As filed with the Securities and Exchange Commission on April 13, 1995
Registration No. 2-69719
811-3105
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. / /
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.
Executive Vice President & General Counsel
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(212) 323-0256
(Name and Address of Agent for Service)
As soon as practicable after the Registration Statement becomes effective.
(Approximate Date of Proposed Public Offering)
It is proposed that this filing will become effective on May 15, 1995,
pursuant to Rule 488.
No filing fee is due because the Registrant has previously registered an
indefinite number of shares under Rule 24f-2; a Rule 24f-2 notice for the
year ended December 31, 1994 was filed on February 27, 1995.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A
Proxy Statement for Oppenheimer Time Fund
and
Prospectus for Oppenheimer Target Fund
Part B
Statement of Additional Information
Part C
Other Information
Signatures
Exhibits
<PAGE>
FORM N-14
OPPENHEIMER TARGET FUND
Cross Reference Sheet
Part A of
Form N-14
Item No. Proxy Statement and Prospectus Heading and/or Title of Document
- --------- ---------------------------------------------------------------
1 (a) Cross Reference Sheet
(b) Front Cover Page
(c) *
2 (a) *
(b) Table of Contents
3 (a) Table of Fees
(b) Synopsis
(c) Principal Risk Factors
4 (a) Synopsis; Approval of the Reorganization; Comparison between the
Fund and Target Fund; Method of Carrying Out the Reorganization;
Miscellaneous Information
(b) Approval of the Reorganization - Capitalization Table
5 (a) Registrant's Prospectus; Additional Information
(b) *
(c) *
(d) *
(e) Comparison between the Fund and Target Fund
(f) Comparison between the Fund and Target Fund
6 (a) Prospectus of Oppenheimer Time Fund; Front Cover Page
(b) Comparison between the Fund and Target Fund
(c) *
(d) *
7 (a) Introduction; Synopsis
(b) *
(c) Introduction; Approval of the Reorganization
8 (a) Proxy Statement
(b) *
9 *
Part B of
Form N-14
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Table of Contents
12 (a) Registrant's Statement of Additional Information
(b) *
13 (a) Statement of Additional Information about Oppenheimer Time Fund
(b) *
14 Registrant's Statement of Additional Information; Statement of
Additional Information about Oppenheimer Time Fund; Annual
Report of Oppenheimer Time Fund at 6/30/94; Semi-Annual Report
of Oppenheimer Time Fund at 12/31/94; Registrant's Annual Report
at 12/31/94
Part C of
Form N-14
Item No. Other Information Heading
- --------- -------------------------
15 Indemnification
16 Exhibits
17 Undertakings
_______________
* Not Applicable or negative answer
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant / x /
Filed by a party other than the registrant / /
Check the appropriate box:
/ X / Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Oppenheimer Target Fund
- ------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Oppenheimer Time Fund
- ------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-
6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee Computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- ------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
- ------------------------------------------------------------------
(1) Amount previously paid:
- ------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- ------------------------------------------------------------------
(3) Filing Party:
- ------------------------------------------------------------------
(4) Date Filed:
- -----------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER TIME FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 20, 1995
To the Shareholders of Oppenheimer Time Fund:
Notice is hereby given that a Special Meeting of the Shareholders of
Oppenheimer Time Fund (the "Fund"), a registered management investment
company, will be held at 3410 South Galena Street, Denver, Colorado 80231,
at 10:00 A.M., Denver time, on June 20, 1995, or any adjournments thereof
(the "Meeting"), for the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization
between the Fund and Oppenheimer Target Fund ("Target Fund") and which
contemplates the transfer of substantially all the assets of the Fund, in
exchange for Class A shares of Target Fund, the distribution of such Class
A shares to the shareholders of the Fund in complete liquidation of the
Fund, the de-registration of the Fund as an investment company under the
Investment Company Act of 1940, as amended, and the cancellation of the
outstanding shares of the Fund (The Proposal); and
2. To act upon such other matters as may properly come before the
Meeting.
Shareholders of record at the close of business on April 21, 1995 are
entitled to notice of, and to vote at, the Meeting. The Proposal is more
fully discussed in the Proxy Statement and Prospectus. Please read it
carefully before telling us, through your proxy or in person, how you wish
your shares to be voted. The Fund's Board of Trustees recommends a vote
in favor of the Proposal. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED
PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
May __, 1995
_______________________________________________________________________
Shareholders who do not expect to attend the Meeting are requested to
indicate voting instructions on the enclosed proxy and to date, sign and
return it in the accompanying postage-paid envelope. To avoid unnecessary
duplicate mailings, we ask your cooperation in promptly mailing your proxy
no matter how large or small your holdings may be.
320
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER TARGET FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Oppenheimer Target Fund ("Target Fund") has filed with the Securities and
Exchange Commission (the "SEC") a Registration Statement on Form N-14
relating to the registration of shares of Target Fund to be offered to the
shareholders of Oppenheimer Time Fund (the "Fund"), located at Two World
Trade Center, New York, New York 10048-0203 (telephone 1-800-525-7048),
pursuant to an Agreement and Plan of Reorganization (the "Reorganization
Agreement") between Target Fund and the Fund. This Proxy Statement of the
Fund relating to the Reorganization Agreement and the transactions
contemplated thereby (the "Reorganization") also constitutes a Prospectus
of Target Fund filed as part of such Registration Statement. Target Fund
is a mutual fund that seeks capital appreciation as its investment
objective by investing in securities of "growth-type" companies and
cyclical industries.
This Proxy Statement and Prospectus sets forth concisely information about
Target Fund that shareholders of the Fund should know before voting on the
Reorganization. A copy of the Prospectus for Target Fund, dated May 1,
1995, is enclosed, and is incorporated herein by reference. The following
documents have been filed with the SEC and are available without charge
upon written request to Oppenheimer Shareholder Services ("OSS"), the
transfer and shareholder servicing agent for Target Fund and the Fund, at
P.O. Box 5270, Denver, Colorado 80217, or by calling the toll-free number
shown above: (i) a Prospectus for the Fund, dated October 21, 1994,
supplemented April 13, 1995; (ii) a Statement of Additional Information
about the Fund, dated October 21, 1994, supplemented January 3, 1995; and
(iii) a Statement of Additional Information about Target Fund, dated May
1, 1995, (the "Target Fund Additional Statement"). The Target Fund
Additional Statement, which is incorporated herein by reference, contains
more detailed information about Target Fund and its management. A
Statement of Additional Information relating to the Reorganization, dated
May __, 1995, has been filed with the SEC as part of the Target Fund
Registration Statement on Form N-14 and is incorporated by reference
herein, and is available by written request to OSS at the same address
immediately above or by calling the toll-free number shown above.
Investors are advised to read and retain this Proxy Statement and
Prospectus for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated May __, 1995.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
Page
Introduction
General
Record Date; Vote Required; Share Information
Proxies
Costs of the Solicitation and the Reorganization
Comparative Fee Table
Synopsis
Parties to the Reorganization
The Reorganization
Reasons for the Reorganization
Tax Consequences of the Reorganization
Investment Objectives and Policies
Investment Advisory and Service Plan Fees
Purchases, Exchanges and Redemptions
Principal Risk Factors
Approval of the Reorganization (The Proposal)
Reasons for the Reorganization
The Reorganization
Tax Aspects of the Reorganization
Capitalization Table (Unaudited)
Comparison Between the Fund and Target Fund
Investment Objectives and Policies
Special Investment Methods
Investment Restrictions
Portfolio Turnover
Brokerage Practices
Expense Ratios and Performance
Shareholder Services
Rights of Shareholders
Management and Distribution Arrangements
Target Fund Performance
Purchase of Additional Shares
Method of Carrying Out the Reorganization
Miscellaneous
Additional Information - Target Fund Performance
Financial Information
Public Information
Other Business
Annex A - Agreement and Plan of Reorganization, dated March ___, 1995, by
and between
Oppenheimer Time Fund and Oppenheimer Target Fund A-1
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER TARGET FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Special Meeting of Shareholders
to be held June 20, 1995
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the shareholders
of Oppenheimer Time Fund (the "Fund"), a registered management investment
company, in connection with the solicitation by the Fund's Board of
Trustees (the "Board") of proxies to be used at the Special Meeting of
Shareholders of the Fund to be held at 3410 South Galena Street, Denver,
Colorado 80231, at 10:00 A.M., Denver time, on June 20, 1995, or any
adjournments thereof (the "Meeting"). It is expected that the mailing of
this Proxy Statement and Prospectus will commence on or about May 14,
1995.
At the Meeting, shareholders of the Fund will be asked to approve an
Agreement and Plan of Reorganization (the "Reorganization Agreement")
between the Fund and Oppenheimer Target Fund, including the transfer of
substantially all the assets of the Fund (consisting of Class A shares)
in exchange for Class A shares of Target Fund, the distribution of such
Class A shares to the shareholders of the Fund in complete liquidation of
the Fund, the deregistration of the Fund as an investment company under
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the cancellation of the outstanding shares of the Fund. Target
Fund currently offers Class A shares with a sales charge imposed at the
time of purchase (certain purchases aggregating $1.0 million or more are
not subject to a sales charge, but may be subject to a contingent deferred
sales charge). Target Fund also offers Class C shares which are offered
without a sales or front-end sales charge, although an investor may pay
a sales charge when shares are redeemed, depending on how long they are
held. A contingent deferred sales charge is imposed on most Class C
shares redeemed within 12 months of purchase. The Class A shares to be
issued by Target Fund pursuant to the Reorganization will be issued at net
asset value without a sales charge.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on April 21, 1995 as the record
date (the "Record Date") for the determination of shareholders entitled
to notice of, and to vote at, the Meeting. An affirmative vote of the
holders of a majority of the outstanding shares of the Fund entitled to
vote at the Meeting is required for approval of the Proposal. Each
shareholder will be entitled to one vote for each share and a fractional
vote for each fractional share held of record at the close of business on
the Record Date. Only shareholders of the Fund will vote on the
Reorganization. The vote of shareholders of Target Fund is not being
solicited.
At the close of business on the Record Date, there were approximately
_____________ shares of the Fund issued and outstanding. The presence in
person or by proxy of the holders of a majority of such shares constitutes
a quorum for the transaction of business at the Meeting. To the knowledge
of the Fund, as of the Record Date, no person owned of record or
beneficially 5% or more of its outstanding shares except
for____________________________________________, which owned of record
___________ shares of the Fund (___% of the outstanding shares of the Fund
as of such date). As of the Record Date, to the knowledge of Target Fund,
no person owned of record or beneficially 5% or more of its outstanding
shares except for _____________, which owned of record ___________ shares
of Target Fund (___% of the outstanding shares of Target Fund as of such
date).
Proxies
The enclosed form of proxy, if properly executed and returned, will be
voted (or counted as an abstention or withheld from voting) in accordance
with the choices specified thereon, and will be included in determining
whether there is quorum to conduct the Meeting. The proxy will be voted
in favor of the Proposal unless a choice is indicated to vote against or
to abstain from voting on the Proposal.
Shares owned of record by broker-dealers for the benefit of their
customers ("street account shares") will be voted by the broker-dealer
based on instructions received from its customers. If no instructions are
received, the broker-dealer may (if permitted under applicable stock
exchange rules), as record holder, vote such shares on the Proposal in the
same proportion as that broker-dealer votes street account shares for
which voting instructions were received in time to be voted. If a
shareholder executes and returns a proxy but fails to indicate how the
votes should be cast, the proxy will be voted in favor of the Proposal.
The proxy may be revoked at any time prior to the voting thereof by: (i)
writing to the Secretary of the Fund at Two World Trade Center, 34th
Floor, New York, New York 10048-0203; (ii) attending the Meeting and
voting in person; or (iii) signing and returning a new proxy (if returned
and received in time to be voted).
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing and
mailing this Proxy Statement and Prospectus, will be borne by the Fund.
Any documents such as existing prospectuses or annual reports that are
included in that mailing will be a cost of the fund issuing the document.
In addition to the solicitation of proxies by mail, proxies may be
solicited by officers of the Fund or officers and employees of OSS,
personally or by telephone or telegraph. Any expenses so incurred will
be borne by OSS. Brokerage houses, banks and other fiduciaries may be
requested to forward soliciting material to the beneficial owners of
shares of the Fund and to obtain authorization for the execution of
proxies. For those services, if any, they will be reimbursed by the Fund
for their reasonable out-of-pocket expenses.
With respect to the Reorganization, the Fund and Target Fund will bear the
cost of their respective tax opinion. Any other out-of-pocket expenses
of the Fund and Target Fund associated with the Reorganization, including
legal, accounting and transfer agent expenses, will be borne by the Fund
and Target Fund, respectively, in the amounts so incurred by each.
COMPARATIVE FEE TABLE
The Fund and Target Fund each pay a variety of expenses directly for
management of their assets, administration, distribution of their shares
and other services, and those expenses reflected in each fund's net asset
value per share. Shareholders pay other expenses directly, such as sales
charges.
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer
Target Fund Time Fund
Class A Class C Class A
<S> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None 5.75%
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) 1.0%(2) None(1)
<FN>
(1)If you invest more than $1 million 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 during which you purchased those shares.
(2)If you redeem Class C shares within 12 months of buying them, you may have to pay a 1.0% contingent deferred sales
charge.
</TABLE>
The sales charge on purchases of the Fund, and the sales charge on
purchases of Class A shares of Target Fund, are identical, and are not
expected to change as a result of the reorganization.
The following numbers are projections of each fund's business expenses
for the period ended December 31, 1994. These amounts are shown as a
percentage of the average net assets of each class of a fund's shares for
that year. The pro forma fees reflect the combined funds at December 31,
1994, as if the Reorganization had occurred on that date.
<TABLE>
<CAPTION>
Pro forma
Oppenheimer Oppenheimer Combined
Target Fund Time Fund Fund
Class A Class C Class A Class A Class C
<S> <C> <C> <C> <C> <C>
Management Fees 0.74%+ 0.74%+ 0.74% 0.71% 0.71%
12b-1 Service Plan Fees 0.17%* 1.00% 0.16%* 0.16% 1.00%
Other Expenses 0.30% 0.42% 0.26% 0.27% 0.39%
Total Fund Operating 1.21% 2.16% 1.16% 1.14% 2.10%
Expenses
<FN>
+ Management fees for Target Fund have been restated in the fee table because the annual fees on the first and second $200
million of net assets decreased to .75% and .70%, respectively, on July 1, 1994. The fees in the table are based on expenses
that would have been incurred if the lower management rate had been in effect for the twelve months ended December 31, 1994.
* The 12b-1 Service Plan fees for Target Fund have been restated in the table because an amended Service Plan for Target
Fund shares took effect July 1, 1994. That applies to all shares of the Fund, regardless of the date on which the shares were
purchased. The fees in the table are based on expenses that would have been incurred if that plan had been in effect during the
twelve months ended December 31, 1994. Actual management fees for Target Fund would have been .76%, other expenses were
.30% and actual 12b-1 Service Plan fees would have been .10% and actual total operating expenses would have been 1.16%.
The 12b-1 Service Plan fees for Time Fund have been restated for the same reasons as described above. The actual 12b-1
Service Plan fees would have been .11%, other expenses were .26% and the actual total fund operating expenses would have
been 1.11%. Target Fund's 12b-1 Service Plan fees for its Class C shares includes an asset-based sales charge.
</TABLE>
To try and show the effect of these expenses, on an investment over time,
the hypotheticals shown below have been created. Assume that you make a
$1,000 investment in either the Fund or Target Fund or the new combined
fund and that the annual return is 5% and that the operating expenses for
each fund are the ones shown in the chart above. If you were to redeem
your shares at the end of each period shown below, your investment would
incur the following expenses by the end of each period shown:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years(1)
<S> <C> <C> <C> <C>
Oppenheimer Target Fund
Class A Shares $69 $94 $120 $196
Class C Shares $32 $68 $116 $249
Oppenheimer Time Fund
Class A Shares $69 $92 $118 $190
Pro Forma Combined Fund
Class A Shares $68 $92 $117 $188
Class C Shares $31 $66 $113 $243
If you did not redeem your investment, it would incur the following expenses:
1 year 3 years 5 years 10 years(1)
Oppenheimer Target Fund
Class A Shares $69 $94 $120 $196
Class C Shares $22 $68 $116 $249
Oppenheimer Time Fund
Class A Shares $69 $68 $118 $190
Pro Forma Combined Fund
Class A Shares $68 $92 $117 $188
Class C Shares $21 $66 $113 $243
<FN>
(1)Because of the asset-based sales charge imposed on Class C shares of Target Fund, long-term shareholders of Class C shares
could bear expenses that would be the economic equivalent of an amount greater than the maximum front-end sales charges
permitted under applicable regulatory requirements.
</TABLE>
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus and
presents key considerations for shareholders of the Fund to assist them
in determining whether to approve the Reorganization. This synopsis is
only a summary and is qualified in its entirety by the more detailed
information contained in or incorporated by reference in this Proxy
Statement and Prospectus and the Annex hereto. Shareholders should
carefully review this Proxy Statement and Prospectus and the Annex hereto
in their entirety and, in particular, the current Prospectus of Target
Fund which accompanies this Proxy Statement and Prospectus and is
incorporated by reference herein.
Parties to the Reorganization
The Fund is a diversified, open-end, management investment company.
Target Fund is a diversified, open-end, management investment company
which was reorganized as a Massachusetts business trust on ______________,
1987. The Fund and Target Fund are each located at Two World Trade
Center, New York, New York 10048-0203. The members of the Board of the
Fund and the Board of Trustees of Target Fund are the same. Oppenheimer
Management Corporation (the "Manager") acts as investment adviser to the
Fund and Target Fund (collectively referred to herein as the "funds").
Additional information about the parties is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of substantially
all the assets of the Fund, consisting of Class A shares, to Target Fund
in exchange for Class A shares of Target Fund. The net asset value of
Target Fund's Class A shares issued in the exchange will equal the value
of the assets of the Fund received by Target Fund. Following the Closing
Date (as hereafter defined) scheduled for the Reorganization, the Fund
will distribute the Class A shares of Target Fund received by the Fund on
the Closing Date to holders of Fund shares issued and outstanding as of
the Valuation Date (as hereinafter defined) in complete liquidation of the
Fund and the Fund will thereafter be dissolved and deregistered under the
Investment Company Act. As a result of the Reorganization, each Fund
shareholder will receive that number of full and fractional Target Fund,
Class A shares equal in value to such shareholder's pro rata interest in
the assets transferred to Target Fund as of the Valuation Date. The Board
has determined that the interests of existing Fund shareholders will not
be diluted as a result of the Reorganization. For the reasons set forth
below under "The Reorganization - Reasons for the Reorganization," the
Board, including the trustees who are not "interested persons" of the Fund
(the "Independent Trustees'), as that term is defined in the Investment
Company Act, has concluded that the Reorganization is in the best
interests of the Fund and its shareholders and recommends approval of the
Reorganization by Fund shareholders. If the Reorganization is not
approved, the Fund will continue in existence and the Board will determine
whether to pursue alternative actions.
Reasons for the Reorganization
The Board of Trustees of the Fund (the "Board"), including the Independent
Trustees, at a meeting held on March 16, 1995, unanimously approved and
recommended to the shareholders of the Fund that they approve the
Reorganization and Reorganization Agreement. In considering the
Reorganization, the Board compared the Fund to Target Fund with respect
to size, investment objectives, management fees and performance. Both the
Fund and Target Fund are equity funds sharing similar investment
objectives of seeking capital appreciation through emphasis on securities
of "growth-type companies." Each of the funds seeks its investment
objective by investing in common stocks, preferred stocks, convertible
securities and rights and warrants which vary in proportion from time to
time. Both funds may invest in stocks that are sensitive to changes in
the business cycle, known as "cyclicals" if they present opportunities for
long term growth. The funds do not invest to seek current income to pay
shareholders. Among other factors, the Board took into consideration that
the schedule of management fee rates are identical for both funds. The
Board also considered pro forma financial information which indicated that
the average management fee rate paid by shareholders in a combined fund
would likely be lower and that the expense ratio would be lower for Class
A shareholders of the combined fund. For the fiscal year ended June 30,
1994, the expense ratio for Time Fund was .94% of average annual net
assets. For the fiscal year ended December 31, 1994, the expense ratio
was 1.16% of the average annual net assets for Class A shares of Target
Fund and it was 2.18% of the average annual net assets for Class C shares.
With respect to the six months ended December 31, 1994, the expense ratio
for Time Fund was 1.29% of the average annual net assets (annualized).
For the fiscal year ended December 31, 1994, on a pro forma basis, giving
effect to the Reorganization, the expense ratio for Target Fund as the
surviving fund, would be 1.14% of the average annual net assets for Class
A shares and 2.10% of the average annual net assets for Class C shares.
The Board also considered that the Fund consists solely of Class A shares,
while Target Fund offers Class A shares and Class C shares. Class A
shares of the Fund could easily be exchanged for Class A shares of Target
Fund. The Board compared the size of each fund. As of March 15, 1995,
the net assets of the Fund were approximately $311 million and the net
assets of Target Fund were approximately $317 million. While the funds
are similar in size, it is expected that over time, Target Fund will
continue to grow and become the larger fund. In the month of February,
the Fund had over 7 million in net redemptions while Target Fund had over
5 million in net purchases. In addition, as a result of the
Reorganization, the combined fund will be much larger and shareholders of
the Fund should benefit from the economies of scale available to a larger
fund. These economies of scale should result in lower costs per account
for each shareholder through lower operating expenses and transfer agency
expenses.
The Board also considered that there would be no sales charge imposed in
effecting the Reorganization, and that the Reorganization would be
effected as a tax-free exchange. The Board determined that it would be
in the best interests of Time Fund and its shareholders to combine with
Target Fund. The Board also determined that combining the funds would not
result in a dilution of the interests of Time Fund shareholders.
In determining to recommend approval of the reorganization to
shareholders, the Board also considered information on the historical
performance of both funds. Target Fund has enjoyed significantly better
performance than the Fund, for the one and five year periods ended
December 31, 1994. Although past performance is not predictive of future
results the Board determined that the shareholders of the Fund would have
the opportunity to be shareholders in a similar fund with more favorable
past performance.
Tax Consequences of the Reorganization
In the opinion of KPMG Peat Marwick LLP ("Peat Marwick"), tax adviser to
the Fund, the Reorganization will qualify as a tax-free reorganization for
Federal income tax purposes. As a result, no gain or loss will be
recognized by the Fund, Target Fund, or the shareholders of the combined
fund for Federal income tax purposes as a result of the Reorganization.
For further information about the tax consequences of the Reorganization,
see "Approval of the Reorganization - Tax Aspects" below.
Investment Objectives and Policies
As its investment objective, both the Fund and Target Fund seek capital
appreciation.
The Fund seeks its investment objective of capital appreciation by
emphasizing investment in "mid-capitalization" companies (those generally
with capitalization between $500 million and $5 billion, also known as
"mid-cap" companies) that are, in the Manager's opinion, established, well
managed companies with strong market positions, high quality products and
high earnings growth potential that have a proven ability to translate
growth in sales and market share into earnings.
The Fund's investments include common stocks, preferred stocks,
convertible securities, and rights and warrants in proportions which vary
from time to time. Of the companies whose stocks the Fund held during the
fiscal year ended June 30, 1994, some are categorized as "consumer
cyclicals" that do well in the early to middle stages of the economic
cycle; some fall into the technology sectors, others are classified as
financial services issues. In every case, however, sector classifications
are less important selection criteria for the Fund than specific company
characteristics.
Target Fund seeks its investment objective of capital appreciation by
emphasizing investment in common stocks or other equity securities,
including convertible securities or may, just as with the Fund, hold
warrants and rights. Target 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.
Both the Fund and Target Fund may purchase equity and debt securities
issued or guaranteed by foreign companies or foreign governments or their
agencies. The Fund may purchase securities in any country, developed or
underdeveloped. There is no limit on the amount of assets each fund may
invest in foreign securities, although as to Target Fund, it does not
normally "expect" to have more than 35% of its assets invested in foreign
securities. Foreign currency will be held by each fund only in connection
with the purchase or sale of foreign securities.
The Manager considers many identical factors, when investing the assets
of the Fund or the assets of Target Fund, including general economic
conditions in the U.S. relative to foreign economies, and the trends in
domestic and foreign stock markets. Each of the funds may try to hedge
against losses in the value of its portfolio of securities by using
hedging strategies. When market conditions are unstable, each of the
funds may invest substantial amounts of their assets in debt securities,
such as money market instruments or government securities. The Manager
may, with respect to both funds, invest in securities of companies that
are in special situations that the Manager believes presents opportunities
for capital growth, such as a proposed merger or reorganization. There
is a risk that the price of a security may decline if the anticipated
development fails to occur. There is no restriction on the amount of
assets that each fund may invest in special situations.
Because the type of securities each fund invests in, and the investment
techniques each fund uses, some of which may be speculative, both funds
are designed for investors who are willing to accept greater risks of loss
of their capital in the hope of achieving capital appreciation. Neither
fund is intended for investors seeking assured income and preservation of
capital.
Investment Advisory and Distribution Plan Fees
The funds both obtain investment management services from Oppenheimer
Management Corporation (the "Manager"). The management fee is payable
monthly and computed on the net asset value of each fund as of the close
of business each day. The Fund pays a management fee at the rate of 0.75%
of the first $200 million of 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 assets over $800 million. Target Fund pays the identical
management fee rate, however, prior to July 1, 1994 the annual management
fee rate for Target Fund on the first and second $200 million of the
Target Funds aggregate net assets was 0.80% and 0.75% respectively. That
rate was lowered subsequent to July 1, 1994 and Target Fund and the Fund
now have the same management fee rates. Both the Fund and Target Fund
have service plans pursuant to Rule 12b-1 under the Investment Company
Act. Specifically, Target Fund has adopted a service plan for its Class
A shares and a Distribution and Service Plan for its Class C shares to
compensate the Distributor for its services and costs in distributing
Class C shares and servicing accounts. Fund shareholders, as a result of
the reorganization will become Class A shareholders of Target Fund and
will not be affected by the Distribution and Service Plan for Class C
shares. The Service Plan adopted by the Fund, and the Service Plan
adopted by Target Fund for its Class A shares (the "Service Plan") provide
that each of the funds reimburses Oppenheimer Funds Distributor, Inc. (the
"Distributor"), the distributor of each fund's shares, quarterly for all
or a portion of the Distributor's costs incurred in connection with the
personal service and maintenance of shareholder accounts that hold the
funds' shares. Time Fund amended its Service Plan, effective July 1,
1994. The Service Plan, as amended, applies to all shares of the Fund
regardless of the date on which they were purchased. The current maximum
annual fee payable by Time Fund pursuant to its service plan is 0.25% of
the average net asset value of the Fund's shares, and for Target Fund it
is 0.25% of the average net assets of Class A shares, computed as of the
close of each business day. See "Comparison Between the Fund and Target
Fund - Expense Ratios and Performance" below.
Purchases, Exchanges and Redemptions
The Fund and Target Fund are part of the OppenheimerFunds complex of
mutual funds. The procedures for purchases, exchanges and redemptions of
shares of the funds are substantially the same.
The maximum sales charge on shares of the Fund and Class A shares of
Target Fund is 5.75%, and is reduced for purchases of $25,000 or more.
For certain purchases of $1 million or more, the funds do not charge a
front-end sales charge but impose a contingent deferred sales charge of
a maximum of 1% on shares redeemed within 18 months of the end of the
calendar month of their purchase. Shares of Target Fund received in the
Reorganization will be issued at net asset value, without a sales charge.
Shareholders may purchase through AccountLink (whereby funds are
transmitted electronically from an account at a U.S. bank or other
financial institution that is an Automated Clearing House (ACH) up to
$100,000. Shareholders of the funds may exchange their shares at net
asset value for shares of any of over 30 equity, fixed-income and money
market funds for which the Distributor or an affiliate acts as the
distributor. Shares of any money market fund purchased without a sales
charge may be exchanged for shares of a fund offered with a sales charge
upon payment of the sales charge. However, shares of a particular class
may be exchanged only for shares of the same class in other
OppenheimerFunds. For example, shareholders of the Fund can only exchange
their Class A shares for Class A shares of another fund. Shareholders of
the funds may redeem their shares by written request or by telephone
request in an amount up to $50,000 in any seven-day period, or they may
arrange to have share redemption proceeds wired to a pre-designated
account at a U.S. bank or other financial institution that is an ACH
member ("AccountLink redemption"). Shareholders may redeem shares
automatically by calling PhoneLink and having redemption proceeds wired
to a pre-established AccountLink bank account. Shareholders of the funds
may reinvest redemption proceeds within six months of a redemption at net
asset value in shares of the funds or any of numerous "Eligible Funds"
within the OppenheimerFunds complex. The Fund and Target Fund may redeem
accounts valued at less than $500 and $200, respectively, if the account
has fallen below such stated amount for reasons other than market value
fluctuations. Both funds offer Automatic Withdrawal and Exchange Plans.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in Target
Fund, shareholders should carefully consider the following risk factors,
which is a summary only, relating to both Target Fund and the Fund, in
addition to the other information set forth in this Proxy Statement and
Prospectus and the more complete description of risk factors set forth in
the documents incorporated by reference herein, including the Prospectuses
of the funds and their respective Statements of Additional Information.
As stated in their respective Prospectuses, as a general matter, the Fund
and Target Fund are both intended for investors seeking capital
appreciation who are willing to accept greater risks of loss in the hopes
of greater gains. The funds do not invest to seek current income to pay
shareholders. There is no assurance that either the Fund or Target Fund
will achieve its investment objective.
Investment By The Funds in Foreign Securities
Each of the funds may invest in "foreign securities" which 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 market. The funds may purchase securities country, developed
or undeveloped. There is no limit on the amount of each fund assets that
may be invested in foreign securities, however, Target Fund normally does
not expect to have more than 35% of its assets invested in foreign
securities. The Fund may write and purchase both covered and uncovered
calls and puts on foreign currencies. The Fund may also enter into
Forward Contracts to protect against uncertainty in the level of future
exchange rates. Investments in foreign securities present special
additional risks and considerations not typically associated with
instruments in domestic securities. 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 instruments 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. Other risks include reduction of income
by foreign taxes; fluctuation in value of foreign portfolio investments
due to changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of public
information about foreign issuers; lack of uniform accounting, auditing
and financial reporting standards comparable to those applicable to
domestic issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity on foreign markets than in the U.S.;
less regulation of foreign issuers, stock exchanges and brokers than in
the U.S.; greater difficulties in commencing lawsuits; higher brokerage
commission rates than in the U.S.; increased risks of delays in settlement
of portfolio transactions or loss of certificates for portfolio
securities; possibilities in some countries of expropriation, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and unfavorable differences between the U.S. economy and
foreign economies. In the past, U.S. Government policies have
discouraged certain investments abroad by U.S. investors, through taxation
or other restrictions, and it is possible that such restrictions could be
re-imposed.
Investment In Growth Type Companies
The funds both seek their investment of capital appreciation by
emphasizing investment in "growth-type" companies. Specifically, the Fund
invests in "mid-capitalization" companies those generally with
capitalization between $500 million and $5 billion, also known as "mid-
cap" companies. With respect to Target Fund, the Manager may emphasize
investment in companies in particular ranges of size. Both funds may
invest in companies of any size and capitalization, however, in general
capital appreciation is more likely to be found in the securities of
"growth-type" companies that have a proven ability to translate growth in
sales and market shares into earnings gain. Some of the investment
techniques used by the Funds (see Risks of Hedging With Options and
Futures, described below) may be considered to be speculative and may
increase the risks of investing in the funds, and may also increase each
funds' operating costs.
Special Situations
Each of the funds, 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 each of the funds
may invest in "special situations."
Borrowing for Leverage
The Fund and Target Fund may borrow up to 10% of the value of their
respective total assets from banks on an unsecured basis to buy
securities. This is a speculative investment method known as "leverage."
Leveraging may subject an investment in 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.
Small, Unseasoned Companies. The funds 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
and may be subject to volatility in their prices. Neither of the funds
currently intends to invest no more than 5% of their respective net assets
in securities of small, unseasoned issuers.
Warrants and Rights
Each of the funds may invest in warrants, which are the option to purchase
stock at set prices that are valid for a limited period of time. The Fund
may invest up to 2% of its total assets in warrants or rights. Target
Fund may invest up to 5% of its total assets. These restrictions do not
include warrants or rights that have been acquired in units or are
attached to other securities. With respect to Target Fund no more than
2% of its assets may be invested in warrants that are not listed on the
New York or American Stock Exchanges.
Risks of Hedging With Options and Futures
The funds may write covered call options and engage in hedging
transactions as described below in "Comparison Between the Fund and Target
Fund - Special Investment Methods". There are certain risks in writing
calls. If a call written by the fund is exercised, the fund forgoes any
profit from any increase in the market price above the call price of the
underlying investment on which the call was written. In addition, the
fund could experience capital losses which might cause previously
distributed short-term capital gains to be re-characterized as a non-
taxable return of capital to shareholders. In writing puts, there is the
risk that the fund may be required to buy the underlying security at a
disadvantageous price. The principal risks of trading futures are (i)
possible imperfect correlation between the prices of the futures an the
market value of the dept securities in the fund's portfolio, (ii) possible
lack of a liquid secondary market for closing out a futures position,
(iii) the need for additional skills and techniques beyond those required
for normal portfolio management and (iv) losses on futures resulting from
interest rate movements not anticipated by the Manager. Writing covered
calls and the buying and selling of options and futures contracts are
considered derivative investments. A derivative investment is a specially
designed investment whose performance is linked to the performance of
another investment or security, such as an option, future, index or
currency. The risks of investing in derivative investments include not
only the ability of the company issuing the instrument to pay the amount
due on the maturity of the instrument, but also the risk that the
underlying investment or security might not perform the way the Manager
expected it to perform. The performance of derivative investments may
also be influenced by interest rate changes in the U.S. and abroad. All
of this can mean that the Fund will realize less income than expected.
Certain derivative instruments held by the Fund and Target Fund may trade
in the over-the-counter markets and may be illiquid. See "Illiquid and
Restricted Securities".
APPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
The Board of Trustees of the Fund (the "Board"), including the Independent
Trustees, at a meeting held on March 16, 1995, unanimously approved and
recommended to the shareholders of the Fund that they approve the
Reorganization and Reorganization Agreement. In considering the
Reorganization, the Board compared the Fund to Target Fund with respect
to size, investment objectives, management fees and performance. Both the
Fund and Target Fund are equity funds sharing similar investment
objectives of seeking capital appreciation through emphasis on securities
of "growth-type companies." Each of the funds seeks its investment
objective by investing in common stocks, preferred stocks, convertible
securities and rights and warrants which vary in proportion from time to
time. Both funds may invest in stocks that are sensitive to changes in
the business cycle, known as "cyclicals" if they present opportunities for
long term growth. The funds do not invest to seek current income to pay
shareholders. Among other factors, the Board took into consideration that
the schedule of management fee rates are identical for both funds. The
Board also considered pro forma financial information which indicated that
the average management fee rate paid by shareholders in a combined fund
would likely be lower and that the expense ratio would be lower for Class
A shareholders of the combined fund. For the fiscal year ended June 30,
1994, the expense ratio for Time Fund was .94% of average annual net
assets. For the fiscal year ended December 31, 1994, the expense ratio
was 1.16% of the average annual net assets for Class A shares of Target
Fund and it was 2.18% of the average annual net assets for Class C shares.
With respect to the six months ended December 31, 1994, the expense ratio
for Time Fund was 1.29% of the average annual net assets (annualized).
For the fiscal year ended December 31, 1994, on a pro forma basis, giving
effect to the Reorganization, the expense ratio for Target Fund as the
surviving fund, would be 1.14% of the average annual net assets for Class
A shares and 2.10% of the average annual net assets for Class C shares.
The Board also considered that the Fund consists solely of Class A shares,
while Target Fund offers Class A shares and Class C shares. Class A
shares of the Fund could easily be exchanged for Class A shares of Target
Fund. The Board compared the size of each fund. As of March 15, 1995,
the net assets of the Fund were approximately $311 million and the net
assets of Target Fund were approximately $317 million. While the funds
are similar in size, it is expected that over time, Target Fund will
continue to grow and become the larger fund. In the month of February,
the Fund had over 7 million in net redemptions while Target Fund had over
5 million in net purchases. In addition, as a result of the
Reorganization, the combined fund will be much larger and shareholders of
the Fund should benefit from the economies of scale available to a larger
fund. These economies of scale should result in lower costs per account
for each shareholder through lower operating expenses and transfer agency
expenses.
