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. 33 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 27 / 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)
/ X / On November 1, 1995, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On ________________, pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On _____________, pursuant to paragraph (a)(2) of Rule 485
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)
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
A Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services,
and those expenses are subtracted from the Fund's assets to calculate
the Fund's net asset value per share. All shareholders therefore pay
those expenses indirectly. Shareholders pay other expenses directly,
such as sales charges and account transaction charges. The following
tables are provided to help you understand your direct expenses of
investing in the Fund and your share of the Fund's operating expenses
that you will bear indirectly. The calculations are based on the
Fund's expenses during its last 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 "About Your
Account" from pages 23 through 33 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
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 management fees in
the table below have been 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%. The Class A Service Plan Fees
would have been 0.10%, and total operating expenses would have been
1.16% for Class A shares, 2.18% for Class B shares and 2.18% for Class
C shares, respectively. 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>
- 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 1, 3, 5 and 10 years:
<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 $72 $98 $136 $203
Class C Shares $32 $68 $116 $249
If you did not redeem your investment, it would incur the following expenses:
1 year 3 years 5 years 10 years*
Class A Shares $69 $94 $120 $196
Class B Shares $22 $68 $116 $203
Class C Shares $22 $68 $116 $249
<FN>
_____________________
* The Class B expenses in years 7 through 10 are based on the Class A
expenses shown above, because the Fund automatically converts your
Class B shares into Class A shares after 6 years. Because of the
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 pay the economic equivalent of an amount greater than the maximum
front-end sales charge allowed under applicable regulatory
requirements. For Class B shareholders, the automatic conversion of
Class B shares to Class A shares is designed to minimize the likelihood
that this will occur. Please refer to "How to Buy Shares - Class B
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 having over $38
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 16 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
growth and income funds and the more conservative 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 10 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 21 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 12 months, respectively, of buying them. 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 21 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 35. The
Fund also offers exchange privileges to other Oppenheimer funds,
described in "How to Exchange Shares" on page 37.
- 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 20. 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, together with the Fund's unaudited financial
statements for the six months ended June 30, 1995. Class B shares were
not publicly offered during the periods shown. Accordingly, no
information on Class B shares is reflected in the table below or in the
Fund's financial statements.
Financial Highlights
<TABLE>
<CAPTION>
Class A Class C
--------------------- --------------------------------------------------
Six Months
Ended Six Months
June 30, Ended
Year Ended
1995 June 30, Year Ended
December 31, 1995 December 31,
(Unaudited) 1994 1993 1992 1991(3) 1990 1989
-------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
<C>
Per Share Operating Data:
Net asset value, beginning of period $22.63 $25.72 $25.25 $23.76 $17.47 $18.26
$16.04
-------- -------- -------- -------- -------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) .10 .20 .13 .16 .27 .39 .59
Net realized and unrealized gain (loss) on investments 4.84 (.11) .86 2.28 6.87 (.78) 2.34
-------- -------- -------- -------- -------- ------- -------
Total income (loss) from investment operations 4.94 .09 .99 2.44 7.14 (.39) 2.93
-------- -------- -------- -------- -------- ------- -------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.20) (.12) (.17) (.18) (.40) (.62) (.26)
Distributions from net realized gain on investments -- (2.98) (.40) (.78) (.67) -- (.09)
-------- -------- -------- -------- -------- ------- -------
Total dividends and distributions to shareholders -- (3.18) (.52) (.95) (.85) (.40) (.71)
Net asset value, end of period $27.57 $22.63 $25.72 $25.25 $23.76 $17.47 $18.26
======== ======== ======== ========
======== ======= =======
Total Return, at Net Asset Value(4) 21.83% .46% 3.93% 10.27% 41.33% (2.13)%
18.31%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $682,737 $301,698 $368,806 $401,256 $369,351 $52,526
$66,050
-------- -------- -------- -------- -------- ------- -------
Average net assets (in thousands) $349,023 $325,003 $383,875 $362,295 $209,596 $56,208
$70,874
-------- -------- -------- -------- -------- ------- -------
Number of shares outstanding at end of period
(in thousands) 24,766 13,331 14,339 15,892 15,546 3,007 3,616
-------- -------- -------- -------- -------- ------- -------
Ratios to average net assets:
Net investment income (loss) 1.34%(5) .72% .47% .69% 1.25% 2.08%
2.93%
Expenses 1.13%(5) 1.16% 1.07% 1.09% 1.17% 1.33% 1.27%
-------- -------- -------- -------- -------- ------- -------
Portfolio turnover rate 42.3%(7) 34.7%(6) 22.9% 42.3% 65.6% 51.2%
68.3%
<CAPTION>
Class C
------------------------------------------------------------------------
Year Ended
December 31, Year Ended
Year Ended 1995 December 31,
1988 1987 1986(2) 1985(2) (Unaudited) 1994(3) 1993(1)
-------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
<C>
Per Share Operating Data:
Net asset value, beginning of period $12.38 $20.49 $19.30 $15.16 $22.50 $25.72
$25.92
-------- -------- -------- -------- -------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) .27 .17 .11 .41 .08 -- (.01)
Net realized and unrealized gain (loss) on investments 3.74 (3.68) 1.46 4.05 4.68 (.15) .31
-------- -------- -------- -------- -------- ------- -------
Total income (loss) from investment operations 4.01 (3.51) 1.57 4.46 4.76 (.15) .30
-------- -------- -------- -------- -------- ------- -------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.31) (.38) (.32) -- (.09) (.10)
Distributions from net realized gain on investments (.09) (4.29) -- -- -- (2.98) (.40)
-------- -------- -------- -------- -------- ------- -------
Total dividends and distributions to shareholders (.35) (4.60) (.38) (.32) -- (3.07) (.50)
Net asset value, end of period $16.04 $12.38 $20.49 $19.30 $27.26 $22.50 $25.72
======== ======== ======== ========
======== ======= =======
Total Return, at Net Asset Value(4) 32.39% (17.95)% 8.28% 29.85% 21.16% (.50)%
1.17%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $68,031 $60,888 $111,417 $118,244 $3,564 $1,066
$8
-------- -------- -------- -------- -------- ------- -------
Average net assets (in thousands) $68,068 $107,475 $128,757 $130,925 $2,108 $467
$6
-------- -------- -------- -------- -------- ------- -------
Number of shares outstanding at end of period
(in thousands) 4,242 4,918 5,437 6,127 131 47 --
-------- -------- -------- -------- -------- ------- -------
Ratios to average net assets:
Net investment income (loss) 1.64% .60% .36% 1.87% .45%(5) (.02)%
(.07)%(5)
Expenses 1.29% 1.16% 1.16% 1.17% 2.02%(5) 2.18%
2.18%(5)
-------- -------- -------- -------- -------- ------- -------
Portfolio turnover rate 108.4% 95.1% 69.9% 118.8% 42.3%(7) 34.7%(6)
22.9%
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to December
31, 1993.
2. During 1986 and 1985, the Fund had average monthly debt outstanding of
$688,172 and $663,262, respectively; the average monthly number of shares
outstanding for the years ended December 31, 1986 and 1985 was 5,799,198 and
7,715,542, respectively, and the average monthly debt per share was $.12 and
$.09 for 1986 and 1985, respectively. The amount of debt outstanding at
December 31, 1985 was $7,000,000.
3. Per share amounts calculated based on the weighted average number of shares
outstanding during the year.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns.
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended December 31, 1994 were $100,706,246 and $210,599,293,
respectively.
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended June 30, 1995 were $104,546,864 and $119,843,084,
respectively.
<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.
- 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.
- 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 investments in any one industry or group of industries.
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. That
percentage limit is a fundamental policy. 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 and interest expense affects the
Fund's share price. 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.
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 basically are options to
purchase stock at set prices that are valid for a limited period of
time. Rights are similar to warrants but normally have a short
duration and are distributed directly by the issuer to its
shareholders. The Fund may invest up to 5% of its total net assets in
warrants or rights. That 5% does not apply to warrants the Fund has
acquired in units with other securities or that are attached to other
securities. No more than 2% of the Fund's net assets may be invested
in warrants that are not listed on the New York or American Stock
Exchanges. For further details about these investments, please refer
to "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.
- 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.
- Investing in 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
securities 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.
- Derivative Investments. In general, a "derivative investment"
is a specially designed investment. Its performance is linked to the
performance of another investment or security, such as an option,
future, index, currency or commodity. The Fund can invest in a number
of different kinds of "derivative investments." They are used in some
cases for hedging purposes and in other cases to enhance total return.
In the broadest sense, exchange-traded options and futures contracts
(discussed in "Hedging," below) may be considered "derivative
investments."
There are special risks in investing in derivative investments.
The company issuing the instrument may fail to pay the amount due on
the maturity of the instrument. Also, the underlying investment or
security on which the derivative is based might not perform the way the
Manager expected it to perform. The performance of derivative
investments may also be influenced by interest rate and stock market
changes in the U.S. and abroad. All of this can mean that the Fund may
realize less principal or income from the investment than expected.
Certain derivative investments held by the Fund may trade in the over-
the-counter market and may be illiquid. Please refer to "Illiquid and
Restricted Securities" for an explanation.
- 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 currently intends to invest
no 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 as a
class on matters that affect that class alone. Shares are freely
transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting
the Fund's investments and handling its day-to-day business. The
Manager carries out its duties, subject to the policies established by
the Board of Trustees, under an investment advisory agreement which
states the Manager's responsibilities. The agreement sets 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 Oppenheimer funds, with assets of more than
$38 billion as of September 30, 1995, and with more than 2.8 million
shareholder accounts. The Manager is owned by Oppenheimer Acquisition
Corp., a holding company that is owned in part by senior officers of
the Manager and controlled by Massachusetts Mutual Life Insurance
Company.
- Portfolio Manager. The Portfolio Manager of the Fund is Robert
C. Doll, Jr. He has been the person principally responsible for the
day-to-day management of the Fund's portfolio since 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 an officer and
portfolio manager for other Oppenheimer funds.
- 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" table on page 4 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
"Oppenheimer funds" managed by the Manager 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 Oppenheimer
funds on an "at-cost" basis. It also acts as the shareholder servicing
agent for the other Oppenheimer funds. 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
over time, depending on market conditions, the composition of the
portfolio, expenses and which class of shares you purchase.
- Total Returns. There are different types of total returns used
to measure the Fund's performance. Total return is the change in value
of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares. The cumulative total return measures the change in
value over the entire period (for example, ten years). An average
annual total return shows the average rate of return for each year in a
period that would produce the cumulative total return over the entire
period. However, average annual total returns do not show the Fund's
actual year-by-year performance.
When total returns are quoted for Class A shares, they reflect the
payment of the current maximum initial sales charge. 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 reflect the effect of the contingent
deferred sales charge. Total returns may also be quoted at net asset
value, without considering the effect of the 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)
1. The average annual total returns and the ending account value in
the graph reflect reinvestment of all dividends and capital gains
distributions and are shown net of the applicable 5.75% maximum initial
sales charge.
2. Class C shares of the Fund were first publicly offered on 12/1/93.
The average annual total returns reflect reinvestment of all dividends
and capital gains distributions. The 1-year return is shown net of the
applicable 1% contingent deferred sales charge.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors three different classes
of shares. The different classes of shares represent investments in the
same portfolio of securities but are subject to different expenses and
will likely have different share prices.
- Class A Shares. If you buy Class A shares, you may pay an
initial sales charge on investments up to $1 million (up to $500,000
for purchases by OppenheimerFunds prototype 401(k) plans). If you
purchase Class A shares as part of an investment of at least $1 million
($500,000 for OppenheimerFunds prototype 401(k) plans) in shares of one
or more Oppenheimer funds, you will not pay an initial sales charge,
but if you sell any of those shares within 18 months of buying them,
you may pay a contingent deferred sales charge. The amount of that
sales charge will vary depending on the amount you invested. Sales
charge rates are described in "Buying Class A Shares" below.
- Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within six
years, you will normally pay a contingent deferred sales charge. That
sales charge varies depending on how long you own your shares. Please
refer to "Buying Class B shares" below.
- Class C Shares. If you buy Class C shares, you pay no sales
charge at the time of purchase, but if you sell your shares within 12
months of buying them, you will normally pay a contingent deferred
sales charge of 1%. Please refer to "Buying Class C Shares" below.
Which Class of Shares Should You Choose? Once you decide that the Fund
is an appropriate investment for you, the decision as to which class of
shares is better suited to your needs depends on a number of factors
which you should discuss with your financial advisor. The Fund's
operating costs that apply to a class of shares and the effect of the
different types of sales charges on your investment will vary your
investment results over time. The most important factors are how much
you plan to invest and how long you plan to hold your investment. If
your goals and objectives change over time and you plan to purchase
additional shares, you should re-evaluate those factors to see if you
should consider another class of shares.
In the following discussion, to help provide you and your
financial advisor with a framework in which to choose a class, we have
made some assumptions using a hypothetical investment in the Fund. We
used the sales charge rates that apply to Class A, Class B and Class C
considering the effect of the annual asset-based sales charge on Class
B and Class C expenses (which, like all expenses, will affect your
investment return). For the sake of comparison, we have assumed that
there is a 10% rate of appreciation in the investment each year. Of
course, the actual performance of your investment cannot be predicted
and will vary, based on the Fund's actual investment returns and the
operating expenses borne by each class of shares, and which class you
invest in. The factors discussed below are not intended to be
investment advice or recommendations, because each investor's financial
considerations are different. The discussion below of the factors to
consider in purchasing a particular class of shares assumes that you
will purchase only one class of shares and not a combination of shares
of different classes.
- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, knowing how long
you expect to hold your investment will assist you in selecting the
appropriate class of shares. Because of the effect of class-based
expenses, your choice will also depend on how much you plan to invest.
For example, the reduced sales charges available for larger purchases
of Class A shares may, over time, offset the effect of paying an
initial sales charge on your investment (which reduces the amount of
your investment dollars used to buy shares for your account), compared
to the effect over time of higher class-based expenses on Class B or
Class C shares for which no initial sales charge is paid.
- Investing for the Short Term. If you have a short-term
investment horizon (that is, you plan to hold your shares for not more
than six years), you should probably consider purchasing Class A or
Class C shares rather than Class B shares, because of the effect of the
Class B contingent deferred sales charge if you redeem in less than 7
years, as well as the effect of the Class B asset-based sales charge on
the investment return for that class in the short term. Class C shares
might be the appropriate choice (especially for investments of less
than $100,000), because there is no initial sales charge on Class C
shares, and the contingent deferred sales charge does not apply to
amounts you sell after holding them one year.
However, if you plan to invest more than $100,000 for the shorter
term, then the more you invest and the more your investment horizon
increases toward six years, Class C shares might not be as advantageous
as Class A shares. That is because the annual asset-based sales charge
on Class C shares will have a greater impact on your account over the
longer term than the reduced front-end sales charge available for
larger purchases of Class A shares. For example, Class A shares might
be more advantageous than Class C (as well as Class B) shares for
investments of more than $100,000 expected to be held for 5 or 6 years
(or more). For investments over $250,000 expected to be held 4 to 6
years (or more), Class A shares may become more advantageous than Class
C (and Class B) shares. If investing $500,000 or more, Class A shares
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 Class 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.
Of course all of these examples are based on approximations of the
effect of current sales charges and expenses on a hypothetical
investment over time, assumed annual performance returns stated above,
and you should analyze your options carefully.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available for Class B or Class
C shareholders, you should carefully review how you plan to use your
investment account before deciding which class of shares is better for
you. For example, share certificates are not available for Class B or
Class C shares and if you are considering using 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 of shares 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: that is, to compensate the Distributor for commissions
it pays to dealers and financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any
time with as little as $25. There are reduced minimum investments under
special investment plans.
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension 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 Oppenheimer
funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer Agent), or
by reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, directly through the Distributor or
automatically from your bank account through an Asset Builder Plan
under the OppenheimerFunds AccountLink service. 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, it is recommended 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. You can then 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 Oppenheimer funds) automatically each month from your
account at a bank or other financial institution under an Asset Builder
Plan with AccountLink. Details are on the Application and in the
Statement of Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales
charge that applies) that is next determined after the Distributor
receives the purchase order in Denver. In most cases, to enable you to
receive that day's offering price, the Distributor 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
Oppenheimer funds in the following cases:
- purchases aggregating $1 million or more, or
- purchases by an OppenheimerFunds prototype 401(k) plan that:
(1) buys shares costing $500,000 or more or (2) has, at the time of
purchase, 100 or more eligible participants, or (3) certifies that it
projects to have annual plan purchases of $200,000 or more.
