Registration No. 2-11052
File No. 811-490
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. __ / /
POST-EFFECTIVE AMENDMENT NO. 79 / X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X/
Amendment No. 36 / X/
OPPENHEIMER TOTAL RETURN FUND, INC.
(Exact Name of Registrant as Specified in Charter)
_________________________________________________________________
6803 South Tucson Way, Englewood, Colorado 80112
(Address of Principal Executive Offices)
303-768-3200
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation, Suite 3400
Two World Trade Center, New York, New York 10048-0203
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X/ On April 18, 1996 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On _____________, pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On ________________ pursuant to paragraph (a)(2) of Rule 485
Registration of Shares Under the Securities Act of 1933
The Registrant has registered an indefinite number of shares
under the Securities Act of 1933 pursuant to Rule 24f-2 promulgated
under the Investment Company Act of 1940. A Rule 24f-2 Notice for
the Registrant's fiscal year ended December 31, 1996 was filed on
February 27, 1997. <PAGE>
FORM N-1A
OPPENHEIMER TOTAL RETURN FUND, INC.
Cross Reference Sheet
Part A of
Form N-1A Prospectus
Item No. Heading
- --------- ------------------
1 Front Cover Page
2 Expenses; Brief Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; How the Fund is Managed--
Organization and History; Investment Objectives and
Policies
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 How the Fund is Managed-Organization and History;
The Transfer Agent; Dividends, Capital Gains and
Taxes; Investment Objectives and Policies-Portfolio
Turnover
7 Shareholder Account Rules and Policies; How To Buy
Shares; How to Exchange Shares; Special Investor
Services; Service Plan for Class A Shares;
Distribution and Service Plan for Class B Shares;
Distribution and Service Plan for Class C Shares;
How to Sell Shares
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A
Item No. Heading In Statement of Additional Information
- --------- ----------------------------------------------
10 Cover Page
11 Cover Page
12 *
13 Investment Objectives and Policies; Other Investment
Techniques and Strategies; Additional Investment
Restrictions
14 How the Fund is Managed - Directors and Officers of
the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and Service
Plans
17 Brokerage Policies of the Fund
18 Additional Information About the Fund
19 Your Investment Account - How to Buy Shares; How to
Sell Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the
Fund
22 Performance of the Fund
23 *
- ----------------
* Not applicable or negative answer.
OPPENHEIMER TOTAL RETURN FUND, INC.
Prospectus dated April 18, 1997
Oppenheimer Total Return Fund, Inc. is a mutual fund with the
investment objective of seeking high total return. The Fund
intends to seek its investment objective through investment in
securities which it believes will provide a high return, including
investments which are expected to provide opportunities for growth
or to produce income, or both. The Fund is not restricted to any
specific type of security and may also use certain hedging
instruments to try to reduce risks of market fluctuations that
affect the value of the securities the Fund holds. Please refer to
"Investment Objective and Policies" for more information on the
types of securities the Fund invests in and refer to Investment
Risks for a discussion of the risks of investing in the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and
keep it for future reference. You can find more detailed
information about the Fund in the April 18, 1997 Statement of
Additional Information. For a free copy, call OppenheimerFunds
Services, the Fund's Transfer Agent, at 1-800-525-7048, or write to
the Transfer Agent at the address on the back cover. The Statement
of Additional Information has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by
reference (which means that it is legally part of this Prospectus).
(OppenheimerFunds logo)
Shares of the Fund are not deposits or obligations of any bank, are
not guaranteed by any bank, are not insured by the F.D.I.C. or any
other agency, and involve investment risks, including the possible
loss of the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
3 Expenses
5 A Brief Overview of the Fund
8 Financial Highlights
11 Investment Objective and Policies
12 Investment Risks
15 Investment Techniques and Strategies
22 How the Fund is Managed
23 Performance of the Fund
ABOUT YOUR ACCOUNT
28 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class Y Shares
42 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
44 How to Sell Shares
By Mail
By Telephone
46 How to Exchange Shares
47 Shareholder Account Rules and Policies
49 Dividends, Capital Gains and Taxes
A-1 Appendix A: Special Sales Charge Arrangements
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management
of its assets, administration, distribution of its shares and other
services, and those expenses are subtracted from the Fund's assets
to calculate the Fund's net asset value per share. All
shareholders therefore pay those expenses indirectly. Shareholders
pay other expenses directly, such as sales charges and account
transaction charges. The following tables are provided to help you
understand your direct expenses of investing in the Fund and your
share of the Fund's business operating expenses that you will bear
indirectly. The numbers below are based on the Fund's expenses
during its last fiscal year ended December 31, 1996.
- Shareholder Transaction Expenses are charges you pay when
you buy or sell shares of the Fund. Please refer to "About Your
Account," starting on pages 24, for an explanation of how and when
these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
Shares Shares Shares Shares
<S> <C> <C> <C> <C>
Maximum Sales Charge on 5.75% None None None
Purchases (as a % of
offering price)
Maximum Deferred Sales None(1) 5% in the 1% if shares None
Charge as a % of the lower of the first year, are redeemed
original offering price or declining to within 12
redemption proceeds) 1% in the months of
sixth year purchase(2)
and
eliminated
thereafter(2)
Maximum Sales Charge On None None None None
Reinvested Dividends
Exchange Fee None None None None
Redemption Fee None(3) None(3) None(3) None(3)
<FN>
(1) If you invest $1 million or more ($500,000 or more for purchases Retirement Plans as
defined in Class a Contingent Deferred Sales Charge on page 33 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. See
"How to Buy Shares -- Buying Class A Shares," below.
(2) See "How to Buy Shares - Buying Class B Shares" and "How to Buy Shares - Buying Class
C Shares" below for more information on contingent deferred sales charges.
(3) There is a $10 transaction fee for redemptions paid by Federal Funds wire, but not for
redemptions paid by check or by ACH transfer through AccountLink. See "How to Sell
Shares" below.
</TABLE>
- Annual Fund Operating Expenses are paid out of the Fund's
assets and represent the Fund's expenses in operating its business.
For example, the Fund pays management fees to its investment
adviser, OppenheimerFunds, Inc. (which is referred to in this
Prospectus as the "Manager"). The rates of the Manager's fees are
set forth in "How the Fund is Managed," below. The Fund has other
regular expenses for services, such as transfer agent fees,
custodial fees paid to the bank that holds the Fund's portfolio
securities, audit fees and legal expenses. Those expenses are
detailed in the Fund's Financial Statements in the Statement of
Additional Information.
Annual Fund Operating Expenses (as a Percentage of Average Net
Assets):
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
Shares Shares Shares Shares
Average Net Assets
<S> <C> <C> <C> <C>
Management Fees 0.53% 0.53% 0.53% 0.53%
12b-1 Plan Fees 0.18% 1.00% 1.00% None
Other Expenses 0.19% 0.18% 0.23% 0.24%
Total Fund Operating
Expenses 0.90% 1.71% 1.76% 0.77%
</TABLE>
The numbers in the table above are based upon the Fund's expenses
in its last fiscal year ended December 31, 1996. These amounts are
shown as a percentage of the average net assets of each class of
the Fund's shares for that year. The 12b-1 Plan Fees for Class A
shares are service plan (the maximum fee is 0.25% of average annual
net assets of that class) and for Class B and Class C shares are
the service plan (the maximum service fee is 0.25% of average
annual net assets of the class) and the asset-based sales charges
of 0.75%. These plans are described in greater detail in "How to
Buy Shares, below. The actual expenses for each class of shares
in future years may be more or less than the numbers in the table,
depending on a number of factors, including the actual value of the
Fund's assets represented by each class of shares.
- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples
shown below. Assume that you make a $1,000 investment in each
class of shares of the Fund, and that the Fund's annual return is
5%, and that its operating expenses for each class are the ones
shown in the Annual Fund Operating Expenses table 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 1,
3, 5 and 10 years:
1 year 3 years 5 years 10 years*
Class A Shares $66 $85 $104 $162
Class B Shares $67 $84 $113 $161
Class C Shares $28 $55 $95 $207
Class Y Shares $ 8 $25 $43 $95
If you did not redeem your investment, it would incur the
following expenses:
1 year 3 years 5 years 10 years*
Class A Shares $66 $85 $104 $162
Class B Shares $17 $54 $93 $161
Class C Shares $18 $55 $95 $207
Class Y Shares $8 $25 $43 $95
*In the first example, expenses include the Class A initial sales
charge and the applicable Class B or Class C contingent deferred
sales charge. In the second example, Class A expenses include the
initial sales charge but Class B and Class C expenses do not
include contingent deferred sales charges. The Class B expenses in
years 7 through 10 are based on the Class A expenses shown above,
because the Fund automatically converts your Class B shares into
Class A shares after 6 years. Because of the effect of the asset-
based sales charge and the contingent deferred sales charge on
Class B and Class C shares, long-term Class B and Class C
shareholders could pay the economic equivalent of an amount greater
than the maximum front-end sales charge allowed under applicable
regulations. For Class B shareholders, the automatic conversion of
Class B shares to Class A shares is designed to minimize the
likelihood that this will occur. Please refer to "How to Buy
Shares - Buying Class B Shares" for more information.
These examples show the effect of expenses on an investment, but
are not meant to state or predict actual or expected costs or
investment returns of the Fund, all of which may be more or less
than those shown.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below,
with references to the section of this Prospectus where more
complete information can be found. You should carefully read the
entire Prospectus before making a decision about investing in the
Fund. Keep the Prospectus for reference after you invest,
particularly for information about your account, such as how to
sell or exchange shares.
What Is The Fund's Investment Objective? The Fund's
investment objective is to seek high total return.
What Does the Fund Invest In? To achieve its objective, the
Fund primarily invests in securities which it believes will provide
a high return, including investments which are expected to provide
opportunities for growth or to produce income, or both. The Fund
may also write covered calls and use certain types derivative
investments and hedging instruments to try to manage investment
risks. These investments are more fully explained in "Investment
Objective and Policies" starting on page 11.
Who Manages the Fund? The Fund's investment adviser is
OppenheimerFunds, Inc, which (including subsidiaries) manages
investment company portfolios having over $60 billion in assets.
Prior to January 5, 1996, OppenheimerFunds, Inc. was known as
Oppenheimer Management Corporation. The Manager is paid an
advisory fee by the Fund, based on its assets. The Fund's
portfolio managers are Bruce Bartlett and Diane Sobin, who are
employed by the Manager. They are primarily responsible for the
selection of the Fund's securities. The Manager is paid an
advisory fee by the Fund, based on its assets. The Fund's Board of
Directors, elected by shareholders, oversees the investment adviser
and the portfolio manager. Please refer to "How the Fund is
Managed," starting on page 22 for more information about the
Manager and its fees.
How Risky is the Fund? All investments carry risks to some
degree. The Fund's investments in stocks and bonds are subject to
changes in their value from a number of factors such as changes in
general bond and stock market movements. The change in value of
particular stocks or bonds may result from an event affecting the
issuer, or changes in interest rates that can affect stock and bond
prices. These changes affect the value of the Fund's investments
and its share prices for each class of its shares. In the
Oppenheimer funds spectrum, the Fund is more aggressive than most
growth & income funds but less aggressive than aggressive growth
funds. In addition, there are certain risks associated with the
foreign securities the Fund may purchase and the hedging strategies
the Manager may utilize. While the Manager tries to reduce risks
by diversifying investments, by carefully researching securities
before they are purchased for the portfolio, and in some cases by
using hedging techniques, there is no guarantee of success in
achieving the Fund's objectives and your shares may be worth more
or less than their original cost when you redeem them. Please
refer to "Investment Objective and Policies" and Investment Risks
starting on page 12 for a more complete discussion of the Fund's
investment risks.
How Can I Buy Shares? You can buy shares through your dealer
or financial institution, or you can purchase shares directly
through the Distributor by completing an Application or by using an
Automatic Investment Plan under AccountLink. Please refer to "How
to Buy Shares" on page 28 for more details.
Will I Pay a Sales Charge to Buy Shares? The Fund offers
the individual investor three classes of shares. All classes have
the same investment portfolio but different expenses. Class A
shares are offered with a front-end sales charge, starting at
5.75%, and reduced for larger purchases. Class B and Class C
shares are offered without a front-end sales charge, but may be
subject to a contingent deferred sales charge if redeemed within 6
years or 12 months, respectively, of purchase. There are also
annual asset-based sales charges on Class B and Class C shares.
Please review "How To Buy Shares" starting on page 28 for more
details, including a discussion about factors you and your
financial advisor should consider in determining which class may be
appropriate for you.
How Can I Sell My Shares? Shares can be redeemed by mail
or by telephone call to the Transfer Agent on any business day, or
through your dealer. Please refer to "How to Sell Shares" starting
on page 44. The Fund also offers exchange privileges to other
Oppenheimer funds, described in "How To Exchange Shares" on page
46.
How Has the Fund Performed? The Fund measures its performance
by quoting its dividend yield, average annual total return and
cumulative total return, which measure historical performance.
Those yields and returns can be compared to the yields and returns
(over similar periods) of other funds. Of course, other funds may
have different objectives, investments, and levels of risk. The
Fund's performance can also be compared to a broad market index,
which we have done on pages 26 and 27. Please remember that past
performance does not guarantee future results.
Financial Highlights
The table on the following pages presents selected
financial information about the Fund, including per share data and
expense ratios and other data based on the Fund's average net
assets. This information has been audited by Deloitte & Touche
LLP, the Fund's independent auditors, whose report on the Fund's
financial statements for the fiscal year ended December 31, 1996 is
included in the Statement of Additional Information.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
- -------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995 1994 1993
1992
- ----------------------------------------------------------------------------------------------------------------
- --------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
<S> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 9.35 $ 7.80 $ 8.69 $ 7.84
$ 7.49
- ----------------------------------------------------------------------------------------------------------------
- --------------
Income (loss) from investment operations:
Net investment income .20 .23 .23 .18
.17
Net realized and unrealized gain (loss) 1.63 2.09 (.91) 1.45
.75
- ----------------------------------------------------------------------------------------------------------------
- --------------
Total income (loss) from investment
operations 1.83 2.32 (.68) 1.63
.92
- ----------------------------------------------------------------------------------------------------------------
- --------------
Dividends and distributions to shareholders:
Dividends from net investment income (.20) (.22) (.21) (.20)
(.20)
Distributions from net realized gain (1.21) (.55) -- (.58)
(.37)
- ----------------------------------------------------------------------------------------------------------------
- --------------
Total dividends and distributions
to shareholders (1.41) (.77) (.21) (.78)
(.57)
- ----------------------------------------------------------------------------------------------------------------
- --------------
Net asset value, end of period $ 9.77 $ 9.35 $ 7.80 $ 8.69
$ 7.84
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
TOTAL RETURN, AT NET ASSET VALUE(2) 19.73% 30.12% (7.86)% 21.24%
12.83%
- ----------------------------------------------------------------------------------------------------------------
- --------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,826,599 $1,550,710 $1,235,637 $1,223,395
$795,474
- ----------------------------------------------------------------------------------------------------------------
- --------------
Average net assets (in thousands) $1,684,726 $1,394,245 $1,261,729 $ 992,381
$662,917
- ----------------------------------------------------------------------------------------------------------------
- --------------
Ratios to average net assets:
Net investment income 1.96% 2.53% 2.88% 2.21%
2.68%
Expenses 0.90% 0.92% 1.01% 0.93%
0.96%
- ----------------------------------------------------------------------------------------------------------------
- --------------
Portfolio turnover rate(4) 117.5% 84.8% 117.2% 143.9%
143.5%
Average brokerage commission rate(5) $ 0.0591 $ 0.0532 -- --
--
CLASS A
- -------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1991 1990 1989 1988
1987
- ----------------------------------------------------------------------------------------------------------------
- --------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 6.13 $ 6.68 $ 6.35 $ 5.95
$ 6.76
- ----------------------------------------------------------------------------------------------------------------
- --------------
Income (loss) from investment operations:
Net investment income .24 .24 .27 .26
.25
Net realized and unrealized gain (loss) 1.91 (.49) .93 .53
.63
- ----------------------------------------------------------------------------------------------------------------
- --------------
Total income (loss) from investment
operations 2.15 (.25) 1.20 .79
.88
- ----------------------------------------------------------------------------------------------------------------
- --------------
Dividends and distributions to shareholders:
Dividends from net investment income (.23) (.24) (.28) (.27)
(.32)
Distributions from net realized gain (.56) (.06) (.59) (.12)
(1.37)
- ----------------------------------------------------------------------------------------------------------------
- --------------
Total dividends and distributions
to shareholders (.79) (.30) (.87) (.39)
(1.69)
- ----------------------------------------------------------------------------------------------------------------
- --------------
Net asset value, end of period $ 7.49 $ 6.13 $ 6.68 $ 6.35
$ 5.95
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
TOTAL RETURN, AT NET ASSET VALUE(2) 36.26% (3.86)% 19.25% 13.35%
12.35%
- ----------------------------------------------------------------------------------------------------------------
- --------------
- ----------------------------------------------------------------------------------------------------------------
- --------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 555,865 $ 396,240 $ 389,413 $ 314,039
$274,068
- ----------------------------------------------------------------------------------------------------------------
- --------------
Average net assets (in thousands) $ 475,741 $ 394,903 $ 356,994 $ 298,509
$277,877
- ----------------------------------------------------------------------------------------------------------------
- --------------
Ratios to average net assets:
Net investment income 3.26% 3.87% 3.96% 4.22%
3.42%
Expenses 0.95% 0.98% 0.98% 0.94%
0.88%
- ----------------------------------------------------------------------------------------------------------------
- --------------
Portfolio turnover rate(4) 161.5% 114.1% 151.6% 127.3%
173.4%
Average brokerage commission rate(5) -- -- -- --
--
</TABLE>
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995 1994 1993(1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 9.29 $ 7.76 $ 8.66 $ 8.23
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 .15 .17 .09
Net realized and unrealized gain (loss) 1.62 2.08 (.91) 1.03
- --------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 1.74 2.23 (.74) 1.12
- --------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.12) (.15) (.16) (.11)
Distributions from net realized gain (1.21) (.55) -- (.58)
- --------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (1.33) (.70) (.16) (.69)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.70 $ 9.29 $ 7.76 $ 8.66
---------------------------------------------------
---------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 18.78% 29.03% (8.64)% 13.91%
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $754,918 $589,804 $429,427 $218,716
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $671,593 $510,744 $360,773 $ 90,952
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.15% 1.70% 2.11% 1.09%(3)
Expenses 1.71% 1.75% 1.87% 1.87%(3)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 117.5% 84.8% 117.2% 143.9%
Average brokerage commission rate(5) $ 0.0591 $ 0.0532 -- --
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS Y
----------------------
- ----------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1996 1995(7) 1996 1995 1994(6)
- ----------------------------------------------------------------------------------------------------------------
- -----
- ----------------------------------------------------------------------------------------------------------------
- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 9.33 $ 9.19 $ 9.35 $ 7.80 $ 8.23
- ----------------------------------------------------------------------------------------------------------------
- -----
Income (loss) from investment operations:
Net investment income .16 .07 .23 .20 .15
Net realized and unrealized gain (loss) 1.57 .73 1.61 2.13 (.41)
- ----------------------------------------------------------------------------------------------------------------
- -----
Total income (loss) from investment
operations 1.73 .80 1.84 2.33 (.26)
- ----------------------------------------------------------------------------------------------------------------
- -----
Dividends and distributions to shareholders:
Dividends from net investment income (.13) (.11) (.21) (.23) (.17)
Distributions from net realized gain (1.21) (.55) (1.21) (.55) --
- ----------------------------------------------------------------------------------------------------------------
- -----
Total dividends and distributions
to shareholders (1.34) (.66) (1.42) (.78) (.17)
- ----------------------------------------------------------------------------------------------------------------
- -----
Net asset value, end of period $ 9.72 $ 9.33 $ 9.77 $ 9.35 $ 7.80
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- -----
- ----------------------------------------------------------------------------------------------------------------
- -----
TOTAL RETURN, AT NET ASSET VALUE(2) 18.67% 8.82% 19.88% 30.23% (3.15)%
- ----------------------------------------------------------------------------------------------------------------
- -----
- ----------------------------------------------------------------------------------------------------------------
- -----
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $17,554 $ 1,655 $18,252 $ 6,709 $1,074
- ----------------------------------------------------------------------------------------------------------------
- -----
Average net assets (in thousands) $ 8,277 $ 784 $13,083 $ 3,944 $ 320
- ----------------------------------------------------------------------------------------------------------------
- -----
Ratios to average net assets:
Net investment income 1.05% 1.42%(3) 2.08% 2.51%
4.07%(3)
Expenses 1.76% 1.77%(3) 0.77% 0.87%
0.96%(3)
- ----------------------------------------------------------------------------------------------------------------
- -----
Portfolio turnover rate(4) 117.5% 84.8% 117.5% 84.8% 117.2%
Average brokerage commission rate(5) $0.0591 $0.0532 $0.0591 $0.0532 --
</TABLE>
1. For the period from May 1, 1993 (inception of offering) to December 31,
1993.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date,
and redemption at the net asset value calculated on the last business day of
the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
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, 1996 were
$2,704,801,613 and $2,433,438,627, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
6. For the period from June 1, 1994 (inception of offering) to December 31,
1994.
7. For the period from August 29, 1995 (inception of offering) to December
31, 1995.
<PAGE>
Investment Objective and Policies
Objective. The Fund's investment objective is to seek high total
return. Total return is the change in value of an investment in
shares of the Fund over time, taking into account changes in share
price, from reinvested income and capital appreciation.
Investment Policies and Strategies. In seeking its objective, the
Fund may at times emphasize seeking income and at other times
seeking capital appreciation, or it may do both. The Fund s
investment advisor, OppenheimerFunds, Inc. (referred to as the
Manager ), does not allocate the Fund s assets between investments
to seek income and capital appreciation according to a formula or
fixed ratio. Normally, however, the Fund holds investments to seek
both capital appreciation and income.
The Fund s investments are not limited to any specific types of
securities. The principal types of securities the Fund invest in,
and the risks of those investments, are described in the sections
of this Prospectus that follow. In general, when seeking capital
appreciation, the Fund emphasizes investments in common stocks of
companies of different ranges of market capitalization (focusing
more on medium to large capitalization companies), but does not
invest substantially in speculative securities or stocks that the
manager believes involve undue risk.
To seek income, the Fund may purchase a variety of income
producing securities such as debentures, preferred stock,
convertible bonds and notes and U.S. Government and foreign
government securities. While the Fund seeks to pay dividends, the
amount of dividends paid will fluctuate over time. The Fund may
also hold commercial paper and other short-term U.S. Government
securities or other cash equivalents for certain purposes including
liquidity, pending the purchase of other securities, or when the
portfolio manager believes that the market is unfavorable for other
types of investments.
In selecting securities for the Fund, the portfolio managers of
the Fund may employ a variety of investment techniques or styles
such as value investing (searching for what the portfolio manger
believes are undervalued stocks, or out-of-favor stocks) and
growth investing (searching for stocks of companies the portfolio
manger believes have potential for growth in earnings or other
factors affecting their stock price). The use of a particular
method in selecting securities for the Fund may change over time.
The Fund may try to hedge against losses in the value of its
portfolio of securities by using hedging strategies and
derivative investments described below. Additional Information
about the types of securities the Fund invests in and the
strategies used by the manager in selecting them is contained in
the Statement of Additional Information under the same headings
used in this Prospectus.
The Fund is designed for investors seeking total return over the
long term. Because investing in the different types of securities
involves different risks, discussed below, there can be no
assurances the Fund will be successful in meeting its objective.
Can the Fund's Investment Objective and Policies Change? The
Fund has an investment objective, which is described above, as well
as investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and
strategies in carrying out those investment policies. The Fund's
investment policies and techniques are not "fundamental" unless
this Prospectus or the Statement of Additional Information says
that a particular policy is "fundamental." The Fund's investment
objective is a fundamental policy.
Fundamental policies are those that cannot be changed without
the approval of a "majority" of the Fund's outstanding voting
shares. The term "majority" is defined in the Investment Company
Act to be a particular percentage of outstanding voting shares (and
this term is explained in the Statement of Additional Information).
The Fund's Board of Directors may change non-fundamental policies
without shareholder approval, although significant changes will be
described in amendments to this Prospectus.
Portfolio Turnover. A change in the securities held by the
Fund is known as "portfolio turnover." The Fund ordinarily does not
engage in short-term trading to try to achieve its objective. As
a result, the Fund's portfolio turnover is not expected to be more
than 150% each year. The "Financial Highlights," above, show the
Fund's portfolio turnover rate during past fiscal years.
Portfolio turnover affects brokerage costs, dealer markups and
other transaction costs, and results in the Fund's realization of
capital gains or losses for tax purposes. It may also affect the
Fund's ability to qualify as a "regulated investment company" under
the Internal Revenue Code for tax deductions for dividends and
capital gains distributions the Fund pays to shareholders. See
Dividends, Capital Gains and Taxes in the Statement of Additional
Information for more information. 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.
Investment Risks
All investments carry risks to some degree, whether they are
risks that market prices of the investment will fluctuate (this is
known as market risk ) or that the underlying issuer will
experience financial difficulties and may default on its obligation
under a fixed-income investment to pay interest and repay principal
(this is referred to as credit risk ). These general investment
risks, and the special risks of certain types of investments that
the Fund may hold are described below. They affect the value of
the Fund s investments, its investment performance, and the prices
of its shares. These risks collectively form the risk profile of
the Fund.
Because of the types of companies the Fund invests in and the
investment techniques the Fund uses, some of which may be
speculative, the Fund is designed for those investors who are
investing for the long-term and who are willing to accept greater
risks of loss of their capital in the hope of achieving capital
appreciation. The Fund is not intended for investors whose
principal objective is assured income and conservation of capital.
Investing for capital appreciation entails the risk of loss of all
or part of your principal. Since market risks are inherent in all
investments to varying degrees, there can be no assurance that the
Fund s investment objective will be met, and when you redeem your
shares, they may be worth more or less than what you paid for them.
Stock Investment Risks. Because the Fund invests a
substantial portion of its assets in stocks, the value of the
Fund's portfolio will be affected by changes in the stock markets.
At times, the stock markets can be volatile and stock prices can
change substantially. This market risk will affect the Fund's net
asset value per share, which will fluctuate as the values of the
Fund's portfolio securities change. Not all stock prices change
uniformly or at the same time, and other factors can affect a
particular stock's prices (for example, poor earnings reports by an
issuer, loss of major customers, major litigation against an
issuer, and changes in government regulations affecting an
industry). Not all of these factors can be predicted.
As discussed below, the Fund attempts to limit market risks by
diversifying its investments, that is, by not holding a substantial
amount of the stock of any one company and by not investing too
great a percentage of the Fund's assets in any one company. Also,
the Fund does not concentrate its investments in any one industry
or group of industries. Because changes in overall market prices
can occur at any time, and because the income earned on securities
is subject to change, there is no assurance that the Fund will
achieve its investment objectives, and when you redeem your shares,
they may be worth more or less than what you paid for them.
Interest Rate Risks. Debt securities which the Fund may
purchase are subject to changes in their values due to changes in
prevailing interest rates. When prevailing interest rates fall,
the values of already-issued debt securities generally rise. When
interest rates rise, the values of already-issued debt securities
generally decline. The magnitude of these fluctuations will often
be greater for longer-term debt securities than shorter-term debt
securities. Changes in the value of securities held by the Fund
mean that the Fund's share prices can go up or down when interest
rates change because of the effect of the change on the value of
the Fund's portfolio of debt securities.
Special Risks of Lower-Grade Securities. The Manager may
select high-yield, below investment grade debt securities
(including both rated and unrated securities). These "lower-grade"
securities are commonly known as "junk bonds." All corporate debt
securities (whether foreign or domestic) are subject to some degree
of credit risk. Credit risk relates to the ability of the issuer
to meet interest or principal payments on a security as they become
due. Generally, higher yielding lower-grade securities whether
rated or unrated, often have speculative characteristics and
special risks that make them riskier investments than investment
grade securities and are subject to greater credit risks than
higher-rated securities. They may be subject to greater market
fluctuations and risk of loss of income and principal than lower
yielding, investment grade securities. There may be less of a
market for them and therefore they may be harder to sell at an
acceptable price. There is a relatively greater possibility that
the issuer's earnings may be insufficient to make the payments of
interest and principal due on the bonds and the issuer's low
creditworthiness may increase the potential for its insolvency. A
decline in their values is also likely during a general economic
downturn. An economic downturn or an increase in interest rates
could severely disrupt the market for high yield bonds and
adversely affect the value of outstanding bonds and the ability of
the issuers to repay principal and interest. For foreign lower-
grade debt securities, these risks are in addition to the risks of
investing in foreign securities, described below. These risks mean
that the Fund may not achieve the expected income from lower-grade
securities, and that the Fund's net asset value per share may be
affected by declines in value of these securities. However, the
Fund's limitations on investments in these types of securities may
reduce some of the risk, as will the Fund's policy of diversifying
its investments. Also, convertible securities may be less subject
to some of these risks than other debt securities, to the extent
they can be converted into stock, which may be more liquid and less
affected by these other risk factors.
Foreign Securities have Special Risks. The Fund may invest
in foreign securities. While foreign securities offer special
investment opportunities, there are also 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 exchange rates, exchange control regulations,
expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or abroad, or
other political and economic factors. The Fund can invest in
securities in any country, developed or undeveloped, including
"emerging" markets. In general, "emerging" markets may offer
special investment opportunities because their securities markets,
industries, capital structure and consumer consumption are growing
rapidly, but these countries involve special risks not present in
mature foreign markets. More information about the risks and
potential rewards of investing in foreign securities is contained
in the Statement of Additional Information.
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 what is required for normal portfolio management.
If the Manager uses a hedging instrument at the wrong time or
judges market conditions incorrectly, hedging strategies may reduce
the Fund's return. The Fund could also experience losses if the
prices of its futures and options positions are 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. The use of Forward Contracts may reduce the
gain that would otherwise result from a change in the relationship
between the U.S. dollar and a foreign currency. The Fund attempts
to limit its exposure in foreign currency exchange contracts to the
amount of its assets denominated in the foreign currency, to avoid
having to buy or sell foreign currency at disadvantageous prices.
Interest rate swaps are subject to the risk that the other party
will fail to meet its obligations (or that the underlying issuer
will fail to pay on time), as well as interest rate risks. The
Fund could be obligated to pay more under its swap agreements than
it receives under them, as a result of interest rate changes. If
a covered call written by the Fund is exercised on an investment
that has increased in value, the Fund will be required to sell the
investment at the call price and will not be able to realize any
profit if the investment has increased in value above the call
price. These risks are described in greater detail in the
Statement of Additional Information.
There are Special Risks in Investing in Derivative
Investments. The company issuing the instrument may fail to pay
the amount due on the maturity of the instrument. Also, the
underlying investment or security on which the derivative is based,
and the derivative itself, might not perform the way the Manager
expected it to perform. Markets, underlying securities and indices
may move in a direction not anticipated by the Manager. The
performance of derivative investments may also be influenced by
interest rate and stock market changes in the U.S. and abroad. All
of this can mean that the Fund will realize less principal or
income from the investment than expected. Certain derivative
investments held by the Fund may be illiquid. Please refer to
"Illiquid and Restricted Securities."
Investment Techniques and Strategies
The Fund may also use the investment techniques and strategies
described below. These techniques involve certain risks. The
Statement of Additional Information contains more information about
these practices, including limitations on their use that are
designed to reduce some of the risks.
Foreign Securities. To broaden its opportunities to seek its
investment objective, the Fund may purchase equity and debt
securities (which may be denominated in U.S. dollars or non-U.S.
currencies) issued or guaranteed by foreign companies or debt
securities issued by foreign governments, including foreign
government agencies, that are traded on foreign securities
exchanges or in the foreign over-the-counter markets. The Fund may
buy securities of companies or governments in any country,
developed or underdeveloped. The Fund may invest up to 100% of its
assets in foreign securities. The Fund will hold foreign currency
only to effect foreign securities transactions and not as an
investment.
Investments in Convertible Securities. A convertible
security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed
amount of common stock within a particular period of time at a
specified price or formula. A convertible security entitles the
holder to receive interest paid or accrued on debt or dividends
paid on preferred stock until the convertible security matures or
is redeemed, converted or exchanged. When investing in convertible
securities, the Manager looks to the conversion feature and treats
the securities as "equity securities."
Lower-Rated Securities. In seeking high return, the Fund
may invest in domestic and foreign debt securities, including
high-yield, "lower-grade" debt securities (including both high-
yielding rated and unrated securities), commonly known as "junk
bonds," because they generally offer higher income potential than
investment grade securities. "Lower-grade" securities are those
rated below "investment grade," which means they have a rating
below "BBB" by Standard & Poor's Corporation or "Baa" by Moody's
Investors Service, Inc. or similar ratings by other rating
organizations. "Lower-grade" debt securities the Fund may invest
in also include securities that are not rated by a nationally-
recognized rating organization like Standard & Poor's or Moody's,
but which the Manager judges to be comparable to lower-rated
securities. The Fund may invest in securities rated as low as "D"
by Standard & Poor's or "C" by Moody's.
Derivative Investments. The Fund can invest in a number of
different kinds of "derivative investments." They are used in some
cases for hedging purposes and in other cases to attempt to seek
income or total return. 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, currency or commodity. In the broadest sense,
exchange-traded options and futures contracts (discussed in
"Hedging," below) may be considered "derivative investments."
The Fund may invest in different types of derivatives. "Index-
linked" or "commodity-linked" notes are debt securities of
companies that call for interest payments and/or payment on the
maturity of the note in different terms than the typical note where
the borrower agrees to make fixed payments and/or to pay a fixed
sum on the maturity of the note. Principal and/or interest
payments on an index-linked note depends on the performance of one
or more market indices, such as the S & P 500 Index or a weighted
index of commodity futures, such as crude oil, gasoline and natural
gas. The Fund may invest in 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.
The Fund may also invest in currency-indexed securities.
Typically, these are short-term or intermediate-term debt
securities having a value at maturity, and or an interest rate
determined by reference to one or more foreign currencies. The
currency-indexed securities purchased by the Fund may make payments
based on a formula. The payment of principal or periodic interest
may be calculated as a multiple of the movement of one currency
against another currency, or against an index. These investments
may entail increased risk to principal and increased price
volatility.
Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, put and call options, forward
contracts, and options on futures, on broadly-based stock indices
and on foreign currencies, or enter into interest rate swap
agreements. These are all referred to as "hedging instruments."
The Fund does not use hedging instruments for speculative purposes,
and has limits on the use of them, described below. The hedging
instruments the Fund may use are described below and in greater
detail in the Statement of Additional Information.
The Fund may buy and sell options, futures and forward contracts
for a number of purposes. It may do so to try to manage its
exposure to the possibility that the prices of its portfolio
securities may decline, or to establish a position in the equities
market as a temporary substitute for purchasing particular equity
securities. It may do so to try to manage its exposure to changing
interest rates. Some of these strategies, such as selling futures,
buying puts and writing covered calls, hedge the Fund's portfolio
against price fluctuations.
Other hedging strategies, such as buying futures and call
options, tend to increase the Fund's exposure to the securities
market. Forward contacts are used to try to manage foreign
currency risks on the Fund's foreign investments. Foreign currency
options are used to try to protect against declines in the dollar
value of foreign securities the Fund owns, or to protect against an
increase in the dollar cost of buying foreign securities. Writing
covered call options may also provide income to the Fund for
liquidity purposes or defensive reasons.
Futures. The Fund may buy and sell futures contracts that
relate to (1) foreign currencies (these are Forward Contracts), and
(2) broadly-based stock indices (these are referred to as Stock
Index Futures). These types of Futures are described in "Hedging"
in the Statement of Additional Information.
Put and Call Options. The Fund may buy and sell certain kinds
of put options (puts) and call options (calls).
The Fund may buy calls only on securities, securities indices,
or Stock Index Futures, or to terminate its obligation on a call
the Fund previously wrote. The Fund may write (that is, sell) call
options only if they are "covered." That means the Fund must own
the security subject to the call while the call is outstanding, or
the Fund must own and segregate liquid assets to satisfy its
obligation if the call is exercised. When the Fund writes a call,
it receives cash (called a premium). The call gives the buyer the
ability to buy the investment on which the call was written from
the Fund at the call price during the period in which the call may
be exercised. If the value of the investment does not rise above
the call price, it is likely that the call will lapse without being
exercised, while the Fund keeps the cash premium (and the
investment). The Fund may write calls to generate additional
income or for defensive purposes if, after any sale, not more than
25% of the Fund's total assets are subject to calls. The Fund may
also purchase "relative performance call options." These are call
options that have a cash settlement based on the difference between
the returns on two market indices. These options are subject to
the risk that the value of the option may decline because of
adverse movements in the market indices.
The Fund may purchase puts. Buying a put on an investment gives
the Fund the right to sell the investment at a set price to a
seller of a put on that investment. The Fund can buy only those
puts that relate to (1) securities (whether or not held by it), (2)
Stock Index Futures (whether or not it holds such Stock Index
Futures in its portfolio), or (3) broadly-based stock indices. The
Fund may sell a put on securities, securities indices, or Futures,
but only if the puts are covered by segregated liquid assets. The
Fund will not write puts if more than 50% of the Fund's net assets
would have to be segregated to cover put obligations.
A call or put may be purchased only if, after the purchase, the
value of all call and put options held by the Fund will not exceed
5% of the Fund's total assets. The Fund may buy and sell put and
call options that are traded on U.S. or foreign securities or
commodity exchanges or are traded in the over-the-counter markets.
In the case of foreign currency options, they may be quoted and
traded by major recognized dealers in those options. Options
traded in the over-the-counter market may be "illiquid," and
therefore may be subject to the Fund's restrictions on illiquid
investments, described in "Illiquid and Restricted Securities,"
below.
Forward Contracts. Forward Contracts are foreign currency
exchange contracts. They are used to buy or sell foreign currency
for future delivery at a fixed price. The Fund uses them to try to
"lock in" the U.S. dollar price of a security denominated in a
foreign currency that the Fund has purchased or sold, or to protect
against possible losses from changes in the relative value of the
U.S. dollar and a foreign currency. The Fund may also use "cross
hedging," where the Fund hedges against changes in currencies other
than the currency in which a security it holds is denominated.
Interest Rate Swaps. In an interest rate swap, the Fund and
another party exchange their right to receive, or their obligation
to pay, interest on a security. For example, they may swap a right
to receive floating rate interest payments for fixed rate payments.
The Fund enters into swaps only on securities it owns. The Fund
may not enter into swaps with respect to more than 25% of its total
assets. The Fund will segregate liquid assets to cover any amounts
it could owe under swaps that exceed the amounts it is entitled to
receive, and it will adjust that amount daily, as needed.
Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Directors, the
Manager determines the liquidity of certain of the Fund's
investments. Investments may be illiquid because of the absence of
an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted
security is one that has a contractual restriction on its resale or
which cannot be sold publicly until it is registered under the
Securities Act of 1933. The Fund will not invest more than 10% of
its net assets in illiquid or restricted securities (the Board may
increase that limit to 15%). The Fund's percentage limitation on
these investments does not apply to certain restricted securities
that are eligible for resale to qualified institutional purchasers.
The Manager monitors holdings of illiquid securities on an ongoing
basis and at times the Fund may be required to sell some holdings
to maintain adequate liquidity. See "Restricted and Illiquid
Securities" in the Statement of Additional Information for further
details.