The Board also considered that there would be no sales charge imposed in
effecting the Reorganization, and that the Reorganization would be
effected as a tax-free exchange. The Board determined that it would be
in the best interests of Time Fund and its shareholders to combine with
Target Fund. The Board also determined that combining the funds would not
result in a dilution of the interests of Time Fund shareholders.
In determining to recommend approval of the reorganization to
shareholders, the Board also considered information on the historical
performance of both funds. Target Fund has enjoyed significantly better
performance than the Fund, for the one and five year periods ended
December 31, 1994. Although past performance is not predictive of future
results the Board determined that the shareholders of the Fund would have
the opportunity to be shareholders in a similar fund with more favorable
past performance.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full as
Annex A to this Proxy Statement and Prospectus) contemplates a
reorganization under which (i) all of the assets of the Fund (other than
the cash reserve described below (the "Cash Reserve")) would be
transferred to Target Fund in exchange for Class A shares of Target Fund,
(ii) these shares would be distributed among the shareholders of the Fund
in complete liquidation of the Fund, (iii) the Fund would be deregistered
as an investment company under the Investment Company Act and (iv) the
outstanding shares of the Fund would be cancelled. Target Fund will not
assume any of the Fund's liabilities except for portfolio securities
purchased which have not settled and outstanding shareholder redemption
and dividend checks.
The result of effectuating the Reorganization would be that: (i) Target
Fund would add to its gross assets all of the assets (net of any liability
for portfolio securities purchased but not settled and outstanding
shareholder redemption and dividend checks) of the Fund other than its
Cash Reserve; and (ii) the shareholders of the Fund as of the close of
business on the Closing Date would become shareholders of Target Fund.
The effect of the Reorganization will be that shareholders of the Fund who
vote their shares in favor of the Reorganization will be electing to
redeem their shares of the Fund (at net asset value on the Valuation Date
referred to below under "Method of Carrying Out the Reorganization Plan,"
calculated after subtracting the Cash Reserve) and reinvest the proceeds
in Class A shares of Target Fund at net asset value without sales charge
and without recognition of taxable gain or loss for Federal income tax
purposes (see "Tax Aspects of the Reorganization" below). The Cash
Reserve is that amount retained by the Fund which is sufficient in the
discretion of the Board for the payment of: (a) the Fund's expenses of
liquidation, and (b) its liabilities, other than those assumed by Target
Fund. The Fund and Target Fund will bear all of their respective expenses
associated with the Reorganization, as set forth under "Costs of the
Solicitation and the Reorganization" above. Management estimates that
such expenses associated with the Reorganization to be borne by the Fund
will not exceed $_____. Liabilities as of the date of the transfer of
assets will consist primarily of accrued but unpaid normal operating
expenses of the Fund, excluding the cost of any portfolio securities
purchased but not yet settled and outstanding shareholder redemption and
dividend checks. See "Method of Carrying Out the Reorganization Plan"
below.
The Reorganization Agreement provides for coordination between the funds
as to their respective portfolios so that, after the closing, Target Fund
will be in compliance with all of its investment policies and
restrictions. The Fund will recognize capital gain or loss on any sales
made pursuant to this paragraph. As noted in "Tax Aspects of the
Reorganization" below, if the Fund realizes net gain from the sale of
securities in 1994, such gain, to the extent not offset by capital loss
carry
forward, will be distributed to shareholders prior to the Closing Date and
will be taxable to shareholders as capital gain.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the Reorganization
Agreement, the Fund will pay a dividend or dividends which, together with
all previous such dividends, will have the effect of distributing to the
Fund shareholders all of the Fund's investment company taxable income for
taxable years ending on or prior to the Closing Date (computed without
regard to any deduction for dividends paid) and all of its net capital
gain, if any, realized in taxable years ending on or prior to the Closing
Date (after reduction for any available capital loss carry-forward). Such
dividends will be included in the taxable income of the Fund's
shareholders as ordinary income and capital gain, respectively.
The exchange of the assets of the Fund for Class A shares of Target Fund
and the assumption by Target Fund of certain liabilities of the Fund is
intended to qualify for Federal income tax purposes as a tax-free
reorganization under Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund has represented to Peat Marwick,
tax adviser to the Fund, that there is no plan or intention by any Fund
shareholder who owns 5% or more of the Fund's outstanding shares, and, to
the Fund's best knowledge, there is no plan or intention on the part of
the remaining Fund shareholders, to redeem, sell, exchange or otherwise
dispose of a number of Target Fund shares received in the transaction that
would reduce the Fund shareholders' ownership of Target Fund Class A
shares to a number of shares having a value, as of the Closing Date, of
less than 50% of the value of all the formerly outstanding Fund shares as
of the same date. The Fund and Target Fund have each further represented
to Peat Marwick that, as of the Closing Date, the Fund and Target Fund
will qualify as regulated investment companies or will meet the
diversification test of Section 368(a)(2)(F)(ii) of the Code.
As a condition to the closing of the Reorganization, Target Fund and the
Fund will receive the opinion of KPMG Peat Marwick, LLP to the effect
that, based on the Reorganization Agreement, the above representations,
existing provisions of the Code, Treasury Regulations issued thereunder,
current Revenue Rulings, Revenue Procedures and court decisions, for
Federal income tax purposes:
1. The transactions contemplated by the Reorganization Agreement will
qualify as a tax-free "reorganization" within the meaning of Section
368(a)(1) of the Code.
2. The Fund and Target Fund will each qualify as "a party to a
reorganization" within the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of the Fund
upon the distribution of Class A shares of beneficial interest in
Target Fund to the shareholders of the Fund pursuant to Section 354
of the Code.
4. Under Section 361(a) of the Code no gain or loss will be recognized
by the Fund by reason of the transfer of its assets solely in
exchange for Class A shares of Target Fund.
5. Under Section 1032 of the Code no gain or loss will be recognized by
Target Fund by reason of the transfer of the Fund's assets solely in
exchange for Class A shares of Target Fund.
6. The shareholders of the Fund will have the same tax basis and
holding period for the Class A shares of beneficial interest in
Target Fund that they receive as they had for the Fund stock that
they previously held, pursuant to Sections 358(a) and 1223(1) of the
Code, respectively.
7. The securities transferred by the Fund to Target Fund will have the
same tax basis and holding period in the hands of Target Fund as
they had for the Fund, pursuant to Sections 362(b) and 1223(1) of
the Code, respectively.
Shareholders of the Fund should consult their tax advisors regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the Federal
income tax consequences of the Reorganization, shareholders of the Fund
should also consult their tax advisers as to state and local tax
consequences, if any, of the Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of the Fund and Target Fund
and indicates the pro forma combined capitalization as of December 31,
1994 as if the Reorganization had occurred on that date.
<TABLE>
<CAPTION>
Net Asset
Shares Value
Net Assets Outstanding Per Share
<S> <C> <C> <C>
Oppenheimer Target Fund
Class A Shares $301,698,437 13,330,877 $22.63
Class C Shares $ 1,065,787 47,375 $22.50
Oppenheimer Time Fund
Class A Shares $326,410,301 21,387,554 $14.98
Pro Forma Combined Fund
Class A Shares $628,108,738 27,754,663 $27.63
Class C Shares $ 1,069,787 47,375 $22.50
<FN>
____________________
* Reflects issuance of 14,423,786 shares of Target Fund in a tax-free exchange for the net assets of the Fund, aggregating
$326,410,301.
</TABLE>
The pro forma ratio of expenses to average annual net assets of the
combined funds at December 31, 1994 would have been 1.14% with respect to
Class A shares and 2.10% with respect to Class C shares.
COMPARISON BETWEEN THE FUND AND TARGET FUND
Comparative information about the Fund and Target Fund is presented below.
Additional information about Target Fund is set forth in its Prospectus,
accompanying this Proxy Statement and Prospectus, and additional
information about both funds is set forth in documents that may be
obtained upon request of OSS or are available for review at the offices
of the SEC. See "Miscellaneous - Public Information."
Investment Objectives and Policies
As its investment objective, each of the Fund and Target Fund seeks
capital appreciation in the value of its shares. Current income is not
an objective of either fund. In seeking their investment objectives, the
Fund and Target Fund employ various investment policies as described in
detail below. The Manager is the investment adviser to both the Fund and
Target Fund.
The Fund. The Fund seeks its investment objective of capital appreciation
by emphasizing investment in "mid-capitalization" companies (those
generally with capitalization between $500 million and $5 billion, also
known as "mid-cap" companies) that are, in the Manager's opinion,
established, well-managed companies with strong market positions, high
quality products and high earnings growth potential that have a proven
ability to translate growth in sales and market share into earnings gains.
The Fund's investments include common stocks, preferred stocks,
convertible securities, and rights and warrants in proportions which vary
from time to time. Of the companies whose stocks the Fund held during the
fiscal year ended June 30, 1994, some are categorized as "consumer
cyclicals" that do well in the early to middle stages of the economic
cycle; some fall into the technology sector, others are considered
healthcare companies and a few are classified as financial-services
issues. As a group, mid-cap stocks may be more vulnerable to a weaker
economy than other stock sectors. In every case, however, sector
classifications are a less important selection criterion for the Fund than
specific company characteristics.
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. Securities selected for defensive purposes may include debt
rated or unrated bonds and debentures, and 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 Services, Inc.
The Fund may enter into interest rate swaps. In an interest rate swap,
the Fund and another party exchange their respective commitments to pay
or receive interest on a security, e.g., an exchange of floating rate
payments for fixed rate payments. The Fund will not use interest rate
swaps for leverage. Swap transactions will be entered into only as to
security positions held by the Fund. The Fund may not enter into swap
transactions with respect to more than 25% of its total assets. The Fund
will segregate liquid assets equal to the net excess, if any, of its
obligations over its entitlements under the swap and will mark to market
that amount daily. There is a risk of loss on a swap equal to the net
amount of interest payments that the Fund is contractually obligated to
make. The credit risk of an interest rate swap depends on the
counterparty's ability to perform.
Target Fund
Target Fund invests its assets to seek capital appreciation for
shareholders. Target Fund does not invest to seek current income to pay
to shareholders.
Target 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.
Target Fund's investment adviser, Oppenheimer Management Corporation (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 larger, more established companies.
Target 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 Target 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, Target Fund may invest substantial amounts of its
assets in debt securities, such as money market instruments or government
securities. Securities selected for defensive purposes may include debt
securities, such as rated or unrated bonds and debentures, and 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.
The Fund's portfolio manager may employ special investment techniques in
selecting securities for the Fund.
Growth companies 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.
Special Investment Methods
The Fund and Target Fund each use the special investment methods
summarized below.
Borrowing. The Fund and Target Fund may borrow up to 10% of the value of
their respective total assets from banks on an unsecured basis to buy
securities and invest the borrowed funds, subject to the 300% asset
coverage requirement to the Investment Company Act. This is a speculative
investment method known as "leveraging." Leveraging may subject an
investment in 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 a fund's net asset value per share, since the
each fund pays interest on borrowings. Borrowing is subject to regulatory
limits.
Short Sales Against-the-Box. The funds may not sell securities short
except in transactions referred to as "short sales against-the-box." No
more than 15% of each funds' respective net assets will be held as
collateral for such short sales at any one time.
Foreign Securities. The Fund and Target Fund may purchase equity (and
debt) securities issued or guaranteed by foreign companies or foreign
governments or their agencies. The funds may buy securities of companies
in any country, developed or underdeveloped. There is no limit on the
amount of each funds' assets that may be invested in foreign securities,
although Target Fund normally does not expect to have more than 35% of its
assets invested in foreign securities. Foreign currency will be held by
each of the funds only in connection with the purchase or sale of foreign
securities. The Fund may write and purchase both covered and uncovered
calls and puts on foreign currencies. The Fund may also enter into
Forward Contracts to protect against uncertainty in the level of future
exchange rates. If the funds' securities are held abroad, the countries
in which they are held and the sub-custodians holding them must be
approved by the Fund's Board of Trustees.
Foreign securities have special risks. For example, foreign issuers are
not subject to the same accounting and disclosure requirements that U.S.
companies are subject to. The value of foreign investments may be affected
by changes in foreign currency rates, exchange control regulations,
expropriation or nationalization of a company's assets, foreign taxes,
delays in settlement of transactions, changes in governmental economic or
monetary policy in the U.S. or abroad, or other political and economic
factors.
Writing Covered Calls. The Fund and Target Fund may write (that is, sell)
covered call options (calls) to raise cash for liquidity purposes (for
example, to meet redemption requirements) or for defensive reasons. They
may write calls only if certain conditions are met: (1) after writing any
call, not more than 25% of each funds' total assets may be subject to
calls; (2) the calls must be listed on a domestic securities exchange or
quoted on the Automated Quotation System of the National Association of
Securities Dealers, Inc.; and (3) each call must be "covered" while it is
outstanding; that is, 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. If a covered call written by one
of the funds is exercised on a security that has increased in value, that
fund will be required to sell the security at the call price and will not
be able to realize any profit on the security above the call price.
Hedging With Options and Futures Contracts. Each fund may buy and sell
options and futures contracts to try to manage its exposure to declining
prices on its portfolio securities or to establish a position in the
equity 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
buying call options, tend to increase the Fund's exposure to the market.
Each of the funds may buy and sell futures contracts only if they relate
to broadly-based stock indices, referred to as "Stock Index Futures".
Each fund may purchase certain kinds of put and call options, Stock Index
Futures (described below), financial futures, options on Stock Index
Futures and on broadly-based stock indices. The Fund may enter into
interest rate swaps, only as to security positions held by the Fund and
not with respect to more than 25% of the Fund's total assets. These are
all referred to as "hedging instruments." The funds do not use hedging
instruments for speculative purposes.
Each fund may purchase put options (puts). Buying a put on an investment
gives the Fund the right to sell the investment to a seller of a put on
that investment at a set price. Each fund can buy only puts that relate
to (1) securities or Stock Index Futures, or (2) broadly-based stock
indices. The Fund can buy a put on a security or Stock Index Future
whether or not the Fund owns the particular security or Stock Index Future
in its portfolio, however, Target Fund may not purchase puts on securities
it does not own. Target Fund may purchase puts which relate to Stock
Index Futures, whether or not it owns the particular Stock Index Future
in its portfolio. The Fund may sell puts on securities indices or Futures
only if such puts are covered by segregated liquid assets, but may not
sell puts if, as a result, more than 50% of the Fund's net assets would
be required to be segregated liquid assets. The funds may not sell puts
other than a put that the fund previously purchased. Each of the funds
may purchase calls only on securities, broadly-based stock indices or
Stock Index Futures, or to terminate its obligation on a call a fund
previously wrote. A call or put may not be purchased if the value of all
of a fund's put and call options would exceed 5% of a fund's total assets.
Each fund may buy and sell futures contracts only if they relate to
broadly-based stock indices (these are referred to as "Stock Index
Futures"). The funds may purchase and sell puts and calls on foreign
currencies that are traded on a securities or commodities exchange or
over-the-counter market or quoted by major recognized dealers in such
options, for the purpose of protecting against declines in the dollar
value of foreign securities and against increases in the dollar cost of
securities to be acquired. The Fund may write and purchase both covered
and uncovered calls and puts on foreign currencies. The Funds may also
enter into foreign currency exchange contracts ("Forward Contracts") 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.
Illiquid and Restricted Securities. The Fund will not purchase or
otherwise acquire any securities that may be illiquid by virtue of the
absence of a readily-available market or because their disposition would
be subject to legal restrictions ("restricted securities") if, as a
result, more than 10% of the Fund's net assets would be invested in
securities that are illiquid (including repurchase agreements maturing in
more than seven days). This policy does not limit the acquisition of
restricted securities eligible for resale to qualified institutional
buyers pursuant to Rule 144A under the Securities Act that are determined
to be liquid by the Fund's Board of Trustees or by the Manager under
Board-approved guidelines. Such guidelines take into account, among other
factors, trading activity for such securities and the availability of
reliable pricing information. If there is a lack of trading interest in
particular Rule 144A securities, the Fund's holdings of those securities
may be illiquid. There may be undesirable delays in selling such
securities at prices representing their fair value. Target Fund has an
identical policy with respect to investment in restricted and illiquid
securities.
Loans of Portfolio Securities. To attempt to increase income for
liquidity purposes, each fund may lend its portfolio securities (other
than in repurchase transactions) to brokers, dealers and other financial
institutions meeting specified credit conditions if the loan is
collateralized in accordance with applicable regulatory requirements and
if, after any loan, the value of the securities loaned does not exceed 25%
of the value of that fund's net assets. Each fund presently does not
intend that the value of securities loaned in the current fiscal year will
exceed 5% of the value of its total assets.
Repurchase Agreements. Each fund may acquire securities subject to
repurchase agreements to generate income for liquidity purposes to meet
anticipated redemptions, or pending the investment of proceeds from sales
of fund shares or settlement of purchases of portfolio investments. If
the vendor fails to pay the agreed-upon resale price on the delivery date,
the fund's risks may include any costs of disposing of such collateral,
and any loss from any delay in foreclosing on the collateral. Each fund's
repurchase agreements will be fully collateralized. There is no limit on
the amount of the fund's net assets that may be subject to repurchase
agreements having a maturity of seven days or less. Neither fund will
enter into a repurchase agreement which will cause more than 10% of its
net assets to be subject to repurchase agreements having a maturity beyond
seven days.
Warrants and Rights
Each of the funds may invest in warrants, which are the option to purchase
stock at set prices that are valid for a limited period of time. The fund
may invest up to 2% of its total assets in warrants or rights. Target
Fund may invest up to 5% of its total assets. These restrictions do not
include warrants or rights that have been acquired in units or are
attached to other securities. With respect to Target Fund no more than
2% of its assets may be invested in warrants that are not listed on the
New York or American Stock Exchanges.
Investment Restrictions
Each of the funds and Target Fund has certain investment restrictions
that, together with its investment objectives, are fundamental policies
changeable only by shareholder approval. Set forth below is a summary of
these investment restrictions, which summary is qualified in its entirety
by the investment policies and restrictions of the funds contained in
their respective Prospectuses and Statements of Additional Information.
The Fund and Target Fund cannot: (1) with respect to the Fund, invest in
securities of a single issuer (except the U.S. Government or its agencies
or instrumentalities) if immediately thereafter either: (a) more than 5%
of the Fund's total assets would be invested in securities of that issuer,
or (b) the Fund would then own more than 10% of that issuer's voting
securities (with respect to Target Fund, the above-mentioned restrictions
apply on as to 75% of its assets); (2) invest as to the Fund, more than
25% of its total assets in securities of companies in any one industry and
as to Target Fund, invest more than 25% of its total assets in securities
of companies in any one industry; (3) invest in other open-end investment
companies or invest more than 5% of 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; (4) with respect to the Fund, make short sales of securities
except "short sales against-the-box"; (5) with respect to the Fund,
deviate from the percentage restrictions listed under "Illiquid and
Restricted Securities" and "Writing Covered Calls;" (6) lend money, but
the funds may invest in a portion of a publicly distributed issue of
bonds, debentures, commercial paper, or other similar corporate
obligations; the fund may also make loans of portfolio securities provided
the loan is collateralized in accordance with applicable regulatory
requirements and provided that immediately after any such loan the value
of the securities loaned does not exceed 25% of net assets; (7) underwrite
securities of other companies, except insofar as it might be deemed to be
an underwriter for purposes of the Securities Act of 1933 in the resale
of any securities held in its own portfolio; (8) invest in or hold
securities of any issuer if those officers, directors and trustees of the
funds or its adviser owning individually more than 0.5% of the securities
of such issuer together own more than 5% of the securities of such issuer;
(9) invest in commodities or commodity contracts; however, the funds may
buy and sell any of the Hedging Instruments it may use, whether or not
such Hedging Instrument is considered to be a commodity or commodity
contract; (10) invest in real estate or interests in real estate, but may
purchase readily marketable securities of companies holding real estate
or interests therein; (11) purchase securities on margin; however, the
Fund may make margin deposits in connection with any of the Hedging
Instruments which it may use; or (12) mortgage, hypothecate 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 of the Hedging Instruments
it may use; or (13) with respect to Target Fund, invest in interests in
oil, gas or mineral exploration or development programs.
Portfolio Turnover
The Funds may engage frequently in short-term trading to try to achieve
their investment objectives. As a result the portfolio turnover of each
fund might be higher than other mutual funds, although neither fund
expects its portfolio turnover to be more than 100% each year. High
turnover and short-term trading may cause a fund to have relatively larger
commission expenses and transactions costs than funds that do not engage
in short-term trading. If a fund derives 30% or more of its gross income
from the sale of securities held less than three months, the fund may fail
to qualify under the Code as a regulated investment company and thereupon
would lose certain beneficial tax treatment of its income. The funds each
qualified in their last fiscal year and each intends to qualify in the
coming year, although it reserves the right not to do so.
For the fiscal year ended June 30, 1994, the portfolio turnover rate for
the Fund was 67.7%. For the six months ended December 31, 1994, the
portfolio turnover rate for the Fund was 42.4%. For the fiscal year ended
December 31, 1994, the portfolio turnover rate for Target Fund with
respect to Class A shares was 34.7% and with respect to Class C shares was
34.7%.
Description of Brokerage Practices
Brokerage practices for the Fund and Target Fund are the same. Subject
to the provisions of the Fund's and Target Fund's respective investment
advisory agreements with the Manager, allocations of brokerage are made
by portfolio managers 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 and otherwise 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 transactions 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 it affiliates are combined. 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. Option
commissions may be relatively higher than those which would apply to
direct purchases and sales of portfolio securities.
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 for in
commission dollars. The research services provided by brokers broaden the
scope and supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and 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 and Target
Fund (those Trustees of the Fund and Target 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 investment advisory
agreements described below or the service plans described above), annually
reviews information furnished by the Manager relative to the commissions
paid to brokers furnishing such services in an effort to ascertain that
the amount of such commissions was reasonably related to the value or the
benefit of such services.
During the Fund's fiscal years ended June 30, 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 $623,069,
$923,921 and $1,689,639, respectively. During the fiscal years ended June
30, 1994, $216,461 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
$109,841,151. The transactions giving rise to those commissions were
allocated in accordance with the internal allocation procedures described
above.
During Target Fund's fiscal years ended December 31, 1992, 1993 and 1994,
total brokerage commissions paid by Target 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, $138,285,540 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 $138,265,540. The transactions giving rise to those
commissions were allocated in accordance with the Manager's internal
allocation procedures.
Expense Ratios and Performance
The ratio of expenses to average net assets for the Fund for the fiscal
year ended June 30, 1994 and the six months ended December 31, 1994 were
.94% and 1.29% (annualized), respectively. The ratio of expenses to
average net assets for Class A shares of Target Fund and for Class C
shares of Target Fund for the fiscal year ended December 31, 1994 were
1.16% and 2.18%. Further details are set forth under "Fund Expenses" and
"Financial Highlights" in Target Fund's Prospectus dated May 1, 1995,
which accompanies this Proxy Statement and Prospectus, and in the Fund's
Annual Report as of June 30, 1994 and Semi-Annual Report as of December
31, 1994, and Target Fund's Annual Report as of December 31, 1994 which
are included in the Additional Statement. The Fund's average annual total
returns (at net asset value) for one, five and ten-year periods ended
December 31, 1994 were <12.81>%, 6.92% and 13.18%, respectively. Target
Fund's 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
<5.32>%, 8.46% and 10.49%, respectively. Target Funds average annual
total return (at net asset value) for its Class C shares for the one-year
period ended December 31, 1994 was <1.38>% and from inception to December
31, 1994 was <.60>%.
Shareholder Services
The policies of the Fund and Target Fund with respect to minimum initial
investments and subsequent investments by its shareholders are the same.
Both the Fund and Target Fund offer the following privileges: (i) Rights
of Accumulation, (ii) Letters of Intent, (iii) reinvestment of dividends
and distributions at net asset value, (iv) net asset value purchases by
certain individuals and entities, (v) Asset Builder (automatic investment)
Plans, (vi) Automatic Withdrawal and Exchange Plans for shareholders who
own shares of the fund valued at $5,000 or more (a shareholder may not
combine different classes of shares in order to qualify for privileges
under "Rights of Accumulation" and "Letter of Intent"), (vii) reinvestment
of net redemption proceeds at net asset value within six months of a
redemption, (viii) AccountLink and PhoneLink arrangements, (ix) exchanges
of shares for shares of certain other funds at net asset value, and (x)
telephone redemption and exchange privileges.
Rights of Shareholders
Shares of the Fund and Class A shares of Target Fund are redeemable at
their net asset value. The shares of each such fund entitle the holder
to one vote per share on the election of trustees and all other matters
submitted to shareholders of the fund. Shares of the Fund and the Class
A shares of Target Fund which Fund shareholders will receive in the
Reorganization participate equally in the fund's dividends and
distributions and in the fund's net assets on liquidation. All shares of
each, when issued, are fully paid and non-assessable (except as to Target
Fund, as described below) and have no preference, preemptive or conversion
rights. It is not contemplated that either the Fund or Target Fund will
hold regular annual meetings of shareholders. Under the Investment
Company Act, shareholders of the Fund do not have rights of appraisal as
a result of the transactions contemplated by the Reorganization Agreement.
However, they have the right at any time prior to the consummation of such
transaction to redeem their shares at net asset value. Shareholders of
the Fund and Target Fund have the right, under certain circumstances, to
remove a Trustee and will be assisted in communicating with other
shareholders for such purpose.
The Fund and Target Fund, organized as Massachusetts Business Trusts, are
governed principally by their Declaration of Trusts and by-laws. The
shareholders of the Fund and Target Fund have certain rights to call a
meeting of shareholders as described in their respective Statements of
Additional Information. Amendments to the Declaration of Trust require
the approval of a "majority" (as defined in the Investment Company Act)
of the fund's shareholders. However, the Board of Trustees, under the
provisions of the Declaration of Trust, have the power without shareholder
approval to divide unissued shares of each of the funds into two or more
classes. With respect to Target Fund, the Board has done so and Target
Fund has two classes of shares, Class A and Class C. Each class has its
own dividends and distributions and pays certain expenses which may be
different. Each class may have a different net asset value. Each share
has one vote at shareholder meetings, with fractional shares voting
proportionately. Only shares of a particular class vote together on
matters that affect that class alone. Under certain circumstances,
shareholders of the fund may be held personally liable as partners for the
fund's obligations, and under the Declaration of Trust such a shareholder
is entitled to indemnification rights by the fund; the risk of a
shareholder incurring any such loss is limited to the remote circumstances
in which the fund is unable to meet its obligations.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York 10048-
0203, acts as the investment adviser for the Fund pursuant to an
investment advisory agreement with the Fund dated October 22, 1990 (the
"Fund Advisory Agreement") and acts as the investment adviser to Target
Fund pursuant to an investment advisory agreement with Target Fund dated
October 22, 1990 ("Target Fund Advisory Agreement"). The funds' Advisory
Agreements were submitted to and approved by the shareholders of the funds
at a meeting held October 1, 1990 because the acquisition of the Manager
by Oppenheimer Acquisition Corporation ("OAC") on October 22, 1990
terminated the previous investment advisory agreement. The monthly
management fee payable to the Manager by each fund and the 12b-1 service
plan fee paid by each fund to the Distributor is set forth above under
"Synopsis - Investment Advisory and Service Plan Fees." The Fund and
Target Fund have each adopted a Service Plan for their Class A shares to
reimburse the Distributor for a portion of its costs incurred in
connection with personal service and maintenance of accounts that hold
Class A shares. As of July 1, 1994, Target Fund shareholders approved an
amended Service Plan for Class A shares that applies to all Class A shares
of Target Fund, regardless of the date on which the shares were purchased.
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 each Fund's Board of Trustees
authorizes such reimbursements, which it has not yet done) for its other
expenditures. Services to be provided include, among others, answering
customer inquiries about each fund, assisting in establishing and
maintaining accounts in each fund, making each fund's investment plans
available and providing other services at the request of a fund or the
Distributor.
Pursuant to the Fund Advisory Agreement and the Target Fund Advisory
Agreement, the Manager supervises the investment operations of the funds
and the composition of their portfolios and furnishes advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities. The Manager also provides the Fund and
Target Fund with adequate office space, facilities and equipment and
provides, and supervises the activities of, all administrative and
clerical personnel required to provide effective administration, 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 each fund.
For the fiscal year ended June 30, 1994 and the six months ended December
31, 1994, the management fees paid by the Fund were $2,848,414 and
$1,212,078, respectively. For the fiscal year ended December 31, 1994,
the management fees paid by Target Fund was $2,471,942 for its Class A
shares and $3,549 for its Class C shares. The Fund Advisory Agreement
contains no expense limitation. However, independently of the agreement,
the Manager has undertaken that the total expenses of the Fund in any
fiscal year (including the management fee but exclusive of taxes,
interest, brokerage commissions, distribution plan payments and any
extraordinary non-recurring expenses, including litigation) shall not
exceed the most stringent state regulatory limitation on fund expenses
applicable to the Fund. At present, that limitation is imposed by
California and limits expenses (with specified exclusions) to 2.5% of the
first $30 million of average annual net assets, 2% of the next $70 million
and 1.5% of average annual net assets in excess of $100 million. The
Target Fund Advisory Agreement also contains the foregoing expense
limitation. The Manager reserves the right to change or eliminate the
expense limitation at any time and there can be no assurance as to the
duration of the expense limitation.
The Manager is controlled by OAC, a holding company owned in part by
senior management of the Manager and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company that also advises pension plans and investment companies. The
Manager has operated as an investment company adviser since 1959. The
Manager and its affiliates currently advise investment companies with
combined net assets aggregating over $30 billion as of March 31, 1995,
with more than 2.4 million shareholder accounts. OSS, a division of the
Manager, acts as transfer and shareholder servicing agent on an at-cost
basis for the Fund and Target Fund and for certain other open-end funds
managed by the Manager and its affiliates.
The Distributor, a wholly-owned subsidiary of the Manager, acts as the
general distributor of each fund's shares under a General Distributor's
Agreement for each fund dated December 10, 1992. The General
Distributor's Agreement is subject to the same annual renewal requirements
and termination provisions as the investment advisory agreements. For the
fiscal years ended June 30, 1992, 1993 and 1994, selling charges on the
Fund's shares amounted to $990,171, $714,148 and $629,755, of which the
Distributor and an affiliated broker-dealer retained in the aggregate
$246,042, $189,859 and $168,109, respectively. For the fiscal years ended
December 31, 1992, 1993 and 1994, selling charges on Target Fund's Class
A shares amounted to $975,380, $698,109 and $351,806, of which the
Distributor and an affiliated broker-dealer retained, in the aggregate,
$421,079, $298,443 and $141,646, respectively. For the period ended
December 31, 1994, contingent deferred sales charges collected by the
Distributor on the redemption of Class C shares amounted to $1,185.
Target Fund Performance
Target Fund does not maintain a fixed dividend rate and there can be no
assurance as to the payment of any dividends or the realization of any
capital gains.
The performance graph set forth below depicts the performance of a
hypothetical investment of $10,000 in each class of shares of Target Fund
held until December 31, 1994: in the case of Class A shares, over a ten
year period, and in the case of Class C shares, a one year period, and
from inception of the Class on December 1, 1993, with all dividends and
capital gains distributions reinvested in additional shares as net asset
value on the reinvestment date, without sales charge. The graph reflects
the deduction of the 5.75% maximum initial sales charge on Class A shares
and the 1.0% contingent deferred sales charge and Class C shares. The
graph compares the average annual total return of Class A shares of Target
Fund's shares over that period with the performance of the Standard &
Poor's ("S&P") 500 Index, an unmanaged index of common stocks widely used
as a general measure of the performance of the U.S. equity securities
market. The performance of the S&P 500 Index includes a factor for the
reinvestment of dividend income but does not reflect reinvestment of
capital gains or take into account sales charges or other initial or
ongoing expenses of such stocks. None of the data below shows the effect
of taxes. Fund shareholders receiving Class
A shares of Target Fund in the Reorganization will not pay a sales charge
on Class A shares of Target Fund.
Comparison of Change
In Value of $10,000
Hypothetical Investment in
Oppenheimer Target Fund
S&P 500 Index
Average Annual Total Return of Target Fund at 12/31/94
<TABLE>
<CAPTION>
1 Year 5 Year 10 Year
<S> <C> <C> <C>
Class A <5.32>% 8.46% 10.49%
1 Year (Life)*
Class C <1.38>% <.60>%
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer
Fiscal Year Target Fund S&P Target Fund $10,000
(Period Ended) Class A 500 Index Class C Investment
<S> <C> <C> <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
11/30/93 $26,663 $39,661 $10,000 $10,000
12/31/93 $26,994 $40,142 $10,117 $10,121
12/31/94 $27,117 $40,668 $10,066 $10,254
</TABLE>
Past performance is not predictive of future performance.
Purchase of Additional Shares
Shares of the Fund (consisting of Class A shares) and Class A shares
Target Fund are sold at net asset value plus a maximum sales charge of
5.75% of the offering price. The sales charge is reduced for purchases
of either fund's shares of $25,000 or more. On certain purchases of
shares of $1 million or more, a contingent deferred sales charge of 1% is
imposed when such shares are redeemed within 18 months of the end of the
calendar month of their purchase, subject to certain conditions. Class
C shares of Target Fund 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.
The sales charge on Class A shares of Target Fund will only affect
shareholders of the Fund to the extent that they desire to make additional
purchases of Class A shares of Target Fund in addition to the shares which
they will receive as a result of the Reorganization. The shares to be
issued under the Reorganization Agreement will be issued by Target Fund
at net asset value without a sales charge. Future dividends and capital
gain distributions of Target Fund, if any, may be reinvested without sales
charge into Class A shares. Any Fund shareholder who is entitled to a
reduced sales charge on additional purchases by reason of a Letter of
Intent or Rights of Accumulation based upon holdings of shares of the Fund
will continue to be entitled to a reduced sales charge on any future
purchase of Class A shares of Target Fund.
METHOD OF CARRYING OUT THE REORGANIZATION
The consummation of the transactions contemplated by the Reorganization
Agreement is contingent upon the approval of the Reorganization by the
shareholders of the Fund and the receipt of the other opinions and
certificates set forth in Sections 10 and 11 of the Reorganization
Agreement and the occurrence of the events described in those Sections.
Under the Reorganization Agreement, all the assets of the Fund, excluding
the Cash Reserve, will be delivered to Target Fund in exchange for Class
A shares of Target Fund. The Cash Reserve to be retained by the Fund will
be sufficient in the discretion of the Board for the payment of the Fund's
liabilities, and the Fund's expenses of liquidation.
Assuming the shareholders of the Fund approve the Reorganization, the
actual exchange of assets is expected to take place as soon thereafter as
is practicable (the "Closing Date") on the basis of net asset values as
of the close of business on the business day preceding the Closing Date
(the "Valuation Date"). Under the Reorganization Agreement, all
redemptions of shares of the Fund shall be permanently suspended on the
Valuation Date; only redemption requests received in proper form on or
prior to the close of business on that date shall be fulfilled by it;
redemption requests received by the Fund after that date will be treated
as requests for redemptions of the Class A shares of Target Fund to be
distributed to the shareholders requesting redemption. The exchange of
assets for Class A shares will be done on the basis of the per share net
asset value of the Class A shares of Target Fund, and the value of the
assets of the Fund to be transferred as of the close of business on the
Valuation Date, in the manner used by Target Fund in the valuation of
assets. Target Fund is not assuming any of the liabilities of the Fund,
except for portfolio securities purchased which have not settled and
outstanding shareholder redemption and dividend checks.
The net asset value of the Class A shares transferred by Target Fund to
the Fund will be the same as the value of the net assets received by
Target Fund. For example, if, on the Valuation Date, the Fund were to
have securities with a market value of $95,000 and cash in the amount of
$10,000 (of which $5,000 was to be retained by it as the Cash Reserve),
the value of the assets which would be transferred to Target Fund would
be $100,000. If the net asset value per share of Target Fund were $10 per
share at the close of business on the Valuation Date, the number of shares
to be issued would be 10,000 ($100,000 divided by $10). These 10,000 shares of
Target Fund would be distributed to the former shareholders of the Fund.
This example is given for illustration purposes only and does not bear any
relationship to the dollar amounts or shares expected to be involved in
the Reorganization.