Shares of any of the Oppenheimer funds 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 either (1) the aggregate net asset value of the redeemed
shares (not including shares purchased by reinvestment of dividends or
capital gain distributions) or (2) the original cost of the shares,
whichever is less. However, the Class A contingent deferred sales
charge will not exceed the aggregate commissions the Distributor paid
to your dealer on all Class A shares of all Oppenheimer funds you
purchased subject to the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is
payable, the Fund will first redeem shares that are not subject to the
sales charge, including shares purchased by reinvestment of dividends
and capital gains, and then will redeem other shares in the order that
you purchased them. The Class A contingent deferred sales charge is
waived in certain cases described in "Waivers of Class A Sales Charges"
below.
No Class A contingent deferred sales charge is charged on
exchanges of shares under the Fund's Exchange Privilege (described
below). However, if the shares acquired by exchange are redeemed
within 18 months of the end of the calendar month of the purchase of
the exchanged shares, the contingent deferred sales charge will apply.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of Oppenheimer funds
(other than money market funds) under OppenheimerFunds-sponsored
403(b)(7) custodial plans exceed $5 million per year (calculated per
quarter), will receive monthly one-half of the Distributor's retained
commissions on those sales, and if those sales exceed $10 million per
year, those dealers will receive the Distributor's entire retained
commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of
the following ways:
- Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your
spouse can add together Class A and Class B shares you purchase for
your own accounts, or jointly, or for trust or custodial accounts on
behalf of your children who are minors. A fiduciary can count all
shares purchased for a trust, estate or other fiduciary account
(including one or more employee benefit plans of the same employer)
that has multiple accounts.
Additionally, you can add together current purchases of Class A
and Class B shares of the Fund and other Oppenheimer funds to reduce
the sales charge rate that applies to purchases of Class A shares. You
can also include Class A and Class B shares of Oppenheimer funds you
previously purchased subject to an initial or contingent deferred sales
charge to reduce the sales charge rate for current purchases of Class A
shares, provided that you still hold your investment in one of the
Oppenheimer funds. The value of those shares will be based on the
greater of the amount you paid for the shares or their current value
(at offering price). The Oppenheimer funds are listed in "Reduced
Sales Charges" in the Statement of Additional Information, or a list
can be obtained from the Distributor. The reduced sales charge will
apply only to current purchases and must be requested when you buy your
shares.
- Letter of Intent. Under a Letter of Intent, if you purchase
Class A shares or Class A and Class B shares of the Fund and other
Oppenheimer funds during a 13-month period, you can reduce the sales
charge rate that applies to your purchases of Class A shares. The
total amount of the intended purchases of both Class A and Class B
shares will determine the reduced sales charge rate for the Class A
shares purchased during that period. This can include purchases made
up to 90 days before the date of the Letter. More information is
contained in the Application and in "Reduced Sales Charges" in the
Statement of Additional Information.
- Waivers of Class A Sales Charges. The Class A sales charges
are not imposed in the circumstances described below. There is an
explanation of this policy in "Reduced Sales Charges" in the Statement
of Additional Information.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain Purchasers. Class A shares purchased by the following investors
are not subject to any Class A sales charges:
- the Manager or its affiliates;
- present or former officers, directors, trustees and employees
(and their "immediate families" as defined in "Reduced Sales Charges"
in the Statement of Additional Information) of the Fund, the Manager
and its affiliates, and retirement plans established by them for their
employees;
- registered management investment companies, or separate
accounts of insurance companies having an agreement with the Manager or
the Distributor for that purpose;
- dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
- employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and are
identified to the Distributor) or with the Distributor; the purchaser
must certify to the Distributor at the time of purchase that the
purchase is for the purchaser's own account (or for the benefit of such
employee's spouse or minor children);
- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor providing specifically
for the use of shares of the Fund in particular investment products
made available to their clients (those clients may be charged a
transaction fee by their dealer, broker or adviser for the purchase or
sale of Fund shares); and
- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor to sell shares to
defined contribution employee retirement plans for which the dealer,
broker or investment adviser provides administration services.
Waivers of Initial and Contingent Deferred Sales Charges in
Certain Transactions. Class A shares issued or purchased in the
following transactions are not subject to Class A sales charges:
- shares issued in plans of reorganization, such as mergers,
asset acquisitions and exchange offers, to which the Fund is a party,
or
- shares purchased by the reinvestment of loan repayments by a
participant in a retirement plan for which the Manager or its
affiliates acts as sponsor,
- shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds
(other than Oppenheimer Cash Reserves) or unit investment trusts for
which reinvestment arrangements have been made with the Distributor, or
- shares purchased and paid for with the proceeds of shares
redeemed in the past 12 months from a mutual fund (other than a fund
managed by the Manager or any of its subsidiaries) on which an initial
sales charge or contingent deferred sales charge was paid (this waiver
also applies to shares purchased by exchange of shares of Oppenheimer
Money Market Fund, Inc. that were purchased and paid for in this
manner); this waiver must be requested when the purchase order is
placed for your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver. 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 for
Certain Redemptions. 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 in writing to accept the dealer's
portion of the commission payable on the sale in installments of 1/18th
of the commission per month (and no further commission will be payable
if the shares are redeemed within 18 months of purchase); or
- for distributions from OppenheimerFunds prototype 401(k) plans
for any of the following cases or purposes: (1) following the death or
disability (as defined in the Internal Revenue Code) of the participant
or beneficiary (the death or disability must occur after the
participant's account was established); (2) hardship withdrawals, as
defined in the plan; (3) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (4) to meet the minimum
distribution requirements of the Internal Revenue Code; (5) to
establish "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code, or (6) separation from
service.
- Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for a
portion of its costs incurred in connection with the personal service
and maintenance of 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
at that time 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 Distributor plans to pay the asset-based sales
charge as an ongoing commission to the dealer on Class B shares that
have been outstanding for a year or more.
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 Trustees 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 Charges. The Class B and
Class C contingent deferred sales charges will not be applied to shares
purchased in certain types of transactions nor will it apply to Class B
or 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 B
and Class C contingent deferred sales charges will be waived for
redemptions of shares in the following cases:
- distributions to participants or beneficiaries from Retirement
Plans, if the distributions are made (a) under an Automatic Withdrawal
Plan after the participant reaches age 59-1/2, as long as the payments
are no more than 10% of the account value annually (measured from the
date the Transfer Agent receives the request), or (b) following the
death or disability (as defined in the Internal Revenue Code) of the
participant or beneficiary (the death or disability must have occurred
after the account was established);
- redemptions from accounts other than Retirement Plans following
the death or disability of the last surviving shareholder (the death or
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);
- distributions from OppenheimerFunds prototype 401(k) plans (1)
for hardship withdrawals; (2) under a Qualified Domestic Relations
Order, as defined in the Internal Revenue Code; (3) to meet minimum
distribution requirements as defined in the Internal Revenue Code; (4)
to make "substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code; or (5) for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent deferred sales charge is also waived on Class B and Class C
shares in the following cases:
- shares sold to the Manager or its affiliates;
- shares sold to registered management investment companies or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
- shares issued in plans of reorganization to which the Fund is a
party; or
- shares redeemed in involuntary redemptions as described above.
- 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 Oppenheimer funds account you
have already established by calling the special PhoneLink number.
Please refer to "How to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will send
the proceeds directly to your AccountLink bank account. Please refer
to "How to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans
that enable you to sell shares automatically or exchange them to
another Oppenheimer funds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly, semi-annual or annual
basis. The checks may be sent to you or sent automatically to your bank
account on AccountLink. You may even set up certain types of
withdrawals of up to $1,500 per month by telephone. You should consult
the Application and Statement of Additional Information for more
details.
- Automatic Exchange Plans. You can authorize the Transfer Agent
to exchange automatically an amount you establish in advance for shares
of up to five other Oppenheimer funds on a monthly, quarterly, semi-
annual or annual basis under an Automatic Exchange Plan. The minimum
purchase for each other Oppenheimer funds account is $25. These
exchanges are subject to the terms of the Exchange Privilege, described
below.
Reinvestment Privilege. If you redeem some or all of your Class A or
Class B shares of the Fund, you have up to 6 months to reinvest all or
part of the redemption proceeds in Class A shares of the Fund or other
Oppenheimer funds without paying a sales charge. This privilege
applies to Class A shares that you purchased subject to an initial
sales charge and to Class A 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. Please consult the
Statement of Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your
employer, the plan trustee or administrator must make the purchase of
shares for your retirement plan account. The Distributor offers a
number of different retirement plans that can be used by individuals
and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment; including SAR/SEP-
IRAs
- Pension and Profit-Sharing Plans for self-employed persons and
small business owners
- 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. 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
- A redemption check is not payable to all shareholders listed on
the account statement
- A redemption check is not sent to the address of record on your
account statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as an
Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If
you are signing on behalf of a corporation, partnership or other
business, or as a fiduciary, you must also include your title in the
signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
- Your name
- The Fund's name
- Your Fund account number (from your account statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling,
- The signatures of all registered owners exactly as the account
is registered, and
- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell
shares.
Use the following address for requests by mail:
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. You
may not redeem shares held in an OppenheimerFunds retirement plan or
under a share certificate by telephone.
- To redeem shares through a service representative, call 1-800-
852-8457
- To redeem shares automatically on PhoneLink, call 1-800-533-
3310
Whichever method you use, you may have a check sent to the address
on the account statement, or, if you have linked your Fund account to
your bank account on AccountLink, you may have the proceeds wired to
that bank account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, once in any 7-day period. The check must be
payable to all owners of record of the shares and must be sent to the
address on the account statement. This service is not available within
30 days of changing the address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account
designated when you establish AccountLink. Normally the ACH 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 sent via ACH.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on
behalf of their customers. Brokers or dealers may charge for that
service. Please refer to "Special Arrangements For Repurchase of
Shares From Dealers and Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
Oppenheimer funds at net asset value per share at the time of exchange,
without sales charge. To exchange shares, you must meet several
conditions:
- Shares of the fund selected for exchange must be available for
sale in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of
the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another
fund. At present, Oppenheimer Money Market Fund, Inc., offers only one
class of shares, which are considered "Class A" shares for exchange
purposes. In some cases, sales charges may be imposed on exchange
transactions. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are
registered with the same name(s) and address. Shares held under
certificates may not be exchanged by telephone.
You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1-800-525-7048. That list can
change from time to time.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from
the other fund in the exchange transaction on the same regular business
day on which the Transfer Agent receives an exchange request 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.
- For tax purposes, exchanges of shares involve a redemption of
the shares of the Fund you own and a purchase of the shares of the
other fund, which may result in a capital gain or loss. For more
information about taxes affecting exchanges, please refer to "How to
Exchange Shares" in the Statement of Additional Information.
- If the Transfer Agent cannot exchange all the shares you
request because of a restriction cited above, only the shares eligible
for exchange will be exchanged.
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 day the
Exchange is open by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that are
outstanding. The Fund's Board of Trustees has established procedures
to value the Fund's securities to determine net asset value. In
general, securities values are based on market value. There are
special procedures for valuing illiquid and restricted securities and
obligations for which market values cannot be readily obtained. These
procedures are described more completely in the Statement of Additional
Information.
- The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time the
Board believes it is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone
privileges apply to each owner of the account and the dealer
representative of record for the account unless and until the Transfer
Agent receives cancellation instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other procedures to
confirm that telephone instructions are genuine, by requiring callers
to provide tax identification numbers and other account data or by
using PINs, and by confirming such transactions in writing. If the
Transfer Agent does not use reasonable procedures it may be liable for
losses due to unauthorized transactions, but otherwise neither the
Transfer Agent nor the Fund will be liable for losses or expenses
arising out of telephone instructions reasonably believed to be
genuine. If you are unable to reach the Transfer Agent during periods
of unusual market activity, you may not be able to complete a telephone
transaction and should consider placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From
time to time, the Transfer Agent in its discretion may waive certain of
the requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously or improperly.
- The redemption price for shares will vary from day to day
because the 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 Employer Identification Number when you sign your
application, or if you violate Internal Revenue Service regulations on
tax reporting of income.
- The Fund does not charge a redemption fee, but if your dealer
or broker handles your redemption, they may charge a fee. That fee can
be avoided by redeeming your Fund shares directly through the Transfer
Agent. Under the circumstances described in "How To Buy Shares," you
may be subject to a contingent deferred sales charges when redeeming
certain Class A, Class B and Class C shares.
- To avoid sending duplicate copies of materials to households,
the Fund will mail only one copy of each annual and semi-annual report
to shareholders having the same last name and address on the Fund's
records. However, each shareholder may call the Transfer Agent at 1-
800-525-7048 to ask that copies of those materials be sent personally
to that shareholder.
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 capital gains following the end of
its fiscal year. Long-term capital gains will be separately identified
in the tax information the Fund sends you after the end of the year.
Short-term capital gains are treated as dividends for tax purposes.
There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check
or sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or
have them sent to your bank on AccountLink.
- Reinvest Your Distributions in Another Oppenheimer Funds
Account. You can reinvest all distributions in another Oppenheimer
funds account you have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains
when distributed to shareholders. It does not matter how long you held
your shares. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Distributions are
subject to federal income tax and may be subject to state or local
taxes. Your distributions are taxable when paid, whether you reinvest
them in additional shares or take them in cash. Every year the Fund
will send you and the IRS a statement showing the amount of each
taxable distribution you received in the previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy shares
on or just before the ex-dividend date, or just before the Fund
declares a capital gains distribution, you will pay the full price for
the shares and then receive a portion of the price back as a taxable
dividend or capital gain.
- Taxes on Transactions: Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. Generally speaking,
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. For Class A 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. Class B shares of the Fund were not available during the
fiscal year ended 12/31/94. Accordingly, no information on Class B
shares is included in the graphs. 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 Year 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>
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 Covered 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.
- Risks of Hedging With Options and Futures. 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 offers the Fund potential benefits
not available from investing solely in securities of domestic issuers,
such as the opportunity to invest in foreign issuers that appear to
offer growth potential, or in foreign countries with economic policies
or business cycles different from those of the U.S., 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. In
buying foreign securities, the Fund may convert U.S. dollars into
foreign currency, but only to effect securities transactions on foreign
securities exchanges and not to hold such currency as an investment.
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 where required under
applicable rules of the Securities and Exchange Commission. In buying
foreign securities, the Fund may convert U.S. dollars into foreign
currency, but only to effect securities transactions on foreign
securities exchanges and not to hold such currency as an investment.
- Risks of Foreign Investing. 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.
- Restricted and Illiquid 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 the credit
requirements set by the Fund's Board of Trustees from time to time.
The repurchase 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:
- Invest in companies for the purpose of acquiring control or
management thereof;
- 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;
- 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;
- 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;
- 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";
- 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;
- 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;
- 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
- Invest in interests in oil, gas or mineral exploration leases
or development programs.
For purposes of tho Fund's policy not to concentrate its investments
in any one industry as described 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 Money Market Fund, Inc., Oppenheimer Target
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
(collectively the "New York-based Oppenheimer funds"). Messrs. Spiro,
Bishop, Bowen, Donohue, Farrar and Zack respectively hold the same
offices with the other New York-based Oppenheimer funds as with the
Fund. As of October 6, 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 statement does not
reflect ownership of shares held of record by an employee benefit plan
for employees of the Manager (one of the Trustees of the Fund listed
below, Ms. Macaskill, and one of the officers, Mr. Donohue, are
Trustees of that Plan), 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 Oppenheimer funds 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.
Bridget A. Macaskill, Trustee; Age: 47
President, Chief Executive Officer and a Director of the Manager;
Chairman and a Director of SSI, Vice President and a Director of
OAC; a Director of HarbourView and of Oppenheimer Partnership
Holdings, Inc., a holding company subsidiary of the Manager;
formerly an Executive Vice President of the Manager.
Elizabeth B. Moynihan, Trustee; Age: 66
801 Pennsylvania Avenue, N.W., Washington, 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.
______________________
* A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
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.