Repurchase Agreements. The Fund may enter into repurchase
agreements to generate income and for liquidity purposes to meet
anticipated redemptions, or pending the investment of proceeds from
sales of Fund shares or settlement of purchases of portfolio
investments. In a repurchase transaction, the Fund buys a security
and simultaneously sells it to the vendor for delivery at a future
date. Repurchase agreements must be fully collateralized.
However, if the vendor fails to pay the resale price on the
delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its
ability to do so. The Fund will not enter into a repurchase
agreement that will cause more than 10% of its net assets to be
subject to repurchase agreements maturing in more than seven days.
There is no limit on the amount of the Fund's net assets that may
be subject to repurchase agreements of seven days or less. See
the Statement of Additional Information for more details.
Real Estate Investment Trusts. The Fund cannot invest in
real estate or in interests in real estate, but if the fundamental
investment policy change described below is approved by
shareholders of the Fund, the Fund may purchase securities of
companies holding real estate or interests therein, including real
estate investment trusts ("REITs") and real estate limited
partnerships. REITs and real estate limited partnerships seek to
earn profits for investors by managing income-producing real estate
or lending money to developers. Assets are generally managed by
one or more trustees (in the case of a REIT) or general partners
(in the case of a real estate limited partnership) who control
acquisitions and investments. There are special risks associated
with these type of investments. The value of the Fund's investments
in REITs or real estate limited partnerships will be affected by
changes in the values of the underlying real estate investments as
well as changes in interest rates. At times, the real estate
market can be volatile and prices can changes substantially. These
risks may affect the Fund's net asset values per share.
Loans of Portfolio Securities. To attempt to increase its
income, the Fund may lend its portfolio securities to brokers,
dealers and other financial institutions. The Fund must receive
collateral for a loan. These loans are limited to not more than 10%
of the value of the Fund's net assets, and are subject to other
conditions described in the Statement of Additional Information.
The Fund presently does not intend to lend its portfolio
securities, but if it does, the value of securities loaned is not
expected to exceed 5% of the value of the Fund's total assets in
the coming year.
Other Investment Restrictions. The Fund has other investment
restrictions which, together with its investment objective, are
fundamental policies. Under these fundamental policies, the Fund
cannot do any of the following:
The Fund may not borrow or lend money, or lend, pledge,
mortgage, or hypothecate securities except as provided above
under "Loans of Portfolio Securities" (however, the Fund may
purchase bonds or other debt securities, and enter into escrow
arrangements contemplated by the writing of covered call
options or other collateral or margin arrangements in
connection with Hedging Instruments the Fund may use under its
other fundamental policies);
The Fund may not invest more than 5% of its total assets in
securities of any one issuer other than the U.S. Government;
The Fund may not purchase the securities of any one issuer if
immediately thereafter, the Fund would own more than 10% of
the outstanding voting securities or 10% of any one class of
securities of such issuer (except for securities of investment
companies acquired in exchange for Fund shares); or
The Fund may not concentrate investments in a particular
industry or group of industries; therefore, the Fund will not
purchase the securities of companies in any one industry if,
thereafter, more than 25% of the value of the Fund's total
assets would consist of securities of companies in that
industry.
At a meeting held February 25, 1997, the Fund's Board of
Directors, including a majority of its independent Directors,
determined that the best interests of the Fund would be served by
allowing the Fund greater investment flexibility, as set forth in
the following proposed investment policy changes, in response to
market or regulatory developments. Accordingly, a proxy statement
will be sent to shareholders of the Fund asking for their approval
to change certain of the Fund s fundamental investment policies.
The meeting of shareholders is currently scheduled for June 25,
1997 and this Prospectus will only be supplemented if these
investment policy changes are not approved at that meeting or any
adjournment thereof. The new changes to the Fund s fundamental
in vestment policies would be as follows:
The fundamental policy currently described in the Statement of
Additional Information stating that "The Fund cannot purchase or
sell real estate, including interests in real estate investment
trusts" would be replaced with the following fundamental policy:
The Fund cannot invest in real estate or in interests in
real estate, but may purchase securities of issuers holding
real estate or interests therein.
The fundamental policy currently described in the Statement of
Additional Information stating that "The Fund cannot buy securities
of other investment companies, except in connection with a merger
or consolidation" would be eliminated.
The fundamental policy currently described in the Statement of
Additional Information stating that "The Fund cannot buy or sell
commodities or commodity contracts or purchase securities for
speculative short-term purposes; however, the Fund may buy or sell
any of the Hedging Instruments which it may use as permitted by any
of its other investment policies, whether or not any such Hedging
Instrument is considered to be a commodity or commodity contract"
would be replaced with the following fundamental policy:
The Fund cannot invest in physical commodities or physical
commodity contracts, or purchase securities for speculative
short-term purposes; however, the Fund may: (i) buy and sell
hedging instruments permitted by any of its other investment
policies, and (ii) buy and sell options, futures, securities
or other instruments backed by, or the investment return from
which is linked to changes in the price of, physical
commodities.
The fundamental policy currently described in the Statement of
Additional Information stating that "The Fund cannot purchase
securities on margin or sell securities short; however, the Fund
may make margin deposits in connection with any of the Hedging
Instruments it may use as permitted by any of its other investment
policies" would be replaced with the following fundamental policy:
The Fund cannot purchase securities on margin or sell
securities short; however, the Fund may make margin deposits
in connection with any of its other investments.
The fundamental policy stating that "The Fund may not
mortgage, pledge, or hypothecate securities; however the Fund may
enter into the escrow arrangements contemplated by the writing of
covered call options or other collateral or margin arrangements in
connection with Hedging Instruments the Fund may use under its
other fundamental policies" would be replaced with the following
fundamental policy:
The Fund may not mortgage, pledge or hypothecate securities;
however, the Fund may enter into the escrow arrangements
contemplated by the writing of covered call options or other
collateral or margin arrangements in connection with any
other investments.
The fundamental policy stating that "The Fund may not borrow
or lend money, or lend, pledge, mortgage, or hypothecate securities
except as provided above under "Loans of Portfolio Securities"
(however, the Fund may purchase bonds or other debt securities, and
enter into escrow arrangements contemplated by the writing of
covered call options or other collateral or margin arrangements in
connection with Hedging Instruments the Fund may use under its
other fundamental policies)" would be replaced with the following
two fundamental policies:
The Fund cannot borrow money, except for temporary,
emergency purposes or under other unusual circumstances.
The Fund cannot make loans, except that the Fund may
purchase debt securities and enter into repurchase agreements
or when-issued, delayed delivery or similar securities
transactions, and may lend its portfolio securities.
The fundamental policy currently described in the Statement of
Additional Information stating that "The Fund cannot invest in
securities of any corporation which has a record of less than three
years' continuous operation." would be replaced with the following
non- fundamental policy:
The Fund cannot invest in securities of any corporation
which has a record of operations of less than three years,
including operations of any predecessors.
The fundamental policy stating that "The Fund may not invest
more than 5% of its total assets in securities of any one issuer
other than the U.S. Government and the fundamental policy stating
that The Fund may not purchase the securities of any one issuer if
immediately thereafter, the Fund would own more than 10% of the
outstanding voting securities or 10% of any one class of securities
of such issuer (except for securities of investment companies
acquired in exchange for Fund shares) would be replaced with the
following fundamental policy:
The Fund cannot buy securities issued or guaranteed by any
one issuer (except the U.S. Government or any of its agencies
or instrumentalities) if, with respect to 75% of its total
assets, more than 5% of the Fund's total assets would be
invested in securities of that issuer, or the Fund would then
own more than 10% of that issuer's voting securities.
Unless the prospectus states that a percentage restriction
applies on an ongoing basis, it applies only at the time that Fund
makes an investment and the Fund need not sell securities to meet
the percentage limits if the value of the investment increases in
proportion to the size of the Fund. Other investment restrictions
are listed in Investment Restrictions in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1944. Since
1979, the Fund has been a Maryland corporation. The Fund is a
diversified open-end, management investment company.
The Fund is governed by a Board of Directors, which is
responsible for protecting the interests of shareholders under
Maryland law. The Directors meet periodically throughout the year
to oversee the Fund's activities, review its performance, and
review the actions of the Manager. "Directors and Officers of the
Fund" in the Statement of Additional Information names the
Directors 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 such rights to call a
shareholder meeting as are provided under Maryland law.
The Board of Directors has the power, without shareholder
approval, to divide unissued shares of the Fund into two or more
classes. The Board has done so, and the Fund currently has four
classes of shares, Class A, Class B, Class C and Class Y. All
classes invest in the same investment portfolio. Each class has
its own dividends and distributions and pays certain expenses which
may be different for the different classes. Each class may have a
different net asset value. Each share entitles a shareholder to
one vote on matters submitted to the shareholder to vote on, with
fractional shares voting proportionally. Only shares of a
particular class vote as a class on matters that affect that class
alone. Shares are freely transferrable. Please refer to "How the
Fund is Managed" in the Statement of Additional Information for
more information on the voting of shares.
The Manager and Its Affiliates. The Fund is managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the
Fund's investments and handling its day-to-day business. The
Manager carries out its duties, subject to the policies established
by the Board of Directors, under an Investment Advisory Agreement
which states the Manager's responsibilities. The Agreement sets
forth the fees paid by the Fund to the Manager and describes the
expenses that the Fund is responsible to pay to conduct its
business.
The Manager has operated as an investment adviser since 1959.
The Manager (including subsidiaries) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $60 billion, held in more than 3 million shareholder accounts
as of March 31, 1997. The Manager is owned by Oppenheimer
Acquisition Corp., a holding company that is owned in part by
senior officers of the Manager and controlled by Massachusetts
Mutual Life Insurance Company.
Portfolio Managers. The portfolio managers of the Fund are
Bruce Bartlett and Diane Sobin. Since July 5, 1995, they have been
the individuals primarily responsible for the day-to-day management
of the Fund's portfolio. Each of them is a Vice President of the
Manager and serves as a Vice President and Portfolio Manager of the
Fund. Mr. Bartlett was previously a Vice President and Senior
Portfolio Manager with First of America Investment Corporation.
Ms. Sobin was previously a Vice President and Senior Portfolio
Manager with Dean Witter Intercapital, Inc. For more information
about the Fund's other officers and Directors, see "Directors and
Officers of the Fund" in the Statement of Additional Information.
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 $100
million of net assets, 0.70% of the next $100 million, 0.65% of the
next $100 million, 0.60% of the next $100 million, 0.55% of the
next $100 million, and 0.50% of net assets in excess of $500
million. The Fund's management fee for each of its share classes
during its last fiscal year was 0.54% 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, certain Directors' 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 and other financial institutions that have a
sales agreement with OppenheimerFunds Distributor, Inc., a
subsidiary of the Manager that acts as the Fund's Distributor. The
Distributor also distributes the shares of the other Oppenheimer
funds managed by the Manager and is sub-distributor for funds
managed by a subsidiary of the Manager.
The Transfer Agent. The Fund's transfer agent is
OppenheimerFunds Services, a division of the Manager, which acts as
the shareholder servicing agent for the Fund on an "at-cost" basis.
It also acts as the shareholder servicing agent for other
Oppenheimer funds. Shareholders should direct inquiries about
their accounts to the Transfer Agent at the address and toll-free
number shown below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms
"total return," "average annual total return" and "dividend yield"
to illustrate its performance. The performance of each class of
shares is shown separately, because the performance of each class
of shares will usually be different as a result of the different
kinds of expenses each class bears. This performance information
may be useful to help you see how well your investment has done and
to compare it to other funds or a market index, as we have done
below.
It is important to understand that the Fund's total returns
and yields represent past performance and should not be considered
to be predictions of future returns or performance. This
performance data is described below, but more detailed information
about how total returns are calculated is contained in the
Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio,
expenses and which class of shares you purchase.
Total Returns. There are different types of total returns
used to measure the Fund's performance. Total return is the change
in value of a hypothetical investment in the Fund over a given
period, assuming that all dividends and capital gains distributions
are reinvested in additional shares. The cumulative total return
measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate
of return for each year in a period that would produce the
cumulative total return over the entire period. However, average
annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted for Class A shares, normally the
current maximum initial sales charge has been deducted. When total
returns are shown for Class B or Class C shares, normally the
contingent deferred sales charge that applies to the period for
which total return is shown has been deducted. When total returns
are quoted for Class Y shares, there is no sales charge which is
deducted. However, total returns for Class A, Class B and Class C
shares may also be quoted at net asset value, without considering
the effect of the sales charge, and those returns would be less if
sales charges were deducted.
Dividend Yield. Dividend yield is calculated by dividing
the dividends of a class derived from net investment income during
a stated period by the maximum offering price on the last day of
the period. Yields and dividend yields for Class A shares reflect
the deduction of the maximum initial sales charge, but may also be
shown based on the Fund's net asset value per share. Yields for
Class B and Class C shares do not reflect the deduction of the
contingent deferred sales charge.
How Has the Fund Performed? Below is a discussion by the Manager
of the Fund's performance during its last fiscal year ended
December 31, 1996, followed by a graphical comparison of the Fund's
performance to an appropriate broad-based market index.
Management's Discussion of Performance. During the Fund s
fiscal year ended December 31, 1996 the strong performance of the
U.S. stock market benefited the Fund s overall performance. The
Fund held more than 80% of its assets in common stock at December
31, 1996. Additionally, the portfolio managers employed both
growth and value investing styles in selecting securities for the
portfolio. Investments in healthcare and technology securities,
generally performed well in the past fiscal year, and positively
affected the Fund s total return. During the past fiscal year, the
Fund reduced its holdings of electric utilities because of their
relatively weak performance. The Fund also shifted the focus of
its fixed income investments from U.S. Treasury Bonds to foreign
fixed income securities which provided the Fund with increased
income. The Fund s policy of seeking to maintain a targeted
divided for its Class A shares did not materially affect portfolio
management strategies. The Fund s portfolio holdings, allocations
and strategies are subject to change.
Comparing the Fund's Performance to the Market. The
graphs below show the performance of a hypothetical $10,000
investment in Class A, Class B, Class C and Class Y shares of the
Fund held until December 31, 1996; in the case of Class A shares,
for the past ten-year period, in the case of Class B shares, from
the inception of the Class on May 1, 1993, in the case of C shares,
from the inception of the Class on August 29, 1995, and in the case
of Class Y shares, from the inception of the Class on June 1, 1994,
with all dividends and capital gains distributions reinvested in
additional shares. As a result, the performance for Class B, Class
C and Class Y shares is shown for relatively short periods of time,
and investors should realize that such time periods may not be as
appropriate or useful as a comparison for a longer period.
The Fund's performance is compared to the performance of the
Standard & Poor's ("S&P") 500 Index. The S&P 500 Index is a broad
based index of equity securities widely regarded as the general
measure of the performance of the U.S. equity securities market.
Index performance reflects the reinvestment of dividends but does
not consider the effect of capital gains or transaction costs, and
none of the data below shows the effect of taxes. Also, the Fund's
performance reflects the effect of Fund business and operating
expenses. While index comparisons may be useful to provide a
benchmark for the Fund's performance, it must be noted that the
Fund's investments are not limited to securities in the Index.
Moreover, the index performance 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 Investments
In: Class A, Class B, Class C and Class Y Oppenheimer Total
Return Fund, Inc. and
S&P 500
[Graphs]
Average Annual Total Returns
of the Fund at 12/31/96 (1)
of the Fund at 12/31/96(2)
- ----------------------------
A Shares 1-Year 5-Years 10 Years
12.84% 13.10% 13.92%
B Shares 1-Year Life (2) 13.78% 12.99%
C Shares 1-Year Life 17.67% 21.05%
Y Shares 1-Year Life 19.88% 17.36%
_____________________
Total returns and the ending account value in the graph show change
in share value and include the reinvestment of all dividends and
capital gains distributions.
(1) Class A returns are shown net of the applicable 5.75% maximum
initial sales charge.
(2) Class B shares of the Fund were first publicly offered on
5/1/93. The average annual total returns reflect reinvestment of
all dividends and capital gains distributions and are shown net of
the applicable 5% and 3% contingent deferred sales charges,
respectively, for the 1-year period and life-of-the-class. The
ending account value in the graph is net of the applicable 3%
contingent deferred sales charge.
(3) Class C shares of the Fund were first publicly offered on
August 29, 1995. The performance information in the graph of the
S&P 500 Index begins on September 1, 1995. The cumulative total
return for Class C shares reflects the reinvestment of all
dividends and capital gains distributions and is shown net of the
applicable 1% contingent deferred sales charge.
(4) Class Y shares of the Fund were first publicly offered on
6/1/94.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers three different classes of
shares to individual investors: Class A, Class B and Class C.
Only certain institutional investors may purchase a fourth class of
shares, Class Y shares. The different classes of shares represent
investments in the same portfolio of securities but are subject to
different expenses and will likely have different share prices.
Class A Shares. If you buy Class a shares, you may pay
an initial sales charge on investments up to $1 million (up to
$500,000 for purchases by Retirement Plans, as defined in Class
A Contingent Deferred Sales Charge ). If you purchase Class A
shares as part of an investment of at least $1 million ($500,000
for Retirement Plans) in shares of one or more Oppenheimer funds,
you will not pay an initial sales charge, but if you sell any of
those shares within 18 months of buying them, you may pay a
contingent deferred sales charge. Sales charge rates are described
in Buying Class A Shares, below.
Class B Shares. If you buy Class B shares, you pay no
sales charge at the time of purchase, but if you sell your shares
within six years of buying them, you will normally pay a contingent
deferred sales charge. That sales charge varies depending on how
long you own your shares, as described in "Buying Class B Shares"
below.
Class C Shares. If you buy Class C shares, you pay no
sales charge at the time of purchase, but if you sell your shares
within 12 months of buying them, you will normally pay a contingent
deferred sales charge of 1% as discussed in "Buying Class C Shares"
below.
Class Y Shares. Class Y Shares are sold at net asset value
per share without the imposition of a sales charge at the time of
purchase to separate accounts of insurance companies and other
institutional investors ("Class Y Sponsors") having an agreement
("Class Y Agreements") with the Manager or the Distributor. The
intent of Class Y Agreements is to allow tax qualified
institutional investors to invest indirectly (through separate
accounts of the Class Y Sponsor) in Class Y Shares of the Fund and
to allow institutional investors to invest directly in Class Y
shares of the Fund. Individual investors are not permitted to
invest directly in Class Y Shares. As of the date of this
Prospectus, Massachusetts Mutual Life Insurance Company (an
affiliate of the Manager and the Distributor) acts as Class Y
Sponsor for all outstanding Class Y Shares of the Fund. While
Class Y shares are not subject to a contingent deferred sales
charge, asset-based sales charge or service fee, a Class Y sponsor
may impose charges on separate accounts investing in Class Y
shares.
None of the instructions described elsewhere in this
Prospectus or the Statement of Additional Information for the
purchase, redemption, reinvestment, exchange or transfer of shares
of the Fund, the selection of classes of shares or the reinvestment
of dividends apply to its Class Y shares. Clients of Class Y
Sponsors must request their Sponsor to effect all transactions in
Class Y shares on their behalf.
Which Class of Shares Should You Choose? Once you decide that the
Fund is an appropriate investment for you, the decision as to which
class of shares is better suited to your needs depends on a number
of factors which you should discuss with your financial advisor.
The Fund's operating costs that apply to a class of shares and the
effect of the different types of sales charges on your investment
will vary your investment results over time. The most important
factors are how much you plan to invest and how long you plan to
hold your investment. If your goals and objectives change over
time and you plan to purchase additional shares, you should re-
evaluate those factors to see if you should consider another class
of shares.
In the following discussion, to help provide you and your
financial advisor with a framework in which to choose a class, we
have made some assumptions using a hypothetical investment in the
Fund. We assumed you are an individual investor, and therefore
ineligible to purchase Class Y shares. We used the sales charge
rates that apply to Class A, Class B and Class C shares and
considered the effect of the annual asset-based sales charge on
Class B and Class C expenses (which, like all expenses, will affect
your investment return). For the sake of comparison, we have
assumed that there is a 10% rate of appreciation in your investment
each year. Of course, the actual performance of your investment
cannot be predicted and will vary, based on the Fund's actual
investment returns, and the operating expenses borne by each class
of shares, and which class of shares you invest in.
The factors discussed below are not intended to be investment
advice or recommendations, because each investor's financial
considerations are different. The discussion below of the factors
to consider in purchasing a particular class of shares assumes that
you will purchase only one class of shares and not a combination of
shares of different classes.
How Long Do You Expect to Hold Your Investment? While
future financial needs cannot be predicted with certainty, knowing
how long you expect to hold your investment will assist you in
selecting the appropriate class of shares. Because of the effect
of class-based expenses, your choice will also depend on how much
you plan to invest. For example, the reduced sales charges
available for larger purchases of Class A shares may, over time,
offset the effect of paying an initial sales charge on your
investment (which reduces the amount of your investment dollars
used to buy shares for your account), compared to the effect over
time of higher class-based expenses on shares of Class B or Class
C for which no initial sales charge is paid.
Investing for the Short Term. If you have a short-term
investment horizon (that is, you plan to hold your shares for not
more than six years), you should probably consider purchasing Class
A or Class C shares rather than Class B shares, because of the
effect of the Class B contingent deferred sales charge if you
redeem in less than 7 years, as well as the effect of the Class B
asset-based sales charge on the investment return for that class in
the short-term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there
is no initial sales charge on Class C shares, and the contingent
deferred sales charge does not apply to amounts you sell after
holding them one year.
However, if you plan to invest more than $100,000 for the
shorter term, then the more you invest and the more your investment
horizon increases toward six years, Class C shares might not be as
advantageous as Class A shares. That is because the annual asset-
based sales charge on Class C shares will have a greater economic
impact on your account over the longer term than the reduced front-
end sales charge available for larger purchases of Class A shares.
For example, Class A might be more advantageous than Class C (as
well as Class B) for investments of more than $100,000 expected to
be held for 5 or 6 years (or more). For investments over $250,000
expected to be held 4 to 6 years (or more), Class A shares may
become more advantageous than Class C (and Class B). If investing
$500,000 or more, Class A may be more advantageous as your
investment horizon approaches 3 years or more.
For investors who invest $1 million or more, in most cases
Class A shares will be the most advantageous choice, no matter how
long you intend to hold your shares. For that reason, the
Distributor normally will not accept purchase orders of $500,000 or
more for Class B shares or $1 million or more of Class C shares,
from a single investor.
Investing for the Longer Term. If you are investing for
the longer-term, for example, for retirement, and do not expect to
need access to your money for seven years or more, Class B shares
may be an appropriate consideration, if you plan to invest less
than $100,000. If you plan to invest more than $100,000 over the
long term, Class A shares will likely be more advantageous than
Class B shares or C shares, as discussed above, because of the
effect of the expected lower expenses for Class A shares and the
reduced initial sales charges available for larger investments in
Class A shares under the Fund's Right of Accumulation.
Of course, these examples are based on approximations of the
effect of current sales charges and expenses on a hypothetical
investment over time, using the assumptions stated above, and
therefore, you should analyze your options carefully.
Are There Differences in Account Features That Matter to
You? Because some account features may not be available to or
advisable for Class B or Class C shareholders, or other features
(such as Automatic Withdrawal Plans) may not be advisable (because
of the effect of the contingent deferred sales charge in non-
retirement accounts) for Class B or Class C shareholders, you
should carefully review how you plan to use your investment account
before deciding which class of shares to buy. For example, share
certificates are not available for Class B or Class C shares and if
you are considering using your shares as collateral for a loan,
that may be a factor to consider. Additionally, the dividends
payable to Class B and Class C shareholders will be reduced by the
additional expenses borne solely by those classes, such as the
asset-based sales charges to which Class B and Class C shares are
subject, as described below and in the Statement of Additional
Information.
How Does It Affect Payments to My Broker? A salesperson,
such as a broker, or any other person who is entitled to receive
compensation for selling Fund shares may receive different
compensation for selling one class of shares than for selling
another class. It is important that investors understand that the
purpose of the Class B and Class C contingent deferred sales charge
and asset-based sales charge is the same as the purpose of the
front-end sales charge on sales of Class A shares: that is, to
compensate the Distributor for commissions it pays to dealers and
financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a
minimum initial investment of $1,000 and make additional
investments at any time with as little as $25. There are reduced
minimum investments under special investment plans:
With Asset Builder Plans, Automatic Exchange Plans,
403(b)(7) custodial plans and military allotment plans, you can
make initial and subsequent investments for as little as $25; and
subsequent purchases of at least $25 can be made by telephone
through AccountLink.
Under pension, profit-sharing, 401(k) plans and
Individual Retirement Accounts (IRAs), you can make an initial
investment of as little as $250 (if your IRA is established under
an Asset Builder Plan, the $25 minimum applies), and subsequent
investments may be as little as $25.
There is no minimum investment requirement if you are
buying shares by reinvesting dividends from the Fund or other
Oppenheimer funds (a list of them appears in the Statement of
Additional Information, or you can ask your dealer or call the
Transfer Agent), or by reinvesting distributions from unit
investment trusts that have made arrangements with the Distributor.
How Are Shares Purchased? You can buy shares several ways
- -- through any dealer, broker or financial institution that has a
sales agreement with the Distributor, or directly through the
Distributor, or automatically from your bank account through an
Asset Builder Plan under the OppenheimerFunds AccountLink service.
The distributor may appoint certain servicing agent to accept
purchase and redemption orders. When you buy shares, be sure to
specify Class A, Class B or Class C shares. If you do not choose,
your investment will be made in Class A shares.
Buying Shares Through Your Dealer. Your dealer will place
your order with the Distributor on your behalf.
Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box
5270, Denver, Colorado 80217. If you don't list a dealer on the
application, the Distributor will act as your agent in buying the
shares. However, we recommend that you discuss your investment
first with a financial advisor, to be sure it is appropriate for
you.
Payments by Federal Funds Wire. Shares may be
purchased by Federal Funds wire. The minimum investment is $2,500.
You must first call the Distributor s Wire Department at 1-800-525-
7041 to notify the Distributor of the wire, and receive further
instructions.
Buying Shares Through OppenheimerFunds AccountLink. You
can use AccountLink to link your Fund account with an account at a
U.S. bank or other financial institution that is an Automated
Clearing House (ACH) member. You can then transmit funds
electronically to purchase shares, to have the Transfer Agent send
redemption proceeds, or to transmit dividends and distributions to
your bank account.
Shares are purchased for your account on AccountLink on the
regular business day the Distributor is instructed by you to
initiate the ACH transfer to buy shares. You can provide those
instructions automatically, under an Asset Builder Plan, described
below, or by telephone instructions using OppenheimerFunds
PhoneLink, also described below. You should request AccountLink
privileges on the application or dealer settlement instructions
used to establish your account. Please refer to "AccountLink" below
for more details.
Asset Builder Plans. You may purchase shares of the Fund
(and up to four other Oppenheimer funds) automatically each month
from your account at a bank or other financial institution under an
Asset Builder Plan with AccountLink. Details are in the Statement
of Additional Information.
At What Price Are Shares Sold? Shares are sold at the
public offering price based on the net asset value (and any initial
sales charge that applies) that is next determined after the
Distributor receives the purchase order in Denver, Colorado. In
most cases, to enable you to receive that day's offering price, the
Distributor or its designated agent must receive your order by the
time of day The New York Stock Exchange closes, which is normally
4:00 P.M., New York time, but may be earlier on some days (all
references to time in this Prospectus mean "New York time"). The
net asset value of each class of shares is determined as of that
time on each day The New York Stock Exchange is open (which is a
"regular business day").
If you buy shares through a dealer, the dealer must receive
your order by the close of The New York Stock Exchange on a regular
business day, and transmit it to the Distributor so that it is
received before the Distributor's close of business that day, which
is normally 5:00 P.M. The Distributor in its sole discretion may
reject any purchase order for the Fund's shares.
Special Sales Charge Arrangements for Certain Persons. Appendix A
to this Prospectus sets forth conditions for the waiver of, or
exemption from, sales charges or the special sales charge rates
that apply to purchases of shares of the Fund (including purchases
by exchange) by a person who was a shareholder of one of the Former
Quest for Value Funds (as defined in that Appendix).
Buying Class A Shares. Class A shares are sold at their offering
price, which is normally net asset value plus an initial sales
charge. However, in some cases, described below, purchases are not
subject to an initial sales charge, and the offering price will be
the net asset value. In some cases, reduced sales charges may be
available, as described below. Out of the amount you invest, the
Fund receives the net asset value to invest for your account. The
sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor and
allocated to your dealer as a commission. 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 as Commission as
Percentage of Percentage of Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 4.75%
- ---------------------------------------------------------------------------------------------
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
- ---------------------------------------------------------------------------------------------
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
- ---------------------------------------------------------------------------------------------
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
- ---------------------------------------------------------------------------------------------
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
- ---------------------------------------------------------------------------------------------
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
</TABLE>
The Distributor reserves the right to reallot the entire commission
to dealers. If that occurs, the dealer may be considered an
"underwriter" under Federal securities laws.
Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more of
the Oppenheimer funds in the following cases:
purchases by a retirement plan qualified under section
401(a) if the retirement plan has total plan assets of $500,000 or
more,
purchases aggregating $1 million or more,
purchase by a retirement plan qualified under section 401(a)
or 401(k) of the Internal Revenue Code, by a non-qualified deferred
compensation plan (not including Section 457 plans), employee
benefit plan, group retirement plan (see How to Buy Shares -
Retirement Plans in the Statement of Additional Information for
further details), and employee s 403(b)(7) custodial plan account,
SEP IRA, SARSEP, or SIMPLE plan (all of these plans are
collectively referred to as retirement Plans ); that: (1) buys
shares costing $500,000 or more or (2) has, at the time of
purchase, 100 or more eligible participants, or (3) certifies that
it projects to have annual plan purchases of $200,000 or more; or
purchase by an OppenheimerFunds Rollover IRA if the purchases
are made (1) through a broker, dealer, bank or registered
investment adviser that has made special arrangements with the
Distributor for these purchases, or (2) by a direct rollover of a
distribution from a qualified retirement plan if the administrator
of that plan has made special arrangements with the Distributor for
those purchases.
The Distributor pays dealers of record commissions on those
purchases in an amount equal to (i) 1.0% for non-Retirement Plan
accounts, and (ii) for Retirement Plan accounts, 1.0% of the first
$2.5 million, plus 0.50% of the next $2.5 million, plus 0.25% of
purchases over $5 million. that commission will be paid only on
those purchases that were not previously subject to a front-end
sales charge and dealer commission. No sales commission will be
paid to the dealer, broker or financial institution on sales of
Class A shares purchased with the redemption proceeds of shares of
a mutual fund offered as an investment option in a Retirement Plan
in which Oppenheimer funds are also offered as investment options
under a special arrangement with the Distributor if the purchase
occurs more than 30 days after the addition of the Oppenheimer
funds as an investment option to the Retirement Plan.
If you redeem any of those shares within 18 months of the end
of the calendar month of their purchase, a contingent deferred
sales charge (called the "Class A contingent deferred sales
charge") will be deducted from the redemption proceeds. That sales
charge will be equal to 1.0% of either (1) the aggregate net asset
value of the redeemed shares (not including shares purchased by
reinvestment of dividends or capital gain distributions), or (2)
the original offering price (which is the original net asset value)
of the redeemed shares, whichever is less. However, the Class A
contingent deferred sales charge will not exceed the aggregate
commissions the Distributor paid to your dealer on all Class A
shares of all Oppenheimer funds you purchased subject to the Class
A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is
payable, the Fund will first redeem shares that are not subject to
the sales charge, including shares purchased by reinvestment of
dividends and capital gains, and then will redeem other shares in
the order that you purchased them. The Class A contingent deferred
sales charge is waived in certain cases described in "Waivers of
Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on
exchanges of shares under the Fund's exchange privilege (described
below). However, if the shares acquired by exchange are redeemed
within 18 months of the end of the calendar month of the purchase
of the exchanged shares, the contingent deferred sales charge will
apply.
Special Arrangements With Dealers. The Distributor may
advance up to 13 months' commissions to dealers that have
established special arrangements with the Distributor for Asset
Builder Plans for their clients.
Reduced Sales Charges for Class A Share Purchases. You may be
eligible to buy Class A shares at reduced sales charge rates in one
or more of the following ways:
Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and
your spouse can add together Class A and Class B shares you
purchase for your individual accounts, or jointly, or for trust or
custodial accounts on behalf of your children who are minors. A
fiduciary can count all shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit
plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class
A and Class B shares of the Fund and other Oppenheimer funds to
reduce the sales charge rate that applies to current purchases of
Class A shares. You can also count Class A and Class B shares of
Oppenheimer funds you previously purchased subject to an initial or
contingent deferred sales charge to reduce the sales charge rate
for current purchases of Class A shares, provided that you still
hold your investment in one of the Oppenheimer funds. The
Distributor will use the current offering price of the shares you
previously purchased in calculating the sales charge rate for
current purchases. The Oppenheimer funds are listed in "Reduced
Sales Charges" in the Statement of Additional Information, or a
list can be obtained from the Distributor. The reduced sales charge
will apply only to current purchases and must be requested when you
buy your shares.
Letter of Intent. Under a Letter of Intent, if you purchase
Class A shares or Class A shares and Class B shares of the Fund and
other Oppenheimer funds during a 13-month period, you can reduce
the sales charge rate that applies to your purchases of Class A
shares. The total amount of your intended purchases of both Class
A and Class B shares will determine the reduced sales charge rate
for the Class A shares purchased during that period. This can
include purchases made up to 90 days before the date of the Letter.
More information is contained in the Application and in "Reduced
Sales Charges" in the Statement of Additional Information.
Waivers of Class A Sales Charges. The Class A sales charges
are not imposed in the circumstances described below. There is
an explanation of this policy in "Reduced Sales Charges" in
the Statement of Additional Information.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain Purchasers. Class A shares purchased by the following
investors are not subject to any Class A sales charges:
the Manager or its affiliates;
present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced
Sales Charges" in the Statement of Additional Information) of the
Fund, the Manager and its affiliates, and retirement plans
established by them for their employees;
registered management investment companies, or separate
accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
employees and registered representatives (and their spouses)
of dealers or brokers described above or financial institutions
that have entered into sales arrangements with such dealers or
brokers (and are identified to the Distributor) or with the
Distributor; the purchaser must certify to the Distributor at the
time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor
children);
dealers, brokers 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 or employee benefit plans made available to
their clients (those clients may be charged a transaction fee by
their dealer, broker, or advisor for the purchase or sale of Fund
shares);
(1) investment advisors and financial planners who charge an
advisory, consulting or other fee for their services and buy shares
for their own accounts or the accounts of their clients, (2)
Retirement Plans and deferred compensation plans and trusts used to
fund those Plans (including, for example, plans qualified or
created under sections 401(a), 403(b) or 457 of the Internal
Revenue code), and rabbi trusts that buy shares for their own
accounts, in each case if those purchases are made through a broker
or agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases; and (3)
clients of such investment advisors or financial planners who buy
shares for their own accounts may also purchase shares without
sales charge but only if their accounts are linked to a master
account of their investment advisory or financial planner on the
books and records of the broker, agent or financial intermediary
with which the Distributor has made such special arrangements (each
of these investors may be charged a fee by the broker, agent or
financial intermediary for purchasing shares); or
directors, trustees, officers or full-time employees of
OpCap Advisors or its affiliates, their relatives or any trust,
pension, profit sharing or other benefit plan which beneficially
owns shares for those persons;
accounts for which Oppenheimer Capital is the investment
adviser (the Distributor must be advised of this arrangement) and
persons who are directors or trustees of the company or trust which
is the beneficial owner of such accounts;
any unit investment trust that has entered into an
appropriate agreement with the Distributor;
a TRAC-2000 401(k) plan (sponsored by the former Quest For
Value Advisors) whose Class B or Class C shares of a Former Quest
for Value Fund were exchanged for Class A shares of that Fund due
to the termination of the Class B and Class C TRAC-2000 program on
November 24, 1995; or
qualified retirement plans that had agreed with the former
Quest for Value Advisors to purchase shares of any of the Former
Quest for Value Funds at net asset value, with such shares to be
held through DCXchange, a sub-transfer agency mutual fund
clearinghouse, provided that such arrangements are consummated and
share purchases commence by December 31, 1996.
Waivers of Initial and Contingent Deferred Sales Charges in
Certain Transactions. Class A shares issued or purchased in the
following transactions are not subject to Class A sales charges:
shares issued in plans of reorganization, such as mergers,
asset acquisitions and exchange offers, to which the Fund is a
party,
shares purchased by the reinvestment of loan repayments by
a participant in a retirement plan for which the Manager or its
affiliates acts as sponsor,
shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds
(other than Oppenheimer Cash Reserves) or unit investment trusts
for which reinvestment arrangements have been made with the
Distributor,
shares purchased and paid for with the proceeds of shares
redeemed in the prior 12 months from a mutual fund (other than a
fund managed by the Manager or any of its subsidiaries) on which an
initial sales charge or contingent deferred sales charge was paid
(this waiver also applies to shares purchased by exchange of shares
of Oppenheimer Money Market Fund, Inc. that were purchased and paid
for in this manner); this waiver must be requested when the
purchase order is placed for your shares of the Fund, and the
Distributor may require evidence of your qualification for this
waiver, or
shares purchased with the proceeds of maturing principal or
units of any Qualified Unit Investment Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for
Certain Redemptions. The class A contingent deferred sales charge
is also waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the follow cases:
to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value;
involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see Shareholder Account
Rules and Policies, below);
if, at the time a purchase order is placed for Class A charges
that would otherwise be subject to the Class A contingent deferred
sales charge, the dealer agrees in writing to accept the dealer s
portion of the commission payable on the sales in installments of
1/18th of the commission per month (and no further commission will
be payable if the shares are redeemed within 18 months of
purchase);
for distributions from a TRAC-2000 401(k) plan sponsored by the
Distributor due to the termination of the TRAC-2000 program;
for distributions from Retirement Plans, deferred compensation
plans or other employee benefit plans for any of the following
purposes: (1) following the death or disability (as defined in the
Internal Revenue Code) of the participant or beneficiary (the death
or disability must occur after the participant s account was
established); (2) to return excess contribution; (3) to return
contributions made due to a mistake of fact; (4) hardship
withdrawals, as defined in the plan; (5) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (6) to
meet the minimum distribution requirements of the Internal Revenue
Code; (7) to establish substantially equal periodic payments as
described in Section 72(t) of the Internal Revenue Code; (8) for
retirement distributions or loans to participants or beneficiaries;
(9) separation from service; (10) participant-directed redemptions
to purchase shares of a mutual fund (other than a fund managed by
the Manager or its subsidiary) offered as an investment option in
a Retirement Plan in which Oppenheimer funds are also offered as
investment options under a special arrangement with the
Distributor; or (11) plan termination or in-service
distributions, if the redemption proceeds are rolled over directly
to an OppenheimerFunds IRA;
for all distributions from Retirement Plans with 500 or more
eligible participants, except distributions due to termination of
the Fund as an investment option for the Plan; or
for all distributions from certain 401(k) plan programs
sponsored by broker-dealers that have entered into a special
agreement with the Distributor.
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for a
portion of its costs incurred in connection with the personal
service and maintenance of accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net asset value of Class A
shares of the Fund. The Distributor uses all of those fees to
compensate dealers, brokers, banks and other financial institutions
quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares and to
reimburse itself (if the Fund's Board of Directors authorizes such
reimbursements, which it has not yet done) for its other
expenditures under the Plan.