After the Closing Date, the Fund will distribute on a pro rata basis to
its shareholders of record on the Valuation Date the Class A shares of
Target Fund received by the Fund at the closing, in liquidation of the
outstanding shares of the Fund, and the outstanding shares of the Fund
will be cancelled. To assist the Fund in this distribution, Target Fund
will, in accordance with a shareholder list supplied by the Fund, cause
its transfer agent to credit and confirm an appropriate number of shares
of Target Fund to each shareholder of the Fund. Certificates for shares
of Target Fund will be issued upon written request of a former shareholder
of the Fund but only for whole shares with fractional shares credited to
the name of the shareholder on the books of Target Fund. Former
shareholders of the Fund who wish certificates representing their shares
of Target Fund must, after receipt of their confirmations, make a written
request to OSS, P.O. Box 5270, Denver, Colorado 80217. Shareholders of
the Fund holding certificates representing their shares will not be
required to surrender their certificates to anyone in connection with the
Reorganization. After the Reorganization, however, it will be necessary
for such shareholders to surrender such certificates in order to redeem,
transfer or exchange any shares of Target Fund.
Under the Reorganization Agreement, within one year after the Closing
Date, the Fund shall: (a) either pay or make provision for all of its
debts and taxes; and (b) either (i) transfer any remaining amount of the
Cash Reserve to Target Fund, if such remaining amount is not material (as
defined below) or (ii) distribute such remaining amount to the
shareholders of the Fund who were such on the Valuation Date. Such
remaining amount shall be deemed to be material if the amount to be
distributed, after deducting the estimated expenses of the distribution,
equals or exceeds one cent per share of the number of Fund shares
outstanding on the Valuation Date. Within one year after the Closing
Date, the Fund will complete its liquidation.
Under the Reorganization Agreement, either the Fund or Target Fund may
abandon and terminate the Reorganization Agreement without liability if
the other party breaches any material provision of the Reorganization
Agreement or, if prior to the closing, any legal, administrative or other
proceeding shall be instituted or threatened (i) seeking to restrain or
otherwise prohibit the transactions contemplated by the Reorganization
Agreement and/or (ii) asserting a material liability of either party,
which proceeding or liability has not been terminated or the threat
thereto removed prior to the Closing Date.
In the event that the Reorganization Agreement is not consummated for any
reason, the Board will consider and may submit to the shareholders other
alternatives.
MISCELLANEOUS
Financial Information
The Reorganization will be accounted for by the surviving fund in its
financial statements similar to a pooling without restatement. Further
financial information as to the Fund is contained in its current
Prospectus, which is available without charge from OSS, P.O. Box 5270,
Denver, Colorado 80217, and is incorporated herein, and in its audited
financial statements as of June 30, 1994 and unaudited financial
statements (semi-annual) as of December 31, 1994, which are included in
the Additional Statement. Financial information for Target Fund is
contained in its current Prospectus accompanying this Proxy Statement and
Prospectus and incorporated herein, and in its audited financial
statements as of December 31, 1994, which are included in the Additional
Statement.
Public Information
Additional information about the Fund and Target Fund is available, as
applicable, in the following documents which are incorporated herein by
reference: (i) Target Fund's Prospectus dated May 1, 1995, accompanying
this Proxy Statement and Prospectus and incorporated herein; (ii) the
Fund's Prospectus dated October 21, 1994, supplemented April 13, 1995,
which may be obtained without charge by writing to OSS, P.O. Box 5270,
Denver, Colorado 80217; (iii) Target Fund's Annual Report as of December
31, 1994, which may be obtained without charge by writing to OSS at the
address indicated above; and (iv) the Fund's Annual Report as of June 30,
1994 and Semi-Annual Report as of December 31, 1994, which may be obtained
without charge by writing to OSS at the address indicated above. All of
the foregoing documents may be obtained by calling the toll-free number
on the cover of this Proxy Statement and Prospectus.
Additional information about the following matters is contained in the
Additional Statement, which incorporates by reference the Target Fund
Additional Statement, and the Fund's Prospectus dated October 21, 1994,
supplemented January 3, 1995 and Statement of Additional Information dated
October 21, 1994: the organization and operation of Target Fund and the
Fund; more information on investment policies, practices and risks;
information about the Fund's and Target Fund's respective Boards of
Trustees and their responsibilities; a further description of the services
provided by Target Fund's and the Fund's investment adviser, distributor,
and transfer and shareholder servicing agent; dividend policies; tax
matters; an explanation of the method of determining the offering price
of the shares of Target Fund and the Fund; purchase, redemption and
exchange programs; and distribution arrangements.
The Fund and Target Fund are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended, and in accordance
therewith, file reports and other information with the SEC. Proxy
material, reports and other information about the Fund and Target Fund
which are of public record can be inspected and copied at public reference
facilities maintained by the SEC in Washington, D.C. and certain of its
regional offices, and copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer
Affairs and Information Services, SEC, Washington, D.C. 20549.
OTHER BUSINESS
Management of the Fund knows of no business other than the matters
specified above which will be presented at the Meeting. Since matters not
known at the time of the solicitation may come before the Meeting, the
proxy as solicited confers discretionary authority with respect to such
matters as properly come before the Meeting, including any adjournment or
adjournments thereof, and it is the intention of the persons named as
attorneys-in-fact in the proxy to vote this proxy in accordance with their
judgment on such matters.
By Order of the Board of Directors
Andrew J. Donohue, Secretary
______________, 1995320
<PAGE>
Annex A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
March __, 1995 by and between Oppenheimer Time Fund (the "Fund"), a
Massachusetts business trust, and Oppenheimer Target Fund ("Target Fund"),
a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type; and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), of the Fund through the acquisition by Target Fund
of substantially all of the assets of the Fund in exchange for the Class
A voting shares of beneficial interest ("shares") of Target Fund and the
assumption by Target Fund of certain liabilities of the Fund, which shares
of Target Fund are thereafter to be distributed by the Fund pro rata to
its shareholders in complete liquidation of the Fund and complete
cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. The parties hereto hereby adopt a Plan of Reorganization pursuant
to Section 368(a)(1) of the Code as follows: The reorganization will be
comprised of the acquisition by Target Fund of substantially all of the
properties and assets of the Fund in exchange for shares of Target Fund
and the assumption by Target Fund of certain liabilities of the Fund,
followed by the distribution of such Target Fund shares to the
shareholders of the Fund in exchange for their shares of the Fund, all
upon and subject to the terms of the Agreement hereinafter set forth.
The share transfer books of the Fund will be permanently closed at the
close of business on the Valuation Date (as hereinafter defined) and only
redemption requests received in proper form on or prior to the close of
business on the Valuation Date shall be fulfilled by the Fund; redemption
requests received by the Fund after that date shall be treated as requests
for the redemption of the shares of Target Fund to be distributed to the
shareholder in question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the assets of
the Fund on that date, excluding a cash reserve (the "Cash Reserve") to
be retained by the Fund sufficient in its discretion for the payment of
the expenses of the Fund's dissolution and its liabilities, but not in
excess of the amount contemplated by Section 10E, shall be delivered as
provided in Section 8 to Target Fund, in exchange for and against delivery
to the Fund on the Closing Date of a number of shares of Target Fund
having an aggregate net asset value equal to the value of the assets of
the Fund so transferred and delivered.
3. The net asset value of the shares of Target Fund and the value of
the assets of the Fund to be transferred shall in each case be determined
as of the close of business of the New York Stock Exchange on the
Valuation Date. The computation of the net asset value of the Class A
shares of Target Fund and the Fund shall be done in the manner used by
Target Fund and the Fund, respectively, in the computation of such net
asset value per share as set forth in their respective prospectuses. The
methods used by Target Fund in such computation shall be applied to the
valuation of the assets of the Fund to be transferred to Target Fund.
The Fund shall declare and pay, immediately prior to the Valuation
Date, a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the Fund's
shareholders all of the Fund's investment company taxable income for
taxable years ending on or prior to the Closing Date (computed without
regard to any dividends paid) and all of its net capital gain, if any,
realized in taxable years ending on or prior to the Closing Date (after
reduction for any capital loss carry-forward).
4. The closing (the "Closing") shall be at the office of Oppenheimer
Management Corporation (the "Agent"), Two World Trade Center, Suite 3400,
New York, New York 10048, at 4:00 P.M. New York time on _______________,
1995, or at such other time or place as the parties may designate or as
provided below (the "Closing Date"). The business day preceding the
Closing Date is herein referred to as the "Valuation Date."
In the event that on the Valuation Date either party has, pursuant to
the Investment Company Act of 1940, as amended (the "Act"), or any rule,
regulation or order thereunder, suspended the redemption of its shares or
postponed payment therefor, the Closing Date shall be postponed until the
first business day after the date when both parties have ceased such
suspension or postponement; provided, however, that if such suspension
shall continue for a period of 60 days beyond the Valuation Date, then the
other party to the Agreement shall be permitted to terminate the Agreement
without liability to either party for such termination.
5. As soon as practicable after the Closing, the Fund shall distribute
on a pro rata basis to the shareholders of the Fund on the Valuation Date
the shares of Target Fund received by the Fund on the Closing Date in
exchange for the assets of the Fund in complete liquidation of the Fund;
for the purpose of the distribution by the Fund of such shares of Target
Fund to its shareholders, Target Fund will promptly cause its transfer
agent to: (a) credit an appropriate number of shares of Target Fund on the
books of Target Fund to each shareholder of the Fund in accordance with
a list (the "Shareholder List") of its shareholders received from the
Fund; and (b) confirm an appropriate number of shares of Target Fund to
each shareholder of the Fund; certificates for shares of Target Fund will
be issued upon written request of a former shareholder of the Fund but
only for whole shares with fractional shares credited to the name of the
shareholder on the books of Target Fund.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of the Fund,
indicating his or her share balance. The Fund agrees to supply the
Shareholder List to Target Fund not later than the Closing Date.
Shareholders of the Fund holding certificates representing their shares
shall not be required to surrender their certificates to anyone in
connection with the reorganization. After the Closing Date, however, it
will be necessary for such shareholders to surrender their certificates
in order to redeem, transfer or pledge the Class A shares of Target Fund
which they received.
6. Within one year after the Closing Date, the Fund shall (a) either
pay or make provision for payment of all of its liabilities and taxes,
and (b) either (i) transfer any remaining amount of the Cash Reserve to
Target Fund, if such remaining amount (as reduced by the estimated cost
of distributing it to shareholders) is not material (as defined below) or
(ii) distribute such remaining amount to the shareholders of the Fund on
the Valuation Date. Such remaining amount shall be deemed to be material
if the amount to be distributed, after deduction of the estimated expenses
of the distribution, equals or exceeds one cent per share of the Fund
outstanding on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination between the
parties as to their respective portfolios so that, after the closing,
Target Fund will be in compliance with all of its investment policies and
restrictions. At the Closing, the Fund shall deliver to Target Fund two
copies of a list setting forth the securities then owned by the Fund.
Promptly after the Closing, the Fund shall provide Target Fund a list
setting forth the respective federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to Target Fund
of record ownership thereof by The Depository Trust Company or through the
Federal Reserve Book Entry System or any other depository approved by the
Fund pursuant to Rule 17f-4 under the Act shall be endorsed and delivered,
or transferred by appropriate transfer or assignment documents, by the
Fund on the Closing Date to Target Fund, or at its direction, to its
custodian bank, in proper form for transfer in such condition as to
constitute good delivery thereof in accordance with the custom of brokers
and shall be accompanied by all necessary state transfer stamps, if any.
The cash delivered shall be in the form of certified or bank cashiers'
checks or by bank wire or intra-bank transfer payable to the order of
Target Fund for the account of Target Fund. Class A shares of Target Fund
representing the number of Class A shares of Target Fund being delivered
against the assets of the Fund, registered in the name of the Fund, shall
be transferred to the Fund on the Closing Date. Such shares shall
thereupon be assigned by the Fund to its shareholders so that the shares
of Target Fund may be distributed as provided in Section 5.
If, at the Closing Date, the Fund is unable to make delivery under this
Section 8 to Target Fund of any of its portfolio securities or cash for
the reason that any of such securities purchased by the Fund, or the cash
proceeds of a sale of portfolio securities, prior to the Closing Date have
not yet been delivered to it or the Fund's custodian, then the delivery
requirements of this Section 8 with respect to said undelivered securities
or cash will be waived and the Fund will deliver to Target Fund by or on
the Closing Date and with respect to said undelivered securities or cash
executed copies of an agreement or agreements of assignment in a form
reasonably satisfactory to Target Fund, together with such other
documents, including a due bill or due bills and brokers' confirmation
slips as may reasonably be required by Target Fund.
9. Target Fund shall not assume the liabilities (except for portfolio
securities purchased which have not settled and for shareholder redemption
and dividend checks outstanding) of the Fund, but the Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so
far as may be possible, prior to the Closing Date. The cost of printing
and mailing the proxies and proxy statements will be borne by the Fund.
The Fund and Target Fund will bear the cost of their respective tax
opinion. Any documents such as existing prospectuses or annual reports
that are included in that mailing will be a cost of the fund issuing the
document. Any other out-of-pocket expenses of Target Fund and the Fund
associated with this reorganization, including legal, accounting and
transfer agent expenses, will be borne by the Fund and Target Fund,
respectively, in the amounts so incurred by each.
10. The obligations of Target Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of the Fund shall have authorized the
execution of the Agreement, and the shareholders of the Fund shall have
approved the Agreement and the transactions contemplated hereby, and the
Fund shall have furnished to Target Fund copies of resolutions to that
effect certified by the Secretary or an Assistant Secretary of the Fund;
such shareholder approval shall have been by the affirmative vote of "a
majority of the outstanding voting securities" (as defined in the Act) of
the Fund at a meeting for which proxies have been solicited by the Proxy
Statement and Prospectus (as hereinafter defined).
B. Target Fund shall have received an opinion dated the Closing Date
of counsel to the Fund, to the effect that (i) the Fund is a business
trust duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts with full powers to carry on its
business as then being conducted and to enter into and perform the
Agreement; and (ii) that all action necessary to make the Agreement,
according to its terms, valid, binding and enforceable on the Fund and to
authorize effectively the transactions contemplated by the Agreement have
been taken by the Fund.
C. The representations and warranties of the Fund contained herein
shall be true and correct at and as of the Closing Date, and Target Fund
shall have been furnished with a certificate of the President, or a Vice
President, or the Secretary or the Assistant Secretary or the Treasurer
of the Fund, dated the Closing Date, to that effect.
D. On the Closing Date, the Fund shall have furnished to Target Fund
a certificate of the Treasurer or Assistant Treasurer of the Fund as to
the amount of the capital loss carry-over and net unrealized appreciation
or depreciation, if any, with respect to the Fund as of the Closing Date.
E. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of the Fund at the close of
business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Target Fund under
the Securities Act of 1933, as amended (the "1933 Act"), containing a
preliminary form of the Proxy Statement and Prospectus, shall have become
effective under the 1933 Act not later than _____________, 1995.
G. On the Closing Date, Target Fund shall have received a letter of
Andrew J. Donohue or other senior executive officer of Oppenheimer
Management Corporation acceptable to Target Fund, stating that nothing has
come to his or her attention which in his or her judgment would indicate
that as of the Closing Date there were any material actual or contingent
liabilities of the Fund arising out of litigation brought against the Fund
or claims asserted against it, or pending or to the best of his or her
knowledge threatened claims or litigation not reflected in or apparent
from the most recent audited financial statements and footnotes thereto
of the Fund delivered to Target Fund. Such letter may also include such
additional statements relating to the scope of the review conducted by
such person and his or her responsibilities and liabilities as are not
unreasonable under the circumstances.
H. Target Fund shall have received an opinion, dated the Closing
Date, of KPMG Peat Marwick LLP, to the same effect as the opinion
contemplated by Section 11.E. of the Agreement.
I. Target Fund shall have received at the closing all of the assets
of the Fund to be conveyed hereunder, which assets shall be free and clear
of all liens, encumbrances, security interests, restrictions and
limitations whatsoever.
11. The obligations of the Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of Target Fund shall have authorized the
execution of the Agreement, and the transactions contemplated hereby, and
Target Fund shall have furnished to the Fund copies of resolutions to that
effect certified by the Secretary or an Assistant Secretary of Target
Fund.
B. The Fund's shareholders shall have approved the Agreement and the
transactions contemplated hereby, by an affirmative vote of "a majority
of the outstanding voting securities" (as defined in the Act) of the Fund,
and the Fund shall have furnished Target Fund copies of resolutions to
that effect certified by the Secretary or an Assistant Secretary of the
Fund.
C. The Fund shall have received an opinion dated the Closing Date
of counsel to Target Fund, to the effect that (i) Target Fund is a
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts with full powers to carry
on its business as then being conducted and to enter into and perform the
Agreement; (ii) all action necessary to make the Agreement, according to
its terms, valid, binding and enforceable upon Target Fund and to
authorize effectively the transactions contemplated by the Agreement have
been taken by Target Fund, and (iii) the Class A shares of Target Fund to
be issued hereunder are duly authorized and when issued will be validly
issued, fully-paid and non-assessable, except as set forth in Target
Fund's then current Prospectus and Statement of Additional Information.
D. The representations and warranties of Target Fund contained herein
shall be true and correct at and as of the Closing Date, and the Fund
shall have been furnished with a certificate of the President, a Vice
President or the Secretary or an Assistant Secretary or the Treasurer of
Target Fund to that effect dated the Closing Date.
E. The Fund shall have received an opinion of KPMG Peat Marwick LLP
to the effect that the Federal tax consequences of the transaction, if
carried out in the manner outlined in this Plan of Reorganization and in
accordance with (i) the Fund's representation that there is no plan or
intention by any Fund shareholder who owns 5% or more of the Fund's
outstanding shares, and, to the Fund's best knowledge, there is no plan
or intention on the part of the remaining Fund shareholders, to redeem,
sell, exchange or otherwise dispose of a number of Target Fund shares
received in the transaction that would reduce the Fund shareholders'
ownership of Target Fund shares to a number of shares having a value, as
of the Closing Date, of less than 50% of the value of all of the formerly
outstanding Fund shares as of the same date, (ii) the representation by
each of the Fund and Target Fund that, as of the Closing Date, the Fund
and Target Fund will qualify as regulated investment companies or will
meet the diversification test of Section 368(a)(2)(F)(ii) of the Code, and
(iii) the other representations by each of the Fund and Target Fund made
to KPMG Peat Marwick LLP and set forth in the opinion will generally be
as follows:
1. The transactions contemplated by the Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1) of
the Code, and under the regulations promulgated thereunder.
2. The Fund and Target Fund will each qualify as a "party to
a reorganization" within the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of
the Fund upon the distribution of Class A shares of beneficial interest
in Target Fund to the shareholders of the Fund pursuant to Section 354 of
the Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by the Fund by reason of the transfer of substantially all its
assets in exchange for Class A shares of Target Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Target Fund by reason of the transfer of substantially all
the Fund's assets in exchange for shares of Target Fund and Target Fund's
assumption of certain liabilities of the Fund.
6. The shareholders of the Fund will have the same tax basis
and holding period for the Class A shares of beneficial interest in Target
Fund that they receive as they had for the Fund shares that they
previously held, pursuant to Section 358(a) and 1223(1), respectively, of
the Code.
7. The securities transferred by the Fund to Target Fund will
have the same tax basis and holding period in the hands of Target Fund as
they had for the Fund, pursuant to Section 362(b) and 1223(1),
respectively, of the Code.
F. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of the Fund at the close of
business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Target Fund under
the 1933 Act, containing a preliminary form of the Proxy Statement and
Prospectus, shall have become effective under the 1933 Act not later than
_______________, 1995.
H. On the Closing Date, the Fund shall have received a letter of
Andrew J. Donohue or other senior executive officer of Oppenheimer
Management Corporation acceptable to the Fund, stating that nothing has
come to his or her attention which in his or her judgment would indicate
that as of the Closing Date there were any material actual or contingent
liabilities of Target Fund arising out of litigation brought against
Target Fund or claims asserted against it, or pending or, to the best of
his or her knowledge, threatened claims or litigation not reflected in or
apparent by the most recent audited financial statements and footnotes
thereto of Target Fund delivered to the Fund. Such letter may also
include such additional statements relating to the scope of the review
conducted by such person and his or her responsibilities and liabilities
as are not unreasonable under the circumstances.
I. The Fund shall acknowledge receipt of the Class A shares of
Target Fund.
12. The Fund hereby represents and warrants that:
A. The financial statements of the Fund as at June 30, 1994 and
December 31, 1994 heretofore furnished to Target Fund, present fairly the
financial position, results of operations, and changes in net assets of
the Fund as of that date, in conformity with generally accepted accounting
principles applied on a basis consistent with the preceding year; and that
from June 30, 1994 through the date hereof there has not been, and through
the Closing Date there will not be, any material adverse change in the
business or financial condition of the Fund, it being agreed that a
decrease in the size of the Fund due to a diminution in the value of its
portfolio and/or redemption of its shares shall not be considered a
material adverse change;
B. Contingent upon approval of the Agreement and the transactions
contemplated hereby by the Fund's shareholders, the Fund has authority to
transfer all of the assets of the Fund to be conveyed hereunder free and
clear of all liens, encumbrances, security interests, restrictions and
limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in the
Fund's Registration Statement under the 1933 Act, as amended, is true,
correct and complete, conforms to the requirements of the 1933 Act and
does not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
D. There is no material contingent liability of the Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of the Fund, threatened against the Fund, not
reflected in such Prospectus;
E. There are no material contracts outstanding to which the Fund is
a party other than those ordinary in the conduct of its business;
F. The Fund is a business trust duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts; and
has all necessary and material Federal and state authorizations to own all
of its assets and to carry on its business as now being conducted; and the
Fund is duly registered under the Act and such registration has not been
rescinded or revoked and is in full force and effect;
G. All Federal and other tax returns and reports of the Fund
required by law to be filed have been filed, and all Federal and other
taxes shown due on said returns and reports have been paid or provision
shall have been made for the payment thereof and to the best of the
knowledge of the Fund no such return is currently under audit and no
assessment has been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of the Fund ended
June 30, 1994 have not been filed, such returns will be filed when
required and the amount of tax shown as due thereon shall be paid when
due; and
H. The Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, the Fund has met the
requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and the Fund intends to meet such
requirements with respect to its current taxable year.
13. Target Fund hereby represents and warrants that:
A. The financial statements of Target Fund as at December 31, 1994
heretofore furnished to the Fund, present fairly the financial position,
results of operations, and changes in net assets of Target Fund, as of
that date, in conformity with generally accepted accounting principles
applied on a basis consistent with the preceding year; and that from
December 31, 1994 through the date hereof there has not been, and through
the Closing Date there will not be, any material adverse change in the
business or financial condition of Target Fund, it being understood that
a decrease in the size of Target Fund due to a diminution in the value of
its portfolio and/or redemption of its shares shall not be considered a
material or adverse change;
B. The Prospectus, as amended and supplemented, contained in Target
Fund's Registration Statement under the 1933 Act, is true, correct and
complete, conforms to the requirements of the 1933 Act and does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
C. There is no material contingent liability of Target Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of Target Fund, threatened against Target
Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which Target Fund
is a party other than those ordinary in the conduct of its business;
E. Target Fund is a business trust duly organized, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts;
has all necessary and material Federal and state authorizations to own all
its properties and assets and to carry on its business as now being
conducted; the shares of Target Fund which it issues to the Fund pursuant
to the Agreement will be duly authorized, validly issued, fully-paid and
non-assessable, except as otherwise set forth in Target Fund's
Registration Statement; and will conform to the description thereof
contained in Target Fund's Registration Statement, will be duly registered
under the 1933 Act and in the states where registration is required; and
Target Fund is duly registered under the Act and such registration has not
been revoked or rescinded and is in full force and effect;
F. All Federal and other tax returns and reports of Target Fund
required by law to be filed have been filed, and all Federal and other
taxes shown due on said returns and reports have been paid or provision
shall have been made for the payment thereof and to the best of the
knowledge of Target Fund no such return is currently under audit and no
assessment has been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of Target Fund
ended December 31, 1994 have not been filed, such returns will be filed
when required and the amount of tax shown as due thereon shall be paid
when due;
G. Target Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Target Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and Target Fund intends to
meet such requirements with respect to its current taxable year;
H. Target Fund has no plan or intention (i) to dispose of any of the
assets transferred by the Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the shares issued by it
in the reorganization other than pursuant to valid requests of
shareholders; and
I. After consummation of the transactions contemplated by the
Agreement, Target Fund intends to operate its business in a substantially
unchanged manner.
14. Each party hereby represents to the other that no broker or finder
has been employed by it with respect to the Agreement or the transactions
contemplated hereby. Each party also represents and warrants to the other
that the information concerning it in the Proxy Statement and Prospectus
will not as of its date contain any untrue statement of a material fact
or omit to state a fact necessary to make the statements concerning it
therein not misleading and that the financial statements concerning it
will present the information shown fairly in accordance with generally
accepted accounting principles applied on a basis consistent with the
preceding year. Each party also represents and warrants to the other that
the Agreement is valid, binding and enforceable in accordance with its
terms and that the execution, delivery and performance of the Agreement
will not result in any violation of, or be in conflict with, any provision
of any charter, by-laws, contract, agreement, judgment, decree or order
to which it is subject or to which it is a party. Target Fund hereby
represents to and covenants with the Fund that, if the reorganization
becomes effective, Target Fund will treat each shareholder of the Fund who
received any of Target Fund's shares as a result of the reorganization as
having made the minimum initial purchase of shares of Target Fund received
by such shareholder for the purpose of making additional investments in
shares of Target Fund, regardless of the value of the shares of Target
Fund received.
15. Target Fund agrees that it will prepare and file a Registration
Statement on Form N-14 under the 1933 Act which shall contain a
preliminary form of proxy statement and prospectus contemplated by Rule
145 under the 1933 Act. The final form of such proxy statement and
prospectus is referred to in the Agreement as the "Proxy Statement and
Prospectus." Each party agrees that it will use its best efforts to have
such Registration Statement declared effective and to supply such
information concerning itself for inclusion in the Proxy Statement and
Prospectus as may be necessary or desirable in this connection. Target
Fund covenants and agrees to deregister as an investment company under the
Investment Company Act of 1940, as amended, as soon as practicable and,
thereafter, to cause the cancellation of its outstanding shares.
16. The obligations of the parties under the Agreement shall be
subject to the right of either party to abandon and terminate the
Agreement without liability if the other party breaches any material
provision of the Agreement or if any material legal, administrative or
other proceeding shall be instituted or threatened between the date of the
Agreement and the Closing Date (i) seeking to restrain or otherwise
prohibit the transactions contemplated hereby and/or (ii) asserting a
material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. The Agreement may be executed in counterpart, each of which shall
be deemed an original, but taken together shall constitute one Agreement.
The rights and obligations of each party pursuant to the Agreement shall
not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into the Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written acknowledgement of such waiver.
19. The Fund understands that the obligations of Target Fund under the
Agreement are not binding upon any Trustee or shareholder of Target Fund
personally, but bind only Target Fund and Target Fund's property. The
Fund represents that it has notice of the provisions of the Declaration
of Trust of Target Fund disclaiming shareholder and Trustee liability for
acts or obligations of Target Fund.
20. Target Fund understands that the obligations of the Fund under the
Agreement are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property. Target Fund
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.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to be
executed and attested by its officers thereunto duly authorized on the
date first set forth above.
Attest: OPPENHEIMER TIME FUND
______________________________ By:____________________
Robert G. Zack Andrew J. Donohue
Assistant Secretary Secretary
Attest: OPPENHEIMER TARGET FUND
______________________________ By:_____________________
Robert G. Zack Andrew J. Donohue
Assistant Secretary Secretary
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER TARGET FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD JUNE __, 1995
The undersigned shareholder of Oppenheimer Target Fund (the "Fund"), does
hereby appoint George C. Bowen, Andrew J. Donohue, Robert Bishop and Scott
Farrar, and each of them, as attorneys-in-fact and proxies of the
undersigned, with full power of substitution, to attend the Special
Meeting of Shareholders of the Fund to be held on _______________, 1995,
at 3410 South Galena Street, Denver, Colorado 80231 at 10:00 A.M., Denver
time, and at all adjournments thereof, and to vote the shares held in the
name of the undersigned on the record date for said meeting on the
Proposal specified on the reverse side. Said attorneys-in-fact shall vote
in accordance with their best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO RECOMMENDS A VOTE
FOR THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL
BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO CHOICE IS
INDICATED.
Please mark your proxy, date and sign it on the reverse side and return
it promptly in the accompanying envelope, which requires no postage if
mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between the Fund
and Oppenheimer Target Fund, and the transactions contemplated
thereby, including the transfer of substantially all the assets of
the Fund in exchange for Class A shares of Oppenheimer Target Fund,
the distribution of such shares to the shareholders of the Fund in
complete liquidation of the Fund, the deregistration of the Fund as
an investment company under the Investment Company Act of 1940, as
amended, and the cancellation of the outstanding shares of the Fund.
FOR____ AGAINST____ ABSTAIN____
Dated:________________________, 1995
(Month) (Day)
______________________________
Signature(s)
______________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give his or her title.
250
merge/320proxy
<PAGE>
OPPENHEIMER TARGET FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
May __, 1995
___________________________________
This Statement of Additional Information of Oppenheimer Target Fund
consists of this cover page and the following documents:
1. Target Fund's Statement of Additional Information dated May 1, 1994,
which has been previously filed and is incorporated herein by reference.
2. Target Fund's Annual Report as of December 31, 1994, which has been
previously filed and is incorporated herein by reference.
3. Prospectus of Oppenheimer Time Fund dated October 21, 1994,
supplemented January 3, 1995, which has been previously filed and is
incorporated herein by reference.
4. Statement of Additional Information of Time Fund dated October 21,
1994, supplemented April 13, 1995, which has been previously filed and is
incorporated herein by reference.
5. Time Fund's Annual Report as of June 30, 1994, which has been
previously filed and is incorporated herein by reference.
6. Time Fund's Semi-Annual Report as of December 31, 1994, which has been
previously filed and is incorporated herein by reference.
7. Pro Forma Financial Statements.
This Statement of Additional Information (the "Additional Statement")
is not a Prospectus. This Additional Statement should be read in
conjunction with the Proxy Statement and Prospectus, which may be obtained
by written request to Oppenheimer Shareholder Services ("OSS"), P.O. Box
5270, Denver, Colorado 80217, or by calling OSS at the toll-free number
shown above.
<PAGE>
OPPENHEIMER TIME FUND
Supplement dated April 13, 1995 to
the Prospectus dated October 21, 1994
The Prospectus is hereby amended as follows:
1. The supplement dated January 3, 1995 to the Prospectus is replaced
by this supplement.
2. Under "Expenses" on page 2, the chart "Shareholder Transaction
Expenses" is amended by deleting the references to the $5.00 fee for
"Exchanges" and insert "None"; footnote 2 is deleted from that
chart.
3. The following paragraphs are added at the end of "How The Fund Is
Managed" on page 11:
The Board of Trustees of Oppenheimer Time Fund (referred to as "Time
Fund") has determined that it is in the best interest of Time Fund's
shareholders that Time Fund reorganize with and into the Oppenheimer
Target Fund ("Target Fund") and unanimously approved the terms of an
agreement and plan of reorganization to be entered into between
these funds (the "reorganization plan") and the transactions
contemplated thereby (the "reorganization"). The Board further
determined that the reorganization should be submitted to Time
Fund's shareholders for approval, and recommended that shareholders
approve the reorganization.
Pursuant to the reorganization plan, (i) substantially all of the
assets of Time Fund would be exchanged for Class A shares of Target
Fund, (ii) these shares of Target Fund would be distributed to the
shareholders of Time Fund, (iii) Time Fund would be liquidated, and
(iv) the outstanding shares of Time Fund would be cancelled. The
reorganization will be tax-free, pursuant to Section 368(a)(1) of
the Internal Revenue Code, and the Fund will request an opinion of
tax counsel to that effect.
A meeting of the shareholders of the Fund is expected to be held on
June 20, 1995 to vote on the reorganization. The affirmative vote
of the majority of outstanding shares of the Fund (the term
"majority" is defined in the Investment Company Act as a special
majority and is also explained in the Statement of Additional
Information) is required for approval of the reorganization,
including the reorganization plan. There is no assurance that Time
Fund's shareholders will approve the reorganization. Details about
the proposed reorganization will be contained in a proxy statement
and other soliciting materials to be sent to the Fund shareholders
of record on April 21, 1995, the record date for the shareholder
meeting. Shareholders of Time Fund after the record date for the
shareholder meeting will not be entitled to vote on the
reorganization.
3. The second sentence of the paragraph captioned "At What Price are
Shares Sold?" on page 13 is revised to read as follows:
"In most cases, to enable you to receive that day's
offering price, the Distributor must receive your order by
the time of day the New York Stock Exchange closes, which
is normally 4:00 P.M., New York time, but may be earlier
on some days (all references to time in this Prospectus
mean "New York Time".) The fourth sentence of that
paragraph is revised to read as follows: "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."
4. The section entitled "Selling Shares by Telephone" on page 18 is
amended by revising the second sentence to read as follows:
"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."
5. The section entitled "How to Exchange Shares" is amended by
eliminating the second and third sentences in the first paragraph
under that section on page 18. It is further amended, by revising
the first sentence in the first "bulleted" paragraph following
"Telephone Exchange Requests" on page 19 to read as follows:
"Shares are normally redeemed from one fund and purchased
from the other fund in the exchange transaction on the
same regular business day on which the Transfer Agent
receives an exchange request that is in proper form by the
close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days."
6. The first sentence of the paragraph captioned "Net Asset Value Per
Share" on page 19 is revised to read as follows:
"Net asset value per share is determined as of the close
of The New York Stock Exchange on each regular business
day by dividing the value of the Fund's net assets by the
number of shares that are outstanding."
April 13, 1995 PS0380.001
<PAGE>
OPPENHEIMER TIME FUND
Prospectus dated October 21, 1994
Oppenheimer Time Fund (the "Fund") is a mutual fund that seeks
capital appreciation. Current income is not a consideration in the
selection of the Fund's portfolio securities. In seeking to achieve its
investment objective, the Fund emphasizes investment in "mid-
capitalization" companies that are, in the opinion of Oppenheimer
Management Corporation (the "Manager") established, well-managed companies
with strong market positions, high quality products and high earnings
growth potential that have a proven ability to translate growth in sales
and market share into earnings gains.
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 Policies and Strategies" 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 October 21, 1994, 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).
Because of the Fund's investment policies and practices, the Fund's shares
may be considered to be speculative.
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
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
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy 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 reflected in the Fund's net asset value per share. As
a shareholder, you pay those expenses indirectly. Shareholders pay other
expenses directly, such as sales charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's operating expenses that you might expect
to bear indirectly. The calculations are based on the Fund's expenses
during its fiscal year ended June 30, 1994.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to pages _____ through _____ for
an explanation of how and when these charges apply.
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75%
Sales Charge on Reinvested Dividends None
Deferred Sales Charge None(1)
Redemption Fee None
Exchange Fee $5.00(2)
(1) If you invest more than $1 million, 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 during which you purchased those
shares. See "How to Buy Shares," below.
(2) Fee is waived for automated exchanges, as described in "How to
Exchange Shares."
- 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 (the "Manager"), and other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds its portfolio securities, audit fees and legal and other
expenses. The following numbers 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 Fund's average net assets for
that year. An amended Service Plan for the Fund's shares took effect July
1, 1994, that applies to all shares of the Fund, regardless of the date
on which the shares were purchased. "12b-1 Service Plan Fees" are based
on expenses that would have been incurred if that Plan had been in effect
during the Fund's fiscal year ended June 30, 1994.
Management Fees 0.74%
12b-1 Service Plan Fees (restated) 0.12%
Other Expenses 0.15%
Total Fund Operating Expenses 1.01%
- 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 shares of the Fund, and
that the Fund's annual return is 5%, and that its operating expenses are
as shown in the chart above. If you were to redeem your shares at the end
of each period shown below, your investment would incur the following
expenses by the end of each period shown:
1 year 3 years 5 years 10 years
$67 $86 $107 $166
This example shows the effect of expenses on an investment, but is
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which will vary.
<PAGE>
Financial Highlights
The table on this page 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 June 30, 1994,
is included in the Statement of Additional Information.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to seek capital appreciation for
its shareholders. The Fund does not invest to seek current income to pay
shareholders.
Investment Policies and Strategies. The Fund seeks its investment
objective of capital appreciation by emphasizing investment in "mid-
capitalization" companies (those generally with capitalization between
$500 million and $5 billion, also known as "mid-cap" companies) that are,
in the Manager's opinion, established, well-managed companies with strong
market positions, high quality products and high earnings growth potential
that have a proven ability to translate growth in sales and market share
into earnings gains.
