Registration No. 2-76645
File No. 811-3430
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. 24 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
Amendment No. 23 / X /
OPPENHEIMER U.S. GOVERNMENT TRUST
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center
New York, New York 10048-0203
(Address of Principal Executive Offices)
(212) 323-0200
(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b)
/ / On ______________, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ X / On October 25, 1994, pursuant to paragraph (a) of Rule 485.
The Registrant has registered an indefinite number of its 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 June 30, 1994, will be filed on or before August 30,
1994.
<PAGE>
FORM N-1A
OPPENHEIMER U.S. GOVERNMENT TRUST
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and Policies
5 Expenses; How the Fund is Managed; Back Cover
5A Performance of the Fund
6 Dividends, Capital Gains and Taxes
7 How to Buy Shares; Exchanges of Shares; Special
Investor Services; Service Plan for Class A Shares;
Distribution and Service Plan for Class C Shares; How
to Sell Shares
8 How to Sell Shares; How to Exchange Shares; Special
Investor Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment
Techniques and Strategies; Additional Investment
Restrictions
14 How the Fund is Managed - Trustees and Officers of the
Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and Service Plans
17 Brokerage Policies of the Fund
18 Additional Information About the Fund
19 Your Investment Account - How to Buy Shares; How to
Sell Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 *
________________
* Not applicable or negative answer.
<PAGE>
Oppenheimer U.S. Government Trust
Prospectus dated October 25, 1994
Oppenheimer U.S. Government Trust is a mutual fund with the
investment objective of seeking high current income, preservation of
capital and maintenance of liquidity through investments in debt
instruments issued or guaranteed by the U.S. Government or its agencies
or instrumentalities.
The Fund offers two classes of shares: (1) Class A shares, which are
sold at a public offering price that includes a front-end sales charge,
and (2) Class C shares,which are sold without a front-end sales charge,
although you may pay a sales charge when you redeem your shares, depending
on how long you hold them. A contingent deferred sales charge is imposed
on most Class C shares redeemed within 12 months of purchase. Class C
shares are also subject to an annual "asset-based sales charge." Each
class of shares bears different expenses. In deciding which class of
shares to buy, you should consider how much you plan to purchase, how long
you plan to keep your shares, and other factors discussed in "How to Buy
Shares" starting on page ___.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the October 25, 1994 Statement of Additional Information. For a
free copy, call Oppenheimer Shareholder Services, the Fund's Transfer
Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange
Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
Checkwriting
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services, and
those expenses are reflected in the Fund's net asset value per share. As
a shareholder, you pay those expenses indirectly. Shareholders pay other
expenses directly, such as sales charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's operating expenses that you might expect
to bear indirectly. The calculations are based on the Fund's expenses
during its fiscal year ended June 30, 1994.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to pages _____ through _____ for
an explanation of how and when these charges apply.
Class A Shares Class C Shares
Maximum Sales Charge on Purchases
(as a % of offering price) 4.75% None
Sales Charge on Reinvested Dividends None None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds) None(1) 1.0%(2)
Exchange Fee $5.00(3) $5.00(3)
- ---------------
(1) If you invest more than $1 million in Class A shares, you may have
to pay a sales charge of up to 1% if you sell your shares within 18
calendar months from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares," below.
(2) If you redeem Class C shares within 12 months of buying them, you may
have to pay a 1.0% contingent deferred sales charge. See "How to Buy
Shares," below.
(3) Fee is waived for automated exchanges on PhoneLink, described in "How
to Buy Shares."
- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (the "Manager"), and other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds the Fund's portfolio securities, audit fees and legal and other
expenses. The following numbers are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of each class
of the Fund's shares for that year. The "12b-1 Distribution Plan Fees" for
Class A shares are the Service Plan Fees (which are a maximum of 0.25% of
average annual net assets of that class), and for Class C shares are the
Distribution and Service Plan Fees (maximum of 0.25%) and the asset-based
sales charge of 0.75%. The actual expenses for each class of shares in
future years may be more or less, depending on a number of factors,
including the actual amount of the assets represented by each class of
shares. The Annual Fund Operating Expenses shown are net of a voluntary
reduction of the management fees paid by the Manager effective as of July
1, 1994. Without such reduction by the Manager, the management fees for
Class A and Class C shares would have been ___% of average annual net
assets for each class and "Total Fund Operating Expenses" for Class A
shares and Class C shares would have been ___% and ___%, respectively.
The reduction of the management fee is described in the Statement of
Additional Information and may be modified or withdrawn by the Manager at
any time.
Class C shares were not publicly sold before December 1, 1993. Therefore,
the Annual Fund Operating Expenses shown for Class C shares are based on
expenses for the period from December 1, 1993 through June 30, 1994.
Class A Shares Class C
Shares
Management Fees (Restated) % %
12b-1 Distribution Plan Fees %* %**
Other Expenses ____% ____%
Total Fund Operating Expenses % %
_______________________________
*Service Plan fees only
**Includes Service Plan Fee and
asset-based sales charge
- 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 chart above.
If you were to redeem your shares at the end of each period shown below,
your investment would incur the following expenses by the end of each
period shown:
1 year 3 years 5 years 10 years(1)
Class A Shares $ $ $ $
Class C Shares $ $ $ $
If you did not redeem your investment, it would incur the following
expenses:
Class A Shares $ $ $ $
Class C Shares $ $ $ $
- --------------
(1) Because of the asset-based sales charge imposed on Class C shares of
the Fund, long-term shareholders of Class C shares could bear
expenses that would be the economic equivalent of an amount greater
than the maximum front-end sales charges permitted under applicable
regulatory requirements.
These examples show the effect of expenses on an investment, but are not
meant to state or predict actual or expected costs or investment returns
of the Fund, all of which will vary.
<PAGE>
Financial Highlights
Effective August 16, 1985, the Fund became a long-term government
securities fund which has a fluctuating net asset value per share. Prior
to that date, the Fund invested only in short-term (maturing in one year
or less) U.S. Government securities and maintained a fixed net asset value
of $1.00 per share. The table on this page presents selected financial
information about the Fund, including per share data and expense ratios
and other data based on the Fund's average net assets. This information
has been audited by KPMG Peat Marwick, the Fund's independent auditors,
whose report on the Fund's financial statements for the fiscal year ended
June 30, 1994, is included in the Statement of Additional Information.
Class C shares were publicly offered only during a portion of that period,
commencing December 1, 1993.
(to be supplied)
<PAGE>
Investment Objective and Policies
Objective. The Fund's investment objective is to seek high current
income, preservation of capital and maintenance of liquidity through
investments in debt instruments issued or guaranteed by the U.S.
Government or its agencies or instrumentalities ("U.S. Government
Securities").
Investment Policies and Strategies. In seeking its investment objective,
the Fund may invest only in U.S. Government Securities, and repurchase
agreements on such securities, and may write covered calls and use hedging
instruments as described below. U.S. Government Securities include the
following:
- U.S. Treasury Obligations. These include Treasury Bills
(which have maturities of one year or less), Treasury Notes
(which have maturities of two to ten years) and Treasury Bonds
(which have maturities generally greater than ten years). U.S.
Treasury obligations are backed by the full faith and credit of
the United States.
- Obligations Issued or Guaranteed by U.S. Government Agencies
or Instrumentalities. These are obligations that are supported by
any of the following: (a) the full faith and credit of the U.S.
Government, such as Government National Mortgage Association
("Ginnie Mae") modified pass-through certificates as described
below, (b) the right of the issuer to borrow an amount limited to
a specific line of credit from the U.S. Government such as bonds
issued by Federal National Mortgage Association ("Fannie Mae"),
(c) the discretionary authority of the U.S. Government to
purchase the obligations of the agency or instrumentality, or (d)
the credit of the instrumentality, such as obligations of Federal
Home Loan Mortgage Corporation ("Freddie Mac"). Agencies and
instrumentalities the securities of which are supported by the
discretionary authority of the U.S. Government to purchase such
securities and which the Fund may purchase under (c) above
include: Federal Land Banks, Farmers Home Administration, Central
Bank for Cooperatives, Federal Intermediate Credit Banks, Freddie
Mac and Fannie Mae.
- Mortgage-Backed Securities. Also known as pass-through
securities, the homeowner's principal and interest payments pass
from the originating bank or savings and loan through the
appropriate governmental agency to investors, net of service
charges. These pass-through securities include participation
certificates of Ginnie Mae, that are guaranteed as to timely
payment of interest and principal by the fully faith and credit
of the U.S. Government, Freddie Mac and Fannie Mae, that are
guaranteed and issued, respectively, by these agencies and
instrumentalities of the U.S. Government.
The Statement of Additional Information contains additional
information on U.S. Government Securities. The effective maturity of a
mortgage-backed security may be shortened by unscheduled or early payment
of principal and interest on the underlying mortgages, which may affect
the effective yield of such securities. The principal that is returned
may be invested in instruments having a higher or lower yield than the
prepaid instruments. Such securities therefore may be less effective as
a means of "locking in" attractive long-term interest rates and may have
less potential for appreciation during periods of declining interest rates
than conventional bonds with comparable stated maturities.
The Fund may invest in collateralized mortgage obligations
("CMOs") that are issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, or that are collateralized by a portfolio
of mortgages or mortgage-related securities guaranteed by such an agency
or instrumentality. Payment of the interest and principal generated by
the pool of mortgages is passed through to the holders as the payments are
received by the issuer of the CMO. CMOs may be issued in a variety of
classes or series ("tranches") that have different maturities. The
principal value of certain CMO tranches may be more volatile than other
types of mortgage-related securities, because of the possibility that the
principal value of the CMO may be prepaid earlier than the maturity of the
CMO as a result of prepayments of the underlying mortgage loans by the
borrowers.
The Fund may invest in "stripped" mortgage-backed securities of
CMOs or other securities issued by agencies or instrumentalities of the
U.S. Government. Stripped mortgage-backed securities usually have two
classes. The classes receive different proportions of the interest and
principal distributions on the pool of mortgage assets that act as
collateral for the security. In certain cases, one class will receive all
of the interest payments, while the other class will receive all of the
principal value on maturity. The yield to maturity on the class that
receives only interest is extremely sensitive to the rate of payment of
the principal on the underlying mortgages. Principal prepayments increase
that sensitivity. Stripped securities that pay "interest only" are
therefore subject to greater price volatility when interest rates change,
and they have the additional risk that if the underlying mortgages are
prepaid, the Fund will lose the anticipated cash flow from the interest
on the prepaid mortgages. That risk is increased when general interest
rates fall, and in times of rapidly falling interest rates, the Fund might
receive back less than its investment.
Stripped securities are purchased and sold by institutional
investors through investment banking firms. At present, established
trading markets have not yet developed for these securities. Therefore,
some stripped securities may be deemed "illiquid." If the Fund holds
illiquid stripped securities, the amount it can hold will be subject to
the Fund's fundamental investment policy limiting investments in illiquid
securities to 5% of the Fund's assets.
As with other bond investments, the value of U.S. Government
Securities and mortgage-backed securities will tend to rise when interest
rates fall and to fall when interest rates rise. The value of mortgage-
backed securities may also be affected by changes in the market's
perception of the creditworthiness of the entity issuing or guaranteeing
them or by changes in government regulations and tax policies. Because
of these factors, the Fund's share value and yield are not guaranteed and
will fluctuate, and there can be no assurance that the Fund's objective
will be achieved. The magnitude of these fluctuations generally will be
greater when the average maturity of the Fund's portfolio securities is
longer. Because the yields on U.S. Government Securities are generally
lower than on corporate debt securities, the Fund may attempt to increase
the income it can earn from U.S. Government Securities by writing covered
call options against them, when market conditions are appropriate.
Writing covered call is explained below, under "Other Investment
Techniques and Strategies."
- Portfolio Turnover. A change in the securities held by the
Fund is known as "portfolio turnover." U.S. Government Securities may be
purchased or sold without regard to the length of time they have been
held, to attempt to take advantage of short-term differentials in yields.
While short-term trading increases portfolio turnover, the Fund incurs
little or no brokerage costs for U.S. Government Securities. The
"Financial Highlights," above, show the Fund's portfolio turnover rate
during past fiscal years. High portfolio turnover may affect the ability
of the Fund to qualify for tax deductions for payments made to
shareholders as a "regulated investment company" under the Internal
Revenue Code. The Fund qualified in its last fiscal year and intends to
do so in the coming year, although it reserves the right not to qualify.
- Can the Fund's Investment Objective and Policies Change? The
Fund has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those policies. The Fund's investment policies and
practices are not "fundamental" unless the Prospectus or Statement of
Additional Information says that a particular policy is "fundamental."
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's
investment objective is a fundamental policy. The Fund's Board of Trustees
may change non-fundamental policies without shareholder approval, although
significant changes will be described in amendments to this Prospectus.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below, which involve
certain risks. The Statement of Additional Information contains more
information about these practices, including limitations designed to
reduce some of the risks.
- Loans of Portfolio Securities. To raise cash for liquidity
purposes, the Fund may lend its portfolio securities amounting to not more
than 25% of its total assets to brokers, dealers and other financial
institutions, subject to certain conditions described in the Statement of
Additional Information. There are some risks in connection with
securities lending. The Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the
loaned securities. The Fund presently does not intend to engage in loans
of securities that will exceed 5% of the value of the Fund's total assets
in the coming year.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. There is no limit on the amount of the Fund's net assets that
may be subject to repurchase agreements of seven days or less. Repurchase
agreements must be fully collateralized. However, if the vendor of the
securities under a repurchase agreement fails to pay the resale price on
the delivery date, the Fund may incur costs in disposing of the collateral
and may experience losses if there is any delay in its ability to do so.
The Fund will not enter into a repurchase agreement which causes more than
10% of its net assets to be subject to repurchase agreements having a
maturity beyond seven days.
- Writing Covered Calls. To earn additional income the Fund
may write (that is, sell) call options. The Fund receives premiums from
the calls it writes. The Fund may write calls only if the call is
"covered" while it is outstanding; that is, the Fund owns the securities
that are subject to the call (although it may substitute other qualifying
securities). Calls on Interest Rate Futures written by the Fund must be
covered by deliverable securities or by liquid assets segregated to
satisfy the Futures contract. The Fund may write calls on U.S. Government
Securities on up to 10% of its total assets and may write calls on up to
100% of its total assets if the calls are listed on a domestic securities
or commodities exchange or quoted on the Automated Quotation System of the
National Association of Securities Dealers, Inc.
- Hedging With Options and Futures Contracts. The Fund may buy
and sell options and futures contracts (that relate to debt securities)
to try to manage its exposure to changing interest rates and securities
prices. Some of these strategies, such as selling futures, buying puts
and writing covered calls, hedge the Fund's portfolio against price
fluctuations. Other hedging strategies, such as buying futures and buying
calls, tend to increase the Fund's market exposure. The Fund does not use
hedging instruments for speculative purposes. The Fund may invest in
interest rate futures and call and put options on U.S. Government
Securities, and engage in interest rate swap transactions. All of these
are referred to as "hedging instruments."
Writing puts requires the segregation of liquid assets to cover
the put. Not more than 50% of the Fund's assets may be subject to puts.
The Fund also may resell puts previously purchased by it. The Fund may
purchase calls in "closing purchase transactions" to terminate its
obligations on calls it has written, and on U.S. Government Securities and
Interest Rate Futures. A call or put may not be purchased if the value
of all of the Fund's put and call options would exceed 5% of the value of
the Fund's total assets. The Fund's option writing activities generally
will not exceed 100% of its assets, in the aggregate.
Hedging instruments can be volatile investments and may involve
special risks. If the Manager uses a hedging instrument at the wrong time
or judges market conditions incorrectly, hedging strategies may reduce the
Fund's return. The Fund could also experience losses if the prices of its
futures and options positions were not correlated with its other
investments or if it could not close out a position because of an illiquid
market for the future or option. In writing calls there are risks that
the Fund may forgo profits on an increase in the price of the underlying
security if the call is exercised. In addition, the Fund could experience
capital losses that might cause previously distributed income to be re-
characterized for tax purposes as a return of capital to shareholders.
There are special risks in particular hedging strategies. For
example, in writing puts there is the risk that the Fund may be required
to buy the underlying security at a disadvantageous price. Interest rate
swaps are subject to credit risks (if the other party fails to meet its
obligations) and also to interest rate risks, because the Fund could be
obligated to pay more under its swap agreements than it receives under
them, as a result of interest rate changes. These risks and the hedging
strategies the Fund may use are described in greater detail in the
Statement of Additional Information.
Other Investment Restrictions. The Fund has other investment restrictions
which are fundamental policies. Under these fundamental policies, the
Fund cannot do any of the following: (a) invest in any security other than
those discussed under "Investment Objectives and Policies" above; (b) make
loans; however, the purchase of debt securities which the Fund's
investment policies and restrictions permit it to purchase, whether or not
subject to repurchase agreements, is permitted; the Fund may also lend
securities as described under "Loans of Portfolio Securities"; (c) borrow
money in excess of 10% of the value of its assets (and then only as a
temporary measure for extraordinary or emergency purposes) or make any
investment at a time during which such borrowing exceeds 5% of the value
of its assets; no assets of the Fund may be pledged, mortgaged or
hypothecated to secure a debt; the escrow arrangements involved in options
trading are not considered to involve such a mortgage, hypothecation or
pledge; or (d) enter into repurchase agreements maturing in more than
seven days, or invest in securities which are restricted as to resale,
securities which are not readily convertible to cash ("illiquid
securities") or securities for which market quotations are not readily
available if more than 10% of the Fund's total assets would be invested
in such securities.
All of the percentage restrictions described above and elsewhere
in this Prospectus apply only at the time the Fund purchases a security,
and the Fund need not dispose of a security merely because the Fund's
assets have changed or the security has increased in value relative to the
size of the Fund. There are other fundamental policies discussed in the
Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1982 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible
for protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and provides more information about them
and the officers of the Fund. Although the Fund is not required by law
to hold annual meetings, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder approval,
to divide unissued shares of the Fund into two or more classes. The Board
has done so, and the Fund currently has two classes of shares, Class A and
Class C. Each class has its own dividends and distributions and pays
certain expenses which may be different for the different classes. Each
class may have a different net asset value. Each share has one vote at
shareholder meetings, with fractional shares voting proportionally. Only
shares of a particular class vote together on matters that affect that
class alone. Shares are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager, which
chooses the Fund's investments and handles its day-to-day business. The
Manager carries out its duties, subject to the policies established by the
Board of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities and its fees, and describes the expenses that
the Fund pays to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $27 billion as
of June 30, 1994, and with more than 1.8 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company.
- Portfolio Manager. The Portfolio Manager of the Fund (who
is also a Vice President of the Fund) is David Rosenberg. He is the
person principally responsible for the day-to-day management of the Fund's
portfolio since January 3, 1994. Mr. Rosenberg is a Vice President of the
Manager. He is also the portfolio manager of another OppenheimerFund.