Services to be provided include, among others, answering
customer inquiries about the Fund, assisting in establishing and
maintaining accounts in the Fund, making the Fund's investment
plans available and providing other services at the request of the
Fund or the Distributor. Payments are made by the Distributor
quarterly at an annual rate not to exceed 0.25% of the average
annual net assets of Class A shares held in accounts of the dealer
provider or their customers. The payments under the Plan increase
the annual expenses of Class A shares of the Fund by up to 0.25% of
the class' average annual net assets. For more details, please
refer to "Distribution and Service Plans" in the Statement of
Additional Information.
Buying Class B Shares. Class B shares are sold at net asset
value per share without an initial sales charge. However, if Class
B shares are redeemed within 6 years of their purchase, a
contingent deferred sales charge will be deducted from the
redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based
on the lesser of the net asset value of the redeemed shares at the
time of redemption or the original offering price (which is the
original net asset value). The contingent deferred sales charge is
not imposed on the amount of your account value represented by the
increase in net asset value over the initial purchase price. The
Class B contingent deferred sales charge is paid to the Distributor
to reimburse its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies
to a redemption, the Fund redeems shares in the following order:
(1) shares acquired by reinvestment of dividends and capital gains
distributions, (2) shares held for over 6 years, and (3) shares
held the longest during the 6-year period. The contingent deferred
sales charge is not imposed in the circumstances described in
Waivers of Class B and Class C sales charges, below.
The amount of the contingent deferred sales charge will depend
on the number of years since you invested and the dollar amount
being redeemed, according to the following schedule:
Contingent Deferred Sales Charge
Years Since Beginning of Month In on Redemptions in that Year
Which Purchase Order Was Accepted (As % of Amount Subject to Charge)
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases are
considered to have been made on the first regular business day of
the month in which the purchase was made.
Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to
Class A shares. This conversion feature relieves Class B
shareholders of the asset-based sales charge that applies to Class
B shares under the Class B Distribution and Service Plan, described
below. The conversion is based on the relative net asset value of
the two classes, and no sales load or other charge is imposed. When
Class B shares convert, any other Class B shares that were acquired
by the reinvestment of dividends and distributions on the converted
shares will also convert to Class A shares. The conversion feature
is subject to the continued availability of a tax ruling described
in "Alternative Sales Arrangements - Class A, Class B and Class C
Shares" in the Statement of Additional Information.
Buying Class C Shares. Class C shares are sold at net asset
value per share without an initial sales charge. However, if the
Class C shares are redeemed within 12 months of their purchase, a
contingent deferred sales charge of 1.0% will be deducted from the
redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based
on the lesser of the net asset value of the shares at the time of
redemption or the original offering price. The contingent deferred
sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial
purchase price. The Class C contingent deferred sales charge is
paid to compensate the Distributor for its expenses of providing
distribution-related services to the Fund in connection with the
sale of Class C shares.
To determine whether the contingent deferred sales charge applies
to a redemption, the Fund redeems shares in the following order:
(1) shares acquired by reinvestment of dividends and capital gains
distributions, (2) shares held for over 12 months, and (3) shares
held the longest during the 12-month period.
Distribution and Service Plans for Class B and Class C Shares.
The Fund has adopted Distribution and Service Plans for Class B
and Class C shares to compensate the Distributor for its services
in distributing Class B and C shares and servicing accounts. Under
the Plans, the Fund pays the Distributor an annual "asset-based
sales charge" of 0.75% per year on Class B shares that are
outstanding for 6 years or less and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under
each plan.
Under each Plan, both fees are computed on the average of the net
asset value of shares in the respective class, determined as of the
close of each regular business day during the period. The asset-
based sales charge and service fees increase Class B and Class C
expenses by 1.00% of the net assets per year of the respective
class.
The Distributor uses the service fees to compensate dealers for
providing personal services for accounts that hold Class B or C
shares. Those services are similar to those provided under the
Class A Service Plan, described above. The Distributor pays the
0.25% service fees to dealers in advance for the first year after
Class B or Class C shares have been sold by the dealer. After the
shares have been held for a year, the Distributor pays the service
fees to dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B or
C shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares. The Fund
pays the asset-based sales charges to the Distributor for its
services rendered in distributing Class B and Class C shares.
Those payments are at a fixed rate that is not related to the
Distributor's expenses. The services rendered by the Distributor
include paying and financing the payment of sales commissions,
service fees and other costs of distributing and selling Class B
and Class C shares.
The Distributor currently pays sales commissions of 3.75% of the
purchase price of Class B shares to dealers from its own resources
at the time of sale. Including the advance of the service fee, the
total amount paid by the Distributor to the dealer at the time of
sale of Class B shares is therefore 4.00% of the purchase price.
The Distributor retains the Class B asset-based sales charge. The
Distributor currently pays sales commissions of 0.75% of the
purchase price of Class C shares to dealers from its own resources
at the time of sale. Including the advance of the service fee, the
total amount paid by the Distributor to the dealer at the time of
sale of Class C shares is therefore 1.00% of the purchase price.
The Distributor plans to pay the asset-based sales charge as an
ongoing commission to the dealer on Class C shares that have been
outstanding for a year or more.
The Distributor's actual expenses in selling Class B and Class
C shares may be more than the payments it receives from contingent
deferred sales charges collected on redeemed shares and from the
Fund under the Distribution and Service Plans for Class B and Class
C shares. At December 31, 1996, the end of the Class B Plan year,
the Distributor had incurred unreimbursed expenses in connection
with the sale of Class B shares of $18,066,359(equal to 2.39% of
the Fund s net assets represented by Class B shares on that date).
At December 31, 1996, the end of the Class C Plan Year, the
Distributor had incurred unreimbursed expenses in connection with
the sale of Class C shares of $189,390 (equal to 1.08% of the
Fund s net assets represented by Class C shares on that date). If
either Plan is terminated by the Fund, the Board of Directors may
allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the Plan was
terminated.
Waivers of Class B and Class C Sales Charges. The Class B and
Class C contingent deferred sales charge will not be applied to
shares purchased in certain types of transactions nor will it apply
to Class B and Class C shares redeemed in certain circumstances as
described below. The reasons for this policy are in "Reduced Sales
Charges" in the Statement of Additional Information.
Waivers for Redemptions of Shares in Certain Cases. The Class
B and Class C contingent deferred sales charge will be waived for
redemptions of shares in the following cases:
distributions to participants or beneficiaries from Retirement
Plans, if the distributions are made (a) under an Automatic
Withdrawal Plan after the participant reaches age 59-1/2, as long
as the payments are no more than 10% of the account value annually
(measured from the date the Transfer Agent receives the request),
or (b) following the death or disability (as defined in the
Internal Revenue Code) of the participant or beneficiary (the death
or disability must have occurred after the account was
established);
redemptions from accounts other than Retirement Plans following
the death or disability of the last surviving shareholder,
including a trustee of a grantor trust or revocable living trust
for which the trustee is also the sole beneficiary (the death or
disability must have occurred after the account was established for
disability and you must provide evidence of a determination of
disability by the Social Security Administration);
returns of excess contributions to Retirement Plans;
distributions from retirement plans to make substantially
equal periodic payments as permitted in Section 72(t) of the
Internal Revenue Code that do not exceed 10% of the account value
annually, measured from the date the transfer agent receives the
request;
shares redeemed involuntarily, as described in "Shareholder
Account Rules and Policies," below;
distributions from OppenheimerFunds prototype 401(k) plans (1)
for loans to participants or beneficiaries, (2) for hardship
withdrawals; (3) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (4) to meet minimum
distribution requirements as defined in the Internal Revenue Code;
(5) to make "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code; or (6) for separation
from service; or
Distributions from certain 401(k) plan programs sponsored by
broker-dealers that have entered into a special agreement with the
Distributor.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent deferred sales charge is also waived on Class B and
Class C shares sold or issued in the following cases:
shares sold to the Manager or its affiliates;
shares sold to registered management investment companies or
separate accounts of insurance companies having an agreement with
the Manager or the Distributor for that purpose; and
shares issued in plans of reorganization to which the Fund
is a party.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account
to your account at your bank or other financial institution to
enable you to send money electronically between those accounts to
perform a number of types of account transactions. These include
purchases of shares by telephone (either through a service
representative or by PhoneLink, described below), automatic
investments under Asset Builder Plans, and sending dividends and
distributions or Automatic Withdrawal Plan payments directly to
your bank account. Please call the Transfer Agent for more
information.
AccountLink privileges should be requested on your dealer's
settlement instructions if you buy your shares through your dealer.
After your account is established, you can request AccountLink
privileges by sending signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each
shareholder listed in the registration on your account as well as
to your dealer representative of record unless and until the
Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for your
account, any change of bank account information must be made by
signature-guaranteed instructions to the Transfer Agent signed by
all shareholders who own the account.
Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase
shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1-800-852-8457. The
purchase payment will be debited from your bank account.
PhoneLink. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a number of
account transactions automatically using a touch-tone phone.
PhoneLink may be used on already-established Fund accounts after
you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number: 1-800-533-3310.
Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by
calling 1-800-533-3310. You must have established AccountLink
privileges to link your bank account with the Fund, to pay for
these purchases.
Exchanging Shares. With the OppenheimerFunds exchange
privilege, described below, you can exchange shares automatically
by phone from your Fund account to another Oppenheimer funds
account you have already established by calling the special
PhoneLink number. Please refer to "How to Exchange Shares," below,
for details.
Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will
send the proceeds directly to your AccountLink bank account.
Please refer to "How to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several
plans that enable you to sell shares automatically or exchange them
to another Oppenheimer funds account on a regular basis:
Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly, semi-annual or
annual basis. The checks may be sent to you or sent automatically
to your bank account on AccountLink. You may even set up certain
types of withdrawals of up to $1,500 per month by telephone. You
should consult the Statement of Additional Information for more
details.
Automatic Exchange Plans. You can authorize the Transfer Agent
to exchange an amount you establish in advance automatically for
shares of up to five other Oppenheimer funds on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum purchase for each Oppenheimer funds account is
$25. These exchanges are subject to the terms of the exchange
privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class
A or Class B shares of the Fund, you have up to 6 months to
reinvest all or part of the redemption proceeds in Class A shares
of the Fund or other Oppenheimer funds without paying a sales
charge. This privilege applies only to Class A shares you purchased
subject to an initial sales charge and to Class A or Class B shares
on which you paid a contingent deferred sales charge when you
redeemed them. This privilege does not apply to Class C shares.
You must be sure to ask the Distributor for this privilege when you
send your payment. Please consult the Statement of Additional
Information for more details.
Retirement Plans. Fund shares are available as an investment for
your retirement plans. If you participate in a plan sponsored by
your employer, the plan trustee or administrator must make the
purchase of shares for your retirement plan account. The
Distributor offers a number of different retirement plans that can
be used by individuals and employers:
Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable
organizations
SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment
Pension and Profit-Sharing Plans for self-employed persons and
other employers
401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account by selling
(redeeming) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated
after your order is received and accepted by the Transfer Agent.
The Fund offers you a number of ways to sell your shares: in
writing or by telephone. You can also set up Automatic Withdrawal
Plans to redeem shares on a regular basis, as described above. If
you have questions about any of these procedures, and especially if
you are redeeming shares in a special situation, such as due to the
death of the owner, or from a retirement plan, please call the
Transfer Agent first, at 1-800-525-7048, for assistance.
Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must
submit a withholding form with your request to avoid delay. If your
retirement plan account is held for you by your employer, you must
arrange for the distribution request to be sent by the plan
administrator or trustee. There are additional details in the
Statement of Additional Information.
Certain Requests Require a Signature Guarantee. To protect
you and the Fund from fraud, certain redemption requests must be in
writing and must include a signature guarantee in the following
situations (there may be other situations also requiring a
signature guarantee):
You wish to redeem more than $50,000 worth of shares and
receive a check
The redemption check is not payable to all shareholders
listed on the account statement
The redemption check is not sent to the address of record
on your account statement
Shares are being transferred to a Fund account with a
different owner or name
Shares are redeemed by someone other than the owners (such
as an Executor)
Where Can I Have My Signature Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union
or savings association, or by a foreign bank that has a U.S.
correspondent bank, or by a U.S. registered dealer or broker in
securities, municipal securities or government securities, or by a
U.S. national securities exchange, a registered securities
association or a clearing agency. If you are signing on behalf of
a corporation, partnership or other business, or as a fiduciary,
you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
Your name
The Fund's name
Your Fund account number (from your account statement)
The dollar amount or number of shares to be redeemed
Any special payment instructions
Any share certificates for the shares you are selling
The signatures of all registered owners exactly as the
account is registered, and
Any special requirements or documents requested by the
Transfer Agent to assure proper authorization of the person
asking to sell shares.
Use the following address for requests by mail:
OppenheimerFunds Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
OppenheimerFunds 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 request must be
received by the Transfer Agent or its agent by the close of The New
York Stock Exchange that day, which is normally 4:00 P.M., but may
be earlier on some days. Shares held in an OppenheimerFunds
retirement plan or under a share certificate may not be redeemed by
telephone.
To redeem shares through a service representative, call 1-800-
852-8457
To redeem shares automatically on PhoneLink, call 1-800-533-
3310
Whichever method you use, you may have a check sent to the
address on the account statement, or, if you have linked your Fund
account to your bank account on AccountLink, you may have the
proceeds transferred to that bank account.
Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone once, in any 7-day period. The check must be
payable to all owners of record of the shares and must be sent to
the address on the account statement. This service is not
available within 30 days of changing the address on an account.
Telephone Redemptions Through AccountLink or By Wire.
There are no dollar limits on telephone redemption proceeds sent to
a bank account designated when you establish AccountLink. Normally
the ACH transfer to your bank is initiated on the business day
after the redemption. You do not receive dividends on the proceeds
of the shares you redeemed while they are waiting to be
transferred.
Shareholders may also have the Transfer Agent send redemption
proceeds of $2,500 or more by Federal Funds wire to a designated
commercial bank account. The bank must be a member of the Federal
Reserve wire system. To place a wire redemption request, call the
Transfer Agent at 1-800-852-8457. The wire will normally be
transmitted on the next bank business day after the shares are
redeemed. There is a possibility that the wire may be delayed up
to seven days to enable the Fund to sell securities to pay the
redemption proceeds. No dividends are accrued or paid on the
proceeds of shares that have been redeemed and are awaiting
transmittal by wire. To establish wire redemption privileges on an
account that is already established, please contact the Transfer
Agent for instructions. There is a $10 fee for each wire.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on
behalf of their customers. Brokers or dealers may charge for that
service. Please call your dealer for more information about this
procedure. Please refer to "Special Arrangements for Repurchase of
Shares from Dealers and Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
Oppenheimer funds at net asset value per share at the time of
exchange, without sales charge. To exchange shares, you must meet
several conditions:
Shares of the fund selected for exchange must be available for
sale in your state of residence
The prospectuses of this Fund and the fund whose shares you
want to buy must offer the exchange privilege
You must hold the shares you buy when you establish your
account for at least 7 days before you can exchange them; after the
account is open 7 days, you can exchange shares every regular
business day
You must meet the minimum purchase requirements for the fund
you purchase by exchange
Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class of the Fund may be exchanged only
for shares of the same class in the other Oppenheimer funds. For
example, you can exchange Class A shares of this Fund only for
Class A shares of another fund. At present, Oppenheimer Money
Market Fund, Inc. offers only one class of shares, which are
considered to be Class A shares for this purpose. In some cases,
sales charges may be imposed on exchange transactions. Please
refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
Exchanges may be requested in writing or by telephone:
Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
Telephone Exchange Requests. Telephone exchange requests may
be made either by calling a service representative at 1-800-852-
8457 or by using PhoneLink for automated exchanges, by calling 1-
800-533-3310. Telephone exchanges may be made only between accounts
that are registered with the same name(s) and address. Shares held
under certificates may not be exchanged by telephone.
You can find a list of Oppenheimer funds currently available
for exchanges in the Statement of Additional Information or obtain
one by calling a service representative at 1-800-525-7048. That
list can change from time to time.
There are certain exchange policies you should be aware of:
Shares are normally redeemed from one fund and purchased from
the other fund in the exchange transaction on the same regular
business day on which the Transfer Agent receives an exchange
request that is in proper form by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M., but may be earlier
on some days. However, either fund may delay the purchase of
shares of the fund you are exchanging into up to seven days if it
determines it would be disadvantaged by a same-day transfer of the
proceeds to buy shares. For example, the receipt of multiple
exchange requests from a dealer in a "market-timing" strategy might
require the disposition of securities at a time or price
disadvantageous to the Fund.
Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange
request that will disadvantage it, or to refuse multiple exchange
requests submitted by a shareholder or dealer.
The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund will attempt to provide
you notice whenever it is reasonably able to do so, it may impose
these changes at any time.
For tax purposes, exchanges of shares involve a redemption of
the shares of the Fund you own and a purchase of the shares of the
other fund, which may result in a capital gain or loss. For more
information about taxes affecting exchanges, please refer to "How
to Exchange Shares" in the Statement of Additional Information.
If the Transfer Agent cannot exchange all the shares you
request because of a restriction cited above, only the shares
eligible for exchange will be exchanged.
Shareholder Account Rules and Policies
Net Asset Value Per Share is determined for each class of
shares as of the close of The New York Stock Exchange, which is
normally 4:00 P.M. but may be earlier on some days, on each day the
Exchange is open by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that
are outstanding. The Fund's Board of Directors has established
procedures to value the Fund's securities to determine net asset
value. In general, securities values are based on market value.
There are special procedures for valuing illiquid and restricted
securities and for obligations for which market values cannot be
readily obtained. These procedures are described more completely
in the Statement of Additional Information.
The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the
offering may be suspended by the Board of Directors at any time the
Board believes it is in the Fund's best interest to do so.
Telephone Transaction Privileges for purchases, redemptions
or exchanges may be modified, suspended or terminated by the Fund
at any time. If an account has more than one owner, the Fund and
the Transfer Agent may rely on the instructions of any one owner.
Telephone privileges apply to each owner of the account and the
dealer representative of record for the account unless and until
the Transfer Agent receives cancellation instructions from an owner
of the account.
The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other procedures to
confirm that telephone instructions are genuine, by requiring
callers to provide tax identification numbers and other account
data or by using PINs, and by confirming such transactions in
writing. If the Transfer Agent does not use reasonable procedures
it may be liable for losses due to unauthorized transactions, but
otherwise neither the Transfer Agent nor the Fund will be liable
for losses or expenses arising out of telephone instructions
reasonably believed to be genuine. If you are unable to reach the
Transfer Agent during periods of unusual market activity, you may
not be able to complete a telephone transaction and should consider
placing your order by mail.
Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From
time to time, the Transfer Agent in its discretion may waive
certain of the requirements for redemptions stated in this
Prospectus.
Dealers that can perform account transactions for their
clients by participating in NETWORKING through the National
Securities Clearing Corporation are responsible for obtaining their
clients' permission to perform those transactions and are
responsible to their clients who are shareholders of the Fund if
the dealer performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day
because the value of the securities in the Fund's portfolio
fluctuates, and the redemption price, which is the net asset value
per share, will normally be different for Class A, Class B, Class
C and Class Y shares. Therefore, the redemption value of your
shares may be more or less than their original cost.
Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the
shareholder under the redemption procedures described above) within
7 days after the Transfer Agent receives redemption instructions in
proper form, except under unusual circumstances determined by the
Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer,
payment will be forwarded within 3 business days. The Transfer
Agent may delay forwarding a check or processing a payment via
AccountLink for recently purchased shares, but only until the
purchase payment has cleared. That delay may be as much as 10 days
from the date the shares were purchased. That delay may be avoided
if you purchase shares by certified check or arrange to have your
bank provide telephone or written assurance to the Transfer Agent
that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the
Fund if the account value has fallen below $500 for reasons other
than the fact that the market value of shares has dropped, and in
some cases involuntary redemptions may be made to repay the
Distributor for losses from the cancellation of share purchase
orders.
Under unusual circumstances, shares of the Fund may be
redeemed "in kind," which means that the redemption proceeds will
be paid with securities from the Fund's portfolio. Please refer to
"How to Sell Shares" in the Statement of Additional Information for
more details.
"Backup Withholding" of Federal income tax may be applied at
the rate of 31% from dividends, distributions and redemption
proceeds (including exchanges) if you fail to furnish the Fund a
certified Social Security or Employer Identification Number when
you sign your application, or if you violate Internal Revenue
Service regulations on tax reporting of income.
The Fund does not charge a redemption fee, but if your dealer
or broker handles your redemption, they may charge a fee. That fee
can be avoided by redeeming your Fund shares directly through the
Transfer Agent. Under the circumstances described in "How To Buy
Shares," you may be subject to a contingent deferred sales charges
when redeeming certain Class A, Class B and Class C shares.
To avoid sending duplicate copies of materials to households,
the Fund will mail only one copy of each annual and semi-annual
report to shareholders having the same last name and address on the
Fund's records. However, each shareholder may call the Transfer
Agent at 1-800-525-7048 to ask that copies of those materials be
sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A,
Class B, Class C and Class Y shares from net investment income on
a quarterly basis and pays those dividends to shareholders in
March, June, September and December on a date set by the Fund's
Board. Also, dividends paid on Class A and Class Y shares
generally are expected to be higher than for Class B and Class C
shares because expenses allocable to Class B and Class C shares
will generally be higher. During the Fund s fiscal year ended
December 31, 1996, the Fund maintained the practice, to the extent
consistent with the Fund s net investment income and other
distributable income, of attempting to pay dividends on Class A
shares at a constant level, although the amount of such dividends
was subject to change from time to time depending on market
conditions, the composition of the Fund s portfolio and expenses
borne by the Fund. The Board of Directors may change the level of
dividends at any time without notice to shareholders and there can
be no assurance as to the payment of any dividends or the
realization of any gains.
Capital Gains. The Fund may make distributions annually in December
out of any net short-term or long-term capital gains, and the Fund
may make supplemental distributions of dividends and capital gains
following the end of its fiscal year. Long-term capital gains will
be separately identified in the tax information the Fund sends you
after the end of the year. Short-term capital gains are treated as
dividends for tax purposes. There can be no assurance that the Fund
will pay any capital gains distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are
reinvested. For other accounts, you have four options:
Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
Reinvest Long-Term Capital Gains Only. You can elect to
reinvest long-term capital gains in the Fund while receiving
dividends by check or sent to your bank account on AccountLink.
Receive All Distributions in Cash. You can elect to receive
a check for all dividends and long-term capital gains distributions
or have them sent to your bank on AccountLink.
Reinvest Your Distributions in the Same Class of Shares of
Another Oppenheimer Fund Account. You can reinvest all
distributions in another Oppenheimer fund account you have
established.
Taxes. If your account is not a tax-deferred retirement account,
you should be aware of the following tax implications of investing
in the Fund. Long-term capital gains are taxable as long-term
capital gains when distributed to shareholders. It does not matter
how long you held your shares. Dividends paid from short-term
capital gains and net investment income are taxable as ordinary
income. Distributions are subject to federal income tax and may be
subject to state or local taxes. Your distributions are taxable
when paid, whether you reinvest them in additional shares or take
them in cash. Every year the Fund will send you and the IRS a
statement showing the amount of each taxable distribution you
received in the previous year.
"Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy
shares on or just before the ex-dividend date, or just before the
Fund declares a capital gains distribution, you will pay the full
price for the shares and then receive a portion of the price back
as a taxable dividend or capital gain.
Taxes on Transactions: Share redemptions, including
redemptions for exchanges, are subject to capital gains tax. A
capital gain or loss is the difference between the price you paid
for the shares and the price you received when you sold them.
Returns of Capital: In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices to
shareholders. A non-taxable return of capital may reduce your tax
basis in your Fund shares.
This information is only a summary of certain federal tax
information about your investment. More information is contained
in the Statement of Additional Information, and in addition you
should consult with your tax advisor about the effect of an
investment in the Fund on your particular tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER TOTAL RETURN FUND, INC.
Graphic material included in Prospectus of Oppenheimer Total
Return Fund, Inc.: "Comparison of Total Return of Oppenheimer Total
Return Fund, Inc. 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
Total Return Fund, Inc. (the "Fund") depicting the initial account
value and subsequent account value of a hypothetical $10,000
investment in (i) Class A shares of the Fund for each of the Fund's
most ten recently completed fiscal years, and (ii) Class B shares
of the Fund for the period May 1, 1993 (commencement of class) to
December 31, 1996,(iii) Class C shares of the Fund for the period
August 29, 1995 (inception of class) to December 31, 1996, and (iv)
Class Y shares of the Fund for the period from June 1, 1994 through
December 31, 1996, and comparing such values with the same
investments over the same time periods in the S&P 500 Index. Set
forth below are the relevant data points that will appear on the
linear graph. Additional information with respect to the
foregoing, including a description of the S&P 500 Index, is set
forth in the Prospectus under "Performance of the Fund-How Has the
Fund Performed."
Fiscal Oppenheimer Total Return S & P 500
Year Ended Fund, Inc. Class A Shares Index
12/31/86 $ 9,425 $10,000
12/31/87 $10,589 $10,525
12/31/88 $12,001 $12,268
12/31/89 $14,312 $16,149
12/31/90 $13,760 $15,647
12/31/91 $18,749 $20,404
12/31/92 $21,154 $21,956
12/31/93 $25,646 $24,164
12/31/94 $23,631 $24,482
12/31/95 $30,750 $33,671
12/31/96 $36,816 $41,397
Fiscal Oppenheimer Total Return S&P 500
Period Ended Fund, Inc. Class B Shares Index
05/01/93 $10,000 $10,000
12/31/93 $11,390 $10,807
12/31/94 $10,407 $10,949
12/31/95 $13,428 $15,058
12/31/96 $15,649 $18,513
Fiscal Oppenheimer Total Return S & P 500
Year Ended Fund, Inc. Class C Shares Index
8/29/95 $10,000 $10,000
12/31/95 $10,882 $11,049
12/31/96 $12,915 $13,584
Fiscal Oppenheimer Total Return S & P 500
Period Ended Fund, Inc. Class Y Shares Index
6/1/94 $10,000 $10,000
12/31/94 $ 9,686 $10,230
12/31/95 $12,613 $14,069
12/31/96 $15,120 $17,297
<PAGE>
APPENDIX A
Special Sales Charge Arrangements for Shareholders of the Fund
Who Were Shareholders of the Former Quest for Value Funds
The initial and contingent sales charge rates and waivers for
Class A, Class B and Class C shares of the Fund described elsewhere
in this Prospectus are modified as described below for those
shareholders of (i) Quest for Value Fund, Inc., Quest for Value
Growth and Income Fund, Quest for Value Opportunity Fund, Quest for
Value Small Capitalization Fund and Quest for Value Global Equity
Fund, Inc. on November 24, 1995, when OppenheimerFunds, Inc. became
the investment advisor to those funds, and (ii) Quest for Value
U.S. Government Income Fund, Quest for Value Investment Quality
Income Fund, Quest for Value Global Income Fund, Quest for Value
New York Tax-Exempt Fund, Quest for Value National Tax-Exempt Fund
and Quest for Value California Tax-Exempt Fund when those funds
merged into various Oppenheimer funds on November 24, 1995. The
funds listed above are referred to in this Prospectus as the
"Former Quest for Value Funds." The waivers of initial and
contingent deferred sales charges described in this Appendix apply
to shares of the Fund (i) acquired by such shareholder pursuant to
an exchange of shares of one of the Oppenheimer funds that was one
of the Former Quest for Value Funds or (ii) received by such
shareholder pursuant to the merger of any of the Former Quest for
Value Funds into an Oppenheimer fund on November 24, 1995.
Class A Sales Charges
Reduced Class A Initial Sales Charge Rates for Certain Former
Quest Shareholders
Purchases by Groups, Associations and Certain Qualified
Retirement Plans. The following table sets forth the initial sales
charge rates for Class A shares purchased by a "Qualified
Retirement Plan" through a single broker, dealer or financial
institution, or by members of "Associations" formed for any purpose
other than the purchase of securities if that Qualified Retirement
Plan or that Association purchased shares of any of the Former
Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995. For this
purpose only, a "Qualified Retirement Plan" includes any 401(k)
plan, 403(b) plan, and SEP/IRA or IRA plan for employees of a
single employer.
<TABLE>
<CAPTION>
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
<S> <C> <C> <C>
9 or fewer 2.50% 2.56% 2.00%
At least 10 but not
more than 49 2.00% 2.04% 1.60%
</TABLE>
For purchases by Qualified Retirement plans and Associations
having 50 or more eligible employees or members, there is no
initial sales charge on purchases of Class A shares, but those
shares are subject to the Class A contingent deferred sales charge
described on pages __ to __ of this Prospectus.
Purchases made under this arrangement qualify for the lower of
the sales charge rate in the table based on the number of eligible
employees in a Qualified Retirement Plan or members of an
Association or the sales charge rate that applies under the Rights
of Accumulation described above in the Prospectus. In addition,
purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they
qualified to purchase shares of any of the Former Quest For Value
Funds by virtue of projected contributions or investments of $1
million or more each year. Individuals who qualify under this
arrangement for reduced sales charge rates as members of
Associations, or as eligible employees in Qualified Retirement
Plans also may purchase shares for their individual or custodial
accounts at these reduced sales charge rates, upon request to the
Fund's Distributor.
Special Class A Contingent Deferred Sales Charge Rates. Class
A shares of the Fund purchased by exchange of shares of other
Oppenheimer funds that were acquired as a result of the merger of
Former Quest for Value Funds into those Oppenheimer funds, and
which shares were subject to a Class A contingent deferred sales
charge prior to November 24, 1995, will be subject to a contingent
deferred sales charge at the following rates: if they are redeemed
within 18 months of the end of the calendar month in which they
were purchased, at a rate equal to 1.0% if the redemption occurs
within 12 months of their initial purchase and at a rate of 0.50 of
1.0% if the redemption occurs in the subsequent six months. Class
A shares of any of the Former Quest for Value Funds purchased
without an initial sales charge on or before November 22, 1995 will
continue to be subject to the applicable contingent deferred sales
charge in effect as of that date as set forth in the then-current
prospectus for such fund.
Waiver of Class A Sales Charges for Certain Shareholders. Class
A shares of the Fund purchased by the following investors are not
subject to any Class A initial or contingent deferred sales
charges:
Shareholders of the Fund who were shareholders of the AMA
Family of Funds on February 28, 1991 and who acquired shares of any
of the Former Quest for Value Funds by merger of a portfolio of the
AMA Family of Funds.
Shareholders of the Fund who acquired shares of any Former
Quest for Value Fund by merger of any of the portfolios of the
Unified Funds.
Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will
not apply to redemptions of Class A shares of the Fund purchased by
the following investors who were shareholders of any Former Quest
for Value Fund:
Investors who purchased Class A shares from a dealer that is
or was not permitted to receive a sales load or redemption fee
imposed on a shareholder with whom that dealer has a fiduciary
relationship under the Employee Retirement Income Security Act of
1974 and regulations adopted under that law.
Participants in Qualified Retirement Plans that purchased
shares of any of the Former Quest For Value Funds pursuant to a
special "strategic alliance" with the distributor of those funds.
The Fund's Distributor will pay a commission to the dealer for
purchases of Fund shares as described above in "Class A Contingent
Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge
Waivers
Waivers for Redemptions of Shares Purchased Prior to March 6,
1995. In the following cases, the contingent deferred sales charge
will be waived for redemptions of Class A, B or C shares of the
Fund acquired by merger of a Former Quest for Value Fund into the
Fund or by exchange from an Oppenheimer fund that was a Former
Quest for Value Fund or into which such fund merged, if those
shares were purchased prior to March 6, 1995: in connection with
(i) distributions to participants or beneficiaries of plans
qualified under Section 401(a) of the Internal Revenue Code or from
custodial accounts under Section 403(b)(7) of the Code, Individual
Retirement Accounts, deferred compensation plans under Section 457
of the Code, and other employee benefit plans, and returns of
excess contributions made to each type of plan, (ii) withdrawals
under an automatic withdrawal plan holding only either Class B or
C shares if the annual withdrawal does not exceed 10% of the
initial value of the account, and (iii) liquidation of a
shareholder's account if the aggregate net asset value of shares
held in the account is less than the required minimum value of such
accounts.
Waivers for Redemptions of Shares Purchased on or After March 6,
1995 but Prior to November 24, 1995. In the following cases, the
contingent deferred sales charge will be waived for redemptions of
Class A, B or C shares of the Fund acquired by merger of a Former
Quest for Value Fund into the Fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into
which such fund merged, if those shares were purchased on or after
March 6, 1995, but prior to November 24, 1995: (1) distributions
to participants or beneficiaries from Individual Retirement
Accounts under Section 408(a) of the Internal Revenue Code or
retirement plans under Section 401(a), 401(k), 403(b) and 457 of
the Code, if those distributions are made either (a) to an
individual participant as a result of separation from service or
(b) following the death or disability (as defined in the Code) of
the participant or beneficiary; (2) returns of excess contributions
to such retirement plans; (3) redemptions other than from
retirement plans following the death or disability of the
shareholder(s) (as evidenced by a determination of total disability
by the U.S. Social Security Administration); (4) withdrawals under
an automatic withdrawal plan (but only for Class B or C shares)
where the annual withdrawals do not exceed 10% of the initial value
of the account; and (5) liquidation of a shareholder's account if
the aggregate net asset value of shares held in the account is less
than the required minimum account value. A shareholder's account
will be credited with the amount of any contingent deferred sales
charge paid on the redemption of any Class A, B or C shares of the
Fund described in this section if within 90 days after that
redemption, the proceeds are invested in the same Class of shares
in this Fund or another Oppenheimer fund.
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value Fund to
Quest for Value prototype 401(k) plans that were maintained on the
TRAC-2000 record keeping system and that were transferred to an
OppenheimerFunds prototype 401(k) plan shall be eligible for an
additional one-time payment by the Distributor of 1% of the value
of the plan assets transferred, but that payment may not exceed
$5,000 as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value
Fund to Quest for Value prototype 401(k) plans that were maintained
on the TRAC-2000 recordkeeping system and (i) the shares held by
those plans were exchanged for Class A shares, or (ii) the plan
assets were transferred to an OppenheimerFunds prototype 401(k)
plan, shall be eligible for an additional one-time payment by the
Distributor of 1% of the value of the plan assets transferred, but
that payment may not exceed $5,000.
<PAGE>
Oppenheimer Total Return Fund, Inc.
6803 South Tucson Way
Englewood, Colorado 80112
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street, Suite 3600
Denver, Colorado 80202-3942
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
No dealer, broker, salesperson or any other person has been
authorized to give any information or to make any representations
other than those contained in this Prospectus or the Statement of
Additional Information, and if given or made, such information and
representations must not be relied upon as having been authorized
by the Fund, OppenheimerFunds, Inc., OppenheimerFunds Distributor,
Inc. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state to any person to whom it is
unlawful to make such an offer in such state.
PRO420.001.0497 Printed on recycled paper
<PAGE>
Oppenheimer Total Return Fund, Inc.
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-7048
Statement of Additional Information dated April 18, 1997
This Statement of Additional Information is not a Prospectus.
This document contains additional information about the Fund and
supplements information in the Prospectus dated April 18, 1997. It
should be read together with the Prospectus which may be obtained
by writing to the Fund's Transfer Agent, OppenheimerFunds Services,
at P.O. Box 5270, Denver, Colorado 80217, or by calling the
Transfer Agent at the toll-free number shown above.
TABLE OF CONTENTS
Page
About the Fund
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . . .
Investment Policies and Strategies. . . . . . . . . . . . . . . . . .
Other Investment Techniques and Strategies. . . . . . . . . . . . . .
Other Investment Restrictions . . . . . . . . . . . . . . . . . . . .
How the Fund is Managed. . . . . . . . . . . . . . . . . . . . . . . . . .
Organization and History. . . . . . . . . . . . . . . . . . . . . . .
Directors and Officers of the Fund. . . . . . . . . . . . . . . . . .
The Manager and Its Affiliates. . . . . . . . . . . . . . . . . . . .
Brokerage Policies of the Fund . . . . . . . . . . . . . . . . . . . . . .
Performance of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution and Service Plans . . . . . . . . . . . . . . . . . . . . . .
About Your Account
How To Buy Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Sell Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Exchange Shares . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends, Capital Gains and Taxes . . . . . . . . . . . . . . . . . . . .
Additional Information About the Fund. . . . . . . . . . . . . . . . . . .
Financial Information About the Fund
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix A: Corporate Industry Classifications . . . . . . . . . . . . .A-1
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and
policies of the Fund are discussed in the Prospectus. Set forth
below is supplemental information about these policies and the
types of securities in which the Fund may invest, as well as the
strategies the Fund may use to try to achieve its objective.
Certain capitalized terms used in this Statement of Additional
Information are defined in the Prospectus.
Foreign Securities. As stated in the Prospectus, the
Fund may invest in equity or debt securities (which may be
dominated in U.S. dollars or non-U.S. currencies) issued or
guaranteed by foreign corporations, certain supranational entities
(described below) and foreign governments or their agencies or
instrumentalities, and in securities issued by U.S. corporations
denominated in non-U.S. currencies. Securities of foreign issuers
that are represented by American Depository Receipts or that are
listed on a U.S. securities exchange or traded in the U.S. over-
the-counter markets are not considered "foreign securities" for the
purpose of the Fund's investment allocations, because they are not
subject to many of the special considerations and risks, discussed
below, that apply to foreign securities traded and held abroad.
Investing in foreign securities offers the Fund potential
benefits not available from investing solely in securities of
domestic issuers, such as the opportunity to invest in foreign
issuers that appear to offer growth potential, or in foreign
countries with economic policies or business cycles different from
those of the U.S., or to reduce fluctuations in portfolio value by
taking advantage of foreign stock markets that do not move in a
manner parallel to U.S. markets. If the Fund's portfolio
securities are held abroad, the countries in which such securities
may be held and the sub-custodians or depositories holding them
must be approved by the Fund's Board of Directors to the extent
that approval is required under applicable rules of the Securities
and Exchange Commission. In buying foreign securities, the Fund
may convert U.S. dollars into foreign currency, but only to effect
securities transactions on foreign securities exchanges and not to
hold such currency as an investment.
Risks of Foreign Investing. Investing in foreign securities
involves special additional risks and considerations not typically
associated with investing in securities of issuers traded in the
U.S. These include: reduction of income by foreign taxes;
fluctuation in value of foreign portfolio investments due to
changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of
public information about foreign issuers; lack of uniform
accounting, auditing and financial reporting standards comparable
to those applicable to domestic issuers; less volume on foreign
exchanges than on U.S. exchanges; greater volatility and less
liquidity in 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 against foreign
issuers; higher brokerage commission rates than in the U.S.;
increased risks of delays in settlement of portfolio transactions
or loss of certificates for portfolio securities; possibilities in
some countries of expropriation or nationalization of assets,
confiscatory taxation, political, financial or social instability
or adverse diplomatic developments; and unfavorable differences
between the U.S. economy and foreign economies. In the past, U.S.
Government policies have discouraged certain investments abroad by
U.S. investors, through taxation or other restrictions, and it is
possible that such restrictions could be re-imposed.
Other Investment Techniques and Strategies
Hedging. As described in the Prospectus, the Fund may
employ one or more types of Hedging Instruments. When hedging to
attempt to protect against declines in the market value of the
Fund's portfolio, to permit the Fund to retain unrealized gains in
the value of portfolio securities which have appreciated, or to
facilitate selling securities for investment reasons, the Fund may:
(i) sell Stock Index Futures, (ii) buy puts, (iii) write covered
calls on securities, securities indices or on Stock Index Futures,
or (iv) enter into interest rate swap agreements. When hedging to
permit the Fund to establish a position in the equity market as a
temporary substitute for purchasing individual equity securities
(which the Fund will normally purchase, and then terminate that
hedging position), the Fund may (1) buy Stock Index Futures, or
(ii) buy calls on such Futures on Securities. Covered calls and
puts may also be written on debt securities to attempt to increase
the Fund's income.