The Fund's investments include common stocks, preferred stocks,
convertible securities, and rights and warrants in proportions which vary
from time to time. Of the companies whose stocks the Fund held during the
fiscal year ended June 30, 1994, some are categorized as "consumer
cyclicals" that do well in the early to middle stages of the economic
cycle; some fall into the technology sector, others are considered
healthcare companies and a few are classified as financial-services
issues. As a group, mid-cap stocks may be more vulnerable to a weaker
economy than other stock sectors. See "Management's Discussion of
Performance" on page 11 for details. In every case, however, sector
classifications are a less important selection criterion for the Fund than
specific company characteristics.
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.
- 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 of their 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 price 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.
- 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 2% of its total assets in warrants or rights (other than
those that have been acquired in units or attached to other securities).
For further details, see "Warrants and Rights" in the Statement of
Additional Information.
- 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.
- Other Investment Risks. Because of the types of securities the Fund
invests in and the investment techniques the Fund uses, some of which may
be speculative securities, 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 on an unsecured basis to buy
securities. The Fund will borrow only if it can do so without putting up
assets as security for a loan. This is a speculative investment method
known as "leverage." This investment technique may subject the Fund to
greater risks and costs than funds that do not borrow. These risks may
include the possibility that the Fund's net asset value per share will
fluctuate more than the net asset value of funds that don't borrow, since
the Fund pays interest on borrowings and interest expense affects the
Fund's share price. Borrowing for leverage is subject to limits under the
Investment Company Act, described in more detail in "Borrowing for
Leverage" 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 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 to enable the Fund to obtain tax
reductions for dividends and capital gains distributions paid to
shareholders. The Fund qualified in its last fiscal year and intends to
do so in the coming year, although it reserves the right not to qualify.
- Can the Fund's Investment Objective and Policies Change? The Fund
has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those policies. The Fund's investment policies and
practices are not "fundamental" unless the Prospectus or Statement of
Additional Information says that a particular policy is "fundamental."
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
investment objective is a fundamental policy. The Fund's Board of Trustees
may change non-fundamental policies without shareholder approval, although
significant changes will be described in amendments to this Prospectus.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below, which involve
certain risks. The Statement of Additional Information contains more
information about these practices, including limitations designed to
reduce some of the risks.
- Writing Covered Calls. The Fund may write (that is, sell) covered
call options (calls) to raise cash for liquidity purposes (for example,
to meet redemption requirements) or for defensive reasons. The Fund
receives cash (called a premium) when it writes a call. The call gives
the buyer the ability to buy the security from the Fund at the call price
during the period in which the call may be exercised. If the value of the
security 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 security).
The Fund may write calls only if certain conditions are met: (1)
after writing any call, not more than 25% of the Fund's total assets may
be subject to calls; (2) the calls must be listed on a domestic securities
exchange, quoted on the Automated Quotation System of the National
Association of Securities Dealers, Inc. (NASDAQ); or traded in the over-
the-counter market; and (3) each call 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. The Fund can also write covered
calls on Future Contracts it owns (these are described in the next
section) but these calls must be covered by securities or other liquid
assets the Fund owns, which the Fund must segregate from its other assets
so that it will be able to satisfy its delivery obligations if the call
is exercised.
If a covered call written by the Fund is exercised, 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 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.
- Hedging With Options and Futures Contracts. The Fund may buy and
sell options and futures contracts to try to manage its exposure to
declining prices on its portfolio securities or to establish a position
in the equity 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
buying call options, tend to increase the Fund's exposure to the market.
The Fund may buy and sell futures contracts only if they relate to
broadly-based stock indices (these are referred to as "Stock Index
Futures"), as described in the Statement of Additional Information. The
Fund may purchase certain kinds of put and call options, Stock Index
Futures (described below), financial futures and options on Stock Index
Futures and on broadly-based stock indices, and engage in interest rate
swap transactions. These are all referred to as "hedging instruments."
The Fund does not use hedging instruments for speculative purposes. 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 purchase put options (puts). Buying a put on an
investment gives the Fund the right to sell the investment to a seller of
a put on that investment at a set price. The Fund can buy only puts that
relate to (1) securities or Stock Index Futures, or (2) broadly-based
stock indices. The Fund can buy a put on a security or Stock Index Future
whether or not the Fund owns the particular security or Stock Index Future
in its portfolio. The Fund may sell puts on securities indices or Futures
only if such puts are covered by segregated liquid assets, but may not
sell puts if, as a result, more than 50% of the Fund's net assets would
be required to be segregated liquid assets. The Fund may not sell puts
other than a put that it previously purchased. The Fund may purchase
calls only on securities, broadly-based stock indices or Stock Index
Futures, or to terminate its obligation on a call the Fund previously
wrote. A call or put 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.
The Fund may buy and sell futures contracts only if they relate to
broadly-based stock indices (these are referred to as "Stock Index
Futures"), as described in the Statement of Additional Information. The
Fund may purchase and sell puts and calls on foreign currencies that are
traded on a securities or commodities exchange or over-the-counter market
or quoted by major recognized dealers in such options, for the purpose of
protecting against declines in the dollar value of foreign securities and
against increases in the dollar cost of securities to be acquired. The
Fund may also enter into foreign currency exchange contracts 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.
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 from those 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. For example, in writing puts, there is a risk that the Fund
may be required to buy the underlying security at a disadvantageous price.
These risks and the hedging strategies the Fund may use are described in
greater detail 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 or their agencies. The Fund may purchase securities in any
country, developed or undeveloped. There is no limit on the amount of the
Fund's assets that may be invested in foreign securities. Foreign
currency will be held by the Fund only in connection with the purchase or
sale of foreign securities. If the Fund's securities are held abroad, the
countries in which they are held and the sub-custodians holding them must
be approved by the Fund's Board of Trustees.
Foreign Securities Have Special Risks. For example, foreign issuers
are not subject to the same accounting and disclosure requirements that
U.S. companies are subject to. The value of foreign instruments 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.
- Interest Rate Swap Transactions. The Fund may enter into interest
rate swaps. In an interest rate swap, the Fund and another party exchange
their respective commitments to pay or receive interest on a security,
e.g., an exchange of floating rate payments for fixed rate payments. The
Fund will not use interest rate swaps for leverage. Swap transactions
will be entered into only as to security positions held by the Fund. The
Fund may not enter into swap transactions with respect to more than 25%
of its total assets. The Fund will segregate liquid assets equal to the
net excess, if any, of its obligations over its entitlements under the
swap and will mark to market that amount daily. There is a risk of loss
on a swap equal to the net amount of interest payments that the Fund is
contractually obligated to make. The credit risk of an interest rate swap
depends on the counterparty's ability to perform.
- 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 a trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is
one that has a contractual restriction on its resale or that cannot be
sold publicly until it is registered under the Securities Act of 1933. The
Fund currently intends to invest no more than 10% of its 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). Certain restricted securities, eligible for resale to
qualified institutional purchasers, are not subject to that limit.
- Loans of Portfolio Securities. To raise cash for liquidity
purposes, the Fund may lend its portfolio securities to certain types of
eligible borrowers approved by the Board of Trustees. Each loan must be
collateralized in accordance with applicable regulatory requirements.
After any loan, the value of the securities loaned must not exceed 25% of
the value of the Fund's net assets. There are some risks in connection
with securities lending. The Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the loan
securities. The Fund presently does not intend to engage in loans of
securities that will exceed 5% of the value of its total assets in the
coming year.
- Derivative Investments. The Fund can invest in a number of
different kinds of "derivative investments." In general, a "derivative
investment" is a specially designed investment whose performance is linked
to the performance of another investment or security, such as an option,
future, index or currency. In the broadest sense, derivative instruments
include exchange-traded options and futures contracts (see "Writing
Covered Calls" and "Hedging with Options and Futures Contracts"). The
risks of investing in derivative investments include not only the ability
of the company issuing the instrument to pay the amount due on the
maturity of the instrument, but also the risk that the underlying
investment or security might not perform the way the Manager expected it
to perform. The performance of derivative investments may also be
influenced by interest rate changes in the U.S. and abroad. All of this
can mean that the Fund will realize less income than expected. Certain
derivative instruments held by the Fund may trade in the over-the-counter
markets and may be illiquid. See "Illiquid and Restricted Securities".
Examples of derivative investments the Fund may invest in include,
among others, "index-linked" notes. These are debt securities of
companies that call for payment on the maturity of the note in different
terms than the typical note where the borrower agrees to pay a fixed sum
on the maturity of the note. The payment on maturity of an index-linked
note depends on the performance of one or more market indices, such as the
S & P 500 Index. Further examples of derivative investments the Fund may
invest in include "debt exchangeable for common stock" of an issuer or
"equity-linked debt securities" of an issuer. At maturity, the principal
amount of the debt security is exchanged for common stock of the issuer
or is payable in an amount based on the issuer's common stock price at the
time of maturity. In either case there is a risk that the amount payable
at maturity will be less than the principal amount of the debt.
Other examples of derivative investments the Fund may invest in are
currency-indexed securities. These are typically short-term or
intermediate-term debt securities whose maturity values or interest rates
are determined by reference to one or more specified foreign currencies.
Certain currency-indexed securities purchased by the Fund may have a
payout factor tied to a multiple of the movement of the U.S. dollar (or
the foreign currency in which the security is denominated) against the
movement in the U.S. dollar, the foreign currency, other currency, or an
index. Such securities may be subject to increased principal risk and
increased volatility than comparable securities without a payout factor
in excess of one, but the Manager believes the increased yield justifies
the increased risk.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. There is no limit on the amount of the Fund's net assets that
may be subject to repurchase agreements of seven days or less. Repurchase
agreements 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 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.
- 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 security sold short. This technique is used primarily for tax
purposes. No more than 15% of the Fund's net assets will be held as
collateral for such 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, and 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: (1) invest in securities of a single
issuer (except the U.S. Government or its agencies or instrumentalities)
if immediately thereafter either: (a) more than 5% of the Fund's total
assets would be invested in securities of that issuer, or (b) the Fund
would then own more than 10% of that issuer's voting securities; (2)
invest more than 25% of its total assets in securities of companies in any
one industry; (3) 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;
(4) make short sales of securities except "short sales against-the-box";
or (5) deviate from the percentage restrictions listed under "Illiquid and
Restricted Securities" and "Writing Covered Calls."
All of the percentage restrictions described above and elsewhere in
this Prospectus (other than the percentage limit that applies 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 described in the Statement of Additional
Information.
How the Fund is Managed
Organization and History. The Fund was originally incorporated in
Maryland in 1971 but was reorganized in 1985 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 Manager and Its Affiliates. The Fund is managed by the Manager, which
chooses the Fund's investments and handles its day-to-day business. The
Manager carries out its duties, subject to the policies established by the
Board of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities and its fees, and describes the expenses that
the Fund pays to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $28 billion as
of June 30, 1994, and with more than 1.8 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, a mutual life insurance
company.
- Portfolio Manager. The Portfolio Manager of the Fund is Jay W.
Tracey III, a Vice President of the Manager and of the Fund. He has been
the person principally responsible for the day-to-day management of the
Fund's portfolio, since September, 1994. During the past five years, Mr.
Tracey has also served as an officer of other OppenheimerFunds, prior to
which he was Managing Director of Buckingham Capitol Management, prior to
which he was the portfolio manager of the Fund and a Vice President of the
Manager, before which he was Senior Vice President of Founders Asset
Management, Inc. (mutual fund adviser), prior to which he was a securities
analyst and portfolio manager of Berger Associates, Inc. (investment
adviser).
- 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, .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 0.74% of average annual net assets, which may be higher than the
rate paid by some other mutual funds.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Distributor. The
Distributor also distributes the shares of other mutual funds managed by
the Manager (the "OppenheimerFunds") and is sub-distributor for funds
managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free number shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses certain terms to
illustrate its performance: "total return" and "average annual total
return." This performance information may be useful to help you see how
well your investment has done and to compare it to other funds or market
indices, as we have done below.
It is important to understand that the Fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary, depending on
market conditions, the composition of the portfolio, and expenses that the
Fund incurs.
- 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, they reflect the payment of the
maximum initial 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 June 30, 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, increases in short-term interest rates took a toll on growth
stocks. In that economic climate, the Manager continued to focus on mid-
capitalization companies (having a capitalization between $500 million and
$5 billion, also known as "mid-cap" companies) that, in the Manager's
opinion, have high earnings growth potential. The Fund emphasized
investments in portfolio companies with established market positions and
strong managements, and which may benefit from increased consumer
confidence and spending. The Fund sold stocks whose prices appeared to
have peaked, using the proceeds to invest in companies whose earnings
potential is not, in the Manager's opinion, fully reflected in the value
of their shares.
- Comparing the Fund's Performance to the Market. The chart below
shows the performance of a hypothetical $10,000 investment in shares of
the Fund held until June 30, 1994 over a ten-year period, with all
dividends and capital gains distributions invested in additional shares.
The graph reflects the deduction of the 5.75% maximum initial sales charge
on Fund shares.
The Fund's performance is compared to the performance of the S&P 500
Index, a broad-based index of equity securities widely regarded as a
general measure of the performance of the U.S. equity securities market.
Index performance data 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 mid-cap 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.
Comparison of Change in Value
of $10,000 Hypothetical Investment in:
Oppenheimer Time Fund and the
S&P 500 Index
(Graph)
Past performance is not predictive of future performance.
Oppenheimer Time Fund
Average Annual Total Return of the Fund at 6/30/94
1-Year 5-Year 10-Year
-8.95% 5.68% 12.54%
Past performance is not predictive of future performance.
ABOUT YOUR ACCOUNT
How to Buy Shares
When you buy shares of the Fund, you pay an initial sales charge (on
investments up to $1 million). If you purchase shares as part of an
investment of at least $1 million in shares of one or more
OppenheimerFunds, and you sell any of those shares within 18 months after
your purchase, you may pay a contingent deferred sales charge, which will
vary depending on the amount you invested.
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 OppenheimerFunds (a list
of them appears in the Statement of Additional Information, or you can ask
your dealer or call the Transfer Agent), or by reinvesting distributions
from unit investment trusts that have made arrangements with the
Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service.
- 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.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member, to transmit funds electronically to purchase shares, to send
redemption proceeds, and 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 must request AccountLink privileges
on the application or dealer settlement instructions used to establish
your account. Please refer to "AccountLink" below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other OppenheimerFunds) automatically each month from your account
at a bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of
Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value 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 by 4:00 P.M., New York time (all references to time in
this Prospectus mean "New York time"). The net asset value 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 4:00 P.M., 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.
The Fund's 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 Front-End
Sales Charge Sales Charge
as Percentage as Percentage Commission
of Offering of Amount as Percentage
Amount of Purchase Price Invested of 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%
<FN>
_______________________________________________________________________
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.
</TABLE>
- Contingent Deferred Sales Charge. There is no initial sales
charge on purchases of Class A shares of any one or more OppenheimerFunds
aggregating $1 million or more (shares of the Fund and other
OppenheimerFunds that offer only one class of shares that has no class
designation are considered "Class A" shares for this purpose). However,
the Distributor pays dealers of record commissions on such 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 share purchases over $5 million.
That commission will be paid only on the amount of those purchases in
excess of $1 million 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 will
be deducted from the redemption proceeds. That sales charge will be equal
to 1.0% of the aggregate net asset value of either (1) the redeemed shares
(not including shares purchased by reinvestment of dividends or capital
gain distributions) or (2) the original cost of the shares, whichever is
less. However, the contingent deferred sales charge will not exceed the
aggregate commissions the Distributor paid to your dealer on all shares
of all OppenheimerFunds you purchased subject to the 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 contingent deferred sales charge is waived in certain
cases described in "Waivers of Sales Charges" below.
No 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 sales
charge will apply.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges. You may be eligible to buy the Fund's shares at
reduced sales charge rates in one or more of the following ways:
- Right of Accumulation. You and your spouse can cumulate shares you
purchase for your own accounts, or jointly, or on behalf of your children
who are minors, under trust or custodial accounts. A fiduciary can
cumulate shares purchased for a trust, estate or other fiduciary account
(including one or more employee benefit plans of the same employer) that
has multiple accounts.
Additionally, you can cumulate current purchases of shares of the
Fund and Class A shares of
other OppenheimerFunds with Class A shares of OppenheimerFunds you
previously purchased subject to a sales charge, provided that you still
hold your investment in one of the OppenheimerFunds. The value of those
shares will be based on the greater of the amount you paid for the shares
or their current value (at offering price). The OppenheimerFunds are
listed in "Reduced Sales Charges" in the Statement of Additional
Information, or a list can be obtained from the Transfer Agent. The
reduced sales charge will apply only to current purchases and must be
requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, you may purchase
shares of the Fund and Class A shares of other OppenheimerFunds during a
13-month period at the reduced sales charge rate that applies to the
aggregate amount of the intended purchases, including 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 Sales Charges. No sales charge is imposed on sales of
shares to the following investors: (1) the Manager or its affiliates; (2)
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;
(3) registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor for that purpose; (4) 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; (5) 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); (6) 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; (7) 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
administrative services.
Additionally, no sales charge is imposed on shares that are (a)
issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, or (c) purchased by
the reinvestment of dividends or other distributions reinvested from the
Fund or other OppenheimerFunds (other than Oppenheimer Cash Reserves Fund)
or unit investment trusts for which reinvestment arrangements have been
made with the Distributor. There is a further discussion of this policy
in "Reduced Sales Charges" in the Statement of Additional Information.
The contingent deferred sales charge does not apply to purchases of
shares at net asset value described above and is also waived if shares are
redeemed in the following cases: (1) retirement distributions or loans to
participants or beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans ("Retirement Plans"),
(2) returns of excess contributions made to Retirement Plans, (3)
Automatic Withdrawal Plan payments that are limited to no more than 12%
of the original account value annually, and (4) involuntary redemptions
of shares by operation of law or under the procedures set forth in the
Fund's Declaration of Trust or adopted by the Board of Trustees; and (5)
if, at the time an order is placed for Class A shares that would otherwise
be subject to the Class A contingent deferred sales charge, the dealer
agrees to accept the dealer's portion of the commission payable on the
sale in installments of 1/18th of the commission per month (with no
further commission payable if the shares are redeemed within 18 months of
purchase).
- Service Plan. The Fund has adopted a Service Plan to reimburse
the Distributor for a portion of its costs incurred in connection with the
personal service and maintenance of shareholder accounts. Reimbursement
is made quarterly at an annual rate that may not exceed 0.25% of the
average annual net assets of 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 shares of the Fund 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 shares held in accounts
of the dealer or its customers. The payments under the Plan increase the
annual expenses of shares. For more details, please refer to "Service
Plan" in the Statement of Additional Information.
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, including 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 must be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges on signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each shareholder
listed in the registration on your account as well as to your dealer
representative of record unless and until the Transfer Agent receives
written instructions terminating or changing those privileges. After you
establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the
Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be used
on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive payments
of at least $50 on a monthly, quarterly, semi-annual or annual basis. The
checks may be sent to you or sent automatically to your bank account on
AccountLink. You may even set up certain types of withdrawals of up to
$1,500 per month by telephone. You should consult the Application and
Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange an amount you establish in advance automatically for shares of
up to five other OppenheimerFunds on a monthly, quarterly, semi-annual or
annual basis under an Automatic Exchange Plan. The minimum purchase for
each other OppenheimerFunds account is $25. These exchanges are subject
to the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in shares of the Fund or Class A shares of other OppenheimerFunds without
paying a sales charge. This privilege applies to Fund shares that you
purchased with an initial sales charge or on which you paid a contingent
deferred sales charge when you redeemed them. 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 SARSEP-IRAs
- Pension and Profit-Sharing Plans for self-employed persons and
small business owners
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing or by telephone. You can
also set up Automatic Withdrawal Plans to redeem shares on a regular
basis, as described above. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special
situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525-7048, for
assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive
a check
- The check is not payable to all shareholders listed on the
account statement
- The check is not sent to the address of record on your statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as
an Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing as a fiduciary or on behalf of a corporation, partnership or
other business, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling, 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 4:00 P.M. 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, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds wired to that account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed
by telephone, once in each 7-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account. This service is not available within 30 days of changing the
address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges made by brokers on Fund/SERV and
for automated exchanges between already established accounts on PhoneLink
described below. To exchange shares, you must meet several conditions:
- Shares of the fund selected for exchange must be available for sale
in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other OppenheimerFunds. Because the Fund has only one
class of shares that does not have a class designation, they are "Class
A" shares for exchange purposes. For example, you can exchange shares of
this Fund only for Class A shares of another fund. At present, not all
of the OppenheimerFunds offer the same classes of shares. If a fund has
only one class of shares that does not have a class designation, they are
"Class A" shares for exchange purposes. In some cases, sales charges may
be imposed on exchange transactions. Certain OppenheimerFunds offer Class
A shares and Class B and/or Class C shares, and a list can be obtained by
calling the Distributor at 1-800-525-7048. 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 one of the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or by calling a
service representative at 1-800-525-7048. Exchanges of shares involve a
redemption of the shares of the fund you own and a purchase of shares of
the other fund.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from
the other fund in the exchange transaction on the same regular business
day on which the Transfer Agent receives an exchange request by 4:00 P.M.
that is in proper form, but either fund may delay the purchase of shares
of the fund you are exchanging into if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For
example, the receipt of multiple exchange requests from a dealer in a
"market-timing" strategy might require the disposition of securities at
a time or price disadvantageous to the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege at
any time. Although the Fund will attempt to provide you notice whenever
it is reasonably able to do so, it may impose these changes at any time.
- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
The Distributor has entered into agreements with certain dealers and
investment advisers permitting them to exchange their clients' shares by
telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a
result, those exchanges may be subject to notice requirements, delays and
other limitations that do not apply to shareholders who exchange their
shares directly by calling or writing to the Transfer Agent.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined as of 4:00 P.M. each day
The New York Stock Exchange is open by dividing the value of the Fund's
net assets by the number of shares that are outstanding. The Fund's Board
of Trustees has established procedures to value the Fund's securities to
determine net asset value. In general, securities values are based on
market value. There are special procedures for valuing illiquid and
restricted securities, obligations for which market values cannot be
readily obtained, and call options and hedging instruments. These
procedures are described more completely in the Statement of Additional
Information.
- The offering of shares may be suspended during any period in which
the determination of net asset value is suspended, and the offering may
be suspended by the Board of Trustees at any time the Board believes it
is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise it will not be liable for losses or expenses
arising out of telephone instructions reasonably believed to be genuine.
If you are unable to reach the Transfer Agent during periods of unusual
market activity, you may not be able to complete a telephone transaction
and should consider placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously.
- The redemption price for the Fund's shares will vary from day to
day because the value of the securities in the Fund's portfolio
fluctuates, and the redemption value, which is the net asset value per
share, 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. 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 15 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 $500 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
- Under unusual circumstances, shares of the fund may be redeemed
"in kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to the Statement of
Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or taxpayer identification number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of dividends.
- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described above in "How To Buy Shares," you may
be subject to a contingent deferred sales charges when redeeming certain
shares.
- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report and
updated prospectus to shareholders having the same surname 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 intends to declare dividends on an annual basis in
December each year, on a date set by the Board of Trustees. The Board may
also cause the Fund to declare dividends after the close of the Fund's
fiscal year (which ends June 30th). Because the Fund does not have an
objective of seeking current income, the amounts of dividends it pays, if
any, will likely be small.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of dividends and capital gains following the
end of its fiscal year. Long-term capital gains will be separately
identified in the tax information the Fund sends you after the end of the
year. Short-term capital gains are treated as dividends for tax purposes.
There can be no assurances that the Fund will pay any capital gains
distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a check
for all dividends and long-term capital gains distributions or have them
sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds Account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. Dividends paid from short-term capital gains
and net investment income are taxable as ordinary income. Distributions
are subject to federal income tax and may be subject to state or local
taxes. Your distributions are taxable when paid, whether you reinvest
them in additional shares or take them in cash. Every year the Fund will
send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share price
is reduced by the amount of the distribution. If you buy shares on or
just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. A capital gain or loss is
the difference between the price you paid for the shares and the price you
received when you sold them.
- Returns of Capital: In certain cases distributions made by the Fund
may be considered a non-taxable return of capital to shareholders. If
that occurs, it will be identified in notices to shareholders.
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 TIME FUND
Graphic material included in Prospectus of Oppenheimer Time Fund:
"Comparison of Total Return of Oppenheimer Time Fund with the S&P 500
Index - Change in Value of a $10,000 Hypothetical Investment"
A linear graph will be included in the Prospectus of Oppenheimer Time
Fund (the "Fund") depicting the initial account value and subsequent
account value of a hypothetical $10,000 investment in the Fund over the
ten-year period from 6/30/84 through 6/30/94. The graph will compare such
values with a hypothetical $10,000 investment over the same time periods
in the S&P 500 Index. Set forth below are the relevant data points that
will appear on the linear graph. Additional information with respect to
the foregoing, including a description of the S&P 500 Index, is set forth
in the Prospectus under "Performance of the Fund - Comparing the Fund's
Performance to the Market."
<TABLE>
<CAPTION>
Fiscal Year Oppenheimer S&P 500
(Period) Ended Time Fund Index
<S> <C> <C>
06/30/84 $ 9,425 $10,000
06/30/85 $11,782 $13,096
06/30/86 $17,248 $17,787
06/30/87 $20,060 $22,262
06/30/88 $19,501 $20,719
06/30/89 $23,299 $24,971
06/30/90 $24,909 $29,079
06/30/91 $25,521 $31,222
06/30/92 $27,890 $35,403
06/30/93 $33,734 $40,221
06/30/94 $32,587 $40,784
</TABLE>
<PAGE>
Oppenheimer Time 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
Oppenheimer Shareholder Services Time Fund
P.O. Box 5270 Prospectus
Denver, Colorado 80217 Effective October 21, 1994
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 OppenheimerFunds
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement and, if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, 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.
PR381.1094.R * Printed on recycled paper
<PAGE>
Oppenheimer Time 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
Oppenheimer Shareholder Services Time Fund
P.O. Box 5270 Prospectus and New Account
Denver, Colorado 80217 Application
1-800-525-7048 Effective October 21, 1994
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 OppenheimerFunds
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement and, if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, 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.
PR380.1094.R * Printed on recycled paper
<PAGE>
Oppenheimer Time Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated October 21, 1994
This Statement of Additional Information of Oppenheimer Time Fund is
not a Prospectus. This document contains additional information about the
Fund and supplements information in the Prospectus dated October 21, 1994.
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 2
Investment Objective and Policies 2
Investment Policies and Strategies 2
Other Investment Techniques and Strategies 2
Other Investment Restrictions 12
How the Fund is Managed 13
Organization and History 13
Trustees and Officers of the Fund 14
The Manager and Its Affiliates 17
Brokerage Policies of the Fund 19
Performance of the Fund 21
Service Plan 23
About Your Account 24
How To Buy Shares 24
How To Sell Shares 29
How To Exchange Shares 32
Dividends, Capital Gains and Taxes 34
Additional Information About the Fund 35
Financial Information About the Fund 36
Independent Auditors' Report 36
Financial Statements 37
<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. 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 (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).
Other Investment Techniques and Strategies
- Warrants and Rights. 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 and warrants have no voting
rights, receive no dividends and have no rights with respect to the assets
of the issuer.
- Writing Covered Calls. As described in the Prospectus, the Fund
may write covered calls. When the Fund writes a call on a security, it
receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment) regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing
purchase transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the premium
previously received on the call the Fund has written is more or less than
the price of the call the Fund subsequently purchased. A profit may also
be realized if the call lapses unexercised because the Fund retains the
underlying investment and the premium received. Such profits are
considered short-term capital gains for Federal income tax purposes, as
are premiums on lapsed calls, and when distributed by the Fund are taxable
as ordinary income. If the Fund could not effect a closing purchase
transaction due to the lack of a market, it would have to hold the
callable investment until the call lapsed or was exercised.
The Fund may also write calls on futures without owning a futures
contract or deliverable securities, provided that at the time the call is
written, the Fund covers the call by segregating in escrow an equivalent
dollar value of liquid assets. The Fund will segregate additional liquid
assets if the value of the escrowed assets drops below 100% of the current
value of the future. In no circumstances would an exercise notice as to
a future put the Fund in a short futures position.
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 that are traded on exchanges, or as to other
acceptable escrow securities, so that no margin will be required from the
Fund for such option transactions. OCC will release the securities
covering a call on the expiration of the call or when the Fund enters into
a closing purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally higher
than on general securities transactions, are payable on writing or
purchasing a call.
- Hedging With Options and Futures Contracts. The Fund may use
hedging instruments for the purposes described in the Prospectus. When
hedging to attempt to protect against declines in the market value of the
Fund's portfolio, or to permit the Fund to retain unrealized gains in the
value of portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may: (i) sell Stock
Index Futures, (ii) buy puts on such Futures or securities, or (iii) write
covered calls on securities held by it or on Stock Index Futures (as
described in the Prospectus). When hedging to establish a position in the
equity securities markets as a temporary substitute for the purchase of
individual equity securities the Fund may: (i) buy Stock Index Futures,
or (ii) buy calls on Stock Index Futures or securities. Normally, the
Fund would then purchase the equity securities and terminate the hedging
portion.
The Fund's strategy of hedging with futures and options on futures will
be incidental to the Fund's investment activities in the underlying cash
market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be developed,
to the extent such investment methods are consistent with the Fund's
investment objective, and are legally permissible and disclosed in the
Prospectus. Additional information about the hedging instruments the Fund
may use is provided below.
- Stock Index Futures. As described in the Prospectus, the Fund may
invest in Stock Index Futures only if they relate to broadly-based stock
indices. A stock index is considered to be broadly-based if it includes
stocks that are not limited to issuers in any particular industry or group
of industries. A stock index assigns relative values to the common stocks
included in the index and fluctuates with the changes in the market value
of those stocks. Stock indices cannot be purchased or sold directly.
Stock Index Futures are contracts based on the future value of the
basket of securities that comprise the underlying stock index. The
contracts obligate the seller to deliver, and the purchaser to take, cash
to settle the futures transaction or to enter into an offsetting contract.
No physical delivery of the securities underlying the index is made on
settling the futures obligation. No monetary amount is paid or received
by the Fund on the purchase or sale of a Stock Index Future. Upon
entering into a futures transaction, the Fund will be required to deposit
an initial margin payment, in cash or U.S. Treasury bills, with the
futures commission merchant (the "futures broker"). Initial margin
payments will be deposited with the Fund's Custodian in an account
registered in the futures broker's name; however, the futures broker can
gain access to that account only under certain specified conditions. As
the future is marked to market (that is, its value on the Fund's books is
changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures
broker on a daily basis.
At any time prior to the expiration of the future, the Fund may elect
to close out its position by taking an opposite position, at which time
a final determination of variation margin is made and additional cash is
required to be paid by or released to the Fund. Any gain or loss is then
realized by the Fund on the future for tax purposes. Although Stock Index
Futures by their terms call for settlement by the delivery of cash, in
most cases the settlement obligation is fulfilled without such delivery
by entering into an offsetting transaction. All futures transactions are
effected through a clearing house associated with the exchange on which
the contracts are traded.
- Purchasing Puts and Calls. The Fund may purchase calls to protect
against the possibility that the Fund's portfolio will not participate in
an anticipated rise in the securities market. When the Fund purchases a
call (other than in a closing purchase transaction), it pays a premium
and, except as to calls on stock indices, has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. In
purchasing a call, the Fund benefits only if the call is sold at a profit
or if, during the call period, the market price of the underlying
investment is above the sum of the call price, transaction costs, and the
premium paid, and the call is exercised. If the call is not exercised or
sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the right
to purchase the underlying investment. When the Fund purchases a call on
a stock index, it pays a premium, but settlement is in cash rather than
by delivery of the underlying investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to puts
on stock indices, has the right to sell the underlying investment to a
seller of a corresponding put on the same investment during the put period
at a fixed exercise price. Buying a put on an investment the Fund owns
(a "protective put") enables the Fund to attempt to protect itself during
the put period against a decline in the value of the underlying investment
below the exercise price by selling the underlying investment at the
exercise price to a seller of a corresponding put. If the market price
of the underlying investment is equal to or above the exercise price and
as a result the put is not exercised or resold, the put will become
worthless at its expiration and the Fund will lose the premium payment and
the right to sell the underlying investment. However, the put may be sold
prior to expiration (whether or not at a profit).
Puts and calls on broadly-based stock indices or Stock Index Futures
are similar to puts and calls on securities or futures contracts except
that all settlements are in cash and gain or loss depends on changes in
the index in question (and thus on price movements in the stock market
generally) rather than on price movements of individual securities or
futures contracts. When the Fund buys a call on a stock index or Stock
Index Future, it pays a premium. If the Fund exercises the call during
the call period, a seller of a corresponding call on the same investment
will pay the Fund an amount of cash to settle the call if the closing
level of the stock index or future upon which the call is based is greater
than the exercise price of the call. That cash payment is equal to the
difference between the closing price of the call and the exercise price
of the call times a specified multiple (the "multiplier") which determines
the total dollar value for each point of difference. When the Fund buys
a put on a stock index or Stock Index Future, it pays a premium and has
the right during the put period to require a seller of a corresponding
put, upon the Fund's exercise of its put, to deliver cash to the Fund to
settle the put if the closing level of the stock index or Stock Index
Future upon which the put is based is less than the exercise price of the
put. That cash payment is determined by the multiplier, in the same
manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock Index
Future not owned by it, the put protects the Fund to the extent that the
index moves in a similar pattern to the securities the Fund holds. The
Fund can either resell the put or, in the case of a put on a Stock Index
Future, buy the underlying investment and sell it at the exercise price.
The resale price of the put will vary inversely with the price of the
underlying investment. If the market price of the underlying investment
is above the exercise price, and as a result the put is not exercised, the
put will become worthless on the expiration date. In the event of a
decline in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its loss on
its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause
the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds is within the
Fund's control, holding a put might cause the Fund to sell the related
investments for reasons that would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys or sells a
call, put or an underlying investment in connection with the exercise of
a put or call. Such commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value of
the underlying investments, and consequently put and call options offer
large amounts of leverage. The leverage offered by trading in options
could result in the Fund's net asset value being more sensitive to changes
in the value of the underlying investments.
- Regulatory Aspects of Hedging Instruments. The Fund must operate
within certain restrictions as to its long and short positions in futures
and options thereon under a rule ("CFTC Rule") adopted by the Commodity
Futures Trading Commission ("CFTC") under the Commodity Exchange Act (the
"CEA"). The CEA excludes the Fund from registration with the CFTC as a
"commodity pool operator" (as defined under the CEA), if the Fund complies
with the CFTC Rule. Under these restrictions, the Fund will not, as to
any positions, whether long, short or a combination thereof, enter into
Futures transactions and options thereon for which the aggregate initial
margins and premiums exceed 5% of the fair market value of the Fund's
assets, with certain exclusions as defined in the CFTC Rule. Under the
restrictions, the Fund also must, as to its short positions, use futures
and options thereon solely for "bona fide hedging purposes" within the
meaning and intent of the applicable provisions of the CEA.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of options
that may be written or held by a single investor or group of investors
acting in concert, regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through one or more
brokers. Thus the number of options which the Fund may write or hold may
be affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser
that is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Stock Index Future, the Fund will maintain, in a segregated
account or accounts with its Custodian, cash or readily-marketable, short-
term (maturing in one year or less) debt instruments in an amount equal
to the market value of the securities underlying such Future, less the
margin deposit applicable to it.
- 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 having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Stock Index Futures, held for less than three
months, whether or not they were purchased on the exercise of a call held
by the Fund; (ii) purchasing options which expire in less than three
months; (iii) effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv) exercising
puts or calls held by the Fund for less than three months; or (v) writing
calls on investments held less than three months.
- Risks of Hedging With Options and Futures. An option position may
be closed out only on a market that provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option. In addition to the risks
associated with hedging that are discussed in the Prospectus and above,
there is a risk in using short hedging by (i) selling Stock Index Futures
or (ii) purchasing puts on stock indices or Stock Index Futures to attempt
to protect against declines in the value of the Fund's equity securities.
The risk is that the prices of Stock Index Futures will correlate
imperfectly with the behavior of the cash (i.e., market value) prices of
the Fund's equity securities. The ordinary spreads between prices in the
cash and futures markets are subject to distortions, due to differences
in the natures of those markets. First, all participants in the futures
markets are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may
close out futures contracts through offsetting transactions which could
distort the normal relationship between the cash and futures markets.