During the past five years, Mr. Rosenberg was previously an officer and
portfolio manager for Delaware Investment Advisors and for one of its
mutual funds.
- Fees and Expenses. Under the investment advisory agreement,
the Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 0.75% of the first $200 million of
aggregate net assets, 0.70% of the next $200 million, 0.65% of the next
$400 million, and 0.60% of aggregate net assets over $800 million. The
Manager voluntarily reduced that management fee by reducing the rate at
each breakpoint by .05% effective January 1, 1994, and by an additional
.05% effective July 1, 1994.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. As the Fund purchases
most of its portfolio securities directly from the sellers and not through
brokers, it incurs relatively little expense for brokerage. From time to
time it may use brokers when buying portfolio securities. When deciding
which brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers
and brokers that have a sales agreement with Oppenheimer Funds
Distributor, Inc., a subsidiary of the Manager that acts as the
Distributor. The Distributor also distributes the shares of other mutual
funds managed by the Manager (the "OppenheimerFunds") and is sub-
distributor for funds managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
account to the Transfer Agent at the address and toll-free numbers shown
below in this Prospectus or on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses certain terms to
illustrate its performance: "total return" and "yield." These terms are
used to show the performance of each class of shares separately, because
the performance of each class of shares will usually be different, as a
result of the different kinds of expenses each class bears. This
performance information may be useful to help you see how well your
investment has done and to compare it to other funds or market indices,
as we have done below.
It is important to understand that the fund's total returns 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 and
yields are calculated is contained in the Statement of Additional
Information, which also contains information about other ways to measure
and compare the Fund's performance. The Fund's investment performance will
vary, depending on market conditions, the composition of the portfolio,
expenses and which class of shares you purchase.
- Total Returns. There are different types of "total returns"
used to measure the Fund's performance. Total return is the change in
value of a hypothetical investment in the Fund over a given period,
assuming that all dividends and capital gains distributions are reinvested
in additional shares. The cumulative total return measures the change in
value over the entire period (for example, ten years). An average annual
total return shows the average rate of return for each year in a period
that would produce the cumulative total return over the entire period.
However, average annual total returns do not show the Fund's actual year-
by-year performance.
When total returns are quoted for Class A shares, they reflect the
payment of the maximum initial sales charge. Total returns may also be
quoted "at net asset value," without considering the effect of the sales
charge, and those returns would be reduced if sales charges were deducted.
When total returns are shown for a one-year period for Class C shares,
they reflect the effect of the contingent deferred sales charge. They may
also be shown based on the change in net asset value, without considering
the effect of the contingent deferred sales charge.
- Yield. Each Class of shares calculates its yield by dividing
the annualized net investment income per share on the portfolio during a
30-day period by the maximum offering price on the last day of the period.
The yield of each Class will differ because of the different expenses of
each Class of shares. The yield data represents a hypothetical investment
return on the portfolio, and does not measure an investment return based
on dividends actually paid to shareholders. To show that return, a
dividend yield may be calculated. 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 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 June 30, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the Fund's
fiscal year ended June 30, 1994, the Federal Reserve increased U.S. short-
term interest rates as a pre-emptive strike against inflation. In the
beginning of the Fund's fiscal year the Manager began to position the
Fund's portfolio in response to an expected rise in interest rates by
shortening the maturity of the U.S. Treasury portion of the portfolio and
reducing the Fund's mortgage holdings. During the latter part of the
fiscal year, with the expectation that interest rates would not rise
significantly from rates then in effect, the Manager added higher yielding
bonds to the Fund's portfolio, focusing on issues that could add yield at
attractive prices.
- Comparing the Fund's Performance to the Market. The chart
below shows the performance of a hypothetical $10,000 investment in each
Class of shares of the Fund held until June 30, 1994; in the case of Class
A shares, since August 16, 1985 (the date on which the Fund's investment
objective was changed), and in the case of Class C shares, from the
inception of the Class on December 1, 1993, with all dividends and capital
gains distributions reinvested in additional shares. The graph reflects
the deduction of the 4.75% maximum initial sales charge on Class A shares
and the 1.0% contingent deferred sales charge on Class C shares.
The Fund's performance is compared to the performance of the
Lehman Brothers U.S. Government Bond Index, an unmanaged index including
all U.S. Treasury issues, publicly-issued debt of U.S. Government agencies
and quasi-public corporations and U.S. Government guaranteed corporate
debt, and is widely regarded as a measure of the performance of the U.S.
Government bond 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 should be noted that the Fund's investments
are not limited to the securities in any one index and the index data does
not reflect any assessment of the risk of the investments included in the
index.
Oppenheimer U.S. Government Trust
Comparison of Change in Value
of $10,000 Hypothetical Investment to the
Lehman Brothers U.S. Government Bond Index
(Graph)
Past performance is not predictive of future performance.
Oppenheimer U.S. Government Trust
Average Annual Total Returns at 6/30/94
1-Year 5-Year Life
Class A: % % %
Class C:* % N/A N/A
- ---------------
* Reflects Cumulative Total Return for period from inception of the class
(12/1/93) and is not annualized.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors two different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will
likely have different share prices.
- Class A Shares. If you buy Class A shares, you pay an initial
sales charge (on investments up to $1 million). If you purchase Class A
shares as part of an investment of at least $1 million in shares of one
or more OppenheimerFunds, and you sell any of those shares within 18
months after your purchase, you will pay a contingent deferred sales
charge, which will vary depending on the amount you invested.
- 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%.
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 advisors.
- How Much Do You Plan to Invest? If you plan to invest a
substantial amount over the long term, the reduced sales charges available
for larger purchases of Class A shares may be more beneficial to you than
purchasing Class C shares, because of the higher annual expenses Class C
shares will likely bear. For purchases over $1 million, the contingent
deferred sales charge on Class A shares may be more beneficial. The
Distributor will not accept any order for $1 million or more for Class C
shares on behalf of a single investor for that reason.
- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, investors who prefer
not to pay an initial sales charge and who plan to hold their shares for
more than one year might consider Class C shares. Investors who plan to
redeem shares within a year might consider whether the front-end sales
charge on Class A shares would result in higher net expenses after
redemption.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available for Class C
shareholders, you should carefully review how you plan to use your
investment account before deciding which class of shares is better for
you. Additionally, the dividends payable to Class C shareholders will be
reduced by the additional expenses borne solely by that class, such as the
asset-based sales charge to which 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 or
any other person who is entitled to receive compensation for selling Fund
shares may receive different compensation for selling one class than for
selling another class. It is important that investors understand that the
purpose of the contingent deferred sales charge and asset-based sales
charge for Class C shares is the same as the purpose of the front-end
sales charge on sales of Class A shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual
Retirement Accounts (IRAs), you can make an initial investment of as
little as $250 (if your IRA is established under an Asset Builder Plan,
the $25 minimum applies), and subsequent investments may be as little as
$25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or you
can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements with
the Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service. When you buy shares, be sure to
specify Class A or Class C shares. If you do not choose, your investment
will be made in Class A shares.
- Buying Shares Through Your Dealer. Your dealer will place
your order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares.
- Buying Shares Through OppenheimerFunds AccountLink. You can
use AccountLink to link your Fund account with an account at a U.S. bank
or other financial institution that is an Automated Clearing House (ACH)
member, to transmit funds electronically to purchase shares, to send
redemption proceeds, and to transmit dividends and distributions. Shares
are purchased for your account on the regular business day the Distributor
is instructed by you to initiate the ACH transfer to buy shares. You can
provide those instructions automatically, under an Asset Builder Plan,
described below, or by telephone instructions using OppenheimerFunds
PhoneLink, also described below. You must request AccountLink privileges
on the application or dealer settlement instructions used to establish
your account. Please refer to "AccountLink" below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and
up to four other OppenheimerFunds) automatically each month from your
account at a bank or other financial institution under an Asset Builder
Plan with AccountLink. Details are on the Application and in the Statement
of Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value that is next determined after
the Distributor receives the purchase order in Denver. In most cases, to
enable you to receive that day's offering price, the Distributor must
receive your order by 4:00 P.M., New York time (all references to time in
this Prospectus mean "New York time"). The net asset value 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 4:00 P.M., on a
regular business day, and transmit it to the Distributor so that it is
received before the Distributor's close of business that day, which is
normally 5:00 P.M. The Distributor may reject any purchase order for the
Fund's shares, in its sole discretion.
Class A Shares. Class A shares are sold at their offering price, which
is normally net asset value plus an initial sales charge. However, in
some cases, described below, where purchases are not subject to an initial
sales charge, the offering price may be net asset value. In some cases,
reduced sales charges may be available, as described below. Out of the
amount you invest, the Fund receives the net asset value to invest for
your account. The sales charge varies depending on the amount of your
purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer. The current sales charge rates
and commissions paid to dealers and brokers are as follows:
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.98% 4.00%
$50,000 or more but
less than $100,000 4.50% 4.71% 3.75%
$100,000 or more but
less than $250,000 3.50% 3.63% 2.75%
$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%
$1 million or more None* None* None*
- --------------------------------------------------------------------------
</TABLE>
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
- Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more
OppenheimerFunds aggregating $1 million or more. However, the Distributor
pays dealers of record commissions on such purchases in an amount equal
to the sum of 1.0% of the first $2.5 million, plus 0.50% of the next $2.5
million, plus 0.25% of share purchases over $5 million. However, that
commission will be paid only on the amount of those purchases in excess
of $1 million that were not previously subject to a front-end sales charge
and dealer commission.
If you redeem any of those shares within 18 months of the end of
the calendar month of their purchase, a contingent deferred sales charge
(called the "Class A contingent deferred sales charge") will be deducted
from the redemption proceeds. That sales charge will be equal to 1.0% of
the aggregate net asset value of either (1) the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original cost of the shares, whichever is less.
However, the Class A contingent deferred sales charge will not exceed the
aggregate commissions the Distributor paid to your dealer on all Class A
shares of all OppenheimerFunds you purchased subject to the Class A
contingent deferred sales charge. In determining whether a contingent
deferred sales charge is payable, the Fund will first redeem shares that
are not subject to the sales charge, including shares purchased by
reinvestment of dividends and capital gains, and then will redeem other
shares in the order that you purchased them. The Class A contingent
deferred sales charge is waived in certain cases described in "Waivers of
Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on
exchanges of shares under the Fund's Exchange Privilege (described below).
However, if the shares acquired by exchange are redeemed within 18 months
of the end of the calendar month of the purchase of the exchanged shares,
the sales charge will apply.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of the
following ways:
- Right of Accumulation. You and your spouse can cumulate Class
A shares you purchase for your own accounts, or jointly, or on behalf of
your children who are minors, under trust or custodial accounts. A
fiduciary can cumulate shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the
same employer) that has multiple accounts.
Additionally, you can cumulate current purchases of Class A shares
of the Fund and other OppenheimerFunds with Class A shares of
OppenheimerFunds you previously purchased subject to a sales charge,
provided that you still hold your investment in one of the
OppenheimerFunds. The value of those shares will be based on the greater
of the amount you paid for the shares or their current value (at offering
price). The OppenheimerFunds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Transfer Agent. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
Shareholders of the Fund who acquired (and still hold) Fund shares
as a result of a reorganization of the Fund with Advance America Funds,
Inc. on October 18, 1991, and who held shares of Advance America Funds,
Inc. on March 30, 1990, may purchase shares of the Fund at a maximum sales
charge of 4.50%.
- Letter of Intent. Under a Letter of Intent, you may purchase
Class A shares of the Fund and other OppenheimerFunds during a 13-month
period at the reduced sales charge rate that applies to the aggregate
amount of the intended purchases, including purchases made up to 90 days
before the date of the Letter. More information is contained in the
Application and in "Reduced Sales Charges" in the Statement of Additional
Information.
- Waivers of Class A Sales Charges. No sales charge is imposed
on sales of Class A shares to the following investors: (1) the Manager or
its affiliates; (2) present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced Sales
Charges" in the Statement of Additional Information) of the Fund, the
Manager and its affiliates, and retirement plans established by them for
their employees; (3) registered management investment companies, or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (4) dealers or brokers that
have a sales agreement with the Distributor, if they purchase shares for
their own accounts or for retirement plans for their employees; (5)
employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered
into sales arrangements with such dealers or brokers (and are identified
to the Distributor) or with the Distributor; the purchaser must certify
to the Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's spouse or
minor children); (6) dealers, brokers or registered investment advisers
that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment
products made available to their clients.
Additionally, no sales charge is imposed on shares that are (a)
issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, or (c) purchased by
the reinvestment of dividends or other distributions reinvested from the
Fund or other OppenheimerFunds (other than the Cash Reserves Funds) or
unit investment trusts for which reinvestment arrangements have been made
with the Distributor. There is a further discussion of this policy in
"Reduced Sales Charges" in the Statement of Additional Information.
The Class A contingent deferred sales charge is also waived if
shares are redeemed in the following cases: (1) retirement distributions
or loans to participants or beneficiaries from qualified retirement plans,
deferred compensation plans or other employee benefit plans ("Retirement
Plans"), (2) returns of excess contributions made to Retirement Plans, (3)
Automatic Withdrawal Plan payments that are limited to no more than 12%
of the original account value annually, and (4) involuntary redemptions
of shares by operation of law or under the procedures set forth in the
Fund's Declaration of Trust or adopted by the Board of Trustees.
- Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for a portion
of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. The Distributor uses all
of those fees to compensate dealers, brokers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares and to reimburse
itself (if the Fund's Board of Trustees authorizes such reimbursements,
which it has not yet done) for its other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of Class A shares held in
accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of Class A shares. For more details, please
refer to "Distribution and Service Plans" in the Statement of Additional
Information.
Class C Shares. Class C shares are sold at net asset value per share
without an initial sales charge. However, if Class C shares are redeemed
within 12 months of their purchase, a contingent deferred sales charge of
1.0% will be deducted from the redemption proceeds. That sales charge
will not apply to shares purchased by the reinvestment of dividends or
capital gains distributions. The charge will be assessed on the lesser of
the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class C contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies
to a redemption, the Fund redeems shares in the following order: (1)
shares acquired by reinvestment of dividends and capital gains
distributions, (2) shares held for over 12 months, and (3) shares held the
longest during the 12-month period.
- Waivers of Class C Sales Charge. The Class C contingent
deferred sales charge will be waived if the shareholder requests it for
any of the following redemptions: (1) 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; (2) redemptions from
accounts other than Retirement Plans following the death or disability of
the shareholder (you must provide evidence of a determination of
disability by the Social Security Administration), and (3) returns of
excess contributions to Retirement Plans.
The contingent deferred sales charge is also waived on Class C
shares in the following cases: (i) shares sold to the Manager or its
affiliates; (ii) shares sold to registered management investment companies
or separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (iii) shares issued in plans
of reorganization to which the Fund is a party; and (iv) shares redeemed
in involuntary redemptions as described above. Further details about this
policy are contained in "Reduced Sales Charges" in the Statement of
Additional Information.
- Distribution and Service Plan for Class C Shares. The Fund has
adopted a Distribution and Service Plan for Class C shares to compensate
the Distributor for its services and costs in distributing Class C shares
and servicing accounts. Under the Plan, the Fund pays the Distributor an
annual "asset-based sales charge" of 0.75% per year on Class C shares.
The Distributor also receives a service fee of 0.25% per year. Both fees
are computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. The asset-based
sales charge allows investors to buy Class C shares without a front-end
sales charge while allowing the Distributor to compensate dealers that
sell Class C shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class C shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fees increase
Class C expenses by up to 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance
for the first year after Class C shares have been sold by the dealer.
After the shares have been held for a year, the Distributor pays the fee
on a quarterly basis. The Distributor pays sales commissions of 0.75% of
the purchase price to dealers from its own resources at the time of sale.
The Distributor retains the asset-based sales charge during the first year
shares are outstanding to recoup the sales commissions it pays, the
advances of service fee payments it makes, and its financing costs. The
Distributor plans to pay the asset-based sales charge as an ongoing
commission to the dealer on Class C shares that have been outstanding for
a year or more.
Because the Distributor's actual expenses in selling Class C
shares may be more than the payments it receives from contingent deferred
sales charges collected on redeemed shares and from the Fund under the
Distribution and Service Plan for Class C shares, those expenses may be
carried over and paid in future years. At June 30, 1994, the end of the
Plan year, the Distributor had incurred unreimbursed expenses under the
Plan of $_______ (equal to ___% of the Fund's net assets represented by
Class C shares on that date), which have been carried over into the
present Plan year. If the Plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for certain expenses it incurred before the plan
was terminated.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions, including purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you
use to buy shares, or on your dealer's settlement instructions if you buy
your shares through your dealer. After your account is established, you
can request AccountLink privileges on signature-guaranteed instructions
to the Transfer Agent. AccountLink privileges will apply to each
shareholder listed in the registration on your account as well as to your
dealer representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank
account information must be made by signature-guaranteed instructions to
the Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be used
on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange
Privilege, described below, you can exchange shares automatically by phone
from your Fund account to another OppenheimerFunds account you have
already established by calling the special PhoneLink number. Please refer
to "How to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will send the
proceeds directly to your AccountLink bank account. Please refer to "How
to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive payments
of at least $50 on a monthly, quarterly, semi-annual or annual basis. The
checks may be sent to you or sent automatically to your bank account on
AccountLink. You may even set up certain types of withdrawals of up to
$1,500 per month by telephone. You should consult the Application and
Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent
to exchange an amount you establish in advance automatically for shares
of up to five other OppenheimerFunds on a monthly, quarterly, semi-annual
or annual basis under an Automatic Exchange Plan. The minimum purchase
for each other OppenheimerFunds account is $25. These exchanges are
subject to the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in Class A shares of the Fund or other OppenheimerFunds without paying
sales charge. This privilege applies to Class A shares that you sell, and
Class C shares on which you paid a contingent deferred sales charge when
you redeemed them. You must be sure to ask the Distributor for this
privilege when you send your payment. Please consult the Statement of
Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-
exempt organizations, such as schools, hospitals and charitable
organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small
business owners or people with income from self-employment
- Pension and Profit-Sharing Plans for self-employed persons
and small business owners
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing, by using the Fund's
Checkwriting privilege or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis, as described above.
If you have questions about any of these procedures, and especially if you
are redeeming shares in a special situation, such as due to the death of
the owner, or from a retirement plan, please call the Transfer Agent
first, at 1-800-525-7048, for assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and
receive a check
- The check is not payable to all shareholders listed on the
account statement
- The check is not sent to the address of record on your
statement
- Shares are being transferred to a Fund account with a
different owner or name
- Shares are redeemed by someone other than the owners (such
as an Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing as a fiduciary or on behalf of a corporation, partnership or
other business, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling, and
- Any special requirements or documents requested by the
Transfer Agent to assure proper authorization of the person asking to sell
shares.