The Fund's strategy of hedging with Futures and options on
Futures will be incidental to the Fund's activities in the
underlying cash market. Additional Information about the Hedging
Instruments the Fund may use is provided below. In the future, the
Fund may employ hedging instruments and strategies that are not
presently contemplated but which may be developed, to the extent
such investment methods are consistent with the Fund's investment
objective, legally permissible and adequately disclosed.
Writing Covered Call Options. 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 on the
same security 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 security), regardless of market price
changes during the call period. The Fund has retained the risk of
loss should the price of the underlying security decline during the
call period, which may be offset to some extent by the premium.
To terminate its obligation on a call it has written, the Fund
may purchase a corresponding call in a "closing purchase
transaction." A profit or loss will be realized, depending upon
whether the net of the amount of the option transaction costs and
the premium received on the call written is more or less than the
price of the call subsequently purchased. A profit may also be
realized if the call lapses unexercised, because the Fund retains
the underlying investment and the premium received. Any such
profits are considered short-term capital gains for Federal income
tax purposes, and when distributed by the Fund are taxable as
ordinary income. 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 a particular option. If the Fund could not effect
a closing purchase transaction due to lack of a market, it would
have to hold the callable investments until the call lapsed or was
exercised.
Writing Put Options. A put option on securities gives the
purchaser the right to sell, and the writer the obligation to buy,
the underlying investment at the exercise price during the option
period. Writing a put covered by segregated liquid assets equal to
the exercise price of the put has the same economic effect to the
Fund as writing a covered call. The premium the Fund receives from
writing a put option represents a profit, as long as the price of
the underlying investment remains above the exercise price.
However, the Fund has also assumed the obligation during the option
period to buy the underlying investment from the buyer of the put
at the exercise price, even though the value of the investment may
fall below the exercise price. If the put lapses unexercised, the
Fund (as the writer of the put) realizes a gain in the amount of
the premium. If the put is exercised, the Fund must fulfill its
obligation to purchase the underlying investment at the exercise
price, which will usually exceed the market value of the investment
at that time. In that case, the Fund may incur a loss, equal to
the sum of the current market value of the underlying investment
and the premium received minus the sum of the exercise price and
any transaction costs incurred.
When writing put options on securities, to secure its
obligation to pay for the underlying security, the Fund will
deposit in escrow liquid assets with a value equal to or greater
than the exercise price of the put option. The Fund therefore
forgoes the opportunity of investing the segregated assets or
writing calls against those assets. As long as the obligation of
the Fund as the put writer continues, it may be assigned an
exercise notice by the broker-dealer through whom such option was
sold, requiring the Fund to take delivery of the underlying
security against payment of the exercise price. The Fund has no
control over when it may be required to purchase the underlying
security, since it may be assigned an exercise notice at any time
prior to the termination of its obligation as the writer of the
put. This obligation terminates upon expiration of the put, or
such earlier time at which the Fund effects a closing purchase
transaction by purchasing a put of the same series as that
previously sold. Once the Fund has been assigned an exercise
notice, it is thereafter not allowed to effect a closing purchase
transaction.
The Fund may effect a closing purchase transaction to realize
a profit on an outstanding put option it has written or to prevent
an underlying security from being put. Furthermore, effecting such
a closing purchase transaction will permit the Fund to write
another put option to the extent that the exercise price thereof is
secured by the deposited assets, or to utilize the proceeds from
the sale of such assets for other investments by the Fund. The
Fund will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the
premium received from writing the option. As above for writing
covered calls, any and all such profits described herein from
writing puts are considered short-term gains for Federal tax
purposes, and when distributed by the Fund, are taxable as ordinary
income.
Purchasing Calls and Puts. When the Fund purchases a call
(other than in a closing purchase transaction), it pays a premium
and, except as to calls on securities indices or Stock Index
Futures, has the right to buy the underlying investment from a
seller of a corresponding call on the same investment during the
call period at a fixed exercise price. When the Fund purchases a
call on a securities index or Stock Index Future, it pays a
premium, but settlement is in cash rather than by delivery of the
underlying investment to the Fund. In purchasing a call, the Fund
benefits only if the call is sold at a profit or if, during the
call period, the market price of the underlying investment is above
the sum of the call price plus the transaction costs and the
premium paid and the call is exercised. If the call is not
exercised or sold (whether or not at a profit), it will become
worthless at its expiration date and the Fund will lose its premium
payment and the right to purchase the underlying investment.
When the Fund purchases a put, it pays a premium and, except
as to puts on stock indices or Stock Index Futures, has the right
to sell the underlying investment to a seller of a corresponding
put on the same investment during the put period at a fixed
exercise price. Buying a put on an investment the Fund owns
enables the Fund to protect itself during the put period against a
decline in the value of the underlying investment below the
exercise price by selling such underlying investment at the
exercise price to a seller of a corresponding put. If the market
price of the underlying investment is equal to or above the
exercise price and as a result the put is not exercised or resold,
the put will become worthless at its expiration date, and the Fund
will lose its premium payment and the right to sell the underlying
investment. The put may, however, be sold prior to expiration
(whether or not at a profit.)
Buying a put on an investment it does not own, either a put on
an index or a put on a Stock Index Future not held by the Fund,
permits the Fund either to resell the put or buy the underlying
investment and sell it at the exercise price. The resale price of
the put will vary inversely with the price of the underlying
investment. If the market price of the underlying investment is
above the exercise price and as a result the put is not exercised,
the put will become worthless on its expiration date. When the
Fund purchases a put on a stock index, or on a Stock Index Future
not held by it, the put protects the Fund to the extent that the
index moves in a similar pattern to the securities held. In the
case of a put on a stock index or Stock Index Future, settlement is
in cash rather than by delivery by the Fund of the underlying
investment.
Puts and calls on broadly-based indices or Futures are similar
to puts and calls on securities or futures contracts except that
all settlements are in cash and gain or loss depends on changes in
the index in question (and thus on price movements in the stock
market generally) rather than on price movements in individual
securities or futures contracts. When the Fund buys a calls on an
index or Future, it pays a premium. During the call period, upon
exercise of a call by the Fund, a seller of a corresponding call on
the same investment will pay the Fund an amount of cash to settle
the call if the closing level of the index or Future upon which the
call is based is greater than the exercise price of the call. That
cash payment is equal to the difference between the closing price
of the index and the exercise price of the call times a specified
multiple (the "multiplier"), which determines the total dollar
value for each point of difference. When the Fund buys a put on an
index or Future, it pays a premium and has the right during the put
period to require a seller of a corresponding put, upon the Fund's
exercise of its put, to deliver to the Fund an amount of cash to
settle the put if the closing level of the index or Future upon
which the put is based is less than the exercise price of the put.
That cash payment is determined by the multiplier, in the same
manner as described above as to calls.
An option position may be closed out only on a market which
provides secondary trading for options of the same series and there
is no assurance that a liquid secondary market will exist for any
particular option. The Fund's option activities may affect its
turnover rate and brokerage commissions. The exercise by the Fund
of puts on securities will cause the sale of related investments,
increasing portfolio turnover. Although such exercise is within
the Fund's control, holding a put might cause the Fund to sell the
related investments for reasons which would not exist in the
absence of the put. The Fund will pay a brokerage commission each
time it buys a put or call, sells a call, or buys or sells an
underlying investment in connection with the exercise of a put or
call. Such commissions may be higher than those which would apply
to direct purchases or sales of such underlying investments.
Premiums paid for options are small in relation to the market value
of the related investments, and consequently, put or call options
offer large amounts of leverage. The leverage offered by trading
in options could result in the Fund's net asset value being more
sensitive to changes in the value of the underlying investments.
Stock Index Futures. The Fund may buy and sell "Stock Index
Futures," a type of Financial Future for which the index used as
the basis for trading is a broadly-based stock index (including
stocks that are not limited to issuers in a particular industry or
group of industries). A stock index assigns relative values to the
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. 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 Financial Future or Stock
Index Future.
Upon entering into a Futures transaction, the Fund will be
required to deposit an initial margin payment, liquid assets of any
type, including equity and debt securities of any grade, 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.
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 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, or another currency
that is also subject of the hedge. 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 these
currencies 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 that 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."
Additional Information About Hedging Instruments and Their
Use. The Fund's Custodian, or a securities depository acting for
the Custodian, will act as the Fund's escrow agent, through the
facilities of the Options Clearing Corporation ("OCC"), as to the
investments on which the Fund has written options traded on
exchanges or as to other acceptable escrow securities, so that no
margin will be required for such transactions. OCC will release
the securities on the expiration of the option or upon the Fund's
entering into a closing transaction. An option position may be
closed out only on a market which provides secondary trading for
options of the same series, and there is no assurance that a liquid
secondary market will exist for any particular option.
When the Fund writes an over-the-
counter("OTC") option, it will enter into an arrangement with a
primary U.S. Government securities dealer, which would establish a
formula price at which the Fund would have the absolute right to
repurchase that OTC option. That formula price would generally be
based on a multiple of the premium received for the option, plus
the amount by which the option is exercisable below the market
price of the underlying security (that is, the extent to which the
option is "in-the-money"). When the Fund writes an OTC option, it
will treat as illiquid (for purposes of the limit on its assets
that may be invested in illiquid securities, stated in the
Prospectus) the mark-to-market value of any OTC option held by it
unless subject to a buy-back agreement with the executing broker.
The Securities and Exchange Commission is evaluating whether OTC
options should be considered liquid securities, and the procedure
described above could be affected by the outcome of that
evaluation.
The Fund's option activities may affect its turnover rate and
brokerage commissions. The exercise of calls written by the Fund
may cause the Fund to sell related portfolio securities, thus
increasing its turnover rate in a manner beyond the Fund's control.
The exercise by the Fund of puts on securities or Futures may cause
the sale of related investments, also increasing portfolio
turnover. Although such exercise is within the Fund's control,
holding a put might cause the Fund to sell the related investments
for reasons which would not exist in the absence of the put. The
Fund will pay a brokerage commission each time it buys or sells a
put, a call, or an underlying investment in connection with the
exercise of a put or call. Such commissions may be higher than
those which would apply to direct purchases or sales of the
underlying investments. Premiums paid for options are small in
relation to the market value of the related investments, and
consequently, put and call options offer large amounts of leverage.
The leverage offered by trading in options could result in the
Fund's net asset value being more sensitive to changes in the value
of the underlying investments.
Regulatory Aspects of Hedging Instruments. The Fund is
required to operate within certain guidelines and restrictions with
respect to its use of Futures and options on Futures established by
the Commodity Futures Trading Commission ("CFTC"). In particular,
the Fund is exempted from registration with the CFTC as a
"commodity pool operator" if the Fund complies with the
requirements of Rule 4.5 adopted by the CFTC. The Rule does not
limit the percentage of the Fund's assets that may be used for
Futures margin and related options premiums for a bona fide hedging
position. However, under the Rule the Fund must limit its
aggregate Futures margin and related options premiums to no more
than 5% of the Fund's net assets for hedging strategies that are
not considered bona fide hedging strategies under the Rule.
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 which apply to Futures. An
exchange may order the liquidation of positions found to be in
violation of those limits and may impose certain other sanctions.
Due to requirements under the Investment Company Act, when the
Fund purchases a Future, the Fund will maintain, in a segregated
account or accounts with its Custodian, cash or readily-marketable,
short-term (maturing in one year or less) debt instruments in an
amount equal to the market value of the securities underlying such
Future, less the margin deposit applicable to it.
Tax Aspects of Covered Calls and Hedging Instruments. The
Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code (although it reserves the right not to
qualify). That qualification enables the Fund to "pass through"
its income and realized capital gains to shareholders without the
Fund having to pay tax on them. This avoids a "double tax" on that
income and capital gains, since shareholders normally will be taxed
on the dividends and capital gains they receive from the Fund
(unless the Fund's shares are held in a retirement account or the
shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that
less than 30% of its gross income must be derived from gains
realized on the sale of securities held for less than three months.
To comply with that 30% cap, the Fund will limit the extent to
which it engages in the following activities, but will not be
precluded from them: (i) selling investments, including Stock Index
Futures, held for less than three months, whether or not they were
purchased on the exercise of a call held by the Fund; (ii)
purchasing calls or puts which expire in less than three months;
(iii) effecting closing transactions with respect to calls or puts
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 for less than three months.
Certain foreign currency exchange contracts ("Forward
Contracts") in which the Fund may invest are treated as "section
1256 contracts." Gains or losses relating to section 1256
contracts generally are characterized under the Internal Revenue
Code as 60% long-term and 40% short-term capital gains or losses.
However, foreign currency gains or losses arising from certain
section 1256 contracts (including Forward Contracts) generally are
treated as ordinary income or loss. In addition, section 1256
contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses
are treated as though they were realized. These contracts also may
be marked-to-market for purposes of the excise tax applicable to
investment company distributions and for other purposes under rules
prescribed pursuant to the Internal Revenue Code. An election can
be made by the Fund to exempt these transactions from this marked-
to-market treatment.
Certain Forward Contracts entered into by the Fund may result
in "straddles" for Federal income tax purposes. The straddle rules
may affect the character and timing of gains (or losses) recognized
by the Fund on straddle positions. Generally, a loss sustained on
the disposition of a position making up a straddle is allowed only
to the extent such loss exceeds any unrecognized gain in the
offsetting positions making up the straddle. Disallowed loss is
generally allowed at the point where there is no unrecognized gain
in the offsetting positions making up the straddle, or the
offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable
to fluctuations in exchange rates that occur between the time the
Fund accrues interest or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time
the Fund actually collects such receivables or pays such
liabilities generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of debt securities denominated in
a foreign currency and on disposition of foreign currency forward
contracts, gains or losses attributable to fluctuations in the
value of a foreign currency between the date of acquisition of the
security or contract and the date of disposition also are treated
as ordinary gain or loss. Currency gains and losses are offset
against market gains and losses before determining a net "Section
988" gain or loss under the Internal Revenue Code, which may
increase or decrease the amount of the Fund's investment company
income available for distribution to its shareholders.
Risks of Hedging With Options and Futures. 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 selling Stock Index Futures or purchasing puts on
stock indices or Stock Index Futures to attempt to protect against
decline in value of the Fund's equity securities that the prices of
the Futures or applicable index 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 depend on participants entering into offsetting
transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the
futures markets could be reduced, thus producing distortion.
Third, from the point of view of speculators, the deposit
requirements in the futures markets are less onerous than margin
requirements in the securities markets. Therefore, increased
participation by speculators in the futures markets may cause
temporary price distortions.
If the Fund uses hedging instruments to establish a position
in the equities markets as a temporary substitute for the purchase
of particular equity securities 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 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.
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.
Illiquid and Restricted Securities. To enable the Fund to
sell restricted securities not registered under the Securities Act
of 1933, the Fund may have to cause those securities to be
registered. The expenses of registration of restricted securities
may be negotiated by the Fund with the issuer at the time such
securities are purchased by the Fund, if such registration is
required before such securities may be sold publicly. When
registration must be arranged because the Fund wishes to sell the
security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would
be permitted to sell them. The Fund would bear the risks of any
downward price fluctuation during that period. The Fund may also
acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability
to dispose of such securities and might lower the amount realizable
upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those
percentage restrictions do not limit purchases of restricted
securities that are eligible for sale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933,
provided that those securities have been determined to be liquid by
the Board of Directors of the Fund or by the 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.
Illiquid securities include repurchase agreement maturing in more
than seven days, or certain participation interests other than
those with puts exercisable within seven days.
Repurchase Agreements. In a repurchase transaction, the Fund
acquires a security from, and simultaneously resells it to, an
approved vendor (a U.S. commercial bank or the U.S. branch of a
foreign bank or a broker-dealer which has been designated a primary
dealer in government securities which must meet the credit
requirements set up by the Fund's Board of Directors from time to
time) for delivery on an agreed-on future date. The resale price
exceeds the purchase price by an amount that reflects an agreed-
upon interest rate effective for the period during which the
repurchase agreement is in effect. The majority of these
transactions run from day to day, and delivery pursuant to the
resale typically will occur within one to five days of the
purchase. Repurchase agreements are considered "loans" under the
Investment Company Act of 1940 (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 collateral's value 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.
Loans of Portfolio Securities. The Fund may lend its
portfolio securities subject to the restrictions stated in the
Prospectus, to attempt to increase the Fund's income. Under
applicable regulatory requirements (which are subject to change),
the loan collateral must, on each business day, be at least equal
to the value of the loaned securities and must consist of cash,
bank letters of credit or securities of the U.S. Government, or
other cash equivalents in which the Fund is permitted to invest.
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. In a portfolio securities lending
transaction, the Fund receives from the borrower an amount equal to
the dividends declared or interest paid on loaned securities during
the terms of this loan as well as the interest on the collateral
securities, less any finder's, administrative or other fees the
Fund pays in connection with the loan. The Fund may share the
interest it receives on the collateral securities with the borrower
as long as it realizes at least a minimum amount of interest
required by the lending guidelines established by its Board of
Directors. The Fund will not lend its portfolio securities to any
officer, director, trustee, employee or affiliate of the Fund or
its Manager. The terms of the Fund's loans must meet certain tests
under the Internal Revenue Code and permit the Fund to reacquire
loaned securities on five business days' notice or in time to vote
on any important matter.
Other Investment Restrictions
The Fund's significant investment restrictions are described
in the Prospectus. There are additional investment restrictions
that the Fund must follow that are also fundamental policies.
Fundamental policies and the Fund's investment objective, cannot be
changed without the vote of a "majority" of the Fund's outstanding
voting securities. Under the Investment Company Act, such a
"majority" vote is defined as the vote of the holders of the lesser
of: (i) 67% or more of the shares present or represented by proxy
at a shareholders meeting if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (ii)
more than 50% of the outstanding shares.
Under these additional restrictions the Fund cannot do any of
the following:
The Fund cannot purchase securities on margin or sell
securities short; however, the Fund may make margin deposits
in connection with any of the Hedging Instruments which it may
use as permitted by any of its other investment policies;
The Fund cannot invest in other companies for the purpose of
exercising control or management;
The Fund cannot purchase the securities of other investment
companies, except in connection with a merger or
consolidation;
The Fund cannot purchase or sell real estate, including
interests in real estate investment trusts;
The Fund cannot purchase or sell commodities or commodity
contracts or purchase securities for speculative short-term
purposes; however, the Fund may buy or sell any of the Hedging
Instruments which it may use as permitted by any of its other
investment policies, whether or not any such Hedging
Instrument is considered to be a commodity or a commodity
contract;
The Fund cannot accept the purchase price for any of its
shares without immediately thereafter issuing an appropriate
number of shares;
The Fund cannot invest in securities of any corporation which
has a record of less than three years' continuous operation;
or
The Fund cannot purchase or retain securities of any issuer if
those officers and directors of the Fund or its adviser who
own beneficially more than 0.5% of the securities of such
issuer together own beneficially more than 5% of the
securities of such issuer.
Previously, in connection with the qualification of its shares
in certain states, the Fund made certain undertakings as non-
fundamental policies because of certain state regulations. Due to
changes in federal securities laws, such state regulations no
longer apply and the undertakings are therefore inapplicable and
have been withdrawn. For purposes of the Fund's policy not to
concentrate described in the Prospectus, the Fund has adopted the
industry classifications set forth in Appendix A to this Statement
of Additional Information. This is not a fundamental policy.
How the Fund Is Managed
Organization and History. As a Maryland corporation, the Fund
is not required to hold, and does not plan to hold, regular annual
meetings of shareholders. The Fund will hold meetings when required
to do so by the Investment Company Act or other applicable law, or
when a shareholder meeting is called by the Directors or upon
proper request of the shareholders. Each share of the Fund
represents an interest in the Fund proportionately equal to the
interest of each other share of the same class and entitles the
holder to one vote per share (and a fractional vote for a
fractional share) on matters submitted to their vote at
shareholders' meetings.
Directors and Officers of the Fund. The Fund's Directors and
officers and their principal occupations and business affiliations
during the past five years are set forth below. All of the
Directors are also Trustees, Directors or Managing General Partners
of Centennial America Fund, L.P., Centennial California Tax Exempt
Trust, Centennial Government Trust, Centennial Money Market Trust,
Centennial New York Tax Exempt Trust, Centennial Tax Exempt Trust,
Daily Cash Accumulation Fund, Inc., Oppenheimer Cash Reserves,
Oppenheimer Equity Income Fund, Oppenheimer Integrity Funds,
Oppenheimer International Bond Fund, Oppenheimer High Yield Fund,
Oppenheimer Limited-Term Government Fund, Oppenheimer Main Street
Funds, Inc., Oppenheimer Strategic Income Fund, Oppenheimer
Strategic Income & Growth Fund, Oppenheimer Municipal Fund,
Oppenheimer Variable Account Funds, Panorama Series Fund, Inc. ,
Oppenheimer Real Asset Fund and The New York Tax-Exempt Income
Fund, Inc., (the "Denver-based Oppenheimer funds"), except for Mr.
Fossel and Ms. Macaskill who are not Trustees or Directors
Oppenheimer Integrity Funds, Oppenheimer Strategic Income Fund,
Oppenheimer Variable Account Funds and Panorama Series Fund, Inc.
Mr. Fossel also is not a trustee of Centennial New York Tax Exempt
Trust and he is not a Managing General Partner of Centennial
America Fund, L.P. Ms. Macaskill is President and Mr. Swain is
Chief Executive Officer and Chairman of the Denver-based
Oppenheimer funds. Messrs. Bishop, Bowen, Donohue, Farrar and Zack
hold similar positions as officers of all such funds. As of March
21, 1997, the Directors and officers of the Fund as a group owned
less than 1% of the Fund's outstanding Class A shares, none of the
Fund's outstanding Class B shares and none of the Fund's
outstanding Class C shares. The foregoing statement does not
reflect ownership of shares held of record by an employee benefit
plan for employees of the Manager (for which two of the officers
listed below, Ms. Macaskill and Mr. Donohue, are trustees) other
than shares beneficially owned under that plan by the officers of
the Fund listed above.
Robert G. Avis, Director, Age: 65
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and
A.G. Edwards, Inc. (its parent holding company); Chairman of A.G.E.
Asset Management and A.G. Edwards Trust Company (its affiliated
investment adviser and trust company, respectively).
William A. Baker, Director; Age: 82
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
Charles Conrad, Jr., Director; Age 66
1501 Quail Street, Newport Beach, CA 92660
Chairman and CEO of Universal Space Lines, Inc. (a space services
management company); formerly Vice President of McDonnell Douglas
Space Systems Co. and associated with the National Aeronautics and
Space Administration.
Jon S. Fossel, Director*; Age 55
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Member of the Board of Governors of the Investment Company
Institute (a national trade association of investment companies),
Chairman of the Investment Company Institute Education
Foundation; formerly Chairman and a director of the Manager,
President and a director of Oppenheimer Acquisition Corp. ("OAC"),
the Manager's parent holding company, and Shareholder Services,
Inc. ("SSI") and Shareholder Financial Services, Inc. ("SFSI"),
transfer agent subsidiaries of the Manager.
Sam Freedman, Director; Age 56
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds
Services, Chairman, Chief Executive Officer and a director of SSI,
Chairman, Chief Executive and Officer and director of SFSI, Vice
President and director of OAC and a director of OppenheimerFunds,
Inc.
Raymond J. Kalinowski, Director; Age: 67
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc (a computer
products training company).; formerly Vice Chairman and a director
of A.G. Edwards, Inc., parent holding company of A.G. Edwards &
Sons, Inc. (a broker-dealer), of which he was a Senior Vice
President.
C. Howard Kast, Director; Age: 75
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an
accounting firm).
Robert M. Kirchner, Director; Age: 75
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
Bridget A. Macaskill, President and Director*; Age: 48
President, Chief Executive Officer and a Director of the Manager
and HarbourView Asset Management Corporation ("HarbourView"), a
subsidiary of the Manager; Chairman and a director of SSI and
Shareholder Financial Services, Inc.; President and a director of
OAC and Oppenheimer Partnership Holdings, Inc., a holding company
subsidiary of the Manager; a director of Oppenheimer Real Asset
Management, Inc.; formerly an Executive Vice President of the
Manager.
Ned M. Steel, Director; Age: 81
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; Director of Visiting
Nurse Corporation of Colorado; formerly Senior Vice President and
a director of Van Gilder Insurance Corp. (insurance brokers).
James C. Swain, Chairman, Chief Executive Officer and Director*;
Age: 64
6803 Tucson Way, Englewood, Colorado 80112
Vice Chairman of the Manager; formerly President and a Director of
Centennial Asset Management Corporation, an investment adviser
subsidiary of the Manager ("Centennial"), and Chairman of the Board
of SSI.
Andrew J. Donohue, Vice President and Secretary; Age: 46
Executive Vice President, General Counsel and a director of the
Manager, the Distributor, HarbourView, SSI, SFSI, Oppenheimer
Partnership Holdings, Inc. and MultiSource Services, Inc. (a
broker-dealer); President and a director of Centennial;
President and a director of Oppenheimer Real Asset Management,
Inc.; General Counsel of OAC; an officer of other Oppenheimer
funds.
George C. Bowen, Vice President, Treasurer, and Assistant
Secretary; Age: 60
6803 Tucson Way, Englewood, Colorado 80112
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; President, Treasurer and a director of Centennial
Capital Corporation; Senior Vice President, Treasurer and
Secretary of SSI; Vice President, Treasurer and Secretary of SFSI;
Treasurer of OAC; Treasurer of Oppenheimer Partnership Holdings,
Inc.; Vice President and Treasurer of Oppenheimer Real Asset
Management, Inc.; Chief Executive Officer, Treasurer and a
director of MultiSource Services, Inc. (a broker-dealer); an
officer of other Oppenheimer funds.
Bruce Bartlett, Vice President and Portfolio Manager; Age: 47
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; an officer of other Oppenheimer
funds, formerly a Vice President and Senior Portfolio Manager at
First of America Investment Corp.
Diane L. Sobin, Vice President and Portfolio Manager; Age: 35
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; an officer of other Oppenheimer
funds; formerly a Vice President and Senior Portfolio Manager for
Dean Witter Inter Capital, Inc.
Robert G. Zack, Assistant Secretary; Age: 48
Two World Trade Center, New York, New York 10048-0203
Senior Vice President and Associate General Counsel of the
Manager, Assistant Secretary of SSI and SFSI; an officer of other
Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age: 38
6803 Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting; an officer of
other Oppenheimer funds; formerly a Fund Controller for the
Manager.
SCOTT T. FARRAR, Assistant Treasurer; Age 31
6803 Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting; an officer of
other Oppenheimer funds; formerly a Fund Controller for the
Manager.
Remuneration of Directors. The officers of the Fund and
certain Directors of the Fund (Ms. Macaskill and Mr. Swain) who are
affiliated with the Manager receive no salary or fee from the Fund.
Mr. Fossel did not receive any salary or fees from the Fund prior
to January 1, 1997. The remaining Directors of the Fund received
the compensation shown below. Mr. Freedman became a Director June
27, 1996 and received no compensation from the Fund before that
date. The compensation from the Fund was paid during fiscal year
ended December 31, 1996. The compensation from all of the other
Denver-based Oppenheimer funds includes the Fund and is
compensation received as a director, trustee, managing general
partner or member of a committee of the Board of those funds during
the calendar year 1996. Compensation is paid for services in the
positions listed beneath their names:
<TABLE>
<CAPTION> Total Compensation
Aggregate From All
Compensation Denver-based
Name and Position Fund Oppenheimer funds1
<S> <C> <C>
Robert G. Avis $7,569 $58,003
Director
William A. Baker $10,402 $79,715
Audit and Review
Committee Chairman
and Director
Charles Conrad, Jr. $9,749 $74,717
Audit and Review
Committee Member
and Director
Sam Freedman, 3,850 $29,502
Director
Raymond J. Kalinowski $9,678 $74,173
Risk Management
Oversight Committee Member
and Director
C. Howard Kast $9,678 $74,173
Risk Management
Oversight Committee Member
and Director
Robert M. Kirchner $9,749 $74,717
Audit and Review
Committee Member
and Director
Ned M. Steel $7,569 $58,003
Director
</TABLE>
_____________________
1For the 1996 calendar year.
Major Shareholders. As of March 21, 1997, no person owned
of record or was known by the Fund to own beneficially 5% or more
of the outstanding shares of the Fund as a whole or of the Fund's
outstanding Class A, Class B or Class C shares. As of that same
date the only person who owned of record or was known by the Fund
to own beneficially 5% or more of the Fund's outstanding Y shares
was Massachusetts Mutual Life Insurance Company Separate Investment
Account No. 1, 1295 State Street, Springfield, Massachusetts 01111,
which owned 536,259.926 Class Y shares (representing 100% of the
Class Y shares then outstanding). Massachusetts Mutual Life
Insurance Company's affiliation with the Manager is described
below.
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 (Ms.
Macaskill and Mr. Swain) serve as Directors of the Fund.
The Manager and the Fund have a Code of Ethics. It is
designed to detect and prevent improper personal trading by certain
employees, including portfolio managers, that would compete with or
take advantage of the Fund's portfolio transactions. Compliance
with the Code of Ethics is carefully monitored and strictly
enforced by the Manager.
The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at
its expense, to provide the Fund with adequate office space,
facilities and equipment, and to provide and supervise the
activities of all administrative and clerical personnel required to
provide effective corporate administration for the Fund, including
the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and
composition of proxy materials and registration statements for
continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the
advisory agreement or by the Distributor under the General
Distributor's 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 Directors, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs and non-recurring expenses,
including litigation costs. For the Fund's fiscal years ended
December 31, 1994, 1995 and 1996 the management fees paid by the
Fund to the Manager were $8,860,284, $10,289,397 and $12,631,975,
respectively.
The Investment Advisory Agreement contains no expense
limitation. However, because of state regulations limiting fund
expenses that previously applied, the Manager had voluntarily
undertaken that the Fund s total expenses 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) would
not exceed the most stringent state regulatory limitation
applicable to the Fund. Due to changes in federal securities laws,
such state regulations no longer apply and the Manager s
undertaking is therefore inapplicable and the Manager reserves the
right to terminate or amend the undertaking at any time. During
the Fund s last fiscal year, the Fund s expenses did not exceed the
most stringent state regulatory limit and the voluntary undertaking
was not invoked.
The advisory agreement provides that so long as it shall have
acted with due care and in good faith, the Manager shall not be
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 irrespective of whether the
determinations of the Manager relative thereto shall have been
based, wholly or partly, upon the investigation or research of any
other individual, firm or corporation believed by it to be
reliable. The advisory agreement shall not, however, be construed
to protect the Manager against any liability to the Fund or its
shareholders by reasons of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under the advisory
agreement, or against any liability imposed by law.
The Distributor. Under its General Distributor's
Agreement with the Fund, the Distributor acts as the Fund's
principal underwriter in the continuous public offering of the
Fund's Class A, Class B, Class C and Class Y shares but is not
obligated to sell a specific number of shares. Expenses normally
attributable to sales are borne by the Distributor. During the
Fund's fiscal year ended December 31, 1994, 1995 and 1996, the
aggregate amounts of sales charges on sales of the Fund's Class A
shares were $8,832,144, $4,061,349 and $4,329,798, respectively, of
which the Distributor and an affiliated broker retained $2,726,018,
$1,236,003 and $934,605, in those respective periods. During the
Fund's fiscal years ended December 31, 1994, 1995 and 1996, the
contingent deferred sales charges on the Fund's Class B shares
totaled $731,799, $1,488,860 and $1,054,974, all of which the
Distributor retained. During the fiscal years ended 1995 and 1996
the contingent deferred sales charges on Class C shares were $20
and $3,567, respectively. For additional information about
distribution of the Fund's shares and the payments made by the Fund
to the Distributor in connection with such activities, please refer
to "Distribution and Service Plans," below.
The Transfer Agent. OppenheimerFunds 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 be aware of the current rates
of eligible brokers and to minimize the commissions paid to the
extent consistent with the interest and policies of the Fund as
established by its Board of Directors. Purchases of 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.
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 that
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, and the
procedures and rules described above, allocations of brokerage are
generally made by the Manager's portfolio traders based upon
recommendations from the Manager's portfolio managers. In certain
instances, portfolio managers may directly place trades and
allocate brokerage, also subject to the provisions of the advisory
agreement and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those
for which an exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid
primarily for effecting transactions in listed securities or for
certain fixed-income agency transactions in the secondary market,
and are otherwise paid only if it appears likely that a better
price or execution can be obtained. When the Fund engages in an
option transaction, ordinarily the same broker will be used for the
purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent
orders to purchase or sell the same security by more than one of
the accounts managed by the Manager or its affiliates are combined.
The transactions effected pursuant to such combined orders are
averaged as to price and allocated in accordance with the purchase
or sale orders actually placed for each account.
Most purchases of money market instruments and debt
obligations are principal transactions at net prices. Instead of
using a broker for those transactions, the Fund normally deals
directly with the selling or purchasing principal or market maker
unless it determines that a better price or execution can be
obtained by using a broker. Purchases of these securities from
underwriters include a commission or concession paid by the issuer
to the underwriter. Purchases from dealers include a spread
between the bid and asked prices. The Fund seeks to obtain prompt
execution of these orders at the most favorable net price.
The research services provided by a particular broker may be
useful only to one or more of the advisory accounts of the Manager
and its affiliates, and investment research received for the
commissions of those other accounts may be useful both to the Fund
and one or more of such other accounts. Such research, which may
be supplied by a third party at the instance of a broker, includes
information and analyses on particular companies and industries as
well as market or economic trends and portfolio strategy, receipt
of market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If
a research service also assists the Manager in a non-research
capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to
the Manager in the investment decision-making process may be paid
in commission dollars. The Board of Directors permits the Manager
to use concessions on fixed price offerings to obtain research in
the same manner as is permitted for agency transactions. The Board
also permits the Manager to use stated commissions on secondary
fixed-income agency trades to obtain research where the broker has
represented to Manager that: (i) the trade is not from or for the
broker's own inventory, (ii) the trade was executed by the broker
on an agency basis at the stated commission, and (iii) the trade is
not a riskless principal transaction.
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
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 Directors, including the
"independent" Directors of the Fund (those Directors of the Fund
who are not "interested persons" as defined in the Investment
Company Act, and who have no direct or indirect financial interest
in the operation of the advisory agreement or the Distribution
Plans described below) annually reviews information furnished by
the Manager as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such
commissions was reasonably related to the value or benefit of such
services.
During the Fund's fiscal years ended December 31, 1994, 1995
and 1996, total brokerage commissions paid by the Fund were
$10,116,822, $8,172,905 and $4,700,205, respectively. Of that
amount, during the fiscal year ended December 31, 1996, $1,264,160
was paid to brokers as commissions in return for research services;
the aggregate dollar amount of those transactions was $909,924,667.
The transactions giving rise to those commissions were allocated in
accordance with the Manager's internal allocation procedures.
Performance of the Fund
Yield and Total Return Information. As described in the
Prospectus, from time to time the "dividend yield," "average annual
total return," "cumulative total return," "average annual total
return at net asset value" and "cumulative total return at net
asset value" of an investment in a class of shares of the Fund may
be advertised. An explanation of how these total returns are
calculated for each class and the components of those calculations
is set forth below.
The Fund's advertisement of its performance data must, under
applicable rules of the Securities and Exchange Commission, include
the average annual total returns for each advertised class of
shares of the Fund for the 1, 5, and 10-year periods (or the life
of the class, if less) ending as of the most recently-ended
calendar quarter prior to the publication of the advertisement.
This enables an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a number
of factors should be considered before using such information as a
basis for comparison with other investments. An investment in the
Fund is not insured; its returns and share prices are not
guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a
prediction or representation by the Fund of future returns. The
returns of each class of shares of the Fund are affected by
portfolio quality, the type of investments the Fund holds and its
operating expenses allocated to the particular class.
Dividend Yield and Distribution Return. From time to time
the Fund may quote a "dividend yield" or a "distribution return"
for each class. Dividend yield is based on the dividends paid on
shares of a class from net investment income during a stated
period. Distribution return includes dividends derived from net
investment income and from realized capital gains declared during
a stated period. Under those calculations, the dividends and/or
distributions for that class declared during a stated period of one
year or less (for example, 30 days) are added together, and the sum
is divided by the maximum offering price per share of that class on
the last day of the period. When the result is annualized for a
period of less than one year, the "dividend yield" is calculated as
follows:
Dividend Yield of the Class =
Dividends of the Class
-----------------------------------------------------
Max. Offering Price of the Class (last day of period)
divided by Number of days (accrual period) x 365
The maximum offering price for Class A shares includes the
maximum front-end sales charge. For Class B or Class C shares, the
maximum offering price is the net asset value per share without
considering the effect of contingent deferred sales charges. For
Class Y shares, no sales charge is included.
Total Return Information.
Average Annual Total Returns. The "average annual total
return" of each class is an average annual compounded rate of
return for each year in a specified number of years. It is the
rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a
number of years ("n") to achieve an Ending Redeemable Value ("ERV")
of that investment, according to the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
Cumulative Total Returns. The cumulative "total return"
calculation measures the change in value of a hypothetical
investment of $1,000 over an entire period of years. Its
calculation uses some of the same factors as average annual total
return but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
In calculating total returns for Class A shares, the current
maximum sales charge of 5.75% (as a percentage of the offering
price) is deducted from the initial investment ("P") (unless the
return is shown at net asset value, as described below). For Class
B shares, the payment of the applicable contingent deferred sales
charge of 5.0% for the first year, 4.0% for the second year, 3.0%
for the third and fourth years, 2.0% for the fifth year and 1.0% in
the sixth year, and none thereafter, is applied, as described in
the Prospectus. For Class C shares, the payment of 1.0% contingent
deferred sales charge is applied to the investment result for the
one-year period (or less). Class Y Shares are not subject to a
sales charge. Total returns also assume that all dividends and
capital gains distributions during the period are reinvested to buy
additional shares, at net asset value per share, and that the
investment is redeemed at the end of the period. The average
annual total returns on an investment in Class A shares for the
one, five and ten-year periods ended December 31, 1996 were 12.84
% , 13.10%; and 13.92%, respectively. The average annual total
returns on an investment in Class B shares for the fiscal year
ended December 31, 1996, and for the period May 1, 1993 (inception
of the class) to December 31, 1996 were 13.78% and 12.99%,
respectively. The average annual total returns on an investment in
Class C shares for the fiscal year ended December 31, 1996, for the
period August 29, 1995 (inception of the class) to December 31,
1995 were _____% and 21.05%, respectively. The cumulative total
return on Class A shares for the ten-year period ended December 31,
1995, was 268.15%. The cumulative total return on Class B shares
for the period May 19, 1993 through December 31, 1996 was 56.49%.
The cumulative total return on Class C shares for the period August
29, 1995 through December 31, 1996 was 29.15%.
Total Returns At Net Asset Value. From time to time the
Fund may also quote an average annual total return at net asset
value or a cumulative total return at net asset value for Class A,
Class B, Class C or Class Y shares. Each is based on the
difference in net asset value per share at the beginning and the
end of the period for a hypothetical investment in that class of
shares (without considering front-end or contingent deferred sales
charges) and takes into consideration the reinvestment of dividends
and capital gains distributions. The cumulative total return at
net asset value on the Fund's Class A shares for the ten-year
period ended December 31, 1996, was 290.61%. The average annual
total return at net asset value for the period September 30, 1975
to December 31, 1996, for Class A shares was 13.33%. The average
annual total returns at net asset value for Class B shares for the
fiscal year ended December 31, 1995 and for the period May 1, 1993
(inception of that class) to December 31, 1995 were 18.78% and
13.58%, respectively. The cumulative total return at net asset
value on the Fund's Class B shares for the period May 1, 1993
(inception of that class) to December 31, 1995 was _____%.