Second, the liquidity of the futures markets depends on participants
entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery,
liquidity in the futures markets could be reduced, thus producing
distortion. Third, from the point of view of speculators, the deposit
requirements in the futures markets are less onerous than margin
requirements in the securities markets. Therefore, increased
participation by speculators in the futures markets may cause temporary
price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the equity securities being hedged and movements in the price of
the hedging instruments, the Fund may use hedging instruments in a greater
dollar amount than the dollar amount of equity securities being hedged if
the historical volatility of the prices of the equity securities being
hedged is more than the historical volatility of the applicable index.
It is also possible that if the Fund has used hedging instruments in a
short hedge, the market may advance and the value of equity securities
held in the Fund's portfolio may decline. If that occurred, the Fund would
lose money on the hedging instruments and also experience a decline in
value in its portfolio securities. However, while this could occur for
a very brief period or to a very small degree, over time the value of a
diversified portfolio of equity securities will tend to move in the same
direction as the indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of individual
equity securities (long hedging) by buying Stock Index Futures and/or
calls on such Futures, on securities or on stock indices, it is possible
that the market may decline. If the Fund then concludes not to invest in
equity securities at that time because of concerns as to a possible
further market decline or for other reasons, the Fund will realize a loss
on the hedging instruments that is not offset by a reduction in the price
of the equity securities purchased.
- 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.
- Investing in Small, Unseasoned Companies. The securities of small,
unseasoned companies may have a limited trading market, which may
adversely affect the Fund's ability to dispose of them and can reduce the
price the Fund might be able to obtain for them. If other investment
companies and investors that invest in this type of securities trade the
same securities when the Fund attempts to dispose of its holdings, the
Fund may receive lower prices than might otherwise be obtained, because
of the thinner market for such securities.
- 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 potential benefits not available
from investing solely in securities of domestic issuers, including the
opportunity to invest in foreign issuers that appear to offer growth
potential, or in foreign countries with economic policies or business
cycles different from those of the U.S., or to reduce fluctuations in
portfolio value by taking advantage of foreign stock markets that do not
move in a manner parallel to U.S. markets. If the Fund's portfolio
securities are held abroad, the countries in which they may be held and
the sub-custodians holding them must be approved by the Fund's Board of
Trustees under applicable rules of the Securities and Exchange Commission.
- Risks of Foreign Investing. Investments in foreign securities
present special additional risks and considerations not typically
associated with investments in domestic securities: reduction of income
by foreign taxes; fluctuation in value of foreign portfolio investments
due to changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of public
information about foreign issuers; lack of uniform accounting, auditing
and financial reporting standards comparable to those applicable to
domestic issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity on foreign markets than in the U.S.;
less regulation of foreign issuers, stock exchanges and brokers than in
the U.S.; greater difficulties in commencing lawsuits; higher brokerage
commission rates than in the U.S.; increased risks of delays in settlement
of portfolio transactions or loss of certificates for portfolio
securities; possibilities in some countries of expropriation, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and unfavorable differences between the U.S. economy and
foreign economies. In the past, U.S. Government policies have
discouraged certain investments abroad by U.S. investors, through
taxation or other restrictions, and it is possible that such restrictions
could be re-imposed.
Options on Foreign Currencies. The Fund intends to write and purchase
both covered and uncovered calls and puts on foreign currencies. A call
written on a foreign currency by the Fund is covered if the Fund owns the
underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated
account by its custodian) upon conversion or exchange of other foreign
currency held in its portfolio. Normally this will be effected by the
sale of a security denominated in the relevant currency at a price higher
or lower than the original acquisition price of the security. This will
result in a loss or a gain in addition to that resulting from the currency
option position. An uncovered call may be written by the Fund on a
foreign currency to provide a hedge against a decline in the U.S. dollar
value of a security which the Fund owns or has the right to acquire and
which is denominated in the currency underlying the option due to an
adverse change in the exchange rate. This is a cross-hedging strategy.
In such circumstances, the Fund collateralizes the option by maintaining
in a segregated account with the Fund's custodian, cash or Government
Securities in an amount not less than the value of the underlying foreign
currency in U.S. dollars marked-to-market daily.
Forward Contracts. 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 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. The Fund will not speculate with Forward Contracts or foreign
currency exchange rates.
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 will not enter into such Forward Contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of
the value of the Fund's portfolio securities or other assets denominated
in that currency. The Fund, however, in order to avoid excess
transactions and transaction costs, may maintain a net exposure to Forward
Contracts in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency provided the excess amount is
"covered" by liquid, high-grade debt securities, denominated in any
currency, at least equal at all times to the amount of such excess. As
an alternative, the Fund may purchase a call option permitting the Fund
to purchase the amount of foreign currency being hedged by a forward sale
contract at a price no higher than the forward contract price or the Fund
may purchase a put option permitting the Fund to sell the amount of
foreign currency subject to a forward purchase contract at a price as high
or higher than the forward contract price. 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.
- Interest Rate Swap Transactions. Swap agreements entail both
interest rate risk and credit risk. There is a risk that, based on
movements of interest rates in the future, the payments made by the Fund
under a swap agreement will have been greater than those received by it.
Credit risk arises from the possibility that the counterparty will
default. If the counterparty to an interest rate swap defaults, the
Fund's loss will consist of the net amount of contractual interest
payments that the Fund has not yet received. The Manager will monitor the
creditworthiness of counterparties to the Fund's interest rate swap
transactions on an ongoing basis. The Fund will enter into swap
transactions with appropriate counterparties pursuant to master netting
agreements. A master netting agreement provides that all swaps done
between the Fund and the counterparty under the master agreement shall be
regarded as parts of an integral agreement. If on any date amounts are
payable in the same currency in respect of one or more swap transactions,
the net amount payable on that date in that currency shall be paid. In
addition, the master netting agreement may provide that if one party
defaults generally or on one swap, the counterparty may terminate the
swaps with that party. Under such agreements, if there is a default
resulting in a loss to one party, the measure of that party's damages is
calculated by reference to the average cost of a replacement swap with
respect to each swap (i.e., the mark-to-market value at the time of the
termination of each swap). The gains and losses on all swaps are then
netted, and the result is the counterparty's gain or loss on termination.
The termination of all swaps and the netting of gains and losses on
termination is generally referred to as "aggregation."
- 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 Fund will not lend its portfolio securities to any officer, trustee,
employee or affiliate of the Fund or the Manager. The terms of the Fund's
loans must meet applicable tests under the Internal Revenue Code and must
permit the Fund to reacquire loaned securities on five days' notice or in
time to vote on any important matter.
- Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Fund
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor"
is a U.S. commercial bank or the U.S. branch of a foreign bank or a
broker-dealer which has been designated a primary dealer in government
securities, which must meet credit requirements set by the Fund's Board
of Trustees from time to time. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective
for the period during which the repurchase agreement is in effect. The
majority of these transactions run from day to day, and delivery pursuant
to the resale typically will occur within one to five days of the
purchase. Repurchase agreements are considered "loans" under the
Investment Company Act, collateralized by the underlying security. The
Fund's repurchase agreements require that at all times while the
repurchase agreement is in effect, the value of the collateral must equal
or exceed the repurchase price to fully collateralize the repayment
obligation. Additionally, the Manager will impose creditworthiness
requirements to confirm that the vendor is financially sound and will
continuously monitor the collateral's value.
- 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 (1) 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 (2) more than 50% of the
outstanding shares.
Under these additional restrictions, the Fund cannot: (1) lend money,
but the Fund may invest in a portion of a publicly distributed issue of
bonds, debentures, commercial paper, or other similar corporate
obligations; the Fund may also make loans of portfolio securities provided
the loan is collateralized in accordance with applicable regulatory
requirements and provided that immediately after any such loan the value
of the securities loaned does not exceed 25% of the total value of the
Fund's assets; (2) underwrite securities of other companies, except
insofar as it might be deemed to be an underwriter for purposes of the
Securities Act of 1933 in the resale of any securities held in its own
portfolio; (3) invest in or hold securities of any issuer if those
officers, directors and trustees of the Fund or its adviser owning
individually more than 0.5% of the securities of such issuer together own
more than 5% of the securities of such issuer; (4) invest in commodities
or commodity contracts; however, the Fund may buy and sell any of the
Hedging Instruments it may use, whether or not such Hedging Instrument is
considered to be a commodity or commodity contract; (5) invest in real
estate or interests in real estate, but may purchase readily marketable
securities of companies holding real estate or interests therein; (6)
purchase securities on margin; however, the Fund may make margin deposits
in connection with any of the Hedging Instruments which it may use; or (7)
mortgage, hypothecate 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 of the Hedging Instruments it may use.
The Fund has further undertaken, as a non-fundamental investment
policy, in response to state securities regulations, that it will not
invest in oil, gas, or mineral exploration or development programs; the
Fund may terminate that undertaking at any time.
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.
The Fund's Declaration of Trust and an SEC exemptive order permits it
to offer shares of more than one class. In the event the Fund determines
to offer a class of shares in addition to the one presently offered, the
Prospectus will be amended accordingly.
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 Time Fund, Oppenheimer Growth
Fund, Oppenheimer Discovery Fund, Oppenheimer Global Growth & Income Fund,
Oppenheimer Global Emerging Growth Fund, Oppenheimer Gold & Special
Minerals Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer New York Tax-
Exempt Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer Multi-
State Tax-Exempt Trust, Oppenheimer Asset Allocation Fund, Oppenheimer
Mortgage Income Fund, Oppenheimer Money Market Fund, Inc., Oppenheimer
U.S. Government Trust, Oppenheimer Multi-Sector Income Trust, Oppenheimer
Multi-Government Trust and Oppenheimer Target Fund (the "New York-based
OppenheimerFunds"). Messrs. Spiro, Bishop, Bowen, Donohue, Farrar and Zack
respectively hold the same offices with the other New York-based
OppenheimerFunds as with the Fund. As of September 30, 1994, the Trustees
and officers of the Fund as a group owned less than 1% of the outstanding
shares of the Fund.
Leon Levy, Chairman of the Board of Trustees
General Partner of Odyssey Partners, L.P. (investment partnership) and
Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee
386 Park Avenue South, New York, New York 10016
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of The Research Institute
of America.
Robert G. Galli, Trustee*
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Manager's parent holding company;
formerly he held the following positions: a director of the Manager
and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment advisory subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of the
Manager, an officer of other OppenheimerFunds and Executive Vice
President and General Counsel of the Manager and the Distributor.
Benjamin Lipstein, Trustee
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University.
Elizabeth B. Moynihan, Trustee
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the American Schools
of Oriental Research, the Freer Gallery of Art (Smithsonian
Institution), the Institute of Fine Arts (New York University) and the
Preservation League of New York State; a member of the Indo-U.S. Sub-
Commission on Education and Culture.
Kenneth A. Randall, Trustee
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Northeast Bancorp, Inc. (bank holding company), Dominion
Resources, Inc. (electric utility holding company) and Kemper
Corporation (insurance and financial services company); formerly
Chairman of the Board of ICL, Inc. (information systems).
Edward V. Regan, Trustee
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 of GranCare, Inc.
(healthcare provider); formerly New York State Comptroller and
trustee, New York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee
200 Park Avenue, New York, New York 10166
Founder 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 Hospital and the Greenwich Historical Society.
Sidney M. Robbins, Trustee
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; a director of The Korea Fund, Inc. and
The Malaysia Fund, Inc. (closed-end investment companies); 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*
Chairman Emeritus and a director of the Manager; formerly Chairman of
the Manager and the Distributor.
Pauline Trigere, Trustee
550 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
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, 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 Vigoro 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
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, 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.
George C. Bowen, Treasurer
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President and
Treasurer of the Distributor and HarbourView; Senior Vice President,
Treasurer, Assistant Secretary and a director of Centennial; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of
other OppenheimerFunds.
Jay W. Tracey, III, Vice President and Portfolio Manager
Vice President of the Manager; an officer of other OppenheimerFunds;
formerly Managing Director of Buckingham Capital Management and Senior
Vice President of Founders Asset Management, Inc. (mutual fund
adviser), prior to which he was a securities analyst and portfolio
manager of Berger Associates, Inc. (investment adviser).
Paul LaRocco, Associate Portfolio Manager
Assistant Vice President of the Manager; an officer of other
OppenheimerFunds; formerly a Securities Analyst with Columbus Circle
Investors, prior to which he was an Investment Analyst for Chicago
Title & Trust Co.
Robert G. Zack, Assistant Secretary
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
Robert Bishop, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; formerly a Fund Controller for the
Manager, prior to which he was an Accountant for Yale & Seffiger,
P.C., an accounting firm, and previously an Accountant and Commissions
Supervisor for Stuart James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; formerly 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.
_______________
* A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
- 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 (Mr. Galli and Mr. Spiro, who is both an officer and
Trustee) receive no salary or fee from the Fund. During the Fund's fiscal
year ended June 30, 1994, the remuneration (including expense
reimbursements) paid to all Trustees of the Fund (excluding Mr. Galli and
Mr. Spiro) as a group for services as trustees and as members of one or
more committees of the Board, totalled $34,778. The Fund has adopted a
retirement plan that provides for payment to a retired Trustee of up to
80% of the average compensation paid during that Trustee's five years of
service in which the highest compensation was received. A Trustee must
serve in that capacity for any of the New York-based OppenheimerFunds for
at least 15 years to be eligible for the maximum payment; no payments have
been made by the Fund under the plan as of June 30, 1994. The accumulated
liability for the Fund's projected benefit obligations under the plan was
$117,741 as of that date.
- Major Shareholders. As of September 30, 1994, no person owned of
record or was known by the Fund to own beneficially 5% or more of the
Fund's outstanding shares.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Messrs. Galli and Spiro)
serve as Trustees of the Fund.
- The 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 of which 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 June 30, 1992, 1993
and 1994, the management fees paid by the Fund to the Manager were
$2,638,571, $2,642,347 and $2,848,414, respectively.
The advisory agreement contains no provision limiting the Fund's
expenses. However, independently of the advisory agreement, the Manager
has 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 Agreement contains no expense limitation. However, independently
of the Agreement, the Manager has undertaken that the total expenses of
the Fund in any fiscal year (including the management fee but excluding
taxes, interest, distribution plan payments, brokerage commissions and any
extraordinary non-recurring expenses such as litigation costs) shall not
exceed (and the Manager undertakes to reduce the Fund's management fee in
the amount by which such expenses shall exceed) the most stringent state
regulatory limitation on fund expenses applicable to the Fund. At
present, that limitation is imposed by California and limits expenses
(with specified exclusions) to 2.5% of the first $30 million of average
annual net assets, 2% of the next $70 million of average net assets and
1.5% of average net assets in excess of $100 million. The payment of the
management fee at the end of any month will be reduced so that there will
not be any accrued but unpaid liability under this expense limitation.
Any assumption of the Fund's expenses under this undertaking would lower
the Fund's overall expense ratio and increase its total return during any
period in which expenses are limited. The Manager reserves the right to
vary the amounts of expenses assumed or eliminate the assumption of
expenses altogether.
As long as the Manager has acted with due care and in good faith, the
Manager is not liable for any loss sustained by reason of any investment,
the adoption of any investment policy, or the purchase, sale or retention
of any security, provided, however, that the Agreement does not exculpate
the Manager from liability for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or reckless disregard of its
obligations under the Agreement.
- 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 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 June 30,
1992, 1993 and 1994, the aggregate sales charges on sales of the Fund's
shares were $990,171, $714,148 and $629,755, respectively, of which the
Distributor and an affiliated broker-dealer retained in the aggregate
$246,042, $189,859 and $168,109 in those respective years. For additional
information about distribution of the Fund's shares and the expenses
connected with such activities, please refer to "Service Plan," 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 made by portfolio managers
of the Manager 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 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. For those transactions, instead of
using a broker the Fund normally deals directly with the selling or
purchasing principal or market maker unless it is determined 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, and purchases from dealers include a spread
between the bid and asked price. The Fund seeks to obtain prompt
execution of such 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 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 June 30, 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 $623,069,
$523,921 and $1,689,639, respectively. During the fiscal year ended June
30, 1994, $216,461 was paid to brokers as commissions in return for
research services; the aggregate dollar amount of those transactions was
$109,841,151. 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 "total return at net
asset value" of an investment in 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.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission ("SEC"),
include the average annual total returns for the Fund's shares for the 1,
5, and 10-year periods 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
on shares of the Fund are affected by portfolio quality, the type of
investments the Fund holds and its operating expenses.
- Average Annual Total Returns. The Fund's "average annual total
return" 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 return, 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). 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 the Fund for the one, five and ten year periods ended June
30, 1994 were (8.95%), 5.68% and 12.54%, respectively. The "cumulative
total return" for the ten year period ended June 30, 1994 was 225.87%.
During a portion of the periods for which total returns are shown, 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.
- 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 an investment in the Fund.
Each is based on the difference in net asset value per share at the
beginning and at the end of the period for a hypothetical investment
(without considering the sales charge) and takes into consideration the
reinvestment of dividends and capital gains distributions. The cumulative
total return at net asset value of the Fund's shares for the ten-year
period ended December 31, 1993 was 257.61%. The average annual total
returns at net asset value for the one, five and ten-year periods ended
December 31, 1993 were 19.63%, 19.19% and 15.02%, respectively.
Total return information may be useful to investors in reviewing the
Fund's performance. However, when comparing total return of an investment
in 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 performance 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 is 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 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
three, five and ten-year average annual total returns (when available) in
excess of 90-day 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. Rankings
are subject to change.
The total return on an investment in the Fund's 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 stock market performance. Both
indices consist of unmanaged groups of common stocks; the Dow consists of
thirty such issues. The performance of both indices includes a factor for
the reinvestment of income dividends. Neither index reflects reinvestment
of capital gains or takes transaction charges or taxes into consideration
as these items are not applicable to indices.
Investors may also wish to compare the Fund's 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.
Service Plan
The Fund has adopted a Service Plan (the "Plan") under Rule 12b-1 of
the Investment Company Act pursuant to which the Fund will reimburse the
Distributor quarterly for all or a portion of its costs incurred in
connection with the servicing of the Fund's shares, as described in the
Prospectus. The 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 the Fund.
In addition, under the Plan 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
Plan) for distribution and administrative services they perform. The
Distributor and the Manager may, in their sole discretion, increase or
decrease the amount of payments they make from their own resources to
Recipients.
Unless terminated as described below, the 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. The 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
Fund's outstanding shares. The Plan may not be amended to increase
materially the amount of payments to be made unless such amendment is
approved by the Fund's shareholders. All material amendments must be
approved by the Board and the Independent Trustees.
While the Plan is in effect, the Treasurer of the Fund shall provide
written reports to the Fund's Board of Trustees at least quarterly on the
amount of all payments made pursuant to the Plan, the purpose for which
each payment was made and the identity of each Recipient that received any
payment. 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. The 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 Plan, 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. For the fiscal year ended
June 30, 1994, payments under the Plan totalled $241,045, all of which was
paid by the Distributor to Recipients, including $4,498 paid to MML
Investor Services, Inc., an affiliate of the Distributor.
Any unreimbursed expenses incurred by the Distributor for any fiscal
year may not be recovered in subsequent years. Payments received by the
Distributor under the Plan will not be used to pay any interest expense,
carrying charge, or other financial costs, or allocation of overhead by
the Distributor.
ABOUT YOUR ACCOUNT
How To Buy Shares
Determination of Net Asset Values Per Share. The net asset value per
share of the Fund is determined each day The New York Stock Exchange (the
"NYSE") is open, as of 4:00 P.M., New York time, that day, by dividing the
value of the Fund's net assets by the number of the Fund's shares
outstanding. The NYSE's most recent annual announcement (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 debt securities or in foreign securities
primarily listed on foreign exchanges or in foreign over-the-counter
markets which may trade on Saturdays or customary U.S. business holidays
on which the NYSE is closed. Because the Fund's offering price and net
asset value will not be calculated on those days, the Fund's net asset
value per share may be significantly affected on such days, when
shareholders may not purchase or redeem shares.
The Fund's Board of 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
traded on NASDAQ and other unlisted equity securities for which last sale
prices are not regularly reported but for which over-the-counter market
quotations are readily available are valued at the highest closing bid
price at the time of valuation, or, if no closing bid price is reported,
on the basis of a closing bid price obtained from a dealer who maintains
an active market in that security; (iii) debt securities having a 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 Board or
obtained from active market makers on the basis of reasonable inquiry;
(iv) short-term debt securities having a remaining maturity of 60 days or
less are valued at cost, adjusted for amortization of premiums and
accretion of discounts; (v) securities (including restricted securities)
not having readily-available market quotations are valued at fair value
under the Board's procedures; and (vi) securities traded on foreign
exchanges are valued at the closing or last sales prices reported on a
principal exchange, or, if none, at the mean between closing bid and asked
prices and reflect prevailing rates of exchange taken from the closing
price on the London foreign exchange market that day.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the NYSE.
Events affecting the values of foreign securities traded in stock markets
that occur between the time their prices are determined and the close of
the NYSE will not be reflected in the Fund's calculation of net asset
value unless the Board of Trustees or the Manager, under procedures
established by the Board of Trustees, determines that the particular event
would materially affect the Fund's net asset value, in which case an
adjustment would be made. Foreign currency will be valued as close to the
time fixed for the valuation date as is reasonably practicable. The
values of securities denominated in foreign currency will be converted to
U.S. dollars at the prevailing rates of exchange at the time of valuation.
Puts, calls and futures held by the Fund are valued at the last sales
price on the principal exchange on which they are traded, or on NASDAQ,
as applicable, or, if there are no sales that day, in accordance with (i),
above. Forward currency contracts are valued at the closing price on the
London foreign exchange market. When the Fund writes an option, an amount
equal to the premium received by the Fund is included in the Fund's
Statement of Assets and Liabilities as an asset, and an equivalent
deferred credit is included in the liability section. The deferred credit
is "marked-to-market" to reflect the current market value of the option.
In determining the Fund's gain on investments, if a call written by the
Fund is exercised, the proceeds are increased by the premium received.
If a call or put written by the Fund expires, the Fund has a gain in the
amount of the premium; if the Fund enters into a closing purchase
transaction, it will have a gain or loss depending on whether the premium
was more or less than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the
Fund.
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
transfer to buy the shares. Dividends will begin to accrue on such shares
on the day the Fund receives Federal Funds for such purchase through the
ACH system before 4:00 P.M., which is normally 3 days after the ACH
transfer is initiated. The Distributor and the Fund are not responsible
for any delays. If the Federal Funds are received after 4:00 P.M.,
dividends will begin to accrue on the next regular business day after such
Federal Funds are received.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained under Right of Accumulation and Letters of
Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No
sales charge is imposed in certain other circumstances described in the
Prospectus because the Distributor incurs little or no selling expenses.
The term "immediate family" refers to one's spouse, children,
grandchildren, grandparents, parents, parents-in-law, brothers and
sisters, sons- and daughters-in-law, a sibling's spouse and a spouse's
siblings.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Insured Tax-Exempt Bond 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 Time 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 High Yield Fund
Oppenheimer Investment Grade Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Mortgage Income Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Environment Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Diversified Income Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of
each of the OppenheimerFunds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent ("Letter") is the investor's
statement of intention to purchase shares of the Fund (and Class A shares
of other eligible OppenheimerFunds sold with a front-end sales charge)
during the 13-month period from the investor's first purchase pursuant to
the Letter (the "Letter of Intent period"), which may, at the investor's
request, include purchases made up to 90 days prior to the date of the
Letter. The Letter states the investor's intention to make the aggregate
amount of purchases (excluding any purchases made by reinvestments of
dividends or distributions or purchases made at net asset value without
sales charge), which together with the investor's holdings of such funds
(calculated at their respective public offering prices calculated on the
date of the Letter) will equal or exceed the amount specified in the
Letter. This enables the investor to obtain the reduced sales charge rate
(as set forth in the Prospectus) applicable to purchases of shares in that
amount (the "intended purchase amount"). Each purchase under the Letter
will be made at the public offering price applicable to a single lump-sum
purchase of shares in the intended purchase amount, as described in the
Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent period
do not equal or exceed the intended purchase amount, the commissions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual purchases. If total eligible purchases during the
Letter of Intent period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set
forth in the applicable prospectus, the sales charges paid will be
adjusted to the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid to the
dealer over the amount of commissions that apply to the actual amount of
purchases. The excess commissions returned to the Distributor will be
used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly
after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value 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 the Letter) do not include
any shares sold without a front-end sales charge or without being subject
to a Class A contingent deferred sales charge unless (for the purpose of
determining completion of the obligation to purchase shares under the
Letter) the shares were acquired in exchange for shares of one of the
OppenheimerFunds whose shares were acquired by payment of a 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 "Exchange Privilege," 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 this account
for monthly automatic purchases of shares of up to four other
OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
- Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board of
Trustees of the Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make payment
of a redemption order wholly or partly in cash. In that case the Fund may
pay the redemption proceeds in whole or in part by a distribution "in
kind" of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets
of the Fund during any 90-day period for 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 it 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 $500 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 shares of the Fund
in the Fund or in Class A shares of any other OppenheimerFund. The
reinvestment may be made without sales charge at the net asset value next
computed after the Transfer Agent receives the reinvestment order. The
shareholder must ask the Distributor for that privilege at the time of
reinvestment. Any capital gain that was realized when the shares were
redeemed is taxable, and reinvestment will not alter any capital gains tax
payable on that gain. If there has been a capital loss on the redemption,
some or all of the loss may not be tax deductible, depending on the timing
and amount of the reinvestment. Under the Internal Revenue Code, if the
redemption proceeds of Fund shares on which a sales charge was paid are
reinvested in shares of the Fund or another of the OppenheimerFunds within
90 days of payment of the sales charge, the shareholder's basis in the
shares of the Fund that were redeemed may not include the amount of the
sales charge paid. That would reduce the loss or increase the gains
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 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, shares acquired pursuant to reinvestment of
dividends or distributions will be transferred first.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, or pension or
profit-sharing plans should be addressed to "Trustee, OppenheimerFunds
Retirement Plans," c/o the Transfer Agent at its address listed in "How
To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the
plan and the Fund's other redemption requirements. Participants (other
than self-employed persons) in OppenheimerFunds-sponsored pension or
profit-sharing plans may not directly request redemption of their
accounts. The employer or plan administrator must sign the request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents
(available from the Transfer Agent) must be completed before the
distribution may be made. Distributions from retirement plans are subject
to withholding requirements under the Internal Revenue Code, and IRS Form
W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed.
Unless the shareholder has provided the Transfer Agent with a certified
tax identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have
tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not
be responsible for any tax penalties assessed in connection with a
distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. The repurchase price will be the net asset
value next computed after the receipt of an order placed by such dealer
or broker, except that orders received from dealers or brokers after 4:00
P.M. on a regular business day will be processed at that day's net asset
value if such orders were received by the dealer or broker from its
customers prior to 4:00 P.M., and were transmitted to and received by the
Distributor prior to its close of business that day (normally 5:00 P.M.).
Payment ordinarily will be made within seven days after the Distributor's
receipt of the required redemption documents, with signature(s) guaranteed
as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the
Fund valued at $5,000 or more can authorize the Transfer Agent to redeem
shares (minimum $50) automatically on a monthly, quarterly, semi-annual
or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges
(see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on purchases, shareholders should not make regular additional
share purchases while participating in an Automatic Withdrawal Plan.
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated
below and in the provisions of the OppenheimerFunds Application relating
to such Plans, as well as the Prospectus. These provisions may be amended
from time to time by the Fund and/or the Distributor. When adopted, such
amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other OppenheimerFunds automatically on
a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional
Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who
executed the Plan authorization and application submitted to the Transfer
Agent. The Transfer Agent shall incur no liability to the Planholder for
any action taken or omitted by the Transfer Agent in good faith to
administer the Plan. Certificates will not be issued for shares of the
Fund purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the records of
the Fund. Any share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the
shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to
the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent
to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
OppenheimerFunds that have a single class without a class designation are
deemed "Class A" shares for this purpose, and all OppenheimerFunds offer
"Class A" shares (except for Oppenheimer Strategic Diversified Income
Fund).
Class A shares of OppenheimerFunds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund
purchased without a sales charge may be exchanged for shares of
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge). Shares
of this Fund acquired by reinvestment of dividends or distributions from
any other of the OppenheimerFunds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may
be exchanged at net asset value for shares of any of the OppenheimerFunds.
No contingent deferred sales charge is imposed on exchanges of shares of
either class purchased subject to a contingent deferred sales charge.
However, when Class A shares acquired by exchange of Class A shares of
other OppenheimerFunds purchased subject to a Class A contingent deferred
sales charge are redeemed within 18 months of the end of the calendar
month of the initial purchase of the exchanged Class A shares, the Class
A contingent deferred sales charge is imposed on the redeemed shares (see
"Contingent Deferred Sales Charge" in the Prospectus).
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of,
the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction
for corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by
the Fund which may qualify for the deduction is limited to the aggregate
amount of qualifying dividends that the Fund derives from its portfolio
investments that the Fund has held for a minimum period, usually 46 days.
A corporate shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less. To the extent the
Fund's dividends are derived from gross income from option premiums,
interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for
the deduction.
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 Class A
shares of any of the other OppenheimerFunds 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 certain of the OppenheimerFunds may be invested in
shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on the
portfolio securities and handling the delivery of such securities to and
from the Fund. The Manager has represented to the Fund that the banking
relationships between the Manager and the Custodian have been and will
continue to be unrelated to and unaffected by the relationship between the
Fund and the Custodian. It will be the practice of the Fund to deal with
the Custodian in a manner uninfluenced by any banking relationship the
Custodian may have with the Manager and its affiliates.
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>
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048
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
Annual Report December 31, 1994
[photo depicting couple building new home]
"We have some
important
financial
goals, so
we want our
investment
to increase
in value
over time."
[logo] OppenheimerFunds(R)
<PAGE>
This Fund is for people who want the potential for solid investment growth over
the long term.
How Your Fund Is Managed
Oppenheimer Target Fund seeks long-term growth by investing in the stocks of
companies that the Fund's managers believe have excellent growth potential and
are worth more than they cost. So the Fund's shareholders get the potential for
long-term appreciation.
In today's stock market, the Fund's managers are targeting consumer and
industrial companies with strong earnings momentum, as well as companies that
have excellent prospects in technology growth areas, such as computer software
and networking. The Fund also invests in U.S.-based companies that are believed
to have superior growth potential because their products or services are in high
demand in foreign countries.
Performance
Total return at net asset value for the 12 months ended 12/31/94 was 0.46% for
Class A shares and -0.50% for Class C shares.(1)
The financial markets had a difficult year and, like many mutual funds,
your Fund felt the effects. While difficult years are hard to accept, they're an
inevitable part of investing. That's why keeping a long-term perspective is
crucial to getting the most from your investment and helping you through
short-term market fluctuations.
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1-, 5-, and 10-year periods ended 12/31/94 and since
inception of the Class on 1/22/81 were -5.32%, 8.46%, 10.49% and 15.51%,
respectively. For Class C shares, average annual total returns for the 1-year
period ended 12/31/94 and since inception of the Class on 12/1/93 were -1.38%
and -1.17%, respectively.(3)
News
Outperformed Average
Total Return for the Year
Ended 12/31/94:
Oppenheimer
Target Fund
Class A (at NAV)(1) 0.46%
Lipper
Capital Appreciation
Funds Average(2) -3.43%
Outlook
"In today's challenging markets, we're taking a more cautious approach to
portfolio management. There's no easy money to be made, and we're positioning
the portfolio more defensively. We're still looking for stocks trading at
attractive prices, with exciting earnings potential."
Robert Doll, Portfolio Manager
December 31, 1994
1. Based on the change in net asset value per share from 12/31/93 to 12/31/94,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Source: Lipper Analytical Services. The Lipper total return average for the
year ended 12/31/94 was for 141 capital appreciation funds. The average is shown
for comparative purposes only. Oppenheimer Target Fund is characterized by
Lipper as a capital appreciation fund. Lipper performance does not take sales
charges into consideration.
3. Average annual total returns are based on a hypothetical investment held
until 12/31/94, after deducting the current maximum initial sales charge of
5.75% for Class A shares. The Fund's maximum sales charge rate for Class A
shares was higher during a portion of some of the periods shown, and actual
investment results will be different as a result of the change. Total return for
Class C shares was based on a hypothetical investment held for that period,
after deducting the 1% contingent deferred sales charge for the 1-year
calculation. Class A and Class C shares were first publicly offered on 1/22/81
and 12/1/93, respectively. All figures assume reinvestment of dividends and
capital gains distributions. Past performance is not indicative of future
results. Investment and principal value on an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost.
2 Oppenheimer Target Fund
<PAGE>
Dear OppenheimerFunds Shareholder,
The past year has been a difficult period for the stock market, one marked above
all by one of the most aggressive series of moves to raise interest rates in the
U.S. Federal Reserve's history. As interest rates moved up, bond prices fell and
the stock market followed, while investors looked everywhere for answers to
questions about directions in inflation, interest rates, and the economy. These
questions all concerned one basic issue: Is the bull market in stocks coming to
an end?
In our view, it is not. While we are not expecting major gains in stock
prices in the very near term, we believe that the uncertainties which held the
market back in 1994 will recede in 1995 as the fundamental positives in the
economy are recognized. The most important of these positives is our belief that
the Fed's attempt to preempt possible inflation, while temporarily
disconcerting, will likely have its desired effect in 1995. We believe that the
economy will begin to slow, and although short-term rates may move up modestly
from their present levels, long-term interest rates--the ones that most affect
securities prices--should stabilize in their current range. Long-term rates may
even begin to decline as overblown concerns about inflation abate.
Those concerns are, in fact, already fading. While the prices of some
commodities have risen over the past year and U.S. manufacturing capacity
utilization and employment rose to their highest levels in years, in today's
globally competitive environment, price increases are difficult to pass on to
either consumers or businesses. The inflation rate--as measured by the Consumer
Price Index--continues to run at less than 3% a year, and there's nothing on the
horizon to suggest to us that it will increase substantially anytime soon. Even
at their current levels, interest rates remain low relative to recent periods,
and in our view, pose no real threat to most companies' earnings or cash flows.
During the most recent recession, many businesses learned to operate much more
efficiently and took advantage of the extended decline in interest rates to work
down their debt loads and strengthen their financial positions. As a result,
corporate profits have soared despite higher interest rates. And we believe that
business earnings should grow even more as economies in Europe and elsewhere
emerge from their recessions, stimulating demand for U.S. companies' goods and
services. As profits rise, we expect stocks to become more valuable.
Finally, the changing political landscape reflected in results of the
mid-term election bodes well for the stock market over time. In addition to
limiting the expectation that Congress will pass potentially inflationary
government spending proposals, the realignment in Washington has raised the
possibility of tax relief in the form of an expanded deduction for individual
retirement savings or possibly a reduction in the capital gains tax rate. What
specific action, if any, Congress will take on these proposals remains to be
seen. But any action to reduce the federal deficit, cut spending, and reduce
taxes should be good news for the stock market overall.
In light of all these factors, we remain bullish on stocks. As we have
noted in previous reports, we're expecting moderate gains in the short-term, in
line with increasing corporate earnings. Over time, however, we expect stocks to
perform well in both the U.S. and foreign markets. Your portfolio manager
discusses the outlook for your Fund on the following pages. We appreciate your
confidence, and we look forward to helping you continue to reach your investment
goals.
Donald W. Spiro
President
Oppenheimer
Target Fund
Jon S. Fossel
Chairman and CEO
Oppenheimer
Management
Corporation
Donald W. Spiro Jon S. Fossel
January 23, 1995
3 Oppenheimer Target Fund
<PAGE>
Q + A
An interview with your Fund's manager.
The past year was challenging for stocks and stock market funds, yet Target
Fund's performance was relatively good. What factors contributed to the Fund's
performance?
The most important factor in our performance has been the moves we've made to
position the portfolio more defensively.
In the first six months of the year, we moved out of cyclical stocks and
concentrated on financial, technology, and healthcare issues--an approach that
was rewarded. Over the last six months, we've concentrated more on consumer and
industrial companies with strong earnings power, and moved out of financial and
healthcare issues. We're looking for more than just attractive valuations. We're
also looking for proven earnings power. And we've increased the Fund's cash
position to its highest level in more than four years.
How has this defensive strategy affected your day-to-day management of the Fund?
In general, we're slower to buy and quicker to sell. We're extremely
price-sensitive; we don't want to overpay for any stock. And we're ready to sell
any stock that doesn't perform at or above our expectations. In today's markets,
this kind of caution is not only warranted, it's the key to good investment
performance.
Where are you finding the best values today?