Use the following address for requests by mail:
Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record
may also sell your shares by telephone. To receive the redemption price
on a regular business day, your call must be received by the Transfer
Agent by 4:00 P.M. You may not redeem shares held in an OppenheimerFunds
retirement plan or under a share certificate by telephone.
- To redeem shares through a service representative, call
1-800-852-8457
- To redeem shares automatically on PhoneLink, call
1-800-533-3310
Whichever method you use, you may have a check sent to the address
on the account, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds wired to that account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, once in each 7-day period. The check must be
payable to all owners of record of the shares and must be sent to the
address on the account. This service is not available within 30 days of
changing the address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
Check Writing. To be able to write checks against your Fund account, you
may request that privilege on your account Application or you can contact
the Transfer Agent for signature cards, which must be signed (with a
signature guarantee) by all owners of the account and returned to the
Transfer Agent so that checks can be sent to you to use. Shareholders with
joint accounts can elect in writing to have checks paid over the signature
of one owner.
- Checks can be written to the order of whomever you wish, but
may not be cashed at the Fund's bank or custodian.
- Checkwriting privileges are not available for accounts holding
Class B shares or Class A shares that are subject to a contingent
deferred sales charge.
- Checks must be written for at least $100.
- Checks cannot be paid if they are written for more than your
account value. Remember: your shares fluctuate in value and you should
not write a check close to the total account value.
- You may not write a check that would require the Fund to redeem
shares that were purchased by check or Asset Builder Plan payments within
the prior 15 days.
- Don't use your checks if you changed your Fund account number.
The Fund will charge a $10 fee for any check that is not paid
because (1) the owners of the account told the Fund not to pay the check,
or (2) the check was for more than the account balance, or (3) the check
did not have the proper signatures, (4) or the check was written for less
than $100.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges between already established
accounts on PhoneLink described below. To exchange shares, you must meet
several conditions:
- Shares of the fund selected for exchange must be available
for sale in your state of residence
- The prospectuses of this Fund and the fund whose shares you
want to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your
account for at least 7 days before you can exchange them; after the
account is open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund
you purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of
the same class in the other OppenheimerFunds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another
fund. At present, not all of the OppenheimerFunds offer the same classes
of shares. If a fund has only one class of shares that does not have a
class designation, they are "Class A" shares for exchange purposes. In
some cases, sales charges may be imposed on exchange transactions.
Certain OppenheimerFunds offer Class A shares and either Class B or Class
C shares, and a list can be obtained by calling the Distributor at 1-800-
525-7048. Please refer to "How to Exchange Shares" in the Statement of
Additional Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may
be made either by calling a service representative at 1-800-852-8457 or
by using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or by calling the
Transfer Agent at 1-800-525-7048. Exchanges of shares involve a redemption
of the shares of the fund you own and a purchase of shares of the other
fund.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from
the other fund in the exchange transaction on the same regular business
day on which the Transfer Agent receives an exchange request by 4:00 P.M.
that is in proper form, but either fund may delay the purchase of shares
of the fund you are exchanging into if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For
example, the receipt of multiple exchange requests from a dealer in a
"market-timing" strategy might require the disposition of securities at
a time or price disadvantageous to the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund will attempt to provide you
notice whenever it is reasonably able to do so, it may impose these
changes at any time.
- If the Transfer Agent cannot exchange all the shares you
request because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
The Distributor has entered into agreements with certain dealers
and investment advisers permitting them to exchange their clients' shares
by telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a
result, those exchanges may be subject to notice requirements, delays and
other limitations that do not apply to shareholders who exchange their
shares directly by calling or writing to the Transfer Agent.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined for each class of
shares as of 4:00 P.M. each day The New York Stock Exchange is open by
dividing the value of the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding. The Fund's Board of
Trustees has established procedures to value the Fund's securities to
determine net asset value. In general, securities values are based on
market value. There are special procedures for valuing illiquid and
restricted securities, obligations for which market values cannot be
readily obtained, and call options and hedging instruments. These
procedures are described more completely in the Statement of Additional
Information.
- The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the offering
may be suspended by the Board of Trustees at any time the Board believes
it is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other procedures to confirm
that telephone instructions are genuine, by requiring callers to provide
tax identification numbers and other account data or by using PINs, and
by confirming such transactions in writing. If the Transfer Agent does
not use reasonable procedures it may be liable for losses due to
unauthorized transactions, but otherwise it will not be liable for losses
or expenses arising out of telephone instructions reasonably believed to
be genuine. If you are unable to reach the Transfer Agent during periods
of unusual market activity, you may not be able to complete a telephone
transaction and should consider placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously.
- The redemption price for 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 and Class C shares. Therefore, the
redemption value of your shares may be more or less than their original
cost.
- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. The Transfer Agent may
delay forwarding a check or processing a payment via AccountLink for
recently purchased shares, but only until the purchase payment has
cleared. That delay may be as much as 15 days from the date the shares
were purchased. That delay may be avoided if you purchase shares by
certified check or arrange with your bank to provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
- Involuntary redemptions in some cases may be made to repay the
Distributor for losses from the cancellation of share purchase orders.
- Under unusual circumstances, shares of the fund may be redeemed
"in kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to the Statement of
Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at
the rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or taxpayer identification number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of dividends.
- The Fund does not charge a redemption fee, but if your dealer
or broker handles your redemption, they may charge a fee. That fee can
be avoided by redeeming your Fund shares directly through the Transfer
Agent. Under the circumstances described in "How To Buy Shares," you may
be subject to a contingent deferred sales charges when redeeming certain
Class A and Class C shares.
- To avoid sending duplicate copies of materials to households,
the Fund will mail only one copy of each annual and semi-annual report and
updated prospectus to shareholders having the same 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 and Class
C shares from net investment income each regular business day and pays
those dividends to shareholders monthly. Dividends are normally paid on
the last business day of each month, but the Board of Trustees can change
that date. The Board may also cause the Fund to declare dividends after
the close of the Fund's fiscal year (which ends December 31st). Also,
dividends paid on Class A shares generally are expected to be higher than
for Class C shares because expenses allocable to Class C shares will
generally be higher. The Fund does not have a fixed dividend rate and
there can be no assurance as to the payment of any dividends or the
realization of any capital 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 assurances that the Fund will pay any capital gains
distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
- Reinvest Capital Gains Only. You can elect to reinvest long-
term capital gains in the Fund while receiving dividends by check or sent
to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive
a check for all dividends and long-term capital gains distributions or
have them sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds
Account. You can reinvest all distributions in another OppenheimerFunds
account you have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. Dividends paid from short-term capital gains
and net investment income are taxable as ordinary income. Distributions
are subject to federal income tax and may be subject to state or local
taxes. Your distributions are taxable when paid, whether you reinvest
them in additional shares or take them in cash. Every year the Fund will
send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy shares on
or just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including
redemptions for exchanges, are subject to capital gains tax. A capital
gain or loss is the difference between the price you paid for the shares
and the price you received when you sold them.
- Returns of Capital: In certain cases distributions made by
the Fund may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices to
shareholders.
This information is only a summary of certain federal tax
information about your investment. More information is contained in the
Statement of Additional Information, and in addition you should consult
with your tax adviser about the effect of an investment in the Fund on
your particular tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER U.S. GOVERNMENT TRUST
Graphic material included in Prospectus of Oppenheimer U.S.
Government Trust: "Comparison of Total Return of Oppenheimer U.S.
Government Trust and the Lehman Brothers Government Bond Index - Change
in Value of a $10,000 Hypothetical Investment."
A linear graph will be included in the Prospectus of Oppenheimer
U.S. Government Trust (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in each
Class of shares of the Funds held until June 30, 1994, in the case of
Class A shares, since August 16, 1985, and in the case of Class C shares,
from the inception of the Class on December 1, 1993, and comparing such
values with the same investments over the same time periods in the Lehman
Brothers Government Bond 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 Lehman Brothers
Government Bond Index, is set forth in the Prospectus under "Fund
Performance Information -- Management's Discussion of Performance."
Fiscal Year Oppenheimer Lehman Brothers
(Period) Ended U.S. Government Trust - A Government Bond Index
08/16/85 $9,525 $10,000
06/30/86 $10,803 $11,887
06/30/87 $11,371 $12,377
06/30/88 $12,268 $13,267
06/30/89 $13,430 $14,869
06/30/90 $14,282 $15,900
06/30/91 $15,645 $17,512
06/30/92 $17,688 $19,920
06/30/93 $19,403 $22,489
06/30/94 $19,218 $22,187
Fiscal Oppenheimer Lehman Brothers
Period Ended U.S. Government Trust - C Government Bond
Index
12/1/93(1) $10,000 $10,000
06/30/94 $9,591 $9,625
- ----------------------
(1) Class C shares of the Fund were first publicly offered on December
1, 1993.
<PAGE>
Oppenheimer U.S. Government Trust
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG Peat Marwick
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47 Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement, and if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
PR220 (10/94) * Printed on recycled paper
Prospectus
Oppenheimer U.S. Government Trust
(OppenheimerFunds Logo)
<PAGE>
Prospectus and
New Account Application
Oppenheimer U.S. Government Trust
(OppenheimerFunds Logo)
<PAGE>
Oppenheimer U.S. Government Trust
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated October 25, 1994
This Statement of Additional Information of Oppenheimer U.S.
Government Trust is not a Prospectus. This document contains additional
information about the Fund and supplements information in the Prospectus
dated October 25, 1994. It should be read together with the Prospectus,
which may be obtained by writing to the Fund's Transfer Agent, Oppenheimer
Shareholder Services, at P.O. Box 5270, Denver, Colorado 80217 or by
calling the Transfer Agent at the toll-free number shown above.
Contents
Page
About the Fund
Investment Objective and Policies . . . . . . . . . . . . . . .
Other Investment Techniques and Strategies . . . . . . . .
Other Investment Restrictions. . . . . . . . . . . . . . .
How the Fund is Managed . . . . . . . . . . . . . . . . . . . .
Organization and History . . . . . . . . . . . . . . . . .
Trustees and Officers of the Fund. . . . . . . . . . . . .
The Manager and Its Affiliates . . . . . . . . . . . . . .
Brokerage Policies of the Fund. . . . . . . . . . . . . . . . .
Performance of the Fund . . . . . . . . . . . . . . . . . . . .
Distribution and Service Plans. . . . . . . . . . . . . . . . .
About Your Account. . . . . . . . . . . . . . . . . . . . . . .
How To Buy Shares . . . . . . . . . . . . . . . . . . . . . . .
How To Sell Shares. . . . . . . . . . . . . . . . . . . . . . .
How To Exchange Shares. . . . . . . . . . . . . . . . . . . . .
Dividends, Capital Gains and Taxes. . . . . . . . . . . . . . .
Additional Information About the Fund . . . . . . . . . . . . .
Financial Information About the Fund. . . . . . . . . . . . . .
Independent Auditors' Report. . . . . . . . . . . . . . . . . .
Financial Statements. . . . . . . . . . . . . . . . . . . . . .
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Set forth below is
supplemental information about those policies and the types of securities
in which the Fund invests, as well as the strategies the Fund may use to
try to achieve its objective. Capitalized terms used in this Statement
of Additional Information have the same meaning as those terms have in the
Prospectus.
- U.S. Government Securities. Obligations of U.S. Government agencies
or instrumentalities may or may not be guaranteed or supported by the
"full faith and credit" of the United States. Some are backed by the
right of the issuer to borrow from the U.S. Treasury; others, by
discretionary authority of the U.S. Government to purchase the agencies'
obligations; while others are supported only by the credit of the
instrumentality. All U.S. Treasury obligations are backed by the full
faith and credit of the United States. If the securities are not backed
by the full faith and credit of the United States, the owner of the
securities must look principally to the agency issuing the obligation for
repayment and may not be able to assert a claim against the United States
in the event that the agency or instrumentality does not meet its
commitment. The Fund will invest in U.S. Government Securities of such
agencies and instrumentalities only when the Manager is satisfied that the
credit risk with respect to such instrumentality is minimal.
General changes in prevailing interest rates will affect the values of
the Fund's portfolio securities. The value will vary inversely to changes
in such rates. For example, if such rates go up after a security is
purchased, the value of the security will generally decline. A decrease
in interest rates may affect the maturity and yield of mortgage-backed
securities by increasing unscheduled prepayments of the underlying
mortgages. With its objective of seeking interest income while conserving
capital, the Fund may purchase or sell securities without regard to the
length of time the security has been held, to take advantage of short-term
differentials in yields. While short-term trading increases the portfolio
turnover, the execution cost for U.S. Government Securities is
substantially less than for equivalent dollar values of equity securities.
Other Investment Techniques and Strategies
- Repurchase Agreements. In a repurchase transaction, at the time the
Fund acquires a U.S. Government Security, it simultaneously resells it to
an approved vendor (a commercial bank with assets of at least $1 billion
or a broker-dealer meeting Board established credit standards and which
has been designated a primary dealer in government securities) for
delivery on an agreed-upon future date. The repurchase price exceeds the
purchase price by an amount that reflects an agreed-upon interest rate
effective for the period during which the repurchase agreement is in
effect. The majority of these transactions run from day to day, and
delivery pursuant to the resale typically will occur within one to five
days of the purchase. Repurchase agreements are considered "loans" under
the Investment Company Act 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,
Oppenheimer Management Corporation, the Fund's investment manager (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. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the market value of
the loaned securities and must consist of cash, bank letters of credit or
U.S. Government securities, 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. The terms of the letter 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
interest paid or the dividends declared on the loaned securities during
the term of the loan as well as one or more of (a) negotiated loan fees,
(b) interest on securities used as collateral, or (c) interest on short-
term debt securities purchased with such loan collateral; either type of
interest may be shared with the borrower. The Fund may also pay
reasonable finder's, custodian and administrative fees and will not lend
its portfolio securities to any officer, trustee, employee or affiliate
of the Fund or its Manager. The terms of the Fund's loans must meet
applicable 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.
- Writing Covered Calls. As described in the Prospectus, the Fund may
write covered calls. When the Fund writes a call on a security, it
receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment), regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing purchase
transaction." A profit or loss will be realized, depending upon whether
the net of the amount of 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 related investments 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 a lack of a market, it would have to hold the
callable investments until the call lapsed or was exercised.
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. This 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 ("in-the-money"). For any OTC option the Fund
writes, it will treat as illiquid (for purposes of its restriction on
illiquid securities, stated in the Prospectus) the mark-to-market value
of any OTC option held by it. The Securities and Exchange Commission is
evaluating the general issue of whether or not OTC options should be
considered as liquid securities, and the procedure described above could
be affected by the outcome of that evaluation.
The Fund may also write calls on Interest Rate Futures without owning
a futures contract or deliverable bond, provided that at the time the call
is written, the Fund covers the call by segregating in escrow an
equivalent dollar value of liquid assets. The Fund will segregate
additional liquid assets if the value of the escrowed assets drops below
100% of the current value of the Future. In no circumstances would an
exercise notice as to a Future put the Fund in a short futures position.
- Hedging With Options and Futures Contracts. The Fund may use hedging
instruments for the purposes described in the Prospectus. When hedging
to attempt to protect against declines in the market value of the Fund's
portfolio, 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 Interest Rate
Futures, (ii) purchase puts on such Futures or on U.S. Government
Securities; or (iii) write covered calls on U.S. Government Securities or
on Interest Rate Futures. When hedging to attempt to protect against the
possibility that portfolio securities are not fully included in a rise in
value of the bond market, the Fund may: (i) purchase Interest Rate
Futures, or (ii) purchase calls on such Futures or on U.S. Government
Securities. Additional information about the Hedging Instruments the Fund
may use is provided below.
The Fund's strategy of hedging with Futures and options on Futures will
be incidental to the Fund's investment activities in the underlying cash
market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be developed,
to the extent such investment methods are consistent with the Fund's
investment objective, and are legally permissible and disclosed in the
Prospectus. Additional information about the hedging instruments the Fund
may use is provided below.
- Interest Rate Futures. No price is paid or received upon the
purchase of an Interest Rate Future. Upon entering into a Futures
transaction, the Fund will be required to deposit an initial margin
payment, equal to a specified percentage of the contract value, with the
futures commission merchant (the "broker"). Initial margin payments will
be deposited with the Fund's custodian bank in an account registered in
the broker's name; however, the broker can gain access to that account
only under specified conditions. As the Future is marked to market to
reflect changes in its market value, subsequent payments, called variation
margin, will be made to and from the broker on a daily basis. Prior to
expiration of the Future, if the Fund elects to close out its position by
taking an opposite position, a final determination of variation margin is
made, additional cash is required to be paid by or released to the Fund,
and any loss or gain is realized for tax purposes. Although Interest Rate
Futures by their terms call for the actual delivery or acquisition of the
specified debt security, in most cases the obligation is fulfilled by
closing out the position. All futures transactions are effected through
a clearing house associated with the exchange on which the contracts are
traded.
- Writing Put Options. The Fund may write put options on U.S.
Government Securities. A put option 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 expires unexercised, the Fund (as
the writer) 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 sale price of the underlying investment
and the premium received minus the sum of the exercise price and any
transaction costs incurred.
When writing put options, 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 underlying
securities. The Fund therefore foregoes 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 Puts and Calls. When the Fund purchases a call (other
than in a closing purchase transaction), it pays a premium and 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. 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 for the call 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 has the right to
sell the underlying investment to a seller of a put on a corresponding
investment during the put period at a fixed exercise price. Buying a put
on U.S. Government Securities or Futures the Fund owns enables the Fund
to attempt to protect itself during the put period against a decline in
the value of the underlying investment below the exercise price by selling
the underlying investment at the exercise price to a seller of a
corresponding put. If the market price of the underlying investment is
equal to or above the exercise price and as a result the put is not
exercised or resold, the put will become worthless at its expiration 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).
Purchasing either a put on Interest Rate Futures or on U.S. Government
Securities it does not own permits the Fund either to resell the put or
to buy the underlying investment and sell it at the exercise price. The
resale price of the put will vary inversely with the price of the
underlying investment. If the market price of the underlying investment
is above the exercise price, and, as a result, the put is not exercised,
the put will become worthless on its expiration date. In the event of a
decline in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its loss on
its portfolio securities. When the Fund purchases a put on an Interest
Rate Future or U.S. Government Security not held by it, the put protects
the Fund to the extent that the prices of the underlying Future or U.S.
Government Securities move in a similar pattern to the prices of the U.S.
Government Securities in the Fund's portfolio.