Average annual total return for Class C at net asset value for the
period August 29, 1995 (inception of the class) to December 31,
1996 was 21.05% and cumulative total return at net asset value was
29.15%. The cumulative total return for Class Y shares from June
1, 1994 (commencement of offering) to December 31, 1996 was 51.21%.
Total return information may be useful to investors in
reviewing the performance of the Fund's Class A, Class B, Class C
or Class Y shares. However, when comparing total return of an
investment in shares of the Fund, a number of factors should be
considered before using such information as a basis for comparison
with other investments. No adjustment is made for taxes payable on
distributions. An investment in the Fund's shares is not insured;
its total return is not guaranteed and will fluctuate on a daily
basis. Total return for any given past period is not an indication
or representation by the Fund of future rates of return on its
shares. The total return of the Fund's shares is affected by
portfolio quality, portfolio maturity, type of investments held and
operating expenses. When comparing total return of an investment
in shares of the Fund with that of other investment instruments,
investors should understand that certain other investment
alternatives such as money market instruments, certificates of
deposit, U.S. Government securities or bank accounts provide a
return which remains relatively constant over time and also that
bank accounts may be insured. Investors should also understand,
when comparing the Fund's total return with that of other
investment alternatives, that since the Fund is an equity fund
seeking capital appreciation, its shares are subject to greater
market risks than certain other investments. The current price per
share for certain classes is listed daily in newspaper financial
sections.
Other Performance Comparisons. From time to time the Fund may
publish the ranking of its Class A, Class B, Class C or Class Y
shares by Lipper Analytical Services, Inc. ("Lipper"), a widely-
recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies,
including the Fund, and ranks their performance for various periods
based on categories relating to investment objectives. The
performance of the Fund's classes are ranked against (i) all other
funds, (ii) all other "growth and income" funds, and (iii) all
other growth and income funds in a specific size category. The
Lipper performance rankings are based on total returns that include
the reinvestment of capital gains distributions and income
dividends but do not take sales charges or taxes into
consideration. The Fund may also compare its performance from time
to time with that of Morgan Stanley Capital International index, a
capitalization-weighted index which is widely utilized as a measure
of world-wide stock market performance.
From time to time the Fund may publish the ranking of the
performance of its Class A, Class B, Class C or Class Y shares by
Morningstar, Inc., an independent mutual fund monitoring service.
Morningstar ranks mutual funds, including the Fund, monthly in
broad investment categories (domestic stock funds, international
stock funds, taxable bond funds, municipal bond and hybrid) based
on risk-adjusted investment return. Investment return measures a
fund's three, five and ten-year average annual total returns (when
available) in excess of 90-day U.S. Treasury bill returns after
considering sales charges and expenses. Risk measures fund
performance below 90-day U.S. Treasury bill monthly returns. Risk
and 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 Class A and Class B shares of
the Fund in relation to other equity funds and includes the maximum
sales charge as a factor in its ranking computations. Rankings are
subject to change.
The Fund may also compare its performance to that of other
funds in its Morningstar Category. In addition to its star
ranking, Morningstar also categorizes and compares a fund's 3-year
performance based on Morningstar's classification of the fund's
investments and investment style, rather than how a fund defines
its investment objective. Morningstar's four broad categories
(domestic equity, international equity, municipal bond and taxable
bond) are each further subdivided into categories based on types of
investments and investment styles. Those comparisons by
Morningstar are based on the same risk and return measurements as
its star rankings but do not consider the effect of sales charges.
The total return on an investment in the Fund's Class A, Class
B, Class C or Class Y shares may be compared with the performance
for the same period of one or more of the following indices: 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 sales charges or taxes into consideration as
these items are not applicable to indices. The performance of the
Fund s Class A, Class B, Class C or Class Y shares may also be
compared in publications to (i) the performance of various market
indices or to other investments for which reliable performance data
is available, and (ii) to averages, performance rankings or others
benchmarks prepared by recognized mutual fund statistical services.
From time to time, the Fund's Manager may publish rankings or
ratings of the Manager or Transfer Agent or the investor services
provided by them to shareholders of the Oppenheimer funds, other
than performance rankings of the Oppenheimer funds themselves.
Those ratings or rankings of shareholder/investor services by third
parties may compare the Oppenheimer funds' services to those of
other mutual fund families selected by the rating or ranking
services and may be based upon the opinions of the rating or
ranking service itself, based on its research or judgment, or based
upon surveys of investors, brokers, shareholders or others.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and
Distribution and Service Plans for Class B and Class C shares of
the Fund under Rule 12b-1 of the Investment Company Act pursuant to
which the Fund makes payments to the Distributor in connection with
the distribution and/or servicing of the shares of that class, as
described in the Prospectus. No such plan has been adopted for
Class Y shares. Each Plan has been approved by a vote of (i) the
Board of Directors of the Fund, including a majority of the
Independent Directors, cast in person at a meeting called for the
purpose of voting on that Plan, and (ii) the holders of a
"majority" (as defined in the Investment Company Act) of the shares
of each class. For the Distribution and Service Plan for Class C
shares, that vote was cast by the Manager as the then sole initial
holder of Class C shares of the Fund.
In addition, under the Plans, the Manager and the Distributor,
in their sole discretion, from time to time, may use their own
resources (which, in the case of the Manager, may include profits
from the advisory fee it receives from the Fund), to make payments
to brokers, dealers or other financial institutions (each is
referred to as a "Recipient" under the Plans) for distribution and
administrative services they perform, at no cost to the Fund. The
Distributor and the Manager may, in their sole discretion, increase
or decrease the amount of payments they make from their own
resources to Recipients.
Unless terminated as described below, each Plan continues in
effect from year to year but only as long as its continuance is
specifically approved at least annually by the Fund's Board of
Directors and its Independent Directors by a vote cast in person at
a meeting called for the purpose of voting on such continuance. A
Plan may be terminated at any time by the vote of a majority of the
Independent Directors or by the vote of the holders of a "majority"
(as defined in the Investment Company Act) of the outstanding
shares of that class. None of the Plans may be amended to increase
materially the amount of payments to be made unless such amendment
is approved by shareholders of the class affected by the amendment.
In addition, because Class B shares of the Fund automatically
convert into Class A shares after six years, the Fund is required
by a Securities and Exchange Commission Rule to obtain the approval
of Class B as well as Class A shareholders for a proposed amendment
to the Class A Plan that would materially increase payments under
the Class A Plan. Such approval must be by a "majority" of the
Class A and Class B shares (as defined in the Investment Company
Act), voting separately by class. All material amendments must be
approved by the Independent Directors.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Directors
at least quarterly on the amount of all payments made pursuant to
each Plan, the purpose for which each payment was made and the
services rendered in connection with the distribution of shares.
Those reports will be subject to the review and approval of the
Independent Directors in the exercise of their fiduciary duty.
Each Plan further provides that while it is in effect, the
selection and nomination of those Directors of the Fund who are not
"interested persons" of the Fund is committed to the discretion of
the Independent Directors. This does not prevent the involvement
of others in such selection and nomination if the final decision on
selection or nomination is approved by a majority of the
Independent Directors.
Under the Plans, no payment will be made to any Recipient in
any quarter if the aggregate net asset value of all Fund shares
held by the Recipient for itself and its customers did not exceed
a minimum amount, if any, that may be determined from time to time
by a majority of the Fund's Independent Directors. The Board of
Directors has set the fees at the maximum rate and set no minimum
amount.
For the fiscal year ended December 31, 1996, payments under
the Plan for Class A shares totaled $3,068,444, all of which was
paid by the Distributor to Recipients including $235,887 that was
paid to an affiliate of the Distributor. Any unreimbursed expenses
incurred by the Distributor with respect to Class A shares for any
fiscal year may not be recovered in subsequent fiscal years.
Payments received by the Distributor under the Plan for Class A
shares will not be used to pay any interest expense, carrying
charges, or other financial costs, or allocation of overhead by the
Distributor.
The Class B and Class C Plans allows the service fee payment
to be paid by the Distributor to Recipients in advance for the
first year such shares are outstanding, and thereafter on a
quarterly basis, as described in the Prospectus. The advance
payment is based on the net asset value of shares sold. An
exchange of shares does not entitle the Recipient to an advance
service fee payment. In the event shares are redeemed during the
first year such shares are outstanding, the Recipient will be
obligated to repay a pro rata portion of such advance payment to
the Distributor. Payments made under the Class B Plan during the
fiscal year ended December 31, 1996 totaled $6,709,692, of which
$5,318,916 was retained by the Distributor and $93,473 was paid to
a dealer affiliated with the Distributor. For the fiscal year
ended December 31, 1996 payments made under the Class C plan
amounted to $82,374, of which $76,238 was retained by the
Distributor.
Although the Class B and the Class C Plans permit the
Distributor to retain both the asset-based sales charges and the
service fees on such shares, or to pay Recipients the service fee
on a quarterly basis without payment in advance, the Distributor
presently intends to pay the service fee to Recipients in the
manner described above. A minimum holding period may be
established from time to time under the Class B and the Class C
Plan by the Board. The Board has set no minimum holding period.
All payments under the Class B and the Class C Plan are subject to
the limitations imposed by the Conduct Rules of the National
Association of Securities Dealers, Inc. on payments of asset-based
sales charges and service fees.
The Class B and Class C Plans provide for the Distributor to
be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the
Fund during that period. Such payments are made in recognition
that the Distributor (i) pays sales commissions to authorized
brokers and dealers at the time of sale and pays service fees as
described in the Prospectus, (ii) may finance such commissions
and/or the advance of the service fee payment to Recipients under
those Plans, or may provide such financing from its own resources
or from an affiliate, (iii) employs personnel to support
distribution of shares, and (iv) may bear the costs of sales
literature, advertising and prospectuses (other than those
furnished to current shareholders) and state "blue sky"
registration fees and certain other distribution expenses. For the
fiscal year ended December 31, 1995, the Distributor has incurred
unreimbursed expenses under the Class B Plan of $18,066,359 (equal
to 2.39% of the Fund's net asset represented by Class B shares on
that date) and under the Class C Plan of $189,390 (equal to 1.08%
of the Fund's net asset represented by Class B shares on that date)
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C
Shares. The availability of three classes of shares to individual
investors permits an investor to choose the method of purchasing
shares that is more beneficial to the investor depending on the
amount of the purchase, the length of time the investor expects to
hold shares and other relevant circumstances. Investors should
understand that the purpose and function of the deferred sales
charge and asset-based sales charge with respect to Class B and
Class C shares are the same as those of the initial sales charge
with respect to Class A shares. Any salesperson or other person
entitled to receive compensation for selling Fund shares may
receive different compensation with respect to one class of shares
than the other. The Distributor normally will not accept any order
for $500,000 or more of Class B shares or $1 million or more of
Class C shares on behalf of a single investor (not including dealer
"street name" or omnibus accounts) because generally it will be
more advantageous for that investor to purchase Class A shares of
the Fund instead. A fourth class of shares, may be purchased only
by certain institutional investors at net asset value per share
(the "Class Y Shares").
The four classes of shares each represent an interest in the
same portfolio investments of the Fund. However, each class has
different shareholder privileges and features. The net income
attributable to Class B and Class C shares and the dividends
payable on Class B and Class C shares will be reduced by
incremental expenses borne solely by that class, including the
asset-based sales charges to which Class B and Class C shares are
subject.
The conversion of Class B shares to Class A shares after six
years is subject to the continuing availability of a private letter
ruling from the Internal Revenue Service, or an opinion of counsel
or tax adviser, to the effect that the conversion of Class B shares
does not constitute a taxable event for the holder under Federal
income tax law. If such a revenue ruling or opinion is no longer
available, the automatic conversion feature may be suspended, in
which event no further conversions of Class B shares would occur
while such suspension remained in effect. Although Class B shares
could then be exchanged for Class A shares on the basis of relative
net asset value of the two classes, without the imposition of a
sales charge or fee, such exchange could constitute a taxable event
for the holder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for longer
than six years.
The methodology for calculating the net asset value, dividends
and distributions of the Fund's Class A, Class B, Class C and Class
Y shares recognizes two types of expenses. General expenses that
do not pertain specifically to any class are allocated pro rata to
the shares of each class, based on the percentage of the net assets
of such class to the Fund's total assets, and then equally to each
outstanding share within a given class. Such general expenses
include (i) management fees, (ii) legal, bookkeeping and audit
fees, (iii) printing and mailing costs of shareholder reports,
Prospectuses, Statements of Additional Information and other
materials for current shareholders, (iv) fees to unaffiliated
Directors, (v) custodian expenses, (vi) share issuance costs, (vii)
organization and start-up costs, (viii) interest, taxes and
brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to
a class are allocated equally to each outstanding share within that
class. Such expenses include (i) Distribution and/or Service Plan
fees, (ii) incremental transfer and shareholder servicing agent
fees and expenses, (iii) registration fees and (iv) shareholder
meeting expenses, to the extent that such expenses pertain to a
specific class rather than to the Fund as a whole.
Determination of Net Asset Value Per Share. The net asset
values per share of Class A, Class B, Class C and Class Y shares of
the Fund are determined as of the close of business of The New York
Stock Exchange on each day that the Exchange is open, by dividing
the value of the Fund's net assets attributable to that class by
the number of shares of that class outstanding. The Exchange
normally closes at 4:00 P.M., New York time, but may close earlier
on some days (for example, in case of weather emergencies or on
days falling before a holiday). The Exchange's most recent annual
holiday schedule (which is subject to change) states that it will
close on New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. It may also close on other days. Trading may occur in debt
securities and in foreign securities when the Exchange is closed
(including weekends and holidays), or after the close of the
Exchange on a regular business day. The Fund may invest a
substantial portion of its assets in foreign securities primarily
listed on foreign exchanges or in foreign over-the-counter markets
that may trade on Saturdays or customary U.S. business holidays on
which the Exchange is closed. Because the Fund's net asset value
will not be calculated at those times, if securities held in the
Fund's portfolio are traded at such time, the net asset values per
share of Class A, Class B, Class C and Class Y shares of the Fund
may be significantly affected at times when shareholders may not
purchase or redeem shares.
The Fund's Board of Directors has established procedures for
the valuation of the Fund's securities, generally as follows: (i)
equity securities traded on a U.S. securities exchange or on 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 sale prices of the preceding trading day, or closing bid
prices that day); (ii) securities actively traded on a foreign
securities exchange are valued generally at the last sales price
available to the pricing service approved by the Fund's Board of
Directors or to the Manager as reported by the principal exchange
on which the security is traded at its last trading session on or
immediately preceding the valuation date, or at the mean between
"bid" and "asked" prices obtained from the principal exchange or
two active market makers in the security on the basis of reasonable
inquiry; (iii) long-term debt securities having a remaining
maturity in excess of 60 days are valued at the mean between the
"bid" and "ask" prices determined by a portfolio pricing service
approved by the Fund's Board of Directors or obtained by the
Manager from two active market makers in the security on the basis
of reasonable inquiry; (iv) debt instruments having a maturity of
more than one year when issued, and non-money market type
instruments having a maturity of 397 days or less when issued,
which have a remaining maturity of 60 days or less are valued at
the mean between the "bid" and "ask" prices determined by a pricing
service approved by the Fund's Board of Directors or obtained by
the Manager from two active market makers in the security on the
basis of reasonable inquiry; (v) money market-type debt securities
having a maturity of less than 397 days when issued that have a
remaining maturity of 60 days or less are valued at cost, adjusted
for amortization of premiums and accretion of discounts; and (vi)
securities (including restricted securities) not having readily-
available market quotations are valued at fair value under the
Board's procedures. If the Manager is unable to locate two market
makers willing to give quotes (see (ii), (iii) and (iv) above), the
security may be priced at the mean between the bid and ask
prices provided by a single active market maker (which in certain
cases may be the bid price if no ask price is available).
Trading in securities on European and Asian exchanges and
over-the-counter markets is normally completed before the close of
The New York Stock Exchange. Events affecting the values of
foreign securities traded in securities markets that occur between
the time their prices are determined and the close of the Exchange
will not be reflected in the Fund s calculation of net asset value
unless the Board of Directors or the Manager, under procedures
established by the Board of Directors, determines that the
particular event is likely to effect a material change in the value
of such security and may affect the Fund s net asset value per
share. Foreign currency, including forward contracts, will be
valued at the closing price in the London foreign exchange market
that day as provided by a reliable bank, dealer or pricing service.
The values of securities denominated in foreign currency will be
converted to U.S. dollars at the closing price in the London
foreign exchange market closing price that day, as provided by a
reliable bank, dealer or pricing service.
In the case of U.S. Government Securities, mortgage-backed
securities and corporate bonds, when last sale information is not
generally available, such pricing procedures may include "matrix"
comparisons to the prices for comparable instruments on the basis
of quality, yield, maturity, and other special factors involved.
The Manager may use pricing services approved by the Board of
Directors to price U.S. Government Securities, mortgage-backed
securities, and foreign government and corporate bonds. The
Manager will monitor the accuracy of such pricing services which
may include comparing prices used for portfolio evaluation to
actual sales prices of selected securities.
Calls, puts 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, as determined by a pricing
service approved by the Board of Directors or by the Manager. If
there were no sales that day, the value shall be the last sale
price on the preceding trading day if it is within the spread of
the closing bid and asked prices on the principal exchange or on
NASDAQ on the valuation date, or, if not, value shall be the
closing bid price on the principal exchange or on NASDAQ on the
valuation date. If the put, call or future is not traded on an
exchange or on NASDAQ, it shall be valued at the mean between bid
and asked prices obtained by the Manager from two active market
makers (which in certain cases may be the bid price if no asked
price is available).
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 shares. Dividends will
begin to accrue on shares purchased by the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for
the purchase through the ACH system before the close of The New
York Stock Exchange. The Exchange normally closes at 4:00 P.M.,
but may close earlier on certain days. If Federal Funds are
received on a business day after the close of the Exchange, the
shares will be purchased and dividends will begin to accrue on the
next regular business day. The proceeds of ACH transfers are
normally received by the Fund 3 days after the transfers are
initiated. The Distributor and the Fund are not responsible for
any delays in purchasing shares resulting from delays in ACH
transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced
sales charge rate may be obtained for Class A shares under Right of
Accumulation and Letters of Intent because of the economies of
sales efforts and expenses realized by the Distributor, dealers and
brokers making such sales. No sales charge is imposed in certain
circumstances described in the Prospectus because the Distributor
or dealer or broker incurs little or no selling expenses. The term
"immediate family" refers to one's spouse, children, grandchildren,
grandparents, aunts, uncles, nieces and nephews, parents, parents-
in-law, sons- and daughters-in-law, siblings, a sibling's spouse
and a spouse's siblings.
The Oppenheimer Funds. The Oppenheimer funds are those
mutual funds for which the Distributor acts as the distributor or
the sub-distributor and include the following:
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Intermediate Municipal Fund Oppenheimer Insured
Municipal Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Multiple Strategies Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
<PAGE>
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government
Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Real Asset Fund
Oppenheimer Developing Markets Fund
Oppenheimer Strategic Income Fund
Oppenheimer Enterprise Fund
Oppenheimer Strategic Income & Growth
Fund
Oppenheimer Bond Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer Bond Fund for Growth
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Bond Fund for Growth
Rochester Fund Municipals
Limited-Term New York Municipal Fund*
Oppenheimer Disciplined Value Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer Life Span Balanced Fund
Oppenheimer Life Span Growth Fund
Oppenheimer Life Span 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
<PAGE>
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
*Shares of the Fund are not presently exchangeable for shares
Limited Term New York Municipal Fund prior to May 1, 1997.
There is an initial sales charge on the purchase of Class A
shares of each of the Oppenheimer funds except Money Market Funds
(under certain circumstances described herein, redemption proceeds
of Money Market Fund shares may be subject to a contingent
deferred sales charge). Current shareholders of Rochester Fund
Municipals, The Bond Fund for Growth or Limited-Term New York
Municipal Fund (collectively referred to as the Rochester Funds )
may exchange their shares for the same class of shares in any of
the Oppenheimer funds listed above.
Letters of Intent. A Letter of Intent (referred to as a
"Letter") is an investor's statement in writing to the Distributor
of the intention to purchase Class A shares or Class A and Class B
shares of the Fund (and other Oppenheimer funds) during a 13-month
period (the "Letter of Intent period"), which may, at the
investor's request, include purchases made up to 90 days prior to
the date of the Letter. The Letter states the investor's intention
to make the aggregate amount of purchases of shares which, when
added to the investor's holdings of shares of those funds, will
equal or exceed the amount specified in the Letter. Purchases made
by reinvestment of dividends or distributions of capital gains and
purchases made at net asset value without sales charge do not count
toward satisfying the amount of the Letter. A Letter enables an
investor to count the Class A and Class B shares purchased under
the Letter to obtain the reduced sales charge rate on purchases of
Class A shares of the Fund (and other Oppenheimer funds) that
applies under the Right of Accumulation to current purchases of
Class A shares. Each purchase of Class A shares under the Letter
will be made at the public offering price (including the sales
charge) that applies to a single lump-sum purchase of shares in the
amount intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to
purchase shares, but if the investor's purchases of shares within
the Letter of Intent period, when added to the value (at offering
price) of the investor's holdings of shares on the last day of that
period, do not equal or exceed the intended purchase amount, the
investor agrees to pay the additional amount of sales charge
applicable to such purchases, as set forth in "Terms of Escrow,"
below (as those terms may be amended from time to time). The
investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be
bound by the terms of the Prospectus, this Statement of Additional
Information and the Application used for such Letter of Intent, and
if such terms are amended, as they may be from time to time by the
Fund, that those amendments will apply automatically to existing
Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer
funds by OppenheimerFunds prototype 401(k) plans under a Letter of
Intent, the Transfer Agent will not hold shares in escrow. If the
intended purchase amount under the Letter entered into by an
OppenheimerFunds prototype 401(k) plan is not purchased by the plan
by the end of the Letter of Intent period, there will be no
adjustment of commissions paid to the broker-dealer or financial
institution of record for accounts held in the name of that plan.
If the total eligible purchases made during the Letter of
Intent period do not equal or exceed the intended purchase amount,
the commissions previously paid to the dealer of record for the
account and the amount of sales charge retained by the Distributor
will be adjusted to the rates applicable to actual purchases. If
total eligible purchases during the Letter of Intent period exceed
the intended purchase amount and exceed the amount needed to
qualify for the next sales charge rate reduction set forth in the
applicable prospectus, the sales charges paid will be adjusted to
the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid
to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the
investor's account at the net asset value per share in effect on
the date of such purchase, promptly after the Distributor's receipt
thereof.
In determining the total amount of purchases made under a
Letter, shares redeemed by the investor prior to the termination of
the Letter of Intent period will be deducted. It is the
responsibility of the dealer of record and/or the investor to
advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of
such purchases must be made through the Distributor.
Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in
value up to 5% of the intended purchase amount specified in the
Letter shall be held in escrow by the Transfer Agent. For example,
if the intended purchase amount is $50,000, the escrow shall be
shares valued in the amount of $2,500 (computed at the public
offering price adjusted for a $50,000 purchase). Any dividends and
capital gains distributions on the escrowed shares will be credited
to the investor's account.
2. If the intended purchase amount specified under the
Letter is completed within the thirteen-month Letter of Intent
period, the escrowed shares will be promptly released to the
investor.
3. If, at the end of the thirteen-month Letter of Intent
period the total purchases pursuant to the Letter are less than the
intended purchase amount specified in the Letter, the investor must
remit to the Distributor an amount equal to the difference between
the dollar amount of sales charges actually paid and the amount of
sales charges which would have been paid if the total amount
purchased had been made at a single time. Such sales charge
adjustment will apply to any shares redeemed prior to the
completion of the Letter. If such difference in sales charges is
not paid within twenty days after a request from the Distributor or
the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares
necessary to realize such difference in sales charges. Full and
fractional shares remaining after such redemption will be released
from escrow. If a request is received to redeem escrowed shares
prior to the payment of such additional sales charge, the sales
charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably
constitutes and appoints the Transfer Agent as attorney-in-fact to
surrender for redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or
the holding of which may be counted toward completion of a Letter)
include (a) Class A shares sold with a front-end sales charge or
subject to a Class A contingent deferred sales charge, (b) Class B
shares acquired subject to a contingent deferred sales charge, and
(c) Class A or Class B shares acquired in exchange for either (i)
Class A shares of one of the other Oppenheimer funds that were
acquired subject to a Class A initial or contingent deferred sales
charge or (ii) Class B shares of one of the other Oppenheimer funds
that were acquired subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be
exchanged for shares of another fund to which an exchange is
requested, as described in the section of the Prospectus entitled
"How to Exchange Shares," and the escrow will be transferred to
that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a
bank account, a check (minimum $25) for the initial purchase must
accompany the application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption
restrictions for recent purchases described in "How to Sell
Shares," in the Prospectus. Asset Builder Plans also enable
shareholders of Oppenheimer Cash Reserves to use those accounts for
monthly automatic purchases of shares of up to four other
Oppenheimer funds. If you make payments from your bank account to
purchase shares of the fund, your bank account will be
automatically debited normally four to five days prior to the
investment dates selected in the Account Application. Neither the
Distributor, the Transfer Agent nor the Fund shall be responsible
for any delays in purchasing shares resulting from delays in ACH
transmissions.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply
to shares purchased by Asset Builder payments. An application
should be obtained from the Distributor, completed and returned,
and a prospectus of the selected fund(s) should be obtained from
the Distributor or your financial advisor before initiating Asset
Builder payments. The amount of the Asset Builder investment may
be changed or the automatic investments may be terminated at any
time by writing to the Transfer Agent. A reasonable period
(approximately 15 days) is required after the Transfer Agent's
receipt of such instructions to implement them. The Fund reserves
the right to amend, suspend, or discontinue offering such plans at
any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders
for the Fund's shares (for example, when a purchase check is
returned to the Fund unpaid) causes a loss to be incurred when the
net asset value of the Fund's shares on the cancellation date is
less than on the purchase date. That loss is equal to the amount
of the decline in the net asset value per share multiplied by the
number of shares in the purchase order. The investor is
responsible for that loss. If the investor fails to compensate the
Fund for the loss, the Distributor will do so. The Fund may
reimburse the Distributor for that amount by redeeming shares from
any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
Retirement Plans. In describing certain types of employee
benefit plans that may purchase Class A shares without being
subject to the Class A contingent deferred sales charge, the term
employee benefit plan means any plan or arrangement, whether or
not qualified under the Internal Revenue Code, including, medical
savings accounts, payroll deduction plans or similar plans in which
Class A shares are purchased by a fiduciary or other person for the
account of participants who are employees of a single employer or
of affiliated employers, if the Fund account is registered in the
name of the fiduciary or other person for the benefit of
participants in the plan.
The term group retirement plan means any qualified retirement
plan (including 457 plans, SEPs, SARSEPs, 403(b) plans, and SIMPLE
plans) for employees of a corporation or a sole proprietorship,
members and employees of a partnership or association or other
organized group of persons (the members of which may include other
groups), if the group has made special arrangements with the
Distributor and all members of the group participating in the plan
purchase Class A shares of the Fund through a single investment
dealer, broker or other financial institution designated by the
group.
How To Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and
conditions for redemptions set forth in the Prospectus.
Involuntary Redemptions. The Fund's Board of Directors has
the right to cause the involuntary redemption of the shares held in
any 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 Directors will not cause the involuntary redemption of
shares in an account if the aggregate net asset value of the shares
has fallen below the stated minimum solely as a result of market
fluctuations. Should the Board elect to exercise this right, it
may also fix, in accordance with the Investment Company Act, and
the provisions of Maryland law, the requirements for any notice to
be given to the shareholders in question (not less than 30 days),
or the Board may set requirements for granting permission to the
Shareholder to increase the investment, and set other terms and
conditions so that the shares would not be involuntarily redeemed.
Payments "In Kind". The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash.
However, the Board of Directors of the Fund may determine that it
would be detrimental to the best interests of the remaining
shareholders of the Fund to make payment of a redemption order
wholly or partly in cash. In that case the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind"
of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act, pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day
period for any one shareholder. If shares are redeemed in kind,
the redeeming shareholder might incur brokerage or other costs in
selling the securities for cash. The method of valuing securities
used to make redemptions in kind will be the same as the method the
Fund uses to value its portfolio securities described above under
"Determination of Net Asset Values Per Share" and that valuation
will be made as of the time the redemption price is determined.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of
(i) Class A shares that you purchased subject to an initial sales
charge or which were purchased subject to the Class A share
contingent deferred sales charge, or (ii) Class B shares on which
you paid a contingent deferred sales charge when you redeemed them.
It does not apply to Class C shares. The reinvestment may be made
without sales charge only in Class A shares of the Fund or any of
the other Oppenheimer funds into which shares of the Fund are
exchangeable as described below, at the net asset value next
computed after the Transfer Agent receives the reinvestment order.
The shareholder must ask the Distributor for that privilege at the
time of reinvestment. Any capital gain that was realized when the
shares were redeemed is taxable, and reinvestment will not alter
any capital gains tax payable on that gain. If there has been a
capital loss on the redemption, some or all of the loss may not be
tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption
proceeds of Fund shares on which a sales charge was paid are
reinvested in shares of the Fund or another of the Oppenheimer
funds within 90 days of payment of the sales charge, the
shareholder's basis in the shares of the Fund that were redeemed
may not include the amount of the sales charge paid. That would
reduce the loss or increase the gain recognized from the
redemption. However, in that case the sales charge would be added
to the basis of the shares acquired by the reinvestment of the
redemption proceeds. The Fund may amend, suspend or cease offering
this reinvestment privilege at any time as to shares redeemed after
the date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge at the time of transfer to the
name of another person or entity (whether the transfer occurs by
absolute assignment, gift or bequest, not involving, directly or
indirectly, a public sale). The transferred shares will remain
subject to the contingent deferred sales charge, calculated as if
the transferee shareholder had acquired the transferred shares in
the same manner and at the same time as the transferring
shareholder. If less than all shares held in an account are
transferred, and some but not all shares in the account would be
subject to a contingent deferred sales charge if redeemed at the
time of transfer, the priorities described in the Prospectus under
"How to Buy Shares" for the imposition of the Class B or the Class
C contingent deferred sales charge will be followed in determining
the order in which shares are transferred.
Distributions From Retirement Plans. Requests for distributions
from OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans,
401(k) plans or pension or profit-sharing plans should be addressed
to "Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer
Agent at its address listed in "How To Sell Shares" in the
Prospectus or on the back cover of this Statement of Additional
Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if
the distribution is premature; and (iii) conform to the
requirements of the plan and the Fund's other redemption
requirements. Participants (other than self-employed persons
maintaining a plan account in their own name) in OppenheimerFunds-
sponsored prototype pension, profit-sharing or 401(k) plans may not
directly redeem or exchange shares held for their account under
those plans. The employer or plan administrator must sign the
request. Distributions from pension and profit sharing plans are
subject to special requirements under the Internal Revenue Code and
certain documents (available from the Transfer Agent) must be
completed before the distribution may be made. Distributions from
retirement plans are subject to withholding requirements under the
Internal Revenue Code, and IRS Form W-4P (available from the
Transfer Agent) must be submitted to the Transfer Agent with the
distribution request, or the distribution may be delayed. Unless
the shareholder has provided the Transfer Agent with a certified
tax identification number, the Internal Revenue Code requires that
tax be withheld from any distribution even if the shareholder
elects not to have tax withheld. The Fund, the Manager, the
Distributor, the Trustee and the Transfer Agent assume no
responsibility to determine whether a distribution satisfies the
conditions of applicable tax laws and will not be responsible for
any tax penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and
Brokers. The Distributor is the Fund's agent to repurchase its
shares from authorized dealers or brokers on behalf of their
customers. The shareholder should contact the broker or dealer to
arrange this type of redemption. The repurchase price per share
will be the net asset value next computed after the Distributor
receives the order placed by the dealer or broker, except that if
the Distributor receives a repurchase order from a dealer or broker
after the close of The New York Stock Exchange on a regular
business day, it will be processed at that day's net asset value if
the order was received by the dealer or broker from its customers
prior to the time the Exchange closes (normally, that is 4:00 P.M.,
but may be earlier on some days) and the order was transmitted to
and received by the Distributor prior to its close of business that
day (normally 5:00 P.M.). Ordinarily, for accounts redeemed by a
broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the
Distributor's receipt of the required redemption documents in
proper form, with the signature(s) of the registered owners
guaranteed on the redemption document as described in the
Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning
shares of the Fund valued at $5,000 or more can authorize the
Transfer Agent to redeem shares (minimum $50) automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic
Withdrawal Plan. Shares will be redeemed three business days prior
to the date requested by the shareholder for receipt of the
payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable
to all shareholders of record and sent to the address of record for
the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on
this basis. Payments are normally made by check, but shareholders
having AccountLink privileges (see "How To Buy Shares") may arrange
to have Automatic Withdrawal Plan payments transferred to the bank
account designated on the OppenheimerFunds New Account Application
or signature-guaranteed instructions. Shares are normally redeemed
pursuant to an Automatic Withdrawal Plan three business days before
the date you select in the Account Application. If a contingent
deferred sales charge applies to the redemption, the amount of the
check or payment will be reduced accordingly. The Fund cannot
guarantee receipt of a payment on the date requested and reserves
the right to amend, suspend or discontinue offering such plans at
any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make
regular additional Class A share purchases while participating in
an Automatic Withdrawal Plan. Class B and Class C shareholders
should not establish withdrawal plans because of the imposition of
the contingent deferred sales charge on such withdrawals (except
where the Class B or the Class C contingent deferred sales charge
is waived as described in the Prospectus under "Waivers of Class B
and Class C Contingent Deferred Sales Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such
plans, as stated below and in the Prospectus. These provisions may
be amended from time to time by the Fund and/or the Distributor.
When adopted, such amendments will automatically apply to existing
Plans.
Automatic Exchange Plans. Shareholders can authorize the
Transfer Agent (on the OppenheimerFunds Application or signature-
guaranteed instructions) to exchange a pre-determined amount of
shares of the Fund for shares (of the same class) of other
Oppenheimer funds automatically on a monthly, quarterly, semi-
annual or annual basis under an Automatic Exchange Plan. The
minimum amount that may be exchanged to each other fund account is
$25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a
sales charge will be redeemed first and thereafter shares acquired
with reinvested dividends and capital gains distributions will be
redeemed next, followed by shares acquired with a sales charge, to
the extent necessary to make withdrawal payments. Depending upon
the amount withdrawn, the investor's principal may be depleted.
Payments made under withdrawal plans should not be considered as a
yield or income on your investment.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the
"Planholder") who executed the Plan authorization and application
submitted to the Transfer Agent. The Transfer Agent and the Fund
shall incur no liability to the Planholder for any action taken or
omitted by the Transfer Agent in good faith to administer the Plan.
Certificates will not be issued for shares of the Fund purchased
for and held under the Plan, but the Transfer Agent will credit all
such shares to the account of the Planholder on the records of the
Fund. Any share certificates held by a Planholder may be
surrendered unendorsed to the Transfer Agent with the Plan
application so that the shares represented by the certificate may
be held under the Plan.
For accounts subject to Automatic Withdrawal Plans,
distributions of capital gains must be reinvested in shares of the
Fund, which will be done at net asset value without a sales charge.
Dividends on shares held in the account may be paid in cash or
reinvested.
Redemptions of shares needed to make withdrawal payments will
be made at the net asset value per share determined on the
redemption date. Checks or AccountLink payments of the proceeds of
Plan withdrawals will normally be transmitted three business days
prior to the date selected for receipt of the payment (receipt of
payment on the date selected cannot be guaranteed), according to
the choice specified in writing by the Planholder.
The amount and the interval of disbursement payments and the
address to which checks are to be mailed or AccountLink payments
are to be sent may be changed at any time by the Planholder by
writing to the Transfer Agent. The Planholder should allow at
least two weeks' time in mailing such notification for the
requested change to be put in effect. The Planholder may, at any
time, instruct the Transfer Agent by written notice (in proper form
in accordance with the requirements of the then-current Prospectus
of the Fund) to redeem all, or any part of, the shares held under
the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will
mail a check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by
writing to the Transfer Agent. A Plan may also be terminated at
any time by the Transfer Agent upon receiving directions to that
effect from the Fund. The Transfer Agent will also terminate a
Plan upon receipt of evidence satisfactory to it of the death or
legal incapacity of the Planholder. Upon termination of a Plan by
the Transfer Agent or the Fund, shares that have not been redeemed
from the account will be held in uncertificated form in the name of
the Planholder, and the account will continue as a dividend-
reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her
executor or guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt,
the Planholder may request issuance of a portion of the shares in
certificated form. Upon written request from the Planholder, the
Transfer Agent will determine the number of shares for which a
certificate may be issued without causing the withdrawal checks to
stop because of exhaustion of uncertificated shares needed to
continue payments. However, should such uncertificated shares
become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the
Fund, the Planholder will be deemed to have appointed any successor
transfer agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be
exchanged only for shares of the same class of other Oppenheimer
funds. Shares of Oppenheimer funds that have a single class
without a class designation are deemed "Class A" shares for this
purpose. All of the Oppenheimer funds offer Class A, B and C
shares except Oppenheimer Money Market Fund, Inc., Centennial Money
Market Trust, Centennial Tax Exempt Trust, Centennial Government
Trust, Centennial New York Tax Exempt Trust, Centennial California
Tax Exempt Trust, Centennial America Fund, L.P., and Daily Cash
Accumulation Fund, Inc., which only offer Class A shares and
Oppenheimer Main Street California Municipal Fund which only offers
Class A and Class B shares (Class B and Class C shares of
Oppenheimer Cash Reserves are generally available only by exchange
from the same class of shares of other Oppenheimer funds or through
OppenheimerFunds sponsored 401(k) plans). A current list showing
which funds offer which class can be obtained by calling the
distributor at 1-800-525-7048.
For accounts established on or before March 8, 1996 holding
Class M shares of Oppenheimer Bond Fund for Growth, Class M shares
can be exchanged only for Class A shares of other Oppenheimer
funds. Exchanges to Class M shares of Oppenheimer Bond Fund for
Growth are permitted from Class A shares of Oppenheimer Money
Market Fund, Inc. or Oppenheimer Cash Reserves that were acquired
by exchange from Class M shares. Otherwise no exchanges of any
class of any Oppenheimer fund into Class M shares are permitted.
Class A shares of Oppenheimer funds may be exchanged at net
asset value for shares of any Money Market Fund. Shares of any
Money Market Fund purchased without a sales charge may be exchanged
for shares of OppenheimerFunds offered with a sales charge upon
payment of the sales charge (or, if applicable, may be used to
purchase shares of Oppenheimer funds subject to a contingent
deferred sales charge). Shares of this Fund acquired by
reinvestment of dividends or distributions from any other of the
Oppenheimer funds (except Oppenheimer Cash Reserves) or from any
unit investment trust for which reinvestment arrangements have been
made with the Distributor may be exchanged at net asset value for
shares of any of the Oppenheimer funds. However, shares of
Oppenheimer Money Market Fund, Inc. purchased with the redemption
proceeds of shares of other mutual funds (other than funds managed
by the Manager or its subsidiaries) redeemed within the 12 months
prior to that purchase may subsequently be exchanged for shares of
other Oppenheimer funds without being subject to an initial or
contingent deferred sales charge, whichever is applicable. To
qualify for that privilege, the investor or the investor's dealer
must notify the Distributor of eligibility for this privilege at
the time the shares of Oppenheimer Money Market Fund, Inc. are
purchased, and, if requested, must supply proof of entitlement to
this privilege.