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 Oppenheimer funds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor; prior to which he was a 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
Oppenheimer funds.
George C. Bowen, Treasurer; Age: 59
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and SFSI;
an officer of other Oppenheimer funds.
Robert G. Zack, Assistant Secretary; Age: 47
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other Oppenheimer
funds.
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 Oppenheimer funds; 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 Oppenheimer funds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman Co., a bank, and previously a
Senior Fund Accountant for State Street Bank & Trust Company, before
which he was a sales representative for Central Colorado Planning.
- Remuneration of Trustees. The officers of the Fund are
affiliated with the Manager; they and the Trustees of the Fund who are
affiliated with the Manager (Ms. Macaskill and Messrs. Galli and Spiro;
Mr. Spiro are also an officers) receive no salary or fee from the Fund.
The Trustees of the Fund (including Mr. Delaney, a former Trustee, but
excluding Ms. Macaskill and Messrs. Galli and Spiro) received the total
amounts shown below (i) from the Fund, during its fiscal year ended
December 31, 1994, and (ii) from all 17 of the New York-based
Oppenheimer funds (including the Fund) listed in the first paragraph of
this section (and from Oppenheimer Global Environment Fund, Oppenheimer
Mortgage Income Fund and Oppenheimer Time Fund, which ceased operation
following the acquisition of their assets by certain other Oppenheimer
funds).
<TABLE>
<CAPTION>
Aggregate Total Compensation
Compensation From All
Name and from New York-based
Position Fund Oppenheimer Funds1
<S> <C> <C>
Leon Levy $17,233 $141,000.00
Chairman and
Trustee
Leo Cherne $ 8,412 $ 68,800.00
Audit Committee
Member and
Trustee
Edmund T. Delaney $10,536 $ 86,200.00
Study Committee
Member and Trustee2
Benjamin Lipstein $10,536 $ 86,200.00
Study Committee
Member and Trustee
Elizabeth B. Moynihan $ 7,408 $ 60,625.00
Study Committee
Member and Trustee3
Kenneth A. Randall $ 9,584 $ 78,400.00
Audit Committee
Member and Trustee
Edward V. Regan $ 6,874 $ 56,275.00
Audit Committee
Member and Trustee3
Russell S. Reynolds, Jr. $ 6,372 $ 52,100.00
Trustee
Sidney M. Robbins $14,931 $122,100.00
Study Committee
Chairman, Audit
Committee Vice-Chairman
and Trustee
Pauline Trigere $ 6,372 $ 52,100.00
Trustee
Clayton K. Yeutter $ 6,372 $ 52,100.00
Trustee
<FN>
______________________
1 For the 1994 calendar year.
2 Board and committee member positions held during a portion of the
period shown.
3 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 Oppenheimer funds for at least 15 years to be
eligible for the maximum payment. Because each Trustee's retirement
benefits will depend on the amount of the Trustee's future compensation
and length of service, the amount of those benefits cannot be
determined at this time, nor can the Fund estimate the number of years
of credited service that will be used to determine those benefits. No
sums were accrued during the fiscal year ended December 31, 1994 for
the Fund's projected retirement benefit obligations.
- Major Shareholders. As of October 6, 1995, the one entity that
owned of record or was known by the Fund to own beneficially 5% or more
of any class of the Fund's outstanding shares was Merrill Lynch Pierce
Fenner & Smith Inc., 4800 Deer Lake Drive E FL3, Jacksonville, FL
32246-6484, which owned 10,936,000 Class C shares (5.63%).
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 publicly offered 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)
through December 31, 1994 and for the one-year period ending through
December 31, 1994 were 0.66% 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 period from December 1,
1993, (the commencement of the offering of the shares) through December
31, 1994 and for the one-year period ending through December 31, 1994
were 0.66% and -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 performance of 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. The performance of the Fund's Class A,
Class B and Class C shares may also be compared in publications to (i)
performance of various market indices or other investments for which
reliable performance data is available, and (ii) to averages,
performance rankings or other benchmarks prepared by recognized mutual
fund statistical services.
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 Oppenheimer funds, other than
performance rankings of the Oppenheimer funds themselves. Those
ratings or rankings of shareholder/investor services by third parties
may compare the Oppenheimer funds' services to those of other mutual
fund families selected by the rating or ranking services and may be
based upon the opinions of the rating or ranking service itself, based
on its research or judgment, or based upon surveys of investors,
brokers, shareholders or others.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and 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 at no cost to the Fund. The Distributor and the
Manager may, in their sole discretion, increase or decrease the amount
of payments they make from their own resources to Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as 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, all of
which was retained by the Distributor.
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
B and 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 Trustees 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 Trustees 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
Trustees 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 Exchange.
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 Exchange will not be reflected in the Fund's calculation
of net asset value unless the Board of Trustees or the Manager, under
procedures established by the Board of Trustees, determines that the
particular event would materially affect the Fund's net asset value, in
which case an adjustment would be made. Foreign currency, including
forward contracts, will be valued at the closing price in the London
foreign exchange market that day as provided by a reliable bank, dealer
or pricing service. The values of securities denominated in foreign
currency will be converted to U.S. dollars at the closing price in the
London foreign exchange market that day as provided by a reliable bank,
dealer or pricing service. In the case of U.S. government securities
and corporate bonds, where last sale information is not generally
available, such pricing procedures may indue "matrix" comparisons to
the prices for comparable instruments on the basis of quality, yield,
maturity and other special factors involved. The Trustees will monitor
the accuracy of pricing services by comparing prices used for portfolio
evaluation to actual sales prices of selected securities.
Puts, calls and Futures 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 Oppenheimer Funds. 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 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
Oppenheimer International Bond 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 Oppenheimer funds except Money Market Funds (under
certain circumstances described herein, redemption proceeds of Money
Market Fund shares may be subject to a contingent deferred sales
charge).
- Letters of Intent. A Letter of Intent (referred to as a "Letter")
is an investor's statement in writing to the Distributor of the
intention to purchase Class A shares of the Fund (and Class A and Class
B shares of other Oppenheimer funds during a 13-month period (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 of shares which, when added to the investor's holdings of
shares of those funds, will equal or exceed the amount specified in the
Letter. Purchases made by reinvestment of dividends or distributions
of capital gains and purchases made at net asset value without sales
charge do not count toward satisfying the amount of the Letter. A
Letter enables an investor to count the Class A and Class B shares
purchased under the Letter to obtain the reduced sales charge rate on
purchases of Class A shares of the Fund (and other Oppenheimer funds)
that applies under the Right of Accumulation to current purchases of
Class A shares. Each purchase of Class A shares under the Letter will
be made at the public offering price (including the sales charge) that
applies to a single lump-sum purchase of shares in the amount intended
to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not
equal or exceed the intended purchase amount, the investor agrees to
pay the additional amount of sales charge applicable to such purchases,
as set forth in "Terms of Escrow," below (as those terms may be amended
from time to time). The investor agrees that shares equal in value to
5% of the intended purchase amount will be held in escrow by the
Transfer Agent subject to the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the Prospectus, this Statement of
Additional Information and the Application used for such Letter of
Intent, and if such terms are amended, as they may be from time to time
by the Fund, that those amendments will apply automatically to existing
Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the
Transfer Agent will not hold shares in escrow. If the intended
purchase amount under the Letter entered into by an OppenheimerFunds
prototype 401(k) plan is not purchased by the plan by the end of the
Letter of Intent period, there will be no adjustment of commissions
paid to the broker-dealer or financial institution of record for
accounts held in the name of that plan.
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 Oppenheimer funds that were acquired subject to a Class A initial
or contingent deferred sales charge or (ii) Class B shares of one of
the other 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 Oppenheimer funds.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after
the Transfer Agent's receipt of such instructions to implement them.
The Fund reserves the right to amend, suspend, or discontinue offering
such plans at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for
the Fund's shares (for example, when a purchase check is returned to
the Fund unpaid) causes a loss to be incurred when the net asset value
of the Fund's shares on the cancellation date is less than on the
purchase date. That loss is equal to the amount of the decline in the
net asset value per share multiplied by the number of shares in the
purchase order. The investor is responsible for that loss. If the
investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the Distributor for that amount by
redeeming shares from any account registered in that investor's name,
or the Fund or the Distributor may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions
for redemptions set forth in the Prospectus.
- 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 or Class B shares of the Fund that you purchased by
reinvesting dividends or distributions or on which you purchased a
contingent deferred sales charge when you redeemed them. It does not
apply to Class C shares. The reinvestment may be made without sales
charge only in Class A shares of the Fund or any of the other
Oppenheimer funds into which shares of the Fund are exchangeable as
described below, at the net asset value next computed after the
Transfer Agent receives the reinvestment order. The shareholder must
ask the Distributor for such privilege at the time of reinvestment.
Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable
on that gain. If there has been a capital loss on the redemption, some
or all of the loss may not be tax deductible, depending on the timing
and amount of the reinvestment. Under the Internal Revenue Code, if
the redemption proceeds of Fund shares on which a sales charge was paid
are reinvested in shares of the Fund or another of the Oppenheimer
funds within 90 days of payment of the sales charge, the shareholder's
basis in the shares of the Fund that were redeemed may not include the
amount of the sales charge paid. That would reduce the loss or
increase the gain recognized from the redemption. However, in that case
the sales charge would be added to the basis of the shares acquired by
the reinvestment of the redemption proceeds. The Fund may amend,
suspend or cease offering this reinvestment privilege at any time as to
shares redeemed after the date of such amendment, suspension or
cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of either class at the time of
transfer to the name of another person or entity (whether the transfer
occurs by absolute assignment, gift or bequest, not involving, directly
or indirectly, a public sale). The transferred shares will remain
subject to the contingent deferred sales charge, calculated as if the
transferee shareholder had acquired the transferred shares in the same
manner and at the same time as the transferring shareholder. If less
than all shares held in an account are transferred, and some but not
all shares in the account would be subject to a contingent deferred
sales charge if redeemed at the time of transfer, the priorities
described in the Prospectus under "How to Buy Shares" for the
imposition of the Class B or Class C contingent deferred sales charge
will be followed in determining the order in which shares are
transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k)
plans, or pension or profit-sharing plans should be addressed to
"Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer Agent at
its address listed in "How To Sell Shares" in the Prospectus or on the
back cover of this Statement of Additional Information. The request
must: (i) state the reason for the distribution; (ii) state the owner's
awareness of tax penalties if the distribution is premature; and (iii)
conform to the requirements of the plan and the Fund's other redemption
requirements. Participants (other than self-employed persons
maintaining an account in their own name) in OppenheimerFunds-sponsored
pension, profit-sharing or 401(k) plans may not directly redeem or
exchange shares held for their account under those plans. The employer
or plan administrator must sign the request. Distributions from
pension 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 Distributor
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.). Ordinarily for
accounts redeemed by a broker-dealer under this procedure, payment will
be made within three business days after the shares have been redeemed
upon the Distributor's receipt of the required redemption documents in
proper form, with signature(s) of the registered owners guaranteed on
the redemption document as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of
the Fund valued at $5,000 or more can authorize the Transfer Agent to
redeem shares (minimum $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares
will be redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be
made by check payable to all shareholders of record and sent to the
address of record for the account (and if the address has not been
changed within the prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on this
basis. Payments are normally made by check, but shareholders having
AccountLink privileges (see "How To Buy Shares") may arrange to have
Automatic Withdrawal Plan payments transferred to the bank account
designated on the OppenheimerFunds New Account Application or
signature-guaranteed instructions. The Fund cannot guarantee receipt
of a payment on the date requested and reserves the right to amend,
suspend or discontinue offering such plans at any time without prior
notice. Because of the sales charge assessed on Class A share
purchases, shareholders should not make regular additional Class A
share purchases while participating in an Automatic Withdrawal Plan.
Class B and Class C shareholders should not establish withdrawal plans
because of the imposition of the contingent deferred sales charge on
such withdrawals (except where the contingent deferred sales charge is
waived as described in the Prospectus under "Waivers of Class B and
Class C Sales Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such
plans, as stated below and in the provisions of the OppenheimerFunds
Application relating to such Plans, as well as the Prospectus. These
provisions may be amended from time to time by the Fund and/or the
Distributor. When adopted, such amendments will automatically apply to
existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the
Transfer Agent (on the OppenheimerFunds Application or signature-
guaranteed instructions) to exchange a pre-determined amount of shares
of the Fund for shares (of the same class) of other Oppenheimer funds
automatically on a monthly, quarterly, semi-annual or annual basis
under an Automatic Exchange Plan. The minimum amount that may be
exchanged to each other fund account is $25. Exchanges made under
these plans are subject to the restrictions that apply to exchanges as
set forth in "How to Exchange Shares" in the Prospectus and below in
this Statement of Additional Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next,
followed by shares acquired with a sales charge, to the extent
necessary to make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted. Payments made
under withdrawal plans should not be considered as a yield or income on
your investment. It may not be desirable to purchase additional Class
A shares while making automatic withdrawals because of the sales
charges that apply to purchases when made. Accordingly, a shareholder
normally may not maintain an Automatic Withdrawal Plan while
simultaneously making regular purchases of Class A shares.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the
"Planholder") who executed the Plan authorization and application
submitted to the Transfer Agent. 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 Class A shares in
certificated form. Upon written request from the Planholder, the
Transfer Agent will determine the number of shares for which a
certificate may be issued without causing the withdrawal checks to stop
because of exhaustion of uncertificated shares needed to continue
payments. However, should such uncertificated shares become exhausted,
Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be exchanged
only for shares of the same class of other Oppenheimer funds. Shares
of the Oppenheimer funds that have a single class without a class
designation are deemed "Class A" shares for this purpose. All of the
Oppenheimer funds offer Class A, B and C shares except Oppenheimer
Money Market Fund, Inc., Centennial Money Market Trust, Centennial Tax
Exempt Trust, Centennial Government Trust, Centennial New York Tax
Exempt Trust, Centennial California Tax Exempt Trust, Centennial
America Fund, L.P., and Daily Cash Accumulation Fund, Inc., which only
offer Class A shares and Oppenheimer Main Street California Tax-Exempt
Fund which only offers Class A and Class B shares, (Class B and Class C
shares of Oppenheimer Cash Reserves are generally available only by
exchange from the same class of shares of other Oppenheimer funds or
through OppenheimerFunds sponsored 401(k) plans). A list showing which
funds offer which class can be obtained by calling the Distributor at
1-800-525-7048.
Class A shares of Oppenheimer funds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
Oppenheimer funds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
Oppenheimer funds subject to a contingent deferred sales charge).
However, shares of Oppenheimer Money Market Fund, Inc. purchased with
the redemption proceeds of shares of other mutual funds (other than
funds managed by the Manager or its subsidiaries) redeemed within the
12 months prior to that purchase may subsequently be exchanged for
shares of other Oppenheimer funds without being subject to an initial
or contingent deferred sales charge, whichever is applicable. To
qualify for that privilege, the investor or the investor's dealer must
notify the Distributor of eligibility for this privilege at the time
the shares of Oppenheimer Money Market Fund, Inc. are purchased, and,
if requested, must supply proof of entitlement to this privilege.
Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the Oppenheimer funds or from any unit
investment trust for which reinvestment arrangements have been made
with the Distributor may be exchanged at net asset value for shares of
any of the Oppenheimer funds. 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 Oppenheimer funds
purchased subject to a Class A contingent deferred sales charge are
redeemed within 18 months of the end of the calendar month of the
initial purchase of the exchanged Class A shares, the Class A
contingent deferred sales charge is imposed on the redeemed shares (see
"Class A Contingent Deferred Sales Charge" in the Prospectus). The
Class B 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 A, Class B or Class C shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the
Prospectus for the imposition of the Class A, Class B and 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 Oppenheimer funds available for exchange have
different investment objectives, policies and risks, and a shareholder
should assure that the Fund selected is appropriate for his or her
investment and should be aware of the tax consequences of an exchange.
For federal income tax purposes, an exchange transaction is treated as
a redemption of shares of one fund and a purchase of shares of another.