- 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. Subject to the limitations described
in the Prospectus, 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 that 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 calls 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 calls or upon the
Fund entering into a closing purchase transaction. An option position may
be closed out 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 of calls written by the Fund may cause the Fund
to sell portfolio U.S. Government Securities, thus increasing the turnover
rate in a manner beyond the Fund's control. The exercise by the Fund of
puts on U.S. Government Securities or Futures 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 underlying investment for reasons which would not exist in the
absence of the put. The Fund will pay a brokerage commission every time
it buys or sells a call, a put or an underlying investment in connection
with the exercise of a put or call. Such commissions may be higher on a
relative basis than on general securities transactions. Premiums paid for
options are small in relation to the market value of the underlying
investments and consequently, put and call options offer large amounts of
leverage.
- Regulatory Aspects of Hedging Instruments. The Fund must operate
within certain restrictions as to its positions in Futures and options
thereon under a rule ("CFTC Rule") adopted by the Commodity Futures
Trading Commission ("CFTC") under the Commodity Exchange Act (the "CEA"),
which exempts the Fund from registration with the CFTC as a "commodity
pool operator" (as defined under the CEA) if it complies with the CFTC
Rule. Under these restrictions, the Fund will not, as to any positions,
whether short, long or a combination thereof, enter into Futures and
options thereon for which the aggregate initial margins and premiums
exceed 5% of the fair market value of its net assets, with certain
exclusions as defined in the CFTC Rule. Under the restrictions, the Fund
also must, as to its short positions, use Futures and options thereon
solely for bona fide hedging purposes within the meaning and intent of the
applicable provisions of the CEA.
Transactions in options by the Fund are subject to limitations
established by each of the exchanges governing the maximum number of
options which 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
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 or an affiliated investment adviser.
Position limits also apply to Futures. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
- Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code (although it reserves the right not to qualify). That
qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Interest Rate Futures, held for less than three
months, whether or not they were purchased on the exercise of a call held
by the Fund; (ii) purchasing options which expire in less than three
months; (iii) effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv) exercising
puts or calls held by the Fund for less than three months; or (v) writing
calls on investments held less than three months.
- Risks of Hedging With Options and Futures. In addition to the risks
with respect to options and futures discussed in the Prospectus and above,
there is a risk in using short hedging by selling Interest Rate Futures
to attempt to protect against decline in value of the Fund's portfolio
securities that the prices of Interest Rate Futures will correlate
imperfectly with the behavior of the cash (i.e., market value) prices of
the Fund's securities. The ordinary spreads between prices in the cash
and futures markets are subject to distortions due to differences in the
natures of those markets. First, all participants in the futures market
are subject to margin deposit and maintenance requirements. Rather than
meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the
normal relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering into
offsetting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the
futures market could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures
market are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market
may cause temporary price distortions.
If the Fund uses Hedging Instruments to establish a position in the
U.S. Government Securities markets as a temporary substitute for the
purchase of individual U.S. Government Securities by buying Interest Rate
Futures and/or calls on such Futures or on U.S. Government Securities, it
is possible that the market may decline; if the Fund then concludes not
to invest in such securities at that time because of concerns as to
possible further market decline or for other reasons, the Fund will
realize a loss on the Hedging Instruments that is not offset by a
reduction in the price of the U.S. Government Securities.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in
the Prospectus. There are additional investment restrictions that the Fund
must follow that are also fundamental policies. Fundamental policies and
the Fund's investment objective cannot be changed without the vote of a
"majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such a "majority" vote is defined as the vote of
the holders of the lesser of (1) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present, or (2) more than 50% of the
outstanding shares.
Under these additional restrictions, the Fund cannot: (1) invest in
commodities or commodity contracts or invest in interests in oil, gas, or
other mineral exploration or development programs; however, the Fund may
buy and sell any of the Hedging Instruments which it may use as permitted
by any of its other fundamental policies, whether or not any such Hedging
Instrument is considered to be a commodity or a commodity contract; (2)
invest in real estate; (3) purchase securities on margin or make short
sales of securities; 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 fundamental policies; (4) underwrite
securities of other companies; or (5) invest in securities of other
investment companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
How the Fund is Managed
Organization and History. The Fund was organized in 1982 as a
Massachusetts business trust. Effective August 16, 1985, the Fund changed
its investment objective and became a long-term government securities
fund.
As a Massachusetts business trust, the Fund is not required to hold,
and does not plan to hold, regular annual meetings of shareholders. The
Fund will hold meetings when required to do so by the Investment Company
Act or other applicable law, or when a shareholder meeting is called by
the Trustees or upon proper request of the shareholders. Shareholders
have the right, upon the declaration in writing or vote of two-thirds of
the outstanding shares of the Fund, to remove a Trustee. The Trustees
will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of its outstanding
shares. In addition, if the Trustees receive a request from at least 10
shareholders (who have been shareholders for at least six months) holding
shares of the Fund valued at $25,000 or more or holding at least 1% of the
Fund's outstanding shares, whichever is less, stating that they wish to
communicate with other shareholders to request a meeting to remove a
Trustee, the Trustees will then either make the Fund's shareholder list
available to the applicants or mail their communication to all other
shareholders at the applicants' expense, or the Trustees may take such
other action as set forth under Section 16(c) of the Investment Company
Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and
their principal occupations and business affiliations during the past five
years are listed below. The address of each Trustee and officer is Two
World Trade Center, New York, New York 10048-0203, unless another address
is listed below. All of the Trustees are also trustees of Oppenheimer
Fund, Oppenheimer Global Fund, Oppenheimer Time Fund, Oppenheimer Special
Fund, Oppenheimer Discovery Fund, Oppenheimer Global Growth & Income Fund,
Oppenheimer Global Bio-Tech Fund, Oppenheimer Global Environment Fund,
Oppenheimer Gold & Special Minerals Fund, Oppenheimer Tax-Free Bond Fund,
Oppenheimer New York Tax-Exempt Fund, Oppenheimer California Tax-Exempt
Fund, Oppenheimer Multi-State Tax-Exempt Trust, Oppenheimer Asset
Allocation Fund, Oppenheimer Mortgage Income Fund, Oppenheimer Target
Fund, Oppenheimer Multi-Sector Income Trust and Oppenheimer Multi-
Government Trust (the "New York-based OppenheimerFunds"). Messrs. Spiro,
Bishop, Bowen, Donohue, Farrar and Zack respectively hold the same offices
with the other New York-based OppenheimerFunds as with the Fund. As of
October ___, 1994, the Trustees and officers of the Fund as a group owned
less than 1% of the outstanding shares of the Fund.
Leon Levy, Chairman of the Board of Trustees
General Partner of Odyssey Partners, L.P. (investment partnership) and
Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee
386 Park Avenue South, New York, New York 10016
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of The Research Institute
of America.
Edmund T. Delaney, Trustee
5 Gorham Road, Chester, Connecticut 06412
Attorney-at-law; formerly a member of the Connecticut State Historical
Commission and Counsel to Copp, Berall & Hempstead (a law firm).
Robert G. Galli, Trustee
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Manager's parent holding company;
formerly he held the following positions: a director of the Manager
and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment advisory subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of the
Manager, an officer of other OppenheimerFunds and Executive Vice
President and General Counsel of the Manager and the Distributor.
Benjamin Lipstein, Trustee
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University.
Elizabeth B. Moynihan, Trustee
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the American Schools
of Oriental Research and of the Freer Gallery of Art, Smithsonian
Institution; a member of the Indo-U.S. Sub-Commission on Education and
Culture; a trustee of the Institute of Fine Arts, New York University;
and a trustee of the Preservation League of New York State.
Kenneth A. Randall, Trustee
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Northeast Bancorp, Inc. (bank holding company), Dominion
Resources, Inc. (electric utility holding company) and Kemper
Corporation (insurance and financial services company); formerly
Chairman of the Board of ICL, Inc. (information systems).
Edward V. Regan, Trustee
40 Park Avenue, New York, New York 10016
President of Jerome Levy Economics Institute; a member of the U.S.
Competitiveness Policy Council; a director or GranCare, Inc.
(healthcare provider); formerly New York State Comptroller and a
trustee, New York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Hospital and the Greenwich Historical Society.
Sidney M. Robbins, Trustee
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions, Graduate
School of Business, Columbia University; Visiting Professor of
Finance, University of Hawaii; a director of The Korea Fund, Inc. and
The Malaysia Fund, Inc. (closed-end investment companies); a member of
the Board of Advisors, Olympus Private Placement Fund, L.P.; Professor
Emeritus of Finance, Adelphi University.
Donald W. Spiro, President and Trustee
Chairman Emeritus and a director of the Manager; formerly Chairman of
the Manager and the Distributor.
Pauline Trigere, Trustee
550 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and sale
of women's fashions).
Clayton K. Yeutter, Trustee
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel to Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and agricultural products), FMC Corp.
(chemicals and machinery), Lindsay Manufacturing Co. and Texas
Instruments, Inc. (electronics); formerly (in descending chronological
order) Deputy Chairman, Bush/Quayle Presidential Campaign, Counsellor
to the President (Bush) for Domestic Policy, Chairman of the
Republican National Committee, Secretary of the U.S. Department of
Agriculture, and U.S. Trade Representative, Executive Office of the
President.
Andrew J. Donohue, Secretary
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-dealer)
and First Investors Management Company, Inc. (broker-dealer and
investment adviser), and a director and an officer of First Investors
Family of Funds and First Investors Life Insurance Company.
David Rosenberg, Vice President and Portfolio Manager
Vice President of the Manager; an officer of other OppenheimerFunds;
formerly, an officer and portfolio manager for Delaware Investment
Advisors and for one of its mutual funds.
George C. Bowen, Treasurer
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President and
Treasurer of the Distributor and HarbourView; Senior Vice President,
Treasurer, Assistant Secretary and a director of Centennial; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of
other OppenheimerFunds; formerly Senior Vice President/Comptroller and
Secretary of Oppenheimer Asset Management Corporation.
Robert G. Zack, Assistant Secretary
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
Robert Bishop, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Resolution Trust
Corporation and previously an Accountant and Commissions Supervisor
for Stuart James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman Co., a bank, and previously a
Senior Fund Accountant for State Street Bank & Trust Company, before
which he was a sales representative for Central Colorado Planning.
- Remuneration of Trustees. The officers of the Fund are affiliated
with the Manager; they and the Trustees of the Fund who are affiliated
with the Manager (Mr. Galli and Mr. Spiro, who is both an officer and
Trustee) receive no salary or fee from the Fund. During the Fund's fiscal
year ended June 30, 1994, the remuneration (including expense
reimbursements) paid to all Trustees of the Fund (excluding Mr. Galli and
Mr. Spiro) as a group for services as trustees and as members of one or
more committees of the Board, totalled $______. The Fund has adopted a
retirement plan that provides for payment to a retired Trustee of up to
80% of the average compensation paid during that Trustee's five years of
service in which the highest compensation was received. A Trustee must
serve in that capacity for any of the New York-based OppenheimerFunds for
at least 15 years to be eligible for the maximum payment. No Trustee has
retired since the adoption of the plan and no payments have been made by
the Fund under the plan. The accumulated liability for the Fund's
projected benefit obligations under the plan was $_____ as of June 30,
1994.
- Major Shareholders. As of October __, 1994, no person owned of
record or was known by the Fund to own beneficially 5% or more of the
Fund's outstanding shares.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Messrs. Galli and Spiro)
serve as Trustees of the Fund.
- The Investment Advisory Agreement. The investment advisory agreement
between the Manager and the Fund requires the Manager, at its expense, to
provide the Fund with adequate office space, facilities and equipment, and
to provide and supervise the activities of all administrative and clerical
personnel required to provide effective 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 independent Trustees, legal and audit
expenses, custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs and non-recurring expenses,
including litigation. For the Fund's fiscal years ended June 30, 1992,
1993 and 1994, the management fees paid by the Fund to the Manager were
$2,735,353, $2,911,199 and $_________, respectively.
The advisory agreement contains no provision limiting the Fund's
expenses. However, independently of the advisory agreement, the Manager
has undertaken that the total expenses of the Fund in any fiscal year
(including the management fee but excluding taxes, interest, brokerage
commissions, distribution assistance payments and extraordinary expenses
such as litigation costs) shall not exceed the most stringent expense
limitation imposed under state law applicable to the Fund. Pursuant to
the undertaking, the Manager's fee will be reduced at the end of a month
so that there will not be any accrued but unpaid liability under this
undertaking. Currently, the most stringent state expense limitation is
imposed by California, and limits the Fund's expenses (with specified
exclusions) to 2.5% of the first $30 million of average annual net assets,
2% of the next $70 million of average annual net assets, and 1.5% of
average annual net assets in excess of $100 million. The Manager reserves
the right to terminate or amend the undertaking at any time. Any
assumption of the Fund's expenses under this limitation would lower the
Fund's overall expense ratio and increase its total return during any
period in which expenses are limited.
The advisory agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard for its obligations and duties under the
advisory agreement, the Manager is not liable for any loss resulting from
a good faith error or omission on its part with respect to any of its
duties thereunder. The advisory agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with its other investment activities.
If the Manager shall no longer act as investment adviser to the Fund, the
right of the Fund to use the name "Oppenheimer" as part of its corporate
name may be withdrawn.
- The Distributor. Under its Distribution Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous
public offering of the Fund's Class A and Class C shares but is not
obligated to sell a specific number of shares. Expenses normally
attributable to sales, including advertising and the cost of printing and
mailing prospectuses, other than those furnished to existing shareholders,
are borne by the Distributor. During the Fund's fiscal years ended June
30, 1992, 1993 and 1994, the aggregate sales charges on sales of the
Fund's Class A shares were $______, $______, and $______, respectively,
of which the Distributor and an affiliated broker-dealer retained in the
aggregate $_____, $______ and $______ in those respective years. There
were no contingent deferred sales charges collected by the Distributor on
the redemption of Class C shares during the period from December 1, 1993
(the commencement of the offering of those shares) through June 30, 1994.
For additional information about distribution of the Fund's shares and the
expenses connected with such activities, please refer to "Distribution and
Service Plans," below.
- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions
paid to the extent consistent with the interest and policies of the Fund
as established by its Board of Trustees.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be higher
than another qualified broker would have charged if a good faith
determination is made by the Manager and the commission is fair and
reasonable in relation to the services provided. Subject to the foregoing
considerations, the Manager may also consider sales of shares of the Fund
and other investment companies managed by the Manager or its affiliates
as a factor in the selection of brokers for the Fund's portfolio
transactions.
Description of Brokerage Practices Followed by the Manager. Subject to
the provisions of the advisory agreement, the procedures and rules
described above, allocations of brokerage are made by portfolio managers
of the Manager under the supervision of the Manager's executive officers.
As most purchases made by the Fund are principal transactions at net
prices, the Fund incurs little or no brokerage costs. The Fund usually
deals directly with the selling or purchasing principal or market maker
without incurring charges for the services of a broker on its behalf
unless it is determined that better price or execution may be obtained by
utilizing the services of a broker. Purchases of portfolio securities
from underwriters include a commission or concession paid by the issuer
to the underwriter, and purchases from dealers include a spread between
the bid and asked price. The Fund seeks to obtain prompt execution of
orders at the most favorable net price.
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.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid in
commission dollars. The Board of Trustees has permitted the Manager to
use concessions on fixed price offerings to obtain research in the same
manner as is permitted for agency transactions.
The research services provided by brokers broadens the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and by enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolio or being considered for purchase. The Board of
Trustees, including the "independent" Trustees of the Fund (those Trustees
of the Fund who are not "interested persons" as defined in the Investment
Company Act, and who have no direct or indirect financial interest in the
operation of the advisory agreement or the Distribution Plans described
below) annually reviews information furnished by the Manager as to the
commissions paid to brokers furnishing such services so that the Board may
ascertain whether the amount of such commissions was reasonably related
to the value or benefit of such services.
Performance of the Fund
Yield and Total Return Information. As described in the Prospectus, from
time to time the "standardized yield," "dividend yield," "average annual
total return," "cumulative total return," "average annual total return at
net asset value" and "total return at net asset value" of an investment
in a class of shares of the Fund may be advertised. An explanation of how
these yields and total returns are calculated for each class and the
components of those calculations is set forth below.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include the
average annual total returns for each class of shares of the Fund for the
1, 5, and 10-year periods (or the life of the class, if less) ending as
of the most recently-ended calendar quarter prior to the publication of
the advertisement. This enables an investor to compare the Fund's
performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using such
information as a basis for comparison with other investments. An
investment in the Fund is not insured; its yields, total 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. Yields and total returns for any given past period are not
a prediction or representation by the Fund of future yields or rates of
return on its shares. The yields and total returns of Class A and Class
C 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.
- Standardized Yields. The Fund's "yield" (referred to as
"standardized yield") for a given 30-day period for a class of shares is
calculated using the following formula set forth in rules adopted by the
Securities and Exchange Commission that apply to all funds that quote
yields:
a-b 6
Standardized Yield = 2 ((------ + 1) - 1)
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense
reimbursements).
c = the average daily number of shares of that class outstanding
during the 30-day period that were entitled to receive
dividends.
d = the maximum offering price per share of the class on the last
day of the period, using the current maximum sales charge rate
adjusted for undistributed net investment income.
The standardized yield of a class of shares for a 30-day period may
differ from its yield for any other period. The SEC formula assumes that
the standardized yield for a 30-day period occurs at a constant rate for
a six-month period and is annualized at the end of the six-month period.
This standardized yield is not based on actual distributions paid by the
Fund to shareholders in the 30-day period, but is a hypothetical yield
based upon the net investment income from the Fund's portfolio investments
calculated for that period. The standardized yield may differ from the
"dividend yield" of that class, described below. Additionally, because
each class of shares is subject to different expenses, it is likely that
the standardized yields of the Fund's classes of shares will differ. For
the 30-day period ended June 30, 1994, the standardized yields for the
Fund's Class A and Class C shares were ____% and ____%, respectively.
- 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 Class A or Class C share dividends derived
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 current
maximum front-end sales charge. For Class C shares, the maximum offering
price is the net asset value per share, without considering the effect of
contingent deferred sales charges.
From time to time similar yield or distribution return calculations may
also be made using the Class A net asset value (instead of its respective
maximum offering price) at the end of the period. The dividend yields on
Class A shares for the 30-day period ended June 30, 1994, were _____% and
____% when calculated at maximum offering price and at net asset value,
respectively. The dividend yield on Class C shares for the 30-day period
ended June 30, 1994, was ____% when calculated at net asset value.