No contingent deferred sales charge is imposed on exchanges of
shares of any class purchased subject to a contingent deferred
sales charge. However, when Class A shares acquired by exchange of
Class A shares of other Oppenheimer funds purchased subject to a
Class A contingent deferred sales charge are redeemed within 18
months of the end of the calendar month of the initial purchase of
the exchanged Class A shares, the Class A contingent deferred sales
charge is imposed on the redeemed shares (see "Class A Contingent
Deferred Sales Charge" in the Prospectus). The Class B contingent
deferred sales charge is imposed on Class B shares acquired by
exchange if they are redeemed within 6 years of the initial
purchase of the exchanged Class B shares. The Class C contingent
deferred sales charge is imposed on Class C shares acquired by
exchange if they are redeemed within 12 months of the initial
purchase of the exchanged Class C shares.
When Class A, Class B or Class C shares are redeemed to effect
an exchange, the priorities described in "How To Buy Shares" in the
Prospectus for the imposition of the Class A, Class B or the Class
C contingent deferred sales charge will be followed in determining
the order in which the shares are exchanged. Shareholders should
take into account the effect of any exchange on the applicability
and rate of any contingent deferred sales charge that might be
imposed in the subsequent redemption of remaining shares.
Shareholders owning shares of more than one class must specify
whether they intend to exchange Class A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written
exchange requests submitted in bulk by anyone on behalf of more
than one account. The Fund may accept requests for exchanges of up
to 50 accounts per day from representatives of authorized dealers
that qualify for this privilege. In connection with any exchange
request, the number of shares exchanged may be less than the number
requested if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In
those cases, only the shares available for exchange without
restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either
have an existing account in, or obtain and acknowledge receipt of
a prospectus of, the fund to which the exchange is to be made. For
full or partial exchanges of an account made by telephone, any
special account features such as Asset Builder Plans, Automatic
Withdrawal Plans, Checkwriting, if available, and retirement plan
contributions will be switched to the new account unless the
Transfer Agent is instructed otherwise. If all telephone lines are
busy (which might occur, for example, during periods of substantial
market fluctuations), shareholders might not be able to request
exchanges by telephone and would have to submit written exchange
requests.
Shares to be exchanged are redeemed on the regular business
day the Transfer Agent receives an exchange request in proper form
(the "Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such purchases
may be delayed by either fund up to five business days if it
determines that it would be disadvantaged by an immediate transfer
of the redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may disadvantage it
(for example, if the receipt of multiple exchange requests from a
dealer might require the disposition of portfolio securities at a
time or at a price that might be disadvantageous to the Fund).
The different Oppenheimer funds available for exchange have
different investment objectives, policies and risks, and a
shareholder should assure that the Fund selected is appropriate for
his or her investment and should be aware of the tax consequences
of an exchange. For federal income tax purposes, an exchange
transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and
the Transfer Agent are unable to provide investment, tax or legal
advice to a shareholder in connection with an exchange request or
any other investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal
tax treatment of the Fund's dividends and capital gains
distributions is explained in the Prospectus under the caption
"Dividends, Capital Gains and Taxes." Special provisions of the
Internal Revenue Code govern the eligibility of the Fund's
dividends for the dividends-received deduction for corporate
shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends
paid by the Fund which may qualify for the deduction is limited to
the aggregate amount of qualifying dividends that the Fund derives
from its portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be
eligible for the deduction on dividends paid on Fund shares held
for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or
short-term gains from the sale of securities or dividends from
foreign corporations, those dividends will not qualify for the
deduction.
Dividends, distributions and the proceeds of the redemption of
Fund shares represented by checks returned to the Transfer Agent by
the Postal Service as undeliverable will be invested in shares of
Oppenheimer Money Market Fund, Inc., as promptly as possible after
the return of such checks to the Transfer Agent, in order to enable
the investor to earn a return on otherwise idle funds.
If prior distributions must be re-characterized at the end of
the fiscal year as a result of the effect of the Fund's investment
policies, shareholders may have a non-taxable return of capital,
which will be identified in notices to shareholders. There is no
fixed dividend rate and there can be no assurance as to the payment
of any dividends or the realization of any capital gains.
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 Directors and the Manager might determine in a
particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the
required levels and to pay the excise tax on the undistributed
amounts. That would reduce the amount of income or capital gains
available for distribution to shareholders.
If the Fund qualifies as a "regulated investment company"
under the Internal Revenue Code, it will not be liable for Federal
income taxes on amounts paid by it as dividends and distributions.
The Fund qualified as a regulated investment company in its last
fiscal year, and intends to qualify in future years, but reserves
the right not to qualify. The Internal Revenue Code contains a
number of complex tests relating to qualification which the Fund
might not meet in any particular year. For example, if the Fund
derives 30% or more of its gross income from the sale of securities
held less than three months, it may fail to qualify. If it did not
so qualify, the Fund would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for payments made
to shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund
may elect to reinvest all dividends and/or capital gains
distributions in shares of the same class of any of the other
Oppenheimer funds listed in "Reduced Sales Charges," above, at net
asset value without sales charge. To elect this option, a
shareholder must notify the Transfer Agent in writing and either
have an existing account in the fund selected for reinvestment or
must obtain a prospectus for that fund and an application from the
Distributor to establish an account. The investment will be made
at the net asset value per share in effect at the close of business
on the payable date of the dividend or distribution. Dividends
and/or distributions from shares of other Oppenheimer funds may be
invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities and handling the
delivery of such securities to and from the Fund. The Manager has
represented to the Fund that the banking relationships with the
Custodian have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in
a manner uninfluenced by any banking relationship the Custodian may
have with the Manager and its affiliates. The Fund's cash balances
with the Custodian in excess of $100,000 are not protected by
Federal deposit insurance. Those uninsured balances at times may be
substantial.
Independent Auditors. The independent auditors of the Fund audit
the Fund's financial statements and perform other related audit
services. They also act as auditors for the Manager and certain
other funds advised by the Manager and its affiliates.
27 Oppenheimer Total Return Fund, Inc.
<PAGE> 28
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Directors and Shareholders of Oppenheimer Total Return Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Total Return Fund, Inc. as of
December 31, 1996, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended December 31, 1996
and 1995, and the financial highlights for the period January 1, 1992 to
December 31, 1996. 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 at
December 31, 1996 by correspondence with the custodian and brokers; where
replies 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
Total Return Fund, Inc. at December 31, 1996, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
January 22, 1997
6 Oppenheimer Total Return Fund, Inc.
<PAGE> 7
STATEMENT OF INVESTMENTS December 31, 1996
<TABLE>
<CAPTION>
FACE
MARKET VALUE
AMOUNT(1)
SEE NOTE 1
================================================================================================================
====================
<S> <C>
<C>
SHORT-TERM NOTES--3.3%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Ford Motor Credit Co., 5.40%, 1/2/97 $ 25,000,000
$ 24,996,097
- ----------------------------------------------------------------------------------------------------------------
- ------------
Goldman Sachs Group, L.P., 5.43%, 1/16/97 50,000,000
49,886,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sheffield Receivables Corp., 5.70%, 1/3/97 12,500,000
12,496,042
------------
Total Short-Term Notes (Cost $87,379,014)
87,379,014
================================================================================================================
===================
U.S. GOVERNMENT OBLIGATIONS--0.8%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
U.S. Treasury Nts.:
5%, 1/31/98 4,000,000
3,961,252
7.75%, 11/30/99(2)(3) 10,000,000
10,446,879
7.75%, 12/31/99(2) 5,000,000
5,229,690
-----------
Total U.S. Government Obligations (Cost $18,990,037)
19,637,821
================================================================================================================
===================
FOREIGN GOVERNMENT OBLIGATIONS--2.8%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Banco Estado Minas Gerais, 8.25%, 2/10/00 2,000,000
1,931,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Banco Hipotecario Nacional (Argentina) Medium-Term Nts.,
10.625%, 8/7/06(2) 1,000,000
1,037,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Banco Nacional de Comercio Exterior SNC International Finance
BV Gtd. Registered Bonds, 11.25%, 5/30/06 2,900,000
3,164,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Bonos de la Tesoreria de la Federacion, Zero Coupon, 27.80%, 9/4/97(4) MXP 11,671,330
1,267,726
- ----------------------------------------------------------------------------------------------------------------
- ------------
Buenos Aires (Province of) Bonds, 10%, 3/5/01 DEM 1,100,000
764,449
- ----------------------------------------------------------------------------------------------------------------
- ------------
Canada (Government of) Debs., 10.50%, 7/1/00 CAD 5,680,000
4,861,048
- ----------------------------------------------------------------------------------------------------------------
- ------------
Central Bank of Costa Rica Interest Claim Bonds, Series B,
6.344%, 5/21/05(5)(6) 809,147
763,633
- ----------------------------------------------------------------------------------------------------------------
- ------------
Comtel Brasileira Ltd. Nts., 10.75%, 9/26/04(7) 500,000
515,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Denmark (Kingdom of) Bonds, 8%, 11/15/01 DKK 35,290,000
6,640,535
- ----------------------------------------------------------------------------------------------------------------
- ------------
Hashemite Kingdom of Jordan Interest Arrears Bonds, 6.50%, 12/23/05(6) 2,225,000
2,052,562
- ----------------------------------------------------------------------------------------------------------------
- ------------
Italy (Republic of) Sr. Unsec. Unsub. Global Bonds, 0.563%, 7/26/99(6) JPY 530,000,000
4,589,954
- ----------------------------------------------------------------------------------------------------------------
- ------------
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali,
10.50%, 11/1/98 ITL 6,295,000,000
4,433,473
- ----------------------------------------------------------------------------------------------------------------
- ------------
Ministry of Finance (Russian Government) Unsec. Unsub. Debs.,
Series REGS, 9.25%, 11/27/01 40,000
38,975
- ----------------------------------------------------------------------------------------------------------------
- ------------
New Zealand (Government of) Bonds, 8%, 4/15/04 NZD 1,610,000
1,188,308
- ----------------------------------------------------------------------------------------------------------------
- ------------
New Zealand (Government of) Index Linked Bonds, 4.60%, 2/15/16(6) NZD 78,000
53,995
- ----------------------------------------------------------------------------------------------------------------
- ------------
Norwegian Government Bonds, 9.50%, 10/31/02 NOK 10,430,000
1,950,956
- ----------------------------------------------------------------------------------------------------------------
- ------------
Panama (Republic of) Interest Reduction Bonds, 3.50%, 7/17/14(8) 4,000,000
2,783,760
- ----------------------------------------------------------------------------------------------------------------
- ------------
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo,
11.625%, 2/23/98 PTE 336,000,000
2,295,675
- ----------------------------------------------------------------------------------------------------------------
- ------------
Russia (Government of) Interest Nts., 12/29/49(9)(10) 2,000,000
1,392,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sweden (Kingdom of) Bonds, Series 1030, 13%, 6/15/01 SEK 17,400,000
3,285,576
- ----------------------------------------------------------------------------------------------------------------
- ------------
Telecomunicacoes Brasileiras SA Bonds, 13%, 2/5/99 ITL 540,000,000
382,441
- ----------------------------------------------------------------------------------------------------------------
- ------------
Telkom SA Ltd. Bonds, Series TK05, 12%, 3/31/98 ZAR 5,720,000
1,164,615
</TABLE>
7 Oppenheimer Total Return Fund, Inc.
<PAGE> 8
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
FACE
MARKET VALUE
AMOUNT(1)
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
FOREIGN GOVERNMENT OBLIGATIONS
(CONTINUED)
Treasury Corp. of Victoria Gtd. Bonds, 12%, 9/22/01 AUD 6,660,000
$ 6,325,850
- ----------------------------------------------------------------------------------------------------------------
- ------------
United Kingdom Treasury Nts., 12.50%, 11/21/05 GBP 4,680,000
10,156,337
- ----------------------------------------------------------------------------------------------------------------
- ------------
United Mexican States Bonds, 10.375%, 1/29/03 DEM 8,180,000
5,724,533
- ----------------------------------------------------------------------------------------------------------------
- ------------
Venezuela (Republic of) Collateralized Par Bonds,
Series W-A, 6.75%, 3/31/20 2,250,000
1,726,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.625%, 3/31/07(6) 3,900,000
3,485,625
-----------
Total Foreign Government Obligations (Cost $72,013,641)
73,978,401
================================================================================================================
===================
LOAN PARTICIPATIONS--0.2%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Algeria (Republic of) Reprofiled Debt Loan Participation,
Tranche A, 6.625%, 9/4/06(5)(6) 1,875,000
1,448,437
- ----------------------------------------------------------------------------------------------------------------
- ------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.437%, 1/1/09((2)6) 4,505,000
3,672,983
- ----------------------------------------------------------------------------------------------------------------
- ------------
Trinidad & Tobago Loan Participation Agreement,
Tranche B, 1.772%, 9/30/00(5)(6) JPY 95,165,638
762,506
-----------
Total Loan Participations (Cost $5,544,705)
5,883,926
================================================================================================================
===================
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.7%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Banco Itamarati SA, 11.625% Sr. Unsec. Debs., 11/23/97(5) 2,015,000
2,070,412
- ----------------------------------------------------------------------------------------------------------------
- ------------
Bank of America Malaysia, Zero Coupon Nts., 7.16%, 3/27/97(4) MYR 884,000
344,479
- ----------------------------------------------------------------------------------------------------------------
- ------------
Bank of America Malaysia, Zero Coupon Nts., 7.22%, 4/11/97(4) MYR 2,383,000
925,861
- ----------------------------------------------------------------------------------------------------------------
- ------------
Central Termica Guemes, 12% Bonds, 11/26/01(5) 1,200,000
1,218,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD,
7.16%, 3/24/97(4) MYR 733,000
285,807
- ----------------------------------------------------------------------------------------------------------------
- ------------
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD,
7.17%, 5/5/97(4) MYR 700,000
270,729
- ----------------------------------------------------------------------------------------------------------------
- ------------
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD,
7.16%, 5/7/97(4) MYR 700,000
270,623
- ----------------------------------------------------------------------------------------------------------------
- ------------
Empresas ICA Sociedad Controladora SA de CV, 11.875% Nts., 5/30/01 1,800,000
1,917,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Indah Kiat International Finance Co. BV, 11.875% Sr. Sec. Gtd. Nts., 6/15/02 1,500,000
1,640,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Mechala Group Jamaica Ltd., 12.75% Bonds, 12/30/99(5) 775,000
779,844
- ----------------------------------------------------------------------------------------------------------------
- ------------
PT Hutama Karya, Zero Coupon Medium-Term Nts., 17.51%, 3/19/97(4) IDR 5,200,000,000
2,133,295
- ----------------------------------------------------------------------------------------------------------------
- ------------
PT Polysindo Eka Perkasa, 13% Gtd. Nts., 6/15/01 1,500,000
1,687,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Snap Ltd., 11.50% Sec. Bonds, 1/29/09 DEM 5,840,000
3,836,847
- ----------------------------------------------------------------------------------------------------------------
- ------------
Tjiwi Kimia International Finance Co. BV, 13.25% Sr. Gtd. Nts., 8/1/01 1,500,000
1,695,000
-----------
Total Non-Convertible Corporate Bonds and Notes (Cost $18,813,807)
19,076,022
================================================================================================================
===================
CONVERTIBLE CORPORATE BONDS AND NOTES--2.8%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
ADT Operations, Inc., Zero Coupon Cv. Sub. Nts., 6.50%, 7/6/10(4) 10,000,000
6,512,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Central Garden & Pet Co., 6% Cv. Sub. Nts., 11/15/03(7) 4,100,000
4,069,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Empresas ICA Sociedad Controladora SA de CV, 5% Cv. Sub. Debs., 3/15/04 600,000
423,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
First Financial Management Corp., 5% Cv. Debs., 12/15/99 1,500,000
2,593,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
HEALTHSOUTH Corp., 5% Cv. Sub. Debs., 4/1/01 4,000,000
8,040,000
</TABLE>
8 Oppenheimer Total Return Fund, Inc.
<PAGE> 9
<TABLE>
<CAPTION>
FACE
MARKET VALUE
AMOUNT(1)
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
CONVERTIBLE CORPORATE
BONDS AND NOTES
(CONTINUED)
IRSA Inversiones y Representaciones SA, 4.50%
Puttable & Redeemable Cv. Knockout Securities, 8/2/03(7) $ 7,758,000
$ 7,724,059
- ----------------------------------------------------------------------------------------------------------------
- ------------
Nabors Industries, Inc., 5% Cv. Sub. Nts., 5/15/06 4,800,000
5,952,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Offshore Logistics, Inc., 6% Cv. Sub. Nts., 12/15/03(5) 5,000,000
5,262,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(5)(11) 3,000,000
30,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Seacor Holdings, Inc., 5.375% Cv. Sub. Nts., 11/15/06(7) 3,000,000
3,474,375
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sports Authority, Inc. (The), 5.25% Cv. Sub. Nts., 9/15/01(7) 3,000,000
2,816,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Thermo Electron Corp., 4.25% Cv. Sub. Nts., 1/1/03(7) 4,000,000
4,715,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Thermo Electron Corp., 5% Cv. Debs., 4/15/01 5,000,000
8,912,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
U.S. Filter Corp., 4.50% Cv. Sub. Nts., 12/15/01 3,000,000
3,063,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
U.S. Filter Corp., 6% Cv. Sub. Nts., 9/15/05 1,250,000
2,200,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
U.S. Filter Corp., 6% Cv. Sub. Nts., 9/15/05 1,250,000
2,200,000
- ----------------------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01(7) 4,000,000
4,785,000
-----------
Total Convertible Corporate Bonds and Notes (Cost $61,220,865)
72,773,309
<CAPTION>
SHARES
================================================================================================================
===================
<S> <C>
<C>
COMMON STOCKS--80.7%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
BASIC MATERIALS--4.9%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
CHEMICALS--3.6%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Betzdearborn, Inc. 145,100
8,488,350
- ----------------------------------------------------------------------------------------------------------------
- ------------
Cabot Corp. 94,900
2,384,362
- ----------------------------------------------------------------------------------------------------------------
- ------------
Du Pont (E.I.) De Nemours & Co. 362,800
34,239,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
IMC Global, Inc. 165,000
6,455,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Morton International, Inc. 440,000
17,930,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Praxair, Inc. 535,000
24,676,875
-----------
94,174,462
- ----------------------------------------------------------------------------------------------------------------
- -------------------
GOLD--0.4%
Newmont Mining Corp. 260,000
11,635,000
- ----------------------------------------------------------------------------------------------------------------
- -------------------
METALS--0.9%
Allegheny Teledyne, Inc. 250,000
5,750,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Aluminum Co. of America 150,000
9,562,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Nucor Corp. 150,900
7,695,900
-----------
23,008,400
- ----------------------------------------------------------------------------------------------------------------
- -------------------
CONSUMER CYCLICALS--14.3%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
AUTOS & HOUSING--1.6%
General Motors Corp. 170,000
9,477,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Lear Seating Corp.(12) 200,000
6,825,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Miller Industries, Inc.(12) 120,000
2,400,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Pep Boys-Manny, Moe & Jack 190,000
5,842,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sherwin-Williams Co. 221,100
12,381,600
- ----------------------------------------------------------------------------------------------------------------
- ------------
SPX Corp. 125,000
4,843,750
-----------
41,770,350
- ----------------------------------------------------------------------------------------------------------------
- -------------------
LEISURE & ENTERTAINMENT--3.8%
Brinker International, Inc.(12) 200,000
3,200,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Carnival Corp., Cl. A 310,000
10,230,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Eastman Kodak Co. 160,000
12,840,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Gaylord Entertainment Co., Cl. A 400,000
9,150,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
HFS, Inc.(12) 141,400
8,448,650
</TABLE>
9 Oppenheimer Total Return Fund, Inc.
<PAGE> 10
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
LEISURE & ENTERTAINMENT
(CONTINUED)
Landry's Seafood Restaurants, Inc.(12) 580,000
$ 12,397,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Nintendo Co. Ltd. 126,300
9,020,651
- ----------------------------------------------------------------------------------------------------------------
- ------------
Regal Cinemas, Inc.(12) 455,100
13,994,325
- ----------------------------------------------------------------------------------------------------------------
- ------------
Starbucks Corp.(12) 275,000
7,871,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Viacom, Inc., Cl. B(12) 225,000
7,846,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
West Marine, Inc.(12) 150,000
4,237,500
------------
99,237,376
- ----------------------------------------------------------------------------------------------------------------
- -------------------
MEDIA--0.8%
Comcast Corp., Cl. A Special 300,000
5,343,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Cox Communications, Inc., Cl. A(12) 260,000
6,012,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
U S West Media Group(12) 450,000
8,325,000
------------
19,681,250
- ----------------------------------------------------------------------------------------------------------------
- -------------------
RETAIL: GENERAL--3.6%
Federated Department Stores, Inc.(12) 200,000
6,825,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Gucci Group NV 154,500
9,868,687
- ----------------------------------------------------------------------------------------------------------------
- ------------
Jones Apparel Group, Inc.(12) 275,000
10,278,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
Kohl's Corp.(12) 370,000
14,522,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
May Department Stores Cos. 150,000
7,012,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Price/Costco, Inc.(12) 550,000
13,818,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Revco D.S., Inc.(12) 285,000
10,545,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Shaw Industries, Inc. 380,000
4,465,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Wal-Mart Stores, Inc. 395,000
9,035,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Warnaco Group, Inc. (The), Cl. A 73,900
2,189,287
- ----------------------------------------------------------------------------------------------------------------
- ------------
Wolverine World Wide, Inc. 155,000
4,495,000
------------
93,055,474
- ----------------------------------------------------------------------------------------------------------------
- -------------------
RETAIL: SPECIALTY--4.5%
adidas AG, ADS(7) 76,000
3,279,453
- ----------------------------------------------------------------------------------------------------------------
- ------------
Central Garden & Pet Co.(12) 50,000
1,053,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
CompUSA, Inc.(12) 358,200
7,387,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Ethan Allen Interiors, Inc. 125,000
4,812,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Gadzooks, Inc.(12) 100,000
1,825,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Home Depot, Inc. 274,000
13,734,250
- ----------------------------------------------------------------------------------------------------------------------------
Intimate Brands, Inc., Cl. A 225,000
3,825,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Nike, Inc., Cl. B 253,100
15,122,725
- ----------------------------------------------------------------------------------------------------------------
- ------------
Nine West Group, Inc.(12) 562,000
26,062,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
OfficeMax, Inc.(12) 651,000
6,916,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Pacific Sunware of California, Inc.(12) 87,500
2,253,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sports Authority, Inc. (The)(12) 50,000
1,087,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Staples, Inc.(12) 337,500
6,096,094
- ----------------------------------------------------------------------------------------------------------------
- ------------
Tiffany & Co. 150,000
5,493,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
TJX Cos., Inc. 170,000
8,053,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Walgreen Co. 200,000
8,000,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Wet Seal, Inc., Cl. A(12) 87,500
1,870,312
------------
116,874,084
</TABLE>
10 Oppenheimer Total Return Fund, Inc.
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
CONSUMER NON-CYCLICALS--15.7%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
BEVERAGES--0.5%
Anheuser-Busch Cos., Inc. 350,000
$ 14,000,000
- ----------------------------------------------------------------------------------------------------------------
- -------------------
FOOD--1.3%
Albertson's, Inc. 200,000
7,125,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Hormel Foods Corp. 255,000
6,885,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
JP Foodservice, Inc.(12) 196,900
5,488,587
- ----------------------------------------------------------------------------------------------------------------
- ------------
Richfood Holdings, Inc. 202,500
4,910,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Vons Cos., Inc. (The)(12) 140,000
8,382,500
------------
32,791,712
- ----------------------------------------------------------------------------------------------------------------
- -------------------
HEALTHCARE/DRUGS--3.6%
Abbott Laboratories 425,000
21,568,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
American Home Products Corp. 305,000
17,880,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Bristol-Myers Squibb Co. 125,000
13,593,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Genzyme Corp.(12) 310,000
6,742,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Johnson & Johnson 290,000
14,427,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Neurex Corp.(12) 125,000
2,125,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Pharmacia & Upjohn, Inc. 200,000
7,925,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
SmithKline Beecham plc, ADR 150,000
10,200,000
------------
94,463,125
- ----------------------------------------------------------------------------------------------------------------
- -------------------
HEALTHCARE/SUPPLIES &
SERVICES--5.9%
Baxter International, Inc. 270,000
11,070,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Becton, Dickinson & Co. 250,000
10,843,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Boston Scientific Corp.(12) 175,000
10,500,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Cardinal Health, Inc. 580,000
33,785,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
HEALTHSOUTH Corp.(12) 1,180,000
45,577,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Hillenbrand Industries, Inc. 170,000
6,162,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Lynx Therapeutics, Inc. (New)(12) 15,390
61,560
- ----------------------------------------------------------------------------------------------------------------
- ------------
Medtronic, Inc. 115,000
7,820,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Molecular Devices Corp.(12) 190,000
2,956,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Orthodontic Centers of America, Inc.(12) 601,400
9,622,400
- ----------------------------------------------------------------------------------------------------------------
- ------------
Vencor, Inc.(12) 300,000
9,487,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
WellPoint Health Networks, Inc.(12) 183,000
6,290,625
------------
154,177,710
- ----------------------------------------------------------------------------------------------------------------
- -------------------
HOUSEHOLD GOODS--2.7%
Avon Products, Inc. 365,000
20,850,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Kimberly-Clark Corp. 430,000
40,957,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Tambrands, Inc. 200,000
8,175,000
------------
69,983,125
</TABLE>
11 Oppenheimer Total Return Fund, Inc.
<PAGE> 12
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
TOBACCO--1.7%
Philip Morris Cos., Inc. 315,000
$ 35,476,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
RJR Nabisco Holdings Corp. 300,000
10,200,000
------------
45,676,875
- ----------------------------------------------------------------------------------------------------------------
- -------------------
ENERGY--6.0%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
ENERGY SERVICES &
PRODUCERS--2.2%
Dresser Industries, Inc. 135,000
4,185,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Kerr-McGee Corp. 120,000
8,640,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Schlumberger Ltd. 241,800
24,149,775
- ----------------------------------------------------------------------------------------------------------------
- ------------
Seacor Holdings, Inc.(12) 100,000
6,300,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Tidewater, Inc. 330,000
14,932,500
------------
58,207,275
- ----------------------------------------------------------------------------------------------------------------
- -------------------
OIL-INTEGRATED--3.8%
Amoco Corp. 150,000
12,075,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Exxon Corp. 160,000
15,680,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Louisiana Land & Exploration Co. 125,000
6,703,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
MAPCO, Inc. 290,000
9,860,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Mobil Corp. 85,000
10,391,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Union Pacific Resources Group, Inc. 509,083
14,890,678
- ----------------------------------------------------------------------------------------------------------------
- ------------
Unocal Corp. 400,000
16,250,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
USX-Marathon Group 600,000
14,325,000
------------
100,175,053
- ----------------------------------------------------------------------------------------------------------------
- -------------------
FINANCIAL--13.5%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
BANKS--6.3%
BankAmerica Corp. 285,000
28,428,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Chase Manhattan Corp. (New) 222,400
19,849,200
- ----------------------------------------------------------------------------------------------------------------
- ------------
Citicorp 70,000
7,210,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
CoreStates Financial Corp. 100,000
5,187,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Deutsche Bank AG 70,000
3,261,288
- ----------------------------------------------------------------------------------------------------------------
- ------------
Dresdner Bank AG 131,500
3,925,095
- ----------------------------------------------------------------------------------------------------------------
- ------------
First America Bank Corp. 103,400
6,216,925
- ----------------------------------------------------------------------------------------------------------------
- ------------
Firstar Corp. 246,700
12,951,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
National City Corp. 160,000
7,180,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
PNC Bank Corp. 300,000
11,287,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Societe Generale 47,000
5,071,809
- ----------------------------------------------------------------------------------------------------------------------------
Summit Bancorp 440,000
19,250,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
TCF Financial Corp. 390,000
16,965,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Washington Mutual, Inc. 385,000
16,675,313
------------
163,460,130
</TABLE>
12 Oppenheimer Total Return Fund, Inc.
<PAGE> 13
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
DIVERSIFIED FINANCIAL--5.6%
Associates First Capital Corp., Cl. A 307,100
$ 13,550,788
- ----------------------------------------------------------------------------------------------------------------
- ------------
Concord EFS, Inc.(12) 135,000
3,813,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Fannie Mae 85,000
3,166,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Federal Home Loan Mortgage Corp. 190,000
20,923,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Household International, Inc. 496,000
45,756,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
MBNA Corp. 597,500
24,796,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Travelers Group, Inc. 776,667
35,241,265
------------
147,248,053
- ----------------------------------------------------------------------------------------------------------------
- -------------------
INSURANCE--1.6%
Allstate Corp. 200,000
11,575,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
ITT Hartford Group, Inc. 225,000
15,187,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
MGIC Investment Corp. 140,500
10,678,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
SunAmerica, Inc. 75,000
3,328,125
-----------
40,768,625
- ----------------------------------------------------------------------------------------------------------------
- -------------------
INDUSTRIAL--7.7%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
ELECTRICAL EQUIPMENT--1.4%
Honeywell, Inc. 570,500
37,510,375
- ----------------------------------------------------------------------------------------------------------------
- -------------------
INDUSTRIAL SERVICES--2.9%
AccuStaff, Inc.(12) 215,000
4,541,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Corrections Corp. of America(12) 200,000
6,125,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Reynolds & Reynolds Co., Cl. A 464,800
12,084,800
- ----------------------------------------------------------------------------------------------------------------
- ------------
Service Corp. International 1,383,000
38,724,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
United Waste Systems, Inc.(12) 160,000
5,500,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
USA Waste Services, Inc.(12) 295,000
9,403,125
-----------
76,378,800
- ----------------------------------------------------------------------------------------------------------------
- -------------------
MANUFACTURING--2.1%
American Standard Cos., Inc.(12) 386,500
14,783,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
New Holland NV(12) 362,000
7,556,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Tenneco, Inc. (New) 120,000
5,415,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Tyco International Ltd. 490,000
25,908,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
U.S. Filter Corp.(12) 50,000
1,587,500
-----------
55,251,625
- ----------------------------------------------------------------------------------------------------------------
- -------------------
TRANSPORTATION--1.3%
Alexander & Baldwin, Inc. 70,000
1,750,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Canadian Pacific Ltd. (New) 460,000
12,190,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Newport News Shipbuilding, Inc.(12) 24,000
360,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Union Pacific Corp. 320,000
19,240,000
-----------
33,540,000
</TABLE>
13 Oppenheimer Total Return Fund, Inc.
<PAGE> 14
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
TECHNOLOGY--12.2%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
AEROSPACE/DEFENSE--0.6%
Precision Castparts Corp. 300,000
$14,887,500
- ----------------------------------------------------------------------------------------------------------------
- -------------------
COMPUTER HARDWARE--2.8%
Applied Magnetics Corp.(12) 65
1,950
- ----------------------------------------------------------------------------------------------------------------
- ------------
Compaq Computer Corp.(12) 105,000
7,796,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Gateway 2000, Inc.(12) 405,000
21,692,813
- ----------------------------------------------------------------------------------------------------------------
- ------------
Ingram Micro, Inc., Cl. A(12) 123,600
2,842,800
- ----------------------------------------------------------------------------------------------------------------
- ------------
Seagate Technology(12) 760,000
30,020,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sun Microsystems, Inc.(12) 460,000
11,816,250
------------
74,170,063
- ----------------------------------------------------------------------------------------------------------------
- -------------------
COMPUTER SOFTWARE--1.3%
BMC Software, Inc.(12) 285,000
11,791,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Computer Associates International, Inc. 237,500
11,815,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Microsoft Corp.(12) 90,000
7,436,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Oracle Corp.(12) 97,500
4,070,625
------------
35,114,375
- ----------------------------------------------------------------------------------------------------------------
- -------------------
ELECTRONICS--4.3%
ADT Ltd.(12) 475,000
10,865,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
Analog Devices, Inc.(12) 421,300
14,271,538
- ----------------------------------------------------------------------------------------------------------------
- ------------
DuPont Photomasks, Inc.(12) 82,500
3,743,438
- ----------------------------------------------------------------------------------------------------------------
- ------------
ESS Technology, Inc.(12) 100,000
2,812,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Hewlett-Packard Co. 165,000
8,291,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Input/Output, Inc.(12) 150,000
2,775,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Intel Corp. 490,000
64,159,375
- ----------------------------------------------------------------------------------------------------------------
- ------------
Photronics, Inc.(12) 117,200
3,193,700
- ----------------------------------------------------------------------------------------------------------------
- ------------
Ultrak, Inc.(12) 66,900
2,040,450
------------
112,152,876
- ----------------------------------------------------------------------------------------------------------------
- -------------------
TELECOMMUNICATIONS-TECHNOLOGY--3.2%
3Com Corp.(12) 250,000
18,343,750
- ----------------------------------------------------------------------------------------------------------------
- ------------
Cisco Systems, Inc.(12) 295,000
18,769,375
- ----------------------------------------------------------------------------------------------------------------
- ------------
LCI International, Inc.(12) 760,000
16,340,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Millicom, Inc.(12) 400,000
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
Newbridge Networks Corp.(12) 200,000
5,650,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Periphonics Corp.(12) 132,400
3,872,700
- ----------------------------------------------------------------------------------------------------------------------------
Uniphase Corp.(12) 100,000
5,250,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
WorldCom, Inc.(12) 602,800
15,710,475
------------
83,936,300
</TABLE>
14 Oppenheimer Total Return Fund, Inc.
<PAGE> 15
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C>
<C>
UTILITIES--6.4%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
ELECTRIC UTILITIES--2.9%
Allegheny Power System, Inc. 460,000
$ 13,972,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Boston Edison Co. 150,000
4,031,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
Carolina Power & Light Co. 275,000
10,037,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
CINergy Corp. 239,000
7,976,625
- ----------------------------------------------------------------------------------------------------------------
- ------------
FPL Group, Inc. 225,000
10,350,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Public Service Co. of Colorado 200,000
7,775,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
SCANA Corp. 180,000
4,815,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Southern Company 421,000
9,525,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
Texas Utilities Co. 175,000
7,131,250
-------------
75,614,250
- ----------------------------------------------------------------------------------------------------------------
- -------------------
GAS UTILITIES--2.0%
Columbia Gas System, Inc. 155,000
9,861,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
El Paso Natural Gas Co. 286,160
14,451,080
- ----------------------------------------------------------------------------------------------------------------
- ------------
PanEnergy Corp. 177,500
7,987,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Sonat, Inc. 410,000
21,115,000
-------------
53,415,455
- ----------------------------------------------------------------------------------------------------------------
- -------------------
TELEPHONE UTILITIES--1.5%
BCE, Inc. 175,000
8,356,250
- ----------------------------------------------------------------------------------------------------------------
- ------------
GTE Corp. 450,000
20,475,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Pacific Telesis Group 100,000
3,675,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
SBC Communications, Inc. 130,000
6,727,500
-------------
39,233,750
-------------
Total Common Stocks (Cost $1,683,421,947)
2,111,593,448
================================================================================================================
===================
PREFERRED STOCKS--1.0%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Freeport-McMoRan Copper & Gold, Inc., Depositary Shares
each representing 0.05 Shares of Step-Up Cv. Preferred Stock 290,000
8,047,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Microsoft Corp., $2.196 Cv., Series A 185,000
14,823,125
- ----------------------------------------------------------------------------------------------------------------
- ------------
Money Store (The), $1.72 Cv. Preferred 70,000
1,916,250
-------------
Total Preferred Stocks (Cost $23,637,550)
24,786,875
================================================================================================================
===================
OTHER SECURITIES--0.8%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Cooper Industries, Inc., Debt Exchangeable for Common Stock,
6% Exchangeable Nts., 1/1/99 365,000
7,071,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Merrill Lynch & Co., Inc., 6.25% Structured Yield
Product Exchangeable for Stock of IMC Global, Inc. 90,900
3,647,363
- ----------------------------------------------------------------------------------------------------------------
- ------------
Merrill Lynch & Co., Inc., 6.50% Cv. Structured Yield
Product Exchangeable for Stock due 8/15/98 110,000
7,397,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
RJR Nabisco Holdings Corp., $6.50 Cv., Series C 400,000
2,700,000
-------------
Total Other Securities (Cost $16,457,506)
20,816,738
</TABLE>
15 Oppenheimer Total Return Fund, Inc.
<PAGE> 16
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS
SEE NOTE 1
================================================================================================================
===================
<S> <C>
<C>
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
American Satellite Network, Inc. Wts., Exp. 6/99 100,000
$ --
- ----------------------------------------------------------------------------------------------------------------
- ------------
Venezuela Government Wts., Exp. 4/20 11,250
--
----------
Total Rights, Warrants and Certificates (Cost $0)
--
<CAPTION>
FACE
AMOUNT(1)
================================================================================================================
===================
<S> <C>
<C>
STRUCTURED INSTRUMENTS--1.1%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Bayerische Landesbank Girozentrale, New York Branch,
6.28% Deutsche Mark Currency Protected Yield Curve CD, 7/25/97 $ 1,000,000
996,500
- ----------------------------------------------------------------------------------------------------------------
- ------------
Canadian Imperial Bank of Commerce, New York Branch,
13.50% Greek Drachma/Swiss Franc Linked Nts., 2/5/97 2,000,000
2,024,200
- ----------------------------------------------------------------------------------------------------------------
- ------------
Canadian Imperial Bank of Commerce, New York Branch, 17% CD,
4/2/97 (indexed to the Russian Federation GKO, Zero Coupon, 3/26/97) 850,000
847,875
- ----------------------------------------------------------------------------------------------------------------
- ------------
Canadian Imperial Bank of Commerce, New York Branch, 17.30% CD,
2/26/97 (indexed to the Federation GKO, Zero Coupon, 2/19/97)(5) 2,000,000
1,997,000
- ----------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, New York Branch, Czech Koruna Linked Nts.,
Zero Coupon Debs., 12.548%, 2/3/97(4) CZK 69,000,000
2,508,491
- ----------------------------------------------------------------------------------------------------------------
- ------------
ING (U.S.) Financial Holdings Corp., Zero Coupon
Korean Won/U.S. Dollar Linked Nts., 10.87%, 6/9/97(4) 600,000
557,880
- ----------------------------------------------------------------------------------------------------------------
- ------------
ING (U.S.) Financial Holdings Corp., Zero Coupon Nts.,
Linked to Greek Drachma/Swiss Franc Exchange Rate, 14.437%, 12/10/97(4) 2,300,000
1,961,440
- ----------------------------------------------------------------------------------------------------------------
- ------------
Lehman Brothers Holdings, 15% U.S. Dollar Nts.
Linked to Czech Koruna/Swiss Franc, 12/21/98 1,200,000
1,199,040
- ----------------------------------------------------------------------------------------------------------------
- ------------
Lehman Brothers Holdings, Zero Coupon U.S. Dollar Nts.
Linked to Greek Drachma/Swiss Franc, 15.639%, 12/23/97(4) 1,500,000
1,494,900
- ----------------------------------------------------------------------------------------------------------------
- ------------
Lehman Brothers Holdings, Zero Coupon U.S. Dollar Nts.
