charges on your investment will vary
your investment results over time. The most important factors are how
much you plan to invest, how long you plan to hold your investment, and
whether you anticipate exchanging your shares for shares of other
OppenheimerFunds (not all of which currently offer Class C shares). 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 discussions, to help provide you and your
financial advisor with a framework in which to choose a class, we have
made some assumptions using a hypothetical investment in the Fund. We
used the sales charge rates that apply to Class A and Class C
considering the effect of the annual asset-based sales charge on 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 you invest in.
The factors discussed below are not intended to be investment advice or
recommendations, because each investor's financial considerations are
different. The discussion below of the factors to consider in
purchasing a particular class of shares assumes that you will purchase
only one class of shares and not a combination of shares of different
classes.
- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, knowing how long
you expect to hold your investment will assist you in selecting the
appropriate class of shares. Because of the effect of class-based
expenses, your choice will also depend on how much you plan to invest.
For example, the reduced sales charges available for larger purchases
of Class A shares may, over time, offset the effect of paying an
initial sales charge on your investment (which reduces the amount of
your investment dollars used to buy shares for your account), compared
to the effect over time of higher class-based expenses on shares of
Class B or C for which no initial sales charge is paid.
Investing for the Short Term. If you have a short-term investment
horizon (that is, you plan to hold your shares for not more than six
years), you should probably consider purchasing Class A or Class C
shares rather than Class B shares, because of the effect of the Class B
contingent deferred sales charge if you redeem in less than 7 years, as
well as the effect of the Class B asset-based sales charge on the
investment return for that class in the short-term. Class C shares
might be the appropriate choice (especially for investments of less
than $100,000), because there is no initial sales charge on Class C
shares, and the contingent deferred sales charge does not apply to
amounts you sell after holding them one year.
However, if you plan to invest more than $100,000 for the shorter
term, then the more you invest and the more your investment horizon
increases toward six years, Class C shares might not be as advantageous
as Class A shares. That is because the annual asset-based sales charge
on Class C shares will have a greater impact on your account over the
longer term than the reduced front-end sales charge available for
larger purchases of Class A shares. For example, Class A might be more
advantageous than Class C (as well as Class B) for investments of more
than $100,000 expected to be held for 5 or 6 years (or more). For
investments over $250,000 expected to be held 4 to 6 years (or more),
Class A shares may become more advantageous than Class C (and 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 $1
million or more of Class B or C shares respectively from a single
investor. 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 should not be relied on as rigid
guidelines.
Investing for the Longer Term. If you are investing for the
longer-term, for example, for retirement, and do not expect to need
access to your money for seven years or more, Class B shares may be an
appropriate consideration, if you plan to invest less than $100,000. If
you plan to invest more than $100,000 over the long term, Class A
shares will likely be more advantageous than Class B shares or C
shares, as discussed above, because of the effect of the expected lower
expenses for Class A shares and the reduced initial sales charges
available for larger investments in Class A shares under the Fund's
Right of Accumulation.
- 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, you should carefully review how you plan to use your
investment account before deciding which class of shares is better for
you. For example, not all other OppenheimerFunds offer Class B or
Class C shares limiting exchangeability from the Fund. Share
certificates are not available for Class B or Class C shares and if you
are considering using you shares as collateral for a loan, that may be
a factor to consider. Additionally, the dividends payable to Class B
and Class C shareholders will be reduced by the additional expenses
borne solely by that class, such as the asset-based sales charge, as
described below and in the Statement of Additional Information.
- How Does It Affect Payments to My Broker? A salesperson, such
as a broker, or any other person who is entitled to receive
compensation for selling Fund shares may receive different compensation
for selling one class than for selling another class. It is important
that investors understand that the purpose of the Class B and Class C
contingent deferred sales charge and asset-based sales charges are the
same as the purpose of the front-end sales charge on sales of Class A
shares: to compensate the Distributor for commissions it pays to
dealers and financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any
time with as little as $25. There are reduced minimum investments under
special investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments for as little as $25; and subsequent purchases
of at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as
$250 (if your IRA is established under an Asset Builder Plan, the $25
minimum applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or
you can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements
with the Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan
under the OppenheimerFunds AccountLink service. When you buy shares,
be sure to specify Class A, Class B or Class C shares. If you do not
choose, your investment will be made in Class A shares.
- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box
5270, Denver, Colorado 80217. If you don't list a dealer on the
application, the Distributor will act as your agent in buying the
shares. However, we recommend that you discuss your investment first
with a financial advisor, to be sure it is appropriate for you.
- Buying Shares Through OppenheimerFunds AccountLink. You can
use AccountLink to link your Fund account with an account at a U.S.
bank or other financial institution that is an Automated Clearing House
(ACH) member, to transmit funds electronically to purchase shares, or
to have the Transfer Agent send redemption proceeds or to transmit
dividends and distributions.
Shares are purchased for your account on the regular business day
the Distributor is instructed by you to initiate the ACH transfer to
buy shares. You can provide those instructions automatically, under an
Asset Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. You should request
AccountLink privileges on the application or dealer settlement
instructions used to establish your account. Please refer to
"AccountLink" below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and
up to four other OppenheimerFunds) automatically each month from your
account at a bank or other financial institution under an Asset Builder
Plan with AccountLink. Details are on the Application and in the
Statement of Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales
charge that applies) that is next determined after the Distributor
receives the purchase order in Denver. In most cases, to enable you to
receive that day's offering price, the Distributor must receive your
order at the time of day the New York Stock Exchange closes, which is
normally 4:00 P.M., New York time, but may be earlier on some days (all
references to time in this Prospectus mean "New York time"). The net
asset value of each class of shares is determined as of that time on
each day The New York Stock Exchange is open (which is a "regular
business day").
If you buy shares through a dealer, the dealer must receive your
order by the close of the New York Stock Exchange on a regular business
day and transmit it to the Distributor so that it is received before
the Distributor's close of business that day, which is normally 5:00
P.M. The Distributor may reject any purchase order for the Fund's
shares, in its sole discretion.
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, where purchases are not
subject to an initial sales charge, the offering price may be 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.
The current sales charge rates and commissions paid to dealers and
brokers are as follows:
<TABLE>
<CAPTION>
________________________________________________________________________________
Front-End Sales Charge Front-End Sales Charge Commission as
As a Percentage of: As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
_________________________________________________________________________________
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
</TABLE>
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
- Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more of the
OppenheimerFunds in the following cases:
- purchases aggregating $1 million or more, or
- purchases by an OppenheimerFunds prototype 401(k) plan that:
(1) buys shares costing $500,000 or more or (2) has, at the time of
purchase, 100 or more eligible participants, or (3) certifies that it
projects to have annual plan purchases of $200,000 or more.
Shares of any of the OppenheimerFunds that offers only one class
of shares that has no designation are considered "Class A shares" for
this purpose. The Distributor pays dealers of record commissions on
those purchases in an amount equal to the sum of 1.0% of the first $2.5
million, plus 0.50% of the next $2.5 million, plus 0.25% of purchases
over $5 million. That commission will be paid only on the amount of
those purchases in excess of $1 million ($500,000 for purchases by
OppenheimerFunds 401(k) prototype plans) that were not previously
subject to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of
the calendar month of their purchase, a contingent deferred sales
charge (called the "Class A contingent deferred sales charge") will be
deducted from the redemption proceeds. That sales charge will be equal
to 1.0% of the aggregate net asset value of either (1) the redeemed
shares (not including shares purchased by reinvestment of dividends or
capital gain distributions) or (2) the original cost of the shares,
whichever is less. However, the Class A contingent deferred sales
charge will not exceed the aggregate commissions the Distributor paid
to your dealer on all Class A shares of all OppenheimerFunds 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.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds
(other than money market funds) under OppenheimerFunds-sponsored
403(b)(7) custodial plans exceed $5 million per year (calculated per
quarter), will receive monthly one-half of the Distributor's retained
commissions on those sales, and if those sales exceed $10 million per
year, those dealers will receive the Distributor's entire retained
commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of
the following ways:
- Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your
spouse can add together Class A and Class B shares you purchase for
your own accounts, or jointly, or on behalf of your children who are
minors, under trust or custodial accounts. A fiduciary can cumulate
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
shares of the Fund and Class A and Class B shares of other
OppenheimerFunds to reduce the sales charge rate that applies to
purchases of Class A shares. You can also include Class A and Class B
shares of OppenheimerFunds 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 OppenheimerFunds. The value of those
shares will be based on the greater of the amount you paid for the
shares or their current value (at offering price). The
OppenheimerFunds are listed in "Reduced Sales Charges" in the Statement
of Additional Information, or a list can be obtained from the Transfer
Agent. The reduced sales charge will apply only to current purchases
and must be requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, you may purchase
Class A and Class B shares of the Fund and other OppenheimerFunds
during a 13-month period and the reduced Class A sales charge rate that
applies to the total amount of the intended purchases will be the sales
charge rate for the Class A shares purchased during that period. This
can include purchases made up to 90 days before the date of the Letter.
More information is contained in the Application and in "Reduced Sales
Charges" in the Statement of Additional Information.
- Waivers of Class A Sales Charges. The Class A sales charges
are not imposed in the circumstances described below. There is an
explanation of this policy in "Reduced Sales Charges" in the Statement
of Additional Information.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain Purchasers. Class A shares purchased by the following investors
are not subject to any Class A sales charges:
- the Manager or its affiliates;
- present or former officers, directors, trustees and employees
(and their "immediate families" as defined in "Reduced Sales Charges"
in the Statement of Additional Information) of the Fund, the Manager
and its affiliates, and retirement plans established by them for their
employees;
- registered management investment companies, or separate
accounts of insurance companies having an agreement with the Manager or
the Distributor for that purpose;
- dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
- employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and are
identified to the Distributor) or with the Distributor; the purchaser
must certify to the Distributor at the time of purchase that the
purchase is for the purchaser's own account (or for the benefit of such
employee's spouse or minor children);
- dealers, brokers 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;
- dealers, brokers or registered investment advisors that have
entered into an agreement with the Distributor to sell shares to
defined contribution employee retirement plans for which the dealer,
broker or investment advisor provides administration services.
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:
- issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party, or
- purchased by the reinvestment of loan repayments by a
participant in a retirement plan for which the Manager or its
affiliates acts as sponsor,
- purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other OppenheimerFunds (other
than Oppenheimer Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the Distributor, or
- shares purchased and paid for with the proceeds of shares
redeemed in the prior 12 months from a mutual fund (other than a fund
managed by the Manager or any of its subsidiaries) on which an initial
sales charge or contingent deferred sales charge was paid (this waiver
also applies to shares purchased by exchange of shares of Oppenheimer
Money Market Fund, Inc. that were purchased and paid for in this
manner); this waiver must be requested when the purchase order is
placed for your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver. There is a further
discussion of this policy in "Reduced Sales Charges" in the Statement
of Additional Information.
Waivers of the Class A Contingent Deferred Sales Charge. The Class
A contingent deferred sales charge does not apply to purchases of Class
A shares at net asset value without sales charge as described in the
two sections above. It is also waived if shares that would otherwise be
subject to the contingent deferred sales charge are redeemed in the
following cases:
- for retirement distributions or loans to participants or
beneficiaries from qualified retirement plans, deferred compensation
plans or other employee benefit plans, including OppenheimerFunds
prototype 401(k) plans (these are all referred to as "Retirement
Plans"); or
- to return excess contributions made to Retirement Plans; or
- to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value; or
- involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder Account
Rules and Policies," below); or
- if, at the time a purchase order is placed for Class A shares
that would otherwise be subject to the Class A contingent deferred
sales charge, the dealer agrees to accept the dealer's portion of the
commission payable on the sale in installments of 1/18th of the
commission per month (and no further commission will be payable if the
shares are redeemed within 18 months of purchase); or
- for distributions from OppenheimerFunds prototype 401(k) plans
for any of the following cases or purposes: (1) following the death or
disability (as defined in the Internal Revenue Code) of the participant
or beneficiary (the death or disability must occur after the
participant's account was established); (2) hardship withdrawals, as
defined in the plan; (3) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (4) to meet the minimum
distribution requirements of the Internal Revenue Code; (5) to
establish "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code, or (6) separation from
service.
- Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for a
portion of its costs incurred in connection with the personal service
and maintenance of accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the
average annual net assets of Class A shares of the Fund. The
Distributor uses all of those fees to compensate dealers, brokers,
banks and other financial institutions quarterly for providing personal
service and maintenance of accounts of their customers that hold Class
A shares and to reimburse itself (if the Fund's Board of Trustees
authorizes such reimbursements, which it has not yet done) for its
other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of Class A shares held in
accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of Class A shares. For more details,
please refer to "Distribution and Service Plans" in the Statement of
Additional Information.
Buying Class B Shares. Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B shares
are redeemed within 6 years of their purchase, a contingent deferred
sales charge will be deducted from the redemption proceeds. That sales
charge will not apply to shares purchased by the reinvestment of
dividends or capital gains distributions. The charge will be assessed
on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price. The contingent deferred
sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial
purchase price (including increases due to the reinvestment of
dividends and capital gains distributions). The Class B contingent
deferred sales charge is paid to the Distributor to reimburse its
expenses of providing distribution-related services to the Fund in
connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies
to a redemption, the Fund redeems shares in the following order: (1)
shares acquired by reinvestment of dividends and capital gains
distributions, (2) shares held for over 6 years, and (3) shares held
the longest during the 6-year period.
The 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:
<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
Years Since Beginning of Month In on Redemptions in that Year
Which Purchase Order Was Accepted (As % of Amount Subject to Charge)
<S> <C>
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
</TABLE>
In the table, a "year" is a 12-month period. All purchases are
considered to have been made on the first regular business day of the
month in which the purchase was made.
- Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to
Class A shares. This conversion feature relieves Class B shareholders
of the asset-based sales charge that applies to Class B shares under
the Class B Distribution and Service Plan, described below. The
conversion is based on the relative net asset value of the two classes,
and no sales load or other charge is imposed. When Class B shares
convert, any other Class B shares that were acquired by the
reinvestment of dividends and distributions on the converted shares
will also convert to Class A shares. The conversion feature is subject
to the continued availability of a tax ruling described in "Alternative
Sales Arrangements - Class A, Class B and Class C Shares" in the
Statement of Additional Information.
- Distribution and Service Plan for Class B Shares. The Fund has
adopted a Distribution and Service Plan for Class B shares to
compensate the Distributor for distributing Class B shares and
servicing accounts. Under the Plan, 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. The Distributor also
receives a service fee of 0.25% per year. Both fees are computed on
the average annual net assets of Class B shares, determined as of the
close of each regular business day. The asset-based sales charge allows
investors to buy Class B shares without a front-end sales charge while
allowing the Distributor to compensate dealers that sell Class B
shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class B shares.
Those services are similar to those provided under the Class A Service
Plan, described above. The asset-based sales charge and service fee
increase Class B expenses by 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance
for the first year after Class B shares have been sold by the dealer.
After the shares have been held for a year, the Distributor pays the
fee on a quarterly basis. The Distributor pays sales commissions of
3.75% of the purchase price to dealers from its own resources at the
time of sale.
The Fund pays the asset-based sales charge to the Distributor for
its services rendered in connection with the distribution of Class B
shares. Those payments, retained by the Distributor, are at a fixed
rate which is not related to the Distributor's expenses. The services
rendered by the Distributor include paying and financing the payment of
sales commissions, service fees, and other costs of distributing and
selling Class B shares, including compensating personnel of the
Distributor who support distribution of Class B shares. If the Plan is
terminated by the Fund, the Board of Directors may allow the Fund to
continue payments of the asset-based sales charge to the Distributor
for distributing Class B shares before the Plan was terminated.
Buying Class C Shares. Class C shares are sold at net asset value
per share without an initial sales charge. However, if Class C shares
are redeemed within 12 months of their purchase, a contingent deferred
sales charge of 1.0% will be deducted from the redemption proceeds.
That sales charge will not apply to shares purchased by the
reinvestment of dividends or capital gains distributions. The charge
will be assessed on the lesser of the net asset value of the shares at
the time of redemption or the original purchase price. The contingent
deferred sales charge is not imposed on the amount of your account
value represented by the increase in net asset value over the initial
purchase price (including increases due to the reinvestment of
dividends and capital gains distributions). The Class C contingent
deferred sales charge is paid to the Distributor to reimburse its
expenses of providing distribution-related services to the Fund in
connection with the sale of Class 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.
- Waivers of Class B and Class C Sales Charge. The Class B and
Class C contingent deferred sales charge will not be applied to shares
purchased in certain types of transactions nor will it apply to Class C
shares redeemed in certain circumstances as described below. The
reasons for this policy are in "Reduced Sales Charges" in the Statement
of Additional Information.
Waivers for Redemptions of Shares in Certain Cases. The Class C
contingent deferred sales charge will be waived for redemptions of
shares in the following cases:
- distributions to participants or beneficiaries from Retirement
Plans, if the distributions are made (a) under an Automatic Withdrawal
Plan after the participant reaches age 59-1/2, as long as the payments
are no more than 10% of the account value annually (measured from the
date the Transfer Agent receives the request), or (b) following the
death or disability (as defined in the Internal Revenue Code) of the
participant or beneficiary;
- redemptions from accounts other than Retirement Plans following
the death or disability of the shareholder (the disability must have
occurred after the account was established and you must provide
evidence of a determination of disability by the Social Security
Administration),
- returns of excess contributions to Retirement Plans;
- distributions from IRAs (including SEP-IRAs and SAR/SEP
accounts) before the participant is age 59 1/2, and distributions from
403(b)(7) custodial plans or pension or profit sharing plans before the
participant is age 59 1/2 but only after the participant has separated
from service, if the distributions are made in substantially equal
periodic payments over the life (or life expectancy) of the participant
or the joint lives (or joint life and last survivor expectancy) of the
participant and the participant's designated beneficiary (and the
distributions must comply with other requirements for such
distributions under the Internal Revenue Code and may not exceed 10% of
the account value annually, measured from the date the Transfer Agent
receives the request) and
- or distributions from OppenheimerFunds prototype 401(k) plans
(a) for hardship withdrawals; (b) under a Qualified Domestic Relations
Order, as defined in the Internal Revenue Code; (c) to meet minimum
distribution requirements as defined in the Internal Revenue Code; (d)
to make "substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code; or (e) for separation from service.
The contingent deferred sales charge is also waived on Class B and
Class C shares in the following cases: (i) shares sold to the Manager
or its affiliates; (ii) 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; (iii)
shares issued in plans of reorganization to which the Fund is a party;
and (iv) shares redeemed in involuntary redemptions as described above.
Further details about this policy are contained in "Reduced Sales
Charges" in the Statement of Additional Information.
- Distribution and Service Plan for Class C Shares. The Fund has
adopted a Distribution and Service Plan for Class C shares to
compensate the Distributor for its services and costs in distributing
Class C shares and servicing accounts. Under the Plan, the Fund pays
the Distributor an annual "asset-based sales charge" of 0.75% per year
on Class C shares. The Distributor also receives a service fee of
0.25% per year. Both fees are computed on the average annual net
assets of Class C shares, determined as of the close of each regular
business day. The asset-based sales charge allows investors to buy
Class C shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell Class C shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class C shares.
Those services are similar to those provided under the Class A Service
Plan, described above. The asset-based sales charge and service fees
increase Class C expenses by up to 1.00% of average net assets per
year.
The Distributor pays the 0.25% service fee to dealers in advance
for the first year after Class C shares have been sold by the dealer.
After the shares have been held for a year, the Distributor pays the
fee on a quarterly basis. The Distributor pays sales commissions of
0.75% of the purchase price to dealers from its own resources at the
time of sale. The Distributor retains the asset-based sales charge
during the first year shares are outstanding to recoup the sales
commissions it pays, the advances of service fee payments it makes, and
its financing costs. 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.
Because the Distributor's actual expenses in selling 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 Plan for Class C shares, those
expenses may be carried over and paid in future years. If the Plan is
terminated by the Fund, the Board of Trustees may allow the Fund to
continue payments of the asset-based sales charge to the Distributor
for certain expenses it incurred before the plan was terminated.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to
your account at your bank or other financial institution to enable you
to send money electronically between those accounts to perform a number
of types of account transactions. These include purchases of shares by
telephone (either through a service representative or by PhoneLink,
described below), automatic investments under Asset Builder Plans, and
sending dividends and distributions or Automatic Withdrawal Plan
payments directly to your bank account. Please refer to the
Application for details or call the Transfer Agent for more
information.
AccountLink privileges should be requested on the Application you
use to buy shares, or on your dealer's settlement instructions if you
buy your shares through your dealer. After your account is
established, you can request AccountLink privileges on signature-
guaranteed instructions to the Transfer Agent. AccountLink privileges
will apply to each shareholder listed in the registration on your
account as well as to your dealer representative of record unless and
until the Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for your
account, any change of bank account information must be made by
signature-guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase
shares in amounts up to $250,000 through a telephone representative,
call the Distributor at 1-800-852-8457. The purchase payment will be
debited from your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a number of
account transactions automatically using a touch-tone phone. PhoneLink
may be used on already-established Fund accounts after you obtain a
Personal Identification Number (PIN), by calling the special PhoneLink
number: 1-800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have
established AccountLink privileges to link your bank account with the
Fund, to pay for these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange
Privilege, described below, you can exchange shares automatically by
phone from your Fund account to another OppenheimerFunds account you
have already established by calling the special PhoneLink number.
Please refer to "How to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will send
the proceeds directly to your AccountLink bank account. Please refer
to "How to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans
that enable you to sell shares automatically or exchange them to
another OppenheimerFunds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly, semi-annual or annual
basis. The checks may be sent to you or sent automatically to your bank
account on AccountLink. You may even set up certain types of
withdrawals of up to $1,500 per month by telephone. You should consult
the Application and Statement of Additional Information for more
details.