- Average Annual Total Returns. The "average annual total return" of
each class is an average annual compounded rate of return for each year
in a specified number of years. It is the rate of return based on the
change in value of a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over
an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return
on an annual basis. Cumulative total return is determined as follows:
ERV - P
- ------- = Total Return
P
In calculating total returns for Class A shares, the current maximum sales
charge of 4.75% (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 C shares, the 1.0% contingent
deferred sales charge is applied to the investment result for the one-year
period (or less). Total returns also assume that all dividends and capital
gains distributions during the period are reinvested to buy additional
shares at net asset value per share, and that the investment is redeemed
at the end of the period. The "average annual total returns" on an
investment in Class A shares of the Fund for the one and five year periods
ended June 30, 1994 and for the period from August 16, 1985 to June 30,
1994, were ___%, ___% and ___%, respectively. The cumulative "total
return" on Class A shares for the period from August 16, 1985 to June 30,
1994 was ___%. During a portion of the periods for which total returns
are shown for Class A shares, the Fund's maximum initial sales charge rate
was higher; as a result, performance returns on actual investments during
those periods may be lower than the results shown. The cumulative total
return on Class C shares for the period from December 1, 1993 (the
commencement of the offering of the shares) through June 30, 1994 was
___%.
- 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 or Class C shares. Each is
based on the difference in net asset value per share at the beginning and
the end of the period for a hypothetical investment in that class of
shares (without considering front-end or contingent deferred sales
charges) and takes into consideration the reinvestment of dividends and
capital gains distributions. The cumulative total return at net asset
value of the Fund's Class A shares for the period from August 16, 1985 to
June 30, 1994 was ___%. The average annual total returns at net asset
value for the one and five year periods ended June 30, 1994 and for the
period from August 16, 1985 to June 30, 1994, for Class A shares were
___%, ___% and ___%, respectively.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A or Class C shares by Lipper Analytical Services,
Inc. ("Lipper"), a widely-recognized independent service. Lipper monitors
the performance of regulated investment companies, including the Fund, and
ranks their performance for various periods based on categories relating
to investment objectives. The performance of the Fund is ranked against
(i) all other funds (excluding money market funds), (ii) all other U.S.
Government funds and (iii) all other U.S. Government funds in a specific
size category. The Lipper performance rankings are based on total returns
that include the reinvestment of capital gain distributions and income
dividends but do not take sales charges or taxes into consideration.
From time to time the Fund may publish the ranking of the performance
of its Class A or Class C shares by Morningstar, Inc., an independent
mutual fund monitoring service that ranks mutual funds, including the
Fund, monthly in broad investment categories (equity, taxable bond,
municipal bond and hybrid). The ranking calculations are based upon the
Fund's three, five and ten-year average annual total returns (when
available) in excess of 90-day Treasury bill returns with a risk
adjustment factor that reflects fund performance below three-month U.S.
Treasury bill monthly returns. Such returns are adjusted for fees and
sales loads. There are five ranking categories, with a corresponding
number of stars: highest (5), above average (4), neutral (3), below
average (2) and lowest (1). The top ten percent of the funds, series or
classes in an investment category receive five stars; 22.5% receive four
stars; 35% receive three stars; 22.5% receive two stars; and the bottom
10% receive one star. Morningstar ranks the Fund in relation to other U.S.
Government funds.
The total return on an investment made in Class A or Class C shares of
the Fund may be compared with the performance for the same period of the
Lehman Brothers U.S. Government Bond Index, an unmanaged index including
all U.S. Treasury issues, publicly- issued debt of U.S. Government
agencies and quasi-public corporations and U.S. Government-guaranteed
corporate debt, and is widely regarded as a measure of the performance of
the U.S. Government bond market. The foregoing bond index includes a
factor for the reinvestment of interest but does not reflect expenses or
taxes. Other indices may be used from time to time.
From time to time the Fund may also include in its advertisements and
sales literature performance information about the Fund or rankings of the
Fund's performance cited in newspapers or periodicals, such as The New
York Times. These articles may include quotations of performance from
other sources, such as Lipper or Morningstar.
When comparing yield, total return and investment risk of an investment
in Class A or Class C shares of the Fund with other investments, investors
should understand that certain other investments have different risk
characteristics than an investment in shares of the Fund. For example,
certificates of deposit may have fixed rates of return and may be insured
as to principal and interest by the FDIC, while the Fund's returns will
fluctuate and its share values and returns are not guaranteed. U.S.
Treasury securities are guaranteed as to principal and interest by the
full faith and credit of the U.S. government.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and a
Distribution and Service Plan for Class C shares under Rule 12b-1 of the
Investment Company Act pursuant to which the Fund will reimburse the
Distributor quarterly for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of that
class, as described in the Prospectus. Each Plan has been approved by a
vote of (i) the Board of Trustees of the Fund, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose
of voting on that Plan, and (ii) the holders of a "majority" (as defined
in the Investment Company Act) of the shares of each class. For the
Distribution and Service Plan for Class C shares, that vote was cast by
the Manager as the 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. The
Distributor and the Manager may, in their sole discretion, increase or
decrease the amount of payments they make from their own resources to
Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as its continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. Either Plan may be terminated at
any time by the vote of a majority of the Independent Trustees or by the
vote of the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding shares of that class. Neither Plan may be amended
to increase materially the amount of payments to be made unless such
amendment is approved by shareholders of the class affected by the
amendment. All material amendments must be approved by the Independent
Trustees.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Trustees at least
quarterly on the amount of all payments made pursuant to each Plan, the
purpose for which each payment was made and the identity of each Recipient
that received any payment. The report for the Class C Plan shall also
include the distribution costs for that quarter, and such costs for
previous fiscal periods that have been carried forward, as explained in
the Prospectus and below. Those reports, including the allocations on
which they are based, will be subject to the review and approval of the
Independent Trustees in the exercise of their fiduciary duty. Each Plan
further provides that while it is in effect, the selection and nomination
of those Trustees of the Fund who are not "interested persons" of the Fund
is committed to the discretion of the Independent Trustees. This does not
prevent the involvement of others in such selection and nomination if the
final decision on selection or nomination is approved by a majority of the
Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers, did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the
fee at the maximum rate and set no minimum amount. For the fiscal year
ended June 30, 1994, payments under the Class A Plan totalled $_____, all
of which was paid by the Distributor to Recipients, including $_____ paid
to MML Investor Services, Inc., an affiliate of the Distributor. Payments
made under the Class C Plan during that fiscal period totalled $__.
Any unreimbursed expenses incurred by the Distributor with respect to
Class A shares for any fiscal year may not be recovered in subsequent
years. Payments received by the Distributor under the Plan for Class A
shares will not be used to pay any interest expense, carrying charge, or
other financial costs, or allocation of overhead by the Distributor.
The Class C Plan allows the service fee payment to be paid by the
Distributor to Recipients in advance for the first year Class C shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net asset value of the
Class C shares sold. An exchange of shares does not entitle the Recipient
to an advance service fee payment. In the event Class C shares are
redeemed during the first year that the shares are outstanding, the
Recipient will be obligated to repay a pro rata portion of the advance
payment for those shares to the Distributor.
Although the Class C Plan permits the Distributor to retain both the
asset-based sales charges and the service fee on Class C shares, or to pay
Recipients the service fee on a quarterly basis, without payment in
advance, the Distributor intends to pay the service fee to Recipients in
the manner described above. A minimum holding period may be established
from time to time under the Class C Plan by the Board. Initially, the
Board has set no minimum holding period. All payments under the Class C
Plan are subject to the limitations imposed by the Rules of Fair Practice
of the National Association of Securities Dealers, Inc. on payments of
asset-based sales charges and service fees.
The Class C Plan allows for the carry-forward of distribution expenses,
to be recovered from asset-based sales charges in subsequent fiscal
periods, as described in the Prospectus. The asset-based sales charge
paid to the Distributor by the Fund under the Class C Plan is intended to
allow the Distributor to recoup the cost of sales commissions paid to
authorized brokers and dealers at the time of sale, plus financing costs,
as described in the Prospectus. Such payments may also be used to pay for
the following expenses in connection with the distribution of Class C
shares: (i) financing the advance of the service fee payment to Recipients
under the Class C Plan, (ii) compensation and expenses of personnel
employed by the Distributor to support distribution of Class C shares, and
(iii) costs of sales literature, advertising and prospectuses (other than
those furnished to current shareholders) and state "blue sky" registration
fees.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A and Class C Shares. The
availability of two classes of shares permits an investor to choose the
method of purchasing shares that is more beneficial to the investor
depending on the amount of the purchase, the length of time the investor
expects to hold shares and other relevant circumstances. Investors should
understand that the purpose and function of the deferred sales charge and
asset-based sales charge with respect to Class C shares are the same as
those of the initial sales charge with respect to Class A shares. Any
salesperson or other person entitled to receive compensation for selling
Fund shares may receive different compensation with respect to one class
of shares than the other. The Distributor will not accept any order for
$1 million or more of Class C shares on behalf of a single investor (not
including dealer "street name" or omnibus accounts) because generally it
will be more advantageous for that investor to purchase Class A shares of
the Fund instead.
The two 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
C shares and the dividends payable on Class C shares will be reduced by
incremental expenses borne solely by that class, including the asset-based
sales charge to which Class C shares are subject.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A and Class C shares recognizes two
types of expenses. General expenses that do not pertain specifically to
either class are allocated pro rata to the shares of each class, based on
the percentage of the net assets of such class to the Fund's total assets,
and then equally to each outstanding share within a given class. Such
general expenses include (i) management fees, (ii) legal, bookkeeping and
audit fees, (iii) printing and mailing costs of shareholder reports,
Prospectuses, Statements of Additional Information and other materials for
current shareholders, (iv) fees to Independent Trustees, (v) custodian
expenses, (vi) share issuance costs, (vii) organization and start-up
costs, (viii) interest, taxes and brokerage commissions, and (ix) non-
recurring expenses, such as litigation costs. Other expenses that are
directly attributable to a class are allocated equally to each outstanding
share within that class. Such expenses include (i) Distribution 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 and Class C shares of the Fund are determined each day the New
York Stock Exchange (the "NYSE") is open, as of 4:00 P.M., New York time,
that day, by dividing the value of the Fund's net assets attributable to
that class by the number of Fund shares of that class outstanding. The
NYSE'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. Dealers may conduct trading at
times when the NYSE is closed (including weekends and holidays) so that
debt securities of the same type held by the Fund may be traded. Because
the net asset values of the Fund will not be calculated at such times, if
debt securities held in the Fund's portfolio are traded at such times, the
net asset values per share of Class A and Class C shares of the Fund may
be significantly affected at times when shareholders do not have the
ability to purchase or redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally, as follows: (i) equity
securities traded on a securities exchange or on NASDAQ are valued at the
last sales prices 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 and asked prices); (ii) NASDAQ and
other unlisted equity securities for which last sale prices are not
regularly reported but for which over-the-counter market quotations are
readily available are valued at the highest closing bid price as of the
time of valuation, or, if no closing bid price is reported, on the basis
of a closing bid price obtained from a dealer who maintains an active
market in that security; (iii) securities (including restricted
securities) not having readily-available market quotations are valued at
fair value under the Board's procedures; (iv) long-term debt securities,
and short-term debt securities having a remaining maturity in excess of
60 days, are valued at the mean between the asked and bid prices
determined by a portfolio pricing service appointed by the Fund's Board
of Trustees or obtained from active market makers in the security; and (v)
short-term debt securities having a remaining maturity of 60 days or less
are valued at cost, adjusted for amortization of premiums and accretion
of discounts. In the case of U.S. Government Securities and all mortgage-
backed securities, where 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 Trustees will monitor the accuracy of
pricing services by comparing prices used for portfolio evaluation to
actual sales prices of selected securities.
Puts, calls and Futures are valued at the last sales prices on the
principal exchanges on which they are traded or on NASDAQ, as applicable,
or, if there are no sales that day, in accordance with (i) above. When
the Fund writes an option, an amount equal to the premium received by the
Fund is included in its Statement of Assets and Liabilities as an asset
and an equivalent deferred credit is included in the liability section.
The deferred credit is adjusted ("marked-to-market") to reflect the
current market value of the option.
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
transfer to buy the shares. Dividends will begin to accrue on such shares
on the day the Fund receives Federal Funds for such purchase through the
ACH system before 4:00 P.M., which is normally 3 days after the ACH
transfer is initiated. The Distributor and the Fund are not responsible
for any delays. If the Federal Funds are received after 4:00 P.M.,
dividends will begin to accrue on the next regular business day after such
Federal Funds are received.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Rights 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, parents, grandparents, parents-
in-law, brothers and sisters, sons- and daughters-in-law, siblings, and
a sibling's spouse and a spouse's siblings.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt
Fund
Oppenheimer California Tax-
Exempt Fund
Oppenheimer Intermediate Tax-
Exempt Bond Fund
Oppenheimer Insured Tax-Exempt
Bond Fund
Oppenheimer Main Street
California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt
Fund
Oppenheimer Pennsylvania Tax-
Exempt Fund
Oppenheimer New Jersey Tax-
Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Time Fund
Oppenheimer Target Fund
Oppenheimer Special Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation
Fund
Oppenheimer Total Return Fund,
Inc.
Oppenheimer Main Street Income
& Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion High Yield
Fund
Oppenheimer Investment Grade
Bond Fund
Oppenheimer U.S. Government
Trust
Oppenheimer Limited-Term
Government Fund
Oppenheimer Mortgage Income
Fund
Oppenheimer Global Fund
Oppenheimer Global Bio-Tech
Fund
Oppenheimer Global Environment
Fund
Oppenheimer Global Growth &
Income Fund
Oppenheimer Gold & Special
Minerals Fund
Oppenheimer Strategic Income
Fund
Oppenheimer Strategic
Investment Grade Bond Fund
Oppenheimer Strategic Short-
Term Income Fund
Oppenheimer Strategic Income &
Growth Fund
Oppenheimer Strategic
Diversified Income Fund
<PAGE>
and the following "Money Market
Funds":
<PAGE>
Oppenheimer Money Market Fund,
Inc.
Oppenheimer Cash Reserves
Oppenheimer Tax-Exempt Cash
Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt
Trust
Centennial California Tax
Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund,
Inc.
<PAGE>
There is an initial sales charge on the purchase of Class A shares of
each of the OppenheimerFunds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent ("Letter") is the investor's
statement of intention to purchase Class A shares of the Fund (and other
eligible OppenheimerFunds) sold with a front-end sales charge during the
13-month period from the investor's first purchase pursuant to the Letter
(the "Letter of Intent period"), which may, at the investor's request,
include purchases made up to 90 days prior to the date of the Letter. The
Letter states the investor's intention to make the aggregate amount of
purchases (excluding any purchases made by reinvestments of dividends or
distributions or purchases made at net asset value without sales charge),
which together with the investor's holdings of such funds (calculated at
their respective public offering prices calculated on the date of the
Letter) will equal or exceed the amount specified in the Letter. This
enables the investor to obtain the reduced sales charge rate (as set forth
in the Prospectus) applicable to purchases of shares in that amount (the
"intended purchase amount"). Each purchase under the Letter will be made
at the public offering price applicable to a single lump-sum purchase of
shares in the intended purchase amount, as described in the Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent period
do not equal or exceed the intended purchase amount, the commissions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual purchases. If total eligible purchases during the
Letter of Intent period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set
forth in the applicable prospectus, the sales charges paid will be
adjusted to the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid to the
dealer over the amount of commissions that apply to the actual amount of
purchases. The excess commissions returned to the Distributor will be
used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly
after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in value
to 5% of the intended purchase amount specified in the Letter shall be
held in escrow by the Transfer Agent. For example, if the intended
purchase amount is $50,000, the escrow shall be shares valued in the
amount of $2,500 (computed at the public offering price adjusted for a
$50,000 purchase). Any dividends and capital gains distributions on the
escrowed shares will be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the
holding of which may be counted toward completion of the Letter) do not
include any shares sold without a front-end sales charge or without being
subject to a Class A contingent deferred sales charge unless (for the
purpose of determining completion of the obligation to purchase shares
under the Letter) the shares were acquired in exchange for shares of one
of the OppenheimerFunds whose shares were acquired by payment of a sales
charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as described
in the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Tax-Exempt Cash Reserves or
Oppenheimer Cash Reserves to use those accounts for monthly automatic
purchases of shares of up to four other OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
Check Writing. When a check is presented to the Bank for clearance, the
Bank will ask the Fund to redeem a sufficient number of full and
fractional shares in the shareholder's account to cover the amount of the
check. This enables the shareholder to continue receiving dividends on
those shares until the check is presented to the Fund. Checks may not be
presented for payment at the offices of the Bank or the Fund's Custodian.
This limitation does not affect the use of checks for the payment of bills
or to obtain cash at other banks. The Fund reserves the right to amend,
suspend or discontinue offering checkwriting privileges at any time
without prior notice.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
- Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board of
Trustees of the Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make payment
of a redemption order wholly or partly in cash. In that case the Fund may
pay the redemption proceeds in whole or in part by a distribution "in
kind" of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets
of the Fund during any 90-day period for any one shareholder. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage or
other costs in selling the securities for cash. The method of valuing
securities used to make redemptions in kind will be the same as the method
the Fund uses to value it portfolio securities described above under
"Determination of Net Asset Values Per Share" and that valuation will be
made as of the time the redemption price is determined.
Reinvestment Privilege. Within six months of a redemption, a shareholder
may reinvest all or part of the redemption proceeds of (i) Class A shares,
or (ii) Class C shares that were subject to the Class C contingent
deferred sales charge when redeemed. The reinvestment may be made without
sales charge only in Class A shares of the Fund or any of the other
OppenheimerFunds into which shares of the Fund are exchangeable as
described 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 OppenheimerFunds within 90 days of payment
of the sales charge, the shareholder's basis in the shares of the Fund
that were redeemed may not include the amount of the sales charge paid.
That would reduce the loss or increase the gain recognized from the
redemption. However, in that case the sales charge would be added to the
basis of the shares acquired by the reinvestment of the redemption
proceeds. The Fund may amend, suspend or cease offering this reinvestment
privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of either class at the time of transfer
to the name of another person or entity (whether the transfer occurs by
absolute assignment, gift or bequest, not involving, directly or
indirectly, a public sale). The transferred shares will remain subject
to the contingent deferred sales charge, calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at
the same time as the transferring shareholder. If less than all shares
held in an account are transferred, and some but not all shares in the
account would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, the priorities described in the Prospectus under
"How to Buy Shares" for the imposition of the Class C contingent deferred
sales charge will be followed in determining the order in which shares are
transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, or pension or
profit-sharing plans should be addressed to "Trustee, OppenheimerFunds
Retirement Plans," c/o the Transfer Agent at its address listed in "How
To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the
plan and the Fund's other redemption requirements. Participants (other
than self-employed persons) in OppenheimerFunds-sponsored pension or
profit-sharing plans may not directly request redemption of their
accounts. The employer or plan administrator must sign the request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents
(available from the Transfer Agent) must be completed before the
distribution may be made. Distributions from retirement plans are subject
to withholding requirements under the Internal Revenue Code, and IRS Form
W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed.