In consumer cyclicals, we recently bought Brunswick, a well-diversified
recreation company positioned to profit from the pickup in power boat and engine
sales. On the industrial side, we recently added Georgia Gulf, a well-positioned
chemical company. I could add to the list, but those names suggest our general
buying emphasis on companies with good near-term profit outlooks that are
selling at relatively low prices.(1)
Q Why do you adopt a contrarian approach?
1. The Fund's portfolio is subject to change.
4 Oppenheimer Target Fund
<PAGE>
Aren't companies like these somewhat out of favor?
They are, and this contrarian approach is something that sets the Fund apart. We
try not to jump on market bandwagons; if you do that, you're almost sure to buy
too late and hold too long. Instead, we analyze the companies whose stocks we
buy carefully, and try to buy before the market recognizes their potential.
How are you funding those purchases?
Mainly by selling stocks in the financial and healthcare sectors where we can do
so at a profit. We recently sold USF&G, a property and casualty insurer. And
we've been reducing our healthcare exposures throughout the year. We still have
significant positions in those sectors, but they're much lower than they were a
year ago.
The international stock markets seem to be primed for strong growth. Is the Fund
positioned to participate?
While this Fund doesn't invest much of its assets in foreign companies, we do
have significant holdings in companies that derive a third to a half of their
earnings from sales outside the U.S., which covers a wide range of companies
and sectors. Our largest holdings are technology stocks, such as Microsoft,
Intel, Compaq, General Electric, Seagate Technologies, and Cabletron Systems.
How do you expect to manage the Fund going forward?
In the near term, we'll continue to be defensive and maintain our cash position
until the markets stabilize. As the business cycle advances, we'll look for
stocks with lower valuations. Depending on developments, we may trim our
technology positions in favor of more defensive stocks, such as utility and
energy issues. These aren't promises or predictions, of course, but they are
definitely things we're thinking about.
Facing page
Top left: Robert Doll, Portfolio
Manager and Executive VP, Director of Equity Investments, with his assistant,
Pat Andrzejewski
Top right: Christina Raulli, Associate International Trader
Bottom left: Mark Binning, Securities Coordinator, consults with Lawrence
Apolito, VP Equity Trading
This page
Top: Robert Doll
Bottom: The equity trading desk
A We try
not to jump
on market bandwagons;
if you do, you're almost sure to buy too late and hold too long.
5 Oppenheimer Target Fund
<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>
13 Oppenheimer Target Fund
<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>
15 Oppenheimer Target Fund
<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. These financial
statements and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and financial highlights based
on our 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>
16 Oppenheimer Target Fund
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
============
In early 1995, shareholders will receive information regarding all dividends and distributions paid
to them by the Fund during calendar year 1994. Regulations of the U.S. Treasury Department require
the Fund to report this information to the Internal Revenue Service. A distribution of $2.982 per
share was paid on December 19, 1994, which was designated as a "capital gain distribution" for
federal income tax purposes. Whether received in stock or cash, the capital gain distribution should
be treated by shareholders as a gain from the sale of capital assets held for more than one year
(long-term capital gains).
Dividends paid by the Fund during the fiscal year ended December 31, 1994 which are not
designated as capital gain distributions should be multiplied by 100% to arrive at the net amount
eligible for the corporate dividend-received deduction.
The foregoing information is presented to assist shareholders in reporting distributions
received from the Fund to the Internal Revenue Service. Because of the complexity of the federal
regulations which may affect your individual tax return and the many variations in state and local
tax regulations, we recommend that you consult your tax advisor for specific guidance.
</TABLE>
17 Oppenheimer Target Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------
Oppenheimer Target Fund
------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
============
<S> <C>
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Robert C. Doll, Jr., Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
==========================================================
==========================================================
============
Investment Advisor Oppenheimer Management Corporation
==========================================================
==========================================================
============
Distributor Oppenheimer Funds Distributor, Inc.
==========================================================
==========================================================
============
Transfer and Shareholder Oppenheimer Shareholder Services
Servicing Agent
==========================================================
==========================================================
============
Custodian of The Bank of New York
Portfolio Securities
==========================================================
==========================================================
============
Independent Auditors KPMG Peat Marwick LLP
==========================================================
==========================================================
============
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer Target Fund. This report must be preceded
or accompanied by a Prospectus of Oppenheimer Target Fund. For material information concerning the
Fund, see the Prospectus.
</TABLE>
18 Oppenheimer Target Fund
<PAGE>
OppenheimerFunds Family
OppenheimerFunds offers over 35 funds designed to
fit virtually every investment goal. Whether you're
investing for retirement, your children's education or
tax-free income, we have the funds to help you seek your
objective.
When you invest with OppenheimerFunds, you can
feel comfortable knowing that you are investing with a
respected financial institution with over 30 years of
experience in helping people just like you reach their
financial goals. And you're investing with a leader in
global, growth stock and flexible fixed income
investments--with over 1.8 million shareholder accounts
and more than $29 billion under Oppenheimer's management
and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily
exchange shares of eligible funds of the same class by
mail or by telephone for a small administrative fee.(1)
For more information on OppenheimerFunds, please contact
your financial advisor or call us at 1-800-525-7048 for
a prospectus. You may also write us at the address shown
on the back cover. As always, please read the prospectus
carefully before you invest.
Stock Funds Discovery Fund Global Fund
Global Emerging Growth Fund(2) Oppenheimer Fund
Time Fund Value Stock Fund
Target Fund Gold & Special Minerals Fund
Growth Fund(3)
Stock & Bond Funds Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
Bond Funds High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund
Limited-Term Government Fund
Strategic Investment Grade Bond Fund
Tax-Exempt Funds New York Tax-Exempt Fund(4) New Jersey Tax-Exempt Fund(4)
California Tax-Exempt Fund(4) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(4)
Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(4)
Intermediate Tax-Exempt Bond Fund
Money Market Funds Money Market Fund Cash Reserves
1. The fee is waived for PhoneLink exchanges between
existing accounts. Exchange privileges are subject to
change or termination.
2. Formerly Global Bio-Tech Fund and Global Environment
Fund.
3. Formerly Special Fund.
4. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds
Distributor, Inc., Two World Trade Center, New York,
NY 10048-0203.
(Copyright) Copyright 1995 Oppenheimer
Management Corporation. All rights reserved.
19 Oppenheimer Target Fund
<PAGE>
"How may I help you?"
As an OppenheimerFunds shareholder, some special privileges are available to
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And when you need help, our Customer Service Representatives are only a
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When you want to make a transaction, you can do it easily by calling
our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your OppenheimerFunds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
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For added convenience, you can get automated information with
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PhoneLink gives you access to a variety of fund, account, and market
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You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, non-profit
organization made up of over 3,200 customer service management professionals
from around the country, honored the OppenheimerFunds' transfer agent,
Oppenheimer Shareholder Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
Information
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Saturday 10 a.m.-2 p.m. ET
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24 hours a day, timely and insightful messages
on the economy and issues that affect your investments
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PAID
Permit No. 314
Farmingdale, NY
<PAGE>
OPPENHEIMER TIME FUND
ANNUAL REPORT JUNE 30, 1994
(OPPENHEIMERFUNDS(R) LOGO)
[PHOTO #1 -- SEE EDGAR APPENDIX]
" COLLEGE AND RETIREMENT ARE FAR IN THE FUTURE FOR US. BUT I KNOW I NEED TO
START PLANNING TODAY.
"I CHOSE THIS FUND BECAUSE IT INVESTS IN THE KINDS OF STOCKS THAT OFFER STRONG
POTENTIAL FOR LONG-TERM GROWTH."
<PAGE> 2
FUND FACTS
IN THIS REPORT:
ANSWERS TO TWO
TIMELY QUESTIONS
YOU SHOULD ASK YOUR
FUND'S MANAGERS.
* DID THE FEDERAL RESERVE'S MOVES
TO RAISE SHORT-TERM INTEREST RATES AFFECT
THE FUND?
* WHAT'S THE NEAR-TERM OUTLOOK FOR THE STOCKS
OF MID-SIZE GROWTH COMPANIES?
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER TIME FUND
- ------------------------------------------------------------------------------
1 The Fund seeks capital appreciation from a diversified
portfolio of growth-type companies. Its current
strategy focuses on successful medium-size growth
companies, special situations and cyclical industries.
- ------------------------------------------------------------------------------
2 Total return at net asset value for the 12-month period
ended June 30, 1994 was -3.40%.(1)
- ------------------------------------------------------------------------------
3 Average annual total returns for the 1-, 5-, and 10-year
periods ended June 30, 1994 were -8.95%, 5.68%,
and 12.54%, respectively.(2)
- ------------------------------------------------------------------------------
4 Top five stock holdings on June 30, 1994 were:(3)
ADVANTA CORP. CL. B.
LDDS COMMUNICATIONS, INC., CL. B.
CUC INTERNATIONAL, INC.
NIKE, INC., CI.B.
FEDERAL EXPRESS CORP.
- ------------------------------------------------------------------------------
5 "The stocks of growth companies like those in which Time
Fund invests have outperformed the stock market
as a whole by a wide margin over the long term. While these
stocks can be more volatile than those issued by bigger,
"blue-chip" companies, the potential rewards are greater as
well. Recognizing that, and despite recent short-term
setbacks, we have not changed our investment strategies or
approaches at all."
Portfolio Manager Paul LaRocco, June 30, 1994
(1) Based on the change in net asset value per share from 6/30/93 to 6/30/94,
without deducting any sales charges.
(2) Average annual total returns are based on a hypothetical investment held
until 6/30/94, after deducting the current maximum initial sales charge of
5.75% on 6/30/93, 6/30/89, 6/30/84, and 6/30/79, respectively. The Fund's
maximum sales charge rate was higher during a portion of some of the periods
shown, and performance will be affected by that change.
(3) The Fund's portfolio is subject to change.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment return and
principal value on an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost.
2 Oppenheimer Time Fund
<PAGE> 3
REPORT TO SHAREHOLDERS
ABOVE-AVERAGE
LONG-TERM
PERFORMANCE
Average annual total returns
for the 15-year period ended
June 30, 1994
- ----------------------------
Oppenheimer 14.31%
Time Fund(4)
- ----------------------------
Lipper capital 13.66%
appreciation funds
average(5)
The past six months was one of the most challenging periods for mid-size
company stocks that we've seen in recent years.
Challenges stemmed almost entirely from the Federal Reserve's
preemptive strike against inflation in an economy poised for powerful
expansion. From early February through mid-May, the Fed raised short-term
interest rates four times, and as rates rose, they took a toll on growth
stocks.
In your managers' view, this setback is likely to prove temporary. The
Fed's moves seem to have had their hoped-for effects: inflation remains under
control, economic growth has slowed to a gradual, sustainable rate, and
interest rates are still low by historical standards.
In other words, the fundamentals for strong growth-stock performance
remain very much in place. And as a result of several steps taken over the past
several months, your Fund is well positioned to benefit when stocks resume
their advance.
Over the last six months, your managers took profits in a number of
companies whose stock prices seemed stretched in relation to their projected
earnings.
The proceeds from those sales were used to purchase shares of
companies posting strong sales and earnings growth today, and positioned to
benefit from the improving economy.
Many purchases focused on companies that are benefiting from pick-ups
in business spending, such as Birmingham Steel and Federal Express. Others
involved companies benefiting from stronger consumer confidence and spending,
including Nike, Brunswick Corporation, and fast-growing credit card companies
including Advanta and First USA.
All of these purchases reinforced rather than altered the Fund's basic
investment themes and strategies, and reflected your managers' continuing
emphasis on firms with established market positions, strong managements, and
the potential for above-average earnings growth.
Looking ahead, the prospects for the Fund remain promising. While
day-to-day market volatility may be greater than has been seen in the past, the
economy is growing at a gradual, low-inflation rate, and well-managed companies
are posting encouraging gains in market share and profits.
We appreciate the trust you have placed in Oppenheimer Time Fund, and
we look forward to helping you meet your investment goals in the future.
/s/ DONALD W. SPIRO
- -------------------
Donald W. Spiro
President, Oppenheimer Time Fund
July 22, 1994
(4) See footnote 2, page 2.
(5) Source of data: Lipper Analytical Services, Inc., an independent mutual
fund monitoring service, 6/30/94. The Lipper total return average for the 15
years ended 6/30/94 was for 31 capital appreciation funds. The average is shown
for comparative purposes only. Lipper performance rankings do not take sales
charges into consideration.
3 Oppenheimer Time Fund
<PAGE> 4
STATEMENT OF INVESTMENTS June 30, 1994
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
==========================================================
==========================================================
============
<S> <C> <C>
REPURCHASE AGREEMENTS--19.2%
- --------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.22%,
dated 6/30/94, to be repurchased at $61,907,256 on 7/1/94,
collateralized by U.S. Treasury Nts., 3.875%-9.25%, 12/31/94-11/30/98,
with a value of $44,997,687 and U.S. Treasury Bills, 0%, 6/29/95,
with a value of $18,163,596 (Cost $61,900,000) $61,900,000 $61,900,000
==========================================================
==========================================================
============
CORPORATE BONDS AND NOTES--1.3%
- --------------------------------------------------------------------------------------------------------------------------------
Solectron Corp., 0%, Liq. Yld. Opt. Sub. Nts., 5/5/12 (Cost $4,107,535) 8,000,000 4,340,000
UNITS
==========================================================
==========================================================
============
INDEXED INSTRUMENTS--0.1%
- --------------------------------------------------------------------------------------------------------------------------------
Nikkei Index, Opts.(1) (Cost $585,000) 1,000 396,000
==========================================================
==========================================================
============
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------------------------------------------------------
Windmere Corp. Wts., Exp. 1/98(1) 4,727
----------------------------------------------------------------------------------------------------
XOMA Corp. Wts., Exp. 6/95(1) 5,511 276
----------
Total Rights, Warrants and Certificates (Cost $1,378) 276
SHARES
==========================================================
==========================================================
============
PREFERRED STOCKS--1.4%
- --------------------------------------------------------------------------------------------------------------------------------
Sunamerica, Inc., Cv Depositary Shares (Cost $3,380,000) 260,000 4,420,000
==========================================================
==========================================================
============
COMMON STOCKS--79.6%
- --------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--2.4%
- --------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--1.2% Geon Co. (The) 70,000 1,820,000
----------------------------------------------------------------------------------------------------
Georgia Gulf Corp.(1) 55,000 1,883,750
----------
3,703,750
- --------------------------------------------------------------------------------------------------------------------------------
METALS: DIVERSIFIED--1.2% Birmingham Steel Corp. 145,000 3,915,000
- --------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--33.5%
- --------------------------------------------------------------------------------------------------------------------------------
AIRLINES--2.0% Atlantic Southeast Airlines, Inc. 140,000 3,395,000
----------------------------------------------------------------------------------------------------
Southwest Airlines Co. 120,000 3,135,000
----------
6,530,000
- --------------------------------------------------------------------------------------------------------------------------------
AUTO PARTS: AFTER
MARKET--2.4% AutoZone, Inc.(1) 240,000 5,850,000
----------------------------------------------------------------------------------------------------
Lear Seating Corp.(1) 100,000 1,837,500
----------
7,687,500
- --------------------------------------------------------------------------------------------------------------------------------
BROADCAST MEDIA--3.1% Comcast Corp., Cl. A Special 160,000 2,880,000
----------------------------------------------------------------------------------------------------
Grupo Televisa SA, ADS(2) 75,000 3,806,250
----------------------------------------------------------------------------------------------------
IDB Communications Group, Inc.(1) 353,000 3,265,250
----------
9,951,500
- --------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--1.7% Carnival Corp., Cl. A 58,000 2,566,500
----------------------------------------------------------------------------------------------------
Mirage Resorts, Inc.(1) 150,000 2,812,500
----------
5,379,000
</TABLE>
4 Oppenheimer Time Fund
<PAGE> 5
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HOTELS/MOTELS--1.3% Promus Cos., Inc. (The)(1) 137,000 $ 4,058,625
- -----------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD FURNISHINGS Heilig-Meyers Co. 80,000 2,170,000
AND APPLIANCES--2.7% -------------------------------------------------------------------------------------------------
Rhodes, Inc.(1) 85,000 1,360,000
-------------------------------------------------------------------------------------------------
Sunbeam-Oster Co., Inc. 260,000 5,200,000
-----------
8,730,000
- -----------------------------------------------------------------------------------------------------------------------------
LEISURE TIME--2.9% Brunswick Corp. 150,000 3,300,000
-------------------------------------------------------------------------------------------------
Caesar's World, Inc.(1) 90,000 3,262,500
-------------------------------------------------------------------------------------------------
International Game Technology 140,000 2,642,500
-----------
9,205,000
- -----------------------------------------------------------------------------------------------------------------------------
RESTAURANTS--1.3% Brinker International, Inc.(1) 98,000 2,058,000
-------------------------------------------------------------------------------------------------
Shoney's, Inc.(1) 145,000 2,211,250
-----------
4,269,250
- -----------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--7.3% AnnTaylor Stores, Inc.(1) 45,000 1,726,875
-------------------------------------------------------------------------------------------------
Blockbuster Entertainment Corp. 135,000 3,493,125
-------------------------------------------------------------------------------------------------
CML Group, Inc. 119,000 1,398,250
-------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc.(1) 115,200 1,987,200
-------------------------------------------------------------------------------------------------
Intelligent Electronics, Inc. 65,000 983,125
-------------------------------------------------------------------------------------------------
Lowe's Cos., Inc. 82,000 2,808,500
-------------------------------------------------------------------------------------------------
Office Depot, Inc.(1) 150,000 3,000,000
-------------------------------------------------------------------------------------------------
Spiegel, Inc., Cl. A 140,000 2,660,000
-------------------------------------------------------------------------------------------------
Staples, Inc.(1) 70,000 1,890,000
-------------------------------------------------------------------------------------------------
Viking Office Products, Inc.(1) 140,000 3,500,000
-----------
23,447,075
- -----------------------------------------------------------------------------------------------------------------------------
RETAIL STORES: Dollar General Corp. 145,000 3,625,000
DEPARTMENT STORES--3.3% -------------------------------------------------------------------------------------------------
Kohl's Corp.(1) 42,000 1,974,000
-------------------------------------------------------------------------------------------------
Nordstrom, Inc. 120,000 5,100,000
-----------
10,699,000
- -----------------------------------------------------------------------------------------------------------------------------
SHOES--2.0% Nike, Inc., Cl. B 105,000 6,273,750
- -----------------------------------------------------------------------------------------------------------------------------
TEXTILES: APPAREL Cintas Corp. 140,000 4,585,000
MANUFACTURERS--3.5% -------------------------------------------------------------------------------------------------
Phillips-Van Heusen Corp. 80,000 2,010,000
-------------------------------------------------------------------------------------------------
Tommy Hilfiger Corp.(1) 118,200 4,698,450
-----------
11,293,450
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--6.6%
- -----------------------------------------------------------------------------------------------------------------------------
DRUGS--1.9% R.P. Scherer Corp.(1) 116,000 3,828,000
-------------------------------------------------------------------------------------------------
Roberts Pharmaceutical Corp.(1) 115,000 2,386,250
-----------
6,214,250
- -----------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: Elan Corp. PLC(1) 100,000 3,475,000
MISCELLANEOUS--3.5% -------------------------------------------------------------------------------------------------
Genentech, Inc.(1) 75,000 3,693,750
-------------------------------------------------------------------------------------------------
Health Care and Retirement Corp.(1) 160,000 3,960,000
-----------
11,128,750
</TABLE>
5 Oppenheimer Time Fund
<PAGE> 6
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HOSPITAL MANAGEMENT--1.2% Clinicorp, Inc.(1) 50,000 $ 7,815
--------------------------------------------------------------------------------------------------------
Clinicorp, Inc.(1)(2) 128,300 19,045
--------------------------------------------------------------------------------------------------------
Lincare Holdings, Inc.(1) 120,000 2,325,000
--------------------------------------------------------------------------------------------------------
Quorum Health Group, Inc.(1) 87,000 1,522,500
-----------
3,874,360
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--8.3%
- ------------------------------------------------------------------------------------------------------------------------------------
BROKERS/DEALERS--0.4% Partnerre Holdings Ltd. 58,000 1,174,500
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: Advanta Corp., Cl. B 220,000 7,095,000
MISCELLANEOUS--5.0% --------------------------------------------------------------------------------------------------------
First USA, Inc. 155,000 5,948,125
--------------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 55,000 3,080,000
-----------
16,123,125
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE: LIFE--1.3% Bankers Life Holding Corp. 50,000 1,006,250
Equitable of Iowa Cos., Inc. 40,000 1,265,000
--------------------------------------------------------------------------------------------------------
Mid Atlantic Medical Services, Inc.(1) 43,000 1,913,500
-----------
4,184,750
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE: PROPERTY AND Mid Ocean Ltd.(1) 90,500
2,273,812
CASUALTY--0.7%
- ------------------------------------------------------------------------------------------------------------------------------------
MAJOR BANKS:
REGIONAL--0.9% First Interstate Bancorp 40,000 3,080,000
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--8.5%
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS
GROUP--0.3% Martin Marietta Materials, Inc.(1) 50,000 1,100,000
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--0.6% Manpower, Inc. 85,000
1,785,000
- ------------------------------------------------------------------------------------------------------------------------------------
CONGLOMERATES--1.8% Grupo Carso SA, ADS(1)(2) 315,000
5,681,843
- ------------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING: DIVERSIFIED Stewart & Stevenson Services, Inc. 100,000
4,150,000
INDUSTRIALS--2.9% --------------------------------------------------------------------------------------------------------
Trinity Industries, Inc. 147,500 5,180,937
-----------
9,330,937
- ------------------------------------------------------------------------------------------------------------------------------------
RAILROADS--1.0% Southern Pacific Rail Corp.(1) 168,000 3,297,000
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION: Federal Express Corp.(1) 80,000 5,970,000
MISCELLANEOUS--1.9%
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--19.8%
- ------------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE AND CUC International, Inc.(1) 240,000
6,420,000
SERVICES--10.3% --------------------------------------------------------------------------------------------------------
Cadence Design Systems, Inc.(1) 220,000 3,685,000
--------------------------------------------------------------------------------------------------------
Danka Business System PLC, Sponsored ADR 39,000 1,555,125
--------------------------------------------------------------------------------------------------------
EMC Corp.(1) 370,000 4,995,000
--------------------------------------------------------------------------------------------------------
First Financial Management Corp. 70,000 3,885,000
--------------------------------------------------------------------------------------------------------
Oracle Systems Corp.(1) 120,000 4,500,000
--------------------------------------------------------------------------------------------------------
Pyxis Corp.(1) 210,000 3,990,000
--------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 75,000 1,734,375
--------------------------------------------------------------------------------------------------------
Sybase, Inc.(1) 49,000 2,401,000
-----------
33,165,500
</TABLE>
6 Oppenheimer Time Fund
<PAGE> 7
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SYSTEMS--3.7% Cabletron Systems, Inc.(1) 23,000 $
2,222,375
-------------------------------------------------------------------------------------------------------
First Data Corp. 125,000 5,171,875
-------------------------------------------------------------------------------------------------------
Sensormatic Electronics Corp. 160,000 4,600,000
------------
11,994,250
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: American Power Conversion Corp.(1) 65,000 1,048,125
INSTRUMENTATION--3.0% -------------------------------------------------------------------------------------------------------
Analog Devices, Inc.(1) 32,000 920,000
-------------------------------------------------------------------------------------------------------
Linear Technology Corp. 45,500 2,002,000
-------------------------------------------------------------------------------------------------------
Molex, Inc., Cl. A 155,000 5,696,250
------------
9,666,375
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: Applied Materials, Inc.(1) 50,000 2,137,500
SEMICONDUCTORS--0.7%
- -----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.1% LDDS Communications, Inc., Cl. A(1) 381,774
6,681,045
- -----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--0.5%
- -----------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS--0.5% Equitable Resources, Inc. 45,000 1,546,875
------------
Total Common Stocks (Cost $222,610,897) 255,552,772
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $292,584,810) 101.6%
326,609,048
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (1.6) (5,072,922)
NET ASSETS 100.0% $321,536,126
</TABLE>
(1) Non-income producing security.
(2) Restricted security--See Note 6 of Notes to
Financial Statements.
See accompanying Notes to Financial Statements.
7 Oppenheimer Time Fund
<PAGE> 8
STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
<TABLE>
==========================================================
==========================================================
===============
<S> <C>
ASSETS Investments, at value (cost $292,584,810)--see accompanying statement $326,609,048
-------------------------------------------------------------------------------------------------------
Cash 776,689
-------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 3,127,502
Shares of beneficial interest sold 106,582
Dividends and interest 45,403
-------------------------------------------------------------------------------------------------------
Other 96,951
------------
Total assets 330,762,175
==========================================================
==========================================================
===============
LIABILITIES Options written, at value (premiums received $206,111)--
see accompanying statement--Note 4 215,325
-------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 7,011,815
Shares of beneficial interest redeemed 1,768,741
Service plan fees--Note 5 57,084
Other 173,084
------------
Total liabilities 9,226,049
==========================================================
==========================================================
===============
NET ASSETS $321,536,126
============
==========================================================
==========================================================
===============
COMPOSITION OF Paid-in capital $256,898,698
NET ASSETS -------------------------------------------------------------------------------------------------------
Undistributed net investment loss (105,145)
-------------------------------------------------------------------------------------------------------
Accumulated net realized gain from investment and written option transactions 30,727,549
-------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and options written--Note 3 34,015,024
------------
Net assets--applicable to 20,814,080 shares of beneficial interest outstanding $321,536,126
============
==========================================================
==========================================================
===============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
$15.45
==========================================================
==========================================================
===============
MAXIMUM OFFERING PRICE PER SHARE (net asset value plus sales charge of 5.75% of offering price)
$16.39
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Time Fund
<PAGE> 9
STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
<TABLE>
==========================================================
==========================================================
===============
<S> <C>
INVESTMENT INCOME Interest $ 1,554,492
-------------------------------------------------------------------------------------------------------
Dividends 1,273,807
------------
Total income 2,828,299
==========================================================
==========================================================
===============
EXPENSES Management fees--Note 5 2,848,414
-------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 270,842
-------------------------------------------------------------------------------------------------------
Service plan fees--Note 5 241,045
-------------------------------------------------------------------------------------------------------
Shareholder reports 84,568
-------------------------------------------------------------------------------------------------------
Legal and auditing fees 59,469
-------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 53,169
-------------------------------------------------------------------------------------------------------
Custodian fees and expenses 30,053
-------------------------------------------------------------------------------------------------------
Other 68,737
------------
Total expenses 3,656,297
==========================================================
==========================================================
===============
NET INVESTMENT LOSS (827,998)
==========================================================
==========================================================
===============
REALIZED AND UNREALIZED Net realized gain (loss) from:
GAIN (LOSS) ON INVESTMENTS Investments 40,977,001
AND OPTIONS WRITTEN Closing of option contracts written--Note 4 (1,931,520)
------------
Net realized gain 39,045,481
-------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments and options written (45,046,554)
------------
Net realized and unrealized loss on investments and options written (6,001,073)
==========================================================
==========================================================
===============
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(6,829,071)
============
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Time Fund
<PAGE> 10
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1994 1993
==========================================================
==========================================================
===============
<S> <C> <C> <C>
OPERATIONS Net investment income (loss) $ (827,998) $ 48,866
-------------------------------------------------------------------------------------------------------
Net realized gain on investments and options written 39,045,481 17,485,143
-------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation on investments and options written (45,046,554) 49,454,166
------------ ------------
Net increase (decrease) in net assets resulting from operations (6,829,071) 66,988,175
==========================================================
==========================================================
===============
DIVIDENDS AND Dividends from net investment income ($.054 per share) --
(1,210,998)
DISTRIBUTIONS TO -------------------------------------------------------------------------------------------------------
SHAREHOLDERS Dividends in excess of net investment income ($.002 per share) (47,909)
--
-------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments and
options written ($1.226 and $.792 per share, respectively) (25,770,289) (17,728,325)
==========================================================
==========================================================
===============
BENEFICIAL INTEREST Net decrease in net assets resulting from beneficial
TRANSACTIONS interest transactions (16,255,516) (7,584,627)
==========================================================
==========================================================
===============
NET ASSETS Total increase (decrease) (48,902,785) 40,464,225
-------------------------------------------------------------------------------------------------------
Beginning of year 370,438,911 329,974,686
------------- -------------
End of year (including (accumulated net investment loss)
undistributed net investment income of ($105,145) and
$336,671, respectively) $321,536,126 $370,438,911
=============
=============
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Time Fund
<PAGE> 11
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1994 1993 1992 1991 1990
==========================================================
========================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $17.06 $14.84 $14.37 $16.71 $17.38
- --------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income --(1) --(1) .14 .40 .54
Net realized and unrealized
gain(loss) on investments and
options written (.38) 3.06 1.24 (.25) .62
------ ------ ------ ------ ------
Total income (loss) from
investment operations (.38) 3.06 1.38 .15 1.16
- --------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income -- (.05) (.22) (.52) (.51)
Dividends in excess of net
investment income --(1) -- -- -- --
Distributions from net realized
gain on investments and options
written (1.23) (.79) (.69) (1.97) (1.32)
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.23) (.84) (.91) (2.49) (1.83)
- --------------------------------------------------------------------------------------------------
Net asset value, end of year $15.45 $17.06 $14.84 $14.37 $16.71
====== ====== ====== ====== ======
==========================================================
========================================
TOTAL RETURN, AT NET ASSET
VALUE(2) (3.40)% 20.95% 9.28% 2.46% 6.91%
==========================================================
========================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
year (in thousands) $321,536 $370,439 $329,975 $309,390 $335,026
- --------------------------------------------------------------------------------------------------
Average net assets (in
thousands) $387,363 $358,834 $358,097 $310,040 $328,266
- --------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 20,814 21,710 22,242 21,526 20,050
- --------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (.21)% .01% .80% 2.48% 3.12%
Expenses .94% 1.00% .96% .96% .94%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 62.7% 61.7% 86.3% 107.5% 115.7%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1989 1988 1987 1986 1985
==========================================================
========================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $15.50 $20.59 $20.15 $14.17 $12.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .48 .30 .15 .22 .33
Net realized and unrealized
gain(loss) on investments and
options written 2.35 (.99) 2.60 6.17 2.50
------ ------ ------ ------ ------
Total income (loss) from
investment operations 2.83 (.69) 2.75 6.39 2.83
- --------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.42) (.27) (.23) (.31) (.21)
Dividends in excess of net
investment income -- -- -- -- --
Distributions from net realized
gain on investments and options
written (.53) (4.13) (2.08) (.10) (.45)
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.95) (4.40) (2.31) (.41) (.66)
- --------------------------------------------------------------------------------------------------
Net asset value, end of year $17.38 $15.50 $20.59 $20.15 $14.17
====== ====== ====== ====== ======
==========================================================
========================================
TOTAL RETURN, AT NET ASSET
VALUE(2) 19.48% (2.79)% 16.31% 46.39% 25.01%
==========================================================
========================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
year (in thousands) $319,789 $318,293 $347,503 $301,887 $222,423
- --------------------------------------------------------------------------------------------------
Average net assets (in
thousands) $294,079 $311,729 $292,151 $239,231 $194,346
- --------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 18,401 20,539 16,877 14,981 15,693
- --------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 2.74% 1.83% .85% 1.42% 2.60%
Expenses 1.00% .97% .94% .96% .95%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 67.4% 102.6% 47.0% 106.7% 175.8%
</TABLE>
1. Less than $.005 per share.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal year, 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 year. Sales charges are
not reflected in the total returns.
3. The lesser of purchases or sales of portfolio securities for a year, divided
by the monthly average of the market value of portfolio securities owned during
the year. 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 June 30, 1994 were $214,351,214 and $270,797,541, respectively.
See accompanying Notes to Financial Statements.
11 Oppenheimer Time Fund
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
<TABLE>
==========================================================
==========================================================
================
<S> <C>
1. SIGNIFICANT Oppenheimer Time 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 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. Long-term debt
securities are valued by a portfolio pricing service approved by the Board of Trustees. Long-term
debt securities which cannot be valued by the approved portfolio pricing service are valued by
averaging the mean between the bid and asked prices obtained from two active market makers in such
securities. 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. An option is valued
based upon the last sales price on the principal exchange on which the option is traded or, in the
absence of any transactions that day, the value is based upon the last sale on the prior trading
date if it is within the spread between the closing bid and asked prices. If the last sale price
is outside the spread, the closing bid or asked price closest to the last reported sale price is
used.
--------------------------------------------------------------------------------------------------
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. 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.
--------------------------------------------------------------------------------------------------
OPTIONS WRITTEN. The Fund may write covered call and put options. When an option is written,
the Fund receives a premium and becomes obligated to sell the underlying security at a fixed
price, upon exercise of the option. In writing an option, the Fund bears the market risk of an
unfavorable change in the price of the security underlying the written option. Exercise of an
option written by the Fund could result in the Fund selling or purchasing a security at a price
different from the current market value. All securities covering call options written are held in
escrow by the custodian bank and the Fund maintains liquid assets sufficient to cover written put
options in the event of exercise by the holder.
--------------------------------------------------------------------------------------------------
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. During the year ended June 30, 1994, a provision of $18,391 was made for the
Fund's projected benefit obligations, resulting in an accumulated liability of $117,741 at June
30, 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 FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective July 1,
1993, 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 June 30, 1993, amounts have
been reclassified to reflect a decrease in paid-in capital of $35,773, a decrease in undistributed
net investment loss of $390,026, and an increase in undistributed capital gain on investments of
$425,799. During the year ended June 30, 1994, Time Fund generated a net operating loss. As a
result, in accordance with Statement of Position 93-2, paid-in capital was reduced by $809,607,
and undistributed net investment loss was increased by the same amount.
</TABLE>
12 Oppenheimer Time Fund
<PAGE> 13
<TABLE>
==========================================================
==========================================================
================
<S> <C>
1. SIGNIFICANT ACCOUNTING OTHER. Investment transactions are accounted for on the date the investments are
purchased or
POLICIES (CONTINUED) sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on
securities purchased is amortized over the life of the respective securities, in accordance with
federal income tax requirements. 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.
==========================================================
==========================================================
================
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:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1994 YEAR ENDED JUNE 30, 1993
---------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 3,714,136 $ 65,700,854 3,409,926 $55,175,337
Dividends and distributions
reinvested 1,329,264 24,485,036 1,111,804 18,044,576
Redeemed (5,939,332) (106,441,406) (5,053,807) (80,804,540)
---------- ------------ ---------- -----------
Net increase (decrease) (895,932) $(16,255,516) (532,077) $(7,584,627)
========== ============
========== ===========
</TABLE>
<TABLE>
==========================================================
==========================================================
================
<S> <C>
3. UNREALIZED GAINS AND At June 30, 1994, net unrealized appreciation on investments of $34,015,024 was
composed of gross
LOSSES ON INVESTMENTS appreciation of $46,435,098, and gross depreciation of $12,420,074.
==========================================================
==========================================================
================
4. CALL OPTION ACTIVITY Call option activity for the year ended June 30, 1994 was as follows:
</TABLE>
<TABLE>
<CAPTION>
NUMBER AMOUNT OF
OF OPTIONS PREMIUMS
---------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at June 30, 1993 -- $ --
Options written 594 206,111
Options cancelled in closing
purchase transactions -- --
---------- -----------
Options outstanding at June 30, 1994 594 $206,111
==========
===========
</TABLE>
<TABLE>
==========================================================
==========================================================
================
<S> <C>
5. MANAGEMENT FEES Management fees paid to the Manager were in accordance with the investment advisory
agreement
AND OTHER TRANSACTIONS with the Fund which provides for an annual fee of .75% on the first $200 million
of net
WITH AFFILIATES assets with a reduction of .03% on each $200 million thereafter to $800 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 applicable regulatory limit on Fund
expenses.
For the year ended June 30, 1994, commissions (sales charges paid by investors) on
sales of Fund shares totaled $629,755, of which $168,109 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an
affiliated broker-dealer.
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 an approved service plan, the Fund 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 April 1, 1991), including amounts paid to brokers,
dealers, banks and other institutions. During the year ended June 30, 1994, OFDI paid $4,498 to an
affiliated broker/dealer as reimbursement for personal service and maintenance expenses.
</TABLE>
13 Oppenheimer Time Fund
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
==========================================================
==========================================================
================
<S> <C>
6. RESTRICTED SECURITIES The Fund owns securities purchased in private placement transactions, without
registration under
the Securities Act of 1993 (the Act). The securities are valued under methods approved by
the Board of Trustees as reflecting fair value. The Fund intends to invest no more than 10% of its
net assets (determined at the time of purchase) in restricted and illiquid securities, excluding
securities eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid
by the Board of Trustees or by the Manager under Board-approved guidelines. Restricted and
illiquid securities amount to $19,045, or 0% of the Fund's net assets, at June 30, 1994.