- Automatic Exchange Plans. You can authorize the Transfer Agent
to exchange an amount you establish in advance automatically for shares
of up to five other OppenheimerFunds on a monthly, quarterly, semi-
annual or annual basis under an Automatic Exchange Plan. The minimum
purchase for each other OppenheimerFunds 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 OppenheimerFunds without paying a sales charge. This privilege
applies to Class A shares that you purchased subject to an initial
sales charge and to Class A or Class B shares on which you paid a
contingent deferred sales charge when you redeemed them. It does not
apply to Class C shares. You must be sure to ask the Distributor for
this privilege when you send your payment.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your
employer, the plan trustee or administrator must make the purchase of
shares for your retirement plan account. The Distributor offers a
number of different retirement plans that can be used by individuals
and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment; including SAR/SEP-
IRAs
- Pension and Profit-Sharing Plans for self-employed persons and
small business owners
- 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers
you a number of ways to sell your shares: in writing or by telephone.
You can also set up Automatic Withdrawal Plans to redeem shares on a
regular basis, as described above. If you have questions about any of
these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner, or from a
retirement plan, please call the Transfer Agent first, at 1-800-525-
7048, for assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must
submit a withholding form with your request to avoid delay. If your
retirement plan account is held for you by your employer, you must
arrange for the distribution request to be sent by the plan
administrator or trustee. There are additional details in the Statement
of Additional Information.
- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations
(there may be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive
a check
- The redemption check is not payable to all shareholders listed
on the account statement
- The redemption check is not sent to the address of record on
your account statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as an
Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If
you are signing as a fiduciary or on behalf of a corporation,
partnership or other business, you must also include your title in the
signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
- Your name
- The Fund's name
- Your Fund account number (from your account statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling,
- The signatures of all registered owners exactly as the account
is registered, and
- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell
shares.
Use the following address for requests by mail:
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of
record may also sell your shares by telephone. To receive the
redemption price on a regular business day, your call must be received
by the Transfer Agent by the close of the New York Stock Exchange that
day, which is normally 4:00 P.M., but may be earlier on some days.
Shares held in an OppenheimerFunds retirement plan or under a share
certificate may not be redeemed by telephone.
- To redeem shares through a service representative, call 1-800-
852-8457
- To redeem shares automatically on PhoneLink, call 1-800-533-
3310
Whichever method you use, you may have a check sent to the address
on the account statement, or, if you have linked your Fund account to
your bank account on AccountLink, you may have the proceeds wired to
that bank account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, once in each 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. This service is not available within 30 days
of changing the address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account
designated when you establish AccountLink. Normally the ACH wire to
your bank is initiated on the business day after the redemption. You
do not receive dividends on the proceeds of the shares you redeemed
while they are waiting to be wired.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on
behalf of their customers. Brokers or dealers may charge for that
service. Please refer to "Special Arrangements For Repurchase of
Shares From Dealers And Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. To exchange shares, you must meet several
conditions:
- Shares of the fund selected for exchange must be available for
sale in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of
the same class in the other OppenheimerFunds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another
fund. At present, not all of the OppenheimerFunds offer the same
classes of shares. If a fund has only one class of shares that does
not have a class designation, they are "Class A" shares for exchange
purposes. Certain OppenheimerFunds offer Class A shares and either
Class B or Class C shares, and a list can be obtained by calling the
Distributor at 1-800-525-7048. In some cases, sales charges may be
imposed on exchange transactions. Please refer to "How to Exchange
Shares" in the Statement of Additional Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are
registered with the same name(s) and address. Shares held under
certificates may not be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or by calling a
service representative at 1-800-525-7048. Exchanges of shares involve a
redemption of the shares of the fund you own and a purchase of shares
of the other fund.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from
the other fund in the exchange transaction on the same regular business
day on which the Transfer Agent receives an exchange request 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 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
disposition of securities at a time or price disadvantageous to the
Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange
request that will disadvantage it, or to refuse multiple exchange
requests submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege
at any time. Although the Fund will attempt to provide you notice
whenever it is reasonably able to do so, it may impose these changes at
any time.
- 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
- Net Asset Value Per Share is determined for each class of
shares as of the close of the New York Stock Exchange, which is
normally 4:00 P.M. but may be earlier on some days, on each regular
business day by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that are
outstanding. The Fund's Board of Trustees has established procedures
to value the Fund's securities to determine net asset value. In
general, securities values are based on market value. There are
special procedures for valuing illiquid and restricted securities,
obligations for which market values cannot be readily obtained, and
call options and hedging instruments. These procedures are described
more completely in the Statement of Additional Information.
- The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time the
Board believes it is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone
privileges apply to each owner of the account and the dealer
representative of record for the account unless and until the Transfer
Agent receives cancellation instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other procedures to
confirm that telephone instructions are genuine, by requiring callers
to provide tax identification numbers and other account data or by
using PINs, and by confirming such transactions in writing. If the
Transfer Agent does not use reasonable procedures it may be liable for
losses due to unauthorized transactions, but otherwise neither it nor
the Fund will be liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine. If you are unable to
reach the Transfer Agent during periods of unusual market activity, you
may not be able to complete a telephone transaction and should consider
placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From
time to time, the Transfer Agent in its discretion may waive certain of
the requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities
Clearing Corporation are responsible for obtaining their clients'
permission to perform those transactions and are responsible to their
clients who are shareholders of the Fund if the dealer performs any
transaction erroneously.
- 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 and Class C shares.
Therefore, the redemption value of your shares may be more or less than
their original cost.
- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the
shareholder under the redemption procedures described above) within 7
days after the Transfer Agent receives redemption instructions in
proper form, except under unusual circumstances determined by the
Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer,
payment will be forwarded within 3 business days. The Transfer Agent
may delay forwarding a check or processing a payment via AccountLink
for recently purchased shares, but only until the purchase payment has
cleared. That delay may be as much as 10 days from the date the shares
were purchased. That delay may be avoided if you purchase shares by
certified check or arrange with your bank to provide telephone or
written assurance to the Transfer Agent that your purchase payment has
cleared.
- Involuntary redemptions of small accounts may be made by the
Fund if the account value has fallen below $200 for reasons other than
the fact that the market value of shares has dropped, and in some cases
involuntary redemptions may be made to repay the Distributor for losses
from the cancellation of share purchase orders.
- Under unusual circumstances, shares of the Fund may be redeemed
"in kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to the Statement of
Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at
the rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified
Social Security or taxpayer identification number when you sign your
application, or if you violate Internal Revenue Service regulations on
tax reporting of dividends.
- The Fund does not charge a redemption fee, but if your dealer
or broker handles your redemption, they may charge a fee. That fee can
be avoided by redeeming your Fund shares directly through the Transfer
Agent. Under the circumstances described in "How To Buy Shares," you
may be subject to a contingent deferred sales charges when redeeming
certain Class A, Class B and Class C shares.
- To avoid sending duplicate copies of materials to households,
the Fund will mail only one copy of each annual and semi-annual report
and updated prospectus to shareholders having the same last name and
address on the Fund's records. However, each shareholder may call the
Transfer Agent at 1-800-525-7048 to ask that copies of those materials
be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A,
Class B and Class C shares from net investment income on an annual
basis and normally pays those dividends to shareholders in December,
but the Board of Trustees can change that date. The Board may also
cause the Fund to declare dividends after the close of the Fund's
fiscal year (which ends December 31st). Because the Fund does not have
an objective of seeking current income, the amounts of dividends it
pays, if any, will likely be small. Also, dividends paid on Class A
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.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of dividends and capital gains following the
end of its fiscal year. Long-term capital gains will be separately
identified in the tax information the Fund sends you after the end of
the year. Short-term capital gains are treated as dividends for tax
purposes. There can be no assurances that the Fund will pay any capital
gains distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check
or sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or
have them sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds
Account. You can reinvest all distributions in another OppenheimerFunds
account you have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains
when distributed to shareholders. It does not matter how long you held
your shares. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Distributions are
subject to federal income tax and may be subject to state or local
taxes. Your distributions are taxable when paid, whether you reinvest
them in additional shares or take them in cash. Every year the Fund
will send you and the IRS a statement showing the amount of each
taxable distribution you received in the previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy shares
on or just before the ex-dividend date, or just before the Fund
declares a capital gains distribution, you will pay the full price for
the shares and then receive a portion of the price back as a taxable
dividend or capital gain.
- Taxes on Transactions: Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. A capital gain or
loss is the difference between the price you paid for the shares and
the price you received when you sold them.
- Returns of Capital: In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders. A
non-taxable return of capital may reduce your tax basis in your Fund
shares.
This information is only a summary of certain federal tax
information about your investment. More information is contained in
the Statement of Additional Information, and in addition you should
consult with your tax adviser about the effect of an investment in the
Fund on your particular tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER TARGET FUND
Graphic material included in Prospectus of Oppenheimer Target
Fund: "Comparison of Total Return of Oppenheimer Target Fund with the
S&P 500 Index - Change in Value of a $10,000 Hypothetical Investment"
Linear graphs will be included in the Prospectus of Oppenheimer
Target Fund (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in each
class of shares of the Fund. In Class A and Class C shares, that graph
will cover each of the Fund's last ten fiscal years from 12/31/84
through 12/31/94 and in the case of the Fund's Class C shares the graph
will cover the period from the inception of the class (December 1,
1993) through 12/31/94. The graphs will compare such values with
hypothetical $10,000 investments over the same time periods in the S&P
500 Index. Set forth below are the relevant data points that will
appear on the linear graphs. 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."
<TABLE>
<CAPTION>
Fiscal Year Oppenheimer S&P 500
(Period) Ended Target Fund A Index
<S> <C> <C>
12/31/84 $9,425 $10,627
12/31/85 $12,239 $13,999
12/31/86 $13,252 $16,613
12/31/87 $10,873 $17,485
12/31/88 $14,395 $20,380
12/31/89 $17,030 $26,826
12/31/90 $16,667 $25,992
12/31/91 $23,556 $33,894
12/31/92 $25,974 $36,473
12/31/93 $26,994 $40,142
12/31/94 $27,117 $40,668
Fiscal Oppenheimer S&P
Period Ended Target Fund C 500 Index
11/30/93(1) $10,000 $10,000
12/31/93 $10,017 $10,121
12/31/94 $10,066 $10,254
<FN>
- ----------------------
(1) Class C shares of the Fund were first publicly offered on December
1, 1993.
</TABLE>
<PAGE>
Oppenheimer Target Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized
to give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information
and, if given or made, such information and representations must not be
relied upon as having been authorized by the Fund, Oppenheimer
Management Corporation, Oppenheimer Funds 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.
PR0320.001.0595 *Printed on Recycled Paper
<PAGE>
Oppenheimer Target Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated November 1, 1995
This Statement of Additional Information of Oppenheimer Target
Fund is not a Prospectus. This document contains additional
information about the Fund and supplements information in the
Prospectus dated November 1, 1995. It should be read together with the
Prospectus, which may be obtained by writing to the Fund's Transfer
Agent, Oppenheimer Shareholder Services, at P.O. Box 5270, Denver,
Colorado 80217 or by calling the Transfer Agent at the toll-free number
shown above.
Contents
Page
About the Fund
Investment Objective and Policies
Investment Policies and Strategies
Other Investment Techniques and Strategies
Other Investment Restrictions
How the Fund is Managed
Organization and History
Trustees and Officers of the Fund
The Manager and Its Affiliates
Brokerage Policies of the Fund
Performance of the Fund
Distribution and Service Plans
About Your Account
How To Buy Shares
How To Sell Shares
How To Exchange Shares
Dividends, Capital Gains and Taxes
Additional Information About the Fund
Financial Information About the Fund
Independent Auditors' Report
Financial Statements
Appendix A: Industry Classifications A-1
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and
policies of the Fund are described in the Prospectus. Set forth below
is supplemental information about those policies and the types of
securities in which the Fund invests, as well as the strategies the
Fund may use to try to achieve its objective. Certain capitalized
terms used in this Statement of Additional Information have the same
meaning as those terms have in the Prospectus.
In selecting securities for the Fund's portfolio, the Fund's
investment advisor, Oppenheimer Management Corporation (referred to as
the "Manager"), evaluates the merits of securities primarily through
the exercise of its own investment analysis. This may include, among
other things, evaluation of the history of the issuer's operations,
prospects for the industry of which the issuer is part, the issuer's
financial condition, the issuer's pending product developments and
developments by competitors, the effect of general market and economic
conditions on the issuer's business, and legislative proposals or new
laws that might affect the issuer. Current income is not a
consideration in the selection of portfolio securities for the Fund,
whether for appreciation, defensive or liquidity purposes. The fact
that a security has a low yield or does not pay current income will not
be an adverse factor in selecting securities to try to achieve the
Fund's investment objective of capital appreciation unless the Manager
believes that the lack of yield might adversely affect appreciation
possibilities.
The portion of the Fund's assets allocated to securities and methods
selected for capital appreciation will depend upon the judgment of the
Fund's Manager as to the future movement of the equity securities
markets. If the Manager believes that economic conditions favor a
rising market, the Fund will emphasize securities and investment
methods selected for high capital growth. If the Manager believes that
a market decline is likely, defensive securities and investment methods
will be emphasized (See "Temporary Defensive Investments," below).
- Growth-Type Companies. The "growth-type" companies whose
securities may be emphasized in the Fund's portfolio include, among
others, companies in the natural resources fields or those developing
industrial applications for new scientific knowledge having potential
for technological innovation, such as nuclear energy, oceanography,
business services, business technology and new consumer products.
The Fund may invest in securities of smaller, less well-known
companies (see "Investing in Small, Unseasoned Companies" below), but
the Fund may also buy securities of large, well-known companies (which
are not generally considered to be "growth-type" companies) when the
Manager believes that the amounts of securities of smaller companies
available at prices that may be expected to appreciate are insufficient
to help the Fund achieve its objective of capital appreciation.
- Warrants and Rights. Warrants basically are options to purchase
equity securities at set prices valid for a specified period of time.
The prices of warrants do not necessarily move in a manner parallel to
the prices of the underlying securities. The price the Fund pays for a
warrant will be lost unless the warrant is exercised prior to its
expiration. Rights are similar to warrants, but normally have a short
duration and are distributed directly by the issuer to its
shareholders. Rights and warrants have no voting rights, receive no
dividends and have no rights with respect to the assets of the issuer.
Other Investment Techniques and Strategies
- Hedging with Options and Futures Contracts. As described in the
Prospectus, the Fund may employ one or more types of Hedging
Instruments. Hedging Instruments may be used to attempt to: (i)
protect against possible declines in the market value of the Fund's
portfolio resulting from downward trends in the securities markets,
(ii) protect unrealized gains in the value of the Fund's securities
which have appreciated, (iii) facilitate selling securities for
investment reasons, (iv) establish a position in the securities markets
as a temporary substitute for purchasing particular debt securities, or
(v) reduce the risk of adverse currency fluctuations.
The Fund may use hedging to attempt to protect against declines in
the market value of the Fund's portfolio, to permit the Fund to retain
unrealized gains in the value of portfolio securities which have
appreciated, or to facilitate selling securities for investment
reasons. To do, the Fund may: (i) purchase Futures or (ii) purchase
calls on such Futures or securities. Normally, the Fund would then
purchase the equity securities and terminate the hedging position.
When hedging to protect against declines in the dollar value of a
foreign currency-denominated security, the Fund may: (a) purchase puts
on that foreign currency or on foreign currency Futures, (b) write
calls on that currency or on such Futures, or (c) enter into Forward
Contracts at a lower rate than the spot ("cash") rate.
The Fund's strategy of hedging with Futures and options on Futures
will be incidental to the Fund's activities in the underlying cash
market. At present, the Fund does not intend to enter into Futures,
Forward Contracts and options on Futures if, after any such purchase,
the sum of margin deposits on Futures and premiums paid on Futures
options exceeds 5% of the value of the Fund's total assets. In the
future, the Fund may employ Hedging Instruments and strategies that are
not presently contemplated but which may be developed, to the extent
such investment methods are consistent with the Fund's investment
objective, legally permissible and adequately disclosed. Additional
Information about the Hedging Instruments the Fund may use is provided
below
- Writing Call Options. The Fund may write (that is, sell) call
options ("calls"). All calls written by the Fund must be "covered"
while the call is outstanding (that means, the Fund must own the
securities subject to the call or other securities acceptable for
applicable escrow requirements). Calls on Futures (discussed below)
must be covered by deliverable securities or by liquid assets
segregated to satisfy the Futures contract.
When the Fund writes a call on an investment it receives a premium
and agrees to sell the callable investment to a purchaser of a
corresponding call during the call period (usually not more than 9
months) at a fixed exercise price (which may differ from the market
price of the underlying investment), regardless of market price changes
during the call period. The Fund has retained the risk of loss should
the price of the underlying security decline during the call period,
which may be offset to some extent by the premium.
To terminate its obligation on a call it has written, the Fund may
purchase a corresponding call in a "closing purchase transaction." A
profit or loss will be realized, depending upon whether the net of the
amount of the option transaction costs and the premium received on the
call the Fund has written is more or less than the price of the call
the Fund has subsequently purchased. A profit may also be realized if
the call lapses unexercised, because the Fund retains the underlying
investment and the premium received. Those profits are considered
short-term capital gains for Federal income tax purposes, and when
distributed by the Fund are taxable as ordinary income. If the Fund
could not effect a closing purchase transaction due to lack of a
market, it would have to hold the callable investments until the call
lapsed or was exercised.
The Fund may also write calls on Futures without owning a futures
contract or deliverable securities, provided that at the time the call
is written, the Fund covers the call by segregating in escrow an
equivalent dollar amount of deliverable securities or liquid assets.
The Fund will segregate additional liquid assets if the value of the
escrowed assets drops below 100% of the current value of the Future.
In no circumstances would an exercise notice require the Fund to
deliver a futures contract; it would simply put the Fund in a short
futures position, which is permitted by the Fund's hedging policies.
- Purchasing Calls and Puts. The Fund may purchase calls to
protect against the possibility that the Fund's portfolio will not
fully participate in an anticipated rise in the securities market.
When the Fund purchases a call (other than in a closing purchase
transaction), it pays a premium and, except as to calls on stock
indices, has the right to buy the underlying investment from a seller
of a corresponding call on the same investment during the call period
at a fixed exercise price. When the Fund purchases a call on an index,
it pays a premium, but settlement is in cash rather than by delivery of
the underlying investment to the Fund. In purchasing a call, the Fund
benefits only if the call is sold at a profit or if, during the call
period, the market price of the underlying investment is above the sum
of the call price plus the transaction costs and the premium paid and
the call is exercised. If the call is not exercised or sold (whether
or not at a profit), it will become worthless at its expiration date
and the Fund will lose its premium payment and the right to purchase
the underlying investment.
The Fund may purchase put options ("puts") which relate to
securities, foreign currencies or Futures. When the Fund purchases a
put, it pays a premium and, except as to puts on stock indices, has the
right to sell the underlying investment to a seller of a corresponding
put on the same investment during the put period at a fixed exercise
price. Buying a put on an investment the Fund owns enables the Fund to
protect itself during the put period against a decline in the value of
the underlying investment below the exercise price by selling the
underlying investment at the exercise price to a seller of a
corresponding put. If the market price of the underlying investment is
equal to or above the exercise price and as a result the put is not
exercised or resold, the put will become worthless at its expiration
date, and the Fund will lose its premium payment and the right to sell
the underlying investment. The put may, however, be sold prior to
expiration (whether or not at a profit.)
Buying a put on an investment it does not own, either a put on an
index or a put on a Stock Index Future not held by the Fund, permits
the Fund either to resell the put or buy the underlying investment and
sell it at the exercise price. The resale price of the put will vary
inversely with the price of the underlying investment. If the market
price of the underlying investment is above the exercise price and as a
result the put is not exercised, the put will become worthless on its
expiration date. In the event of a decline in the stock market, the
Fund could exercise or sell the put at a profit to attempt to offset
some or all of its loss on its portfolio securities. When the Fund
purchases a put on an index, or on a Future not held by it, the put
protects the Fund to the extent that the index moves in a similar
pattern to the securities held. In the case of a put on an index or
Future, settlement is in cash rather than by delivery by the Fund of
the underlying investment.
Puts and calls on broadly-based stock indices or Stock Index Futures
are similar to puts and calls on securities or futures contracts except
that all settlements are in cash and gain or loss depends on changes in
the index in question (and thus on price movements in the stock market
generally) rather than on price movements in individual securities or
futures contracts. When the Fund buys a call on an index or Future, it
pays a premium. During the call period, upon exercise of a call by the
Fund, a seller of a corresponding call on the same investment will pay
the Fund an amount of cash to settle the call if the closing level of
the index or Future upon which the call is based is greater than the
exercise price of the call. That cash payment is equal to the
difference between the closing price of the index and the exercise
price of the call times a specified multiple (the "multiplier") which
determines the total dollar value for each point of difference. When
the Fund buys a put on an index or Future, it pays a premium and has
the right during the put period to require a seller of a corresponding
put, upon the Fund's exercise of its put, to deliver to the Fund an
amount of cash to settle the put if the closing level of the index or
Future upon which the put is based is less than the exercise price of
the put. That cash payment is determined by the multiplier, in the same
manner as described above as to calls.
- Stock Index Futures. The Fund may buy and sell Stock Index
Futures. No monetary amount is paid or received upon the purchase or
sale of a Stock Index Future or a foreign currency exchange contract
("Forward Contract"), discussed below. This is a type of financial
future for which the index used as the basis for trading is a broadly-
based stock index (including stocks that are not limited to issuers in
a particular industry or group of industries). A stock index assigns
relative values to the stocks included in the index and fluctuates with
the changes in the market value of these stocks. Stock indices cannot
be purchased or sold directly. Financial Futures are contracts based
on the future value of the basket of securities that comprise the
underlying index. The contracts obligate the seller to deliver, and the
purchaser to take, cash to settle the futures transaction, or to enter
into an offsetting contract. No physical delivery of the securities
underlying the index is made on settling futures obligations.