Unless the shareholder has provided the Transfer Agent with a certified
tax identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have
tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not
be responsible for any tax penalties assessed in connection with a
distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. The repurchase price will be the net asset
value next computed after the receipt of an order placed by such dealer
or broker, except that orders received from dealers or brokers after 4:00
P.M. on a regular business day will be processed at that day's net asset
value if such orders were received by the dealer or broker from its
customers prior to 4:00 P.M., and were transmitted to and received by the
Distributor prior to its close of business that day (normally 5:00 P.M.).
Payment ordinarily will be made within seven days after the Distributor's
receipt of the required redemption documents, with signature(s) guaranteed
as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the
Fund valued at $5,000 or more can authorize the Transfer Agent to redeem
shares (minimum $50) automatically on a monthly, quarterly, semi-annual
or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges
(see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an Automatic
Withdrawal Plan. Class C shareholders should not establish withdrawal
plans that would require the redemption of shares held less than 12
months, because of the imposition of the Class C contingent deferred sales
charge on such withdrawals (except where the Class C contingent deferred
sales charge is waived as described in the Prospectus under "Class C
Contingent Deferred Sales Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated
below and in the provisions of the OppenheimerFunds Application relating
to such Plans, as well as the Prospectus. These provisions may be amended
from time to time by the Fund and/or the Distributor. When adopted, such
amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other OppenheimerFunds automatically on
a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional
Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who
executed the Plan authorization and application submitted to the Transfer
Agent. The Transfer Agent shall incur no liability to the Planholder for
any action taken or omitted by the Transfer Agent in good faith to
administer the Plan. Certificates will not be issued for shares of the
Fund purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the records of
the Fund. Any share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the
shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to
the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent
to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. All of the
OppenheimerFunds offer Class A shares (except for Oppenheimer Strategic
Diversified Income Fund), but only the following other OppenheimerFunds
(referred to as "Advisors Portfolio" funds) offer Class C shares:
Oppenheimer Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Champion High Yield Fund
Oppenheimer Target Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Cash Reserves (Class C and B shares are available only
by exchange)
Oppenheimer Strategic Diversified Income Fund
Class A shares of OppenheimerFunds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund
purchased without a sales charge may be exchanged for shares of
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge). Shares
of this Fund acquired by reinvestment of dividends or distributions from
any other of the OppenheimerFunds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may
be exchanged at net asset value for shares of any of the OppenheimerFunds.
No contingent deferred sales charge is imposed on exchanges of shares of
either class purchased subject to a contingent deferred sales charge.
However, when Class A shares acquired by exchange of Class A shares of
other OppenheimerFunds purchased subject to a Class A contingent deferred
sales charge are redeemed within 18 months of the end of the calendar
month of the initial purchase of the exchanged Class A shares, the Class
A contingent deferred sales charge is imposed on the redeemed shares (see
"Class A Contingent Deferred Sales Charge" in the Prospectus). 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 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 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 both classes must specify whether they intend to exchange Class A or
Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of,
the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Dividends and Distributions. Dividends will be payable on shares held of
record at the time of the previous determination of net asset value, or
as otherwise described in "How to Buy Shares." Daily dividends on newly
purchased shares will not be declared or paid until such time as Federal
Funds (funds credited to a member bank's account at the Federal Reserve
Bank) are available from the purchase payment for such shares. Normally,
purchase checks received from investors are converted to Federal Funds on
the next business day. Dividends will be declared on shares repurchased
by a dealer or broker for four business days following the trade date
(i.e., to and including the day prior to settlement of the repurchase).
If all shares in an account are redeemed, all dividends accrued on shares
of the same class in the account will be paid together with the redemption
proceeds.
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, to enable the investor to earn a return on
otherwise idle funds.
The amount of a class's distributions may vary from time to time
depending on market conditions, the composition of the Fund's portfolio,
and expenses borne by the Fund or borne separately by a class, as
described in "Alternative Sales Arrangements -- Class A and Class C,"
above. Dividends are calculated in the same manner, at the same time and
on the same day for shares of each class. However, dividends on Class C
shares are expected to be lower as a result of the asset-based sales
charge on Class C shares, and Class C dividends will also differ in amount
as a consequence of any difference in net asset value between Class A and
Class C shares.
Distributions may be made annually in December out of any net short-
term or long-term capital gains realized from the sale of securities,
premiums from expired calls written by the Fund and net profits from
Hedging Instruments and closing purchase transactions realized in the
twelve months ending on October 31 of the current year. Any difference
between the net asset value of Class A and Class C shares will be
reflected in such distributions. Distributions from net short-term
capital gains are taxable to shareholders as ordinary income and when paid
by the Fund are considered "dividends." The Fund may make a supplemental
distribution of capital gains and ordinary income following the end of its
fiscal year. Any long-term capital gains distributions will be identified
separately when paid and when tax information is distributed by the Fund.
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.
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 to determine
whether the Fund will qualify, and the Fund might not meet those tests in
a 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 (see "Tax Aspects of Covered Calls and Hedging
Instruments," above). If it does not qualify, the Fund will be treated for
tax purposes as an ordinary corporation and will receive no tax deduction
for payments of dividends and distributions made to shareholders.
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 and the Manager might determine in
a particular year that it would be in the best interest of shareholders
for the Fund not to make such distributions at the required levels and to
pay the excise tax on the undistributed amounts. That would reduce the
amount of income or capital gains available for distribution to
shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect
to reinvest all dividends and/or capital gains distributions in shares of
the same class of any of the other funds listed in the Prospectus as
"Eligible Funds," at net asset value without sales charge. Class C
shareholders should be aware that as of the date of this Additional
Statement, not all Eligible Funds offer Class C shares. The names of
these Funds can be obtained by calling the Distributor at 1-800-525-7048.
To elect this option, the shareholder must notify the Distributor in
writing, and either must have an existing account in the fund selected for
dividend reinvestment or must obtain a prospectus for that fund and
application from the Transfer Agent to establish an account. The
investment will be made at net asset value per share in effect at the
close of business on the payable date of the dividend or distribution.
Dividends and distributions from other Eligible Funds may be invested in
shares of the Fund on the same basis.
Additional Information About the Fund
The Custodian. Citibank, N.A. is the Custodian of the Fund's assets. The
Custodian's responsibilities include safeguarding and controlling the
Fund's portfolio securities, collecting income on the portfolio securities
and handling the delivery of such securities to and from the Fund. The
Manager has represented to the Fund that the banking relationships between
the Manager and the Custodian have been and will continue to be unrelated
to and unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG Peat Marwick
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER U.S. GOVERNMENT TRUST
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Condensed Financial Information (see Part A,
Prospectus) - To be filed by amendment.
(2) Report of Independent Auditors (see Part B,
Statement of Additional Information) - To be
filed by amendment.
(3) Statement of Investments (see Part B, Statement
of Additional Information) - To be filed by
amendment.
(4) Statement of Assets and Liabilities (see Part
B, Statement of Additional Information) - To be
filed by amendment.
(5) Statement of Operations (see Part B, Statement
of Additional Information) - To be filed by
amendment.
(6) Statements of Changes in Net Assets (see Part
B, Statement of Additional Information) - To be
filed by amendment.
(7) Notes to Financial Statements (see Part B,
Statement of Additional Information) - To be
filed by amendment.
(8) Independent Auditor's Consent - To be filed by
amendment.
(b) Exhibits
(1) Amended and Restated Declaration of
Trust of Registrant dated June 1, 1992:
Filed with Registrant's Post-Effective
Amendment No. 20, 10/16/92, refiled
herewith pursuant to Item 102 of
Regulation S-T, and incorporated herein
by reference.
(2) By-Laws as amended through 8/6/87: Filed
with Registrant's Form SE to its Form N-
SAR for the fiscal year ended 6/30/88,
refiled herewith pursuant to Item 102 of
Regulation S-T, and incorporated herein
by reference.
(3) Not applicable.
(4) (i) Specimen Class A Share Certificate:
Filed herewith.
(ii) Specimen Class C Share Certificate;
Filed herewith.
(5) Investment Advisory Agreement dated
10/22/90: Filed with Registrant's Post-
Effective Amendment No. 18, 11/1/90,
refiled herewith pursuant to Item 102 of
Regulation S-T, and incorporated herein
by reference.
(6) (i) General Distributor's Agreement dated
12/10/92: Filed with Post-Effective
Amendment No. 21 of the Registrant's
Registration Statement, 8/20/93, and
incorporated herein by reference.
(ii) Form of Dealer Agreement of Oppenheimer
Fund Management, Inc. - Filed with Post-
Effective Amendment No. 12 of
Oppenheimer Government Securities Fund,
12/2/92, and incorporated herein by
reference.
(iii) Form of Oppenheimer Fund Management,
Inc. Broker Agreement - Filed with
Post-Effective Amendment No. 12 of
Oppenheimer Government Securities Fund,
12/2/92, and incorporated herein by
reference.
(iv) Form of Oppenheimer Fund Management,
Inc. Agency Agreement - Filed with Post-
Effective Amendment No. 12 of
Oppenheimer Government Securities Fund,
12/2/92, and incorporated herein by
reference.
(v) Broker Agreement between Oppenheimer
Fund Management, Inc. and Newbridge
Securities, Inc. dated 10/1/86: Filed
with Post-Effective Amendment No. 25 of
Oppenheimer Special Fund (Reg. No. 2-
45272), 11/1/86, and incorporated herein
by reference.
(7) Retirement Plan for Non-Interested Trustees or
Directors (adopted by Registrant 6/7/90): Filed
with Post-Effective Amendment No. 97, 8/30/90,
of Oppenheimer Fund (Reg. No. 2-14586) and
incorporated herein by reference.
(8) (i) Custody Agreement dated 11/12/92: Filed
with Post-Effective Amendment No. 21 of
the Registrant's Registration Statement,
8/20/93, and incorporated herein by
reference.
(9) (i) Agreement and Plan of Reorganization
dated as of 2/28/91 between Registrant
and MassMutual Integrity Funds on behalf
of its series MassMutual U.S. Government
Securities Fund: Filed with Registrant's
Post-Effective Amendment No. 19,
10/25/91, refiled herewith pursuant to
Item 102 of Regulation S-T, and
incorporated herein by reference.
(ii) Agreement and Plan of Reorganization
dated 8/5/91 between Registrant and
Advance America Funds, Inc.: Previously
filed with Post-Effective Amendment No.
19 to Registrant's Registration
Statement, 10/25/91, refiled herewith
pursuant to Item 102 of Regulation S-T,
and incorporated herein by reference.
(10) Opinion and Consent of Counsel dated 6/24/82:
Filed with Registrant's Post-Effective
Amendment No. 5 (8/31/84), refiled herewith
pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (i) Form of Individual Retirement Account
Trust Agreement: Filed with Post-
Effective Amendment No. 21 of the
Registrant's Registration Statement,
8/20/93, and incorporated herein by
reference.
(ii) Form of prototype Standardized and Non-
Standardized Profit Sharing Plans and
Money Purchase Plans for self-employed
persons and corporations: Filed with
Post-Effective Amendment No. 3 to the
Registration Statement of Oppenheimer
Global Growth & Income Fund (Reg. No.
33-23799), 1/31/92, and incorporated
herein by reference.
(iii) Form of Tax-Sheltered Retirement Plan
and Custody Agreement for employees of
public schools and tax-exempt
organizations: Filed with Post-
Effective Amendment No. 22 of
Oppenheimer Directors Fund (File No. 2-
62240), 2/1/90, and incorporated herein
by reference.
(iv) Form of Simplified Employee Pension IRA:
Filed with Post-Effective Amendment No.
36 of Oppenheimer Equity Income Fund
(Reg. No. 2-33043), 10/23/91, and
incorporated herein by reference.
(v) Form of SAR-SEP Simplified Employee
Pension IRA: Filed with Post-Effective
Amendment No. 19 to the Registration
Statment for Oppenheimer Integrity Funds
(File No. 2-76547), 3/1/94, and
incorporated herein by reference.
(15) (a) Service Plan and Agreement for Class A
shares under Rule 12b-1 of the
Investment Company Act of 1940 dated as
of 6/10/93: Filed herewith.
(b) Distribution and Service Plan and
Agreement for Class C shares under Rule
12b-1 of the Investment Company Act
dated December 1, 1993: Filed herewith.
(16) Performance computation schedule: To be filed
by amendment.
(17) Powers of Attorney: Filed with Post-Effective
Amendment No. 21 of the Registrant's
Registration Statement, 8/20/93, 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
Title of Class as of October __, 1994
Shares of Beneficial Interest,
Class A shares
Shares of Beneficial Interest,
Class C shares
ITEM 27. Indemnification
Reference is made to Subdivision (c) of Section 12 of Article
SEVENTH of Registrant's Declaration of Trust filed as Exhibit
(b)(1) to Registrant's Registration Statement and incorporated
herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
ITEM 28. Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser
of the Registrant; it and its affiliates act in the same
capacity for other registered investment companies as
described in Parts A and B.
(b) For information as to the business, profession, vocation or
employment of a substantial nature of each of the directors
and officers of Oppenheimer Management Corporation,
reference is made to Part B of this Registration Statement
and to the registration on Form ADV by Oppenheimer
Management Corporation under the Investment Advisers Act of
1940, which is incorporated herein by reference.
ITEM 29. Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the General
Distributor of the Registrant's shares. It is also the
distributor of the shares of other open-end registered
investment companies of which Oppenheimer Management
Corporation is the investment adviser.
(b) The information contained in the registration on Form BD of
Oppenheimer Funds Distributor, Inc., filed under the
Securities Exchange Act of 1934, is incorporated herein by
reference.
(c) Inapplicable.
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 and rules promulgated thereunder are in the possession of
Oppenheimer Management Corporation, at its offices at 3410 South
Galena Street, Denver, Colorado 80231.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 19th day of August, 1994.
OPPENHEIMER U.S. GOVERNMENT TRUST
By: /s/ Donald W. Spiro*
--------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees August 19, 1994
Leon Levy
/s/ Donald W. Spiro* President, Principal
- -------------------- Executive Officer
Donald W. Spiro and Trustee August 19, 1994
/s/ George Bowen* Treasurer and
- ----------------- Principal Financial
George Bowen and Accounting
Officer August 19, 1994
/s/ Leo Cherne* Trustee August 19, 1994
- ---------------
Leo Cherne
/s/ Edmund T. Delaney* Trustee August 19, 1994
- ----------------------
Edmund T. Delaney
/s/ Robert G. Galli* Trustee August 19, 1994
- ----------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee August 19, 1994
- ----------------------
Benjamin Lipstein
/s/ Kenneth A. Randall* Trustee August 19, 1994
- -----------------------
Kenneth A. Randall
/s/ Sidney M. Robbins* Trustee August 19, 1994
- ----------------------
Sidney M. Robbins
/s/ Russell S. Reynolds, Jr.* Trustee August 19, 1994
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Pauline Trigere* Trustee August 19, 1994
- --------------------
Pauline Trigere
/s/ Elizabeth B. Moynihan* Trustee August 19, 1994
- --------------------------
Elizabeth B. Moynihan
/s/ Clayton K. Yeutter* Trustee August 19, 1994
- -----------------------
Clayton K. Yeutter
/s/ Edward V. Regan* Trustee August 19, 1994
- --------------------
Edward V. Regan
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
powers/220.sig
<PAGE>
OPPENHEIMER U.S. GOVERNMENT TRUST
Registration No. 2-76645
Post-Effective Amendment No. 24
Index to Exhibits
Exhibit No. Description
24(b)(1) Amended and Restated Declaration of Trust of Registrant
dated June 1, 1992
24(b)(2) By-Laws as amended through 8/6/87
24(b)(4)(i) Specimen Class A Share Certificate
24(b)(4)(ii) Specimen Class C Share Certificate
24(b)(5) Investment Advisory Agreement dated 10/22/90
24(b)(9)(i) Agreement and Plan of Reorganization dated as of 2/28/91
between Registrant and MassMutual Integrity Funds on
behalf of its series MassMutual U.S. Government
Securities Fund
24(b)(9)(ii) Agreement and Plan of Reorganization dated 8/5/91 between
Registrant and Advance America Funds, Inc.
24(b)(10) Opinion and Consent of Counsel dated 6/24/82
24(b)(15)(a) Service Plan and Agreement for Class A shares under Rule
12b-1 of the Investment Company Act of 1940 dated as of
6/10/93
24(b)(15)(b) Distribution and Service Plan and Agreement for Class C
shares under Rule 12b-1 of the Investment Company Act
dated December 1, 1993
AMENDED AND RESTATED DECLARATION OF TRUST
OF
OPPENHEIMER U.S. GOVERNMENT TRUST
AMENDED AND RESTATED DECLARATION OF TRUST, made June 1, 1992 as of
October 19, 1987, by and among the individuals executing this Amended and
Restated Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer U.S. Government Trust,
a trust fund under the laws of the Commonwealth of Massachusetts, for the
investment and reinvestment of funds contributed thereto, under a
Declaration of Trust dated March 18, 1982, as amended by a Restated
Declaration of Trust dated May 3, 1982 and a Second Restated Declaration
of Trust dated May 28, 1987;
WHEREAS, the Trustees desire to amend said Second Restated Declaration
of Trust without shareholder approval, as permitted under ARTICLE FOURTH,
to abolish, effective May 28, 1987, the two additional series and their
designation established by the Second Restated Declaration of Trust dated
May 28, 1987, namely "Oppenheimer Government Money Market Fund" and
"Oppenheimer Intermediate Government Fund," neither of which has any
shares outstanding, and to designate Oppenheimer U.S. Government Trust as
the Trust's one Series;
WHEREAS, the Trustees desire to make permitted changes to said Second
Restated Declaration of Trust;
WHEREAS, such changes have been approved by the Fund's shareholders at
a meeting held May 15, 1992;
WHEREAS, the principal office of the Trust is Two World Trade Center,
New York, New York 10048-0203, and the Trust's resident agent in the
Commonwealth of Massachusetts is Massachusetts Mutual Life Insurance
Company, located at 1295 State Street, Springfield, Massachusetts 01111.
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under
this Amended and Restated Declaration of Trust IN TRUST as herein set
forth below.
FIRST: This Trust shall be known as OPPENHEIMER U.S. GOVERNMENT
TRUST.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust which are defined in
the 1940 Act shall have the meanings given to them in the 1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the Board
of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from time
to time.
4. "Class" means a class of a series of shares established and
designated under or in accordance with the provisions of Article FOURTH.
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" shall mean this Amended and Restated
Declaration of Trust as it may be amended or restated from time to time.
7. The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations of the Commission thereunder, all as amended
from time to time.
8. "Series" refers to series of shares established and designated
under or in accordance with the provisions of Article FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust or any Series or Class of the
Trust (as the context may require) shall be divided from time to time and
includes fractions of Shares as well as whole Shares.