Linked to Greek Drachma/Swiss Franc, 15.453%, 12/26/97(4) 1,500,000
1,497,900
- ----------------------------------------------------------------------------------------------------------------
- ------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.886%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 2,000,000
1,999,200
- ----------------------------------------------------------------------------------------------------------------
- ------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.408%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 2,000,000
1,999,200
- ----------------------------------------------------------------------------------------------------------------
- ------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.38%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 4,200,000
4,198,320
- ----------------------------------------------------------------------------------------------------------------
- ------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.384%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 4,000,000
3,998,400
- ----------------------------------------------------------------------------------------------------------------
- ------------
Swiss Bank Corp., New York Branch, 6.05% CD, 6/20/97
(indexed to the closing Nikkei 225 Index on 1/23/97, 5 yr. & 3 mos.
Japanese Yen Swap rate & New Zealand Dollar) 1,700,000
1,734,850
-----------
Total Structured Instruments (Cost $29,049,296)
29,015,196
</TABLE>
16 Oppenheimer Total Return Fund, Inc.
<PAGE> 17
<TABLE>
<CAPTION>
MARKET VALUE
DATE STRIKE CONTRACTS
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------------
<S> <C> <C> <C>
<C>
PUT OPTIONS PURCHASED--0.0%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Australian Dollar Put Opt. 1/97 1.28 AUD 3,905,000
$ 5,272
- ----------------------------------------------------------------------------------------------------------------
- ------------
Australian Dollar Put Opt. 2/97 1.282 AUD 3,900,000
10,335
- ----------------------------------------------------------------------------------------------------------------
- ------------
Deutsche Mark Put Opt. 2/97 1.545 DEM 23,750,000
130,530
- ----------------------------------------------------------------------------------------------------------------
- ------------
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali, 9.50%, 2/1/06 Put Opt. 7/97 99.96 ITL 3,203
2,242
- ----------------------------------------------------------------------------------------------------------------
- ------------
Japanese Yen Put Opt. 3/97 115 JPY 620,000,000
85,560
- ----------------------------------------------------------------------------------------------------------------
- ------------
New Zealand Dollar Put Opt. 3/97 1.43 NZD 1,693,000
10,226
- ----------------------------------------------------------------------------------------------------------------
- ------------
New Zealand Dollar Put Opt. 3/97 1.44 NZD 52,800
192
- ----------------------------------------------------------------------------------------------------------------
- ------------
New Zealand Dollar Put Opt. 3/97 1.453 NZD 23,500
54
------------
Total Put Options Purchased (Cost $448,786)
244,411
<CAPTION>
FACE
AMOUNT
================================================================================================================
===================
<S> <C>
<C>
REPURCHASE AGREEMENTS--5.9%
- ----------------------------------------------------------------------------------------------------------------
- -------------------
Repurchase agreement with J.P. Morgan Securities, Inc.,
6.50%, dated 12/31/96, to be repurchased at $71,225,711 on 1/2/97,
collateralized by U.S. Treasury Bonds, 7.875%--12%, 5/15/09--2/15/21,
with a value of $58,761,504 and U.S. Treasury Nts., 4.75%--6%,
8/31/98--9/30/98, with a value of $14,589,775 $71,200,000
71,200,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Repurchase agreement with PaineWebber, Inc., 6.50%, dated 12/31/96,
to be repurchased at $83,830,261 on 1/2/97,collateralized by
U.S. Treasury Nts., 5.75%--8.75%, 9/30/97--8/31/00, with a value of $86,406,815 83,800,000
83,800,000
--------------
Total Repurchase Agreements (Cost $155,000,000)
155,000,000
- ----------------------------------------------------------------------------------------------------------------
- -------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,171,977,154) 100.1%
2,620,185,161
- ----------------------------------------------------------------------------------------------------------------
- -------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.1)
(2,863,594)
-----------
--------------
NET ASSETS 100.0%
$2,617,321,567
===========
==============
</TABLE>
17 Oppenheimer Total Return Fund, Inc.
<PAGE> 18
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ------------
1. Face amount is reported in U.S. Dollars, except for those denoted in the following currencies:
<S> <C>
AUD--Australian Dollar JPY--Japanese Yen
CAD--Canadian Dollar MXP--Mexican Peso
CZK--Czech Koruna MYR--Malaysian Ringgit
DEM--German Deutsche Mark NOK--Norwegian Krone
DKK--Danish Krone NZD--New Zealand Dollar
GBP--British Pound Sterling PTE--Portuguese Escudo
IDR--Indonesian Rupiah SEK--Swedish Krona
ITL--Italian Lira ZAR--South African Rand
</TABLE>
2. A sufficient amount of liquid assets has been designated to cover
outstanding call options, as follows:
<TABLE>
<CAPTION>
CONTRACTS/FACE EXPIRATION EXERCISE PREMIUM
MARKET VALUE
SUBJECT TO CALL DATE PRICE RECEIVED
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C> <C>
<C>
Call Option on Australian Dollar 3,178,670 1/97 1.229 AUD $20,502
$ 318
- ----------------------------------------------------------------------------------------------------------------
- -----------
Banco Hipotecario Nacional (Argentina)
Medium-Term Nts., 10.625%, 8/7/06 1,000,000 8/00 $100.00 9,200
30,000
- ----------------------------------------------------------------------------------------------------------------
- -----------
Call Option on British Pound Sterling 1,290,000 1/97 1.632 GBP 29,051
103,071
- ----------------------------------------------------------------------------------------------------------------
- -----------
Call Option on British Pound Sterling 2,500,000 3/97 1.69 GBP 46,000
83,350
- ----------------------------------------------------------------------------------------------------------------
- -----------
Call Option on British Pound Sterling 910,000 3/97 1.71 GBP 17,772
28,301
- ----------------------------------------------------------------------------------------------------------------
- -----------
Morocco (Kingdom of) Loan
Participation Agreement,
Tranche A, 6.437%, 1/1/09 4,505,000 1/97 $79.875 49,105
135,150
- ----------------------------------------------------------------------------------------------------------------
- -----------
Call Option on New Zealand Dollar 1,693,000 3/97 1.412 NZD 11,174
9,938
- ----------------------------------------------------------------------------------------------------------------
- -----------
Call Option on New Zealand Dollar 52,800 3/97 1.419 NZD 341
381
- ----------------------------------------------------------------------------------------------------------------
- -----------
Call Option on New Zealand Dollar 23,500 3/97 1.428 NZD 164
223
--------
--------
$183,309
$390,732
========
========
</TABLE>
3. A sufficient amount of securities has been designated to cover
outstanding forward foreign currency exchange contracts. See Note 5 of
Notes to Financial Statements.
4. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
5. Identifies issues considered to be illiquid--See Note 7 of Notes to
Financial Statements.
6. Represents the current interest rate for a variable rate security.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These
securities have been determined to be liquid under guidelines established
by the Board of Directors. These securities amount to $31,379,012 or
1.20% of the Fund's net assets, at December 31, 1996.
8. Represents the current interest rate for an increasing rate security.
9. When-issued security to be delivered and settled after December 31,
1996.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
11. Non-income producing--issuer is in default of interest payment.
12. Non-income producing security.
See accompanying Notes to Financial Statements.
18 Oppenheimer Total Return Fund, Inc.
<PAGE> 19
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
<TABLE>
<S> <C>
==============================================================================================================
ASSETS
Investments, at value (cost $2,171,977,154)--see accompanying statement $2,620,185,161
-------------------------------------------------------------------------------------------------------
Cash 6,739,797
-------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5 138,091
-------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 13,688,515
Interest, dividends and principal paydowns 5,744,650
Shares of capital stock sold 4,969,889
Closed forward foreign currency exchange contracts 183,735
-------------------------------------------------------------------------------------------------------
Other 77,488
--------------
Total assets 2,651,727,326
==============================================================================================================
LIABILITIES
Options written, at value (premiums received $183,309)--see accompanying statement--Note 6 390,731
-------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 23,376,555
Shares of capital stock redeemed 4,245,040
Dividends 3,999,174
Distribution and service plan fees 1,297,178
Closed forward foreign currency exchange contracts 351,868
Transfer and shareholder servicing agent fees 84,655
Directors' fees 10,797
Other 649,761
--------------
Total liabilities 34,405,759
==============================================================================================================
NET ASSETS $2,617,321,567
==============
==============================================================================================================
COMPOSITION OF
NET ASSETS
Par value of shares of capital stock $ 26,841,566
-------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,134,457,377
-------------------------------------------------------------------------------------------------------
Overdistributed net investment income (364,489)
-------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 8,265,055
-------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 448,122,058
--------------
Net assets $2,617,321,567
==============
==============================================================================================================
NET ASSET VALUE
PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of $1,826,598,516
and 186,889,306 shares of capital stock outstanding) $ 9.77
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $10.37
-------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $754,917,593 and 77,852,227 shares of capital stock outstanding) $ 9.70
-------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $17,553,545 and 1,805,922 shares of capital stock outstanding) $ 9.72
-------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $18,251,913 and 1,868,204 shares of capital stock outstanding) $ 9.77
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Total Return Fund, Inc.
<PAGE> 20
STATEMENT OF OPERATIONS For the Year Ended December 31, 1996
<TABLE>
==============================================================================================================
<S> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $50,205) $ 34,379,002
-------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $261,206) 33,517,384
------------
Total income 67,896,386
==============================================================================================================
EXPENSES
Management fees--Note 4 12,631,975
-------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 3,068,444
Class B 6,709,692
Class C 82,374
-------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 2,897,019
-------------------------------------------------------------------------------------------------------
Shareholder reports 620,763
-------------------------------------------------------------------------------------------------------
Custodian fees and expenses 307,358
-------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 181,767
Class B 33,177
Class C 5,405
Class Y 4,881
-------------------------------------------------------------------------------------------------------
Directors' fees and expenses 68,244
-------------------------------------------------------------------------------------------------------
Legal and auditing fees 61,624
-------------------------------------------------------------------------------------------------------
Insurance expenses 46,566
-------------------------------------------------------------------------------------------------------
Other 122,017
-----------
Total expenses 26,841,306
==============================================================================================================
NET INVESTMENT INCOME 41,055,080
==============================================================================================================
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain on:
Investments and options written (including premiums on options exercised) 299,931,324
Closing of futures contracts 227,640
Closing and expiration of options written--Note 6 995,498
Foreign currency transactions 2,216,197
------------
Net realized gain 303,370,659
-------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 82,610,254
Translation of assets and liabilities denominated in foreign currencies (3,814,331)
------------
Net change 78,795,923
------------
Net realized and unrealized gain 382,166,582
==============================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $423,221,662
============
</TABLE>
See accompanying Notes to Financial Statements.
20 Oppenheimer Total Return Fund, Inc.
<PAGE> 21
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
1996
1995
================================================================================================================
==================
<S> <C>
<C>
OPERATIONS
Net investment income $ 41,055,080
$ 44,120,320
- ----------------------------------------------------------------------------------------------------------------
- -----------
Net realized gain 303,370,659
137,567,265
- ----------------------------------------------------------------------------------------------------------------
- -----------
Net change in unrealized appreciation or depreciation 78,795,923
314,781,561
--------------
--------------
Net increase in net assets resulting from operations 423,221,662
496,469,146
================================================================================================================
==================
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income:
Class A (33,143,640)
(35,374,788)
Class B (7,780,831)
(9,099,459)
Class C (120,797)
(11,241)
Class Y (290,763)
(121,199)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (201,096,072)
(85,267,758)
Class B (83,631,438)
(32,692,902)
Class C (1,874,710)
(84,903)
Class Y (1,947,759)
(366,754)
================================================================================================================
==================
CAPITAL STOCK
TRANSACTIONS
Net increase in net assets resulting from capital stock transactions--Note 2:
Class A 206,458,102
69,917,082
Class B 140,890,490
72,588,581
Class C 16,404,454
1,689,246
Class Y 11,355,744
5,093,914
================================================================================================================
==================
NET ASSETS
Total increase 468,444,442
482,738,965
- ----------------------------------------------------------------------------------------------------------------
- -----------
Beginning of period 2,148,877,125
1,666,138,160
--------------
--------------
End of period (including overdistributed net investment income
of $364,489 and $1,164,352 respectively) $2,617,321,567
$2,148,877,125
==============
==============
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Total Return Fund, Inc.
<PAGE> 22
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995 1994
===============================================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $9.35 $7.80 $8.69
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .23 .23
Net realized and unrealized gain (loss) 1.63 2.09 (.91)
---------- --------- ---------
Total income (loss) from investment operations 1.83 2.32 (.68)
- ---------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.20) (.22) (.21)
Distributions from net realized gain (1.21) (.55) --
---------- --------- ---------
Total dividends and distributions to shareholders (1.41) (.77) (.21)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.77 $9.35 $7.80
========== ========= =========
===============================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 19.73% 30.12% (7.86)%
===============================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,826,599 $1,550,710 $1,235,637
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,684,726 $1,394,245 $1,261,729
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.96% 2.53% 2.88%
Expenses 0.90% 0.92% 1.01%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 117.5% 84.8% 117.2%
Average brokerage commission rate(7) $0.0591 $0.0532 --
</TABLE>
1. For the period from June 1, 1994 (inception of offering) to December 31,
1994.
2. For the period from August 29, 1995 (inception of offering) to December 31,
1995.
3. For the period from May 1, 1993 (inception of offering) to December 31,
1993.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
22 Oppenheimer Total Return Fund, Inc.
<PAGE> 23
<TABLE>
<CAPTION>
CLASS B
- ----------------------- -----------------------------------------------------
YEAR ENDED DECEMBER 31,
1993 1992 1996 1995 1994 1993(3)
==================================================================================
<S> <C> <C> <C> <C> <C>
$7.84 $7.49 $9.29 $7.76 $8.66 $8.23
- ----------------------------------------------------------------------------------
.18 .17 .12 .15 .17 .09
1.45 .75 1.62 2.08 (.91) 1.03
--------- --------- --------- --------- -------- --------
1.63 .92 1.74 2.23 (.74) 1.12
- ----------------------------------------------------------------------------------
(.20) (.20) (.12) (.15) (.16) (.11)
(.58) (.37) (1.21) (.55) -- (.58)
--------- --------- --------- --------- -------- --------
(.78) (.57) (1.33) (.70) (.16) (.69)
- ----------------------------------------------------------------------------------
$8.69 $7.84 $9.70 $9.29 $7.76 $8.66
========= ========= ========= ========= ======== ========
==================================================================================
21.24% 12.83% 18.78% 29.03% (8.64)% 13.91%
==================================================================================
$1,223,395 $795,474 $754,918 $589,804 $429,427 $218,716
- ----------------------------------------------------------------------------------
$992,381 $662,917 $671,593 $510,744 $360,773 $ 90,952
- ----------------------------------------------------------------------------------
2.21% 2.68% 1.15% 1.70% 2.11% 1.09%(5)
0.93% 0.96% 1.71% 1.75% 1.87% 1.87%(5)
- ----------------------------------------------------------------------------------
143.9% 143.5% 117.5% 84.8% 117.2% 143.9%
-- -- $0.0591 $0.0532 -- --
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS Y
---------------------- -----------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1996 1995(2) 1996 1995 1994(1)
=======================================================================
<S> <C> <C>
$9.33 $9.19 $9.35 $7.80 $8.23
- -----------------------------------------------------------------------
.16 .07 .23 .20 .15
1.57 .73 1.61 2.13 (.41)
------- ------- -------- ------- --------
1.73 .80 1.84 2.33 (.26)
- -----------------------------------------------------------------------
(.13) (.11) (.21) (.23) (.17)
(1.21) (.55) (1.21) (.55) --
------- -------- -------- -------- ---------
(1.34) (.66) (1.42) (.78) (.17)
- -----------------------------------------------------------------------
$9.72 $9.33 $9.77 $9.35 $7.80
======= ======== ======== ======== =========
=======================================================================
18.67% 8.82% 19.88% 30.23% (3.15)%
=======================================================================
$17,554 $1,655 $18,252 $6,709 $1,074
- -----------------------------------------------------------------------
$ 8,277 $ 784 $13,083 $3,944 $ 320
- -----------------------------------------------------------------------
1.05% 1.42%(5) 2.08% 2.51% 4.07%(5)
1.76% 1.77%(5) 0.77% 0.87% 0.96%(5)
- -----------------------------------------------------------------------
117.5% 84.8% 117.5% 84.8% 117.2%
$0.0591 $0.0532 $0.0591 $0.0532 --
</TABLE>
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended December 31, 1996 were $2,704,801,613 and $2,433,438,627,
respectively.
7. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
23 Oppenheimer Total Return Fund, Inc.
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
Oppenheimer Total Return Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to
seek high total return through investments which are expected to provide
opportunities for growth or to produce income, or both. The Fund's
investment adviser is OppenheimerFunds, Inc. (the Manager). The Fund
offers Class A, Class B, Class C and Class Y shares. Class A shares are
sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares
have identical rights to earnings, assets and voting privileges, except
that each class has its own expenses directly attributable to a
particular class and exclusive voting rights with respect to matters
affecting a single class. Class A, Class B and Class C have separate
distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a summary
of significant accounting policies consistently followed by the Fund.
------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of
the New York Stock Exchange on each trading day. Listed and unlisted
securities for which such information is regularly reported are valued
at the last sale price of the day or, in the absence of sales, at values
based on the closing bid or the last sale price on the prior trading
day. Long-term and short-term "non-money market" debt securities are
valued by a portfolio pricing service approved by the Board of
Directors. Such securities which cannot be valued by the approved
portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is
reliable and that the quotes reflect current market value, or are valued
under consistently applied procedures established by the Board of
Directors to determine fair value in good faith. Short-term "money
market type" debt securities having a remaining maturity of 60 days or
less are valued at cost (or last determined market value) adjusted for
amortization to maturity of any premium or discount. 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 price 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 is used.
-------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of securities and
investment income are translated at the rate of exchange prevailing on
the respective dates of such transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from
changes in market values of securities held and reported with all other
foreign currency gains and losses in the Fund's Statement of Operations.
-------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take
possession, to have legally segregated in the Federal Reserve Book Entry
System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. The market
value of the underlying securities is required to be at least 102% of
the resale price at the time of purchase. If the seller of the agreement
defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
-------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and
losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating
expenses directly attributable to a specific class are charged against
the operations of that class.
-------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss
carryovers, to shareholders. Therefore, no federal income or excise tax
provision is required.
-------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
24 Oppenheimer Total Return Fund, Inc.
<PAGE> 25
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement
and tax purposes. 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.
During the year ended December 31, 1996, the Fund adjusted the
classification of distributions to shareholders to reflect the
differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly,
during the year ended December 31, 1996, amounts have been reclassified
to reflect a decrease in paid-in capital of $1,627,613, a decrease in
overdistributed net investment income of $1,080,814, and an increase in
accumulated net realized gain on investments of $546,799.
-------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income is
recorded on the ex-dividend date. 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 options written and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the
same basis used for federal income tax purposes.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from
those estimates.
================================================================================
2. CAPITAL STOCK
The Fund has authorized 450 million, 200 million, 200 million and 10
million shares of $.10 par value Class A, Class B, Class C and Class Y
capital stock, respectively. Transactions in shares of capital stock
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996 YEAR ENDED
DECEMBER 31, 1995(1)
----------------------------
- -------------------------------
SHARES AMOUNT SHARES
AMOUNT
- ----------------------------------------------------------------------------------------------------------------
- ------------
<S> <C> <C> <C>
<C>
Class A:
Sold 20,733,025 $208,977,166 18,844,314
$166,165,690
Dividends and distributions reinvested 22,428,454 219,649,555 12,296,649
112,950,173
Redeemed (22,110,493) (222,168,619) (23,719,242)
(209,198,781)
----------- ------------ -----------
-------------
Net increase 21,050,986 $206,458,102 7,421,721
$ 69,917,082
=========== ============ ===========
=============
- ----------------------------------------------------------------------------------------------------------------
- ------------
Class B:
Sold 14,539,920 $145,115,033 13,740,203
$120,055,138
Dividends and distributions reinvested 8,941,258 86,830,460 4,344,180
39,709,825
Redeemed (9,142,775) (91,055,003) (9,944,572)
(87,176,382)
----------- ------------- ----------
------------
Net increase 14,338,403 $140,890,490 8,139,811
$ 72,588,581
=========== ============= ==========
============
- ----------------------------------------------------------------------------------------------------------------
- ------------
Class C:
Sold 1,529,403 $ 15,491,645 172,793
$ 1,648,892
Dividends and distributions reinvested 198,823 1,933,848 10,117
93,507
Redeemed (99,731) (1,021,039) (5,483)
(53,153)
---------- ------------ ----------
-----------
Net increase 1,628,495 $ 16,404,454 177,427
$ 1,689,246
========== ============ ==========
===========
- ----------------------------------------------------------------------------------------------------------------
- ------------
Class Y:
Sold 1,481,212 $14,899,947 635,605
$ 5,604,059
Dividends and distributions reinvested 228,630 2,238,523 52,875
487,953
Redeemed (559,150) (5,782,726) (108,744)
(998,098)
---------- ----------- ----------
-----------
Net increase 1,150,692 $11,355,744 579,736
$ 5,093,914
========== =========== ==========
===========
</TABLE>
1. For the year ended December 31, 1995 for Class A, Class B and Class Y
shares and for the period from August 29, 1995 (inception of offering)
to December 31, 1995 for Class C shares.
================================================================================
3. UNREALIZED GAINS AND
LOSSES ON INVESTMENTS
At December 31, 1996, net unrealized appreciation on investments and
options written of $448,000,585 was composed of gross appreciation of
$476,480,803 and gross depreciation of $28,480,218.
25 Oppenheimer Total Return Fund, Inc.
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
4. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of
0.75% on the first $100 million of average annual net assets, 0.70% of
the next $100 million, 0.65% of the next $100 million, 0.60% of the next
$100 million, 0.55% of the next $100 million, and 0.50% of net assets in
excess of $500 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 December 31, 1996, commissions (sales charges
paid by investors) on sales of Class A shares totaled $4,329,798, of
which $934,605 was retained by OppenheimerFunds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general distributor, and by an
affiliated broker/dealer. Sales charges advanced to broker/dealers by
OFDI on sales of the Fund's Class B and Class C shares totaled
$4,468,914 and $142,701, of which $371,419 and $4,807, respectively, was
paid to an affiliated broker/dealer. During the year ended December 31,
1996, OFDI received contingent deferred sales charges of $1,054,974 and
$3,567, respectively, upon redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at the time of sale
of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is
the transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OFS's total costs of providing such
services are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to
reimburse OFDI for a portion of its costs incurred in connection with
the personal service and maintenance of accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net assets of Class A shares of the
Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and
other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold Class A shares.
During the year ended December 31, 1996, OFDI paid $235,887 to an
affiliated broker/dealer as reimbursement for Class A personal service
and maintenance expenses.
The Fund has adopted compensation type Distribution and Service
Plans for Class B and Class C shares to compensate OFDI for its services
and costs in distributing Class B and Class C shares and servicing
accounts. Under the Plans, the Fund pays OFDI an annual asset-based
sales charge of 0.75% per year on Class B and Class C shares, as
compensation for sales commissions paid from its own resources at the
time of sale and associated financing costs. OFDI also receives a
service fee of 0.25% per year as compensation for costs incurred in
connection with the personal service and maintenance of accounts that
hold shares of the Fund, including amounts paid to brokers, dealers,
banks and other financial institutions. Both fees are computed on the
average annual net assets of Class B and Class C shares, determined as
of the close of each regular business day. During the year ended
December 31, 1996, OFDI paid $93,473 to an affiliated broker/dealer as
compensation for Class B personal service and maintenance expenses and
retained $5,318,916 and $76,238, respectively, as compensation for Class
B and Class C sales commissions and service fee advances, as well as
financing costs. If the Plans are terminated by the Fund, the Board of
Directors may allow the Fund to continue payments of the asset-based
sales charge to OFDI for certain expenses it incurred before the Plans
were terminated. At December 31, 1996, OFDI had incurred unreimbursed
expenses of $18,066,359 for Class B and $189,390 for Class C.
================================================================================
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a
commitment to purchase or sell a foreign currency at a future date, at a
negotiated rate.
The Fund uses forward contracts to seek to manage foreign
currency risks. They may also be used to tactically shift portfolio
currency risk. The Fund generally enters into forward contracts as a
hedge upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Fund may enter into such contracts as a hedge
against changes in foreign currency exchange rates on portfolio
positions.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets
on a daily basis as provided by a reliable bank or dealer. The Fund will
realize a gain or loss upon the closing or settlement of the forward
transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments
where applicable. Unrealized appreciation or depreciation on forward
contracts is reported in the Statement of Assets and Liabilities.
Realized gains and losses are reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
Risks include the potential inability of the counterparty to
meet the terms of the contract and unanticipated movements in the value
of a foreign currency relative to the U.S. dollar.
26 Oppenheimer Total Return Fund, Inc.
<PAGE> 27
================================================================================
5. FORWARD CONTRACTS
(CONTINUED)
At December 31, 1996, the Fund had outstanding forward contracts to
purchase and sell foreign currencies as follows:
<TABLE>
<CAPTION>
CONTRACT AMOUNT VALUATION AS OF
UNREALIZED
CONTRACTS TO PURCHASE EXCHANGE DATE (000'S) DECEMBER 31, 1996
APPRECIATION
- ----------------------------------------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C>
<C>
South African Rand (ZAR) 1/3/97 5,630 ZAR $1,202,320
$ 3,277
Spanish Peseta (ESP) 10/20/97 528,537 ESP 4,063,928
41,969
----------
--------
$5,266,248
45,246
==========
========
CONTRACTS TO SELL
- ----------------------------------------------------------------------------------------------------------------
- -----------
Swiss Franc (CHF) 10/20/97 5,100 CHF $3,929,114
92,845
==========
--------
$138,091
========
</TABLE>
================================================================================
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and 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.
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.
Securities designated to cover outstanding call options are
noted in the Statement of Investments where applicable. 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.
Written option activity for the year ended December 31, 1996 was as
follows:
<TABLE>
<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 December 31, 1995 -- $ -- --
$ --
- ----------------------------------------------------------------------------------------------------------------
- -----------
Options written 50,620,173 1,257,664 940,238
105,639
- ----------------------------------------------------------------------------------------------------------------
- -----------
Options closed or expired (30,043,398) (910,598) (940,238)
(105,639)
- ----------------------------------------------------------------------------------------------------------------
- -----------
Options exercised (10,958,700) (163,757) --
--
- ----------------------------------------------------------------------------------------------------------------
- -----------
Options outstanding at December 31, 1996 9,618,075 $ 183,309 --
$ --
=========== =========== ========
==========
</TABLE>
================================================================================
7. ILLIQUID AND RESTRICTED
SECURITIES
At December 31, 1996, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in
private placement transactions, are not registered under the Securities
Act of 1933, may have contractual restrictions on resale, and are valued
under methods approved by the Board of Directors as reflecting fair
value. A security may be considered illiquid if it lacks a readily
available market or if its valuation has not changed for a certain
period of time. The Fund intends to invest no more than 10% of its net
assets (determined at the time of purchase and reviewed from time to
time) in illiquid and restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors,
are not subject to that limit. The aggregate value of illiquid or
restricted securities subject to this limitation at December 31, 1996
was $14,362,332 which represents less than 0.55% of the Fund's net
assets.
<PAGE>
Appendix A
Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
<PAGE>
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
Oppenheimer Total Return Fund, Inc.
6803 South Tucson Way
Englewood, Colorado 80112
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PXO420.001.0497 Printed on recycled paper
<PAGE>
OPPENHEIMER TOTAL RETURN FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements
(1) Financial Highlights - See Parts A and B: Filed
herewith.
(2) Independent Auditors' Report - See Part B: Filed
herewith.
(3) Statement of Investments - See Part B: Filed herewith.
(4) Statement of Assets and Liabilities - See Part B: Filed
herewith.
(5) Statement of Operations - See Part B: Filed herewith.
(6) Statement of Changes in Net Assets - See Part B: Filed
herewith.
(7) Notes to Financial Statements - See Part B: Filed
herewith.
(b) Exhibits
--------
(1) (i) Articles of Incorporation dated 12/5/79:
Previously filed with Registrant's Post-Effective Amendment No. 48,
8/19/80, and refiled with Registrant's Post-Effective Amendment No.
75, 4/27/95, pursuant to Item 102 of Regulation S-T and
incorporated herein by reference.
(ii) Articles of Incorporation, amended as of 8/24/81:
Previously filed with Registrant's Post-Effective Amendment No. 50,
4/23/82, and refiled with Registrant's Post-Effective Amendment No.
75, 4/27/95, pursuant to Item 102 of Regulation S-T and
incorporated herein by reference.
(iii) Articles of Amendment dated 4/28/87 to
Articles of Incorporation, changing Registrant's name from
"Hamilton Funds, Inc." to Oppenheimer Total Return Fund, Inc.":
Previously filed with Registrant's Post-Effective Amendment No. 62,
4/27/87, and refiled with Registrant's Post-Effective Amendment No.
75,4/27/95, pursuant to Item 102 of Regulation S-T and incorporated
herein by reference.
(iv) Articles of Amendment dated 3/23/93 to
Articles of Incorporation: Previously filed with Registrant's Post-
Effective Amendment No. 72, 4/28/93, refiled with Registrant's
Post-Effective Amendment No. 75, 4/27/95, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(v) Articles Supplementary dated 4/14/93 to
Articles of Incorporation: Previously filed with Registrant's Post-
Effective Amendment No. 72, 4/28/93, refiled with Registrant's
Post-Effective Amendment No. 75, 4/27/95, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(vi) Articles Supplementary dated 3/30/94 to
Articles of Incorporation: Filed pursuant to Item 102 of Regulation
S-T, and incorporated herein by reference.
(vii) Articles Supplementary dated 7/13/95 to
Articles of Incorporation: Filed with Registrant s Post-Effective
Amendment No. 77, 8/25/95, and incorporated herein by reference.
(2) By-Laws, as amended through 4/18/95: Filed with
Registrant s Post-Effective Amendment No. 77, 8/25/95, and
incorporated herein by reference..
(3) Not applicable.
(4) (i) Specimen Class A Share Certificate: Filed
herewith.
(ii) Specimen Class B Share Certificate: Filed
herewith.
(iii) Specimen Class C Share Certificate: Filed
herewith.
(iv) Specimen Class Y Share Certificate: Filed
herewith.
(5) Investment Advisory Agreement between Registrant and
Oppenheimer Management Corporation dated 10/22/90: Previously filed
with Post-Effective Amendment No. 68, 2/28/91, refiled with
Registrant's Post-Effective Amendment No. 75, 4/27/95, pursuant to
Item 102 of Regulation S-T, and incorporated herein by reference.
(6) (i) General Distributor's Agreement between
Registrant and Oppenheimer Fund Management, Inc. dated 10/13/92:
Previously filed with Registrant's Post-Effective Amendment No. 71,
2/26/93, refiled with Registrant's Post-Effective Amendment No. 75,
4/27/95, pursuant to Item 102 of Regulation S-T and incorporated
herein by reference.
(ii) Form of Oppenheimer Funds Distributor, Inc.
Dealer Agreement: Filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg.
No. 33-17850), 9/30/94, and incorporated herein by reference.
(iii) Form of Oppenheimer Funds Distributor, Inc.
Broker Agreement: Filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg.
No. 33-17850), 9/30/94, and incorporated herein by reference.
(iv) Form of Oppenheimer Funds Distributor, Inc.
Agency Agreement: Filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer Main Street Funds (File No.
33-17850), 9/30/94, and incorporated herein by reference.
(v) Broker Agreement between Oppenheimer Fund
Management, Inc. and Newbridge Securities, Inc. dated 10/1/86:
Previously filed with Post-Effective Amendment No. 25 to the
Registration Statement of Oppenheimer Special Fund (Reg. No. 2-
45272), 11/1/86, and refiled with Post-Effective Amendment No. 45
of Oppenheimer Growth Fund (Reg. No. 2-45272), 8/22/94, and
incorporated herein by reference.
(7) Not applicable.
(8) Custody Agreement with The Bank of New York dated
10/6/92: Previously filed with Registrant's Post-Effective
Amendment No. 71, 2/26/93, and refiled with Post-Effective
Amendment No. 75, 4/27/95, and incorporated herein by reference.
(9) Not applicable.
(10) Opinion and Consent of Counsel dated 1/30/81:
Previously filed with Registrant's Post-Effective Amendment No. 57,
4/25/85, refiled with Post-Effective Amendment No. 75, 4/27/95,
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(11) Independent Auditors' Consent: Filed herewith.
(12) Not applicable.
(13) Not applicable.
(14) (i) Form of Individual Retirement Account (IRA)
Trust Agreement: Filed with Post-Effective Amendment No. 21 to the
Registration Statement of Oppenheimer U.S. Government Trust (File
No. 2-76645), 8/25/93, and incorporated herein by reference.
(ii) Form of Tax Sheltered Retirement Plan and
Custody Agreement for employees of public schools and tax-exempt
organizations: Previously filed with Post-Effective Amendment No.
47 to the Registration Statement of Oppenheimer Growth Fund (File
No. 2-45272), 10/21/94, and incorporated herein by reference.
(iii) Form of Prototype 401(k) Plan: Filed with
Post-Effective Amendment No. 7 to the Registration Statement of
Oppenheimer Strategic Income & Growth Fund (Reg. No. 33-47378),
9/28/95, and incorporated herein by reference.
(iv) Form of prototype Standardized and Non-
Standardized Profit-Sharing Plan and Money Purchase Pension Plan
for self-employed persons and corporations: Filed with Post-
Effective Amendment No. 15 to the Registration Statement of
Oppenheimer Mortgage Income Fund (Reg. No. 33-6614), 1/19/95, and
incorporated herein by reference.
(v) Form of SAR-SEP Simplified Employee Pension
IRA: Filed with Post-Effective Amendment No. 15 to the Registration
Statement of Oppenheimer Mortgage Income Fund (Filed No. 33-7714),
1/19/95, and incorporated herein by reference.
(15) (i) Service Plan and Agreement for Class A Shares
dated 7/1/94, pursuant to Rule 12b-1 of the Investment Company Act
of 1940: Filed with Post-Effective Amendment No. 75, 4/27/95 and
incorporated herein by reference.
(ii) Distribution and Service Plan and Agreement
for Class B Shares dated 7/19/95, pursuant to Rule 12b-1 of the
Investment Company Act of 1940: Filed with Registrant s Post-
Effective Amendment No. 77, 8/25/95, and incorporated herein by
reference.
(iii) Distribution and Service Plan and Agreement
for Class C Shares dated 8/29/95, pursuant to Rule 12b-1 of the
Investment Company Act of 1940: Filed with Post-Effective Amendment
No. 76, 6/26/95, and incorporated herein by reference.
(16) Performance Calculations: Filed herewith.
(17) (i) Financial Data Schedule for Class A shares
for fiscal year ended 12/31/95: Filed herewith.
(ii) Financial Data Schedule for Class B shares
for fiscal year ended 12/31/95: Filed herewith.
(iii) Financial Data Schedule for Class C shares
for the period 8/29/95 (inception of class) to 12/31/95: Filed
herewith.
(iv) Financial Data Schedule for Class Y shares
for fiscal year ended 12/31/95: Filed herewith.
-- Powers of Attorney: Filed herewith (Bridget A.
Macaskill), previously filed (all other Directors) with
Registrant's Post-Effective Amendment No. 73, 1/28/94, and
incorporated herein by reference.
(18) Oppenheimer Funds Multiple Class Plan under Rule
18f-3, dated 10/24/95: filed with Post-effective Amendment No. 12
to the Registration Statement of Oppenheimer California Tax-Exempt
Fund (Reg. No. 33-23566), 11/1/95, and incorporated herein by
reference.
Item 25. Persons Controlled by or Under Common Control
with Registrant
- -------- ---------------------------------------------
None.
Item 26. Number of Holders of Securities
- -------- --------------------------------
Number of Record
Holders as of
Title of Class April 2, 1997
- -------------- ----------------
Class A Common Stock, Par Value $.10 106,819
Class B Common Stock, Par Value $.10 60,500
Class C Common Stock, Par Value $.10 1,447
Class Y Common Stock, Par Value $.10 1
Item 27. Indemnification
- -------- ---------------
Reference is made to Section 7(c) of Article SEVENTH of
Registrant's Articles of Incorporation filed as Exhibit 24(b)(1) to
this Registration Statement, and to Section 2-418 of the Maryland
General Corporation Law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid
by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person, Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(a) OppenheimerFunds, Inc. is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in
the same capacity to other registered investment companies as
described in Parts A and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other
business, profession, vocation or employment of a substantial
nature in which each officer and director of OppenheimerFunds, Inc.
is, or at any time during the past two fiscal years has been,
engaged for his/her own account or in the capacity of director,
officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Name & Current Position Other Business and Connections with
OppenheimerFunds, Inc. During the Past Two Years
- --------------------------- ------------------------------
<S> <C>
Mark J.P. Anson,
Vice President Vice President of Oppenheimer Real
Asset Management, Inc. ("ORAMI");
formerly Vice President of Equity
Derivatives at Salomon Brothers,
Inc.
Peter M. Antos,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Senior Vice President of
HarbourView; prior to March, 1996 he was the
senior equity portfolio manager for the
Panorama Series Fund, Inc. (the "Company")
and other mutual funds and pension funds
managed by G.R. Phelps & Co. Inc. ("G.R.
Phelps"), the Company's former investment
adviser, which was a subsidiary of
Connecticut Mutual Life Insurance Company;
was also responsible for managing the common
stock department and common stock investments
of Connecticut Mutual Life Insurance Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly a Vice
President and Senior Portfolio Manager at
First of America Investment Corp.
Ellen Batt,
Assistant Vice President None
Kathleen Beichert,
Assistant Vice President Formerly employed by Smith Barney, Inc.
David Bernard,
Vice President Previously a Regional Sales Director for
Retirement Plan Services at Charles Schwab
& Co., Inc.
Rajeev Bhaman,
Assistant Vice President Formerly Vice President of Asian Equities for
Barclays de Zoete Wedd, Inc.
Robert J. Bishop,
Vice President Assistant Treasurer of the Oppenheimer Funds
(listed below); previously a Fund Controller
for OppenheimerFunds, Inc. (the "Manager").
George Bowen,
Senior Vice President & Treasurer Treasurer of the New York-based Oppenheimer
Funds; Vice President, Assistant Secretary
and Treasurer of the Denver-based Oppenheimer
Funds. Vice President and Treasurer of
OppenheimerFunds Distributor, Inc. (the
"Distributor") and HarbourView Asset
Management Corporation ("HarbourView"), an
investment adviser subsidiary of the Manager;
Senior Vice President, Treasurer, Assistant
Secretary and a director of Centennial Asset
Management Corporation ("Centennial"), an
investment adviser subsidiary of the Manager;
Vice President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of the
Manager; Director, Treasurer and Chief
Executive Officer of MultiSource Services,
Inc.; Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc.;
President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers.
Scott Brooks,
Assistant Vice President None.
Susan Burton,
Assistant Vice President Previously a Director of Educational Services
for H.D. Vest Investment Securities, Inc.
Michael A. Carbuto,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President of
Centennial.
Ruxandra Chivu,
Assistant Vice President None.
O. Leonard Darling,
Executive Vice President Formerly Co-Director of Fixed Income for
State Street Research & Management Co.
Robert A. Densen,
Senior Vice President None.
Sheri Devereux,
Assistant Vice President None.
Robert Doll, Jr.,
Executive Vice President and
Director An officer and/or portfolio manager of
certain Oppenheimer funds.