Upon entering into a Futures transaction, the Fund will be required
to deposit an initial margin payment in cash or U.S. Treasury bills
with the futures commission merchant (the "futures broker"). The
initial margin will be deposited with the Funds's Custodian in an
account registered in the futures broker's name; however the futures
broker can gain access to that account only under specified conditions.
As the future is marked to market (that is, as the value on the Fund's
books is changed) to reflect changes in its market value, subsequent
margin payments, called variation margin, will be made to or by the
futures broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may
elect to close out its position by taking an opposite position at which
time a final determination of variation margin is made and additional
cash is required to be paid by or released to the Fund. Any loss or
gain is then realized for tax purposes. Although Stock Index Futures
by their terms call for cash settlement or delivery of cash, in most
cases the obligation is fulfilled by entering into an offsetting
position. All futures transactions are effected through a
clearinghouse associated with the exchange on which to contracts are
traded.
- Forward Contracts. The Fund may enter into foreign currency
exchange contracts ("Forward Contracts"), which obligate the seller to
deliver and the purchaser to take a specific amount of foreign currency
at a specific future date for a fixed price. A Forward Contract
involves bilateral obligations of one party to purchase, and another
party to sell, a specific currency at a future date (which may be any
fixed number of days from the date of the contract agreed upon by the
parties), at a price set at the time the contract is entered into.
These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their
customers. The Fund may enter into a Forward Contract in order to
"lock in" the U.S. dollar price of a security denominated in a foreign
currency which it has purchased or sold but which has not yet settled,
or to protect against a possible loss resulting from an adverse change
in the relationship between the U.S. dollar and a foreign currency.
There is a risk that use of Forward Contracts may reduce the gain
that would otherwise result from a change in the relationship between
the U.S. dollar and a foreign currency. To attempt to limit its
exposure to loss under Forward Contracts in a particular foreign
currency, the Fund limits its use of these contracts to the amount of
its net assets denominated in that currency or denominated in a
closely-correlated foreign currency. Forward contracts include
standardized foreign currency futures contracts which are traded on
exchanges and are subject to procedures and regulations applicable to
other Futures. The Fund may also enter into a forward contract to sell
a foreign currency denominated in a currency other than that in which
the underlying security is denominated. This is done in the
expectation that there is a greater correlation between the foreign
currency of the forward contract and the foreign currency of the
underlying investment than between the U.S. dollar and the foreign
currency of the underlying investment. This technique is referred to
as "cross hedging." The success of cross hedging is dependent on many
factors, including the ability of the Manager to correctly identify and
monitor the correlation between foreign currencies and the U.S. dollar.
To the extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the
cross currency hedge.
The Fund may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does
not eliminate fluctuations in the prices of the underlying securities
the Fund owns or intends to acquire, but it does fix a rate of exchange
in advance. In addition, although Forward Contracts limit the risk of
loss due to a decline in the value of the hedged currencies, at the
same time they limit any potential gain that might result should the
value of the currencies increase.
There is no limitation as to the percentage of the Fund's assets
that may be committed to foreign currency exchange contracts. The Fund
does not enter into such forward contracts or maintain a net exposure
in such contracts to the extent that the Fund would be obligated to
deliver an amount of foreign currency in excess of the value of the
Fund's assets denominated in that currency, or enter into a "cross
hedge," unless it is denominated in a currency or currencies that the
Manager believes will have price movements that tend to correlate
closely with the currency in which the investment being hedged is
denominated. See "Tax Aspects of Covered Calls and Hedging
Instruments" below for a discussion of the tax treatment of foreign
currency exchange contracts.
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for
the purchase or sale of a security denominated in a foreign currency,
or when the Fund anticipates receipt of dividend payments in a foreign
currency, the Fund may desire to "lock-in" the U.S. dollar price of the
security or the U.S. dollar equivalent of such payment by entering into
a Forward Contract, for a fixed amount of U.S. dollars per unit of
foreign currency, for the purchase or sale of the amount of foreign
currency involved in the underlying transaction ("transaction hedge").
The Fund will thereby be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the
currency exchange rates during the period between the date on which the
security is purchased or sold, or on which the payment is declared, and
the date on which such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions ("position hedge"). In a position hedge,
for example, when the Fund believes that foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a
forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency, or when the Fund
believes that the U.S. dollar may suffer a substantial decline against
a foreign currency, it may enter into a forward purchase contract to
buy that foreign currency for a fixed dollar amount. In this situation
the Fund may, in the alternative, enter into a forward contract to sell
a different foreign currency for a fixed U.S. dollar amount where the
Fund believes that the U.S. dollar value of the currency to be sold
pursuant to the forward contract will fall whenever there is a decline
in the U.S. dollar value of the currency in which portfolio securities
of the Fund are denominated ("cross hedge").
The Fund's Custodian will place cash or U.S. Government securities
or other liquid high-quality debt securities in a separate account of
the Fund having a value equal to the aggregate amount of the Fund's
commitments under forward contracts to cover its short positions. If
the value of the securities placed in the separate account declines,
additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the
Fund's commitments with respect to such contracts. Unanticipated
changes in currency prices may result in poorer overall performance for
the Fund than if it had not entered into such contracts.
The precise matching of the Forward Contract amounts and the value
of the securities involved will not generally be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of these securities
between the date the Forward Contract is entered into and the date it
is sold. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot (i.e., cash) market (and bear
the expense of such purchase), if the market value of the security is
less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make
delivery of the foreign currency. Conversely, it may be necessary to
sell on the spot market some of the foreign currency received upon the
sale of the portfolio security if its market value exceeds the amount
of foreign currency the Fund is obligated to deliver. The projection
of short-term currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly
uncertain. Forward Contracts involve the risk that anticipated
currency movements will not be accurately predicted, causing the Fund
to sustain losses on these contracts and transactions costs.
At or before the maturity of a Forward Contract requiring the Fund
to sell a currency, the Fund may either sell a portfolio security and
use the sale proceeds to make delivery of the currency or retain the
security and offset its contractual obligation to deliver the currency
by purchasing a second contract pursuant to which the Fund will obtain,
on the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund may close out a Forward
Contract requiring it to purchase a specified currency by entering into
a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would
realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange
rate or rates between the currencies involved moved between the
execution dates of the first contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract
period and the market conditions then prevailing. Because Forward
Contracts are usually entered into on a principal basis, no fees or
commissions are involved. Because such contracts are not traded on an
exchange, the Fund must evaluate the credit and performance risk of
each particular counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into
U.S. dollars on a daily basis. The Fund may convert foreign currency
from time to time, and investors should be aware of the costs of
currency conversion. Foreign exchange dealers do not charge a fee for
conversion, but they do seek to realize a profit based on the
difference between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the
Fund desire to resell that currency to the dealer.
- Additional Information About Hedging Instruments and Their Use.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the facilities
of the Options Clearing Corporation ("OCC"), as to the investments on
which the Fund has written options traded on exchanges or as to other
acceptable escrow securities, so that no margin will be required from
the Fund for such transactions. OCC will release the securities on the
expiration of the option or upon the Fund's entering into a closing
transaction. An option position may be closed out only on a market
which provides secondary trading for options of the same series, and
there is no assurance that a liquid secondary market will exist for any
particular option.
The Fund's option activities may affect its turnover rate and
brokerage commissions. The exercise by the Fund of puts on securities
will cause the sale of related investments, increasing portfolio
turnover. Although such exercise is within the Fund's control, holding
a put might cause the Fund to sell the related investments for reasons
which would not exist in the absence of the put. The Fund will pay a
brokerage commission each time it buys a put or call, sells a call, or
buys or sells an underlying investment in connection with the exercise
of a put or call. Such commissions may be higher than those which
would apply to direct purchases or sales of such underlying
investments. Premiums paid for options are small in relation to the
market value of the related investments, and consequently, put and call
options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being
more sensitive to changes in the value of the underlying investments.
When the Fund writes an over-the-counter ("OTC") option, it will
enter into an arrangement with a primary U.S. Government securities
dealer, which would establish a formula price at which the Fund would
have the absolute right to repurchase that OTC option. That formula
price would generally be based on a multiple of the premium received
for the option, plus the amount by which the option is exercisable
below the market price of the underlying security (that is, the extent
to which the option is "in-the-money"). When the Fund writes an OTC
option, it will treat as illiquid (for purposes of the limit on its
assets that may be invested in illiquid securities, stated in the
Prospectus) the mark-to-market value of any OTC option held by it. The
Securities and Exchange Commission ("SEC") is evaluating whether OTC
options should be considered liquid securities, and the procedure
described above could be affected by the outcome of that evaluation.
- Regulatory Aspects of Hedging Instruments. The Fund is required
to operate within certain guidelines and restrictions with respect to
its use of Futures and options on Futures established by the Commodity
Futures Trading Commission ("CFTC"). In particular the Fund is
exempted from registration with the CFTC as a "commodity pool operator"
if the Fund complies with the requirements of Rule 4.5 adopted by the
CFTC. The Rule does not limit the percentage of the Fund's assets that
may be used for Futures margin and related options premiums for a bona
fide hedging position. However, under the Rule the Fund must limit its
aggregate initial futures margin and related option premiums to no more
than 5% of the Fund's net assets for hedging strategies that are not
considered bona fide hedging strategies under the Rule. Under the
Rule, the Fund also must use short Futures and Futures options
positions solely for "bona fide hedging purposes" within the meaning
and intent of the applicable provisions of the Commodity Exchange Act.
Transactions in options by the Fund are subject to limitations
established by each of the option exchanges governing the maximum
number of options that may be written or held by a single investor or
group of investors acting in concert, regardless of whether the options
were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more exchanges or
brokers. Thus, the number of options which the Fund may write or hold
may be affected by options written or held by other entities, including
other investment companies having the same advisor as the Fund, or an
advisor that is an affiliate of the Fund's advisor. Position limits
also apply to Futures. An exchange may order the liquidation of
positions found to be in violation of those limits and may impose
certain other sanctions. Due to requirements under the Investment
Company Act, when the Fund purchases a Future, the Fund will maintain,
in a segregated account or accounts with its custodian bank, cash or
readily-marketable, short-term (maturing in one year or less) debt
instruments in an amount equal to the market value of the securities
underlying such Future, less the margin deposit applicable to it.
- Tax Aspects of Covered Calls and Hedging Instruments. The
Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code (although it reserves the right not to qualify).
That qualification enables the Fund to "pass through" its income and
realized capital gains to shareholders without the Fund having to pay
tax on them. This avoids a "double tax" on that income and capital
gains, since shareholders normally will be taxed on the dividends and
capital gains they receive from the Fund (unless the Fund's shares are
held in a retirement account or the shareholder is otherwise exempt
from tax). One of the tests for the Fund's qualification as a
regulated investment company is that less than 30% of its gross income
must be derived from gains realized on the sale of securities held for
less than three months. To comply with that 30% cap, the Fund will
limit the extent to which it engages in the following activities, but
will not be precluded from them: (i) selling investments, including
Stock Index Futures, held for less than three months, whether or not
they were purchased on the exercise of a call held by the Fund; (ii)
purchasing options which expire in less than three months; (iii)
effecting closing transactions with respect to calls or puts written or
purchased less than three months previously; (iv) exercising puts or
calls held by the Fund for less than three months; or (v) writing calls
on investments held less than three months.
Certain foreign currency exchange contracts ("Forward Contracts") in
which the Fund may invest are treated as "section 1256 contracts."
Gains or losses relating to section 1256 contracts generally are
characterized under the Internal Revenue Code as 60% long-term and 40%
short-term capital gains or losses. However, foreign currency gains or
losses arising from certain section 1256 contracts (including Forward
Contracts) generally are treated as ordinary income or loss. In
addition, section 1256 contracts held by the Fund at the end of each
taxable year are "marked-to market" with the result that unrealized
gains or losses are treated as though they were realized. These
contracts also may be marked-to-market for purposes of the excise tax
applicable to investment company distributions and for other purposes
under rules prescribed pursuant to the Internal Revenue Code. An
election can be made by the Fund to exempt these transactions from this
mark-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on
straddle positions. Generally, a loss sustained on the disposition of
a position making up a straddle is allowed only to the extent such loss
exceeds any unrecognized gain in the offsetting positions making up the
straddle. Disallowed loss is generally allowed at the point where
there is no unrecognized gain in the offsetting positions making up the
straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates that occur between the time the Fund
accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities generally
are treated as ordinary income or ordinary loss. Similarly, on
disposition of debt securities denominated in a foreign currency and on
disposition of foreign currency forward contracts, gains or losses
attributable to fluctuations in the value of a foreign currency between
the date of acquisition of the security or contract and the date of
disposition also are treated as ordinary gain or loss. Currency gains
and losses are offset against market gains and losses before
determining a net "Section 988" gain or loss under the Internal Revenue
Code, which may increase or decrease the amount of the Fund's
investment company income available for distribution to its
shareholders.
- Possible Risk Factors in Hedging. In addition to the risks with
respect to options discussed in the Prospectus and above, there is a
risk in using short hedging by selling Futures to attempt to protect
against decline in value of the Fund's portfolio securities (due to an
increase in interest rates) that the prices of such Futures will
correlate imperfectly with the behavior of the cash (i.e., market
value) prices of the Fund's securities. The ordinary spreads between
prices in the cash and futures markets are subject to distortions due
to differences in the natures of those markets. First, all
participants in the futures markets are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal relationship
between the cash and futures markets. Second, the liquidity of the
futures markets depend on participants entering into offsetting
transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures
markets could be reduced, thus producing distortion. Third, from the
point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the
futures markets may cause temporary price distortions.
If the Fund uses Hedging Instruments to establish a position in the
securities markets as a temporary substitute for the purchase of
individual securities (long hedging) by buying Futures and/or calls on
such Futures or on securities, it is possible that the market may
decline; if the Fund then concludes not to invest in such securities at
that time because of concerns as to possible further market decline or
for other reasons, the Fund will realize a loss on the Hedging
Instruments that is not offset by a reduction in the price of the
securities purchased.
- Borrowing for Leverage. From time to time, the Fund may
increase its ownership of securities by borrowing from banks on an
unsecured basis and investing the borrowed funds, subject to the
restrictions stated in the Prospectus. Any such borrowing will be made
only from banks, and, pursuant to the requirements of the Investment
Company Act of 1940 (the "Investment Company Act"), will only be made
to the extent that the value of the Fund's assets, less its liabilities
other than borrowings, is equal to at least 300% of all borrowings
including the proposed borrowing. If the value of the Fund's assets,
when computed in that manner, should fail to meet the 300% asset
coverage requirement, the Fund is required within three days to reduce
its bank debt to the extent necessary to meet that requirement. To do
so, the Fund may have to sell a portion of its investments at a time
when independent investment judgment would not dictate such sale.
Interest on money borrowed is an expense the Fund would not otherwise
incur, so that during periods of substantial borrowings, its expenses
may increase more than funds that do not borrow.
- Foreign Securities. "Foreign securities" include equity and debt
securities of companies organized under the laws of countries other
than the United States and debt securities of foreign governments that
are traded on foreign securities exchanges or in the foreign over-the-
counter markets. Securities of foreign issuers that are represented by
American Depository Receipts or that are listed on a U.S. securities
exchange or traded in the U.S. over-the-counter markets are not
considered "foreign securities" for the purpose of the Fund's
investment allocations, because they are not subject to many of the
special considerations and risks, discussed below, that apply to
foreign securities traded and held abroad.
Investing in foreign securities offer potential benefits not
available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear to
offer growth potential, or in foreign countries with economic policies
or business cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of foreign stock
markets that do not move in a manner parallel to U.S. markets. If the
Fund's portfolio securities are held abroad, the countries in which
they may be held and the sub-custodians holding them must be approved
by the Fund's Board of Trustees under applicable rules of the
Securities and Exchange Commission.
Investing in foreign securities involves considerations and possible
risks not typically associated with investing in securities in the U.S.
The values of foreign securities will be affected by changes in
currency rates or exchange control regulations or currency blockage,
application of foreign tax laws, including withholding taxes, changes
in governmental administration or economic or monetary policy (in the
U.S. or abroad) or changed circumstances in dealings between nations.
There may be a lack of public information about foreign issuers.
Foreign countries may not have financial reporting, accounting and
auditing standards comparable to those that apply to U.S. issuers.
Costs will be incurred in connection with conversions between various
currencies. Foreign brokerage commissions are generally higher than
commissions in the U.S., and foreign securities markets may be less
liquid, more volatile and less subject to governmental regulation than
in the U.S. They may have increased delays in setting portfolio
transactions. Investments in foreign countries could be affected by
other factors not generally thought to be present in the U.S.,
including expropriation or nationalization, confiscatory taxation and
potential difficulties in enforcing contractual obligations, and could
be subject to extended settlement periods.
- Illiquid and Restricted Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933,
the Fund may have to cause those securities to be registered. The
expenses of registration of restricted securities may be negotiated by
the Fund with the issuer at the time such securities are purchased by
the Fund, if such registration is required before such securities may
be sold publicly. When registration must be arranged because the Fund
wishes to sell the security, a considerable period may elapse between
the time the decision is made to sell the securities and the time the
Fund would be permitted to sell them. The Fund would bear the risks of
any downward price fluctuation during that period. The Fund may also
acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability to
dispose of such securities and might lower the amount realizable upon
the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those percentage
restrictions do not limit purchases of restricted securities that are
eligible for sale to qualified institutional purchasers pursuant to
Rule 144A under the Securities Act of 1933, provided that those
securities have been determined to be liquid by the Board of Trustees
of the Fund or by the Manager under Board-approved guidelines. Those
guidelines take into account the trading activity for such securities
and the availability of reliable pricing information, among other
factors. If there is a lack of trading interest in a particular Rule
144A security, the Fund's holding of that security may be deemed to be
illiquid.
- Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the
loan collateral on each business day must at least equal the value of
the loaned securities and must consist of cash, bank letters of credit
or securities of the U.S. Government (or its agencies or
instrumentalities). To be acceptable as collateral, letters of credit
must obligate a bank to pay amounts demanded by the Fund if the demand
meets the terms of the letter. Such terms and the issuing bank must be
satisfactory to the Fund. When it lends securities, the Fund receives
amounts equal to the dividends or interest on loaned securities and
also receives one or more of (a) negotiated loan fees, (b) interest on
securities used as collateral, and (c) interest on short-term debt
securities purchased with such loan collateral. Either type of
interest may be shared with the borrower. The Fund may also pay
reasonable finder's, custodian and administrative fees. The terms of
the Fund's loans must meet applicable tests under the Internal Revenue
Code and must permit the Fund to reacquire loaned securities on five
days' notice or in time to vote on any important matter.
- Repurchase Agreements. The Fund may acquire securities subject
to repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of
Fund shares, or pending the settlement of purchases of portfolio
securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor"
is a U.S. commercial bank or the U.S. branch of a foreign bank or a
broker-dealer which has been designated a primary dealer in government
securities, which must meet credit requirements set by the Fund's Board
of Trustees from time to time. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective
for the period during which the repurchase agreement is in effect. The
majority of these transactions run from day to day, and delivery
pursuant to the resale typically will occur within one to five days of
the purchase. Repurchase agreements are considered "loans" under the
Investment Company Act, collateralized by the underlying security. The
Fund's repurchase agreements require that at all times while the
repurchase agreement is in effect, the value of the collateral must
equal or exceed the repurchase price to fully collateralize the
repayment obligation. Additionally, the Manager will impose
creditworthiness requirements to confirm that the vendor is financially
sound and will continuously monitor the collateral's value.
- Short Sales "Against-the-Box". In this type of short sale,
while the short position is open, the Fund must own an equal amount of
the securities sold short, or by virtue of ownership of other
securities have the right, without payment of further consideration, to
obtain an equal amount of the securities sold short. Short sales
against-the-box may be made to defer, for Federal income tax purposes,
recognition of gain or loss on the sale of securities "in-the-box"
until the short position is closed out. They may also be used to
protect a gain on the security "in-the-box" when the Fund does not want
to sell it and recognize a capital gain.
- Temporary Defensive Investments. When the equity markets in
general are declining, the Fund may commit an increasing portion of its
assets to defensive securities. These may include the types of
securities described in the Prospectus. When investing for defensive
purposes, the Fund will normally emphasize investment in short-term
debt securities (that is, securities maturing in one year or less from
the date of purchase), since those types of securities are generally
more liquid and usually may be disposed of quickly without significant
gains or losses so that the Manager may have liquid assets when it
wishes to make investments in securities for appreciation
possibilities.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in
the Prospectus. There are additional investment restrictions that the
Fund must follow that are also fundamental policies. Fundamental
policies and the Fund's investment objective cannot be changed without
the vote of a "majority" of the Fund's outstanding voting securities.
Under the Investment Company Act, such a "majority" vote is defined as
the vote of the holders of the lesser of: 67% or more of the shares
present or represented by proxy at a shareholder meeting, if the
holders of more than 50% of the outstanding shares are present, or more
than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot:
(1) Invest in companies for the purpose of acquiring control or
management thereof;
(2) Invest in commodities or commodities contracts other than the
hedging instruments permitted by any of its other fundamental
policies, whether or not any such hedging instrument is
considered to be a commodity or a commodity contract;
(3) Invest in real estate or in interests in real estate, but the
Fund may purchase readily marketable securities of companies
holding real estate or interests therein;
(4) Purchase securities on margin; however, the Fund may make
margin deposits in connection with any of the hedging
instruments permitted by any of its other fundamental
policies;
(5) Lend money, but the Fund may invest in all or a portion of an
issue of bonds, debentures, commercial paper, or other
similar corporate obligations of the types that are usually
purchased by institutions, whether or not publicly
distributed; the Fund may also make loans of portfolio
securities, subject to the percentage restrictions set forth
in the Prospectus under the caption "Loans of Portfolio
Securities";
(6) Mortgage or pledge any of its assets; however, this does not
prohibit the escrow arrangements contemplated by the writing
of covered call options or other collateral or margin
arrangements in connection with any hedging instruments
permitted by any of its other fundamental policies;
(7) Underwrite securities of other companies, except insofar as
the Fund 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;
(8) Invest in or hold securities of any issuer if those officers
and Trustees of the Fund or its adviser owning individually
more than .5% of the securities of such issuer together own
more than 5% of the securities of such issuer; or
(9) Invest in interests in oil, gas or mineral exploration or
development programs.