11. The "Trust" refers to the Massachusetts business trust created
by this Declaration of Trust, as amended or restated from time to time.
12. "Trustees" refers to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors for
the time being in office as such trustees.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
financial futures contracts, indexes, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein,
or in any property or assets) created or issued by any issuer (which term
"issuer" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof be deemed to include any persons,
firms, associations, corporations, syndicates, business trusts, investment
companies, combinations, organizations, governments, or subdivisions
thereof) and in financial instruments (whether they are considered as
securities or commodities); and to exercise, as owner or holder of any
securities or financial instruments, all rights, powers and privileges in
respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value of any or
all such securities or financial instruments.
2. To borrow money and pledge assets in connection with any of
the objects or purposes of the Trust, and to issue notes or other
obligations evidencing such borrowings, to the extent permitted by the
1940 Act and by the Trust's fundamental investment policies under the 1940
Act.
3. To issue and sell its Shares in such Series and Classes and
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including without limitation thereto,
securities) now or hereafter permitted by the laws of the Commonwealth of
Massachusetts and by this Declaration of Trust, as the Trustees may
determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any
Series or Class into one or more Series or Classes that may have been
established and designated from time to time, all without the vote or
consent of the Shareholders of the Trust, in any manner and to the extent
now or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in New York, Colorado and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes
as principal or agent, and alone or with associates or to the extent now
or hereafter permitted by the laws of Massachusetts, as a member of, or
as the owner or holder of any stock of, or share of interest in, any
issuer, and in connection therewith to make or enter into such deeds or
contracts with any issuers and to do such acts and things and to exercise
such powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of like nature, not expressed;
provided, however, that the Trust shall not carry on any business, or
exercise any powers, in any state, territory, district or country except
to the extent that the same may lawfully be carried on or exercised under
the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into
Shares, all without par value, but the Trustees shall have the authority
from time to time to create one or more Series of Shares in addition to
the Series specifically established and designated in part 3 of this
Article FOURTH, and to divide the shares of any Series into two or more
Classes pursuant to Part 2 of this Article FOURTH, all as they deem
necessary or desirable, to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as
between the different Series of Shares or Classes as to right of
redemption and the price, terms and manner of redemption, liabilities and
expenses to be borne by any Series or Class, special and relative rights
as to dividends and other distributions and on liquidation, sinking or
purchase fund provisions, conversion on liquidation, conversion rights,
and conditions under which the several Series or Classes shall have
individual voting rights or no voting rights. Except as aforesaid, all
Shares of the different Series shall be identical.
(a) The number of authorized Shares and the number of Shares
of each Series and each Class of a Series that may be issued is unlimited,
and the Trustees may issue Shares of any Series or Class of any Series for
such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without
action or approval of the Shareholders. All Shares when so issued on the
terms determined by the Trustees shall be fully paid and non-assessable.
The Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series into one or more Series or
Classes of Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares
of any Series reacquired by the Trust.
(b) The establishment and designation of any Series or any
Class of any Series in addition to that established and designated in part
3 of this Article FOURTH shall be effective upon the execution by a
majority of the Trustees of an instrument setting forth such establishment
and designation and the relative rights and preferences of such Series or
such Class of such Series or as otherwise provided in such instrument.
At any time that there are no Shares outstanding of any particular Series
previously established and designated, the Trustees may by an instrument
executed by a majority of their number abolish that Series and the
establishment and designation thereof. Each instrument referred to in
this paragraph shall be an amendment to this Declaration of Trust, and the
Trustees may make any such amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold
and dispose of Shares of any Series of the Trust to the same extent as if
such person were not a Trustee, officer or other agent of the Trust; and
the Trust may issue and sell or cause to be issued and sold and may
purchase Shares of any Series from any such person or any such
organization subject only to the general limitations, restrictions or
other provisions applicable to the sale or purchase of Shares of such
Series generally.
2. The Trustees shall have the authority from time to time to
divide the Shares of any Series into two or more Classes as they deem
necessary or desirable, and to establish and designate such Classes. In
such event, each Class of a Series shall represent interests in the
designated Series of the Trust and have such voting, dividend, liquidation
and other rights as may be established and designated by the Trustees.
Expenses related directly or indirectly to the Shares of a Class of a
Series may be borne solely by such Class (as shall be determined by the
Trustees) and, as provided in Article FIFTH, a Class of a Series may have
exclusive voting rights with respect to matters relating solely to such
Class. The bearing of expenses solely by a Class of Shares of a Series
shall be appropriately reflected (in the manner determined by the
Trustees) in the net asset value, dividend and liquidation rights of the
Shares of such Class of a Series. The division of the Shares of a Series
into Classes and the terms and conditions pursuant to which the Shares of
the Classes of a Series will be issued must be made in compliance with the
1940 Act. No division of Shares of a Series into Classes shall result in
the creation of a Class of Shares having a preference as to dividends or
distributions or a preference in the event of any liquidation, termination
or winding up of the Trust, to the extent such a preference is prohibited
by Section 18 of the 1940 Act as to the Trust.
3. Without limiting the authority of the Trustees set forth in
part 1 of this Article FOURTH to establish and designate any further
Series, the Trustees hereby establish one Series of Shares all of one
Class having the same name as the Trust. The Shares of that Series and
any Shares of any further Series or Classes that may from time to time be
established and designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Series or Classes at the
time of establishing and designating the same) have the following relative
rights and preferences:
(a) Assets Belonging to Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
for all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are
herein referred to as "assets belonging to" that Series. In the event
that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively "General Items"), the
Trustees shall allocate such General Items to and among any one or more
of the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series for all
purposes.
(b) (1)Liabilities Belonging to Series. The liabilities,
expenses, costs, charges and reserves attributable to each Series shall
be charged and allocated to the assets belonging to each particular
Series. Any general liabilities, expenses, costs, charges and reserves
of the Trust which are not identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees to and among any one
or more of the Series established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The liabilities, expenses, costs, charges and
reserves allocated and so charged to each Series are herein referred to
as "liabilities belonging to" that Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall
be conclusive and binding upon the shareholders of all Series for all
purposes.
(2)Liabilities Belonging to a Class. If a Series is divided
into more than one Class, the liabilities, expenses, costs, charges and
reserves attributable to a Class shall be charged and allocated to the
Class to which such liabilities, expenses, costs, charges or reserves are
attributable. Any general liabilities, expenses, costs, charges or
reserves belonging to the Series which are not identifiable as belonging
to any particular Class shall be allocated and charged by the Trustees to
and among any one or more of the Classes established and designated from
time to time in such manner and on such basis as the Trustees in their
sole discretion deem fair and equitable. The liabilities, expenses,
costs, charges and reserves allocated and so charged to each Class are
herein referred to as "liabilities belonging to" that Class. Each
allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the holders of all Classes
for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series or Class may be paid to the holders of Shares of that
Series or Class, with such frequency as the Trustees may determine, which
may be daily or otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may determine,
from such of the income, capital gains accrued or realized, and capital
and surplus, from the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities belonging
to such Series or Class. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the holders
of such Series or Class in proportion to the number of Shares of such
Series or Class held by such holders at the date and time of record
established for the payment of such dividends or distributions, except
that in connection with any dividend or distribution program or procedure
the Trustees may determine that no dividend or distribution shall be
payable on Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established by the
Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination thereof as
determined by the Trustees or pursuant to any program that the Trustees
may have in effect at the time for the election by each Shareholder of the
mode of the making of such dividend or distribution to that Shareholder.
Any such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with paragraph 13 of
Article SEVENTH.
(d) Liquidation. In the event of the liquidation or
dissolution of the Trust, the Shareholders of all Classes of each Series
that has been established and designated shall be entitled to receive, as
a Series or Class, when and as declared by the Trustees, the excess of the
assets belonging to that Series over the liabilities belonging to that
Series or Class. The assets so distributable to the Shareholders of any
particular Class and Series shall be distributed among such Shareholders
in proportion to the number of Shares of such Class of that Series held
by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Class and Series
will be recorded on the Share transfer records of the Trust applicable to
such Class of that Series only at such times as Shareholders shall have
the right to require the Trust to redeem Shares of such Class of that
Series and at such other times as may be permitted by the Trustees.
(f) Equality. All Shares of all Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to such Class of that Series), and
each Share of any particular Series shall be equal to each other Share of
that Series; but the provisions of this sentence shall not restrict any
distinctions permissible under this Article FOURTH that may exist with
respect to Shares of the different Classes of a Series. The Trustees may
from time to time divide or combine the Shares of any particular Class or
Series into a greater or lesser number of Shares of that Class or Series
without thereby changing the proportionate beneficial interest in the
assets belonging to that Class or Series or in any way affecting the
rights of Shares of any other Class or Series.
(g) Fractions. Any fractional Share of any Class and Series,
if any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Class and Series,
including those rights and obligations with respect to voting, receipt of
dividends and distributions, redemption of Shares, and liquidation of the
Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that (i) holders of Shares of any Series shall have the right to
exchange said Shares into Shares of one or more other Series of Shares,
(ii) holders of shares of any Class shall have the right to exchange said
Shares into Shares of one or more other Classes of the same or a different
Series, and/or (iii) the Trust shall have the right to carry out the
aforesaid exchanges, in each case in accordance with such requirements and
procedures as may be established by the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Class and Series that has been established and designated. No
certification certifying the ownership of Shares need be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as
to who are the Shareholders and as to the number of Shares of each Class
and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other
person to accept orders for the purchase or sale of Shares that conform
to such authorized terms and to reject any purchase or sale orders for
Shares whether or not conforming to such authorized terms.
FIFTH: The following provisions are hereby adopted with respect to
voting shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the
election of Trustees when that issue is submitted to them, (b) with
respect to the amendment of this Declaration of Trust except where the
Trustees are given authority to amend the Declaration of Trust without
shareholder approval, (c) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders, and (d) with
respect to those matters relating to the Trust as may be required by the
1940 Act or required by law, by this Declaration of Trust, or by the By-
Laws of the Trust or any registration statement of the Trust with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust shall not hold shareholder meetings unless required
by the 1940 Act, the provisions of this Declaration of Trust, or any other
applicable law. The Trustees may call a meeting of shareholders.
3. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote on each matter submitted to a vote of the
Shareholders of the affected Series for each Share standing in his name
on the books of the Trust on the date, fixed in accordance with the By-
Laws, for determination of Shareholders of the affected Series entitled
to vote at such meeting (except, if the Board so determines, for Shares
redeemed prior to the meeting), and each such Series shall vote separately
("Individual Series Voting"); a Series shall be deemed to be affected when
a vote of the holders of that Series on a matter is required by the 1940
Act; provided, however, that as to any matter with respect to which a vote
of Shareholders is required by the 1940 Act or by any applicable law that
must be complied with, such requirements as to a vote by Shareholders
shall apply in lieu of Individual Series Voting as described above. If
the shares of a Series shall be divided into Classes as provided in
Article FOURTH, the shares of each Class shall have identical voting
rights except that the Trustees, in their discretion, may provide a Class
of a Series with exclusive voting rights with respect to matters which
relate solely to such Classes. If the Shares of any Series shall be
divided into Classes with a Class having exclusive voting rights with
respect to certain matters, the quorum and voting requirements described
below with respect to action to be taken by the Shareholders of the Class
of such Series on such matters shall be applicable only to the Shares of
such Class. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the right to
receive dividends. The presence in person or by proxy of the holders of
one-third of the Shares, or of the Shares of any Series or Class of any
Series, outstanding and entitled to vote thereat shall constitute a
quorum at any meeting of the Shareholders or of that Series or Class,
respectively; provided however, that if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires an affirmative
vote of a majority, or more than a majority, of the shares outstanding and
entitled to vote, then in such event the presence in person or by proxy
of the holders of a majority of the shares outstanding and entitled to
vote at such a meeting shall constitute a quorum for all purposes. At a
meeting at which is a quorum is present, a vote of a majority of the
quorum shall be sufficient to transact all business at the meeting. If
at any meeting of the Shareholders there shall be less than a quorum
present, the Shareholders or the Trustees present at such meeting may,
without further notice, adjourn the same from time to time until a quorum
shall attend, but no business shall be transacted at any such adjourned
meeting except such as might have been lawfully transacted had the meeting
not been adjourned.
4. Each Shareholder, upon request to the Trust in proper form
determined by the Trust, shall be entitled to require the Trust to redeem
from the net assets of that Series and Class all or any part of the Shares
of such Series and Class standing in the name of such Shareholder. The
method of computing such net asset value, the time at which such net asset
value shall be computed and the time within which the Trust shall make
payment therefor, shall be determined as hereinafter provided in Article
SEVENTH of this Declaration of Trust. Notwithstanding the foregoing, the
Trustees, when permitted or required to do so by the 1940 Act, may suspend
the right of the Shareholders to require the Trust to redeem Shares.
5. No Shareholder shall, as such holder, have any right to
purchase or subscribe for any Shares of the Trust which it may issue or
sell, other than such right, if any, as the Trustees, in their discretion,
may determine.
6. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
7. Cumulative voting for the election of Trustees shall not be
allowed.
SIXTH:
1. The persons who shall act as initial Trustees until the first
meeting or until their successors are duly chosen and qualified are the
initial Trustees executing this Declaration of Trust or any counterpart
thereof. However, the By-Laws of the Trust may fix the number of Trustees
at a number greater or lesser than the number of initial Trustees and may
authorize the Trustees to increase or decrease the number of Trustees, to
fill any vacancies on the Board which may occur for any reason including
any vacancies created by any such increase in the number of Trustees, to
set and alter the terms of office of the Trustees and to lengthen or
lessen their own terms of office or make their terms of office of
indefinite duration, all subject to the 1940 Act. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be
Shareholders.
2. A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative vote of the holders
of two-thirds of the outstanding Shares, present in person or by proxy at
any meeting of shareholders called for such purpose; such a meeting shall
be called by the Trustees when requested in writing to do so by the
recordholders of not less than ten per centum of the outstanding Shares.
A Trustee may also be removed by the Board of Trustees as provided in the
By-Laws of the Trust.
3. The Trustees shall make available a list of names and
addresses of all Shareholders as recorded on the books of the Trust, upon
receipt of the request in writing signed by not less than ten Shareholders
(who have been shareholders for at least six months) holding in the
aggregate shares of the Trust valued at not less than $25,000 at current
offering price (as defined in the Trust's Prospectus and/or Statement of
Additional Information) or holding not less than 1% in amount of the
entire amount of Shares issued and outstanding; such request must state
that such Shareholders wish to communicate with other Shareholders with
a view to obtaining signatures to a request for a meeting to take action
pursuant to part 2 of this Article SIXTH and accompanied by a form of
communication to the Shareholders. The Trustees may, in their discretion,
satisfy their obligation under this part 3 by either making available the
Shareholder list to such Shareholders at the principal offices of the
Trust, or at the offices of the Trust's transfer agent, during regular
business hours, or by mailing a copy of such communication and form of
request, at the expense of such requesting Shareholders, to all other
Shareholders. If and when the Trust has outstanding two or more series
of Shares pursuant to Article FOURTH of this Declaration of Trust, each
series shall be considered as if it were a separate common law trust
covered by Section 16(c) of the 1940 Act and parts 2 and 3 of this Article
SIXTH. The Trust may at any time or from time to time apply to the
Commission for one or more exemptions from all or part of said Section
16(c) and, if an exemptive order or orders are issued by the Commission,
such order or orders shall be deemed part of Section 16(c) for the
purposes of parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust and of the
Trustees and Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or
the Trustees and shall have accepted this trust, the Trust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be deemed
a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them shall not operate to annul
or terminate the Trust but the Trust shall continue in full force and
effect pursuant to the terms of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets
of the Trust shall at all times be considered as vested in the Trustees.
No Shareholder shall have, as such holder of beneficial interest in the
Trust, any authority, power or right whatsoever to transact business for
or on behalf of the Trust, or on behalf of the Trustees, in connection
with the property or assets of the Trust, or in any part thereof.
4. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute, and to authorize the officers and agents of the Trust to make and
execute, any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration of
Trust providing for the conduct of the business of the
Trust and to amend and repeal them to the extent that they
do not reserve that right to the Shareholders;
(b) to elect and remove such officers and appoint and
terminate such officers as they consider appropriate with
or without cause, and to appoint and designate from among
the Trustees such committees as the Trustees may
determine, and to terminate any such committee and remove
any member of such committee;
(c) to employ as custodian of any assets of the Trust a bank
or trust company or any other entity qualified and
eligible to act as a custodian, subject to any conditions
set forth in this Declaration of Trust or in the By-Laws;
(d) to retain a transfer agent and shareholder servicing
agent, or both;
(e) to provide for the distribution of Shares either through
a principal underwriter or the Trust itself or both;
(f) to set record dates in the manner provided for in the By-
Laws of the Trust;
(g) to delegate such authority as they consider desirable to
any officers of the Trust and to any agent, custodian or
underwriter;
(h) to vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property held in Trust hereunder; and to execute and
deliver powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities
held in trust hereunder;
(j) to hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other
negotiable form, either in its own name or in the name of
a custodian or a nominee or nominees, subject in either
case to proper safeguards according to the usual practice
of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation
or concern, any security of which is held in the Trust; to
consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to
pay calls or subscriptions with respect to any security
held in the Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy
including, but not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws,
distributions of income and of capital gains to
Shareholders;
(n) to borrow money to the extent and in the manner permitted
by the 1940 Act and the Trust's fundamental policy
thereunder as to borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more
corporations, partnerships, trusts, associations or other
persons;
(p) to change the name of the Trust or any Class or Series of
the Trust as they consider appropriate without prior
Shareholder approval;
(q) to establish Officers' and Trustees' fees or compensation
and fees or compensation for committees of the Trustees to
be paid by the Trust or each Series thereof in such manner
and amount as the Trustees may determine;
(r) to invest all or substantially all of the Trust's assets
in another registered investment company; and
(s) to determine whether a minimum and/or maximum value should
apply to accounts holding Shares, to fix such values and
the terms, procedures, and other conditions to cause the
involuntary redemption of accounts that do not satisfy
such criteria.
5. No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
6. (a)
The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment
of any sum of money or assessment whatsoever other than
such as the Shareholder may at any time personally agree
to pay by way of subscription to any Shares or otherwise.
This paragraph shall not limit the right of the Trustees
to asset claims against any shareholder based upon the
acts or omissions of such shareholder or for any other
reason. There is hereby expressly disclaimed shareholder
and Trustee liability for the acts and obligations of the
Trust. Every note, bond, contract or other undertaking
issued by or on behalf of the Trust or the Trustees
relating to the Trust shall include a notice and provision
limiting the obligation represented thereby to the Trust
and its assets (but the omission of such notice and
provision shall not operate to impose any liability or
obligation on any Shareholder).