"Reinvestment Privilege," above, discusses some of the tax consequences
of reinvestment of redemption proceeds in such cases. The Fund, the
Distributor, and the Transfer Agent are unable to provide investment,
tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received
deduction for corporate shareholders. Long-term capital gains
distributions are not eligible for the deduction. In addition, the
amount of dividends paid by the Fund which may qualify for the
deduction is limited to the aggregate amount of qualifying dividends
that the Fund derives from its portfolio investments that the Fund has
held for a minimum period, usually 46 days. A corporate shareholder
will not be eligible for the deduction on dividends paid on Fund shares
held for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or
short-term gains from the sale of securities or dividends from foreign
corporations, those dividends will not qualify for the deduction.
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 Oppenheimer funds
listed in "Reduced Sales Charges," above, at net asset value without
sales charge. To elect this option, a shareholder must notify the
Transfer Agent in writing and either have an existing account in the
fund selected for reinvestment or must obtain a prospectus for that
fund and an application from the Distributor to establish an account.
The investment will be made at the net asset value per share in effect
at the close of business on the payable date of the dividend or
distribution. Dividends and/or distributions from shares of other
Oppenheimer funds may be invested in shares of this Fund on the same
basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, 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>
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------
Independent Auditors' Report
------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
============
The Board of Trustees and Shareholders of Oppenheimer Target Fund:
We have audited the accompanying statements of investments and assets and liabilities of
Oppenheimer Target Fund as of December 31, 1994, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the years in the two-year period
then ended and the financial highlights for each of the years in the ten-year period then ended. Thes
e
financial statements and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of December 31, 1994, by
correspondence with the custodian and brokers; and where confirmations were not received from
brokers, we performed other auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to above present
fairly, in all material respects, the financial position of Oppenheimer Target Fund as of December
31, 1994, the results of its operations for the year then ended, the changes in its net assets for
each of the years in the two-year period then ended, and the financial highlights for each of the
years in the ten-year period then ended, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Denver, Colorado
January 23, 1995
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Statement of Investments December 31, 1994
------------------------------------------------------------------------------------------------------
Face Market Value
Amount See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Repurchase Agreements--21.9% Repurchase agreement with First Chicago Capital Markets, 6%,
dated 12/30/94, to be repurchased at $66,444,267 on 1/3/95,
collateralized by U.S. Treasury Nts., 3.875%--8.875%, 5/31/95--8/31/05,
with a value of $63,145,634 and U.S. Treasury Bonds, 10.75%--14.25%,
2/15/02--8/15/05, with a value of $4,638,710 (Cost $66,400,000) $66,400,000
$66,400,000
Shares
==========================================================
==========================================================
===============
Common Stocks--78.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Materials--2.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.0% Georgia Gulf Corp.(1) 75,000 2,915,625
- -----------------------------------------------------------------------------------------------------------------------------------
Steel--1.1% LTV Corp.(1) 215,000 3,493,750
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--10.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Auto Parts: After Market-0.4% Goodyear Tire & Rubber Co. 40,000
1,345,000
- -----------------------------------------------------------------------------------------------------------------------------------
Broadcast Media--0.6% Multimedia, Inc.(1) 62,500 1,781,250
- -----------------------------------------------------------------------------------------------------------------------------------
Entertainment--0.4% WMS Industries, Inc.(1) 65,000 1,218,750
- -----------------------------------------------------------------------------------------------------------------------------------
Leisure Time--3.1% Acclaim Entertainment, Inc.(1) 25,000 359,375
-----------------------------------------------------------------------------------------------------
Brunswick Corp. 275,000 5,190,625
-----------------------------------------------------------------------------------------------------
Harley-Davidson, Inc. 80,000 2,240,000
-----------------------------------------------------------------------------------------------------
Outboard Marine Corp. 75,000 1,471,875
------------
9,261,875
- -----------------------------------------------------------------------------------------------------------------------------------
Restaurants--0.4% Shoney's, Inc.(1) 95,000 1,211,250
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Stores: Bradlees, Inc. 10,000 116,250
-----------------------------------------------------------------------------------------------------
Department Stores--0.5% Dollar General Corp. 50,000 1,500,000
------------
1,616,250
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Stores: General Waban, Inc.(1) 90,000 1,597,500
-----------------------------------------------------------------------------------------------------
Merchandise Chains--1.8% Wal-Mart Stores, Inc. 185,000 3,931,250
------------
5,528,750
- -----------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--2.0% Home Depot, Inc. (The) 30,000 1,380,000
-----------------------------------------------------------------------------------------------------
Intelligent Electronics, Inc. 73,200 585,600
-----------------------------------------------------------------------------------------------------
Michaels Stores, Inc.(1) 82,900 2,880,775
-----------------------------------------------------------------------------------------------------
Toys 'R' Us, Inc.(1) 40,000 1,220,000
------------
6,066,375
- -----------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty Apparel--0.7%
Gap, Inc. (The) 65,000 1,982,500
- -----------------------------------------------------------------------------------------------------------------------------------
Toys--0.3% Mattel, Inc. 30,000 753,750
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--19.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages: Soft Drinks--2.3% Coca-Cola Co. (The) 100,000 5,150,000
-----------------------------------------------------------------------------------------------------
PepsiCo, Inc. 50,000 1,812,500
------------
6,962,500
</TABLE>
6 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Drugs--3.2% Merck & Co., Inc. 40,000 $ 1,525,000
-----------------------------------------------------------------------------------------------------
Pfizer, Inc. 35,000 2,703,750
-----------------------------------------------------------------------------------------------------
Schering-Plough Corp. 75,000 5,550,000
------------
9,778,750
- -----------------------------------------------------------------------------------------------------------------------------------
Food Processing--0.7% ConAgra, Inc. 45,000 1,406,250
-----------------------------------------------------------------------------------------------------
IBP, Inc. 25,000 756,250
------------
2,162,500
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare: Diversified--4.4% Abbott Laboratories 125,000 4,078,125
-----------------------------------------------------------------------------------------------------
American Home Products Corp. 37,400 2,346,850
-----------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 50,000 2,893,750
-----------------------------------------------------------------------------------------------------
Warner-Lambert Co. 50,000 3,850,000
------------
13,168,725
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare: Miscellaneous--3.7%
Amgen, Inc.(1) 60,000 3,540,000
-----------------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 100,000 4,125,000
-----------------------------------------------------------------------------------------------------
United Healthcare Corp. 80,000 3,610,000
------------
11,275,000
- -----------------------------------------------------------------------------------------------------------------------------------
Hospital Management--0.8% HealthCare COMPARE Corp.(1) 70,000
2,388,750
- -----------------------------------------------------------------------------------------------------------------------------------
Household Products--0.8% Colgate-Palmolive Co. 40,000 2,535,000
- -----------------------------------------------------------------------------------------------------------------------------------
Medical Products--2.4% Cordis Corp.(1) 75,000 4,537,500
-----------------------------------------------------------------------------------------------------
Medtronic, Inc. 50,000 2,781,250
------------
7,318,750
- -----------------------------------------------------------------------------------------------------------------------------------
Tobacco--1.2% Philip Morris Cos., Inc. 15,000 862,500
-----------------------------------------------------------------------------------------------------
UST, Inc. 95,000 2,636,250
------------
3,498,750
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial--2.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Conglomerates--0.8% Canadian Pacific Ltd. 150,000 2,250,000
- -----------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--1.7% General Electric Co. 100,000 5,100,000
- -----------------------------------------------------------------------------------------------------------------------------------
Manufacturing: Mark IV Industries, Inc. 20,000 395,000
Diversified Industrials--0.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Railroads--0.3% Illinois Central Corp. 30,000 922,500
- -----------------------------------------------------------------------------------------------------------------------------------
Financial--23.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Commercial Finance--0.3% MBNA Corp. 40,000 935,000
</TABLE>
7 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
-----------------------------------------------------------------------------------------------------
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Financial Services:
Miscellaneous--9.9% Advanta Corp., Cl. A 175,000 $ 4,593,750
-----------------------------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 90,000 1,383,750
-----------------------------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 20,000 260,000
-----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 15,000 757,500
-----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. 45,000 3,279,375
-----------------------------------------------------------------------------------------------------
First USA, Inc. 65,000 2,136,875
-----------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 190,000 5,771,250
-----------------------------------------------------------------------------------------------------
PaineWebber Group, Inc. 156,800 2,352,000
-----------------------------------------------------------------------------------------------------
Student Loan Marketing Assn. 75,000 2,437,500
-----------------------------------------------------------------------------------------------------
Sunamerica, Inc. 125,100 4,534,875
-----------------------------------------------------------------------------------------------------
Travelers, Inc. 75,000 2,437,500
------------
29,944,375
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance: Life--2.2% AFLAC, Inc. 159,750 5,112,000
-----------------------------------------------------------------------------------------------------
NWNL Companies, Inc. 60,000 1,740,000
------------
6,852,000
- -----------------------------------------------------------------------------------------------------------------------------------
Major Banks: Other--1.5% Bank of Boston Corp. 175,000 4,528,125
- -----------------------------------------------------------------------------------------------------------------------------------
Major Banks: Regional--8.1% First Interstate Bancorp 40,000 2,705,000
-----------------------------------------------------------------------------------------------------
KeyCorp 100,000 2,500,000
-----------------------------------------------------------------------------------------------------
Midlantic Corp. 100,000 2,650,000
-----------------------------------------------------------------------------------------------------
NationsBank Corp. 100,000 4,512,500
-----------------------------------------------------------------------------------------------------
Northern Trust Corp. 10,000 350,000
-----------------------------------------------------------------------------------------------------
Shawmut National Corp. 245,000 4,011,875
-----------------------------------------------------------------------------------------------------
Signet Banking Corp. 155,000 4,436,875
-----------------------------------------------------------------------------------------------------
SouthTrust Corp. 157,500 2,835,000
-----------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 10,000 477,500
------------
24,478,750
- -----------------------------------------------------------------------------------------------------------------------------------
Money Center Banks--0.4% Chase Manhattan Corp. 33,500 1,151,563
- -----------------------------------------------------------------------------------------------------------------------------------
Savings and Loans/ California Federal Bank(1) 190,000 2,066,250
Holding Cos.--0.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Technology--19.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software Automatic Data Processing, Inc. 35,000 2,047,500
-----------------------------------------------------------------------------------------------------
And Services--6.9% BMC Software, Inc.(1) 100,000 5,687,500
-----------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 65,000 3,152,500
-----------------------------------------------------------------------------------------------------
Computer Sciences Corp.(1) 23,100 1,178,100
-----------------------------------------------------------------------------------------------------
General Motors Corp., Cl. E 25,000 962,500
-----------------------------------------------------------------------------------------------------
Microsoft Corp.(1) 100,000 6,112,500
-----------------------------------------------------------------------------------------------------
Novell, Inc.(1) 35,000 599,375
-----------------------------------------------------------------------------------------------------
Sybase, Inc.(1) 20,000 1,040,000
------------
20,779,975
</TABLE>
8 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer Systems--7.0% 3Com Corp.(1) 100,000 $ 5,156,250
-----------------------------------------------------------------------------------------------------
American Power Conversion Corp.(1) 115,000 1,883,125
-----------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(1) 50,000 2,325,000
-----------------------------------------------------------------------------------------------------
Compaq Computer Corp.(1) 90,000 3,555,000
-----------------------------------------------------------------------------------------------------
Quantum Corp.(1) 94,000 1,421,750
-----------------------------------------------------------------------------------------------------
Seagate Technology(1) 20,000 480,000
-----------------------------------------------------------------------------------------------------
Western Digital Corp.(1) 375,000 6,281,250
------------
21,102,375
- -----------------------------------------------------------------------------------------------------------------------------------
Electronics: Linear Technology Corp. 60,000 2,970,000
Instrumentation--1.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Electronics: Intel Corp. 125,000 7,984,375
-----------------------------------------------------------------------------------------------------
Semiconductors--2.9% Novellus Systems, Inc.(1) 7,500 375,000
------------------------------------------------------------------------------------------------------
VLSI Technology, Inc.(1) 35,000 420,000
------------
8,779,375
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications--1.3% AT&T Corp. 80,000 4,020,000
- -----------------------------------------------------------------------------------------------------------------------------------
Utilities--1.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Electric Companies--0.7% Empresa Nacional de Electricidad SA, Sponsored ADR 50,000
2,025,000
- -----------------------------------------------------------------------------------------------------------------------------------
Telephone--0.6% Telefonos de Mexico SA, Sponsored ADR 50,000
2,050,000
------------
Total Common Stocks (Cost $185,188,215) 236,614,138
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $251,588,215) 100.1% 303,014,138
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.1) (249,914)
---------- ------------
Net Assets 100.0% $302,764,224
==========
============
<FN>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
</FN>
</TABLE>
9 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1994
-----------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C> <C>
Assets Investments, at value (including repurchase agreements of $66,400,000)
(cost $251,588,215)--see accompanying statement $303,014,138
-----------------------------------------------------------------------------------------------------
Cash 253,694
-----------------------------------------------------------------------------------------------------
Receivables:
Investments sold 2,200,708
Interest and dividends 440,133
Shares of beneficial interest sold 133,504
-----------------------------------------------------------------------------------------------------
Other 243,911
------------
Total assets 306,286,088
==========================================================
==========================================================
===============
Liabilities Payables and other liabilities:
Investments purchased 1,852,737
Shares of beneficial interest redeemed 982,557
Dividends and distributions 146,484
Distribution and service plan fees--Note 4 130,930
Other 409,156
------------
Total liabilities 3,521,864
==========================================================
==========================================================
===============
Net Assets $302,764,224
============
==========================================================
==========================================================
===============
Composition of Paid-in capital $248,122,703
-----------------------------------------------------------------------------------------------------
Net Assets Undistributed (overdistributed) net investment income (69,749)
-----------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) from investment transactions 3,285,347
-----------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments--Note 3 51,425,923
------------
Net assets $302,764,224
============
==========================================================
==========================================================
===============
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of
$301,698,437 and 13,330,877 shares of beneficial interest outstanding) $22.63
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $24.01
-----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $1,065,787 and 47,375 shares of beneficial interest outstanding) $22.50
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Statement of Operations For the Year Ended December 31, 1994
-----------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C> <C>
Investment Income Interest $ 1,583,627
-----------------------------------------------------------------------------------------------------
Dividends 4,540,238
-------------
Total income 6,123,865
==========================================================
==========================================================
===============
Expenses Management fees--Note 4 2,475,491
-----------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 325,662
Class C--Note 4 4,640
-----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 334,992
-----------------------------------------------------------------------------------------------------
Shareholder reports 324,811
-----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 104,631
-----------------------------------------------------------------------------------------------------
Custodian fees and expenses 51,086
-----------------------------------------------------------------------------------------------------
Legal and auditing fees 41,829
-----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 826
Class C 375
-----------------------------------------------------------------------------------------------------
Other 119,641
-------------
Total expenses 3,783,984
==========================================================
==========================================================
===============
Net Investment Income (Loss) 2,339,881
==========================================================
==========================================================
===============
Realized and Unrealized Net realized gain (loss) on investments 38,815,275
Gain (Loss) on Investments -----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (40,560,449)
-------------
Net realized and unrealized gain (loss) on investments (1,745,174)
==========================================================
==========================================================
===============
Net Increase (Decrease) in Net Assets Resulting From Operations $ 594,707
=============
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
-----------------------------------------------------------------------------------------------------
Year Ended December 31,
1994 1993
==========================================================
==========================================================
===============
<S> <C> <C> <C>
Operations Net investment income (loss) $ 2,339,881 $ 1,811,132
-----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 38,815,275 7,582,007
-----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (40,560,449) 3,927,425
------------ ------------
Net increase (decrease) in net assets resulting from operations 594,707 13,320,564
==========================================================
==========================================================
===============
Dividends and Dividends from net investment income:
Distributions to Class A ($.201 and $.12 per share, respectively) (2,361,728) (1,693,272)
Shareholders Class C ($.085 and $.101 per share, respectively) (2,907) (180)
-----------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments:
Class A ($2.982 and $.398 per share, respectively) (35,048,552) (5,616,693)
Class C ($2.982 and $.398 per share, respectively) (102,047) (123)
==========================================================
==========================================================
===============
Beneficial Interest Net increase (decrease) in net assets resulting from
Transactions Class A beneficial interest transactions--Note 2 (30,283,681) (38,460,852)
-----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
Class C beneficial interest transactions--Note 2 1,154,378 8,135
==========================================================
==========================================================
===============
Net Assets Total increase (decrease) (66,049,830) (32,442,421)
-----------------------------------------------------------------------------------------------------
Beginning of period 368,814,054 401,256,475
------------ ------------
End of period [including undistributed (overdistributed) net
investment income of $(69,749) and $10,407, respectively] $302,764,224
$368,814,054
============
============
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Target Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------------------------
Class A Class C
------------------------------------------------------------------------------------------- ---------------
Year Ended
Year Ended December 31, December 31,
1994 1993 1992 1991(3) 1990 1989 1988 1987 1986(2) 1985(2) 1994(3) 1993(1)
==========================================================
==========================================================
============
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Per Share Operating Data:
Net asset
value, beginning
of period $ 25.72 $ 25.25 $ 23.76 $ 17.47 $ 18.26 $ 16.04 $ 12.38 $ 20.49 $ 19.30 $ 15.16 $ 25.72
$25.92
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss)
from investment
operations:
Net investment
income (loss) .20 .13 .16 .27 .39 .59 .27 .17 .11 .41 -- (.01)
Net realized
and unrealized
gain (loss)
on investments (.11) .86 2.28 6.87 (.78) 2.34 3.74 (3.68) 1.46 4.05 (.15) .31
------- ------- ------- ------- ------- ------- ------- -------- ------- ------- ------- ------
Total income
(loss) from
investment
operations .09 .99 2.44 7.14 (.39) 2.93 4.01 (3.51) 1.57 4.46 (.15) .30
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.20) (.12) (.17) (.18) (.40) (.62) (.26) (.31) (.38) (.32) (.09) (.10)
Distributions from
net realized gain
on investments (2.98) (.40) (.78) (.67) -- (.09) (.09) (4.29) -- -- (2.98) (.40)
------- ------- ------- ------- ------- ------- ------- -------- ------- ------- ------- ------
Total dividends and
distributions to
shareholders (3.18) (.52) (.95) (.85) (.40) (.71) (.35) (4.60) (.38) (.32) (3.07) (.50)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $ 22.63 $ 25.72 $ 25.25 $ 23.76 $ 17.47 $ 18.26 $ 16.04 $ 12.38 $ 20.49 $ 19.30 $ 22.50
$25.72
======= ======= ======= ======= ======= =======
======= ======== ======= ======= ======= ======
==========================================================
==========================================================
============
Total Return,
at Net Asset
Value(4) .46% 3.93% 10.27% 41.33% (2.13)% 18.31% 32.39% (17.95)% 8.28% 29.85%
(.50)% 2.11%
==========================================================
==========================================================
============
Ratios/Supplemental
Data:
Net assets,
end of period
(in thousands) $301,698 $368,806 $401,256 $369,351 $52,526 $66,050 $68,031 $60,888 $111,417 $118,244
$1,066 $8
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $325,003 $383,875 $362,295 $209,596 $56,208 $70,874 $68,068 $107,475 $128,757 $130,925 $
467 $6
- --------------------------------------------------------------------------------------------------------------------------------
Number of shares
outstanding at
end of period
(in thousands) 13,331 14,339 15,892 15,546 3,007 3,616 4,242 4,918 5,437 6,127 47 --
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average
net assets:
Net investment
income (loss) .72% .47% .69% 1.25% 2.08% 2.93% 1.64% .60% .36% 1.87%
(.02)% (.07)%(5)