For purposes of tho Fund's policy not to concentrate its investments
in any one industry as described in restriction (2) and in "Other
Investment Restrictions: in the Prospectus, the Fund has adopted the
industry classifications set forth in Appendix A to this Statement of
Additional Information. This is not a fundamental policy.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the Fund
is not required to hold, and does not plan to hold, regular annual
meetings of shareholders. The Fund will hold meetings when required to
do so by the Investment Company Act or other applicable law, or when a
shareholder meeting is called by the Trustees or upon proper request of
the shareholders. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund valued
at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with
other shareholders to request a meeting to remove a Trustee, the
Trustees will then either make the Fund's shareholder list available to
the applicants or mail their communication to all other shareholders at
the applicants' expense, or the Trustees may take such other action as
set forth under Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and
provides for indemnification and reimbursement of expenses out of its
property for any shareholder held personally liable for its
obligations. The Declaration of Trust also provides that the Fund
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Fund and satisfy any
judgment thereon. Thus, while Massachusetts law permits a shareholder
of a business trust (such as the Fund) to be held personally liable as
a "partner" under certain circumstances, the risk of a Fund shareholder
incurring financial loss on account of shareholder liability is
limited to the relatively remote circumstances in which the Fund would
be unable to meet its obligations described above. Any person doing
business with the Trust, and any shareholder of the Trust, agrees under
the Trust's Declaration of Trust to look solely to the assets of the
Trust for satisfaction of any claim or demand which may arise out of
any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers
and their principal occupations and business affiliations during the
past five years are listed below. The address of each Trustee and
officer is Two World Trade Center, New York, New York 10048-0203,
unless another address is listed below. All of the Trustees are also
trustees of Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer
Growth Fund, Oppenheimer Discovery Fund, Oppenheimer Global Emerging
Growth Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer Tax-
Free Bond Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer
California Tax-Exempt Fund, Oppenheimer Multi-State Tax-Exempt Trust,
Oppenheimer Asset Allocation Fund, Oppenheimer U.S. Government Trust,
Oppenheimer Multi-Sector Income Trust and Oppenheimer Multi-Government
Trust (the "New York-based OppenheimerFunds"). Messrs. Spiro, Bishop,
Bowen, Donohue, Farrar and Zack respectively hold the same offices with
the other New York-based OppenheimerFunds as with the Fund. As of
____________, 1995, the Trustees and officers of the Fund as a group
owned of record or beneficially less than 1% of the outstanding shares
of each class of the Fund. The foregoing does not include shares held
of record by an employee benefit plan for employees of the Manager (for
which one of the officers listed below, Mr. Donohue, is a Trustee),
other than the shares beneficially owned under that plan by the
officers of the Fund listed below.
Leon Levy, Chairman of the Board of Trustees; Age: 70
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee; Age: 83
122 East 42nd Street, New York, New York 10168
Chairman Emeritus of the International Rescue Committee
(philanthropic organization); formerly Executive Director of The
Research Institute of America.
Robert G. Galli, Trustee*; Age: 62
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp. ("OAC"), the Manager's parent holding
company; formerly he held the following positions: a director of the
Manager and Oppenheimer Funds Distributor, Inc. (the "Distributor"),
Vice President and a director of HarbourView Asset Management
Corporation ("HarbourView") and Centennial Asset Management
Corporation ("Centennial"), investment advisory subsidiaries of the
Manager, a director of Shareholder Financial Services, Inc. ("SFSI")
and Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries
of the Manager, an officer of other OppenheimerFunds and Executive
Vice President and General Counsel of the Manager and Oppenheimer
Funds Distributor, Inc. (the 'Distributor").
Benjamin Lipstein, Trustee; Age: 72
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; a director of Sussex
Publishers, Inc. (Publishers of Psychology Today on Mother Earth
News) and a director of Spy Magazine, L.P.
Elizabeth B. Moynihan, Trustee; Age: 66
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the Freer Gallery
of Art (Smithsonian Institution), the Institute of Fine Arts (New
York University), National Building Museum; a member of the Trustees
Council, Preservation League of New York State; a member of the
Indo-U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age: 68
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding
company), Dominion Energy, Inc. (electric power and oil & gas
producer), Enron-Dominion Cogen Corp. (cogeneration company), Kemper
Corporation (insurance and financial services company), Fidelity
Life Association (mutual life insurance company); formerly Chairman
of the Board of ICL, Inc. (information systems), and President and
Chief Executive Officer of The Conference Board, Inc. (international
economic and business research).
Edward V. Regan, Trustee; Age: 65
40 Park Avenue, New York, New York 10016
President of Jerome Levy Economics Institute; a member of the U.S.
Competitiveness Policy Council; a director or GranCare, Inc.
(healthcare provider); formerly New York State Comptroller and a
trustee of the New York State and Local Retirement Fund.
______________________
* A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
Russell S. Reynolds, Jr., Trustee; Age: 63
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International
House, Greenwich Historical Society and Greenwich Hospital.
Sidney M. Robbins, Trustee; Age: 83
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting Professor
of Finance, University of Hawaii; and a director of The Korea Fund,
Inc. (closed-end investment company); a member of the Board of
Advisors, Olympus Private Placement Fund, L.P.; Professor Emeritus
of Finance, Adelphi University.
Donald W. Spiro, President and Trustee*; Age: 69
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and Oppenheimer Funds Distributor, Inc. (the
"Distributor").
Pauline Trigere, Trustee; Age: 82
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
Clayton K. Yeutter, Trustee; Age: 64
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel to Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and agricultural products), Farmers
Insurance Company (Insurance); FMC Corp. (chemicals and machinery),
Lindsay Manufacturing Co. (irrigation equipment), Texas Instruments,
Inc. (electronics), and The Virgo Corporation (fertilizer
manufacturer); formerly (in descending chronological order)
Counsellor to the President (Bush) for Domestic Policy, Chairman of
the Republican National Committee, Secretary of the U.S. Department
of Agriculture, and U.S. Trade Representative.
Andrew J. Donohue, Secretary; Age: 45
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor; Partner in Kraft & McManimon (a law firm), an officer
of First Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment adviser), and
a director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.
Robert Doll, Jr., Vice President and Portfolio Manager; Age: 41
Executive Vice President of the Manager; an officer of other
OppenheimerFunds.
_____________________
* A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
George C. Bowen, Treasurer; Age: 59
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and SFSI;
an officer of other OppenheimerFunds.
Robert G. Zack, Assistant Secretary; Age: 47
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
Robert Bishop, Assistant Treasurer; Age: 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Yale &
Seffinger, P.C., an accounting firm, and previously an Accountant
and Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott Farrar, Assistant Treasurer; Age: 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman Co., a bank, and previously a
Senior Fund Accountant for State Street Bank & Trust Company.
- Remuneration of Trustees. The officers of the Fund are
affiliated with the Manager. They and the Trustees of the Fund who are
affiliated with the Manager (Messrs. Galli and Spiro, who is also an
officer of the Fund,) receive no salary or fee from the Fund. The
Trustees of the Fund (including Mr. Edmund Delaney, a former Trustee
who retired in 1994, but excluding Messrs. Galli and Spiro) received
the total amounts shown below from the Fund, during its fiscal year
ended December 31, 1994, and from all 19 of the New York-based
OppenheimerFunds (including the Fund) listed in the first paragraph of
this section (and from Oppenheimer Global Environment Fund, a former
New York-based OppenheimerFund), for services in the positions shown
below.
<TABLE>
<CAPTION>
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as Part From All
Name and from of Fund New York-based
Position Fund Expenses OppenheimerFunds1
<S> <C> <C> <C>
Leon Levy $141,000.00
Chairman and
Trustee
Leo Cherne $ 68,800.00
Audit Committee
Member and
Trustee
Benjamin Lipstein $ 86,200.00
Study Committee
Member and Trustee
Elizabeth B. Moynihan $ 60,625.00
Study Committee
Member and Trustee
Kenneth A. Randall $ 78,400.00
Audit Committee
Member and Trustee
Edward V. Regan $ 56,275.00
Audit Committee
Member and Trustee
Russell S. Reynolds, Jr. $ 52,100.00
Trustee
Sidney M. Robbins $122,100.00
Study Committee
Chairman, Audit
Committee Vice-Chairman
and Trustee
Pauline Trigere $ 52,100.00
Trustee
Clayton K. Yeutter $ 52,100.00
Trustee
<FN>
______________________
1 For the 1994 calendar year.
2 Committee position held during a portion of the period shown.
</TABLE>
The Fund has adopted a retirement plan that provides for payment
to a retired Trustee of up to 80% of the average compensation paid
during that Trustee's five years of service in which the highest
compensation was received. A Trustee must serve in that capacity for
any of the New York-based OppenheimerFunds for at least 15 years to be
eligible for the maximum payment. Because retirement benefits future
compensation, such benefits are not presently estimable. (No provision
was made and length of service, the amount of those benefits cannot be
determined at this time, nor can the Fund estimate the number of years
of credited service that will be used to determine those benefits. (No
sums were accrued during the fiscal year ended __________ for the
Fund's projected retirement benefit obligations.)
- Major Shareholders. As of ______________, 1995, no person owned
of record or was known by the Fund to own beneficially 5% or more of
any class of the Fund's outstanding shares.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Messrs. Galli and
Spiro) serve as Trustees of the Fund.
The Manager and the Fund have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees,
including portfolio managers, that would compete with or take advantage
of the Fund's portfolio transactions. Compliance with the Code of
Ethics is carefully monitored and strictly enforced by the Manager.
- The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
corporate administration for the Fund, including the compilation and
maintenance of records with respect to its operations, the preparation
and filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of the
Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributors
Agreement are paid by the Fund. The advisory agreement lists examples
of expenses paid by the Fund. The major categories relate to interest,
taxes, brokerage commissions, fees to certain Trustees, legal and audit
expenses, custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs and non-recurring expenses,
including litigation costs. For the Fund's fiscal years ended December
31, 1992, 1993 and 1994, the management fees paid by the Fund to the
Manager were $3,006,439, $3,028,433, and $2,475,491 respectively.
During the fiscal year ended December 31, 1994, the rates under the
investment advisory fee changed on assets up to $400 million. Until
June 30, 1994, the rates were 0.80% of the first $200 million of
aggregate net assets and 0.75% of the next $200 million. Effective
July 1, 1994, those rates were reduced to 0.75% of the first $200
million and 0.72% of the next $200 million.
The advisory agreement contains no provision limiting the Fund's
expenses. However, independently of the advisory agreement, the
Manager has voluntarily undertaken that the total expenses of the Fund
in any fiscal year (including the management fee but excluding taxes,
interest, brokerage commissions, distribution assistance payments and
extraordinary expenses such as litigation costs) shall not exceed the
most stringent expense limitation imposed under state law applicable to
the Fund. Pursuant to the undertaking, the Manager's fee will be
reduced at the end of a month so that there will not be any accrued but
unpaid liability under this undertaking. Currently, the most stringent
state expense limitation is imposed by California, and limits the
Fund's expenses (with specified exclusions) to 2.5% of the first $30
million of average annual net assets, 2% of the next $70 million of
average annual net assets, and 1.5% of average annual net assets in
excess of $100 million. The Manager reserves the right to terminate or
amend the undertaking at any time. Any assumption of the Fund's
expenses under this limitation would lower the Fund's overall expense
ratio and increase its total return during any period in which expenses
are limited.
The 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 a good faith error or omission on its part with respect to any of
its duties thereunder. The advisory agreement permits the Manager to
act as investment adviser for any other person, firm or corporation and
to use the name "Oppenheimer" in connection with other investment
companies for which it may act as investment adviser or general
distributor. If the Manager shall no longer act as investment adviser
to the Fund, the right of the Fund to use the name "Oppenheimer" as
part of its name may be withdrawn.
- The Distributor. Under its General Distributor's Agreement
with the Fund, the Distributor acts as the Fund's principal underwriter
in the continuous public offering of the Fund's Class A, Class B and
Class C shares but is not obligated to sell a specific number of
shares. Expenses normally attributable to sales, including advertising
and the cost of printing and mailing prospectuses, other than those
furnished to existing shareholders, are borne by the Distributor.
During the Fund's fiscal years ended December 31, 1992, 1993, and 1994,
the aggregate sales charges on sales of the Fund's Class A shares were
$975,580, $698,109, and $351,806 respectively, of which the Distributor
and an affiliated broker-dealer retained in the aggregate $421,079,
$298,443 and $141,646 in those respective years. During the Fund's
fiscal year ended December 31, 1994, contingent deferred sales charges
collected on the Fund's Class C shares totalled $1,185 all of which the
Distributor retained. Class B shares were not publicly offered during
those periods and no contingent deferred sales charges were collected.
For additional information about distribution of the Fund's shares and
the expenses connected with such activities, please refer to
"Distribution and Service Plans," below.
- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder
servicing and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers,
including "affiliated" brokers, as that term is defined in the
Investment Company Act, as may, in its best judgment based on all
relevant factors, implement the policy of the Fund to obtain, at
reasonable expense, the "best execution" (prompt and reliable execution
at the most favorable price obtainable) of such transactions. The
Manager need not seek competitive commission bidding but is expected to
minimize the commissions paid to the extent consistent with the
interest and policies of the Fund as established by its Board of
Trustees.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be
higher than another qualified broker would have charged if a good faith
determination is made by the Manager and the commission is fair and
reasonable in relation to the services provided. Subject to the
foregoing considerations, the Manager may also consider sales of shares
of the Fund and other investment companies managed by the Manager or
its affiliates as a factor in the selection of brokers for the Fund's
portfolio transactions.
Description of Brokerage Practices Followed by the Manager.
Subject to the provisions of the advisory agreement, the procedures and
rules described above, allocations of brokerage are generally made by
the Manager's portfolio traders based upon recommendations from the
Manager's portfolio managers. In certain instances portfolio managers
may directly place trades and allocate brokerage, also subject to the
provisions of the advisory agreement and the procedures and rules
described above. In either case, brokerage is allocated under the
supervision of the Manager's executive officers. Transactions in
securities other than those for which an exchange is the primary market
are generally done with principals or market makers. Brokerage
commissions are paid primarily for effecting transactions in listed
securities or for certain fixed-income agency transactions in the
secondary market, and are otherwise paid only if it appears likely that
a better price or execution can be obtained. When the Fund engages in
an option transaction, ordinarily the same broker will be used for the
purchase or sale of the option and any transaction in the securities to
which the option relates. When possible, concurrent orders to purchase
or sell the same security by more than one of the accounts managed by
the Manager or its affiliates are combined. The transactions effected
pursuant to such combined orders are averaged as to price and allocated
in accordance with the purchase or sale orders actually placed for each
account.
Most purchases of money market instruments and debt obligations are
principal transactions at net prices. Instead of using a broker for
those transactions, the Fund normally deals directly with the selling
or purchasing principal or market maker unless it determines that a
better price or execution can be obtained by using a broker. Purchases
of these securities from underwriters include a commission or
concession paid by the issuer to the underwriter. Purchases from
dealers include a spread between the bid and asked prices. The Fund
seeks to obtain prompt execution of these orders at the most favorable
net price.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of
those other accounts may be useful both to the Fund and one or more of
such other accounts. Such research, which may be supplied by a third
party at the instance of a broker, includes information and analyses on
particular companies and industries as well as market or economic
trends and portfolio strategy, receipt of market quotations for
portfolio evaluations, information systems, computer hardware and
similar products and services. If a research service also assists the
Manager in a non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or component that
provides assistance to the Manager in the investment decision-making
process may be paid in commission dollars. The Board of Trustees has
permitted the Manager to use concessions on fixed price offerings to
obtain research, in the same manner as is permitted for agency
transactions. The Board has also permitted the Manager to use stated
commissions on secondary fixed-income trades to obtain research where
the broker has represented to the Manager that (i) the trade is not
from the broker's own inventory, (ii) the trade was executed by the
broker on an agency basis at the stated commissions and (iii) the trade
is not a riskless principal transaction.
The research services provided by brokers broadens the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and by enabling the
Manager to obtain market information for the valuation of securities
held in the Fund's portfolio or being considered for purchase. The
Board of Trustees, including the "independent" Trustees of the Fund
(those Trustees of the Fund who are not "interested persons" as defined
in the Investment Company Act, and who have no direct or indirect
financial interest in the operation of the advisory agreement or the
Distribution Plans described below) annually reviews information
furnished by the Manager as to the commissions paid to brokers
furnishing such services so that the Board may ascertain whether the
amount of such commissions was reasonably related to the value or
benefit of such services.
During the Fund's fiscal years ended December 31, 1992, 1993, and
1994, total brokerage commissions paid by the Fund (not including
spreads or concessions on principal transactions on a net trade basis)
were $493,589, $319,608 and $564,504, respectively. During the fiscal
year ended December 31, 1994, $295,074 was paid to brokers as
commissions in return for research services (including special
research, statistical information and execution); the aggregate dollar
amount of those transactions was $138,285,540. The transactions giving
rise to those commissions were allocated in accordance with the
Manager's internal allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from
time to time the "average annual total return," "cumulative total
return," "average annual total return at net asset value" and
"cumulative total return at net asset value" of an investment in a
class of shares of the Fund may be advertised. An explanation of how
these total returns are calculated for each class and the components of
those calculations is set forth below. No total return calculations
are presented below for Class B shares because no shares of that class
were available during the fiscal year ended December 31, 1994.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include the
average annual total returns for each class of shares of the Fund for
the 1, 5, and 10-year periods (or the life of the class, if less)
ending as of the most recently-ended calendar quarter prior to the
publication of the advertisement. This enables an investor to compare
the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using
such information as a basis for comparison with other investments. An
investment in the Fund is not insured; its returns and share prices are
not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a prediction
or representation by the Fund of future returns. The returns of each
class of shares of the Fund are affected by portfolio quality, the type
of investments the Fund holds and its operating expenses allocated to
the particular class.
- Average Annual Total Returns. The "average annual total return"
of each class is an average annual compounded rate of return for each
year in a specified number of years. It is the rate of return based on
the change in value of a hypothetical initial investment of $1,000 ("P"
in the formula below) held for a number of years ("n") to achieve an
Ending Redeemable Value ("ERV") of that investment, according to the
following formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- Cumulative Total Returns. The "cumulative total return"
calculation measures the change in value of a hypothetical investment
of $1,000 over an entire period of years. Its calculation uses some of
the same factors as average annual total return, but it does not
average the rate of return on an annual basis. Cumulative total return
is determined as follows:
ERV - P
- ------- = Total Return
P
In calculating total returns for Class A shares, the current
maximum sales charge of 5.75% (as a percentage of the offering price)
is deducted from the initial investment ("P") (unless the return is
shown at net asset value, as described below). For Class B shares,
payment of a contingent deferred sales charge of 5.0% for the first
year, 4.0% for the second year, 3.0% for the third and fourth year,
2.0% for the fifth year and 1.0% for the sixth year, and none
thereafter, is applied as described in the Prospectus. For Class C
shares, the 1.0% contingent deferred sales charge is applied to the
investment result for the one-year period (or less). Total returns also
assume that all dividends and capital gains distributions during the
period are reinvested to buy additional shares at net asset value per
share, and that the investment is redeemed at the end of the period.
The "average annual total returns" on an investment in Class A shares
of the Fund for the one, five and ten year periods ended December 31,
1994, were -5.32%, 8.46% and 10.49%, respectively. The "cumulative
total return" on Class A shares for the ten year period ended December
31, 1994, was 171.17%. During a portion of the periods for which total
returns are shown for Class A shares, the Fund's maximum initial sales
charge rate was higher; as a result, performance returns on actual
investments during those periods may be lower than the results shown.
The average annual total returns on Class C shares for the period
from December 1, 1993, (the commencement of the offering of the shares)
and for the one-year period ending through December 31, 1994 were 0.60%
and 1.38%, respectively.
- Total Returns at Net Asset Value. From time to time the Fund may
also quote an average annual total return at net asset value or a
cumulative total return at net asset value for Class A, Class B or
Class C shares. Each is based on the difference in net asset value per
share at the beginning and the end of the period for a hypothetical
investment in that class of shares (without considering front-end or
contingent deferred sales charges) and takes into consideration the
reinvestment of dividends and capital gains distributions. The
cumulative total return at net asset value of the Fund's Class A shares
for the ten-year period ended December 31, 1994 was 187.71%. The
average annual total returns at net asset value for the one, five and
ten-year periods ended December 31, 1994, for Class A shares were
0.46%, 9.75% and 11.15%, respectively. The average annual total return
at net asset value for Class C shares for the 1-year period ended
December 31, 1994, was 0.50% respectively.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A, Class B or Class C shares. However,
when comparing total return of an investment in Class A, Class B or
Class C shares of the Fund with that of other alternatives, investors
should understand that as the Fund is an aggressive equity fund seeking
capital appreciation, its shares are subject to greater market risks
and volatility than shares of funds having other investment objectives
and that the Fund is designed for investors who are willing to accept
greater risk of loss in the hopes of realizing greater gains.
Other Performance Comparisons. From time to time the Fund may publish
the ranking of its Class A, Class B or Class C shares by Lipper
Analytical Services, Inc. ("Lipper"), a widely-recognized independent
service. Lipper monitors the performance of regulated investment
companies, including the Fund, and ranks their performance for various
periods based on categories relating to investment objectives. The
performance of the Fund's classes are ranked against (i) all other
funds (excluding money market funds), (ii) all other capital
appreciation funds and (iii) all other capital appreciation funds in a
specific size category. The Lipper performance rankings are based on
total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or
taxes into consideration.
From time to time, the Fund may include in its advertisements and
sales literature performance information about the Fund cited in other
newspapers and periodicals, such as The New York Times, which may
include performance quotations from other sources, including Lipper.