John Doney,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Secretary of the New York-
based Oppenheimer Funds; Vice President and
Secretary of the Denver-based Oppenheimer
Funds; Secretary of the Oppenheimer Quest and
Oppenheimer Rochester Funds; Executive Vice
President, Director and General Counsel of
the Distributor; President and a Director of
Centennial; Chief Legal Officer and a
Director of MultiSource Services, Inc.;
President and a Director of Oppenheimer Real
Asset Management, Inc.; Executive Vice
President, General Counsel and Director of
SFSI and SSI; formerly Senior Vice President
and Associate General Counsel of the Manager
and the Distributor.
George Evans,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Scott Farrar,
Vice President Assistant Treasurer of the New York-based and
Denver-based Oppenheimer funds.
Leslie A. Falconio,
Assistant Vice President None.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of
OppenheimerFunds Distributor, Inc.; Secretary
of HarbourView Asset Management Corporation,
MultiSource Services, Inc. and Centennial
Asset Management Corporation; Secretary, Vice
President and Director of Centennial Capital
Corporation; Vice President and Secretary of
ORAMI.
Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division An officer, Director and/or portfolio manager
of certain Oppenheimer funds. Formerly
Chairman of the Board and Director of
Rochester Fund Distributors, Inc. ("RFD"),
President and Director of Fielding Management
Company, Inc. ("FMC"), President and Director
of Rochester Capital Advisors, Inc. ("RCAI"),
Managing Partner of Rochester Capital
Advisors, L.P., President and Director of
Rochester Fund Services, Inc. ("RFS"),
President and Director of Rochester Tax
Managed Fund, Inc.
John Fortuna,
Vice President None.
Patricia Foster,
Vice President Formerly she held the following positions:
An officer of certain Oppenheimer funds;
Secretary and General Counsel of Rochester
Capital Advisors, L.P. and Secretary of
Rochester Tax Managed Fund, Inc.
Jennifer Foxson,
Assistant Vice President None.
Paula C. Gabriele,
Executive Vice President Formerly Managing Director (1990-1996) for
Bankers Trust Co.
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds; Vice President and
Counsel of OAC; formerly he held the
following positions: Vice President and a
director of HarbourView and Centennial, a
director of SFSI and SSI, an officer of
other Oppenheimer Funds.
Linda Gardner,
Assistant Vice President None.
Jill Glazerman, None.
Assistant Vice President
Ginger Gonzalez,
Vice President, Director of
Marketing Communications Formerly 1st Vice President / Director of
Graphic and Print Communications for Shearson
Lehman Brothers.
Mildred Gottlieb,
Assistant Vice President Formerly served as a Strategy Consultant for
the Private Client Division of Merrill Lynch.
Robert Grill,
Vice President Formerly Marketing Vice President for Bankers
Trust Company (1993-1996); Steering Committee
Member, Subcommittee Chairman for American
Savings Education Council (1995-1996).
Caryn Halbrecht,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly Vice
President of Fixed Income Portfolio
Management at Bankers Trust.
Glenna Hale,
Director of Investor Marketing Formerly Vice President (1994-1997) of
Retirement Plans Services for
OppenheimerFunds Services.
Thomas B. Hayes,
Assistant Vice President None.
Barbara Hennigar,
Executive Vice President and
President and Chief Executive
Officer of OppenheimerFunds
Services, a division of the Manager President and Director of SFSI; President and
Chief Executive Officer of SSI.
Dorothy Hirshman,
Assistant Vice President None.
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President None.
Jane Ingalls,
Assistant Vice President Formerly a Senior Associate with Robinson,
Lake/Sawyer Miller.
Ronald Jamison,
Vice President Formerly Vice President
and Associate General Counsel at
Prudential Securities, Inc.
Frank Jennings,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly a
Managing Director of Global Equities at Paine
Webber's Mitchell Hutchins division.
Heidi Kagan,
Assistant Vice President None.
Thomas W. Keffer,
Vice President Formerly Senior Managing Director of Van Eck
Global.
Avram Kornberg,
Vice President Formerly a Vice President with Bankers Trust.
Joseph Krist,
Assistant Vice President None.
Paul LaRocco,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly a
Securities Analyst for Columbus Circle
Investors.
Michael Levine,
Assistant Vice President None.
Shanquan Li,
Assistant Vice President Director of Board (since 2/96), Chinese
Finance Society; formerly Chairman (11/94-
2/96)), Chinese Finance Society; and Director
(6/94-6/95), Greater China Business Networks.
Stephen F. Libera,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March, 1996 he was the
senior bond portfolio manager for Panorama
Series Fund, Inc., other mutual funds and
pension accounts managed by G.R. Phelps; was
also responsible for managing the public
fixed-income securities department at
Connecticut Mutual Life Insurance Co.
Mitchell J. Lindauer,
Vice President None.
David Mabry,
Assistant Vice President None.
Loretta McCarthy,
Executive Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director President, Director and Trustee of the New
York-based and the Denver-based Oppenheimer
funds; President and a Director of OAC,
HarbourView and Oppenheimer Partnership
Holdings, Inc.; Director of ORAMI; Chairman
and Director of SSI; a Director of
Oppenheimer Real Asset Management, Inc.
Timothy Martin,
Assistant Vice President Formerly Vice President, Mortgage Trading,
at S.N. Phelps & Co., Salomon Brothers, and
Kidder Peabody.
Sally Marzouk,
Vice President None.
Michelle McCann,
Assistant Vice President Formerly Vice President, Quest for Value
Distributors, Oppenheimer Capital
Corporation.
Lisa Migan,
Assistant Vice President, None.
Robert J. Milnamow,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly a
Portfolio Manager with Phoenix Securities
Group.
Denis R. Molleur,
Vice President None.
Linda Moore,
Vice President Formerly Marketing Manager (July, 1995 -
November, 1996) for Chase Investment Services
Corp.
Kenneth Nadler,
Vice President None.
David Negri,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Gina M. Palmieri,
Assistant Vice President None.
Robert E. Patterson,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
John Pirie,
Assistant Vice President Formerly a Vice President with Cohane
Rafferty Securities, Inc.
Tilghman G. Pitts III,
Executive Vice President Chairman and Director of the Distributor.
Jane Putnam,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly Senior
Investment Officer and Portfolio Manager with
Chemical Bank.
Russell Read,
Vice President Consultant for Prudential Insurance on behalf
of the General Motors Pension Plan.
Thomas Reedy,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly a
Securities Analyst for the Manager.
David Robertson,
Vice President None.
Adam Rochlin,
Vice President Formerly a Product Manager for Metropolitan
Life Insurance Company.
Michael S. Rosen
Vice President; President:
Rochester Division An officer and/or portfolio
manager of certain Oppenheimer funds.
Formerly Vice President of RFS, President and
Director of RFD, Vice President and Director
of FMC, Vice President and director of RCAI,
General Partner of RCA, an officer and/or
portfolio manager of certain Oppenheimer
funds.
David Rosenberg,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly Vice
President and Portfolio Manager/Security
Analyst for Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Assistant Vice President Formerly Vice President of Dollar Dry Dock
Bank.
James Ruff,
Executive Vice President None.
Valerie Sanders,
Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Stephanie Seminara,
Vice President Formerly Vice President of Citicorp
Investment Services.
Diane Sobin,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly a Vice
President and Senior Portfolio Manager for
Dean Witter InterCapital, Inc.
Richard A. Soper, None.
Assistant Vice President
Nancy Sperte,
Executive Vice President
None.
Donald W. Spiro,
Chairman Emeritus and Director Vice Chairman and Trustee of the New York-
based Oppenheimer Funds; formerly Chairman
of the Manager and the Distributor.
Arthur Steinmetz,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Ralph Stellmacher,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
John Stoma,
Senior Vice President,
Director Retirement Plans Formerly Vice President of U.S. Group Pension
Strategy and Marketing for Manulife
Financial.
Michael C. Strathearn,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March, 1996 he was an
equity portfolio manager for Panorama Series
Fund, Inc. and other mutual funds and pension
accounts managed by G.R. Phelps.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee, Director or
Managing Partner of the Denver-based
Oppenheimer Funds; President and a Director
of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin,
Vice President None.
Jay Tracey,
Vice President Vice President of the Manager; Vice President
and Portfolio Manager of Oppenheimer
Discovery Fund, Oppenheimer Global Emerging
Growth Fund and Oppenheimer
Enterprise Fund. Formerly Managing Director
of Buckingham Capital Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant Treasurer Assistant Treasurer of the Distributor and
SFSI.
Ashwin Vasan,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Dorothy Warmack,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
Jerry A. Webman,
Senior Vice President Director of New York-
based tax-exempt fixed income Oppenheimer
Funds; Formerly Managing Director and Chief
Fixed Income Strategist at
Prudential Mutual Funds.
Christine Wells,
Vice President None.
Joseph Welsh,
Assistant Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Vice President of
HarbourView; prior to March, 1996 he was an
equity portfolio manager for Panorama Series
Fund, Inc. and other mutual funds and pension
funds managed by G.R. Phelps.
William L. Wilby,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President of
HarbourView.
Carol Wolf,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President of
Centennial; Vice President, Finance and
Accounting and member of the Board of
Directors of the Junior League of Denver,
Inc.
Robert G. Zack,
Senior Vice President and
Assistant Secretary Associate General Counsel of the Manager;
Assistant Secretary of the Oppenheimer Funds;
Assistant Secretary of SSI, SFSI; an officer
of other Oppenheimer Funds.
Arthur J. Zimmer,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President of
Centennial.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer Funds,
the Denver-based Oppenheimer Funds, and the Quest/Rochester Funds,
set forth below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer Multiple Strategies Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer New York Municipal Fund
Oppenheimer Fund
Oppenheimer Series Fund, Inc.
Oppenheimer Municipal Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Oppenheimer Developing Markets Fund
Denver-based Oppenheimer Funds
- ------------------------------
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Municipal Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Quest/Rochester Funds
- ---------------------------------
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Bond Fund For Growth
Rochester Fund Municipals
Limited-Term New York Municipal Fund
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer Funds, Quest funds, OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management Corp., Oppenheimer Partnership
Holdings, Inc., and Oppenheimer Acquisition Corp. is Two World
Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds,
Shareholder Financial Services, Inc., Shareholder Services, Inc.,
OppenheimerFunds Services, Centennial Asset Management Corporation,
Centennial Capital Corp., and Oppenheimer Real Asset Management,
Inc. is 6803 South Tucson Way, Englewood, Colorado 80112.
The address of MultiSource Services, Inc. is 1700 Lincoln
Street, Denver, Colorado 80203.
The address of Oppenheimer Bond Fund For Growth, Rochester
Fund Municipals and Limited Term New York Municipal Fund is 350
Linden Oaks, Rochester, New York 14625-2807.
Item 29. Principal Underwriter
- -------- ---------------------
(a) OppenheimerFunds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the
other registered open-end investment companies for which
OppenheimerFunds, Inc. is the investment adviser, as described in
Part A and B of this Registration Statement and listed in Item
28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions
and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Vice President and Treasurer of
the NY-based Oppenheimer funds
/ Vice President, Secretary and
Treasurer of the Denver-based
Oppen- heimer funds
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Maryann Bruce* Senior Vice President - None
Director - Financial
Institution Div.
Robert Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Bill Coughlin Vice President None
3425 1/2 Irving Avenue So.
Minneapolis, MN 55408
Mary Crooks+ Senior Vice President None
E. Drew Devereaux ++ Assistant Vice President None
Andrew John Donohue* Executive Vice Secretary of
President, General the New York-
Counsel and Director based Oppen-heimer funds / Vice
President of the Denver-based
Oppen-heimer funds
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding++ Vice President; Chairman:
Rochester Division None
Reed F. Finley Vice President - None
320 E. Maple, Ste. 254 Financial Institution Div.
Birmingham, MI 48009
Wendy Fishler* Vice President - None
Financial Institution Div.
Ronald R. Foster Senior Vice President None
139 Avant Lane
Cincinatti, OH 45249
Patricia Gadecki Vice President None
3906 Americana Drive
Tampa, FL 3334
Luiggino Galletto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Mark D. Johnson Vice President None
7512 Cromwell Dr. Apt 1
Clayton, MO 63105
Michael Keogh* Vice President None
Richard Klein Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409
Ilene Kutno* Vice President - None
Director - Regional Sales
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
John McDonough Vice President None
P.O. Box 760
50 Riverview Road
New Castle, NH 03854
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Wendy Murray Vice President None
114-B Larchmont Acres West
Larchmont, NY 10538
Joseph Norton Vice President None
2518 Fillmore Street
Apt. 1
San Francisco, CA 94115
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Kevin Parchinski Vice President None
1105 Harney St., #310
Omaha, NE 68102
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
1777 Larimer St. #807
Denver, CO 80202
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.,
Director -
Key Accounts
Minnie Ra Vice President - None
0895 Thirty-First Ave. Financial Institution Div.
Apt. 4
San Francisco, CA 94121
Michael Raso Vice President None
30 Hommocks Road
Apt. 30
Larchmont, NY 10538
John C. Reinhardt ++ Vice President None
Ian Robertson Vice President None
4204 Summit Way
Marietta, GA 30066
Michael S. Rosen++ Vice President, President:
Rochester Division None
Kenneth Rosenson Vice President None
3802 Knickerbocker Place
Apt. 3D
Indianapolis, IN 46240
James Ruff* President None
Timothy Schoeffler Vice President None
1717 Fox Hall Road
Wasington, DC 20007
Michael Sciortino Vice President None
3114 Hickory Run
Sugarland, TX 77479
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker ++ Vice President None
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
David G. Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
</TABLE>
* Two World Trade Center, New York, NY 10048-0203
+ 6803 South Tucson Way, Englewood, CO 80112
++ 350 Linden Oaks, Rochester, NY 14625-2807 (the "Rochester
Division")
(c) Not applicable.
Item 30. Location of Accounts and Records
- -------- --------------------------------
The accounts, books and other documents
required to be maintained by Registrant pursuant to Section 31(a)
of the Investment Company Act of 1940 and rules promulgated
thereunder are in the possession of Oppenheimer Management
Corporation, at its offices at 6803 South Tucson Way, Englewood,
Colorado 80122
Item 31. Management Services
- -------- -------------------
Not applicable.
Item 32. Undertakings
- -------- ------------
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or
the Investment Company Act of 1940, the Registrant certifies that
it meets all of the requirements for the effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the County of Arapahoe and State of Colorado on the 17th day of
April, 1997.
OPPENHEIMER TOTAL RETURN FUND, INC.
By: /s/ James C. Swain
-----------------------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Chairman of the Board of April 17, 1997
/s/ James C. Swain* Directors and Principal
- ------------------------ Executive Officer
James C. Swain
/s/ Bridget A. Macaskill* President and Director April 17, 1997
- ------------------------
Bridget A. Macaskill
/s/ George Bowen* Treasurer and Principal April 17, 1997
- ------------------ Financial and Accounting
George Bowen Officer
/s/ Robert G. Avis*
- -------------------- Director April 17, 1997
Robert G. Avis
/s/ Jon S. Fossel*
- -------------------- Director April 17, 1997
Jon S. Fossel
/s/ Sam Freedman*
- -------------------- Director April 17, 1997
Sam Freedman
/s/ William A. Baker*
- --------------------- Director April 17, 1997
William A. Baker
/s/ Charles Conrad, Jr.*
- ----------------------- Director April 17 1997
Charles Conrad, Jr.
/s/ Raymond J. Kalinowski*
- --------------------- Director April 17, 1997
Raymond J. Kalinowski
/s/ C. Howard Kast* Director April 17, 1997
- -------------------
C. Howard Kast
/s/ Robert M. Kirchner*
- --------------------- Director April 17, 1997
Robert M. Kirchner
/s/ Ned M. Steel*
- ----------------- Director April 17, 1997
Ned M. Steel
</TABLE>
*By:/s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER TOTAL RETURN FUND, INC.
Post-Effective Amendment No. 79
EXHIBIT INDEX
Form N-1A
Item No.
Description
- ---------
-----------
24(b)(4)(i) Specimen Class A Share Certificate
24(b)(4)(ii) Specimen Class B Share Certificate
24(b)(4)(iii) Specimen Class C Share Certificate
24(b)(4)(iv) Specimen Class Y Share Certificate
24(b)(11) Independent Auditors' Consent
24(b)(16) Performance Calculations
24(b)(17)(i) Financial Data Schedules for Class A Shares
24(b)(17)(ii) Financial Data Schedules for Class B Shares
24(b(17(iii) Financial Data Schedules for Class C Shares
24(b)(17)(iv) Financial Date Schedules For Class Y Shares
- --
Power of Attorney of Sam Freedman
Exhibit 24(b)(4)(i)
OPPENHEIMER TOTAL RETURN FUND, INC.
Class A Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box with heading: CLASS A SHARES (below cert. no.)
(centered below boxes) OPPENHEIMER TOTAL RETURN FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683808 109
(at left) is the owner of
(centered) FULLY PAID AND NON-ASSESSABLE CLASS A SHARES OF
CAPITAL STOCK WITH THE PAR VALUE OF $.001 EACH OF OPPENHEIMER TOTAL
RETURN FUND, INC.
(hereinafter called the "Corporation"), transferable only on
the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held subject
to all of the provisions of the Articles of Incorporation of
the Corporation to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the
signatures of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ George C. Bowen /s/ Bridget A. Macaskill
---------------------- ------------------------
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal with legend
OPPENHEIMER TOTAL RETURN FUND, INC.
SEAL
1979
MARYLAND
(at lower right, printed vertically):
Countersigned
OppenheimerFunds Services
(A Division of OppenheimerFunds, Inc.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though
they were written out in full according to applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - _______ Custodian ________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the
above list.
For Value Received ................ hereby sell(s), assign(s),
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
__________________________________________
(Please print or type name and address of assignee)
__________________________________________
__________________________________________ Class A Shares of
the capital stock represented by the within Certificate, and
do hereby irrevocably constitute and appoint _________________
Attorney to transfer the said shares on the books of the
within named Corporation with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
__________________________
(Both must sign if joint owners)
Signature(s) ___________________
guaranteed Name of Guarantor
by: ______________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to correspond with the name(s) as written upon the
right of above face of the certificate in every particular
paragraph) without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Corporation.
The Corporation will furnish to any stockholder, on request and
without charge, a full statement of the designations and any
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption of the stock of each class which the
Corporation is authorized to issue.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without "four hands"
this watermark: logotype
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(ii)
OPPENHEIMER TOTAL RETURN FUND, INC.
Class B Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box with heading: CLASS B SHARES (below cert. no.)
(centered below boxes) OPPENHEIMER TOTAL RETURN FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683808 208
(at left) is the owner of
(centered) FULLY PAID AND NON-ASSESSABLE CLASS B SHARES OF
CAPITAL STOCK WITH THE PAR VALUE OF $.001 EACH OF OPPENHEIMER TOTAL
RETURN FUND, INC.
(hereinafter called the "Corporation"), transferable only on
the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held subject
to all of the provisions of the Articles of Incorporation of
the Corporation to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the
signatures of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ George C. Bowen /s/ Bridget A. Macaskill
---------------------- ------------------------
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal with legend
OPPENHEIMER TOTAL RETURN FUND, INC.
SEAL
1979
MARYLAND
(at lower right, printed vertically):
Countersigned
OppenheimerFunds Services
(A Division of OppenheimerFunds, Inc.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though
they were written out in full according to applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - _______ Custodian ________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the
above list.
For Value Received ................ hereby sell(s), assign(s),
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
__________________________________________
(Please print or type name and address of assignee)
__________________________________________
__________________________________________ Class B Shares of
the capital stock represented by the within Certificate, and
do hereby irrevocably constitute and appoint _________________
Attorney to transfer the said shares on the books of the
within named Corporation with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
__________________________
(Both must sign if joint owners)
Signature(s) ___________________
guaranteed Name of Guarantor
by: ______________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to correspond with the name(s) as written upon the
right of above face of the certificate in every particular
paragraph) without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Corporation.
The Corporation will furnish to any stockholder, on request and
without charge, a full statement of the designations and any
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption of the stock of each class which the
Corporation is authorized to issue.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without "four hands"
this watermark: logotype
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(iii)
OPPENHEIMER TOTAL RETURN FUND, INC.
Class C Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box with heading: CLASS C SHARES (below cert. no.)
(centered below boxes) OPPENHEIMER TOTAL RETURN FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683808 406
(at left) is the owner of
(centered) FULLY PAID AND NON-ASSESSABLE CLASS C SHARES OF
CAPITAL STOCK WITH THE PAR VALUE OF $.001 EACH OF OPPENHEIMER TOTAL
RETURN FUND, INC.
(hereinafter called the "Corporation"), transferable only on
the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held subject
to all of the provisions of the Articles of Incorporation of
the Corporation to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the
signatures of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ George C. Bowen /s/ Bridget A. Macaskill
---------------------- ------------------------
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal with legend
OPPENHEIMER TOTAL RETURN FUND, INC.
SEAL
1979
MARYLAND
(at lower right, printed vertically):
Countersigned
OppenheimerFunds Services
(A Division of OppenheimerFunds, Inc.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though
they were written out in full according to applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - _______ Custodian ________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the
above list.
For Value Received ................ hereby sell(s), assign(s),
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
__________________________________________
(Please print or type name and address of assignee)
__________________________________________
__________________________________________ Class C Shares of
the capital stock represented by the within Certificate, and
do hereby irrevocably constitute and appoint _________________
Attorney to transfer the said shares on the books of the
within named Corporation with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
__________________________
(Both must sign if joint owners)
Signature(s) ___________________
guaranteed Name of Guarantor
by: ______________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to correspond with the name(s) as written upon the
right of above face of the certificate in every particular
paragraph) without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Corporation.
The Corporation will furnish to any stockholder, on request and
without charge, a full statement of the designations and any
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption of the stock of each class which the
Corporation is authorized to issue.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without "four hands"
this watermark: logotype
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(iv)
OPPENHEIMER TOTAL RETURN FUND, INC.
Class Y Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box with heading: CLASS Y SHARES (below cert. no.)
(centered below boxes) OPPENHEIMER TOTAL RETURN FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683808 307
(at left) is the owner of
(centered) FULLY PAID AND NON-ASSESSABLE CLASS Y SHARES OF
CAPITAL STOCK WITH THE PAR VALUE OF $.001 EACH OF OPPENHEIMER TOTAL
RETURN FUND, INC.
(hereinafter called the "Corporation"), transferable only on
the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held subject
to all of the provisions of the Articles of Incorporation of
the Corporation to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the
signatures of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ George C. Bowen /s/ Bridget A. Macaskill
---------------------- ------------------------
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal with legend
OPPENHEIMER TOTAL RETURN FUND, INC.
SEAL
1979
MARYLAND
(at lower right, printed vertically):
Countersigned
OppenheimerFunds Services
(A Division of OppenheimerFunds, Inc.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though
they were written out in full according to applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - _______ Custodian ________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the
above list.
For Value Received ................ hereby sell(s), assign(s),
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
__________________________________________
(Please print or type name and address of assignee)
__________________________________________
__________________________________________ Class Y Shares of
the capital stock represented by the within Certificate, and
do hereby irrevocably constitute and appoint _________________
Attorney to transfer the said shares on the books of the
within named Corporation with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
__________________________
(Both must sign if joint owners)
Signature(s) ___________________
guaranteed Name of Guarantor
by: ______________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to correspond with the name(s) as written upon the
right of above face of the certificate in every particular
paragraph) without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Corporation.
The Corporation will furnish to any stockholder, on request and
without charge, a full statement of the designations and any
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption of the stock of each class which the
Corporation is authorized to issue.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without "four hands"
this watermark: logotype
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(11)
INDEPENDENT AUDITORS' CONSENT
Oppenheimer Total Return Fund, Inc.:
We consent to the use in this Post-Effective Amendment No. 79 to
Registration Statement No. 2-11052 of Oppenheimer Total Return
Fund, Inc. of our report dated January 22, 1997 appearing in the
Statement of Additional Information, which is a part of such
Registration Statement, and to the reference to us under the
caption "Financial Highlights" appearing in the Prospectus, which
is also a part of such Registration Statement.
/s/ Deloitte & Touche
- --------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
April 17, 1997
Oppenheimer Total Return Fund, Inc.
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are
calculated as described below, on the basis of the Fund's
distributions, for the past 10 years which are as
follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
03/30/87 0.0700000 0.0000000 7.930
06/26/87 0.0700000 0.0950000 8.010
09/25/87 0.0700000 0.0000000 8.520
12/24/87 0.1050000 1.2750000 6.010
03/25/88 0.0600000 0.0000000 6.220
06/24/88 0.0600000 0.0100000 6.570
09/23/88 0.0600000 0.0000000 6.360
12/23/88 0.0850000 0.1100000 6.270
03/23/89 0.0600000 0.0000000 6.520
06/23/89 0.0600000 0.0000000 6.990
09/22/89 0.0600000 0.0000000 7.300
12/22/89 0.0950000 0.5900000 6.550
03/23/90 0.0600000 0.0000000 6.600
06/22/90 0.0600000 0.0450000 6.710
09/21/90 0.0600000 0.0000000 6.100
12/21/90 0.0600000 0.0150000 6.110
03/22/91 0.0600000 0.0000000 6.900
06/21/91 0.0600000 0.0000000 7.000
09/20/91 0.0600000 0.0000000 7.600
12/20/91 0.0500000 0.5550000 6.910
03/27/92 0.0600000 0.0000000 7.580
06/26/92 0.0500000 0.0150000 6.960
09/25/92 0.0500000 0.0000000 7.260
12/21/92 0.0410000 0.3580000 7.630
03/26/93 0.0500000 0.0000000 8.180
06/25/93 0.0500000 0.0150000 8.450
09/24/93 0.0500000 0.0000000 9.000
12/23/93 0.0500000 0.5684000 8.480
03/25/94 0.0500000 0.0000000 8.740
06/24/94 0.0500000 0.0000000 7.780
09/23/94 0.0500000 0.0000000 8.120
12/27/94 0.0622000 0.0000000 7.790
03/24/95 0.0500000 0.0000000 8.260
06/23/95 0.0500000 0.0000000 8.920
09/22/95 0.0500000 0.0000000 9.440
12/26/95 0.0762200 0.5478200 9.270
03/25/96 0.0500000 0.0000000 9.810
06/18/96 0.0500000 0.0000000 10.110
09/17/96 0.0500000 0.0000000 10.370
12/19/96 0.0500400 1.2084500 9.760
Oppenheimer Total Return Fund, Inc.
Page 2
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class B Shares
06/25/93 0.0460000 0.0150000 8.420
09/24/93 0.0400000 0.0000000 8.960
12/23/93 0.0231000 0.5684000 8.460
03/25/94 0.0410000 0.0000000 8.690
06/24/94 0.0350000 0.0000000 7.740
09/23/94 0.0350000 0.0000000 8.080
12/27/94 0.0453000 0.0000000 7.740
03/24/95 0.0350000 0.0000000 8.210
06/23/95 0.0320000 0.0000000 8.860
09/22/95 0.0320000 0.0000000 9.380
12/26/95 0.0567400 0.5478200 9.200
03/25/96 0.0310000 0.0000000 9.750
06/18/96 0.0300000 0.0000000 10.040
09/17/96 0.0300000 0.0000000 10.290
12/19/96 0.0252000 1.2084500 9.690
Class C Shares
09/22/95 0.0500000 0.0000000 9.430
12/26/95 0.0644600 0.5478200 9.240
03/25/96 0.0360000 0.0000000 9.780
06/18/96 0.0330000 0.0000000 10.070
09/17/96 0.0360000 0.0000000 10.320
12/19/96 0.0276000 1.2084500 9.710
Class Y Shares
06/24/94 0.0500000 0.0000000 7.780
09/23/94 0.0570000 0.0000000 8.120
12/27/94 0.0649000 0.0000000 7.780
03/24/95 0.0510000 0.0000000 8.260
06/22/95 0.0530000 0.0000000 8.920
09/22/95 0.0520000 0.0000000 9.440
12/26/95 0.0774200 0.5478200 9.270
03/25/96 0.0520000 0.0000000 9.810
06/18/96 0.0530000 0.0000000 10.100
09/17/96 0.0530000 0.0000000 10.360
12/19/96 0.0555400 1.2084500 9.760
Oppenheimer Total Return Fund, Inc.
Page 3
1. Average Annual Total Returns for the Periods Ended 12/31/96:
The formula for calculating average annual total return is as follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$1,128.44 1 $1,850.76 .2
(---------) - 1 = 12.84% (---------) - 1 = 13.10%
$1,000 $1,000
Ten Year
$3,681.50 .1
(---------) - 1 = 13.92%
$1,000
Class B Shares
Example assuming a maximum contingent deferred sales
charge of 5.00% for the first year, and 3.00% for
the inception year:
One Year Inception
$1,137.79 1 $1,564.85 .2727
(---------) - 1 = 13.78% (---------) - 1 = 12.99%
$1,000 $1,000
Class C Shares
Example assuming a maximum contingent deferred sales
charge of 1.00% for the first year, and 0.00%
for the inception year:
One Year Inception
$1,176.73 1 $1,291.46 .7469
(---------) - 1 = 17.67% (---------) - 1 = 21.05%
$1,000 $1,000
Oppenheimer Total Return Fund, Inc.
Page 4
1. Average Annual Total Returns for the Periods Ended 12/31/96 (Continued):
Class Y Shares
Example assuming a maximum contingent deferred sales charge of 0.00% for the
first year and 0.00% for the inception year:
One Year Inception
$1,198.83 1 $1,512.08 .3871
(---------) - 1 = 19.88% (---------) - 1 = 17.36%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$1,197.28 1 $1,963.66 .2
(---------) - 1 = 19.73% (---------) - 1 = 14.45%
$1,000 $1,000
Ten Year
$3,906.13 .1
(---------) - 1 = 14.60%
$1,000
Class B Shares
One Year Inception
$1,187.79 1 $1,594.85 .2727
(---------) - 1 = 18.78% (---------) - 1 = 13.58%
$1,000 $1,000
Class C Shares
One Year Inception
$1,186.73 1 $1,291.46 .7469
(---------) - 1 = 18.67% (---------) - 1 = 21.05%
$1,000 $1,000
Oppenheimer Total Return Fund, Inc.
Page 5
1. Average Annual Total Returns for the Periods Ended 12/31/96 (Continued):
Examples at NAV (continued):
Class Y Shares
One Year Inception
$1,198.83 1 $1,512.08 .3871
(---------) - 1 = 19.88% (---------) - 1 = 17.36%
$1,000 $1,000
2. Cumulative Total Returns for the Periods Ended 12/31/96:
The formula for calculating cumulative total return is as follows:
ERV - P
------- = Cumulative Total Return
P
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$1,128.44 - $1,000 $1,850.76 - $1,000
------------------ = 12.84% ------------------ = 85.08%
$1,000 $1,000
Ten Year
$3,681.50 - $1,000
------------------ = 268.15%
$1,000
Class B Shares
Example assuming a maximum contingent deferred sales charge of 5.00% for
the first year, and 3.00% for the inception year:
One Year Inception Year
$1,137.79 - $1,000 $1,564.85 - $1,000
------------------ = 13.78% ------------------ = 56.49%
$1,000 $1,000
Oppenheimer Total Return Fund, Inc.
Page 6
2. Cumulative Total Returns for the Periods Ended 12/31/96 (Continued):
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00% for
the first year, and 0.00% for the inception year:
Class C Shares
One Year Inception
$1,176.73 - $1,000 $1,291.46 - $1,000
------------------ = 17.67% ------------------ =
29.15% $1,000 $1,000
Class Y Shares
Example assuming a maximum contingent deferred sales charge of 0.00% for
the first year, and 0.00% for the inception year:
One Year Inception
$1,198.83 - $1,000 $1,512.08 - $1,000
------------------ = 19.88% ------------------ = 51.21%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$1,197.28 - $1,000 $1,963.66 - $1,000
------------------ = 19.73% ------------------ = 96.37%
$1,000 $1,000
Ten Year
$3,906.13 - $1,000
------------------ = 290.61%
$1,000
Class B Shares
One Year Inception
$1,187.79 - $1,000 $1,594.85 - $1,000
------------------ = 18.78% ------------------ = 59.49%
$1,000 $1,000
Oppenheimer Total Return Fund, Inc.
Page 7
2. Cumulative Total Returns for the Periods Ended 12/31/96 (Continued):
Examples at NAV:
Class C Shares
One Year Inception
$1,186.73 - $1,000 $1,291.46 - $1,000
------------------ = 18.67% ------------------ = 29.15%
$1,000 $1,000
Class Y Shares
One Year Inception
$1,198.83 - $1,000 $1,512.08 - $1,000
------------------ = 19.88% ------------------ = 51.21%
$1,000 $1,000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> Oppenheimer Total Return Fund, Inc. - A
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<RECEIVABLES> 24,586,789
<ASSETS-OTHER> 77,488
<OTHER-ITEMS-ASSETS> 6,877,888
<TOTAL-ASSETS> 2,651,727,326
<PAYABLE-FOR-SECURITIES> 23,376,555
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<OTHER-ITEMS-LIABILITIES> 11,029,204
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<PAID-IN-CAPITAL-COMMON> 2,161,298,943
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<INTEREST-INCOME> 34,379,002
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<NET-CHANGE-FROM-OPS> 423,221,662
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<DISTRIBUTIONS-OF-INCOME> 33,143,640
<DISTRIBUTIONS-OF-GAINS> 201,096,072
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<NUMBER-OF-SHARES-SOLD> 20,733,025
<NUMBER-OF-SHARES-REDEEMED> 22,110,493
<SHARES-REINVESTED> 22,428,454
<NET-CHANGE-IN-ASSETS> 468,444,442
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,102,424)
<OVERDISTRIB-NII-PRIOR> 1,164,352
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,631,975
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,841,306
<AVERAGE-NET-ASSETS> 1,684,726,000
<PER-SHARE-NAV-BEGIN> 9.35
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 1.63
<PER-SHARE-DIVIDEND> 0.20
<PER-SHARE-DISTRIBUTIONS> 1.21
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.77
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> Oppenheimer Total Return Fund, Inc. - B
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<PERIOD-END> DEC-31-1996
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<INVESTMENTS-AT-VALUE> 2,620,185,161
<RECEIVABLES> 24,586,789
<ASSETS-OTHER> 77,488
<OTHER-ITEMS-ASSETS> 6,877,888
<TOTAL-ASSETS> 2,651,727,326
<PAYABLE-FOR-SECURITIES> 23,376,555
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,029,204
<TOTAL-LIABILITIES> 34,405,759
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,161,298,943
<SHARES-COMMON-STOCK> 77,852,227
<SHARES-COMMON-PRIOR> 63,513,824
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 364,489
<ACCUMULATED-NET-GAINS> 8,265,055
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 448,122,058
<NET-ASSETS> 754,917,593
<DIVIDEND-INCOME> 33,517,384
<INTEREST-INCOME> 34,379,002
<OTHER-INCOME> 0
<EXPENSES-NET> 26,841,306
<NET-INVESTMENT-INCOME> 41,055,080
<REALIZED-GAINS-CURRENT> 303,370,659
<APPREC-INCREASE-CURRENT> 78,795,923
<NET-CHANGE-FROM-OPS> 423,221,662
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,780,831
<DISTRIBUTIONS-OF-GAINS> 83,631,438
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,539,920
<NUMBER-OF-SHARES-REDEEMED> 9,142,775
<SHARES-REINVESTED> 8,941,258
<NET-CHANGE-IN-ASSETS> 468,444,442
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,102,424)
<OVERDISTRIB-NII-PRIOR> 1,164,352
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,631,975
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,841,306
<AVERAGE-NET-ASSETS> 671,593,000
<PER-SHARE-NAV-BEGIN> 9.29
<PER-SHARE-NII> 0.12
<PER-SHARE-GAIN-APPREC> 1.62
<PER-SHARE-DIVIDEND> 0.12
<PER-SHARE-DISTRIBUTIONS> 1.21
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.70
<EXPENSE-RATIO> 1.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<INVESTMENTS-AT-VALUE> 2,620,185,161
<RECEIVABLES> 24,586,789
<ASSETS-OTHER> 77,488
<OTHER-ITEMS-ASSETS> 6,877,888
<TOTAL-ASSETS> 2,651,727,326
<PAYABLE-FOR-SECURITIES> 23,376,555
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,029,204
<TOTAL-LIABILITIES> 34,405,759
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,161,298,943
<SHARES-COMMON-STOCK> 1,805,922
<SHARES-COMMON-PRIOR> 177,427
<ACCUMULATED-NII-CURRENT> 0
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<EXPENSES-NET> 26,841,306
<NET-INVESTMENT-INCOME> 41,055,080
<REALIZED-GAINS-CURRENT> 303,370,659
<APPREC-INCREASE-CURRENT> 78,795,923
<NET-CHANGE-FROM-OPS> 423,221,662
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 120,797
<DISTRIBUTIONS-OF-GAINS> 1,874,710
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,529,403
<NUMBER-OF-SHARES-REDEEMED> 99,731
<SHARES-REINVESTED> 198,823
<NET-CHANGE-IN-ASSETS> 468,444,442
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,102,424)
<OVERDISTRIB-NII-PRIOR> 1,164,352
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,631,975
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,841,306
<AVERAGE-NET-ASSETS> 8,277,000
<PER-SHARE-NAV-BEGIN> 9.33
<PER-SHARE-NII> 0.16
<PER-SHARE-GAIN-APPREC> 1.57
<PER-SHARE-DIVIDEND> 0.13
<PER-SHARE-DISTRIBUTIONS> 1.21
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.72
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
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<INVESTMENTS-AT-VALUE> 2,620,185,161
<RECEIVABLES> 24,586,789
<ASSETS-OTHER> 77,488
<OTHER-ITEMS-ASSETS> 6,877,888
<TOTAL-ASSETS> 2,651,727,326
<PAYABLE-FOR-SECURITIES> 23,376,555
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,029,204
<TOTAL-LIABILITIES> 34,405,759
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,161,298,943
<SHARES-COMMON-STOCK> 1,868,204
<SHARES-COMMON-PRIOR> 717,512
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 364,489
<ACCUMULATED-NET-GAINS> 8,265,055
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 448,122,058
<NET-ASSETS> 18,251,913
<DIVIDEND-INCOME> 33,517,384
<INTEREST-INCOME> 34,379,002
<OTHER-INCOME> 0
<EXPENSES-NET> 26,841,306
<NET-INVESTMENT-INCOME> 41,055,080
<REALIZED-GAINS-CURRENT> 303,370,659
<APPREC-INCREASE-CURRENT> 78,795,923
<NET-CHANGE-FROM-OPS> 423,221,662
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 290,763
<DISTRIBUTIONS-OF-GAINS> 1,947,759
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,481,212
<NUMBER-OF-SHARES-REDEEMED> 559,150
<SHARES-REINVESTED> 228,630
<NET-CHANGE-IN-ASSETS> 468,444,442
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,102,424)
<OVERDISTRIB-NII-PRIOR> 1,164,352
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,631,975
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,841,306
<AVERAGE-NET-ASSETS> 13,083,000
<PER-SHARE-NAV-BEGIN> 9.35
<PER-SHARE-NII> 0.23
<PER-SHARE-GAIN-APPREC> 1.61
<PER-SHARE-DIVIDEND> 0.21
<PER-SHARE-DISTRIBUTIONS> 1.21
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.77
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his true and lawful attorney-in-fact and agents, with full power of
substitution and resubstitution, for him and in his capacity as a
director of OPPENHEIMER TOTAL RETURN FUND, INC., a Maryland
Corporation (the Fund ), to sign on his behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, and each of them, may lawfully do or cause to be
done by virtue hereof.
Dated this 27th day of June, 1996.
/s/ Sam Freedman
- ------------------
Sam Freedman