Expenses 1.16% 1.07% 1.09% 1.17% 1.33% 1.27% 1.29% 1.16% 1.16% 1.17%
2.18% 2.18%(5)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover
rate(6) 34.7% 22.9% 42.3% 65.6% 51.2% 68.3% 108.4% 95.1 69.9% 118.8%
34.7% 22.9%
<FN>
1. For the period from December 1, 1993 (inception of offering) to December 31, 1993.
2. During 1986 and 1985, the Fund had average monthly debt outstanding of $688,172 and
$663,262, respectively; the average monthly number of shares outstanding for the years ended
December 31, 1986 and 1985 was 5,799,198 and 7,715,542, respectively, and the average
monthly debt per share was $.12 and $.09 for 1986 and 1985, respectively. The amount of debt
outstanding at December 31, 1985 was $7,000,000.
3. Per share amounts calculated based on the weighted average number of shares outstanding during
the year.
4. Assumes a hypothetical initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns.
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly
average of the market value of portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year or less are excluded from the
calculation. Purchase and sales of investment securities (excluding short-term securities) for the
year ended December 31, 1994 were $100,706,246 and $210,599,293, respectively.
See accompanying Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------
Notes to Financial Statements
------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
============
1. Significant Oppenheimer Target Fund (the Fund) is registered under the Investment Company Act of 1940, as
Accounting Policies amended, as a diversified, open-end management investment company. The Fund's investment
advisor is
Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class C
shares.
Class A shares are sold with a front-end sales charge. Class C shares may be subject to a contingent
deferred sales charge. Both classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own distribution and/or service plan, expenses directly
attributable to a particular class and exclusive voting rights with respect to matters affecting a
single class. The following is a summary of significant accounting policies consistently followed by
the Fund.
------------------------------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York time) on each trading
day. Listed and unlisted securities for which such information is regularly reported are valued at
the last sale price of the day or, in the absence of sales, at values based on the closing bid or
asked price or the last sale price on the prior trading day. Short-term debt securities having a
remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted
for amortization to maturity of any premium or discount. Securities for which market quotes are not
readily available are valued under procedures established by the Board of Trustees to determine fair
value in good faith.
------------------------------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to have legally
segregated
in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. The market value of the underlying
securities is required to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the seller enters an
insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or
limited.
------------------------------------------------------------------------------------------------------
Allocation of Income, Expenses and Gains and Losses. Income, expenses (other than those
attributable
to a specific class) and gains and losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating expenses directly attributable
to a specific class are charged against the operations of that class.
------------------------------------------------------------------------------------------------------
Federal Income Taxes. The Fund intends to continue to comply with provisions of the Internal
Revenue
Code applicable to regulated investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income tax provision is required.
------------------------------------------------------------------------------------------------------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan for the Fund's
independent trustees. Benefits are based on years of service and fees paid to each trustee during the
years of service. The accumulated liability for the Fund's projected benefit obligations was $99,350
at December 31, 1994. No payments have been made under the plan.
------------------------------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are recorded on the
ex-dividend date.
------------------------------------------------------------------------------------------------------
Change in Accounting Classification of Distributions to Shareholders. The character of the
distributions made during the year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also, due to timing of dividend
distributions, the fiscal year in which amounts are distributed may differ from the year that the
income or realized gain (loss) was recorded by the Fund. Effective January 1, 1994, the Fund
adopted
Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of
Income, Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the
Fund changed the classification of distributions to shareholders to better disclose the differences
between financial statement amounts and distributions determined in accordance with income tax
regulations. Accordingly, subsequent to December 31, 1993, amounts have been reclassified to
reflect
a decrease in paid-in capital of $115,983, a decrease in undistributed net investment income of
$55,402, and an increase in accumulated net realized gain on investments of $171,385.
</TABLE>
14 Oppenheimer Target Fund
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
============
1. Significant Other. Investment transactions are accounted for on the date the investments are purchased or sold
Accounting Policies (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses
on
(continued) investments and unrealized appreciation and depreciation are determined on an identified cost
basis,
which is the same basis used for federal income tax purposes.
==========================================================
==========================================================
============
2. Shares of The Fund has authorized an unlimited number of no par value shares of beneficial interest.
Beneficial Interest Transactions in shares of beneficial interest were as follows:
<CAPTION>
Year Ended December 31, 1994 Year Ended December 31,
1993(1)
---------------------------- -------------------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,091,689 $ 27,823,899 2,339,461 $ 58,420,529
Dividends and distributions reinvested 1,592,900 35,776,790 264,070 6,749,613
Redeemed (3,693,115) (93,884,370) (4,156,612) (103,630,994)
---------- ------------- ---------- -------------
Net decrease (1,008,526) $ (30,283,681) (1,553,081) $ (38,460,852)
========== =============
========== =============
------------------------------------------------------------------------------------------------------
Class C:
Sold 65,435 $ 1,619,304 310 $ 8,000
Dividends and distributions reinvested 4,518 100,882 5 135
Redeemed (22,893) (565,808) -- --
---------- ------------- ---------- -------------
Net increase 47,060 $ 1,154,378 315 $8,135
========== =============
========== =============
1. For the year ended December 31, 1993 for Class A shares and for the period from December 1,
1993
(inception of offering) to December 31, 1993 for Class C shares.
==========================================================
==========================================================
============
3. Unrealized Gains and At December 31, 1994, net unrealized appreciation on investments of $51,425,923 was
composed of gross
Losses on Investments appreciation of $60,340,978, and gross depreciation of $8,915,055.
==========================================================
==========================================================
============
4. Management Fees Prior to July 1, 1994, management fees paid to the Manager were in accordance with the
investment
And Other Transactions advisory agreement with the Fund which provided for an annual fee of .80% on the first $200
million
With Affiliates of net assets, .75% on the next $200 million, .69% on the next $200 million, .66% on the next
$200
million and .60% on net assets in excess of $800 million. Under the terms of the agreement, the
annual fees on the first and second $200 million of net assets decreased to .75% and .72%,
respectively, on July 1, 1994. The Manager has agreed to reimburse the Fund if aggregate expenses
(with specified exceptions) exceed the most stringent applicable regulatory limit on Fund expenses.
For the year ended December 31, 1994, commissions (sales charges paid by investors) on sales
of
Class A shares totaled $351,806, of which $141,646 was retained by Oppenheimer Funds
Distributor,
Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer.
During the year ended December 31, 1994, OFDI received contingent deferred sales charges of
$1,185
upon redemption of Class C shares, as reimbursement for sales commissions advanced by OFDI at
the
time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund, and for other registered investment companies. OSS's total
costs of providing such services are allocated ratably to these companies.
Under separate approved plans, each class may expend up to .25% of its net assets annually to
reimburse OFDI for costs incurred in connection with the personal service and maintenance of
accounts
that hold shares of the Fund (prior to July 1, 1994, reimbursements were made with respect to
shares
sold subsequent to March 31, 1991 for Class A), including amounts paid to brokers, dealers, banks
and
other institutions. In addition, Class C shares are subject to an asset-based sales charge of .75% of
net assets annually, to reimburse OFDI for sales commissions paid from its own resources at the
time
of sale and associated financing costs. In the event of termination or discontinuance of the Class C
plan, the Board of Trustees may allow the Fund to continue payment of the asset-based charge to
OFDI
for distribution expenses incurred on Class C shares sold prior to termination or discontinuance of
the plan. During the year ended December 31, 1994, OFDI paid $33,166 to an affiliated
broker/dealer
as reimbursement for Class A personal service and maintenance expenses and retained $4,642 as
reimbursement for Class C sales commissions and service fee advances, as well as financing costs
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS June 30, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND NOTES--0.7%
- ----------------------------------------------------------------------------------------------------------------
Danka Business Systems PLC,
6.75% Cv. Sub. Nts., 4/1/02(1) $1,700,000 $ 1,793,500
- ----------------------------------------------------------------------------------------------------------------
First Financial Management Corp.,
5% Cv. Debs., 12/15/99 2,000,000 2,670,000
-----------
Total Convertible Corporate Bonds and Notes
(Cost $3,723,750) 4,463,500
SHARES
- ----------------------------------------------------------------------------------------------------------------
COMMON STOCKS--76.9%
- ----------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--4.0%
- ----------------------------------------------------------------------------------------------------------------
CHEMICALS--1.8% Georgia Gulf Corp. 195,000 6,361,875
- ----------------------------------------------------------------------------------------------------------------
IMC Global, Inc. 50,000 2,706,250
- -----------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.(2) 173,500 2,016,938
- -----------------------------------------------------------------------------------------------------------------
Union Carbide Corp. 40,000 1,335,000
------------
12,420,063
- -----------------------------------------------------------------------------------------------------------------
METALS--1.0% Asarco, Inc. 37,500 1,143,750
- -----------------------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co. 52,200 1,487,700
- -----------------------------------------------------------------------------------------------------------------
Magma Copper Co. 100,000 1,625,000
- -----------------------------------------------------------------------------------------------------------------
Reynolds Metals Co. 45,000 2,328,750
-----------
6,585,200
- -----------------------------------------------------------------------------------------------------------------
PAPER--1.2% Boise Cascade Corp. 75,000 3,037,500
- ----------------------------------------------------------------------------------------------------------------
Chesapeake Corp. 35,000 1,089,375
- ----------------------------------------------------------------------------------------------------------------
Federal Paper Board Co. 47,000 1,662,625
- ----------------------------------------------------------------------------------------------------------------
Willamette Industries, Inc. 40,000 2,220,000
-----------
8,009,500
- ----------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--17.8%
- ----------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING--1.5% Breed Technologies, Inc. 112,000 2,688,000
- ----------------------------------------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. 40,000 1,650,000
- ----------------------------------------------------------------------------------------------------------------
Navistar International Corp.(2) 220,000 3,327,500
- ----------------------------------------------------------------------------------------------------------------
Sunbeam-Oster, Inc. 181,700 2,521,088
-----------
10,186,588
- ----------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--2.8% Brunswick Corp. 350,000 5,950,000
- ----------------------------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc.(2) 137,500 4,846,875
- ----------------------------------------------------------------------------------------------------------------
Department 56, Inc.(2) 51,300 1,962,225
- ----------------------------------------------------------------------------------------------------------------
Mattel, Inc. 37,500 975,000
- ----------------------------------------------------------------------------------------------------------------
Outboard Marine Corp. 95,000 1,864,375
---------------------------------------------------------------------------------------------------------------
Walt Disney Co. 60,000 3,337,500
-----------
18,935,975
- ----------------------------------------------------------------------------------------------------------------
MEDIA--1.2% Comcast Corp., Cl. A Special 140,000 2,598,750
- ----------------------------------------------------------------------------------------------------------------
Multimedia, Inc.(2) 62,500 2,421,875
- ----------------------------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B(2) 75,768 3,513,741
-----------
8,534,366
</TABLE>
6 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL--3.7% Dollar General Corp. 321,100 $10,154,787
- ---------------------------------------------------------------------------------------------------------------
Kohl's Corp.(2) 45,000 2,053,125
- ---------------------------------------------------------------------------------------------------------------
Neiman-Marcus Group, Inc. 25,000 356,250
- ---------------------------------------------------------------------------------------------------------------
Revco D.S., Inc.(2) 270,000 6,480,000
- ---------------------------------------------------------------------------------------------------------------
Waban, Inc.(2) 105,000 1,561,875
- ---------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 185,000 4,948,750
-----------
25,554,787
- ---------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--8.6% AmeriSource Health Corp.(2) 74,300 1,694,969
- ---------------------------------------------------------------------------------------------------------------
Bed Bath & Beyond, Inc. 165,000 4,001,250
- ---------------------------------------------------------------------------------------------------------------
CUC International, Inc.(2) 140,000 5,880,000
- ---------------------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc.(2) 181,200 6,364,650
- ---------------------------------------------------------------------------------------------------------------
Home Depot, Inc. (The) 70,000 2,843,750
- ---------------------------------------------------------------------------------------------------------------
Micro Warehouse, Inc.(2) 130,000 5,980,000
- ---------------------------------------------------------------------------------------------------------------
Nike, Inc., Cl. B 105,000 8,820,000
- ---------------------------------------------------------------------------------------------------------------
Office Depot, Inc.(2) 150,000 4,218,750
- ---------------------------------------------------------------------------------------------------------------
OfficeMax, Inc.(2) 81,000 2,257,875
- ---------------------------------------------------------------------------------------------------------------
Staples, Inc.(2) 105,000 3,031,875
- ---------------------------------------------------------------------------------------------------------------
Tommy Hilfiger Corp.(2) 273,000 7,644,000
- ---------------------------------------------------------------------------------------------------------------
Toys 'R' Us, Inc.(2) 20,000 585,000
- ---------------------------------------------------------------------------------------------------------------
Viking Office Products, Inc.(2) 155,000 5,676,875
-----------
58,998,994
- ---------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--15.8%
- ---------------------------------------------------------------------------------------------------------------
BEVERAGES--2.0% Canandaigua Wine Co., Inc., Cl. A(2) 120,000 5,370,000
- ---------------------------------------------------------------------------------------------------------------
Coca-Cola Co. (The) 100,000 6,375,000
- ---------------------------------------------------------------------------------------------------------------
PepsiCo, Inc. 50,000 2,281,250
-----------
14,026,250
- ---------------------------------------------------------------------------------------------------------------
FOOD--1.2% IBP, Inc. 160,000 6,960,000
- ---------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc. 40,000 852,500
-----------
7,812,500
- ---------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--5.9% Abbott Laboratories 145,000 5,872,500
- ---------------------------------------------------------------------------------------------------------------
American Home Products Corp. 10,000 773,750
- ---------------------------------------------------------------------------------------------------------------
Amgen, Inc.(2) 25,000 2,010,937
- ---------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 50,000 3,406,250
- ---------------------------------------------------------------------------------------------------------------
Elan Corp. PLC, ADR(2) 110,000 4,482,500
- ---------------------------------------------------------------------------------------------------------------
Merck & Co., Inc. 26,000 1,274,000
- ---------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 85,000 7,851,875
- ---------------------------------------------------------------------------------------------------------------
R.P. Scherer Corp.(2) 190,000 8,027,500
- ---------------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 150,000 6,618,750
-----------
40,318,062
</TABLE>
7 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES &
SERVICES--4.5% Collagen Corp. 42,500 $ 727,813
- ----------------------------------------------------------------------------------------------------------------
Cordis Corp.(2) 75,000 5,006,250