</TABLE>
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT JUNE 30,
1994
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Clinicorp, Inc. 3/23/93 $ 5.50 $ 0.15
----------------------------------------------------------------------------------------------
Grupo Carso SA, ADS 9/24/91-1/26/93 $ 9.48 $18.04
----------------------------------------------------------------------------------------------
Grupo Televisa SA, ADS 12/9/91-12/11/91 $26.45 $50.75
</TABLE>
14 Oppenheimer Time Fund
<PAGE> 15
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Time Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Time Fund as of June 30, 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.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our 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 and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 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 Time Fund as of June 30, 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
July 22, 1994
15 Oppenheimer Time Fund
<PAGE> 16
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1995, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1994.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
A distribution of $1.228 per share was paid on December 30, 1993, of
which $1.226 was designated as a "capital gain distribution" for federal income
tax purposes. Whether received in stock or cash, the capital gain distribution
should be treated by shareholders as a gain from the sale of capital assets
held for more than one year (long-term capital gains).
None of the dividends paid by the Fund during the fiscal year ended
June 30, 1994 are eligible for the corporate dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
16 Oppenheimer Time Fund
<PAGE> 17
OPPENHEIMER TIME FUND
<TABLE>
==========================================================
==========================================================
================
<S> <C>
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Paul LaRocco, Assistant Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
==========================================================
==========================================================
================
INVESTMENT ADVISOR Oppenheimer Management Corporation
==========================================================
==========================================================
================
DISTRIBUTOR Oppenheimer Funds Distributor, Inc.
==========================================================
==========================================================
================
TRANSFER AND SHAREHOLDER Oppenheimer Shareholder Services
SERVICING AGENT
==========================================================
==========================================================
================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
==========================================================
==========================================================
================
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
==========================================================
==========================================================
================
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer Time Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer Time Fund. For material information
concerning the Fund, see the Prospectus.
</TABLE>
17 Oppenheimer Time Fund
<PAGE> 18
THE FAMILY OF OPPENHEIMERFUNDS
<TABLE>
==========================================================
==========================================================
================
<S> <C>
OppenheimerFunds offers over 30 mutual funds designed to fit virtually every investment
goal. Whether you're investing for retirement, your children's education, or tax-free income, we
have the mutual funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that you are
investing with a respected financial institution with over 30 years of experience in helping
people just like you reach their financial goals. And you're investing with a leader in global,
growth stock, and flexible fixed income investments--with over 1.8 million shareholder accounts
and more than $26 billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of eligible funds of
the same class by mail or by telephone for a small administrative fee.(1) For more
information on OppenheimerFunds, please contact your financial advisor or call us at
1-800-525-7048 for a prospectus. You may also write us at the address shown on the back cover.
As
always, please read the prospectus carefully before you invest.
==========================================================
==========================================================
================
SPECIALTY STOCK FUND Gold & Special Minerals Fund
==========================================================
==========================================================
================
STOCK FUNDS Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
==========================================================
==========================================================
================
STOCK AND BOND FUNDS Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
==========================================================
==========================================================
================
BOND FUNDS High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Limited-Term Government Fund(2)
Strategic Investment Grade Bond Fund
==========================================================
==========================================================
================
TAX-EXEMPT FUNDS New York Tax-Exempt Fund(3) New Jersey Tax-Exempt Fund(3)
California Tax-Exempt Fund(3) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(3) Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(3) Intermediate Tax-Exempt Bond Fund
==========================================================
==========================================================
================
MONEY MARKET FUNDS Money Market Fund Cash Reserves
</TABLE>
(1) The fee is waived for PhoneLink exchanges
between existing accounts. Exchange
privileges are subject to change or
termination.
(2) Formerly Government Securities Fund.
(3) Available only to residents of those
states.
OppenheimerFunds are distributed by
Oppenheimer Funds Distributor, Inc.,
Two World Trade Center, New York, NY 1004
8-0203. (C) Copyright 1994 Oppenheimer
Management Corporation. All rights
reserved.
18 Oppenheimer Time Fund
<PAGE> 19
"HOW MAY I HELP YOU?"
[PHOTO #2 -- SEE EDGAR APPENDIX]
"Just as OppenheimerFunds offers over 30 different mutual funds designed to
help meet virtually every investment need, Oppenheimer Shareholder Services
offers a variety of services to satisfy your individual needs. Whenever you
require help, we're only a toll- free phone call away.
"For personalized assistance and account information, call
our General Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
"When you want to make account transactions, it's easy for
you to redeem shares, exchange shares, or conduct AccountLink transactions,
simply by calling our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink,
an automated voice response system is available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. You can even make purchases, exchanges and redemptions using your
touch-tone phone. Of course, PhoneLink will always give you the option to speak
with a Customer Service Representative during the hours shown to the left.
"When you invest in OppenheimerFunds, you know you'll
receive a high level of customer service. The International Customer Service
Association knows it, too, as it awarded Oppenheimer Shareholder Services a
1993 Award of Excellence for consistently demonstrating superior customer
service.
"Whatever your needs, we're ready to assist you."
(1993 AWARD OF EXCELLENCE INTERNATIONAL CUSTOMER SERVICE ASSOCIATION LOGO)
GENERAL INFORMATION
1-800-525-7048
Talk to a Customer Service
Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and
Saturday from 10:00 a.m.
to 2:00 p.m. ET.
TELEPHONE TRANSACTIONS
1-800-852-8457
Make account transactions with a
Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
PHONELINK
1-800-533-3310
Get automated information or
make automated transactions.
24 hours a day, 7 days a week.
TELECOMMUNICATION
DEVICE FOR THE DEAF
1-800-843-4461
Service for the hearing impaired.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
OPPENHEIMERFUNDS
INFORMATION HOTLINE
1-800-835-3104
Hear timely and insightful
messages on the economy and
issues that affect your finances.
24 hours a day, 7 days a week.
RA220.0794.N
(OPPENHEIMERFUNDS(R) LOGO)
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- ---------------
Bulk Rate
U.S. Postage
PAID
Permit No. 314
Farmingdale, NY
- ---------------
<PAGE> 20
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
The front cover of the report in the printed version contains a photo
(photo # 1) of a man and boy playing.
The back cover of the report in the printed version contains a photo
(photo #2) of Barbara Hennigar, Chief Executive Officer, Oppenheimer
Shareholder Services.
<PAGE>
Oppenheimer Time Fund
Semiannual Report December 31, 1994
[photo depicting couple building new home]
"We know
that to get
the kind
of high
growth
we want, we
have to invest
aggressively
for the
long term."
(logo) OppenheimerFunds
<PAGE>
This Fund is for people who want high growth potential over time.
How Your Fund Is Managed
Oppenheimer Time Fund focuses on medium-sized companies that the Fund's
portfolio manager believes have good management, above-average profitability,
strong balance sheets, and offer the potential for high growth.
These medium-sized companies are more established than smaller emerging
growth companies, and thus may pose less risk than smaller companies. But they
still benefit from being in the emerging growth phase, so they have the
potential for high long-term growth.
In today's stock market, Time Fund's manager is focusing on companies
that have excellent prospects in growth industries such as communications and
computer networking. The Fund also invests in companies that can benefit from
increased consumer spending, such as specialty retailers, restaurants and
household appliance manufacturers.
Performance
Total return at net asset value for the 6 months ended 12/31/94 was 4.69%.(1)
The financial markets had a difficult year and, like many mutual
funds, your Fund felt the effects. While difficult years are hard to accept,
they're an inevitable part of investing. That's why keeping a long-term
perspective is crucial to getting the most from your investment and helping you
through short-term market fluctuations.
Your Fund's average annual total returns at maximum offering price for
the 1- and 5-year periods ended 12/31/94 and since inception of the Fund on
10/21/71 were -17.82%, 5.28% and 10.71%, respectively.(2)
Outlook
"The kinds of companies in which the Fund invests were hurt by rising interest
rates in 1994. While that's never good news, it does have an upside. At this
point, the prices of mid-cap growth stocks appear extremely attractive; we're
paying a very small premium for growth. If long-term interest rates start to
stabilize--and we expect them to in 1995--the value these stocks offer should
be recognized, and both mid-cap growth stocks in general and this Fund in
particular should benefit."
Jay Tracey, Portfolio Manager
December 31, 1994
1. Based on the change in net asset value per share from 6/30/94 to 12/31/94,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Average annual total returns are based on a hypothetical investment held
until 12/31/94, after deducting the current maximum initial sales charge of
5.75%. The Fund's maximum sales charge rate was higher during a portion of
some of the periods shown, and actual investment results will be different
as a result of the change.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
2 Oppenheimer Time Fund
<PAGE>
Dear OppenheimerFunds Shareholder,
The past year has been a difficult period for the stock market, one marked above
all by one of the most aggressive series of moves to raise interest rates in the
U.S. Federal Reserve's history. As interest rates moved up, bond prices fell and
the stock market followed, while investors looked everywhere for answers to
questions about directions in inflation, interest rates, and the economy. These
questions all concerned one basic issue: Is the bull market in stocks coming to
an end?
In our view, it is not. While we are not expecting major gains in stock
prices in the very near term, we believe that the uncertainties which held the
market back in 1994 will recede in 1995 as the fundamental positives in the
economy are recognized. The most important of these positives is our belief that
the Fed's attempt to preempt possible inflation, while temporarily
disconcerting, will likely have its desired effect in 1995. We believe that the
economy will begin to slow, and although short-term rates may move up modestly
from their present levels, long-term interest rates--the ones that most affect
securities prices--should stabilize in their current range. Long-term rates may
even begin to decline as overblown concerns about inflation abate.
Those concerns are, in fact, already fading. While the prices of some
commodities have risen over the past year and U.S. manufacturing capacity
utilization and employment rose to their highest levels in years, in today's
globally competitive environment, price increases are difficult to pass on to
either consumers or businesses. The inflation rate--as measured by the
Consumer Price Index--continues to run at less than 3% a year, and there's
nothing on the horizon to suggest to us that it will increase substantially
anytime soon. Even at their current levels, interest rates remain low relative
to recent periods, and in our view, pose no real threat to most companies'
earnings or cash flows. During the most recent recession, many businesses
learned to operate much more efficiently and took advantage of the extended
decline in interest rates to work down their debt loads and strengthen their
financial positions. As a result, corporate profits have soared despite higher
interest rates. And we believe that business earnings should grow even more as
economies in Europe and elsewhere emerge from their recessions, stimulating
demand for U.S. companies' goods and services. As profits rise, we expect stocks
to become more valuable.
Finally, the changing political landscape reflected in results of the
mid-term election bodes well for the stock market over time. In addition to
limiting the expectation that Congress will pass potentially inflationary
government spending proposals, the realignment in Washington has raised the
possibility of tax relief in the form of an expanded deduction for individual
retirement savings or possibly a reduction in the capital gains tax rate. What
specific action, if any, Congress will take on these proposals remains to be
seen. But any action to reduce the federal deficit, cut spending, and reduce
taxes should be good news for the stock market overall.
In light of all these factors, we remain bullish on stocks. As we have
noted in previous reports, we're expecting moderate gains in the short-term, in
line with increasing corporate earnings. Over time, however, we expect stocks to
perform well in both the U.S. and foreign markets. Your portfolio manager
discusses the outlook for your Fund on the following pages. We appreciate your
confidence, and we look forward to helping you continue to reach your investment
goals.
Donald W. Spiro
President
Oppenheimer
Time Fund
Jon S. Fossel
Chairman and CEO
Oppenheimer
Management
Corporation
Donald W. Spiro Jon S. Fossel
January 23, 1995
3 Oppenheimer Time Fund
<PAGE>
Q+A
An interview with your Fund's manager.
Q Do
you think
the factors
contributing
to 1994's
difficult
stock market
will persist
in '95?
The past year was a difficult period for the stock market. What factors affected
the Fund's performance?
Two factors stand out. First, the Fund focuses on medium-size growth stocks
whose prices were particularly affected by the Federal Reserve's aggressive
moves to raise interest rates during the year. Second, growth rates in several
areas of the market that performed well for the Fund in 1993--notably casual
dining, apparel, gaming, and air transport--slowed in 1994. That
combination--changing mid-cap growth stock valuations and changes in some
industries' fundamentals--held the Fund's performance back.
Do you think those factors will persist in 1995?
No. In fact, we think the setback we experienced in 1994 is temporary. The
Federal Reserve's actions to raise interest rates seem to have had their desired
effect. Inflation remains very low, the economy and business earnings are
growing at a solid, sustainable rate, and interest rates, although up
substantially from year-ago levels, are still low by historical standards.
These factors should set the stage for renewed outperformance by growth stocks.
And with the adjustments made to the portfolio over the last several months, we
believe the Fund is positioned to participate fully in any gains.
What portfolio adjustments did you make?
In terms of selling, we reduced or eliminated positions in several companies
whose competitive dynamics had changed or whose growth rates had softened. For
example, we sold Brinker International, which owns the Chili's restaurant chain;
Phillips Van Heusen; and several air transport companies, including Southwest
Airlines and Federal Express. We also reduced our exposure to
4 Oppenheimer Time Fund
<PAGE>
gaming companies and some credit-card issuers like Advanta and First USA. We
used the proceeds to invest in the stocks of companies which we believe have
strong growth potential.
So you're out of those sectors entirely at this point?
Not at all. Our investment decisions are driven by companies, not sectors; in
fact, we've recently added new names in several of these areas, such as Dollar
General in retailing and Ann Taylor in apparel.(1) We're alert to market trends,
of course, but our buying and selling focuses firmly on a company's performance
and prospects.
What other kinds of stocks have you been buying?
Many of our purchases were in the healthcare area, centering on companies with
strong growth prospects, independent of healthcare reform. For example, we
purchased Lincare Holdings and Integrated Health, both emerging leaders in
providing specialized care outside the high-cost hospital setting.
We also added several technology companies with strong growth
prospects. In software, we added Lotus Development Corporation, DSC
Communications, and Compuware, all of which are positioned to benefit from the
emphasis on business productivity and networking. In communications, we bought
Andrew Corp., which supplies equipment to the television and cable industries.
And we added some "lower-tech" stocks, including Molex, a fast-growing
manufacturer of electronic components and connectors, and some "higher-tech"
stocks, including Teradyne, a manufacturer of semiconductor test equipment.
What's your outlook for the Fund?
This Fund tends to buy and sell stocks for company-specific reasons, not because
a specific market sector is "hot." As a result, the portfolio reflects not just
our outlook for the economy or individual industry groups, but rather the
prospects for individual companies' performance. We believe that the stocks
we're holding today have the potential to perform very well when growth stocks
resume their advance.
Facing page
Top left: Jay Tracey,
Portfolio Manager
Top right: The equity trading desk
Bottom left: Paul LaRocco, Associate Portfolio Manager
This page
Top: Jay Tracey
Bottom: Robert Doll, Executive VP, Director of Equity Investments, with his
assistant, Pat Andrzejewski
A No.
In fact, we think the setback we experienced in 1994 is temporary.
1. The Fund's portfolio is subject to change.
5 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Statement of Investments December 31, 1994 (Unaudited)
------------------------------------------------------------------------------------------------
<CAPTION>
Face Market Value
Amount See Note 1
==========================================================
==========================================================
===============
<S> <C> <C>
Repurchase Agreements--16.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 6%,
dated 12/30/94, to be repurchased at $52,535,000 on 1/3/95,
collateralized by U.S. Treasury Nts., 3.875%--8.875%,
5/31/95--8/31/05, with a value of $49,926,894 and U.S. Treasury
Bonds, 10.75%--14.25%, 2/15/02--8/15/05, with a value of
$3,667,654 (Cost $52,500,000) $52,500,000 $52,500,000
==========================================================
==========================================================
===============
Convertible Corporate Bonds and Notes--2.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Hotels/Lodging--0.4% Hospitality Franc Systems, Inc., 4.50% Cv. Sr. Sub. Nts., 10/1/99 1,200,000
1,164,000
- -----------------------------------------------------------------------------------------------------------------------------------
Financial--0.6% First Financial Management Corp., 5% Cv. Debs., 12/15/99 2,000,000
2,075,000
- -----------------------------------------------------------------------------------------------------------------------------------
Technology--1.3% Solectron Corp., 0% Cv. Liquid Yield Option Sub. Nts., 5/5/12 7,300,000
4,170,125
-----------
Total Convertible Corporate Bonds and Notes (Cost $7,019,157) 7,409,125
Shares
==========================================================
==========================================================
===============
Common Stocks--80.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Materials--3.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals--2.0% Geon Co. (The) 70,000 1,916,250
------------------------------------------------------------------------------------------------
Georgia Gulf Corp.(1) 120,000 4,665,000
-----------
6,581,250
- -----------------------------------------------------------------------------------------------------------------------------------
Steel--1.1% Birmingham Steel Corp 175,000 3,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--24.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Auto Parts: After Market--1.5% Breed Technologies, Inc 112,000 3,178,000
------------------------------------------------------------------------------------------------
Lear Seating Corp.(1) 80,000 1,590,000
-----------
4,768,000
- -----------------------------------------------------------------------------------------------------------------------------------
Broadcast Media--1.9% Comcast Corp., Cl. A Special 200,000 3,137,500
------------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B(1) 75,768 3,078,075
-----------
6,215,575
- -----------------------------------------------------------------------------------------------------------------------------------
Hotels/Motels--1.2% Carnival Corp., Inc., Cl. A 176,000 3,740,000
- -----------------------------------------------------------------------------------------------------------------------------------
Household Furnishings Sunbeam-Oster, Inc 306,700 7,897,525
And Appliances--2.4%
- -----------------------------------------------------------------------------------------------------------------------------------
Leisure Time--0.9% Brunswick Corp 150,000 2,831,250
- -----------------------------------------------------------------------------------------------------------------------------------
Restaurants--0.4% Brinker International, Inc.(1) 70,000 1,268,750
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Stores: Dollar General Corp 165,000 4,950,000
Department Stores--3.2% ------------------------------------------------------------------------------------------------
Kohl's Corp.(1) 62,000 2,464,500
------------------------------------------------------------------------------------------------
Nordstrom, Inc 75,000 3,150,000
-----------
10,564,500
</TABLE>
6 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail: Specialty--8.4% Ann Taylor Stores, Inc.(1) 90,000 $ 3,093,750
------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc. 164,200 4,761,800
------------------------------------------------------------------------------------------------
Heilig-Meyers Co. 100,000 2,525,000
------------------------------------------------------------------------------------------------
Micro Warehouse, Inc.(1) 130,000 4,550,000
------------------------------------------------------------------------------------------------
Office Depot, Inc.(1) 150,000 3,600,000
------------------------------------------------------------------------------------------------
OfficeMax, Inc.(1) 61,000 1,616,500
------------------------------------------------------------------------------------------------
Staples, Inc.(1) 105,000 2,598,750
------------------------------------------------------------------------------------------------
Viking Office Products, Inc.(1) 155,000 4,746,875
-----------
27,492,675
- -----------------------------------------------------------------------------------------------------------------------------------
Shoes--2.4% Nike, Inc., Cl. B 105,000 7,835,625
- -----------------------------------------------------------------------------------------------------------------------------------
Textiles: Apparel Tommy Hilfiger Corp.(1) 126,000 5,685,750
Manufacturers--1.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--17.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages: Alcoholic--1.1% Canandaigua Wine Co., Inc., Cl. A(1) 94,000 3,572,000
- -----------------------------------------------------------------------------------------------------------------------------------
Drugs--5.0% Elan Corp. PLC, ADR(1) 110,000 3,918,750
------------------------------------------------------------------------------------------------
R.P. Scherer Corp.(1) 190,000 8,621,250
------------------------------------------------------------------------------------------------
Roberts Pharmaceutical Corp.(1) 115,000 3,651,250
-----------
16,191,250
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare: Chiron Corp.(1) 50,000 4,018,750
Miscellaneous--9.3% ------------------------------------------------------------------------------------------------
Coram Healthcare Corp.(1) 100,000 1,650,000
------------------------------------------------------------------------------------------------
Genentech, Inc.(1) 75,000 3,403,125
------------------------------------------------------------------------------------------------
Health Care and Retirement Corp.(1) 120,000 3,615,000
------------------------------------------------------------------------------------------------
Horizon Healthcare Corp.(1) 180,000 5,040,000
------------------------------------------------------------------------------------------------
Integrated Health Services, Inc. 143,500 5,668,250
------------------------------------------------------------------------------------------------
Lincare Holdings, Inc.(1) 150,000 4,350,000
------------------------------------------------------------------------------------------------
PacifiCare Health Systems, Inc.(1) 41,900 2,765,400
-----------
30,510,525
- -----------------------------------------------------------------------------------------------------------------------------------
Hospital Management--0.7% Quorum Health Group, Inc.(1) 120,000 2,280,000
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Stores: Revco D.S., Inc.(1) 240,000 5,670,000
Drug Stores--1.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Energy--1.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Oil Well Services and Halliburton Co. 100,000 3,312,500
Equipment--1.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial--8.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Commercial Services--5.7% Cintas Corp. 140,000 4,970,000
------------------------------------------------------------------------------------------------
Manpower, Inc. 100,000 2,812,500
------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 150,000 3,750,000
------------------------------------------------------------------------------------------------
Sensormatic Electronics Corp. 200,000 7,200,000
-----------
18,732,500
</TABLE>
7 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
------------------------------------------------------------------------------------------------
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Electrical Equipment--1.9% Molex, Inc., Cl. A 193,750 $ 6,006,250
- -----------------------------------------------------------------------------------------------------------------------------------
Railroads--1.0% Southern Pacific Rail Corp.(1) 188,000 3,407,500
- -----------------------------------------------------------------------------------------------------------------------------------
Financial--4.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Financial Services: Advanta Corp., Cl. B 170,000 4,292,500
Miscellaneous--3.4% ------------------------------------------------------------------------------------------------
First USA, Inc. 125,000 4,109,375
------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 90,000 2,733,750
-----------
11,135,625
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance: Life--0.4% Equitable of Iowa Cos., Inc. 40,000 1,130,000
- -----------------------------------------------------------------------------------------------------------------------------------
Major Banks: Regional--0.8% First Interstate Bancorp 40,000 2,705,000
- -----------------------------------------------------------------------------------------------------------------------------------
Technology--21.4%
- -----------------------------------------------------------------------------------------------------------------------------------
Communication: Andrew Corp.(1) 100,000 5,225,000
Equipment/Manufacturers--3.6% ------------------------------------------------------------------------------------------------
DSC Communications Corp.(1) 60,000 2,152,500
------------------------------------------------------------------------------------------------
Tellabs, Inc.(1) 80,000 4,460,000
-----------
11,837,500
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software Compuware Corp.(1) 126,000 4,536,000
And Services--9.7% ------------------------------------------------------------------------------------------------
CUC International, Inc.(1) 140,000 4,690,000
------------------------------------------------------------------------------------------------
First Data Corp. 200,000 9,475,000
------------------------------------------------------------------------------------------------
First Financial Management Corp. 20,000 1,232,500
------------------------------------------------------------------------------------------------
Informix Corp.(1) 50,000 1,606,250
------------------------------------------------------------------------------------------------
Lotus Development Corp.(1) 80,000 3,280,000
------------------------------------------------------------------------------------------------
Oracle Systems Corp.(1) 60,600 2,673,975
------------------------------------------------------------------------------------------------
Pyxis Corp.(1) 210,000 3,990,000
-----------
31,483,725
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Systems--3.6% American Power Conversion Corp.(1) 65,000 1,064,375
------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(1) 57,500 2,673,750
------------------------------------------------------------------------------------------------
EMC Corp.(1) 370,000 8,001,250
-----------
11,739,375
- -----------------------------------------------------------------------------------------------------------------------------------
Electronics: Teradyne, Inc.(1) 100,000 3,387,500
Instrumentation--1.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications--3.5% ALC Communications Corp.(1) 190,000 5,913,750
------------------------------------------------------------------------------------------------
LDDS Communications, Inc.(1) 281,774 5,476,982
-----------
11,390,732
-----------
Total Common Stocks (Cost $220,147,018) 262,872,882
</TABLE>
8 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
<CAPTION>
Market Value
Shares See Note 1
==========================================================
==========================================================
===============
<S> <C> <C>
Preferred Stocks--0.5%
- -----------------------------------------------------------------------------------------------------------------------------------
AK Steel Holding Corp., 7% Cv. Stock Appreciation Income Linked
Securities (Cost $1,537,500) 50,000 $ 1,562,500
Units
==========================================================
==========================================================
===============
Rights, Warrants and Certificates--0.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B Rts., Exp. 9/95 95,000 106,875
------------------------------------------------------------------------------------------------
Windmere Corp. Wts., Exp. 1/98 4,727 0
------------------------------------------------------------------------------------------------
Xoma Corp. Wts., Exp. 6/95 5,511 524
------------
Total Rights, Warrants and Certificates (Cost $143,878) 107,399
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $281,347,553) 99.4% 324,451,906
- -----------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.6 1,958,395
----- ------------
Net Assets 100.0% $326,410,301
===== ============
1. Non-income producing security.
See accompanying Notes to Financial Statements.
</TABLE>
9 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1994 (Unaudited)
------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C> <C>
Assets Investments, at value (including repurchase agreements of $52,500,000)
(cost $281,347,553)--see accompanying statement $324,451,906
------------------------------------------------------------------------------------------------
Cash 704,827
------------------------------------------------------------------------------------------------
Receivables:
Investments sold 3,122,730
Shares of beneficial interest sold 928,140
Interest and dividends 128,966
------------------------------------------------------------------------------------------------
Other 85,809
------------
Total assets 329,422,378
==========================================================
==========================================================
===============
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed 1,521,490
Dividends 989,245
Service plan fees--Note 5 129,960
Other 371,382
------------
Total liabilities 3,012,077
==========================================================
==========================================================
===============
Net Assets $326,410,301
============
==========================================================
==========================================================
===============
Composition of Paid-in capital $278,573,569
Net Assets ------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income (71,441)
------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) from investment and written option transactions 4,803,820
------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments--Note 3 43,104,353
------------
Net assets--applicable to 22,387,554 shares of beneficial interest outstanding $326,410,301
============
==========================================================
==========================================================
===============
Net Asset Value and Redemption Price Per Share $14.58
==========================================================
==========================================================
===============
Maximum Offering Price Per Share (net asset value plus sales charge of 5.75% of offering price) $15.47
See accompanying Notes to Financial Statements.
</TABLE>
10 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended December 31, 1994 (Unaudited)
------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C> <C>
Investment Income Interest $ 1,416,418
------------------------------------------------------------------------------------------------
Dividends 729,682
------------
Total income 2,146,100
==========================================================
==========================================================
===============
Expenses Management fees--Note 5 1,212,078
------------------------------------------------------------------------------------------------
Service plan fees--Note 5 248,826
------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 279,305
------------------------------------------------------------------------------------------------
Shareholder reports 197,559
------------------------------------------------------------------------------------------------
Trustees' fees and expenses 51,429
------------------------------------------------------------------------------------------------
Custodian fees and expenses 13,654
------------------------------------------------------------------------------------------------
Legal and auditing fees 9,385
------------------------------------------------------------------------------------------------
Other 100,160
------------
Total expenses 2,112,396
==========================================================
==========================================================
===============
Net Investment Income (Loss) 33,704
==========================================================
==========================================================
===============
Realized and Unrealized Net realized gain (loss) from:
Gain (Loss) on Investments Investments 5,487,485
And Options Written Closing of options written--Note 4 551,040
------------
Net realized gain (loss) 6,038,525
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments
and options written 9,089,329
------------
Net realized and unrealized gain (loss) on investments and options written 15,127,854
==========================================================
==========================================================
===============
Net Increase (Decrease) in Net Assets Resulting From Operations $15,161,558
============
See accompanying Notes to Financial Statements.
</TABLE>
11 Oppenheimer Time Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
December 31, 1994 June 30,
(Unaudited) 1994
==========================================================
==========================================================
===============
<S> <C> <C> <C>
Operations Net investment income (loss) $ 33,704 $ (827,998)
------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and options written 6,038,525 39,045,481
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments and options written 9,089,329 (45,046,554)
----------- -----------
Net increase (decrease) in net assets resulting from operations 15,161,558 (6,829,071)
==========================================================
==========================================================
===============
Dividends and Dividends in excess of net investment income ($.002 per share) -- (47,909)
Distributions to ------------------------------------------------------------------------------------------------
Shareholders Distributions from net realized gain on investments and
options written ($1.572 and $1.226 per share, respectively) (31,962,254) (25,770,289)
==========================================================
==========================================================
===============
Beneficial Interest Net increase (decrease) in net assets resulting from beneficial
Transactions interest transactions--Note 2 21,674,871 (16,255,516)
==========================================================
==========================================================
===============
Net Assets Total increase (decrease) 4,874,175 (48,902,785)
------------------------------------------------------------------------------------------------
Beginning of period 321,536,126 370,438,911
----------- -----------
End of period (including overdistributed net investment income
of $71,441 and $105,145, respectively) $326,410,301 $321,536,126
===========
===========
See accompanying Notes to Financial Statements.
</TABLE>
12 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Financial Highlights
------------------------------------------------------------------------------------------------
Six Months
Ended
December 31,
1994 Year Ended June 30,
(Unaudited) 1994 1993 1992 1991 1990
==========================================================
==========================================================
===============
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 15.45 $ 17.06 $ 14.84 $ 14.37 $ 16.71 $ 17.38
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income -- (1) -- (1) -- (1) .14 .40 .54
Net realized and unrealized gain (loss)
on investments and options written .70 (.38) 3.06 1.24 (.25) .62
------ ------ ------ ------ ------ ------
Total income (loss) from investment
operations .70 (.38) 3.06 1.38 .15 1.16
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (1) -- (.05) (.22) (.52) (.51)
Dividends in excess of net investment income -- -- (1) -- -- -- --
Distributions from net realized gain on
investments and options written (1.57) (1.23) (.79) (.69) (1.97) (1.32)
------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.57) (1.23) (.84) (.91) (2.49) (1.83)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.58 $ 15.45 $ 17.06 $ 14.84 $ 14.37 $ 16.71
======= ======= ======= =======
======= =======
==========================================================
==========================================================
===============
Total Return, at Net Asset Value(2) 4.69% (3.40)% 20.95% 9.28% 2.46% 6.91%
==========================================================
==========================================================
===============
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $326,410 $321,536 $370,439 $329,975 $309,390 $335,026
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $325,659 $387,363 $358,834 $358,097 $310,040 $328,266
- -----------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at end
of period (in thousands) 22,388 20,814 21,710 22,242 21,526 20,050
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income .02%(3) (.21)% .01% .80% 2.48% 3.12%
Expenses 1.29%(3) .94% 1.00% .96% .96% .94%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 42.4% 62.7% 61.7% 86.3% 107.5% 115.7%
1. Less than $.005 per share.
2. 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.
3. Annualized.
4. 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 December 31, 1994 were $115,460,218 and $123,397,455, respectively. See
accompanying Notes to Financial Statements.
</TABLE>
13 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C>
1. Significant Oppenheimer Time 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 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. Long-term debt
securities are valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt 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 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. Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the value is based
upon the last sale on the prior trading date if it is within the spread between the closing bid
and asked prices. If the last sale price is outside the spread, the closing bid or asked price
closest to the last reported sale price is used.
------------------------------------------------------------------------------------------------
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.
------------------------------------------------------------------------------------------------
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 $109,656 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 July 1, 1993,
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 June 30, 1993, amounts
have been reclassified to reflect a decrease in paid-in capital of $845,380, a decrease in
undistributed net investment loss of $419,581 and an increase in accumulated net realized gain
on investments of $425,799.
</TABLE>
14 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C>
1. Significant Other. Investment transactions are accounted for on the date the investments are purchased or
Accounting Policies sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on
(continued) securities purchased is amortized over the life of the respective securities, in accordance with
federal income tax requirements. 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.
==========================================================
==========================================================
===============
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>
Six Months Ended December 31, 1994 Year Ended June 30, 1994
-------------------------------- ----------------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 2,715,506 $ 43,671,280 3,714,136 $ 65,700,854
Dividends and distributions
reinvested 2,119,233 30,474,285 1,329,264 24,485,036
Redeemed (3,261,265) (52,470,694) (5,939,332) (106,441,406)
-------------- -------------- -------------- --------------
Net increase (decrease) 1,573,474 $ 21,674,871 (895,932) $ (16,255,516)
============== ==============
============== ==============
==========================================================
==========================================================
===============
<S> <C>
3. Unrealized Gains and At December 31, 1994, net unrealized appreciation on investments of $43,104,353 was
composed of
Losses on Investments gross appreciation of $50,708,763, and gross depreciation of $7,604,410.
==========================================================
==========================================================
===============
4. Option Activity The Fund may buy and sell put and call options, or write covered call options on portfolio
securities in order to produce incremental earnings or protect against changes in the value of
portfolio securities.
The Fund generally purchases put options or writes covered call options to hedge against
adverse movements in the value of portfolio holdings. When an option is written, the Fund
receives a premium and becomes obligated to sell or purchase the underlying security at a fixed
price, upon exercise of the option. The Fund segregates assets to cover its obligations under
option contracts.
Options are valued daily based upon the last sale price on the principal exchange on which
the option is traded and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss upon the expiration or closing of the option transaction. When an option
is exercised, the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is adjusted by the
amount of premium received or paid.
In this report, securities segregated to cover outstanding call options are noted in the
Statement of Investments. Shares subject to call, expiration date, exercise price, premium
received and market value are detailed in a footnote to the Statement of Investments. Options
written are reported as a liability in the Statement of Assets and Liabilities. Gains and losses
are reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases and the option is exercised. The risk in writing a
put option is that the Fund may incur a loss if the market price of the security decreases and
the option is exercised. The risk in buying an option is that the Fund pays a premium whether or
not the option is exercised. The Fund also has the additional risk of not being able to enter
into a closing transaction if a liquid secondary market does not exist. Option activity for the
six months ended December 31, 1994 was as follows:
<CAPTION>
Call Options Put Options
------------------------ ------------------------
Number of Amount of Number of Amount of
Options Premiums Options Premiums
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding at June 30, 1994 594 $ 206,111 -- $ --
Options written 500 401,237 7,000 1,368,103
------------------------------------------------------------------------------------------------
Options canceled in closing purchase
transactions (500) (401,237) (7,000) (1,368,103)
------------------------------------------------------------------------------------------------
Options exercised (594) (206,111) -- --
---------- ---------- ---------- ----------
Options outstanding at December 31, 1994 -- $ -- -- $ --
========== ==========
========== ==========
</TABLE>
15 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C>
5. Management Fees and Management fees paid to the Manager were in accordance with the investment advisory
agreement
Other Transactions with the Fund which provides for an annual fee of .75% on the first $200 million of net assets
With Affiliates with a reduction of .03% on each $200 million thereafter to $800 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 applicable regulatory limit on Fund
expenses.
For the six months ended December 31, 1994, commissions (sales charges paid by investors)
on sales of Fund shares totaled $221,355, of which $55,532 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an
affiliated broker/dealer.
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 an approved service plan, the Fund 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 April 1, 1991), including amounts paid to brokers, dealers,
banks and other institutions. During the six months ended December 31, 1994, OFDI paid $2,966
to
an affiliated broker/dealer as reimbursement for personal service and maintenance expenses.
</TABLE>
16 Oppenheimer Time Fund
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------
Oppenheimer Time Fund
------------------------------------------------------------------------------------------------
==========================================================
==========================================================
===============
<S> <C>
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Jay W. Tracey, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
==========================================================
==========================================================
===============
Investment Advisor Oppenheimer Management Corporation
==========================================================
==========================================================
===============
Distributor Oppenheimer Funds Distributor, Inc.
==========================================================
==========================================================
===============
Transfer and Shareholder Oppenheimer Shareholder Services
Servicing Agent
==========================================================
==========================================================
===============
Custodian of The Bank of New York
Portfolio Securities
==========================================================
==========================================================
===============
Independent Auditors KPMG Peat Marwick LLP
==========================================================
==========================================================
===============
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records of the Fund without
examination by the independent auditors. This is a copy of a report to shareholders of
Oppenheimer Time Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Time Fund. For material information concerning the Fund, see the Prospectus.
</TABLE>
17 Oppenheimer Time Fund
<PAGE>
OppenheimerFunds Family
OppenheimerFunds offers over 35 funds designed to
fit virtually every investment goal. Whether you're
investing for retirement, your children's education
or tax-free income, we have the funds to help you
seek your objective.