From time to time the Fund may publish the ranking of its
performance by Morningstar, Inc., an independent mutual fund monitoring
service that ranks mutual funds, including the Fund, monthly in broad
investment categories (equity, taxable bond, municipal bond and hybrid)
based on risk-adjusted investment return. Investment return measures a
fund's (or class's) three, five and ten-year average annual total
returns (when available) in excess of 90-day U.S. Treasury bill returns
after considering sales charges and expenses. Risk reflects fund
performance below 90-day U.S. Treasury bill monthly returns. Risk and
return are combined to produce star rankings reflecting performance
relative to the average fund in a fund's category. Five stars is the
"highest" ranking (top 10%), four stars is "above average" (next
22.5%), three stars is "average" (next 35%), two stars is "below
average" (next 22.5%) and one star is "lowest" (bottom 10%).
Morningstar ranks the Fund in relation to other equity funds. The
current ranking is a weighted average of the 3, 5 and 10-year rankings
(if available). Rankings are subject to change.
The total return on an investment in the Fund's Class A, Class B
or Class C shares may be compared with performance for the same period
of either the Dow-Jones Industrial Average ("Dow") or the Standard &
Poor's 500 Index ("S&P 500"), both of which are widely recognized
indices of U.S. stock market performance. Both indices consist of
unmanaged groups of common stocks; the Dow consists of thirty such
issues. The performance of both indices includes a factor for the
reinvestment of income dividends. Neither index reflects reinvestment
of capital gains or takes transaction charges or taxes into
consideration as these items are not applicable to indices.
Investors may also wish to compare the Fund's Class A, Class B or
Class C return to the returns on fixed income investments available
from banks and thrift institutions, such as certificates of deposit,
ordinary interest-paying checking and savings accounts, and other forms
of fixed or variable time deposits, and various other instruments such
as Treasury bills. However, the Fund's returns and share price are not
guaranteed by the FDIC or any other agency and will fluctuate daily,
while bank depository obligations may be insured by the FDIC and may
provide fixed rates of return, and Treasury bills are guaranteed as to
principal and interest by the U.S. government.
From time to time, the Fund's Manager may publish rankings or
ratings of the Manager (or Transfer Agent) or the investor services
provided by them to shareholders of the OppenheimerFunds, other than
performance rankings of the OppenheimerFunds themselves. Those ratings
or rankings of shareholder/investor services by third parties may
compare the OppenheimerFunds' services to those of other mutual fund
families selected by the rating or ranking services and may be based
upon the opinions of the rating or ranking service itself, based on its
research or judgment, or based upon surveys of investors, brokers,
shareholders or others.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and a
Distribution and Service Plans for Class B and Class C shares under
Rule 12b-1 of the Investment Company Act pursuant to which the Fund
makes payment to the Distributor quarterly in connection with the
distribution and/or servicing of the shares of that class, as described
in the Prospectus. Each Plan has been approved by a vote of (i) the
Board of Trustees of the Fund, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting
on that Plan, and (ii) the holders of a "majority" (as defined in the
Investment Company Act) of the shares of each class. For the
Distribution and Service Plan for the Class B shares and Class C
shares, such votes were cast by the Manager as the sole initial holder
of Class B and Class C shares of the Fund.
In addition, under the Plans the Manager and the Distributor, in
their sole discretion, from time to time may use their own resources
(which, in the case of the Manager, may include profits from the
advisory fee it receives from the Fund) to make payments to brokers,
dealers or other financial institutions (each is referred to as a
"Recipient" under the Plans) for distribution and administrative
services they perform. The Distributor and the Manager may, in their
sole discretion, increase or decrease the amount of payments they make
from their own resources to Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as its continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for
the purpose of voting on such continuance. Each Plan may be terminated
at any time by the vote of a majority of the Independent Trustees or by
the vote of the holders of a "majority" (as defined in the Investment
Company Act) of the outstanding shares of that class. No Plan may be
amended to increase materially the amount of payments to be made unless
such amendment is approved by shareholders of the class affected by the
amendment. In addition, because Class B shares of the Fund
automatically convert into Class A shares after six years, the Fund is
required to obtain the approval of Class B as well as Class A
shareholders for a proposed amendment to the Class A Plan that would
materially increase the amount to be paid by Class A shareholders under
the Class A Plan. Such approval must be by a "majority" of the Class A
and Class B shares (as defined in the Investment Company Act), voting
separately by class. All material amendments must be approved by the
Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at
least quarterly on the amount of all payments made pursuant to each
Plan, the purpose for which each payment was made and the identity of
each Recipient that received any payment. The reports for the Class B
and Class C Plans shall also include the distribution costs for that
quarter, and such costs for previous fiscal periods that have been
carried forward, as explained in the Prospectus and below. Those
reports, including the allocations on which they are based, will be
subject to the review and approval of the Independent Trustees in the
exercise of their fiduciary duty. Each Plan further provides that
while it is in effect, the selection and nomination of those Trustees
of the Fund who are not "interested persons" of the Fund is committed
to the discretion of the Independent Trustees. This does not prevent
the involvement of others in such selection and nomination if the final
decision on selection or nomination is approved by a majority of the
Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers, did not exceed a minimum
amount, if any, that may be determined from time to time by a majority
of the Fund's Independent Trustees. Initially, the Board of Trustees
has set the fee at the maximum rate and set no minimum amount.
The Fund's shareholders approved a new Service Plan for Class A
shares, effective July 1, 1994. Under the old plan, payments were made
to a Recipient only as to Class A shares acquired on or after April 1,
1991. Under the current Plan, payments are based on the value of all
Class A shares, whenever acquired.
For the fiscal year ended December 31, 1994, payments under the
Class A Plan totalled $325,662, all of which was paid by the
Distributor to Recipients, including $33,166 paid to MML Investor
Services, Inc., an affiliate of the Distributor. Payments made under
the Class C Plan during that fiscal period totalled $4,642.
Any unreimbursed expenses incurred by the Distributor with respect
to Class A shares for any fiscal year may not be recovered in
subsequent years. Payments received by the Distributor under the Plan
for Class A shares will not be used to pay any interest expense,
carrying charge, or other financial costs, or allocation of overhead by
the Distributor. The Class B and Class C Plans allow the service fee
payment to be paid by the Distributor to Recipients in advance for the
first year such shares are outstanding, and thereafter on a quarterly
basis, as described in the Prospectus. The advance payment is based on
the net asset value of the shares sold. An exchange of shares does not
entitle the Recipient to an advance service fee payment. In the event
shares are redeemed during the first year that the shares are
outstanding, the Recipient will be obligated to repay a pro rata
portion of the advance payment for those shares to the Distributor.
Although the Class B and Class C Plans permit the Distributor to
retain both the asset-based sales charges and the service fees on Class
C shares, or to pay Recipients the service fee on a quarterly basis
without payment in advance, the Distributor intends to pay the service
fee to Recipients in the manner described above. A minimum holding
period may be established from time to time under the Class B and Class
C Plans by the Board. Initially, the Board has set no minimum holding
period. All payments under the Class B and Class C Plans are subject
to the limitations imposed by the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. on payments of asset-
based sales charges and service fees.
The Class C Plan allows for the carry-forward of distribution
expenses, to be recovered from asset-based sales charges in subsequent
fiscal periods, as described in the Prospectus. The asset-based sales
charge paid to the Distributor by the Fund under the Class C Plan is
intended to allow the Distributor to recoup the cost of sales
commissions paid to authorized brokers and dealers at the time of sale,
plus financing costs, as described in the Prospectus. Such payments
may also be used to pay for the following expenses in connection with
the distribution of Class C shares: (i) financing the advance of the
service fee payment to Recipients under the Class C Plan, (ii)
compensation and expenses of personnel employed by the Distributor to
support distribution of Class C shares, and (iii) costs of sales
literature, advertising and prospectuses (other than those furnished to
current shareholders) and state "blue sky" registration fees.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C
Shares. The availability of three classes of shares permits an
investor to choose the method of purchasing shares that is more
beneficial to the investor depending on the amount of the purchase, the
length of time the investor expects to hold shares and other relevant
circumstances. Investors should understand that the purpose and
function of the deferred sales charge and asset-based sales charge with
respect to Class B and Class C shares are the same as those of the
initial sales charge with respect to Class A shares. Any salesperson
or other person entitled to receive compensation for selling Fund
shares may receive different compensation with respect to one class of
shares than the other. The Distributor will not accept (i) any order
for $500,000 or more of Class B or (ii) any order for $1 million or
more of Class C shares on behalf of a single investor (not including
dealer "street name" or omnibus accounts) because generally it will be
more advantageous for that investor to purchase Class A shares of the
Fund instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to
Class B and Class C shares and the dividends payable on Class B and
Class C shares will be reduced by incremental expenses borne solely by
that class, including the asset-based sales charge to which Class B and
Class C shares are subject.
The conversion of Class B shares to Class A shares after six years
is subject to the continuing availability of a private letter ruling
from the Internal Revenue Service, or an opinion of counsel or tax
adviser, to the effect that the conversion of Class B shares does not
constitute a taxable event for the holder under Federal income tax law.
If such a revenue ruling or opinion is no longer available, the
automatic conversion feature may be suspended, in which event no
further conversions of Class B shares would occur while such suspension
remained in effect. Although Class B shares could then be exchanged
for Class A shares on the basis of relative net asset value of the two
classes, without the imposition of a sales charge or fee, such exchange
could constitute a taxable event for the holder, and absent such
exchange, Class B shares might continue to be subject to the asset-
based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares
recognizes two types of expenses. General expenses that do not pertain
specifically to any class are allocated pro rata to the shares of each
class, based on the percentage of the net assets of such class to the
Fund's total assets, and then equally to each outstanding share within
a given class. Such general expenses include (i) management fees, (ii)
legal, bookkeeping and audit fees, (iii) printing and mailing costs of
shareholder reports, Prospectuses, Statements of Additional Information
and other materials for current shareholders, (iv) fees to Independent
Trustees, (v) custodian expenses, (vi) share issuance costs, (vii)
organization and start-up costs, (viii) interest, taxes and brokerage
commissions, and (ix) non-recurring expenses, such as litigation costs.
Other expenses that are directly attributable to a class are allocated
equally to each outstanding share within that class. Such expenses
include (i) Distribution and/or Service Plan fees, (ii) incremental
transfer and shareholder servicing agent fees and expenses, (iii)
registration fees and (iv) shareholder meeting expenses, to the extent
that such expenses pertain to a specific class rather than to the Fund
as a whole.
Determination of Net Asset Values Per Share. The net asset values
per share of Class A, Class B and Class C shares of the Fund are
determined as of the close of business of The New York Stock Exchange
on each day that the Exchange is open, by dividing the value of the
Fund's net assets attributable to that class by the number of shares of
that class outstanding. The Exchange normally closes at 4:00 P.M. New
York time, but may close earlier on some days (for example, in case of
weather emergencies or days falling before a holiday). The Exchange's
most recent annual holiday schedule (which is subject to change) states
that it will close on New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It may also close on other days. The Fund may invest a
portion of its assets in foreign securities primarily listed on foreign
exchanges which may trade on Saturdays or customary U.S. business
holidays on which the Exchange is closed. Because the Fund's price and
net asset value will not be calculated on those days, the Fund's net
asset values per share may be significantly affected on such days when
shareholders may not purchase or redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) equity
securities traded on a securities exchange or on NASDAQ for which last
sale information is regularly reported are valued at the last reported
sale price on their primary exchange or NASDAQ that day (or, in the
absence of sales that day, at values based on the last sales prices of
the preceding trading day, or closing bid and asked prices); (ii)
securities actively traded on a foreign securities exchange are valued
at the last sales price available to the pricing service approved by
the Fund's Board of Directors or to the Manager as reported by the
principal exchange on which the security is traded; (iii) unlisted
foreign securities or listed foreign securities not actively traded are
valued as in (i) above, if available, or at the mean between "bid" and
"asked" prices obtained from active market makers in the security on
the basis of reasonable inquiry; (iv) long-term debt securities having
a remaining maturity in excess of 60 days are valued at the mean
between the "bid" and "asked" prices determined by a portfolio pricing
service approved by the Fund's Board of Directors or obtained from
active market makers in the security on the basis of reasonable
inquiry; (v) debt instruments having a maturity of more than one year
when issued, and non-money market type instruments having a maturity of
one year or less when issued, which have a remaining maturity of 60
days or less are valued at the mean between the "bid" and "asked"
prices determined by a pricing service approved by the Fund's Board of
Directors or obtained from active market makers in the security on the
basis of reasonable inquiry; (vi) money market-type debt securities
having a maturity of less than one year when issued that having a
remaining maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; and (vii)
securities (including restricted securities) not having readily-
available market quotations are valued at fair value under the Board's
procedures.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the NYSE.
Events affecting the values of foreign securities traded in stock
markets that occur between the time their prices are determined and the
close of the NYSE will not be reflected in the Fund's calculation of
net asset value unless the Board of Trustees or the Manager, under
procedures established by the Board of Trustees, determines that the
particular event would materially affect the Fund's net asset value, in
which case an adjustment would be made. Foreign currency will be
valued as close to the time fixed for the valuation date as is
reasonably practicable. The values of securities denominated in
foreign currency will be converted to U.S. dollars at the prevailing
rates of exchange at the time of valuation.
Puts, calls and Futures held by the Fund are valued at the last
sales price on the principal exchange on which they are traded, or on
NASDAQ, as applicable, or, if there are no sales that day, in
accordance with (i), above. Forward currency contracts are valued at
the closing price on the London foreign exchange market. When the Fund
writes an option, an amount equal to the premium received by the Fund
is included in the Fund's Statement of Assets and Liabilities as an
asset, and an equivalent deferred credit is included in the liability
section. The deferred credit is "marked-to-market" to reflect the
current market value of the option. In determining the Fund's gain on
investments, if a call written by the Fund is exercised, the proceeds
are increased by the premium received. If a call or put written by the
Fund expires, the Fund has a gain in the amount of the premium; if the
Fund enters into a closing purchase transaction, it will have a gain or
loss depending on whether the premium was more or less than the cost
of the closing transaction. If the Fund exercises a put it holds, the
amount the Fund receives on its sale of the underlying investment is
reduced by the amount of premium paid by the Fund.
AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $25.00. Shares will be purchased on the
regular business day the Distributor is instructed to initiate the
Automated Clearing House transfer to buy the shares. Dividends will
begin to accrue on shares purchased by the proceeds of ACH transfers
on the business day the Fund receives Federal Funds for such purchase
through the ACH system before the close of The New York Stock Exchange.
The Exchange normally closes at 4:00 P.M.; but may close earlier on
certain days. If Federal Funds are received on a business day after
the close of the Exchange, the shares will be purchased and dividends
will begin to accrue on the next regular business day. The proceeds of
ACH transfers are normally received by the Fund 3 days after the ACH
transfer is initiated. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays
in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of
Accumulation and Letters of Intent because of the economies of sales
efforts and reduction in expenses realized by the Distributor, dealers
and brokers making such sales. No sales charge is imposed in certain
other circumstances described in the Prospectus because the Distributor
incurs little or no selling expenses. The term "immediate family"
refers to one's spouse, children, grandchildren, grandparents, parents,
parents-in-law, brothers and sisters, sons- and daughters-in-law, a
sibling's spouse and a spouse's siblings.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-
distributor and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares
of each of the OppenheimerFunds except Money Market Funds (under
certain circumstances described herein, redemption proceeds of Money
Market Fund shares may be subject to a contingent deferred sales
charge).
- Letters of Intent. A Letter of Intent ("Letter") is the
investor's statement of intention to purchase Class A and Class B
shares or shares of either class of the Fund (and other eligible
OppenheimerFunds) sold with a front-end sales charge during the 13-
month period from the investor's first purchase pursuant to the Letter
(the "Letter of Intent period"), which may, at the investor's request,
include purchases made up to 90 days prior to the date of the Letter.
The Letter states the investor's intention to make the aggregate amount
of purchases (excluding any purchases made by reinvestment of dividends
or distributions or purchases made at net asset value without sales
charge), which together with the investor's holdings of such funds
(calculated at their respective public offering prices calculated on
the date of the Letter) will equal or exceed the amount specified in
the Letter. This enables the investor to count the shares to be
purchased under the Letter of Intent to obtain the reduced sales charge
rate (as set forth in the Prospectus) that applies under the Right of
Accumulation to current purchases of Class A shares. Each purchase of
Class A shares under the Letter will be made at the public offering
price (including the sales charge) that applies to a single lump-sum
purchase of shares in the amount intended to be purchased under the
Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not
equal or exceed the intended purchase amount, the investor agrees to
pay the additional amount of sales charge applicable to such purchases,
as set forth in "Terms of Escrow," below (as those terms may be amended
from time to time). The investor agrees that shares equal in value to
5% of the intended purchase amount will be held in escrow by the
Transfer Agent subject to the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the Prospectus, this Statement of
Additional Information and the Application used for such Letter of
Intent, and if such terms are amended, as they may be from time to time
by the Fund, that those amendments will apply automatically to existing
Letters of Intent.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended purchase amount, the
commissions previously paid to the dealer of record for the account and
the amount of sales charge retained by the Distributor will be adjusted
to the rates applicable to actual purchases. If total eligible
purchases during the Letter of Intent period exceed the intended
purchase amount and exceed the amount needed to qualify for the next
sales charge rate reduction set forth in the applicable prospectus, the
sales charges paid will be adjusted to the lower rate, but only if and
when the dealer returns to the Distributor the excess of the amount of
commissions allowed or paid to the dealer over the amount of
commissions that apply to the actual amount of purchases. The excess
commissions returned to the Distributor will be used to purchase
additional shares for the investor's account at the net asset value per
share in effect on the date of such purchase, promptly after the
Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter
of Intent period will be deducted. It is the responsibility of the
dealer of record and/or the investor to advise the Distributor about
the Letter in placing any purchase orders for the investor during the
Letter of Intent period. All of such purchases must be made through
the Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in value
up to 5% of the intended purchase amount specified in the Letter shall
be held in escrow by the Transfer Agent. For example, if the intended
purchase amount is $50,000, the escrow shall be shares valued in the
amount of $2,500 (computed at the public offering price adjusted for a
$50,000 purchase). Any dividends and capital gains distributions on
the escrowed shares will be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the
escrowed shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended
purchase amount specified in the Letter, the investor must remit to the
Distributor an amount equal to the difference between the dollar amount
of sales charges actually paid and the amount of sales charges which
would have been paid if the total amount purchased had been made at a
single time. Such sales charge adjustment will apply to any shares
redeemed prior to the completion of the Letter. If such difference in
sales charges is not paid within twenty days after a request from the
Distributor or the dealer, the Distributor will, within sixty days of
the expiration of the Letter, redeem the number of escrowed shares
necessary to realize such difference in sales charges. Full and
fractional shares remaining after such redemption will be released from
escrow. If a request is received to redeem escrowed shares prior to
the payment of such additional sales charge, the sales charge will be
withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the
holding of which may be counted toward completion of a Letter) include
(a) Class A shares sold with a front-end sales charge or subject to a
Class A contingent deferred sales charge, (b) Class B shares acquired
subject to a contingent deferred sales charge, and (c) Class A or B
shares acquired in exchange for either (i) Class A shares of one of the
other OppenheimerFunds that were acquired subject to a Class A initial
or contingent deferred sales charge or (ii) Class B shares of one of
the other OppenheimerFunds that were acquired subject to a contingent
deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as
described in the section of the Prospectus entitled "How to Exchange
Shares," and the escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany
the application. Shares purchased by Asset Builder Plan payments from
bank accounts are subject to the redemption restrictions for recent
purchases described in "How To Sell Shares," in the Prospectus. Asset
Builder Plans also enable shareholders of Oppenheimer Cash Reserves to
use those accounts for monthly automatic purchases of shares of up to
four other OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after
the Transfer Agent's receipt of such instructions to implement them.
The Fund reserves the right to amend, suspend, or discontinue offering
such plans at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for
the Fund's shares (for example, when a purchase check is returned to
the Fund unpaid) causes a loss to be incurred when the net asset value
of the Fund's shares on the cancellation date is less than on the
purchase date. That loss is equal to the amount of the decline in the
net asset value per share multiplied by the number of shares in the
purchase order. The investor is responsible for that loss. If the
investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the Distributor for that amount by
redeeming shares from any account registered in that investor's name,
or the Fund or the Distributor may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions
for redemptions set forth in the Prospectus.
- Payments "In Kind". The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash. However, the
Board of Trustees of the Fund may determine that it would be
detrimental to the best interests of the remaining shareholders of the
Fund to make payment of a redemption order wholly or partly in cash.
In that case the Fund may pay the redemption proceeds in whole or in
part by a distribution "in kind" of securities from the portfolio of
the Fund, in lieu of cash, in conformity with applicable rules of the
Securities and Exchange Commission. The Fund has elected to be governed
by Rule 18f-1 under the Investment Company Act, pursuant to which the
Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period
for any one shareholder. If shares are redeemed in kind, the redeeming
shareholder might incur brokerage or other costs in selling the
securities for cash. The method of valuing securities used to make
redemptions in kind will be the same as the method the Fund uses to
value its portfolio securities described above under "Determination of
Net Asset Values Per Share" and that valuation will be made as of the
time the redemption price is determined.
- Involuntary Redemptions. The Fund's Board of Trustees has the
right to cause the involuntary redemption of the shares held in any
account if the aggregate net asset value of those shares is less than
$200 or such lesser amount as the Board may fix. The Board of Trustees
will not cause the involuntary redemption of shares in an account if
the aggregate net asset value of the shares has fallen below the stated
minimum solely as a result of market fluctuations. Should the Board
elect to exercise this right, it may also fix, in accordance with the
Investment Company Act, the requirements for any notice to be given to
the shareholders in question (not less than 30 days), or the Board may
set requirements for granting permission to the Shareholder to increase
the investment, and set other terms and conditions so that the shares
would not be involuntarily redeemed.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of
Class A shares, (ii) Class B shares or (iii) Class C shares that were
subject to the Class C contingent deferred sales charge when redeemed.