- ----------------------------------------------------------------------------------------------------------------
Health Care & Retirement Corp.(2) 60,000 1,755,000
- ----------------------------------------------------------------------------------------------------------------
HealthCare COMPARE Corp.(2) 100,000 3,000,000
- ----------------------------------------------------------------------------------------------------------------
Horizon Healthcare Corp.(2) 65,000 1,161,875
- ----------------------------------------------------------------------------------------------------------------
Integrated Health Services, Inc. 40,000 1,200,000
- ----------------------------------------------------------------------------------------------------------------
Lincare Holdings, Inc.(2) 101,000 2,682,812
- ----------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 60,000 4,627,500
- ----------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc.(2) 50,000 2,362,500
- ----------------------------------------------------------------------------------------------------------------
PacifiCare Health Systems, Inc.(2) 31,900 1,626,900
- ----------------------------------------------------------------------------------------------------------------
Pyxis Corp.(2) 140,000 3,167,500
- ----------------------------------------------------------------------------------------------------------------
Quorum Health Group, Inc.(2) 120,000 2,430,000
- ----------------------------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 45,000 1,378,125
------------
31,126,275
- ----------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--0.7% Colgate-Palmolive Co. 68,800 5,031,000
- ----------------------------------------------------------------------------------------------------------------
TOBACCO--1.5% Philip Morris Cos., Inc. 70,000 5,206,250
- ----------------------------------------------------------------------------------------------------------------
UST, Inc. 175,000 5,206,250
------------
10,412,500
- ----------------------------------------------------------------------------------------------------------------
FINANCIAL--10.4%
- ----------------------------------------------------------------------------------------------------------------
BANKS--3.5% Bank of Boston Corp. 125,000 4,687,500
- ----------------------------------------------------------------------------------------------------------------
First Interstate Bancorp 40,000 3,210,000
- ----------------------------------------------------------------------------------------------------------------
Midlantic Corp. 100,000 4,000,000
- ----------------------------------------------------------------------------------------------------------------
NationsBank Corp. 90,000 4,826,250
- ----------------------------------------------------------------------------------------------------------------
Northern Trust Corp. 10,000 402,500
- ----------------------------------------------------------------------------------------------------------------
Shawmut National Corp. 100,000 3,187,500
- ----------------------------------------------------------------------------------------------------------------
SouthTrust Corp. 130,000 3,006,250
- ----------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 10,000 582,500
------------
23,902,500
- ----------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--4.9% Advanta Corp., Cl. A 175,000 7,295,312
- ----------------------------------------------------------------------------------------------------------------
Advanta Corp., Cl. B 70,000 2,642,500
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 15,000 1,031,250
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. 25,000 2,359,375
- ----------------------------------------------------------------------------------------------------------------
First USA, Inc. 190,000 8,431,250
- ----------------------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 235,000 10,428,125
- ----------------------------------------------------------------------------------------------------------------
Travelers, Inc. 36,000 1,575,000
---------------
33,762,812
- ----------------------------------------------------------------------------------------------------------------
INSURANCE--2.0% AFLAC, Inc. 150,000 6,562,500
- ----------------------------------------------------------------------------------------------------------------
Reliastar Financial Corp. 60,000 2,295,000
- ----------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. 100,000 5,100,000
---------------
13,957,500
</TABLE>
8 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
INDUSTRIAL--8.0%
- ----------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.9% Emerson Electric Co. 21,000 $1,501,500
- ----------------------------------------------------------------------------------------------------------------
General Electric Co. 75,000 4,228,125
- ----------------------------------------------------------------------------------------------------------------
Molex, Inc., Cl. A 193,750 7,071,875
------------
12,801,500
- ----------------------------------------------------------------------------------------------------------------
INDUSTRIAL MATERIALS--0.2% Ball Corp. 40,000 1,395,000
- ----------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--4.6% Cintas Corp. 140,000 4,970,000
- ----------------------------------------------------------------------------------------------------------------
Danka Business System PLC, Sponsored ADR 95,000 2,297,812
- ----------------------------------------------------------------------------------------------------------------
First Data Corp. 170,000 9,668,750
- ----------------------------------------------------------------------------------------------------------------
Loewen Group, Inc. 100,000 3,562,500
- ----------------------------------------------------------------------------------------------------------------
Manpower, Inc. 125,000 3,187,500
- ----------------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 110,000 3,245,000
- ----------------------------------------------------------------------------------------------------------------
Sensormatic Electronics Corp. 130,000 4,615,000
------------
31,546,562
- ----------------------------------------------------------------------------------------------------------------
MANUFACTURING--0.1% Mark IV Industries, Inc. 21,000 451,500
- ----------------------------------------------------------------------------------------------------------------
O.T.F. Equities, Inc.(2) 400,000 --
------------
451,500
- ----------------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.2% Canadian Pacific Ltd. 325,000 5,646,875
- -----------------------------------------------------------------------------------------------------------------
Illinois Central Corp. 88,100 3,039,450
------------
8,686,325
- ----------------------------------------------------------------------------------------------------------------
TECHNOLOGY--20.6%
- ----------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--5.7% 3Com Corp.(2) 65,000 4,355,000
- ----------------------------------------------------------------------------------------------------------------
Adaptec, Inc.(2) 105,000 3,885,000
- ----------------------------------------------------------------------------------------------------------------
Andrew Corp.(2) 110,000 6,366,250
- ----------------------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(2) 100,000 5,325,000
- ----------------------------------------------------------------------------------------------------------------
Compaq Computer Corp.(2) 75,000 3,403,125
- ----------------------------------------------------------------------------------------------------------------
Digital Equipment Corp.(2) 30,000 1,222,500
- ----------------------------------------------------------------------------------------------------------------
EMC Corp.(2) 350,000 8,487,500
- ----------------------------------------------------------------------------------------------------------------
Quantum Corp.(2) 158,000 3,614,250
- ----------------------------------------------------------------------------------------------------------------
Seagate Technology, Inc.(2) 20,000 785,000
- ----------------------------------------------------------------------------------------------------------------
Western Digital Corp.(2) 114,300 1,985,963
------------
39,429,588
- ----------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--7.4% Acclaim Entertainment, Inc.(2) 25,000 460,938
- ----------------------------------------------------------------------------------------------------------------
Adobe Systems, Inc. 15,000 870,000
- ----------------------------------------------------------------------------------------------------------------
Automatic Data Processing, Inc. 35,000 2,200,625
- ----------------------------------------------------------------------------------------------------------------
BMC Software, Inc.(2) 100,000 7,725,000
- ----------------------------------------------------------------------------------------------------------------
Cerner Corp. 5,000 306,250
- ----------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 50,000 3,387,500
- ----------------------------------------------------------------------------------------------------------------
Compuware Corp.(2) 111,000 3,413,250
- ----------------------------------------------------------------------------------------------------------------
First Financial Management Corp. 30,000 2,565,000
</TABLE>
9 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE
(continued) Informix Corp.(2) $410,000 $ 10,403,750
- ----------------------------------------------------------------------------------------------------------------
Microsoft Corp.(2) 100,000 9,037,500
- ----------------------------------------------------------------------------------------------------------------
Oracle Systems Corp.(2) 260,900 10,077,262
-------------------------------
50,447,075
- ----------------------------------------------------------------------------------------------------------------
ELECTRONICS--4.3% Arrow Electronics, Inc. 16,000 796,000
- ----------------------------------------------------------------------------------------------------------------
Checkpoint Systems, Inc. 112,000 2,492,000
- ----------------------------------------------------------------------------------------------------------------
Cypress Semiconductor Corp. 30,000 1,215,000
- ----------------------------------------------------------------------------------------------------------------
General Instrument Corp.(2) 60,000 2,302,500
- ----------------------------------------------------------------------------------------------------------------
Intel Corp. 160,000 10,130,000
- ----------------------------------------------------------------------------------------------------------------
Linear Technology Corp. 45,000 2,970,000
- ----------------------------------------------------------------------------------------------------------------
Novellus Systems, Inc.(2) 20,000 1,355,000
- ----------------------------------------------------------------------------------------------------------------
Philips Electronics N.V. 68,000 2,907,000
- ----------------------------------------------------------------------------------------------------------------
Teradyne, Inc.(2) 70,000 4,576,250
- ----------------------------------------------------------------------------------------------------------------
VLSI Technology, Inc.(2) 35,000 1,054,375
------------
29,798,125
- ----------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-
- ----------------------------------------------------------------------------------------------------------------
TECHNOLOGY--3.2% ALC Communications Corp.(2) 100,000 4,512,500
- ----------------------------------------------------------------------------------------------------------------
AT&T Corp. 50,000 2,656,250
- ----------------------------------------------------------------------------------------------------------------
DSC Communications Corp.(2) 60,000 2,790,000
- ----------------------------------------------------------------------------------------------------------------
Tellabs, Inc.(2) 140,000 6,737,500
- ----------------------------------------------------------------------------------------------------------------
U.S. Long Distance Corp. 50,000 812,500
- ----------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(2) 151,774 4,097,898
------------
21,606,648
- ----------------------------------------------------------------------------------------------------------------
UTILITIES--0.3%
- ----------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.3% Empresa Nacional de Electricidad SA,
Sponsored ADR 45,000 2,216,250
------------
Total Common Stocks (Cost $374,385,177) 527,953,445
Units
UNITS
- ----------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ----------------------------------------------------------------------------------------------------------------
Windmere Corp. Wts., Exp. 1/98 (Cost $0) 7,094 --
</TABLE>
10 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--22.8%
- -----------------------------------------------------------------------------------------------------------------
Repurchase agreement with The First Boston
Corp., 5.95%, dated 6/30/95, to be repurchased
at $7,753,843 on 7/3/95, collateralized by
U.S. Treasury Bills maturing 12/14/95,
with a value of $7,909,869 $ 7,750,000 $ 7,750,000
- -----------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago
Capital Markets, 6.125%, dated 6/30/95, to
be repurchased at $148,672,846 on 7/3/95,
collateralized by U.S. Treasury Bonds,
11.25%, 2/15/15, with a value of
$15,159,471, U.S. Treasury Nts.,
4.75%-7.875%, 3/31/96-8/15/01, with a
value of $99,161,243, and U.S. Treasury
Bills maturing 9/28/95-12/14/95, with a
value of $37,396,722 148,597,000 148,597,000
- -----------------------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS (Cost $156,347,000) 156,347,000
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (Cost $534,455,927) 100.4% 688,763,945
- -----------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.4) (2,462,384)
-------------- ------------
NET ASSETS 100.0% $686,301,561
-------------- ------------
-------------- ------------
<FN>
1. Represents a security sold under
Rule 144A, which is exempt from
registration under the Securities Act of
1933, as amended. This security has been
determined to be liquid under guidelines
established by the Board of Trustees.
These securities amount to $1,793,500 or
0.3% of the Fund's net assets, at June 30,
1995.
2. Non-income producing security.
</TABLE>
See accompanying Notes to Financial
Statements.
11 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS Investments, at value (including repurchase agreements
of $156,347,000) (cost $534,455,927)--see accompanying statement $688,763,945
- ------------------------------------------------------------------------------------------------------------------------------
Cash 2,183
- ------------------------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 3,261,781
Interest and dividends 494,713
Shares of beneficial interest sold 4,017,241
Other 133,706
------------
Total assets 696,673,569
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 6,496,644
Shares of beneficial interest redeemed 3,106,679
Distribution and service plan fees--Note 4 144,962
Trustees' fees 120,840
Transfer and shareholder servicing agent fees 64,900
Other 437,983
------------
Total liabilities 10,372,008
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $686,301,561
------------
------------
- ------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF
NET ASSETS Paid-in capital $502,174,062
- ------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income 2,261,507
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain from investment transactions 27,557,974
- ------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 154,308,018
- ------------------------------------------------------------------------------------------------------------------------------
Net assets $686,301,561
------------
------------
NET ASSET VALUE
PER SHARE Class A Shares:
Net asset value and redemption price per share (based on net assets of
$682,737,269 and 24,765,670 shares of beneficial interest outstanding) $27.57
Maximum offering price per share (net asset value plus sales charge of 5.75%
of offering price) $29.25
- ------------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $3,564,292 and 130,732 shares of beneficial
interest outstanding) $27.26
</TABLE>
See accompanying Notes to Financial
Statements.
12 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Six Months Ended June 30, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Interest $ 2,439,462
--------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $10,987) 1,868,964
-----------
Total income 4,308,426
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 4 1,273,766
--------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 255,050
Class C--Note 4 10,401
--------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 218,986
--------------------------------------------------------------------------------------------------------
Shareholder reports 124,462
--------------------------------------------------------------------------------------------------------
Legal and auditing fees 52,402
--------------------------------------------------------------------------------------------------------
Custodian fees and expenses 23,288
--------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 541
Class C 681
--------------------------------------------------------------------------------------------------------
Other 17,593
-----------
Total expenses 1,977,170
--------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,331,256
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS Net realized gain on investments
24,272,627
--------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 35,813,697
-----------
Net realized and unrealized gain on investments 60,086,324
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $62,417,580
-----------
</TABLE>
See accompanying Notes to Financial
Statements.
13 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
OPERATIONS Net investment income $ 2,331,256 $ 2,339,881
---------------------------------------------------------------------------------------------------------
Net realized gain on investments 24,272,627 38,815,275
---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 35,813,697
(40,560,449)
-------------------------------
Net increase in net assets resulting from operations 62,417,580 594,707
---------------------------------------------------------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS Dividends from net investment income:
Class A ($.201 per share) -- (2,361,728)
class C ($.085 per share) -- (2,907)
---------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments:
Class A ($2.982 per share) -- (35,048,552)
Class C ($2.982 per share) -- (102,047)
---------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST
TRANSACTIONS Net increase (decrease) in net assets resulting from
Class A beneficial interest transactions--Note 2 and 5 319,039,263 (30,283,681)
Net increase in net assets resulting from Class C beneficial
interest transactions--Note 2 2,080,494 1,154,378
---------------------------------------------------------------------------------------------------------
NET ASSETS Total increase (decrease) 383,537,337 (66,049,830)
---------------------------------------------------------------------------------------------------------
Beginning of period 302,764,224 368,814,054
-------------------------------
End of period [including undistributed (overdistributed) net
investment income of $2,261,507 and $(69,749), respectively] $686,301,561
$302,764,224
-------------------------------
-------------------------------
</TABLE>
See accompanying Notes to Financial
Statements.