When you invest with OppenheimerFunds, you can feel
comfortable knowing that you are investing with a
respected financial institution with over 30 years
of experience in helping people just like you reach
their financial goals. And you're investing with a
leader in global, growth stock and flexible fixed
income investments--with over 1.8 million
shareholder accounts and more than $29 billion
under Oppenheimer's management and that of our
affiliates.
As an OppenheimerFunds shareholder, you can easily
exchange shares of eligible funds of the same class
by mail or by telephone for a small administrative
fee.(1) For more information on OppenheimerFunds,
please contact your financial advisor or call us at
1-800-525-7048 for a prospectus. You may also write
us at the address shown on the back cover. As
always, please read the prospectus carefully before
you invest.
Stock Funds Discovery Fund Global Fund
Global Emerging Growth Fund(2) Oppenheimer Fund
Time Fund Value Stock Fund
Target Fund Gold & Special Minerals Fund
Growth Fund(3)
Stock & Bond Funds Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
Bond Funds High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
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Income Fund
Strategic Investment Grade Bond Fund
Tax-Exempt Funds New York New Jersey Tax-Exempt Fund(4)
Tax-Exempt Fund(4)
California Tax-Exempt Fund(4) Tax-Free Bond Fund
Pennsylvania Insured Tax-Exempt Bond Fund
Tax-Exempt Fund(4)
Florida Intermediate Tax-Exempt Bond Fund
Tax-Exempt Fund(4)
Money Market Funds Money Market Fund Cash Reserves
1. The fee is waived for PhoneLink exchanges
between existing accounts. Exchange privileges
are subject to change or termination.
2. Formerly Oppenheimer Bio-Tech Fund and Global
Environment Fund.
3. Formerly Special Fund.
4. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer
Funds Distributor, Inc., Two World Trade Center,
New York, NY 10048-0203. (c) Copyright 1995
Oppenheimer Management Corporation. All rights
reserved.
18 Oppenheimer Time Fund
<PAGE>
"How may I help you?"
As an OppenheimerFunds shareholder, some special privileges are available to
you. Whether it's automatic investment plans, informative newsletters and
hotlines, or ready account access, you can benefit from services designed to
make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling
our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your OppenheimerFunds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. It also gives you the ability to make transactions using your
touch-tone phone. Of course, you can always speak with a Customer Service
Representative during business hours.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, non-profit
organization made up of over 3,200 customer service management professionals
from around the country, hon-ored the OppenheimerFunds' transfer agent,
Oppenheimer Shareholder Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
Information
General Information
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
Jennifer Leonard, Customer Service Representative Oppenheimer Shareholder
Services
PhoneLink
24 hours a day, automated
information and transactions
1-800-533-3310
Telecommunications Device
for the Deaf (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful messages on the
economy and issues that affect your investments
1-800-835-3104
RS0380.001.0295
[logo] OppenheimerFunds
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver,CO
<PAGE>
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES for the 12 month
period ended December 31, 1994 (Unaudited) Oppenheimer Target Fund and
Oppenheimer Time Fund
<TABLE>
<CAPTION>
Pro Forma
Combined
Oppenheimer Oppenheimer Oppenheimer
Target Time Target
Fund Fund(1) Fund
<S> <C> <C> <C>
Assets
Investments, at value* $303,014,138 $324,451,906 $627,466,044
Cash 253,694 704,827 958,521
Receivables:
Investments sold 2,200,708 3,122,730 5,323,438
Dividends and interest 440,133 128,966 569,099
Shares of beneficial interest sold 133,504 928,140 1,061,644
Other 243,911 85,809 329,720
Total assets 306,286,088 329,422,378 635,708,466
Liabilities
Payables and other liabilities:
Investments purchased 1,852,737 -- 1,852,737
Shares of beneficial interest redeemed 982,557 1,521,490 2,504,047
Dividends 146,484 989,245 1,135,729
Distribution and service plan fees 130,930 129,960 260,890
Other 409,156 371,382 780,538
Total liabilities 3,521,864 3,012,077 6,533,941
Net Assets $302,764,224 $326,410,301 $629,174,525
Net Asset Value and Redemption Price Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $301,698,437, $326,410,301,
and $628,108,738 and 13,330,877, 22,387,554,
and 27,754,663 shares of beneficial interest outstanding
for Target Fund Class A, Time Fund, and Combined
Target Fund Class A, respectively). $22.63 $14.58 $22.63
Class C Shares:
Net asset value and redemption price per share (based
on net assets of $1,065,787 and 47,375 shares of
beneficial interest outstanding) $22.50 -- $22.50
*Cost $251,588,215 $281,347,553 $532,935,768
<FN>
(1) Time Fund shares will be exchanged for Target Fund Class A shares.
</TABLE>
<PAGE>
PRO FORMA COMBINING STATEMENT OF OPERATIONS for the 12 month period ended
December 31, 1994 (Unaudited) Oppenheimer Target Fund and Oppenheimer Time Fund
<TABLE>
<CAPTION>
Pro Forma
Combined
Oppenheimer Oppenheimer Pro Oppenheimer
Target Time Forma Target
Fund Fund Adjustments Fund
<S> <C> <C> <C> <C>
Investment Income:
Interest $1,583,627 $2,315,160 -- $3,898,787
Dividends 4,540,238 1,396,097 -- 5,936,335
Total income 6,123,865 3,711,257 -- 9,835,122
Expenses:
Management fees 2,475,491 2,583,243 ($261,861)(1) 4,796,873
Distribution and service plan fees:
Class A 325,662 366,942 692,604
Class C 4,640 -- 4,640
Transfer and shareholder
servicing agent fees 334,992 379,576 -- 714,568
Shareholder reports 324,811 233,855 (88,089)(2) 470,577
Trustees' fees and expenses 104,631 81,030 -- 185,661
Custodian fees and expenses 51,086 29,283 -- 80,369
Legal and auditing fees 41,829 39,684 (15,000)(2) 66,513
Registration and filing fees:
Class A 826 -- -- 826
Class C 375 -- -- 375
Other 119,641 145,994 -- 265,635
Total expenses 3,783,984 3,859,607 (364,950) 7,278,641
Net Investment Income Loss 2,339,881 (148,350) 364,950 2,556,481
Realized and Unrealized
Gain (Loss) on Investments and Options Written:
Net realized gain (loss) from:
Investments 38,815,275 29,807,195 -- 68,622,470
Closing of options written -- (1,380,480) -- (1,380,480)
Net realized gain (loss) 38,815,275 28,426,715 -- 67,241,990
Net change in unrealized appreciation or
depreciation on investments
and options written (40,560,449) (78,237,111) -- (118,797,560)
Net Realized and Unrealized Gain (Loss)
on Investments and Options Written (1,745,174) (49,810,396) -- (51,555,570)
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 594,707 ($49,958,746) $364,950 ($48,999,089)
<FN>
(1) Calculated in accordance with the proposed investment advisory agreement of Oppenheimer Target Fund (.75% on the
first $200 million of average annual net assets, with a reduction of .03% on each $200 million thereafter to $800 million,
and .60% on net assets in excess of $800 million). This assumes that the management fee structure was in place for the
entire period.
(2) Estimated fee for similar size funds.
</TABLE>
<PAGE>
Pro Forma Combining Statement of Investments December 31, 1994 (Unaudited)
Oppenheimer Target Fund and Oppenheimer Time Fund
<TABLE>
<CAPTION>
Face Amount Market Value
Pro Forma Pro Forma
Target Time Combined Target Time Combined
<S> <C> <C> <C> <C> <C> <C>
Repurchase
Agreements
Repurchase agreement
with First Chicago
Capital Markets,
6%, dated
12/30/94, to be
repurchased at
$66,444,267 and
$52,535,000 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
$49,926,894 and
U.S. Treasury
Bonds,
10.75%-14.25%,
2/15/02-8/15/05,
with a value of
$4,638,710 and
$3,667,654 (Cost
$66,400,000 and
$52,500,000),
respectively.
Combined=$118,979,267,
$113,072,528 and
$118,900,000,
respectively $66,400,000 $52,500,000 $118,900,000 $66,400,000 $52,500,000 $118,900,000
Convertible
Corporate Bonds
and Notes
Hotels/Lodging
Hospitality Franc
Systems, Inc.,
4.50% Cv. Sr. Sub.
Nts., 10/1/99 0 1,200,000 1,200,000 0 1,164,000 1,164,000
Financial
First Financial
Management Corp.,
5% Cv. Debs.,
12/15/99 0 2,000,000 2,000,000 0 2,075,000 2,075,000
Technology
Solectron Corp., 0%
Cv. Liquid Yield
Option Sub. Nts.,
5/5/12 0 7,300,000 7,300,000 0 4,170,125 4,170,125
Total Convertible
Corporate Bonds
and Notes (Cost
$7,019,157) 0 7,409,125 7,409,125
Shares
Common Stocks
Basic Materials
Chemicals
Geon Co. (The) 0 70,000 70,000 0 1,916,250 1,916,250
Georgia Gulf Corp. (1) 75,000 120,000 195,000 2,915,625 4,665,000 7,580,625
2,915,625 6,581,250 9,496,875
Steel
Birmingham Steel
Corp. 0 175,000 175,000 0 3,500,000 3,500,000
LTV Corp. (1) 215,000 0 215,000 3,493,750 0 3,493,750
3,493,750 3,500,000 6,993,750
Consumer Cyclicals
Auto Parts: After
Market
Breed Technologies,
Inc. 0 112,000 112,000 0 3,178,000 3,178,000
Goodyear Tire &
Rubber Co. 40,000 0 40,000 1,345,000 0 1,345,000
Lear Seating Corp.
(1) 0 80,000 80,000 0 1,590,000 1,590,000
1,345,000 4,768,000 6,113,000
Broadcast Media
Comcast Corp., Cl. A
Special 0 200,000 200,000 0 3,137,500 3,137,500
Multimedia, Inc.
(1) 62,500 0 62,500 1,781,250 0 1,781,250
Viacom, Inc., Cl. B
(1) 0 75,768 75,768 0 3,078,075 3,078,075
1,781,250 6,215,575 7,996,825
1
<PAGE>
Entertainment
WMS Industries, Inc.
(1) 65,000 0 65,000 1,218,750 0 1,218,750
Hotels/Motels
Carnival Corp.,
Inc., Cl. A 0 176,000 176,000 0 3,740,000 3,740,000
Household
Furnishings and
Appliances
Sunbeam-Oster, Inc. 0 306,700 306,700 0 7,897,525 7,897,525
Leisure Time
Acclaim
Entertainment,
Inc. (1) 25,000 0 25,000 359,375 0 359,375
Brunswick Corp. 275,000 150,000 425,000 5,190,625 2,831,250 8,021,875
Harley-Davidson,
Inc. 80,000 0 80,000 2,240,000 0 2,240,000
Outboard Marine
Corp. 75,000 0 75,000 1,471,875 0 1,471,875
9,261,875 2,831,250 12,093,125
Restaurants
Brinker
International,
Inc. (1) 0 70,000 70,000 0 1,268,750 1,268,750
Shoney's, Inc. (1) 95,000 0 95,000 1,211,250 0 1,211,250
1,211,250 1,268,750 2,480,000
Retail Stores:
Department Stores
Bradlees, Inc. 10,000 0 10,000 116,250 0 116,250
Dollar General Corp. 50,000 165,000 215,000 1,500,000 4,950,000 6,450,000
Kohl's Corp. (1) 0 62,000 62,000 0 2,464,500 2,464,500
Nordstrom, Inc. 0 75,000 75,000 0 3,150,000 3,150,000
1,616,250 10,564,500 12,180,750
Retail Stores:
General
Merchandise Chains
Waban, Inc. (1) 90,000 0 90,000 1,597,500 0 1,597,500
Wal-Mart Stores,
Inc. 185,000 0 185,000 3,931,250 0 3,931,250
5,528,750 0 5,528,750
Retail: Specialty
Ann Taylor Stores,
Inc. (1) 0 90,000 90,000 0 3,093,750 3,093,750
General Nutrition
Cos., Inc. 0 164,200 164,200 0 4,761,800 4,761,800
Heilig-Meyers Co. 0 100,000 100,000 0 2,525,000 2,525,000
Home Depot, Inc.
(The) 30,000 0 30,000 1,380,000 0 1,380,000
Intelligent
Electronics, Inc. 73,200 0 73,200 585,600 0 585,600
Michaels Stores,
Inc. (1) 82,900 0 82,900 2,880,775 0 2,880,775
Micro Warehouse,
Inc. (1) 0 130,000 130,000 0 4,550,000 4,550,000
Office Depot, Inc.
(1) 0 150,000 150,000 0 3,600,000 3,600,000
OfficeMax, Inc.
(1) 0 61,000 61,000 0 1,616,500 1,616,500
Staples, Inc. (1) 0 105,000 105,000 0 2,598,750 2,598,750
Toys 'R' Us, Inc.
(1) 40,000 0 40,000 1,220,000 0 1,220,000
Viking Office
Products, Inc.
(1) 0 155,000 155,000 0 4,746,875 4,746,875
6,066,375 27,492,675 33,559,050
Retail: Specialty
Apparel
Gap, Inc. (The) 65,000 0 65,000 1,982,500 0 1,982,500
Shoes
Nike, Inc., Cl. B 0 105,000 105,000 0 7,835,625 7,835,625
Textiles: Apparel
Manufacturers
Tommy Hilfiger Corp.
(1) 0 126,000 126,000 0 5,685,750 5,685,750
Toys
Mattel, Inc. 30,000 0 30,000 753,750 0 753,750
Consumer
Non-Cyclicals
Beverages: Alcoholic
Canandaigua Wine
Co., Inc., Cl. A
(1) 0 94,000 94,000 0 3,572,000 3,572,000
Beverages: Soft
Drinks
Coca-Cola Co. (The) 100,000 0 100,000 5,150,000 0 5,150,000
PepsiCo, Inc. 50,000 0 50,000 1,812,500 0 1,812,500
6,962,500 0 6,962,500
2
<PAGE>
Drugs
Elan Corp. PLC, ADR
(1) 0 110,000 110,000 0 3,918,750 3,918,750
Merck & Co., Inc. 40,000 0 40,000 1,525,000 0 1,525,000
Pfizer, Inc. 35,000 0 35,000 2,703,750 0 2,703,750
R.P. Scherer Corp.
(1) 0 190,000 190,000 0 8,621,250 8,621,250
Roberts
Pharmaceutical
Corp. (1) 0 115,000 115,000 0 3,651,250 3,651,250
Schering-Plough
Corp. 75,000 0 75,000 5,550,000 0 5,550,000
9,778,750 16,191,250 25,970,000
Food Processing
ConAgra, Inc. 45,000 0 45,000 1,406,250 0 1,406,250
IBP, Inc. 25,000 0 25,000 756,250 0 756,250
2,162,500 0 2,162,500
Healthcare:
Diversified
Abbott Laboratories 125,000 0 125,000 4,078,125 0 4,078,125
American Home
Products Corp. 37,400 0 37,400 2,346,850 0 2,346,850
Bristol-Myers Squibb
Co. 50,000 0 50,000 2,893,750 0 2,893,750
Warner-Lambert Co. 50,000 0 50,000 3,850,000 0 3,850,000
13,168,725 0 13,168,725
Healthcare:
Miscellaneous
Amgen, Inc. (1) 60,000 0 60,000 3,540,000 0 3,540,000
Chiron Corp. (1) 0 50,000 50,000 0 4,018,750 4,018,750
Coram Healthcare
Corp. (1) 0 100,000 100,000 0 1,650,000 1,650,000
Genentech, Inc.
(1) 0 75,000 75,000 0 3,403,125 3,403,125
Health Care and
Retirement Corp.
(1) 0 120,000 120,000 0 3,615,000 3,615,000
Horizon Healthcare
Corp. (1) 0 180,000 180,000 0 5,040,000 5,040,000
Integrated Health
Services, Inc. 0 143,500 143,500 0 5,668,250 5,668,250
Lincare Holdings,
Inc. (1) 0 150,000 150,000 0 4,350,000 4,350,000
PacifiCare Health
Systems, Inc.
(1) 0 41,900 41,900 0 2,765,400 2,765,400
U.S. Healthcare,
Inc. 100,000 0 100,000 4,125,000 0 4,125,000
United Healthcare
Corp. 80,000 0 80,000 3,610,000 0 3,610,000
11,275,000 30,510,525 41,785,525
Hospital Management
HealthCare COMPARE
Corp. (1) 70,000 0 70,000 2,388,750 0 2,388,750
Quorum Health Group,
Inc. (1) 0 120,000 120,000 0 2,280,000 2,280,000
2,388,750 2,280,000 4,668,750
Household Products
Colgate-Palmolive
Co. 40,000 0 40,000 2,535,000 0 2,535,000
Medical Products
Cordis Corp. (1) 75,000 0 75,000 4,537,500 0 4,537,500
Medtronic, Inc. 50,000 0 50,000 2,781,250 0 2,781,250
7,318,750 0 7,318,750
Retail Stores: Drug
Stores
Revco D.S., Inc.
(1) 0 240,000 240,000 0 5,670,000 5,670,000
Tobacco
Philip Morris Cos.,
Inc. 15,000 0 15,000 862,500 0 862,500
UST, Inc. 95,000 0 95,000 2,636,250 0 2,636,250
3,498,750 0 3,498,750
Energy
Oil Well Services
and Equipment
Halliburton Co. 0 100,000 100,000 0 3,312,500 3,312,500
Industrial
Commercial Services
Cintas Corp. 0 140,000 140,000 0 4,970,000 4,970,000
Manpower, Inc. 0 100,000 100,000 0 2,812,500 2,812,500
3
<PAGE>
Reynolds & Reynolds
Co., Cl. A 0 150,000 150,000 0 3,750,000 3,750,000
Sensormatic
Electronics Corp. 0 200,000 200,000 0 7,200,000 7,200,000
0 18,732,500 18,732,500
Conglomerates
Canadian Pacific
Ltd. 150,000 0 150,000 2,250,000 0 2,250,000
Electrical Equipment
General Electric Co. 100,000 0 100,000 5,100,000 0 5,100,000
Molex, Inc., Cl. A 0 193,750 193,750 0 6,006,250 6,006,250
5,100,000 6,006,250 11,106,250
Manufacturing:
Diversified
Industrials
Mark IV Industries,
Inc. 20,000 0 20,000 395,000 0 395,000
Railroads
Illinois Central
Corp. 30,000 0 30,000 922,500 0 922,500
Southern Pacific
Rail Corp. (1) 0 188,000 188,000 0 3,407,500 3,407,500
922,500 3,407,500 4,330,000
Financial
Commercial Finance
MBNA Corp. 40,000 0 40,000 935,000 0 935,000
Financial Services:
Miscellaneous
Advanta Corp., Cl. A 175,000 0 175,000 4,593,750 0 4,593,750
Advanta Corp., Cl. B 0 170,000 170,000 0 4,292,500 4,292,500
Bear Stearns Cos.,
Inc. (The) 90,000 0 90,000 1,383,750 0 1,383,750
Countrywide Credit
Industries, Inc. 20,000 0 20,000 260,000 0 260,000
Federal Home Loan
Mortgage Corp. 15,000 0 15,000 757,500 0 757,500
Federal National
Mortgage Assn. 45,000 0 45,000 3,279,375 0 3,279,375
First USA, Inc. 65,000 125,000 190,000 2,136,875 4,109,375 6,246,250
Green Tree Financial
Corp. 190,000 90,000 280,000 5,771,250 2,733,750 8,505,000
PaineWebber Group,
Inc. 156,800 0 156,800 2,352,000 0 2,352,000
Student Loan
Marketing Assn. 75,000 0 75,000 2,437,500 0 2,437,500
Sunamerica, Inc. 125,100 0 125,100 4,534,875 0 4,534,875
Travelers, Inc. 75,000 0 75,000 2,437,500 0 2,437,500
29,944,375 11,135,625 41,080,000
Insurance: Life
AFLAC, Inc. 159,750 0 159,750 5,112,000 0 5,112,000
Equitable of Iowa
Cos., Inc. 0 40,000 40,000 0 1,130,000 1,130,000
NWNL Companies, Inc. 60,000 0 60,000 1,740,000 0 1,740,000
6,852,000 1,130,000 7,982,000
Major Banks: Other
Bank of Boston Corp. 175,000 0 175,000 4,528,125 0 4,528,125
Major Banks:
Regional
First Interstate
Bancorp 40,000 40,000 80,000 2,705,000 2,705,000 5,410,000
KeyCorp 100,000 0 100,000 2,500,000 0 2,500,000
Midlantic Corp. 100,000 0 100,000 2,650,000 0 2,650,000
NationsBank Corp. 100,000 0 100,000 4,512,500 0 4,512,500
Northern Trust Corp. 10,000 0 10,000 350,000 0 350,000
Shawmut National
Corp. 245,000 0 245,000 4,011,875 0 4,011,875
Signet Banking Corp. 155,000 0 155,000 4,436,875 0 4,436,875
SouthTrust Corp. 157,500 0 157,500 2,835,000 0 2,835,000
SunTrust Banks, Inc. 10,000 0 10,000 477,500 0 477,500
24,478,750 2,705,000 27,183,750
Money Center Banks
Chase Manhattan
Corp. 33,500 0 33,500 1,151,563 0 1,151,563
Savings and
Loans/Holding Cos.
California Federal
Bank (1) 190,000 0 190,000 2,066,250 0 2,066,250
Technology
4
<PAGE>
Communication:
Equipment/
Manufacturers
Andrew Corp. (1) 0 100,000 100,000 0 5,225,000 5,225,000
DSC Communications
Corp. (1) 0 60,000 60,000 0 2,152,500 2,152,500
Tellabs, Inc. (1) 0 80,000 80,000 0 4,460,000 4,460,000
0 11,837,500 11,837,500
Computer Software
and Services
Automatic Data
Processing, Inc. 35,000 0 35,000 2,047,500 0 2,047,500
BMC Software, Inc.
(1) 100,000 0 100,000 5,687,500 0 5,687,500
Computer Associates
International,
Inc. 65,000 0 65,000 3,152,500 0 3,152,500
Computer Sciences
Corp. (1) 23,100 0 23,100 1,178,100 0 1,178,100
Compuware Corp.
(1) 0 126,000 126,000 0 4,536,000 4,536,000
CUC International,
Inc. (1) 0 140,000 140,000 0 4,690,000 4,690,000
First Data Corp. 0 200,000 200,000 0 9,475,000 9,475,000
First Financial
Management Corp. 0 20,000 20,000 0 1,232,500 1,232,500
General Motors
Corp., Cl. E 25,000 0 25,000 962,500 0 962,500
Informix Corp. (1) 0 50,000 50,000 0 1,606,250 1,606,250
Lotus Development
Corp. (1) 0 80,000 80,000 0 3,280,000 3,280,000
Microsoft Corp.
(1) 100,000 0 100,000 6,112,500 0 6,112,500
Novell, Inc. (1) 35,000 0 35,000 599,375 0 599,375
Oracle Systems Corp.
(1) 0 60,600 60,600 0 2,673,975 2,673,975
Pyxis Corp. (1) 0 210,000 210,000 0 3,990,000 3,990,000
Sybase, Inc. (1) 20,000 0 20,000 1,040,000 0 1,040,000
20,779,975 31,483,725 52,263,700
Computer Systems
American Power
Conversion Corp.
(1) 115,000 65,000 180,000 1,883,125 1,064,375 2,947,500
Cabletron Systems,
Inc. (1) 50,000 57,500 107,500 2,325,000 2,673,750 4,998,750
Compaq Computer
Corp. (1) 90,000 0 90,000 3,555,000 0 3,555,000
EMC Corp. (1) 0 370,000 370,000 0 8,001,250 8,001,250
Quantum Corp. (1) 94,000 0 94,000 1,421,750 0 1,421,750
Seagate Technology
(1) 20,000 0 20,000 480,000 0 480,000
3Com Corp. (1) 100,000 0 100,000 5,156,250 0 5,156,250
Western Digital
Corp. (1) 375,000 0 375,000 6,281,250 0 6,281,250
21,102,375 11,739,375 32,841,750
Electronics:
Instrumentation
Linear Technology
Corp. 60,000 0 60,000 2,970,000 0 2,970,000
Teradyne, Inc. (1) 0 100,000 100,000 0 3,387,500 3,387,500
2,970,000 3,387,500 6,357,500
Electronics:
Semiconductors
Intel Corp. 125,000 0 125,000 7,984,375 0 7,984,375
Novellus Systems,
Inc. (1) 7,500 0 7,500 375,000 0 375,000
VLSI Technology,
Inc. (1) 35,000 0 35,000 420,000 0 420,000
8,779,375 0 8,779,375
Telecommunications
ALC Communications
Corp. (1) 0 190,000 190,000 0 5,913,750 5,913,750
AT & T Corp. 80,000 0 80,000 4,020,000 0 4,020,000
LDDS Communications,
Inc. (1) 0 281,774 281,774 0 5,476,982 5,476,982
4,020,000 11,390,732 15,410,732
Utilities
Electric Companies
Empresa Nacional de
Electricidad SA,
Sponsored ADR 50,000 0 50,000 2,025,000 0 2,025,000
Telephone
Telefonos de Mexico
SA, Sponsored ADR 50,000 0 50,000 2,050,000 0 2,050,000
5
<PAGE>
Total Common Stocks
(Cost
$185,188,215,
$220,147,018,
Combined
$405,335,233) 236,614,138 262,872,882 499,487,020
Preferred Stocks
AK Steel Holding
Corp., 7% Cv.
Stock Appreciation
Income Linked
Securities (Cost
$1,537,500) 0 50,000 50,000 0 1,562,500 1,562,500
Units
Rights, Warrants and
Certificates
Viacom, Inc., Cl. B
Rts., Exp. 9/95 0 95,000 95,000 0 106,875 106,875
Windmere Corp. Wts.,
Exp. 1/98 0 4,727 4,727 0 0 0
Xoma Corp. Wts.,
Exp. 6/95 0 5,511 5,511 0 524 524
Total Rights,
Warrants and
Certificates (Cost
$143,878) 0 107,399 107,399
Total Investments,
at Value (Cost
$251,588,215,
$281,347,553,
Combined
$532,935,768) 100.1% 99.4% 303,014,138 324,451,906 627,466,044
Liabilities in
Excess of Other
Assets/Other
Assets Net of
Liabilities (0.1) 0.6 (249,914) 1,958,395 1,708,482
Net Assets 100.0% 100.0% $302,764,224 $326,410,301 $629,174,525
</TABLE>
1. Non-income producing security.
<PAGE>
OPPENHEIMER TARGET FUND
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VIII of Registrant's Agreement and
Declaration of Trust filed as Exhibit 24(b)(1) to Registrant's
Registration Statement and incorporated herein by reference.
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 16. Exhibits
(1) (i) Amended and Restated Declaration of Trust dated
4/28/93; Filed with Post-Effective Amendment No.
27 to Registrant's Registration Statement, 3/2/94,
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 the Registrant's
Statement No. 27, 2/25/94, and incorporated herein
by reference.
(2) By-Laws adopted 8/6/87: Previously filed with
Registrant's Form SE for its Form N-SAR for the fiscal
year ending 12/31/87, and incorporated herein by
reference.
(3) Not applicable.
(4) Agreement and Plan of Reorganization: See Exhibit A to
Part A of this Registration Statement.
(5) Specimen Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 27, 3/2/94 and
incorporated herein by reference.
(6) Investment Advisory Agreement dated 6/20/91: Previously
filed with Registrant's Post-Effective Amendment No. 23,
2/8/92, and incorporated herein by reference.
(7) (i) General Distributor's Agreement dated 12/10/92:
Previously filed with Registrant's Post-Effective
Amendment No. 27, 3/2/94, and incorporated herein
by reference.
(ii) Prototype Oppenheimer Fund Management, Inc. Dealer
Agreement: Previously 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) Prototype Oppenheimer Fund Management, Inc. Broker
Agreement: Previously filed with Post-Effective
Amendment No. 14 of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850), 9/30/94, and incorporated
herein by reference.
(iv) Prototype Oppenheimer Fund Management, Inc. Agency
Agreement: Previously filed with Post-Effective
Amendment No. 14 of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850), 9/30/94, and incorporated
herein by reference.
(v) Broker Agreement between Oppenheimer Fund
Management, Inc. and Newbridge Securities, dated
10/1/86: Previously filed with Post-Effective
Amendment No. 25 of Oppenheimer Growth Fund (Reg.
No. 2-45272), 11/1/86, 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.
(8) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant - 6/7/90): Previously filed with
Post-Effective Amendment No. 97 of Oppenheimer Fund
(Reg. No. 2-14586), 8/30/90, and incorporated herein by
reference.
(9) Custody Agreement dated November 12, 1992 between
Registrant and The Bank of New York: Previously filed
with Registrant's Post-Effective Amendment No. 25,
4/23/93, and incorporated herein by reference.
(10) Service Plan and Agreement dated 6/10/93 under Rule 12b-
1 of the Investment Company Act of 1940 for Class A
shares distribution: Filed with Registrant's Post-
Effective Amendment No. 28, 4/29/94 and incorporated
herein by reference, Distribution Plan and Agreement
dated 12/1/93 under Rule 12b-1 of the Investment Company
Act of 1940 for Class C shares distribution: Filed with
Registrant's Post-Effective Amendment No. 27, 3/2/94,
and incorporated herein by reference.
(11) Opinion and Consent of Counsel dated 5/1/87: Previously
filed with Registrant's Pre-Effective Amendment No. 1,
5/1/87, and incorporated herein by reference.
(12) Tax Opinion Relating to the Reorganization: To be filed
by amendment.
(13) Not applicable.
(14) Consent of KPMG Peat Marwick LLP: Filed herewith.
(15) Not applicable.
(16) Not applicable
(17) Declaration of Registrant under Rule 24f-2: Filed
herewith.
Item 17. Undertakings
(1) Not applicable.
(2) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 13th day of April, 1995.
OPPENHEIMER TARGET FUND
By: /s/ Donald W. Spiro
---------------------------
Donald W. Spiro, President
Attest:
/s/ Andrew J. Donohue
_ _ _ _ _ _ _ _ _ _ _ _
Andrew J. Donohue, Secretary
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:
Signatures Title Date
- ---------- ----- ----
/s/ George Bowen Chairman of the April 13, 1995
_________________ Board of Trustees
George Bowen
/s/ Leo Cherne Trustee April 13, 1995
- ---------------
Leo Cherne
/s/ Edmund T. Delaney Trustee April 13, 1995
- ----------------------
Edmund T. Delaney
/s/ Robert G. Galli Trustee April 13, 1995
- -------------------
Robert G. Galli
/s/ Leon Levy Chairman of the
- -------------- Board of Trustees April 13, 1995
Leon Levy
/s/ Benjamin Lipstein Trustee April 13, 1995
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan Trustee April 13, 1995
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall Trustee April 13, 1995
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan Trustee April 13, 1995
- --------------------
Edward V. Regan
/s/ Sidney M. Robbins Trustee April 13, 1995
- ----------------------
Sidney M. Robbins
/s/ Russell S. Reynolds, Jr. Trustee April 13, 1995
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Donald W. Spiro President, Principal
- -------------------- Executive Officer
Donald W. Spiro and Trustee April 13, 1995
/s/ Pauline Trigere Trustee April 13, 1995
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter Trustee April 13, 1995
- -----------------------
Clayton K. Yeutter
<PAGE>
OPPENHEIMER TARGET FUND
EXHIBIT INDEX
Form N-14
Item No.
- ---------
14 Independent Auditors' Consent
17 Declaration of the Registrant under Rule 24f-2
INDEPENDENT AUDITORS' CONSENT
The Boards of Trustees
Oppenheimer Target Fund and
Oppenheimer Time Fund:
We consent to the incorporation by reference in the registration statement
(No. 2-69719) on Form N-14 of Oppenheimer Target Fund of our report dated
January 23, 1995, appearing in the 1994 Annual Report of Oppenheimer
Target Fund and our report dated July 22, 1994, appearing in the 1994
Annual Report of Oppenheimer Time Fund and to the references to our Firm
under the headings "Tax Consequences of the Reorganization" and "Tax
Aspects of the Reorganization" in the registration statement.
/s/KPMG Peat Marwick LLP
- ------------------------
KPMG Peat Marwick LLP
Denver, Colorado
April 12, 1995
February 28, 1995
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Attn.: Mr. Frank Donaty, Jr.
Mrs. Patricia P. Williams
Re: Oppenheimer Target Fund/Reg. No. 2-69719, File No. 811-3105
To the Securities and Exchange Commission:
Enclosed for your information and files is a copy of an
electronic ("EDGAR") filing made pursuant to Rule 24f-2 of the Investment
Company Act of 1940 (the "1940 Act") on February 27, 1995 on behalf of
Oppenheimer Target Fund (the "Fund"), accompanied by an opinion of counsel
for the registration of additional shares of the Fund. The filing fee of
$363, calculated at the rate of 1/29 of 1% of the value of the Fund's
shares sold in excess of the shares redeemed for the fiscal year ended
December 31, 1994, was wired to the SEC's account at Mellon Bank on
February 21, 1995 (Fed Wire No. 2736) and referenced this filing. The
Fund has previously registered an indefinite number of shares pursuant to
Rule 24f-2.
The purpose of the Notice was to make definite the registration
of shares of the Fund in reliance on Rule 24f-2 as follows:
Class A Shares: 1,091,689 Class C Shares: 65,435
Very truly yours,
/s/ Katherine P. Feld
---------------------
Katherine P. Feld
Vice President
& Associate Counsel
(212) 323-0252
KPF/gl
Enclosures
cc: Ronald M. Feiman, Esq.
Lynn Coluccy
Gloria LaFond
<PAGE>
Rule 24f-2 Notice for Oppenheimer Target Fund
Two World Trade Center, New York, NY 10048-0203
(Registration No. 2-69719, File No. 811-3105)
NOTICE IS HEREBY GIVEN that Oppenheimer Target Fund having previously
filed by post-effective amendment to its registration statement a
declaration that an indefinite number of its shares of beneficial interest
were being registered pursuant to Rule 24f-2 of the Investment Company Act
of 1940, now elects to continue such indefinite registration.
(i) This Notice is being filed for the fiscal year ended December 31,
1994.
(ii) Shares registered other than pursuant to this Rule that remained
unsold at the beginning of the above fiscal year were as follows:
Class A Shares: 200,610 Class C Shares: -0-
(iii) Shares registered other than pursuant to this Rule during the above
fiscal year were as follows:
Class A Shares: 1,827,548 Class C Shares: -0-
(iv) The number of shares sold during the above fiscal year were as
follows: (1)
Class A Shares: 1,091,689 Class C Shares: 65,435
(v) Shares sold during the above fiscal year in reliance upon
registration pursuant to this Rule were as follows:
Class A Shares: 1,091,689 Class C Shares: 65,435
Pursuant to the requirements of the Investment Company Act of 1940, the
undersigned registrant has caused this notice to be signed on its behalf
this 22nd day of February, 1995.
Oppenheimer Target Fund
By /s/ Robert G. Zack
Robert G. Zack, Assistant Secretary
(1) The calculation of the aggregate sales price is made pursuant to Rule
24f-2 of the Investment Company Act of 1940. Based upon an actual
aggregate sales price for which such securities were sold during the
previous fiscal year shown below, reduced by an actual redemption price
of securities of the issuer redeemed during such previous fiscal year
shown below, the filing fee (calculated at the rate of 1/29 of 1% of net
sales) is as given below. Class A shares redeemed in excess of shares
sold to be re-registered total 2,601,426.
Difference
Value of Between Value
Value of Shares Sold & Value Filing
Shares Sold Redeemed Redeemed Fee
Class A $28,175,705 ($ 93,884,370) ($65,708,665) $-0-
Class C $ 1,619,304 ($ 565,808) $ 1,053,496 $363
Total $363
<PAGE>
GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN
114 West 47th Street New York, N.Y. 10036
Telephone: (212) 626-0800 Telecopier (212) 626-0799
February 21, 1995
Oppenheimer Target Fund
Two World Trade Center
New York, New York 10048-0203
Ladies and Gentlemen:
In connection with the public offering of shares of beneficial
interest, no par value, of Oppenheimer Target Fund (the "Fund"), we have
examined such records and documents and have made such further
investigation and examination as we deemed necessary for the purpose of
this opinion.
It is our opinion that the shares the registration of which is
made definite by the accompanying Rule 24f-2 Notice of the Fund were
legally issued, fully paid and non-assessable by the Fund to the extent
set forth in its Prospectus forming part of its Registration Statement
under the Securities Act of 1933, as amended.
We hereby consent to the filing of this opinion with said Notice.
Very truly yours,
/s/ GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