The reinvestment may be made without sales charge only in Class A
shares of the Fund or any of the other OppenheimerFunds into which
shares of the Fund are exchangeable as described in "How to Exchange
Shares," below. The shareholder must ask the Distributor for that
privilege at the time of reinvestment. Any capital gain that was
realized when the shares were redeemed is taxable, and reinvestment
will not alter any capital gains tax payable on that gain. If there
has been a capital loss on the redemption, some or all of the loss may
not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption
proceeds of Fund shares on which a sales charge was paid are reinvested
in shares of the Fund or another of the OppenheimerFunds within 90 days
of payment of the sales charge, the shareholder's basis in the shares
of the Fund that were redeemed may not include the amount of the sales
charge paid. That would reduce the loss or increase the gain
recognized from the redemption. However, in that case the sales charge
would be added to the basis of the shares acquired by the reinvestment
of the redemption proceeds. The Fund may amend, suspend or cease
offering this reinvestment privilege at any time as to shares redeemed
after the date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of either class at the time of
transfer to the name of another person or entity (whether the transfer
occurs by absolute assignment, gift or bequest, not involving, directly
or indirectly, a public sale). The transferred shares will remain
subject to the contingent deferred sales charge, calculated as if the
transferee shareholder had acquired the transferred shares in the same
manner and at the same time as the transferring shareholder. If less
than all shares held in an account are transferred, and some but not
all shares in the account would be subject to a contingent deferred
sales charge if redeemed at the time of transfer, the priorities
described in the Prospectus under "How to Buy Shares" for the
imposition of the Class B or Class C contingent deferred sales charge
will be followed in determining the order in which shares are
transferred.
Distributions From Retirement Plans. Requests for distributions
from OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, or
pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its
address listed in "How To Sell Shares" in the Prospectus or on the back
cover of this Statement of Additional Information. The request must:
(i) state the reason for the distribution; (ii) state the owner's
awareness of tax penalties if the distribution is premature; and (iii)
conform to the requirements of the plan and the Fund's other redemption
requirements. Participants (other than self-employed persons) in
OppenheimerFunds-sponsored pension or profit-sharing plans may not
directly request exchange or redemption of their accounts. The
employer or plan administrator must sign the request. Distributions
from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents
(available from the Transfer Agent) must be completed before the
distribution may be made. Distributions from retirement plans are
subject to withholding requirements under the Internal Revenue Code,
and IRS Form W-4P (available from the Transfer Agent) must be submitted
to the Transfer Agent with the distribution request, or the
distribution may be delayed. Unless the shareholder has provided the
Transfer Agent with a certified tax identification number, the Internal
Revenue Code requires that tax be withheld from any distribution even
if the shareholder elects not to have tax withheld. The Fund, the
Manager, the Distributor, the Trustee and the Transfer Agent assume no
responsibility to determine whether a distribution satisfies the
conditions of applicable tax laws and will not be responsible for any
tax penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. The repurchase price per share will be
the net asset value next computed after the Distribution receives the
order placed by the dealer or broker, except if the Distributor
receives a repurchase from a dealer or broker after the close of The
New York Stock Exchange on a regular business day, it will be processed
at that day's net asset value if the order was received by the dealer
or broker from its customer prior to the time the Exchange closes
(normally 4:00 P.M., but it may be earlier on some days), and the order
was transmitted to and received by the Distributor prior to its close
of business that day (normally 5:00 P.M.). Payment ordinarily will be
made within three business days for accounts registered in the name of
a broker-dealer after the Distributor's receipt of the required
redemption documents, with signature(s) guaranteed as described in the
Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares
of the Fund valued at $5,000 or more can authorize the Transfer Agent
to redeem shares (minimum $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares
will be redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be
made by check payable to all shareholders of record and sent to the
address of record for the account (and if the address has not been
changed within the prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on this
basis. Payments are normally made by check, but shareholders having
AccountLink privileges (see "How To Buy Shares") may arrange to have
Automatic Withdrawal Plan payments transferred to the bank account
designated on the OppenheimerFunds New Account Application or
signature-guaranteed instructions. The Fund cannot guarantee receipt
of a payment on the date requested and reserves the right to amend,
suspend or discontinue offering such plans at any time without prior
notice. Because of the sales charge assessed on Class A share
purchases, shareholders should not make regular additional Class A
share purchases while participating in an Automatic Withdrawal Plan.
Class B and Class C shareholders should not establish withdrawal plans
because of the imposition of the contingent deferred sales charge on
such withdrawals (except where the contingent deferred sales charge is
waived as described in the Prospectus under "Class B Contingent
Deferred Sales Charge" or in "Class C Contingent Deferred Sales
Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such
plans, as stated below and in the provisions of the OppenheimerFunds
Application relating to such Plans, as well as the Prospectus. These
provisions may be amended from time to time by the Fund and/or the
Distributor. When adopted, such amendments will automatically apply to
existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the
Transfer Agent (on the OppenheimerFunds Application or signature-
guaranteed instructions) to exchange a pre-determined amount of shares
of the Fund for shares (of the same class) of other OppenheimerFunds
automatically on a monthly, quarterly, semi-annual or annual basis
under an Automatic Exchange Plan. The minimum amount that may be
exchanged to each other fund account is $25. Exchanges made under
these plans are subject to the restrictions that apply to exchanges as
set forth in "How to Exchange Shares" in the Prospectus and below in
this Statement of Additional Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next,
followed by shares acquired with a sales charge, to the extent
necessary to make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted. Payments made
under withdrawal plans should not be considered as a yield or income on
your investment.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the
"Planholder") who executed the Plan authorization and application
submitted to the Transfer Agent. The Transfer Agent and the Fund shall
incur no liability to the Planholder for any action taken or omitted by
the Transfer Agent in good faith to administer the Plan. Certificates
will not be issued for shares of the Fund purchased for and held under
the Plan, but the Transfer Agent will credit all such shares to the
account of the Planholder on the records of the Fund. Any share
certificates held by a Planholder may be surrendered unendorsed to the
Transfer Agent with the Plan application so that the shares represented
by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be
done at net asset value without a sales charge. Dividends on shares
held in the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be
made at the net asset value per share determined on the redemption
date. Checks or AccountLink payments of the proceeds of Plan
withdrawals will normally be transmitted three business days prior to
the date selected for receipt of the payment (receipt of payment on the
date selected cannot be guaranteed), according to the choice specified
in writing by the Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written
notice (in proper form in accordance with the requirements of the then-
current Prospectus of the Fund) to redeem all, or any part of, the
shares held under the Plan. In that case, the Transfer Agent will
redeem the number of shares requested at the net asset value per share
in effect in accordance with the Fund's usual redemption procedures and
will mail a check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time by
the Transfer Agent upon receiving directions to that effect from the
Fund. The Transfer Agent will also terminate a Plan upon receipt of
evidence satisfactory to it of the death or legal incapacity of the
Planholder. Upon termination of a Plan by the Transfer Agent or the
Fund, shares that have not been redeemed from the account will be held
in uncertificated form in the name of the Planholder, and the account
will continue as a dividend-reinvestment, uncertificated account unless
and until proper instructions are received from the Planholder or his
or her executor or guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in
certificated form. Upon written request from the Planholder, the
Transfer Agent will determine the number of shares for which a
certificate may be issued without causing the withdrawal checks to stop
because of exhaustion of uncertificated shares needed to continue
payments. However, should such uncertificated shares become exhausted,
Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
the OppenheimerFunds that have a single class without a class
designation are deemed "Class A" shares for this purpose. All
OppenheimerFunds offer "Class A" shares but only certain funds offer
Class B shares. The following other OppenheimerFunds offer Class B
shares:
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Bond Fund
Oppenheimer Value Stock Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer Cash Reserves (Class B shares are only available
by exchange)
Oppenheimer Growth Fund
Oppenheimer Global Fund
Oppenheimer Discovery Fund
Oppenheimer U.S. Government Trust
The following other OppenheimerFunds offer Class C shares:
Oppenheimer Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Champion Income Fund
Oppenheimer U.S. Government Trust
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Cash Reserves (Class C and B shares are available
only by exchange)
Oppenheimer Strategic Income Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Target Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Class A shares of OppenheimerFunds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge).
However, if the Distributor receives at the time of purchase, notice
that shares of Oppenheimer Money Market Fund, Inc. are being purchased
with the redemption proceeds of shares of other mutual funds (other
than money market funds) that are not part of the OppenheimerFunds
family, those shares of Oppenheimer Money Market Fund may be exchanged
for shares of other OppenheimerFunds at net asset value without paying
a sales charge.
Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the OppenheimerFunds or from any unit
investment trust for which reinvestment arrangements have been made
with the Distributor may be exchanged at net asset value for shares of
any of the OppenheimerFunds. No contingent deferred sales charge is
imposed on exchanges of shares of either class purchased subject to a
contingent deferred sales charge. However, when Class A shares
acquired by exchange of Class A shares of other OppenheimerFunds
purchased subject to a Class A contingent deferred sales charge are
redeemed within 18 months of the end of the calendar month of the
initial purchase of the exchanged Class A shares, the Class A
contingent deferred sales charge is imposed on the redeemed shares (see
"Class A Contingent Deferred Sales Charge" in the Prospectus). The
Class B and Class C contingent deferred sales charge are imposed on
shares acquired by exchange if they are redeemed within 12 months or 6
years respectively of the initial purchase of the exchanged shares.
When Class B shares or Class C shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the
Prospectus for the imposition of the Class B or the Class C contingent
deferred sales charge will be followed in determining the order in
which the shares are exchanged. Shareholders should take into account
the effect of any exchange on the applicability and rate of any
contingent deferred sales charge that might be imposed in the
subsequent redemption of remaining shares. Shareholders owning shares
of more than one class of shares must specify whether they intend to
exchange Class A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts.
The Fund may accept requests for exchanges of up to 50 accounts per day
from representatives of authorized dealers that qualify for this
privilege. In connection with any exchange request, the number of
shares exchanged may be less than the number requested if the exchange
or the number requested would include shares subject to a restriction
cited in the Prospectus or this Statement of Additional Information or
would include shares covered by a share certificate that is not
tendered with the request. In those cases, only the shares available
for exchange without restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either have
an existing account in, or obtain and acknowledge receipt of a
prospectus of, the fund to which the exchange is to be made. For full
or partial exchanges of an account made by telephone, any special
account features such as Asset Builder Plans, Automatic Withdrawal
Plans and retirement plan contributions will be switched to the new
account unless the Transfer Agent is instructed otherwise. If all
telephone lines are busy (which might occur, for example, during
periods of substantial market fluctuations), shareholders might not be
able to request exchanges by telephone and would have to submit written
exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange
request that may disadvantage it (for example, if the receipt of
multiple exchange requests from a dealer might require the disposition
of portfolio securities at a time or at a price that might be
disadvantageous to the Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should
assure that the Fund selected is appropriate for his or her investment
and should be aware of the tax consequences of an exchange. For
federal income tax purposes, an exchange transaction is treated as a
redemption of shares of one fund and a purchase of shares of another.
"Reinvestment Privilege," above, discusses some of the tax consequences
of reinvestment of redemption proceeds in such cases. The Fund, the
Distributor, and the Transfer Agent are unable to provide investment,
tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received
deduction for corporate shareholders. Long-term capital gains
distributions are not eligible for the deduction. In addition, the
amount of dividends paid by the Fund which may qualify for the
deduction is limited to the aggregate amount of qualifying dividends
that the Fund derives from its portfolio investments that the Fund has
held for a minimum period, usually 46 days. A corporate shareholder
will not be eligible for the deduction on dividends paid on Fund shares
held for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or
short-term gains from the sale of securities or dividends from foreign
corporations, those dividends will not qualify for the deduction.
Dividends, distributions and the proceeds of the redemption of Fund
shares represented by checks returned to the Transfer Agent by the
Postal Service as undeliverable will be invested in shares of
Oppenheimer Money Market Fund, Inc., as promptly as possible after the
return of such checks to the Transfer Agent, in order to enable the
investor to earn a return on otherwise idle funds.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from
January 1 through December 31 of that year and 98% of its capital gains
realized in the period from November 1 of the prior year through
October 31 of the current year, or else the Fund must pay an excise tax
on the amounts not distributed. While it is presently anticipated that
the Fund will meet those requirements, the Fund's Board of Trustees and
the Manager might determine in a particular year that it would be in
the best interest of shareholders for the Fund not to make such
distributions at the required levels and to pay the excise tax on the
undistributed amounts. That would reduce the amount of income or
capital gains available for distribution to shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund
may elect to reinvest all dividends and/or capital gains distributions
in shares of the same class of any of the other OppenheimerFunds listed
in "Reduced Sales Charges," above, at net asset value without sales
charge. As of the date of this Statement of Additional Information,
only certain of the OppenheimerFunds offer Class B or Class C shares.
To elect this option, a shareholder must notify the Transfer Agent in
writing and either have an existing account in the fund selected for
reinvestment or must obtain a prospectus for that fund and an
application from the Distributor to establish an account. The
investment will be made at the net asset value per share in effect at
the close of business on the payable date of the dividend or
distribution. Dividends and/or distributions from certain of the
OppenheimerFunds may be invested in shares of this Fund on the same
basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on the
portfolio securities and handling the delivery of such securities to
and from the Fund. The Manager has represented to the Fund that the
banking relationships between the Manager and the Custodian have been
and will continue to be unrelated to and unaffected by the relationship
between the Fund and the Custodian. It will be the practice of the
Fund to deal with the Custodian in a manner uninfluenced by any banking
relationship the Custodian may have with the Manager and its
affiliates. The Fund's cash balances with the Custodian in excess of
$100,000 are not protected by Federal deposit insurance. Those
uninsured balances at times may be substantial.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the
Manager and its affiliates.
<PAGE>
Appendix A: Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Transmission
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, NY 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER TARGET FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
---------------------------------
(a) Financial Statements
--------------------
1. Financial Highlights*
2. Independent Auditors' Report*
3. Statement of Investments: at 12/31/94 (audited) and at
6/30/95 (unaudited)*
4. Statement of Assets and Liabilities: at 12/31/94 (audited)
and at 6/30/95 (unaudited) (See Part B)*
5. Statement of Operations: at 12/31/94 (audited) and at
6/30/95 (unaudited)*
6. Statements of Changes in Net Assets*
7. Notes to Financial Statements*
_________________
* To be filed by Amendment.
(b) Exhibits
--------
1. (i) Amended and Restated Declaration of Trust dated
August 21, 1995: Filed herewith.
(ii) Amendment No. 1 dated 8/24/93 to the Amended and
Restated Declaration of Trust - Filed with Post-
Effective Amendment No. 27 to Registrant's
Registration Statement, 3/2/94, and incorporated
herein by reference.
2. Amended By-Laws of Oppenheimer Target Fund dated 8/6/87 -
Filed with Registrant's Form SE for its Form N-SAR for the
fiscal year ending 12/31/87 and refiled with Registrant's
Post-Effective Amendment No. 31, 5/1/95, pursuant to Item
102 of Regulation S-T.
3. Not applicable.
4. (i) Specimen Share Certificate for Class A shares of
Oppenheimer Target Fund: Filed with Post-Effective
Amendment No. 27 to Registrant's Registration
Statement, 3/2/94, and incorporated herein by
reference.
(ii) Specimen Share Certificate for Class B shares of
Oppenheimer Target Fund: To be filed by Amendment.
(iii) Specimen Share Certificate for Class C shares of
Oppenheimer Target Fund: Filed with Post-Effective
Amendment No. 27 to Registrant's Registration
Statement, 3/2/94, and incorporated herein by
reference.
5. Investment Advisory Agreement dated 6/20/91 between
Oppenheimer Target Fund and Oppenheimer Management
Corporation - Filed with Post-Effective Amendment No. 23
to Registrant's Registration Statement, 2/28/92, and
refiled with Post-Effective Amendment No. 31 to
Registrant's Registration Statement, 5/1/95, pursuant to
Item 102 of Regulation S-T and incorporated herein by
reference.
6. (i) General Distributor's Agreement dated 12/10/92: Filed
with Post-Effective Amendment No. 27 to Registrant's
Registration Statement, 3/2/94, and incorporated
herein by reference.
(ii) Form of Oppenheimer Funds Distributor, Inc. Dealer
Agreement: Filed with Post-Effective Amendment No. 14
to the Registration Statement of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(iii) Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14
to the Registration Statement of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(iv) Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement: Filed with Post-Effective Amendment No. 14
to the Registration Statement of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(v) Oppenheimer Funds Distributor, Inc. Agreement with
Newbridge Securities, dated 10/1/86: Filed with Post-
Effective Amendment No. 25 to the Registration
Statement of Oppenheimer Growth Fund (Reg. No. 2-
45272) dated 11/1/86 and refiled with Post-Effective
Amendment No. 45 of Oppenheimer Growth Fund (Reg. No.
2-45272), 8/22/94, pursuant to Item 102 of Regulation
S-T, and incorporated herein by reference.
7. Retirement Plan for Non-Interested Trustees, 6/7/90: Filed
with Post-Effective Amendment No. 97 to the Registration
Statement of Oppenheimer Fund (Reg. No. 2-14586) dated
8/30/90 and refiled with Post-Effective Amendment No. 45 to
the Registration Statement of Oppenheimer Growth Fund (Reg.
No. 2-45272) 8/22/94, pursuant to Item 102 of Regulation
S-T, and incorporated herein by reference.
8. Custody Agreement dated 11/12/92: Filed with Post-Effective
Amendment No. 25 to Registrant's Registration Statement,
4/23/93, and refiled with Post-Effective Amendment No. 31
to Registrant's Registration Statement, 5/1/95, pursuant to
Item 102 of Regulation S-T and incorporated herein by
reference.
9. Not applicable.
10. Opinion and Consent of Counsel dated 5/1/87: Filed with
Post-Effective Amendment No. 11 to Registrant's Registration
Statement, 5/1/87, and refiled with Post-Effective Amendment
No. 31 to Registrant's Registration Statement, 5/1/95,
pursuant to Item 102 of Regulation S-T and incorporated
herein by reference.
11. Independent Auditors' Consent: To be filed by Amendment.
12. Not applicable.
13. Not applicable.
14. (i) Form of Individual Retirement Account Trust Agreement:
Filed with Post-Effective Amendment No. 21 of
Oppenheimer U.S. Government Trust (Reg. No. 2-76645),
8/25/93, and incorporated herein by reference.
(ii) Form of prototype Standardized and Non-Standardized
Profit-Sharing Plan and Money Purchase Pension Plan for
self-employed persons and corporations: Filed with
Post-Effective Amendment No. 3 to the Registration
Statement of Oppenheimer Global Growth & Income Fund,
Inc. (File No. 33-33799), 1/31/92, and refiled with
Post-Effective Amendment No. 7 to the Registration
Statement of Oppenheimer Global Growth & Income Fund
(Reg. No. 33-33799), 12/1/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(iii) Form of Tax Sheltered Retirement Plan and Custody
Agreement for Employees of Public Schools and Tax
Exempt Organizations: Filed with Post-Effective
Amendment No. 47 to the Registration Statement of
Oppenheimer Growth Fund (Reg. No. 2-45272), 10/21/94,
and incorporated herein by reference.
(iv) Form of Simplified Employee Pension IRA: Filed as an
Exhibit to Post-Effective Amendment No. 42 to the
Registration Statement of Oppenheimer Equity Income
Fund (Reg. No. 2-33043), 10/28/94, and incorporated
herein by reference.
(v) Form of SAR-SEP Simplified Employee Pension IRA: Filed
with Post-Effective Amendment No. 19 to the
Registration Statement for Oppenheimer Integrity Funds
(Reg. No. 2-76547), 3/1/94, and incorporated herein by
reference.
15. (i) Service Plan and Agreement for Class A shares of
Registrant dated 6/10/93: Filed with Post-Effective
Amendment No. 28, 4/29/94, and incorporated herein by
reference.
(ii) Distribution and Service Plan for Class B shares of
Registrant dated 11/1/95: To be filed by Amendment.
(iii) Distribution and Service Plan for Class C shares of
Registrant dated 12/1/93: Filed with Post-Effective
Amendment No. 27 to Registrant's Registration
Statement, 3/2/94, and incorporated herein by
reference.
16. Performance Data Computation Schedule - To be filed by
Amendment.
17. Financial Data Schedule for:
(i) Class A shares: To be filed by Amendment.
(ii) Class B shares: N/A.
(iii) Class C shares: To be filed by Amendment.
-- Powers of Attorney (including certified resolutions of
Registrant's Board of Trustees): Filed with Registrant's
Post-Effective Amendment No. 28, 4/29/94, and incorporated
herein by reference.
18. Not applicable.
Item 25. Persons Controlled by and Under Common Control with Registrant
--------------------------------------------------------------
None
Item 26. Number of Holders of Securities
-------------------------------
Number of Record Holders
Title of Class as of ___________, 1995
-------------- ------------------------
Class A Shares of Beneficial
Interest
Class B Shares of Beneficial
Interest
Class C Shares of Beneficial
Interest
Item 27. Indemnification
---------------
Reference is made to the provisions of Article SEVENTH of Registrant's
Declaration of Trust filed as an exhibit to this Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons
of Registrant pursuant to the foregoing provisions or otherwise,
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid by a
trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee,
officer or controlling person, Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts
A and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals Fund and
Oppenheimer Global Emerging Growth Fund.
Victor Babin, None.
Senior Vice President
Robert J. Bishop Assistant Treasurer of the OppenheimerFunds
Assistant Vice President (listed below); previously a Fund Controller
for Oppenheimer Management Corporation (the
"Manager").
Bruce Bartlett Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc. and
Oppenheimer Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager at First of America
Investment Corp.