14 Oppenheimer Target Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
1995 -------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991(2) 1990
-------------- ------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 22.63 $ 25.72 $ 25.25 $ 23.76 $ 17.47 $ 18.26
-------------- ------------- --------- --------- --------- ---------
Income (loss) from investment
operations:
Net investment income (loss) .10 .20 .13 .16 .27 .39
Net realized and unrealized gain (loss)
on investments 4.84 (.11) .86 2.28 6.87 (.78)
-------------- ------------- --------- --------- --------- ---------
Total income (loss) from investment
operations 4.94 .09 .99 2.44 7.14 (.39)
-------------- ------------- --------- --------- --------- ---------
Dividends and distributions to
shareholders:
Dividends from net investment income -- (.20) (.12) (.17) (.18) (.40)
Distributions from net realized gain on
investments -- (2.98) (.40) (.78) (.67) --
-------------- ------------- --------- --------- --------- ---------
Total dividends and distributions to
shareholders -- (3.18) (.52) (.95) (.85) (.40)
-------------- ------------- --------- --------- --------- ---------
Net asset
value, end of period $ 27.57 $ 22.63 $ 25.72 $ 25.25 $ 23.76 $ 17.47
-------------- ------------- --------- --------- --------- ---------
-------------- ------------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 21.83% .46% 3.93% 10.27% 41.33%
(2.13)%
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $682,737 $301,698 $368,806 $401,256 $369,351 $ 52,526
-------------- ------------- --------- --------- --------- ---------
Average net assets (in thousands) $349,023 $325,003 $383,875 $362,295 $209,596 $ 56,208
-------------- ------------- --------- --------- --------- ---------
Number of shares outstanding at end of
period (in thousands) 24,766 13,331 14,339 15,892 15,546 3,007
-------------- ------------- --------- --------- --------- ---------
Ratios to average net assets:
Net investment income 1.34%(4) .72% .47% .69% 1.25% 2.08%
Expenses 1.13%(4) 1.16% 1.07% 1.09% 1.17% 1.33%
-------------- ------------- --------- --------- --------- ---------
Portfolio turnover rate(5) 42.3% 34.7% 22.9% 42.3% 65.6% 51.2%
<CAPTION>
CLASS C
----------------------------------------
SIX MONTHS
ENDED JUNE YEAR ENDED DECEMBER 31,
30, 1995 ------------------------
(UNAUDITED) 1994(2) 1993(1)
------------- --------- ------------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 22.50 $ 25.72 $ 25.92
------------- --------- ------------
Income (loss) from investment
operations:
Net investment income (loss) .08 -- (.01)
Net realized and unrealized gain (loss)
on investments 4.68 (.15) .31
------------- --------- ------------
Total income (loss) from investment
operations 4.76 (.15) .30
------------- --------- ------------
Dividends and distributions to
shareholders:
Dividends from net investment income -- (.09) (.10)
Distributions from net realized gain on
investments -- (2.98) (.40)
------------- --------- ------------
Total dividends and distributions to
shareholders -- (3.07) (.50)
------------- --------- ------------
Net asset
value, end of period $ 27.26 $ 22.50 $ 25.72
------------- --------- ------------
------------- --------- ------------
- ----------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 21.16% (.50)% 2.11%
- ----------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 3,564 $ 1,066 $ 8
------------- --------- ------------
Average net assets (in thousands) $ 2,108 $ 467 $ 6
------------- --------- ------------
Number of shares outstanding at end of
period (in thousands) 131 47 --
------------- --------- ------------
Ratios to average net assets:
Net investment income .45%(4) (.02)% (.07)%(4)
Expenses 2.02%(4) 2.18% 2.18%(4)
------------- --------- ------------
Portfolio turnover rate(5) 42.3% 34.7% 22.9%
<FN>
1. For the period from December 1, 1993 (inception of offering) to December 31,
1993.
2. Per share amounts calculated based on the weighted average number of
shares outstanding during the period.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns. Total returns are not
annualized for periods of less than one full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term
securities) for the period ended June 30, 1995 were $104,546,864 and
$119,843,084, respectively. See accompanying Notes to Financial Statements.
</TABLE>
15 Oppenheimer Target Fund
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING Oppenheimer Target Fund (the Fund) is
POLICIES registered under the Investment Company
Act of 1940, as amended, as a
diversified, open-end management
investment company. The Fund's investment
advisor is Oppenheimer Management
Corporation (the Manager). The Fund
offers both Class A and Class C shares.
Class A shares are sold with a front-end
sales charge. Class C shares may be
subject to a contingent deferred sales
charge. Both classes of shares have
identical rights to earnings, assets and
voting privileges, except that each class
has its own distribution and/or service
plan, expenses directly attributable to a
particular class and exclusive voting
rights with respect to matters affecting
a single class. The following is a
summary of significant accounting
policies consistently followed by the
Fund.
----------------------------------------------
INVESTMENT VALUATION. Portfolio
securities are valued at the close of the
New York Stock Exchange on each trading
day. Listed and unlisted securities for
which such information is regularly
reported are valued at the last sale
price of the day or, in the absence of
sales, at values based on the closing bid
or asked price or the last sale price on
the prior trading day. Long-term and
short-term "non-money market" debt
securities are valued by a portfolio
pricing service approved by the Board of
Trustees. Such securities which cannot be
valued by the approved portfolio pricing
service are valued using dealer-supplied
valuations provided the Manager is
satisfied that the firm rendering the
quotes is reliable and that the quotes
reflect current market value, or under
consistently applied procedures
established by the Board of Trustees to
determine fair value in good faith.
Short-term "money market type" debt
securities having a remaining maturity of
60 days or less are valued at cost (or
last determined market value) adjusted
for amortization to maturity of any
premium or discount.
----------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires
the custodian to take possession, to have
legally segregated in the Federal Reserve
Book Entry System or to have segregated
within the custodian's vault, all
securities held as collateral for
repurchase agreements. The market value
of the underlying securities is required
to be at least 102% of the resale price
at the time of purchase. If the seller of
the agreement defaults and the value of
the collateral declines, or if the seller
enters an insolvency proceeding,
realization of the value of the
collateral by the Fund may be delayed or
limited.
----------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS
AND LOSSES. Income, expenses (other than
those attributable to a specific class)
and gains and losses are allocated daily
to each class of shares based upon the
relative proportion of net assets
represented by such class. Operating
expenses directly attributable to a
specific class are charged against the
operations of that class.
----------------------------------------------
FEDERAL TAXES. The Fund intends to
continue to comply with provisions of the
Internal Revenue Code applicable to
regulated investment companies and to
distribute all of its taxable income,
including any net realized gain on
investments not offset by loss
carryovers, to shareholders. Therefore,
no federal income or excise tax provision
is required.
----------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has
adopted a nonfunded retirement plan for
the Fund's independent trustees. Benefits
are based on years of service and fees
paid to each trustee during the years of
service. During the six months ended June
30, 1995, a provision of $12,193 was made
for the Fund's projected benefit
obligations, and a payment of $2,026 was
made to a retired trustee, resulting in
an accumulated liability of $109,517 at
June 30, 1995.
----------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends
and distributions to shareholders are
recorded on the ex-dividend date.
----------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO
SHAREHOLDERS. The character of the
distributions made during the year from
net investment income or net realized
gains may differ from their ultimate
characterization for federal income tax
purposes. Also, due to timing of dividend
distributions, the fiscal year in which
amounts are distributed may differ from
the year that the income or realized gain
(loss) was recorded by the Fund.
----------------------------------------------
OTHER. Investment transactions are
accounted for on the date the investments
are purchased or sold (trade date) and
dividend income is recorded on the
ex-dividend date. Realized gains and
losses on investments and unrealized
appreciation and depreciation are
determined on an identified cost basis,
which is the same basis used for federal
income tax purposes.
16 Oppenheimer Target Fund
<PAGE>
- --------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited
BENEFICIAL INTEREST number of no par value shares of
beneficial interest. Transactions in
shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED
DECEMBER 31, 1994
------------------------------ ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Class A:
Sold 1,366,709 $ 34,221,421 1,091,689 $ 27,823,899
Dividends and distributions
reinvested -- -- 1,592,900 35,776,790
Issued in connection with the
acquisition of Oppenheimer
Time Fund--Note 5 11,277,345 315,314,574
Redeemed (1,209,261) (30,496,732) (3,693,115) (93,884,370)
---------- ------------ ---------- ------------
Net increase (decrease) 11,434,793 $319,039,263 (1,008,526) $(30,283,681)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
-----------------------------------------------------------------------------------------------
Class C:
Sold 102,454 $ 2,547,998 65,435 $ 1,619,304
Dividends and distributions
reinvested -- -- 4,518 100,882
Redeemed (19,097) (467,504) (22,893) (565,808)
---------- ------------ ---------- ------------
Net increase 83,357 $ 2,080,494 47,060 $ 1,154,378
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND At June 30, 1995, net unrealized
LOSSES ON INVESTMENTS appreciation on investments of
$154,308,018 was composed of gross
appreciation of $161,460,470, and gross
depreciation of $7,152,452.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER Management fees paid to the Manager were
TRANSACTIONS WITH AFFILIATES in accordance with the investment
advisory agreement with the Fund which
provides for a fee of .75% on the first
$200 million of average annual net
assets, .72% on the next $200 million,
.69% on the next $200 million, .66% on
the next $200 million and .60% on net
assets in excess of $800 million. The
Manager has agreed to reimburse the Fund
if aggregate expenses (with specified
exceptions) exceed the most stringent
state regulatory limit on Fund expenses.
For the six months ended June 30, 1995,
commissions (sales charges paid by
investors) on sales of Class A shares
totaled $228,199, of which $78,591 was
retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of
the Manager, as general distributor, and
by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by
OFDI on sales of the Fund's Class C
shares totaled $15,545, of which $212 was
paid to an affiliated broker/dealer.
During the six months ended June 30,
1995, OFDI received contingent deferred
sales charges of $935 upon redemption of
Class C shares, as reimbursement for
sales commissions advanced by OFDI at the
time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a
division of the Manager, is the transfer
and shareholder servicing agent for the
Fund, and for other registered investment
companies. OSS's total costs of providing
such services are allocated ratably to
these companies.
Under separate approved plans, each class
may expend up to .25% of its net assets
annually to reimburse OFDI for costs
incurred in connection with the personal
service and maintenance of accounts that
hold shares of the Fund, including
amounts paid to brokers, dealers, banks
and other institutions. In addition,
Class C shares are subject to an
asset-based sales charge of .75% of net
assets annually, to reimburse OFDI for
sales commissions paid from its own
resources at the time of sale and
associated financing costs. In the event
of termination or discontinuance of the
Class C plan, the Board of Trustees may
allow the Fund to continue payment of the
asset-based sales charge to OFDI for
distribution expenses incurred on Class C
shares sold prior to termination or
discontinuance of the plan. During the
six months ended June 30, 1995, OFDI paid
$20,149 to an affiliated broker/dealer as
reimbursement for Class A personal
service and maintenance expenses and
retained $9,631 as reimbursement for
Class C sales commissions and service fee
advances, as well as financing costs.
- --------------------------------------------------------------------------------
5. ACQUISITION OF On June 23, 1995, the Fund acquired all
OPPENHEIMER TIME FUND of the net assets of Oppenheimer Time
Fund, pursuant to an Agreement and Plan
of Reorganization approved by the
Oppenheimer Time Fund shareholders on
June 20, 1995. The Fund issued 11,277,345
shares of beneficial interest (Class A),
valued at $315,314,574 in exchange for
the net assets, resulting in combined
Class A net assets of $686,360,280 on
June 23, 1995. The exchange qualifies as
a tax-free reorganization for federal
income tax purposes.
<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 - See Parts A and B: Filed herewith.
2. Independent Auditors' Report - See Part B: Filed herewith.
3. Statement of Investments: at 12/31/94 (audited) and at
6/30/95 (unaudited) - See Part B: Filed herewith.
4. Statement of Assets and Liabilities: at 12/31/94 (audited)
and at 6/30/95 (unaudited) (See Part B) - See Part B: Filed
herewith.
5. Statement of Operations: at 12/31/94 (audited) and at
6/30/95 (unaudited) - See Part B: Filed herewith.
6. Statements of Changes in Net Assets - See Part B: Filed
herewith.
7. Notes to Financial Statements - See Part B: Filed herewith.
(b) Exhibits
--------
1. (i) Amended and Restated Declaration of Trust dated
August 21, 1995: Filed with Post-Effective Amendment
No. 32, to Registrant's Registration Statement,
8/29/95, and incorporated herein by reference.
(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 and incorporated herein by reference.
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: Filed herewith.
(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: Filed herewith.
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. 15 to the Registration
Statement of Oppenheimer Mortgage Income Fund, (Reg.
No. 33-6614), 1/19/95, and incorporated herein by
reference.
(iii) Form of Tax Sheltered Retirement Plan and Custody
Agreement for Employees of Public Schools and Tax
Exempt Organizations: Filed with Post-Effective
Amendment No. 47 to the Registration Statement of
Oppenheimer Growth Fund (Reg. No. 2-45272), 10/21/94,
and incorporated herein by reference.
(iv) Form of Simplified Employee Pension IRA: Filed with
Post-Effective Amendment No. 15 to the Registration
Statement of Oppenheimer Mortgage Income Fund (Reg. No.
33-6614), 1/19/95, 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.
(vi) Form of Prototype 401(k) plan: Filed with Post-
Effective Amendment No. 7 to the Registration Statement
of Oppenheimer Strategic Income & Growth Fund (Reg. No.
33-47378), 9/28/95, and incorporated herein by
reference.
15. (i) 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: Filed herewith.
(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 - Filed herewith.
17. Financial Data Schedule for:
(i) Class A shares at 12/31/94: Filed herewith.
(ii) Class B shares: N/A.
(iii) Class C shares at 12/31/94: Filed herewith.
(iv) Class A shares at 6/30/95: Filed herewith.
(v) Class C shares at 6/30/95: Filed herewith.
-- 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. OppenheimerFunds Multiple Class Plan under Rule 18f-3 dated
10/24/95: Filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer California Tax-Exempt
Fund (Reg. No. 33-23566), 11/1/95, and incorporated herein
by reference.
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 October 6, 1995
-------------- ------------------------
Class A Shares of Beneficial 60,560
Interest
Class B Shares of Beneficial 0
Interest
Class C Shares of Beneficial 621
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 Oppenheimer Funds
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.,
Oppenheimer Main Street Funds, 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 Oppenheimer Funds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
Oppenheimer Funds. 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; 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.
Senior Vice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer
Variable Account Funds, Oppenheimer Main
Street Funds, Inc. and Oppenheimer
Target Fund; Senior Vice President and
Portfolio Manager of Oppenheimer 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 Oppenheimer Funds; Vice President of the
& General Counsel Denver-based Oppenheimer Funds; 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 Variable Account Funds and
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the Oppenheimer
Funds;
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
and Director parent holding company; President, CEO and
a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
Oppenheimer Funds; President and Chairman of
the Board of Main Street Advisers, Inc.;
formerly President and CEO of the Manager.
Robert G. Galli, Trustee of the New York-based
Vice Chairman Oppenheimer Funds; Vice President and
Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of HarbourView
and Centennial, a director of SFSI and SSI,
an officer of other Oppenheimer Funds and
Executive Vice President & General Counsel
of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Mildred Gottlieb Formerly served as a Strategy Consultant
Assistant Vice President for the Private Client Division of Merrill
Lynch.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Fund and
Oppenheimer Intermediate Tax Exempt Fund; an
officer of other Oppenheimer Funds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and 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.
Frank Jennings Portfolio Manager of Oppenheimer Global
Vice President Growth & Income Fund. Formerly a Managing
Director of Global Equities at Paine
Webber's Mitchell Hutchins division.
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 and Oppenheimer Variable
Account Funds; Associate Portfolio
Manager of Oppenheimer Discovery 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, Chief Executive Street Advisers, Inc.; and Chairman of
Officer and Director 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 Asset
Allocation Fund, Oppenheimer Strategic
Income Fund, Oppenheimer Strategic Income &
Growth Fund, Oppenheimer High Income Fund,
Oppenheimer Variable Account Funds and
Oppenheimer Bond Fund; an officer of other
Oppenheimer Funds.
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
Fund, Oppenheimer Intermediate Tax-
Exempt 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.
Vice President and Portfolio Manager for
Oppenheimer Variable Account Funds. Formerly
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
Oppenheimer Funds; 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
Oppenheimer Funds; 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.
Oppenheimer Main Street Funds, 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 Oppenheimer Funds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund;
an officer of other Oppenheimer Funds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion Income Fund and
Oppenheimer High Yield Fund; an officer of
other Oppenheimer Funds.
John Stoma, Vice President Formerly Vice President of Pension Marketing
with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors Oppenheimer Funds; 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
Jeffrey Van Giesen Formerly employed by Kidder Peabody Asset
Vice President Management.
Ashwin Vasan, Vice President and Portfolio Manager of
Vice President Oppenheimer Multi-Sector Income Trust,
Oppenheimer Multi-Government Trust and
Oppenheimer International Bond Fund; an
officer of other Oppenheimer Funds.
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
Oppenheimer Funds.
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 Oppenheimer
and Assistant Secretary Funds; Assistant Secretary of SSI, SFSI; an
officer of other Oppenheimer Funds.
and Assistant Secretary
Eva A. Zeff, An officer of certain Oppenheimer Funds;
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
Oppenheimer Funds.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer
Funds and the Denver-based Oppenheimer Funds set forth below:
New York-based Oppenheimer Funds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer 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 Oppenheimer Funds
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based Oppenheimer Funds, 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 Oppenheimer Funds, 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
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
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 certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 26th day of October, 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 October 26, 1995
- -------------- Board of Trustees
Leon Levy
/s/ Donald W. Spiro* Chief Executive October 26, 1995
- -------------------- Officer and
Donald W. Spiro Trustee
/s/ George Bowen* Chief Financial October 26, 1995
- ----------------- and Accounting
George Bowen Officer
/s/ Leo Cherne* Trustee October 26, 1995
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee October 26, 1995
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee October 26, 1995
- ----------------------
Benjamin Lipstein
/s/ Bridget A. Macaskill Trustee October 26, 1995
- ------------------------
Bridget A. Macaskill
/s/ Elizabeth B. Moynihan* Trustee October 26, 1995
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee October 26, 1995
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee October 26, 1995
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee October 26, 1995
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee October 26, 1995
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee October 26, 1995
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee October 26, 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)(4)(ii) Specimen Class B Share Certificate
24(b)(11) Independent Auditors' Consent
24(b)(15)(ii) Distribution and Service Plan and Agreement for Class
B Shares dated 11/1/95
24(b)(16) Performance Data Computation Schedule
24(b)(17)(i) Financial Data Schedule for Class A Shares at 12/31/94
24(b)(17)(iii) Financial Data Schedule for Class C Shares at 12/31/94
24(b)(17)(iv) Financial Data Schedule for Class A Shares at 6/30/95
24(b)(17)(v) Financial Data Schedule for Class C Shares at 6/30/95
Exhibit 24(b)(4)(ii)
OPPENHEIMER TARGET FUND
Class B Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box, CLASS B SHARES
below cert. no.)
(centered
below boxes) OPPENHEIMER TARGET FUND
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683924203
(at left) is the owner of
(centered) FULLY PAID CLASS B SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER TARGET FUND
(hereinafter called the "Fund"), transferable only on the
books of the Fund by the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Fund and the signatures
of its duly authorized officers.
(at left Dated: (at right
of seal) of seal)
(signature) (signature)
/s/ Andrew J. Donohue /s/ Donald W. Spiro
_______________________ ___________________
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER TARGET FUND
SEAL
1987
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
[A DIVISION OF OPPENHEIMER MANAGEMENT
CORPORATION]
Denver (CO.) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not on above list.
For Value Received ................ hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
_______________________________________________________________________
(Please print or type name and address of assignee)
______________________________________________________
________________________________________________Class B Shares of
beneficial interest represented by the within certificate, and do hereby
irrevocably constitute and appoint ___________________________ Attorney
to transfer the said shares on the books of the within named Fund with
full power of substitution in the premises.
Dated: ______________________
Signed: __________________________
___________________________________
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) face of the certificate in every particular
without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this "four hands"
watermark: logotype
______________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
CERTIFIC\320CERTB
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees Oppenheimer Target Fund:
We consent to the use of our report dated January 23, 1995, included
herein and the reference to our Firm under the heading "Financial
Highlights" in Part A of the registration statement.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Denver, Colorado
October 24, 1995
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER TARGET FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 1st day
of November, 1995, by and between OPPENHEIMER TARGET FUND (the "Fund") and
OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service
plan for Class B shares of the Fund (the "Shares"), contemplated by Rule
12b-1 (the "Rule") under the Investment Company Act of 1940 (the "1940
Act"), pursuant to which the Fund will compensate the Distributor for its
services in connection with the distribution of Shares, and the personal
service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it
is the issuer, pursuant to the Rule, according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering (1) distribution assistance in
connection with the sale of Shares and/or (2) administrative support
services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms
and provisions of this Plan shall be interpreted and defined in a manner
consistent with the provisions and definitions contained in (i) the 1940
Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., or its
successor (the "NASD Rules of Fair Practice") and (iv) any conditions
pertaining either to distribution-related expenses or to a plan of
distribution, to which the Fund is subject under any order on which the
Fund relies, issued at any time by the Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have
the following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person
or entity which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has provided
administrative support services with respect to Shares held by
Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning the sale of Shares; and (iii) has been selected by
the Distributor to receive payments under the Plan. Notwithstanding
the foregoing, a majority of the Fund's Board of Trustees (the
"Board") who are not "interested persons" (as defined in the 1940
Act) and who have no direct or indirect financial interest in the
operation of this Plan or in any agreements relating to this Plan
(the "Independent Trustees") may remove any broker, dealer, bank or
other person or entity as a Recipient, whereupon such person's or
entity's rights as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed
owned by more than one Recipient for purposes of this Plan. In the
event that more than one person or entity would otherwise qualify as
Recipients as to the same Shares, the Recipient which is the dealer
of record on the Fund's books as determined by the Distributor shall
be deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) The Fund will make payments to the Distributor, (i) within
forty-five (45) days of the end of each calendar quarter, in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of the
Shares computed as of the close of each business day (the "Service
Fee"), plus (ii) within ten (10) days of the end of each month, in
the aggregate amount of 0.0625% (0.75% on an annual basis) of the
average during the month of the aggregate net asset value of Shares
computed as of the close of each business day (the "Asset-Based Sales
Charge") outstanding for six years or less (the "Maximum Holding
Period"). Such Service Fee payments received from the Fund will
compensate the Distributor and Recipients for providing
administrative support services with respect to Accounts. Such
Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor and Recipients for providing distribution
assistance in connection with the sale of Shares.
The administrative support services in connection with the
Accounts to be rendered by Recipients may include, but shall not be
limited to, the following: answering routine inquiries concerning
the Fund, assisting in the establishment and maintenance of accounts
or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment
options available, and providing such other information and services
in connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may
reasonably request.
The distribution assistance in connection with the sale of
Shares to be rendered by the Distributor and Recipients may include,
but shall not be limited to, the following: distributing sales
literature and prospectuses other than those furnished to current
holders of the Fund's Shares ("Shareholders"), and providing such
other information and services in connection with the distribution
of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for payment
under the Plan if it has Qualified Holdings of Shares to entitle it
to payments under the Plan. In the event that either the Distributor
or the Board should have reason to believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering
appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the
Distributor, at the request of the Board, shall require the Recipient
to provide a written report or other information to verify that said
Recipient is providing appropriate distribution assistance and/or
services in this regard. If the Distributor or the Board of Trustees
still is not satisfied, either may take appropriate steps to
terminate the Recipient's status as such under the Plan, whereupon
such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.0625% (0.25% on an annual basis)
of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by
the Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, to be set from
time to time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make
service fee payments ("Advance Service Fee Payments") to any
Recipient quarterly, within forty-five (45) days of the end of each
calendar quarter, at a rate not to exceed (i) 0.25% of the average
during the calendar quarter of the aggregate net asset value of
Shares, computed as of the close of business on the day such Shares
are sold, constituting Qualified Holdings sold by the Recipient
during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) 0.0625% (0.25% on an annual
basis) of the average during the calendar quarter of the aggregate
net asset value of Shares computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record
by the Recipient or by its Customers for a period of more than one
(1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to
Recipients that are, or may be, imposed by Article III, Section 26,
of the NASD Rules of Fair Practice. In the event Shares are redeemed
less than one year after the date such Shares were sold, the
Recipient is obligated and will repay to the Distributor on demand
a pro rata portion of such Advance Service Fee Payments, based on the
ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this
paragraph (b) may, at the Distributor's sole option, be made more
often than quarterly, and sooner than the end of the calendar
quarter. However, no such payments shall be made to any Recipient
for any such quarter in which its Qualified Holdings do not equal
or exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Trustees.
A majority of the Independent Trustees may at any time or from
time to time decrease and thereafter adjust the rate of fees to be
paid to the Distributor or to any Recipient, but not to exceed the
rate set forth above, and/or direct the Distributor to increase or
decrease the Minimum Holding Period or the Minimum Qualified
Holdings. The Distributor shall notify all Recipients of the Minimum
Qualified Holdings, Maximum Holding Period and Minimum Holding
Period, if any, and the rate of payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions.
Inclusion of such provisions or a change in such provisions in a
revised current prospectus shall constitute sufficient notice. The
Distributor may make Plan payments to any "affiliated person" (as
defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are
subject to reduction or elimination of such amounts under the limits
to which the Distributor is, or may become, subject under Article
III, Section 26, of the NASD Rules of Fair Practice. The
distribution assistance and administrative support services to be
rendered by the Distributor in connection with the Shares may
include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity
that sells Shares, and\or paying such persons Advance Service Fee
Payments in advance of, and\or greater than, the amount provided for
in Section 3(b) of this Agreement; (ii) paying compensation to and
expenses of personnel of the Distributor who support distribution of
Shares by Recipients; (iii) obtaining financing or providing such
financing from its own resources, or from an affiliate, for the
interest and other borrowing costs of the Distributor's unreimbursed
expenses incurred in rendering distribution assistance and
administrative support services to the Fund; (iv) paying other direct
distribution costs, including without limitation the costs of sales
literature, advertising and prospectuses (other than those furnished
to current Shareholders) and state "blue sky" registration expenses;
and (v) any service rendered by the Distributor that a Recipient may
render pursuant to part (a) of this Section 3. Such services include
distribution assistance and administrative support services rendered
in connection with Shares acquired (i) by purchase, (ii) in exchange
for shares of another investment company for which the Distributor
serves as distributor or sub-distributor, or (ii) pursuant to a plan
of reorganization to which the Fund is a party. In the event that
the Board should have reason to believe that the Distributor may not
be rendering appropriate distribution assistance or administrative
support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board
with a written report or other information to verify that the
Distributor is providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources
(which may include profits derived from the advisory fee it receives
from the Fund), or (ii) by the Distributor (a subsidiary of OMC),
from its own resources, from Asset-Based Sales Charge payments or
from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does
not obligate or in any way make the Fund liable to make any payment
whatsoever to any person or entity other than directly to the
Distributor. In no event shall the amounts to be paid to the
Distributor exceed the rate of fees to be paid by the Fund to the
Distributor set forth in paragraph (a) of this section 3.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Fund
who are not "interested persons" of the Fund ("Disinterested Trustees")
shall be committed to the discretion of such Disinterested Trustees.
Nothing herein shall prevent the Disinterested Trustees from soliciting
the views or the involvement of others in such selection or nomination if
the final decision on any such selection and nomination is approved by a
majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund
shall provide written reports to the Fund's Board for its review,
detailing services rendered in connection with the distribution of the
Shares, the amount of all payments made and the purpose for which the
payments were made. The reports shall be provided quarterly, and shall
state whether all provisions of Section 3 of this Plan have been complied
with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class, on not more than sixty days written notice to any other party
to the agreement; (ii) such agreement shall automatically terminate in the
event of its assignment (as defined in the 1940 Act); (iii) it shall go
into effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such agreement; and (iv) it shall, unless terminated as herein provided,
continue in effect from year to year only so long as such continuance is
specifically approved at least annually by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan
has been approved by a vote of the Board and its Independent Trustees cast
in person at a meeting called on March 16, 1995, for the purpose of voting
on this Plan, and shall take effect as of the date first set forth above.
Unless terminated as hereinafter provided, it shall continue in effect
until December 31, 1995 and from year to year thereafter or as the Board
may otherwise determine only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such continuance. This Plan may not be amended to increase materially the
amount of payments to be made without approval of the Class B
Shareholders, in the manner described above, and all material amendments
must be approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class. In the event of such termination, the Board and its
Independent Trustees shall determine whether the Distributor shall be
entitled to payment from the Fund of all or a portion of the Service Fee
and/or the Asset-Based Sales Charge in respect of Shares sold prior to the
effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Fund under this Plan are not
binding upon any Trustee or shareholder of the Fund personally, but bind
only the Fund and the Fund's property. The Distributor represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder and Trustee liability for acts or obligations of
the Fund.
OPPENHEIMER TARGET FUND
By:------------------------------------
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:------------------------------------
Katherine P. Feld, Vice President
& Secretary
Oppenheimer Target Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated as
described below, on the basis of the Fund's distributions, for the past 10
years which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
01/11/84 0.1150 0.6000 19.020
01/29/85 0.3150 0.0000 15.760
01/25/86 0.3800 0.0000 19.100
01/26/87 0.1150 0.1900 21.910
12/24/87 0.1900 4.1000 12.640
06/24/88 0.0000 0.0900 15.780
12/23/88 0.2550 0.0000 15.940
06/23/89 0.0500 0.0000 18.350
12/22/89 0.5700 0.0850 17.990
06/22/90 0.0150 0.0000 19.300
12/21/90 0.3850 0.0000 17.400
12/20/91 0.1780 0.6720 21.690
12/18/92 0.1680 0.7820 25.270
12/27/93 0.1200 0.3980 25.560
12/16/94 0.2010 2.9820 22.460
Class C Shares
12/27/93 0.1010 0.3980 25.560
12/16/94 0.0850 2.9820 22.330
Oppenheimer Target Fund
Page 2
October 25, 1995
1. Average Annual Total Returns for the Periods Ended 12/31/94:
The formula for calculating average annual total return is as follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$ 946.79 1 $1,500.73 .2
(---------) - 1 = -5.32% (---------) - 1 = 8.46%
$1,000 $1,000
Ten Year
$2,711.71 .1
(---------) - 1 = 10.49%
$1,000
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00% for the
first year, and 0.00% for the inception:
One Year Inception
$ 986.21 1 $1,006.56 .9217
(---------) - 1 = -1.38% (---------) - 1 = 0.60%
$1,000 $1,000
Oppenheimer Target Fund
Page 3
October 25, 1995
1. Average Annual Total Returns for the Periods Ended 12/31/94 (Continued):
Examples at NAV:
Class A Shares
One Year Five Year
$1,004.55 1 $1,592.28 .2
(---------) - 1 = .46% (---------) - 1 = 9.75%
$1,000 $1,000
Ten Year
$2,877.14 .1
(---------) - 1 = 11.15%
$1,000
Class C Shares
One Year Inception
$ 994.96 1 $1,006.56 .9217
(---------) - 1 = -0.50% (---------) - 1 = 0.60%
$1,000 $1,000
2. Cumulative Total Returns for the Periods Ended 12/31/94:
The formula for calculating cumulative total return is as follows:
ERV - P
------- = Cumulative Total Return
P
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$ 946.79 - $1,000 $1,500.73 - $1,000
------------------ = -5.32% ------------------ = 50.07%
$1,000 $1,000
Ten Year
$2,711.71 - $1,000
------------------ = 171.17%
$1,000
Oppenheimer Target Fund
Page 4
October 25, 1995
2. Cumulative Total Returns for the Periods Ended 12/31/94 (Continued):
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00% for the
first year, and 0.00% for the inception:
One Year Inception Year
$ 986.21 - $1,000 $1,006.56 - $1,000
------------------ = -1.38% ------------------ = .65%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$1,004.55 - $1,000 $1,592.28 - $1,000
------------------ = .46% ------------------ = 59.23%
$1,000 $1,000
Ten Year
$2,877.14 - $1,000
------------------ = 187.71%
$1,000
Class C Shares
One Year Inception Year
$ 994.96 - $1,000 $1,006.56 - $1,000
------------------ = -0.50% ------------------ = .65%
$1,000 $1,000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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