George Bowen Treasurer of the New York-based
Senior Vice President OppenheimerFunds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
OppenheimerFunds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
adviser subsidiary of the Manager; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers; formerly Senior Vice President/
Comptroller and Secretary of Oppenheimer
Asset Management Corporation ("OAMC"), an
investment adviser which was a subsidiary of
the OMC.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Vice President Formerly Vice President\Director of Internal
Audit of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
SeniorVice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer
Variable Account Funds and Oppenheimer
Target Fund; Senior Vice President and
Portfolio Manager of Strategic Income &
Growth Fund.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President OppenheimerFunds; Vice President of the
& General Counsel Denver-based OppenheimerFunds; Executive
Vice President, Director and General Counsel
of the Distributor; formerly Senior Vice
President and Associate General Counsel of
the Manager and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the OppenheimerFunds;
Assistant Vice President previously a Fund Controller for the
Manager.
Katherine P.Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board, Acquisition Corp. ("OAC"), the Manager's
Chief Executive Officer parent holding company; President, CEO and
and Director a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
OppenheimerFunds; formerly President of the
Manager. President and Chairman of the Board
of Main Street Advisers, Inc.
Robert G. Galli, Trustee of the New York-based
Vice Chairman OppenheimerFunds; Vice President and Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of HarbourView
and Centennial, a director of SFSI and SSI,
an officer of other OppenheimerFunds and
Executive Vice President & General Counsel
of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Bond Fund and
Oppenheimer Intermediate Tax Exempt Bond
Fund; an officer of other OppenheimerFunds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Bennett Inkeles, Formerly employed by Doremus & Company, an
Assistant Vice President advertising agency.
Stephen Jobe, None.
Vice President
Heidi Kagan, None.
Assistant Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund; Associate Portfolio
Manager of Oppenheimer Discovery Fund and
Oppenheimer Time Fund. Formerly a
Securities Analyst for Columbus Circle
Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director of HarbourView; Director of Main
President and Director Street Advisers, Inc.; and Chairman of
Shareholder Services, Inc.
Sally Marzouk, None.
Vice President
Marilyn Miller, Formerly a Director of marketing for
Vice President TransAmerica Fund Management Company.
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund, Oppenheimer
Multiple Strategies Fund, Oppenheimer
Strategic Investment Grade Bond Fund,
Oppenheimer Asset Allocation Fund,
Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Short-Term Income
Fund, Oppenheimer High Income Fund and
Oppenheimer Bond Fund; an officer of other
OppenheimerFunds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Bond Fund, Oppenheimer Intermediate Tax-
Exempt Bond Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer New Jersey Tax-
Exempt Fund, Oppenheimer Pennsylvania Tax-
Exempt Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York Tax-Exempt
Fund and Oppenheimer Tax-Free Bond Fund;
Vice President of the New York Tax-Exempt
Income Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund and
Portfolio Manager for Oppenheimer Variable
Account Funds-Growth Fund; Senior Investment
Officer and Portfolio Manager with Chemical
Bank.
Russell Read, Formerly an International Finance Consultant
Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust; an officer of other
OppenheimerFunds; formerly a Securities
Analyst for the Manager.
David Robertson, None.
Vice President
Adam Rochlin, Formerly a Product Manager for Metropolitan
Assistant Vice President Life Insurance Company.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund and
Oppenheimer U.S. Government Trust. Formerly
Vice President and Senior Portfolio Manager
for Delaware Investment Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
Strategies Fund; an officer of other
OppenheimerFunds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
James Ruff, None.
Executive Vice President
Ellen Schoenfeld, None.
Assistant Vice President
Diane Sobin, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc. and
Oppenheimre Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager for Dean Witter
InterCapital, Inc.
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus OppenheimerFunds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Investment Grade Bond
Fund, Oppenheimer Strategic Short-Term
Income Fund; an officer of other
OppenheimerFunds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion High Yield Fund and
Oppenheimer High Yield Fund; an officer of
other OppenheimerFunds.
John Stoma, Vice President Formerly Vice President of Pension Marketing
with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors OppenheimerFunds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund. Formerly
Managing Director
of Buckingham Capital Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Ashwin Vasan, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust: an officer of other
OppenheimerFunds.
Valerie Victorson, None.
Vice President
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Centennial
America Fund, L.P., Centennial Government
Trust and Centennial Money Market Trust;
Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
OppenheimerFunds.
Susan Wilson-Perez, None.
Vice President
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc.,
Centennial America Fund, L.P., Centennial
Government Trust, Centennial Money Market
Trust and Daily Cash Accumulation Fund,
Inc.; Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President of
Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the OppenheimerFunds;
and Assistant Secretary Assistant Secretary of SSI, SFSI; an officer
of other OppenheimerFunds.
Eva A. Zeff, An officer of certain OppenheimerFunds;
Assistant Vice President formerly a Securities Analyst for the
Manager.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
OppenheimerFunds.
</TABLE>
The OppenheimerFunds include the New York-based OppenheimerFunds
and the Denver-based OppenheimerFunds set forth below:
New York-based OppenheimerFunds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based OppenheimerFunds
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based OppenheimerFunds, Oppenheimer Funds Distributor, Inc., Harbourview
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based OppenheimerFunds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Shareholder Services, Centennial Asset Management Corporation, Centennial
Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
Item 29. Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in Part A and B of
this Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Treasurer
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Mary Crooks+ Vice President None
Paul Della Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary
President & Director
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Wendy Fishler* Vice President - None
Financial Institution Div.
Wayne Flanagan Vice President - None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Senior Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Hans Klehmet II Vice President None
26542 Love Lane
Ramona, CA 92065
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
664 Circuit Road
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
Paul Stickney Vice President None
1314 Log Cabin Lane
St. Louis, MO 63124
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President - None
3410 South Galena Street Financial Institution Div.
Executive Suites - 3rd Fl.
Denver, CO 80231
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
Bernard J. Wolocko Vice President None
33915 Grand River
Farmington, MI 48335
William Harvey Young+ Vice President None
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
--------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of Oppenheimer
Management Corporation, at its offices at 3410 South Galena Street,
Denver, Colorado 80231.
Item 31. Management Services
-------------------
Not applicable.
Item 32. Undertakings
------------
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 29th day of August, 1995.
OPPENHEIMER TARGET FUND
By: /s/ Donald W. Spiro*
----------------------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Leon Levy* Chairman of the August 29, 1995
- -------------- Board of Trustees
Leon Levy
/s/ Donald W. Spiro* Chief Executive August 29, 1995
- -------------------- Officer and
Donald W. Spiro Trustee
/s/ George Bowen* Chief Financial August 29, 1995
- ----------------- and Accounting
George Bowen Officer
/s/ Leo Cherne* Trustee August 29, 1995
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee August 29, 1995
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee August 29, 1995
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee August 29, 1995
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee August 29, 1995
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee August 29, 1995
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee August 29, 1995
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee August 29, 1995
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee August 29, 1995
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee August 29, 1995
- -----------------------
Clayton K. Yeutter
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
</TABLE>
<PAGE>
OPPENHEIMER TARGET FUND
Exhibit Index
Item No. Description of Document
- -------- -----------------------
24(b)(1) Amended and Restated Declaration of Trust dated 8/21/95
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OPPENHEIMER TARGET FUND
This AMENDED AND RESTATED DECLARATION OF TRUST, made as of August 21,
1995, by and among the individuals executing this Amended and Restated
Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer Target Fund (the
"Trust"), a trust fund under the laws of the Commonwealth of Massachusetts
for the investment and reinvestment of funds contributed thereto under a
Declaration of Trust dated February 25, 1987;
WHEREAS, the Trustees desire to make certain permitted changes to
said Declaration of Trust;
WHEREAS, the Trustees desire to further amend such Declaration of
Trust, as amended, without shareholder approval, as permitted under
ARTICLE FOURTH, to delete the specific reference to any class of shares
and to permit the addition of a class of shares without requiring further
amendment of this Declaration of Trust;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall henceforth be held and
managed under this Amended and Restated Declaration of Trust IN TRUST as
herein set forth below.
FIRST: This Trust shall be known as OPPENHEIMER TARGET FUND. The
address of the Trust is Two World Trade Center, New York, New York 10048-
0203. The Registered Agent for Service in Massachusetts is Massachusetts
Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111, Attention: Stephen Kuhn, Esq.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust that are defined in
the 1940 Act (defined /below) shall have the meanings given to them in the
1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the Board
of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from time to
time.
4. "Class" means a class of a series of Shares (as defined below) of
the Trust established and designated under or in accordance with the
provisions of Article FOURTH.
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" means this Amended and Restated
Declaration of Trust as it may be amended or restated from time to time.
7. The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations of the Commission thereunder, all as amended
from time to time.
8. "Series" refers to series of Shares of the Trust established and
designated under or in accordance with the provisions of Article FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust or any Series or Class of the
Trust (as the context may require) shall be divided from time to time and
includes fractions of Shares as well as whole Shares.
11. The "Trust" refers to the Massachusetts business trust created
by this Declaration of Trust, as amended or restated from time to time.
12. "Trustees" refers to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors for
the time being in office as such trustees.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
financial futures contracts, indexes, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein,
or in any property or assets) created or issued by any issuer (which term
"issuer" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof be deemed to include any persons,
firms, associations, corporations, syndicates, combinations,
organizations, governments, or subdivisions thereof) and in financial
instruments (whether they are considered as securities or commodities);
and to exercise, as owner or holder of any securities or financial
instruments, all rights, powers and privileges in respect thereof; and to
do any and all acts and things for the preservation, protection,
improvement and enhancement in value of any or all such securities or
financial instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings, to the extent permitted by the 1940 Act and
by the Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such Series and Classes and
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including without limitation thereto,
securities) now or hereafter permitted by the laws of the Commonwealth of
Massachusetts and by this Declaration of Trust, as the Trustees may
determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any
Series or Class into one or more Series or Classes that may have been
established and designated from time to time, all without the vote or
consent of the Shareholders of the Trust, in any manner and to the extent
now or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in New York, Colorado and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or to the extent now or
hereafter permitted by the laws of Massachusetts, as a member of, or as
the owner or holder of any stock of, or share of interest in, any issuer,
and in connection therewith or make or enter into such deeds or contracts
with any issuers and to do such acts and things and to exercise such
powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of a similar or dissimilar
nature, not expressed; provided, however, that the Trust shall not carry
on any business, or exercise any powers, in any state, territory, district
or country except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into
Shares, all without par value, but the Trustees shall have the authority
from time to time, without obtaining shareholder approval, to create one
or more Series of Shares in addition to the Series specifically
established and designated in part 3 of this Article FOURTH, and to divide
the shares of any Series into two or more Classes pursuant to Part 2 of
this Article FOURTH, all as they deem necessary or desirable, to establish
and designate such Series and Classes, and to fix and determine the
relative rights and preferences as between the different Series or Classes
of Shares as to right of redemption and the price, terms and manner of
redemption, liabilities and expenses to be borne by any Series or Class,
special and relative rights as to dividends and other distributions and
on liquidation, sinking or purchase fund provisions, conversion on
liquidation, conversion rights, and conditions under which the several or
Classes of Shares shall have individual voting rights or no voting rights.
Except as aforesaid, all Shares of the different Series shall be
identical.
(a) The number of authorized Shares and the number of Shares
of each Series and each Class of a Series that may be issued is unlimited,
and the Trustees may issue Shares of any Series or Class of any Series for
such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without
action or approval of the Shareholders. All Shares when so issued on the
terms determined by the Trustees shall be fully paid and non-assessable.
The Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series into one or more Series or
Classes of Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares
of any Series reacquired by the Trust.
(b) The establishment and designation of any Series or any
Class of any Series in addition to that established and designated in part
3 of this Article FOURTH shall be effective upon the execution by a
majority of the Trustees of an instrument setting forth such establishment
and designation and the relative rights and preferences of such Series or
such Class of such Series or as otherwise provided in such instrument.
At any time that there are no Shares outstanding of any particular Series
previously established and designated, the Trustees may by an instrument
executed by a majority of their number abolish that Series and the
establishment and designation thereof. Each instrument referred to in
this paragraph shall be an amendment to this Declaration of Trust, and the
Trustees may make any such amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold
and dispose of Shares of any Series or Class of any Series of the Trust
to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued
and sold and may purchase Shares of any Series or Class of any Series from
any such person or any such organization subject only to the general
limitations, restrictions or other provisions applicable to the sale or
purchase of Shares of such Series or Class generally.
2. The Trustees shall have the authority from time to time, without
obtaining shareholder approval, to divide the Shares of any Series into
two or more Classes as they deem necessary or desirable, and to establish
and designate such Classes. In such event, each Class of a Series shall
represent interests in the designated Series of the Trust and have such
voting, dividend, liquidation and other rights as may be established and
designated by the Trustees. Expenses related directly or indirectly to
the Shares of a Class of a Series may be borne solely by such Class (as
shall be determined by the Trustees) and, as provided in Article FIFTH,
a Class of a Series may have exclusive voting rights with respect to
matters relating solely to such Class. The bearing of expenses solely by
a Class of Shares of a Series shall be appropriately reflected (in the
manner determined by the Trustees) in the net asset value, dividend and
liquidation rights of the Shares of such Class of a Series. The division
of the Shares of a Series into Classes and the terms and conditions
pursuant to which the Shares of the Classes of a Series will be issued
must be made in compliance with the 1940 Act. No division of Shares of
a Series into Classes shall result in the creation of a Class of Shares
having a preference as to dividends or distributions or a preference in
the event of any liquidation, termination or winding up of the Trust, to
the extent such a preference is prohibited by Section 18 of the 1940 Act
as to the Trust.
The relative rights and preferences of Shares of different
Classes shall be the same in all respects except that, unless and until
the Board of Trustees shall determine otherwise: (i) when a vote of
Shareholders is required under this Declaration of Trust or when a meeting
of Shareholders is called by the Board of Trustees, the Shares of a Class
shall vote exclusively on matters that affect that Class only, (ii) the
expenses related to a Class shall be borne solely by such Class (as
determined and allocated to such Class by the Trustees from time to time
in a manner consistent with parts 2 and 3 of this Article FOURTH); and
(iii) pursuant to paragraph 10 of Article NINTH, the Shares of each Class
shall have such other rights and preferences as are set forth from time
to time in the then-effective Prospectus and/or Statement of Additional
Information relating to the Shares. Dividends and distributions on one
class may differ from the dividends and distributions on another Class,
and the net asset value of the Shares of one Class may differ from the net
asset value of the Shares of another Class.
3. Without limiting the authority of the Trustees set forth in part
1 of this Article FOURTH to establish and designate any further Series,
the Trustees hereby establish one Series of Shares having the same name
as the Trust, said shares shall be divided into such number of classes as
shall be set forth from time to time in the then effective Prospectus
and/or Statement of Additional Information relating to the Fund. The
Shares of that Series and any Shares of any further Series or Classes that
may from time to time be established and designated by the Trustees shall
(unless the Trustees otherwise determine with respect to some further
Series or Classes at the time of establishing and designating the same)
have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received
by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any reinvestment of
such proceeds, in whatever form the same may be, together with any General
Items allocated to that Series as provided in the following sentence, are
herein referred to as "assets belonging to" that Series. In the event
that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively "General Items"), the
Trustees shall allocate such General Items to and among any one or more
of the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series for all
purposes.
(b) (1)Liabilities Belonging to Series. The assets belonging
to each particular Series shall be charged with the liabilities of the
Trust in respect of that Series and all expenses, costs, charges and
reserves attributable to that Series. Any general liabilities, expenses,
costs, charges and reserves of the Trust which are not identifiable as
belong to any particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series established and
designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges and reserves allocated and so
charged to each Series are herein referred to as "liabilities belonging
to" that Series. Each allocation of liabilities, expenses, costs, charges
and reserves by the Trustees shall be conclusive and binding upon the
shareholders of all Series for all purposes.
(2) Liabilities Belonging to a Class. If a Series is
divided into more than one Class, the liabilities, expenses, costs,
charges and reserves attributable to a Class shall be charged and
allocated to the Class to which such liabilities, expenses, costs, charges
or reserves are attributable. Any general liabilities, expenses, costs,
charges or reserves belonging to the Series which are not identifiable as
belonging to any particular Class shall be allocated and charged by the
Trustees to and among any one or more of the Classes established and
designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
allocations described in the two preceding sentences shall be subject to
the 1940 Act and any release, rule, regulation, interpretation or order
thereunder relating to such allocations. The liabilities, expenses,
costs, charges and reserves allocated and so charged to each Class are
herein referred to as "liabilities belonging to" that Class. Each
allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the holders of all Classes
for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series or Class may be paid to the holders of Shares of that
Series or Class, with such frequency as the Trustees may determine, which
may be daily or otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine, from such of the income and capital gains, accrued or realized,
from the assets belonging to that Series, as the Trustees may determine,
after providing for actual and accrued liabilities belonging to such
Series or Class. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the
Shareholders of such Series or Class in proportion to the number of Shares
of such Series or Class held by such Shareholders at the date and time of
record established for the payment of such dividends or distributions,
except that in connection with any dividend or distribution program or
procedure the Trustees may determine that no dividend or distribution
shall be payable on Shares as to which the Shareholder's purchase order
and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination thereof as
determined by the Trustees or pursuant to any program that the Trustees
may have in effect at the time for the election by each Shareholder of the
mode of the making of such dividend or distribution to that Shareholder.
Any such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with paragraph 13 of
Article SEVENTH.
(d) Liquidation. In the event of the liquidation or
dissolution of the Trust, the Shareholders of each Series and all Classes
of each Series that have been established and designated shall be entitled
to receive, as a Series or Class, when and as declared by the Trustees,
the excess of the assets belonging to that Series over the liabilities
belonging to that Series or Class. The assets so distributable to the
Shareholders of any particular Class and Series shall be distributed among
such Shareholders in proportion to the number of Shares of such Class of
that Series held by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series or Class
shall be transferable, but transfers of Shares of a particular Class or
Series will be recorded on the Share transfer records of the Trust
applicable to such Series or Class only at such times as Shareholders
shall have the right to require the Trust to redeem Shares of such Series
or Class and at such other times as may be permitted by the Trustees.
(f) Equality. All Shares of each Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to such Series or any Class of that
Series), and each Share of any particular Series shall be equal to each
other Share of that Series and Shares of each Class of a Series shall be
equal to each other Share of such Class; but the provisions of this
sentence shall not restrict any distinctions permissible under this
Article FOURTH that may exist with respect to Shares of a Series or the
different Classes of a Series. The Trustees may from time to time divide
or combine the Shares of any particular Class or Series into a greater or
lesser number of Shares of that Class or Series without thereby changing
the proportionate beneficial interest in the assets belonging to that
Class or Series or in any way affecting the rights of Shares of any other
Class or Series.
(g) Fractions. Any fractional Share of any Class and Series,
if any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Class and Series,
including those rights and obligations with respect to voting, receipt of
dividends and distributions, redemption of Shares, and liquidation of the
Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that (i) holders of Shares of any Series shall have the right to
exchange said Shares into Shares of one or more other Series of Shares,
(ii) holders of shares of any Class shall have the right to exchange said
Shares into Shares of one or more other Classes of the same or a different
Series, and/or (iii) the Trust shall have the right to carry out exchanges
of the aforesaid kind, in each case in accordance with such requirements
and procedures as may be established by the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Class and Series that has been established and designated. No
certification certifying the ownership of Shares need be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as
to who are the Shareholders and as to the number of Shares of each Class
and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other
person to accept orders for the purchase or sale of Shares that conform
to such authorized terms and to reject any purchase or sale orders for
Shares whether or not conforming to such authorized terms.
FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the
election of Trustees when that issue is submitted to them, (b) with
respect to the amendment of this Declaration of Trust except where the
Trustees are given authority to amend the Declaration of Trust without
shareholder approval, (c) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders, and (d) with
respect to those matters relating to the Trust as may be required by the
1940 Act or required by law, by this Declaration of Trust, or the By-Laws
of the Trust or any registration statement of the Trust filed with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust will not hold shareholder meetings unless required by
the 1940 Act, the provisions of this Declaration of Trust, or any other
applicable law.
3. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote on each matter submitted to a vote of the
Shareholders of the affected Series for each Share standing in his name
on the books of the Trust on the date, fixed in accordance with the By-
Laws, for determination of Shareholders of the affected Series entitled
to vote at such meeting (except, if the Board so determines, for Shares
redeemed prior to the meeting), and each such Series shall vote separately
("Individual Series Voting"); a Series shall be deemed to be affected when
a vote of the holders of that Series on a matter is required by the 1940
Act; provided, however, that as to any matter with respect to which a vote
of Shareholders is required by the 1940 Act or by any applicable law that
must be complied with, such requirements as to a vote by Shareholders
shall apply in lieu of Individual Series Voting as described above. If
the shares of a Series shall be divided into Classes as provided in
Article FOURTH, the shares of each Class shall have identical voting
rights except that the Trustees, in their discretion, may provide a Class
of a Series with exclusive voting rights with respect to matters which
relate solely to such Classes. If the Shares of any Series shall be
divided into Classes with a Class having exclusive voting rights with
respect to certain matters, the quorum and voting requirements described
below with respect to action to be taken by the Shareholders of the Class
of such Series on such matters shall be applicable only to the Shares of
such Class. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the right to
receive dividends. The presence in person or by proxy of the holders of
one-third of the Shares, or of the Shares of any Series or Class of any
Series, outstanding and entitled to vote thereat shall constitute a
quorum at any meeting of the Shareholders or of that Series or Class,
respectively; provided however, that if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires an affirmative
vote of a majority, or more than a majority, of the shares outstanding and
entitled to vote, then in such event the presence in person or by proxy
of the holders of a majority of the shares outstanding and entitled to
vote at such a meeting shall constitute a quorum for all purposes. If at
any meeting of the Shareholders there shall be less than a quorum present,
the Shareholders or the Trustees present at such meeting may, without
further notice, adjourn the same from time to time until a quorum shall
attend, but no business shall be transacted at any such adjourned meeting
except such as might have been lawfully transacted had the meeting not
been adjourned.
4. Each Shareholder of a Series or Class, upon request to the Trust
in proper form determined by the Trust, shall be entitled to require the
Trust to redeem from the net assets of that Series or Class all or part
of the Shares of such Series or Class standing in the name of such
Shareholder. The method of computing such net asset value, the time at
which such net asset value shall be computed and the time within which the
Trust shall make payment therefor, shall be determined as hereinafter
provided in Article SEVENTH of this Declaration of Trust. Notwithstanding
the foregoing, the Trustees, when permitted or required to do so by the
1940 Act, may suspend the right of the Shareholders to require the Trust
to redeem Shares.
5. No Shareholder shall, as such holder, have any right to purchase
or subscribe for any security of the Trust which it may issue or sell,
other than such right, if any, as the Trustees, in their discretion, may
determine.
6. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
SIXTH:
1. The persons who shall act as initial Trustees until the first
meeting or until their successors are duly chosen and qualify are the
initial trustees executing this Declaration of Trust or any counterpart
thereof. However, the By-Laws of the Trust may fix the number of Trustees
at a number greater or lesser than the number of initial Trustees and may
authorize the Trustees to increase or decrease the number of Trustees, to
fill any vacancies on the Board which may occur for any reason including
any vacancies created by any such increase in the number of Trustees, to
set and alter the terms of office of the Trustees and to lengthen or
lessen their own terms of office or make their terms of office of
indefinite duration, all subject to the 1940 Act. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be
Shareholders.
2. A Trustee at any time may be removed either with or without cause
by resolution duly adopted by the affirmative vote of the holders of two-
thirds of the outstanding Shares, present in person or by proxy at any
meeting of Shareholders called for such purpose; such a meeting shall be
called by the Trustees when requested in writing to do so by the record
holders of not less than ten per centum of the outstanding Shares. A
Trustee may also be removed by the Board of Trustees as provided in the
By-Laws of the Trust.
3. The Trustees shall make available a list of names and addresses
of all Shareholders as recorded on the books of the Trust, upon receipt
of the request in writing signed by not less than ten Shareholders (who
have been shareholders for at least six months) holding shares of the
Trust valued at not less than $25,000 at current offering price (as
defined in the Trust's Prospectus and\or Statement of Additional
Information) or holding not less than 1% in amount of the entire amount
of Shares issued and outstanding; such request must state that such
Shareholders wish to communicate with other shareholders with a view to
obtaining signatures to a request for a meeting to take action pursuant
to part 2 of this Article SIXTH and be accompanied by a form of
communication to the Shareholders. The Trustees may, in their discretion,
satisfy their obligation under this part 3 by either making available the
Shareholder list to such Shareholders at the principal offices of the
Trust, or at the offices of the Trust's transfer agent, during regular
business hours, or by mailing a copy of such communication and form of
request, at the expense of such requesting Shareholders.
4. If and when the Trust has outstanding two or more series of
Shares pursuant to Article FOURTH of this Declaration of Trust, each
Series shall be considered as if it were a separate common law trust
covered by Section 16(c) of the 1940 Act and parts 2 and 3 of this Article
SIXTH. However, the Trust may at any time or from time to time apply to
the Commission for one or more exemptions from all or part of said Section
16(c) of the 1940 Act, and, if an exemptive order or orders are issued
by the Commission, such order or orders shall be deemed part of said
Section 16(c) for the purposes of parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust, the Trustees
and the Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or the
Trustees and shall have accepted this Trust, the Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees,
without any further act or conveyance, and he or she shall be deemed a
Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms
of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets
of the Trust shall at all times be considered as vested in the Trustees.
No Shareholder shall have, as a holder of beneficial interest in the
Trust, any authority, power or right whatsoever to transact business for
or on behalf of the Trust, or on behalf of the Trustees, in connection
with the property or assets of the Trust, or in any part thereof.
4. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute, and to authorize the officers and agents of the Trust to make and
execute, any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business of the Trust and to
amend and repeal them to the extent that they do not reserve that right
to the Shareholders;
(b) to elect and remove such officers and appoint and
terminate such officers as they consider appropriate with or without
cause;
(c) to employ a bank or trust company as custodian of any
assets of the Trust subject to any conditions set forth in this
Declaration of Trust or in the By-Laws;
(d) To retain a transfer agent and shareholder servicing
agent, or both;
(e) To provide for the distribution of Shares either through
a principal underwriter or the Trust itself or both;
(f) To set record dates in the manner provided for in the By-
Laws of the Trust;
(g) to delegate such authority as they consider desirable to
any officers of the Trust and to any agent, custodian or underwriter;
(h) to vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property held in
Trust hereunder; and to execute and deliver powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to securities
or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities held in trust
hereunder;
(j) to hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form,
either in its own name or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the
usual practice of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern,
and to pay calls or subscriptions with respect to any security held in the
Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but
not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws,
distributions of income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted
by the 1940 Act and the Trust's fundamental policy thereunder as to
borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations, partnerships,
trusts, associations or other persons; and
(p) to change the name of the Trust or any Class or Series of
the Trust as they consider appropriate without prior shareholder approval.
5. No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see to
the application of any payments made or property transferred to the
Trustees or upon their order.
6. (a) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription to any Shares or
otherwise. There is hereby expressly disclaimed shareholder liability for
the acts and obligations of the Trust. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust shall include a recitation limiting the obligation
represented thereby to the Trust and its assets (but the omission of such
recitation shall not operate to bind any Shareholder).
(b) Whenever this Declaration of Trust calls for or permits
any action to be taken by the Trustees hereunder, such action shall mean
that taken by the Board of Trustees by vote of the majority of a quorum
of Trustees as set forth from time to time in the By-Laws of the Trust or
as required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the powers herein
contained such as may be necessary or convenient in the conduct of any
business or enterprise of the Trust, to do and perform anything necessary,
suitable, or proper for the accomplishment of any of the purposes, or the
attainment of any one or more of the objects, herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively whether any
moneys, securities, or other properties of the Trust are, for the purposes
of this Trust, to be considered as capital or income and in what manner
any expenses or disbursements are to be borne as between capital and
income whether or not in the absence of this provision such moneys,
securities, or other properties would be regarded as capital or income and
whether or not in the absence of this provision such expenses or
disbursements would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into classes and
prescribe the tenure of office of the several classes, but no class of
Trustee shall be elected for a period shorter than that from the time of
the election following the division into classes until the next meeting
and thereafter for a period shorter than the interval between meetings or
for a period longer than five years, and the term of office of at least
one class shall expire each year.
8. The Shareholders shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by any
committee of the Trustees may be removed at any time, with or without
cause, by vote of the Trustees.
10. If the By-Laws so provide, the Trustees shall have power to
hold their meetings, to have an office or offices and, subject to the
provisions of the laws of Massachusetts, to keep the books of the Trust
outside of said Commonwealth at such places as may from time to time be
designated by them. Action may be taken by the Trustees without a meeting
by unanimous written consent or by telephone or similar method of
communication.
11. Securities held by the Trust shall be voted in person or by
proxy by the President or a Vice-President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12. (a) Subject to the provisions of the 1940 Act, any
Trustee, officer or employee, individually, or any partnership of which
any Trustee, officer or employee may be a member, or any corporation or
association of which any Trustee, officer or employee may be an officer,
director, trustee, employee or stockholder, may be a party to, or may be
pecuniarily or otherwise interested in, any contract or transaction of the
Trust, and in the absence of fraud no contract or other transaction shall
be thereby affected or invalidated; provided that in case a Trustee, or
a partnership, corporation or association of which a Trustee is a member,
officer, director, trustee, employee or stockholder is so interested, such
fact shall be disclosed or shall have been known to the Trustees
or a majority thereof; and any Trustee who is so interested, or who is
also a director, officer, trustee, employee or stockholder of such other
corporation or a member of such partnership or association which is so
interested, may be counted in determining the existence of a quorum at any
meeting of the Trustees which shall authorize any such contract or
transaction, and may vote thereat to authorize any such contract or
transaction, with like force and effect as if he or she were not such
director, officer, trustee, employee or stockholder of such other trust
or corporation or association or a member of a partnership so interested.
(b) Specifically, but without limitation of the foregoing, the
Trust may enter into a management or investment advisory contract or
underwriting contract and other contracts with, and may otherwise do
business with any manager or investment adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or
affiliate of any such manager or investment adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation
relating to the Trust notwithstanding that the Trustees of the Trust may
be composed in part of partners, directors,
officers or employees of any such firm or corporation, and officers of the
Trust may have been or may be or become partners, directors, officers or
employees of any such firm or corporation, and in the absence of fraud the
Trust and any such firm or corporation may deal freely with each other,
and no such contract or transaction between the Trust and any such firm
or corporation shall be invalidated or in any way affected thereby, nor
shall any Trustee or officer of the Trust be liable to the Trust or to any
Shareholder or creditor thereof or to any other person for any loss
incurred by it or him or her solely because of the existence of any such
contract or transaction; provided that nothing herein shall protect any
director or officer of the Trust against any liability to the Trust
or to its security holders to which he or she would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
(c) As used in this paragraph the following terms shall have
the meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former Trustee
or officer of another trust or corporation whose securities are or were
owned by the Trust or of which the Trust is or was a creditor and who
served or serves in such capacity at the request of the Trust, and the
heirs, executors, administrators, successors and assigns of any of the
foregoing; however, whenever conduct by an indemnitee is referred to, the
conduct shall be that of the original indemnitee rather than that of the
heir, executor, administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which an indemnitee
is or was a party or is threatened to be made a party by reason of the
fact or facts under which he or she or it is an indemnitee as defined
above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an indemnitee in connection
with a covered proceeding; and
(v) the term "adjudication of liability" shall mean, as
to any covered proceeding and as to any indemnitee, an adverse
determination as to the indemnitee whether by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any
covered expenses in any covered proceeding if there has been an
adjudication of liability against such indemnitee expressly based on a
finding of disabling conduct.
(e) Except as set forth in paragraph (d) above, the Trust
shall indemnify any indemnitee for covered expenses in any covered
proceeding, whether or not there is an adjudication of liability as to
such indemnitee if a determination has been made that the indemnitee was
not liable by reason of disabling conduct by (1) a final decision on the
merits of the court or other body before which the covered proceeding was
brought; or (2) in the absence of such decision, a reasonable
determination, based on a review of the facts, by either (A) the vote of
a majority of a quorum of Trustees who are neither "interested persons"
as defined in the 1940 Act nor parties to the covered proceedings, or (B)
an independent legal counsel in a written opinion; provided that such
Trustees or counsel, in making such determination, may but need not
presume the absence of disabling conduct on the part of the indemnitee by
reason of the manner in which the covered proceeding was terminated.
(f) Covered expenses incurred by an indemnitee in connection
with a covered proceeding shall be advanced by the Trust to an indemnitee
prior to the final disposition of a covered proceeding upon the request
of the indemnitee for such advance and the undertaking by or on behalf of
the indemnitee to repay the advance unless it is ultimately determined
that the indemnitee is entitled to indemnification hereunder, but only if
one or more of the following is the case: (i) the indemnitee shall
provide a security for such undertaking; (ii) the Trust shall be insured
against losses arising out of any lawful advances; or (iii) there shall
have been a determination, based on a review of the readily available
facts (as opposed to a full trial-type inquiry) that there is a reason to
believe that the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a written opinion
or by the vote of a majority of a quorum of trustees who are neither
"interested persons" as defined in the 1940 Act nor parties to the covered
proceeding.
(g) Nothing herein shall be deemed to affect the right of the
Trust and/or any indemnitee to acquire and pay for any insurance covering
any or all indemnitees to the extent permitted by the 1940 Act or to
affect any other indemnification rights to which any indemnitee may be
entitled to the extent permitted by the 1940 Act.
13. For purposes of the computation of net asset value, as in this
Declaration of Trust referred to, the following rules shall apply:
(a) The net asset value per Share of any Series, as of the
time of valuation on any day, shall be the quotient obtained by dividing
the value, as at such time, of the net assets of that Series (i.e., the
value of the assets of that Series less its liabilities exclusive of its
surplus) by the total number of Shares of that Series outstanding at such
time. The assets and liabilities of any Series shall be determined in
accordance with generally accepted accounting principles, provided,
however, that in determining the liabilities of any Series there shall be
included such reserves for taxes or contingent liabilities as may be
authorized or approved by the Trustees, and provided further that in
connection with the accrual of any fee or refund payable to or by an
investment advisor of the Trust for such Series, the amount of which
accrual is not definitely determinable as of any time at which the net
asset value of each Share of that Series is being determined due to the
contingent nature of such fee or refund, the Trustees are authorized to
establish from time to time formulae for such accrual, on the basis of the
contingencies in question to the date of such determination, or on such
other bases as the Trustees may establish.
(1) Shares of a Series to be issued shall be
deemed to be outstanding as of the time of the
determination of the net asset value per Share
applicable to such issuance and the net price thereof
shall be deemed to be an asset of that Series;
(2) Shares of a Series to be redeemed by the
Trust shall be deemed to be outstanding until the time
of the determination of the net asset value applicable
to such redemption, and thereupon, and until paid, the
redemption price thereof shall be deemed to be a
liability of that Series; and
(3) Shares of a Series voluntarily purchased or
contracted to be purchased by the Trust pursuant to the
provisions of paragraph 4 of Article FIFTH shall be
deemed to be outstanding until whichever is the later of
(i) the time of the making of such purchase or contract
of purchase, and (ii) the time at which the purchase
price is determined, and thereupon, and until paid, the
purchase price thereof shall be deemed to be a liability
of that Series.
(b) The Trustees are empowered, in their absolute discretion,
to establish other bases or times, or both, for determining the net asset
value per Share of any Series or Class in accordance with the 1940 Act and
to authorize the voluntary purchase by any Series or Class either directly
or through an agent, of Shares of any Series or Class upon such terms and
conditions and for such consideration as the Trustees shall deem advisable
in accordance with any such provision, rule or regulation.
14. Payment of the net asset value per Share of any Class and
Series properly surrendered to it for redemption shall be made by the
Trust within seven days, or as specified in any applicable law or
regulation, after tender of such stock or request for redemption to the
Trust for such purpose together with any additional documentation that may
reasonably be required by the Trust or its transfer agent to evidence the
authority of the tenderor or to make such requests plus any period of time
during which the right of the holders of the shares of such Class of that
Series to require the Trust to redeem such shares has been suspended. Any
such payment may be made in portfolio securities of such Class of that
Series and/or in cash, as the Trustees shall deem advisable, and no
Shareholder shall have a right, other than as determined by the Trustees,
to have Shares redeemed in kind.
15. The Trust shall have the right, at any time and without prior
notice to the Shareholder, to redeem Shares of the Class and Series held
by such Shareholder held in any account registered in the name of such
Shareholder for its current net asset value, if and to the extent that
such redemption is necessary to reimburse either that Series or Class of
the Trust or the distributor (i.e., principal underwriter) of the Shares
for any loss either has sustained by reason of the failure of such
Shareholder to make timely and good payment for Shares purchased or
subscribed for by such Shareholder, regardless of whether such Shareholder
was a Shareholder at the time of such purchase or subscription, subject
to and upon such terms and conditions as the Trustees may from time to
time prescribe.
EIGHTH: The name "Oppenheimer" included in the name of the Trust and
of any Series shall be used pursuant to a royalty-free, non-exclusive
license from Oppenheimer Management Corporation ("OMC"), incidental to and
as part of an advisory, management or supervisory contract which may be
entered into by the Trust with OMC. The license may be terminated by OMC
upon termination of such advisory, management or supervisory contract or
without cause upon 60 days' written notice, in which case neither the
Trust nor any Series or Class shall have any further right to use the name
"Oppenheimer" in its name or otherwise and the Trust, the Shareholders and
its officers and Trustees shall promptly take whatever action may be
necessary to change its name and the names of any Series or Classes
accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or the Shareholder's,
heirs, executors, administrators or other legal representatives or in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust estate to be held harmless
from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind the Trust, the Trust's officers or any Shareholder. All
persons extending credit to, doing business with, contracting with or
having or asserting any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under any such credit,
transaction, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall
be personally liable therefor; notice of such disclaimer shall be given
in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee
against any liability to which such Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee
hereunder.
3. The exercise by the Trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to
the provisions of paragraph 2 of this Article NINTH, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operations of this Declaration of Trust, contracts,
obligations, transactions or any other business the Trust may enter into,
and subject to the provisions of paragraph 2 of this Article NINTH, shall
be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be
required to give any bond as such, nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but subject
to the provisions of sub-sections (a), (b), (c) and (d) of this paragraph
4.
(a) The Trustees, with the favorable vote of the holders of
a majority as defined in the 1940 Act, of the outstanding Shares of any
one or more Series entitled to vote, may sell and convey the assets of
that Series (which sale may be subject to the retention of assets for the
payment of liabilities and expenses) to another issuer for a consideration
which may be or include securities of such issuer. Upon making provision
for the payment of liabilities, by assumption by such issuer or otherwise,
the Trustees shall distribute the remaining proceeds ratably among the
holders of the outstanding Shares of the Series the assets of which have
been so transferred.
(b) The Trustees, with the favorable vote of the holders of
a majority, as defined in the 1940 Act, of the outstanding Shares of any
one or more Series entitled to vote, may at any time sell and convert into
money all the assets of that Series. Upon making provisions for the
payment of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of that Series, the Trustees shall distribute the
remaining assets of that Series ratably among the holders of the
outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of
a majority, as defined in the 1940 Act, of the outstanding Shares of any
one or more Series entitled to vote, may otherwise alter, convert or
transfer the assets of the Series.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and (b),
and in subsection (c) where applicable, the Series the assets of which
have been so transferred shall terminate, and if all the assets of the
Trust have been so transferred, the Trust shall terminate and the Trustees
shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be
cancelled and discharged.
5. The original or a copy of this instrument and of each restated
declaration of trust or instrument supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each supplemental or restated declaration
of trust shall be filed with the Secretary of State of Massachusetts, as
well as any other governmental office where such filing may from time to
time be required. Anyone dealing with the Trust may rely on a certificate
by an officer of the Trust as to whether or not any such supplemental or
restated declarations of trust have been made and as to any matters in
connection with the Trust hereunder, and, with the same effect as if it
were the original, may rely on a copy certified by an officer of the Trust
to be a copy of this instrument or of any such supplemental or restated
declaration of trust. In this instrument or in any such supplemental or
restated declaration of trust, references to this instrument, and all
expressions like "herein", "hereof" and "hereunder" shall be deemed to
refer to this instrument as amended or affected by any such supplemental
or restated declaration of trust. This instrument may be executed in any
number of counterparts, each of which shall be deemed an original.
6. The Trust set forth in this instrument is created under and is to
be governed by and construed and administered according to the laws of the
Commonwealth of Massachusetts. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily exercised
by such a trust.
7. The Board of Trustees is empowered to cause the redemption of the
Shares held in any account if the aggregate net asset value of such Shares
(taken at cost or value, as determined by the Board) has been reduced to
$200 or less upon such notice to the shareholder in question, with such
permission to increase the investment in question and upon such other
terms and conditions as may be fixed by the Board of Trustees in
accordance with the 1940 Act.
8. In the event that any person advances the organizational expenses
of the Trust, such advances shall become an obligation of the Trust
subject to such terms and conditions as may be fixed by, and on a date
fixed by, or determined with criteria fixed by the Board of Trustees, to
be amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of Trust
under any authorization to take action which is permitted by the 1940 Act
or any other applicable law, such action shall be deemed to have been
properly taken if such action is in accordance with the construction of
the 1940 Act or such other applicable law then in effect as expressed in
"no action" letters of the staff of the Commission or any release, rule,
regulation or order under the 1940 Act or any decision of a court of
competent jurisdiction, notwithstanding that any of the foregoing shall
later be found to be invalid or otherwise reversed or modified by any of
the foregoing.
10. Any action which may be taken by the Board of Trustees under
this Declaration of Trust or its By-Laws may be taken by the description
thereof in the then effective Prospectus and/or Statement of Additional
Information relating to the Shares under the Securities Act of 1933 or in
any proxy statement of the Trust rather than by formal resolution of the
Board.
11. Whenever under this Declaration of Trust, the Board of
Trustees is permitted or required to place a value on assets of the Trust,
such action may be delegated by the Board, and/or determined in accordance
with a formula determined by the Board, to the extent permitted by the
1940 Act.
12. If authorized by vote of the Trustees and, if a vote of
Shareholders is required under this Declaration of Trust, the favorable
vote of the holders of a "majority", as defined in the 1940 Act, of the
outstanding Shares entitled to vote, or by any larger vote which may be
required by applicable law in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a Declaration of
Trust supplemental hereto, which thereafter shall form a part hereof; any
such Supplemental or Restated Declaration of Trust may be executed by and
on behalf of the Trust and the Trustees by an officer or officers of the
Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of this 21st day of August, 1995.
/s/ Leo Cherne /s/ Benjamin Lipstein
- -------------- ---------------------
Leo Cherne Benjamin Lipstein
50 East 79th Street 333 East 57th Street
New York, NY 10021 New York, NY 10022
/s/ Edmund T. Delaney /s/ Donald W. Spiro
- --------------------- -------------------
Edmund T. Delaney Donald W. Spiro
5 Gorham Road 399 Ski Trail
Chester, CT 06412 Kinnelon, NJ 07405
/s/ Leon Levy /s/ Pauline Trigere
- ------------- -------------------
Leon Levy Pauline Trigere
One Sutton Place South 525 Park Avenue
New York, NY 10022 New York, NY 10021
/s/ Sidney M. Robbins /s/ Kenneth A. Randall
- --------------------- ----------------------
Sidney M. Robbins Kenneth A. Randall
50 Overlook Road 6 Whittaker's Mill
Ossining, NY 10562 Williamsburg, VA 23185
/s/ Russell S. Reynolds /s/ Elizabeth B. Moynihan
- ----------------------- -------------------------
Russell S. Reynolds Elizabeth B. Moynihan
39 Clapboard Ridge Road 801 Pennsylvania Avenue
Greenwich, CT 06830 Washington, DC 20004
/s/ Clayton K. Yeutter
- ----------------------
Clayton K. Yeutter
1325 Merrie Ridge Road
McLean, VA 22101