(b) Whenever this Declaration of Trust calls for or permits
any action to be taken by the Trustees hereunder, such
action shall mean that taken by the Board of Trustees by
vote of the majority of a quorum of Trustees as set forth
from time to time in the By-Laws of the Trust or as
required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the
powers herein contained such as may be necessary or
convenient in the conduct of any business or enterprise of
the Trust, to do and perform anything necessary, suitable,
or proper for the accomplishment of any of the purposes,
or the attainment of any one or more of the objects,
herein enumerated, or which shall at any time appear
conducive to or expedient for the protection or benefit of
the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set
forth, or that may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively
whether any moneys, securities, or other properties of the
Trust are, for the purposes of this Trust, to be
considered as capital or income and in what manner any
expenses or disbursements are to be borne as between
capital and income whether or not in the absence of this
provision such moneys, securities, or other properties
would be regarded as capital or income and whether or not
in the absence of this provision such expenses or
disbursements would ordinarily be charged to capital or to
income.
7. The By-Laws of the Trust may divide the Trustees into Classes
and prescribe the tenure of office of the several Classes, but no Class
shall be elected for a period shorter than that from the time of the
election following the division into classes until the next meeting and
thereafter for a period shorter than the interval between meetings or for
a period longer than five years, and the term of office of at least one
Class shall expire each year.
8. The Shareholders shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by the
Shareholders or otherwise, may be removed at any time, with or without
cause, in such lawful manner as may be provided in the By-Laws of the
Trust.
10. The Trustees shall have power to hold their meetings, to have
an office or offices and, subject to the provisions of the laws of
Massachusetts, to keep the books of the Trust outside of said Commonwealth
at such places as may from time to time be designated by them. Action may
be taken by the Trustees without a meeting by unanimous written consent
or by telephone or similar method of communication.
11. Securities held by the Trust shall be voted in person or by
proxy by the President or a Vice-President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12. (a)Subject to the provisions of the 1940 Act, any Trustee,
officer or employee, individually, or any partnership of
which any Trustee, officer or employee may be a member, or
any corporation or association of which any Trustee, officer
or employee may be an officer, partner, director, trustee,
employee or stockholder, or otherwise may have an interest,
may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of the Trust, and
in the absence of fraud no contract or other transaction
shall be thereby affected or invalidated; provided that in
such case a Trustee, officer or employee or a partnership,
corporation or association of which a Trustee, officer or
employee is a member, officer, director, trustee, employee or
stockholder is so interested, such fact shall be disclosed or
shall have been known to the Trustees including those
Trustees who are not so interested and who are neither
"interested" not "affiliated" persons as those terms are
defined in the 1940 Act, or a majority thereof; and any
Trustee who is so interested, or who is also a director,
officer, partner, trustee, employee or stockholder of such
other corporation or a member of such partnership or
association which is so interested, may be counted in
determining the existence of a quorum at any meeting of the
Trustees which shall authorize any such contract or
transaction, and may vote thereat to authorize any such
contract or transaction, with like force and effect as if he
were not so interested.
(b) Specifically, but without limitation of the foregoing, the
Trust may enter into a management or investment advisory
contract or underwriting contract and other contracts
with, and may otherwise do business with any manager or
investment adviser for the Trust and/or principal
underwriter of the Shares of the Trust or any subsidiary
or affiliate of any such manager or investment adviser
and/or principal underwriter and may permit any such firm
or corporation to enter into any contracts or other
arrangements with any other firm or corporation relating
to the Trust notwithstanding that the Trustees of the
Trust may be composed in part of partners, directors,
officers or employees of any such firm or corporation, and
officers of the Trust may have been or may be or become
partners, directors, officers or employees of any such
firm or corporation, and in the absence of fraud the Trust
and any such firm or corporation may deal freely with each
other, and no such contract or transaction between the
Trust and any such firm or corporation shall be
invalidated or in any way affected thereby, nor shall any
Trustee or officer of the Trust be liable to the Trust or
to any Shareholder or creditor thereof or to any other
person for any loss incurred by it or him solely because
of the existence of any such contract or transaction;
provided that nothing herein shall protect any director or
officer of the Trust against any liability to the trust or
to its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of his office.
(c) As used in this paragraph the following terms shall have
the meanings set forth below:
(i)
the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or
former Trustee, partner, Director or officer of another
trust, partnership, corporation or association whose
securities are or were owned by the Trust or of which the
Trust is or was a creditor and who served or serves in
such capacity at the request of the Trust, and the heirs,
executors, administrators, successors and assigns of any
of the foregoing; however, whenever conduct by an
indemnitee is referred to, the conduct shall be that of
the original indemnitee rather than that of the heir,
executor, administrator, successor or assignee;
(ii)
the term "covered proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which
an indemnitee is or was a party or is threatened to be
made a party by reason of the fact or facts under which he
or it is an indemnitee as defined above;
(iii)
the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the
office in question;
(iv)
the term "covered expenses" shall mean expenses (including
attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an
indemnitee in connection with a covered proceeding; and
(v)
the term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse
determination as to the indemnitee whether by judgment,
order, settlement, conviction or upon a plea of nolo
contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any
covered expenses in any covered proceeding if there has
been an adjudication of liability against such indemnitee
expressly based on a finding of disabling conduct.
(e) Except as set forth in paragraph (d) above, the Trust
shall indemnify any indemnitee for covered expenses in any
covered proceeding, whether or not there is an
adjudication of liability as to such indemnitee, if a
determination has been made that the indemnitee was not
liable by reason of disabling conduct by (i) a final
decision on the merits of the court or other body before
which the covered proceeding was brought; or (ii) in the
absence of such decision, a reasonable determination,
based on a review of the facts, by either (a) the vote of
a majority of a quorum of Trustees who are neither
"interested persons," as defined in the 1940 Act nor
parties to the covered proceedings or (b) an independent
legal counsel in a written opinion; provided that such
Trustees or counsel, in reaching such determination, may
but need not presume the absence of disabling conduct on
the part of the indemnitee by reason of the manner in
which the covered proceeding was terminated, such
indemnification by the Trust to be to the fullest extent
now or hereafter permitted by any applicable law unless
the By-laws limit or restrict the indemnification to which
any indemnitee may be entitled. The Board of Trustees may
adopt bylaw provisions to implement sub-paragraphs (c),
(d) and (e) hereof.
(f) Covered expenses incurred by an indemnitee in connection
with a covered proceeding shall be advanced by the Trust
to an indemnitee prior to the final disposition of a
covered proceeding upon the request of the indemnitee for
such advance and the undertaking by or on behalf of the
indemnitee to repay the advance unless it is ultimately
determined that the indemnitee is entitled to
indemnification thereunder, but only if one or more of the
following is the case: (i) the indemnitee shall provide a
security for such undertaking; (ii) the Trust shall be
insured against losses arising out of any lawful advances;
or (iii) there shall have been a determination, based on
a review of the readily available facts (as opposed to a
full trial-type inquiry) that there is a reason to believe
that the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a
written opinion or by the vote of a majority of a quorum
of trustees who are neither "interested persons" as
defined in the 1940 Act nor parties to the covered
proceeding.
(g) Nothing herein shall be deemed to affect the right of the
Trust and/or any indemnitee to acquire and pay for any
insurance covering any or all indemnitees to the extent
permitted by applicable law or to affect any other
indemnification rights to which any indemnitee may be
entitled to the extent permitted by applicable law. Such
rights to indemnification shall not, except as otherwise
provided by law, be deemed exclusive of any other rights
to which such indemnitee may be entitled under any statute
now or hereafter enacted, By-Law, contract or otherwise.
13. The Trustees are empowered, in their absolute discretion, to
establish bases or times, or both, for determining the net asset value per
Share of any Class and Series in accordance with the 1940 Act and to
authorize the voluntary purchase by any Class and Series, either directly
or through an agent, of Shares of any Class and Series upon such terms and
conditions and for such consideration as the Trustees shall deem advisable
in accordance with the 1940 Act.
14. Payment of the net asset value per Share of any Class and
Series properly surrendered to it for redemption shall be made by the
Trust within seven days, or as specified in any applicable law or
regulation, after tender of such stock or request for redemption to the
Trust for such purpose plus any period of time during which the right of
the holders of the shares of such Class of that Series to require the
Trust to redeem such shares has been suspended. Any such payment may be
made in portfolio securities of such Class of that Series and/or in cash,
as the Trustees shall deem advisable, and no Shareholder shall have a
right, other than as determined by the Trustees, to have Shares redeemed
in kind.
15. The Trust shall have the right, at any time and without prior
notice to the Shareholder, to redeem Shares of the Class and Series held
by such Shareholder held in any account registered in the name of such
Shareholder for its current net asset value, if and to the extent that
such redemption is necessary to reimburse either that Series of the Trust
or the distributor (i.e., principal underwriter) of the Shares for any
loss either has sustained by reason of the failure of such Shareholder to
make timely and good payment for Shares purchased or subscribed for by
such Shareholder, regardless of whether such Shareholder was a Shareholder
at the time of such purchase or subscription; subject to and upon such
terms and conditions as the Trustees may from time to time prescribe.
EIGHTH: The name "Oppenheimer" included in the name of the Trust and
of any Series shall be used pursuant to a royalty-free, non-exclusive
license from Oppenheimer Management Corporation ("OMC"), incidental to and
as part of any one or more advisory, management or supervisory contract
which may be entered into by the Trust with OMC. Such license shall allow
OMC to inspect and subject to the control of the Board of Trustees to
control the nature and quality of services offered by the Trust under such
name. The license may be terminated by OMC upon termination of such
advisory, management or supervisory contract or without cause upon 60
days' written notice, in which case neither the Trust nor any Series or
Class shall have any further right to use the name "Oppenheimer" in its
name or otherwise and the Trust, the Shareholders and its officers and
Trustees shall promptly take whatever action may be necessary to change
its name accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or the Shareholders, heirs,
executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust estate to be held harmless
from and indemnified against all loss and expense arising from such
liability. This Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind the Trust, the Trust's officers or any Shareholder. All
persons extending credit to, during business with, contracting with or
having or asserting any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under such credit,
transaction, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall
be personally liable therefor; notice of such disclaimer shall be given
in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee against any liability to which such Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
3. The exercise by the Trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to
the provisions of paragraph 2 of this Article NINTH, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operations of this Declaration of Trust, applicable laws,
contracts, obligations, transactions or any other business the Trust may
enter into, and subject to the provisions of paragraph 2 of this Article
NINTH, shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees shall
not be required to give any bond as such, nor any surety if a bond is
required.
4. This Trust shall continue without limitation of time but
subject to the provisions of sub-sections (a), (b), and (c) of this
paragraph 4.
(a) The Trustees, with the favorable vote of the holders of a
majority of the outstanding voting securities, as defined in the 1940 Act,
of any one or more Series entitled to vote, may sell and convey the assets
of that Series (which sale may be subject to the retention of assets for
the payment of liabilities and expenses) to another issuer for a
consideration which may be or include securities of such issuer. Upon
making provision for the payment of liabilities, by assumption by such
issuer or otherwise, the Trustees shall distribute the remaining proceeds
ratably among the holders of the outstanding Shares of the Series the
assets of which have been so transferred.
(b) The Trustees, with the favorable vote of the holders of a
majority of the outstanding voting securities, as defined in the 1940 Act,
of any one or more Series entitled to vote, may at any time sell and
convert into money all the assets of that Series. Upon making provisions
for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of that Series, the Trustees shall
distribute the remaining assets of that Series ratably among the holders
of the outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of a
majority of the outstanding voting securities, as defined in the 1940 Act,
of any one or more Series entitled to vote, may otherwise alter, convert
or transfer the assets of that Series or those Series.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and (b),
and in subsection (c) where applicable, the Series the assets of which
have been so transferred shall terminate, and if all the assets of the
Trust have been so transferred, the Trust shall terminate and the Trustees
shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be
cancelled and discharged.
5. The original or a copy of this instrument and of each restated
declaration of trust or instrument supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each supplemental or restated declaration
of trust shall be filed with the Secretary of the Commonwealth of
Massachusetts, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may rely
on a certificate by an officer of the Trust as to whether or not any such
supplemental or restated declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and, with the same
effect as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any such
supplemental or restated declaration of trust. In this instrument or in
any such supplemental or restated declaration of trust, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder"
shall be deemed to refer to this instrument as amended or affected by any
such supplemental or restated declaration of trust. This instrument may
be executed in any number of counterparts, each of which shall be deemed
as original.
6. The Trust set forth in this instrument is created under and
is to be governed by and construed and administered according to the laws
of the Commonwealth of Massachusetts. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
7. In the event that any person advances the organizational
expenses of the Trust, such advances shall become an obligation of the
Trust subject to such terms and conditions as may be fixed by, and on a
date fixed by, or determined with criteria fixed by the Board of Trustees,
to be amortized over a period or periods to be fixed by the Board.
8. Whenever any action is taken under this Declaration of Trust
including action which is required or permitted by the 1940 Act or any
other applicable law, such action shall be deemed to have been properly
taken if such action is in accordance with the construction of the 1940
Act or such other applicable law then in effect as expressed in "no
action" letters of the staff of the Commission or any release, rule,
regulation or order under the 1940 Act or any decision of a court of
competent jurisdiction, notwithstanding that any of the foregoing shall
later be found to be invalid or otherwise reversed or modified by any of
the foregoing.
9. Any action which may be taken by the Board of Trustees under
this Declaration of Trust or its By-Laws may be taken by the description
thereof in the then effective prospectus and/or statement of additional
information relating to the Shares under the Securities Act of 1933 or in
any proxy statement of the Trust rather than by formal resolution of the
Board.
10. Whenever under this Declaration of Trust, the Board of
Trustees is permitted or required to place a value on assets of the Trust,
such action may be delegated by the Board, and/or determined in accordance
with a formula determined by the Board, to the extent permitted by the
1940 Act.
11. If authorized by vote of the Trustees and the favorable vote
of the holders of a majority of the outstanding voting securities, as
defined in the 1940 Act, entitled to vote, or by any larger vote which may
be required by applicable law in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a Restated
Declaration of Trust or a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof; any such Supplemental or Restated
Declaration of Trust may be executed by and on behalf of the Trust and the
Trustees by an officer or officers of the Trust.
OPPENHEIMER U.S. GOVERNMENT TRUST
BY-LAWS
(amended as of 8/6/87)
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the
Shareholders (which terms as used herein shall, together with all
other terms defined in the Declaration of Trust, have the same
meaning as in the Declaration of Trust) shall be held at the
principal office of the Trust or at such other place as may from
time to time be designated by the Board of Trustees and stated in
the notice of meeting.
Section 2. Shareholder Meetings. Meetings of Shareholders
for any purposes or purposes may be called by the Chairman of the
Board of Trustees, if any, or by the President or by the Board of
Trustees and shall be called by the Secretary upon receipt of the
request in writing signed by Shareholders holding not less than one
third in amount of the entire number of Shares issued and
outstanding and entitled to vote thereat. Such request shall state
the purpose or purposes of the proposed meeting. In addition,
meetings of the Shareholders shall be called by the Board of
Trustees upon receipt of the request in writing signed by
Shareholders that have, for at least six months prior to making
such requests, held not less than ten percent in amount of the
entire number of Shares issued and outstanding and entitled to vote
thereat, stating the purpose of the proposed meeting is the removal
of a Trustee.
Section 3. Notice of Meetings of Shareholders. Not less than
ten days' and not more than 120 days' written or printed notice of
every meeting of Shareholders, stating the time and place thereof
(and the general nature of the business proposed to be transacted
at any special or extraordinary meeting), shall be given to each
Shareholder entitled to vote thereat by leaving the same with him
or at his residence or usual place of business or by mailing it,
postage prepaid and addressed to him at his address as it appears
upon the books of the Trust.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in person
or by proxy or to any Shareholder who, in writing executed and
filed with the records of the meeting, either before or after the
holding thereof, waives such notice.
Section 4. Record Dates. The Board of Trustees may fix, in
advance, a date, not exceeding 120 days and not less than ten days
preceding the date of any meeting of Shareholders, and not
exceeding 120 days preceding any dividend payment date or any date
and entitled to receive such dividends or rights for the allotment
of rights, as a record date for the determination of the
Shareholders entitled to receive such dividend or rights, as the
case may be; and only Shareholders of record on such date and
entitled to receive such dividends or rights shall be entitled to
notice of and to vote at such meeting or to receive such dividends
or rights, as the case may be.
Section 5. Access to Shareholder List. The Board of Trustees
shall make available a list of the names and addresses of all
shareholders as recorded on the books of the Trust, upon receipt of
the request in writing signed by not less than ten Shareholders
holding Shares of the Trust valued at $25,000 or more at current
offering price (as defined in the Trust's Prospectus), or holding
not less than one percent in amount of the entire number of shares
of the Trust issued and outstanding; such request must state that
such Shareholders wish to communicate with other Shareholders with
a view to obtaining signatures to a request for a meeting pursuant
to Section 2 of Article II of these By-Laws and accompanied by a
form of communication to the Shareholders. The Board of Trustees
may, in its discretion, satisfy its obligation under this Section
5 by either making available the Shareholder List to such
Shareholders at the principal offices of the Trust, or at the
offices of the Trust's transfer agents, during regular business
hours, or by mailing a copy of such Shareholders' proposed
communication and form of request, at their expense, to all other
Shareholders.
Section 6. Quorum, Adjournment of Meetings. The presence in
person or by proxy of the holders of record of more than 50% of the
Shares of the stock of the Trust issued and outstanding and
entitled to vote thereat, shall constitute a quorum at all meetings
of the Shareholders. If at any meeting of the Shareholders there
shall be less than a quorum present, the Shareholder present at
such a meeting may, without further notice, adjourn the same from
time to time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as might have
been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of
Shareholders, every Shareholder of record entitled to vote thereat
shall be entitled to vote at such meeting either in person or by
proxy appointed by instrument in writing subscribed by such
Shareholder of his duly authorized attorney-in-fact.
All elections of Trustees shall be had by a plurality of the
votes cast and all questions shall be decided by a majority of the
votes cast, in each case at a duly constituted meeting, except as
otherwise provided in the Declaration of Trust or in these By-Laws
or by specific statutory provision superseding the restrictions and
limitations contained in the Declaration of Trust or in these By-
Laws.
At any election of Trustees, the Board of Trustees prior
thereto may, or if they have not so acted, the Chairman of the
meeting may, and upon the request of the holders of ten percent
(10%) of the Shares entitled to vote at such election shall,
appoint two inspectors of election who shall first subscribe an
oath or affirmation to execute faithfully the duties of inspectors
at such election with strict impartiality and according to the best
of their ability, and shall after the election make a certificate
of the result of the vote taken. No candidate for the office of
Trustee shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be
taken upon any election or matter, and such vote shall be taken
upon the request of the holders of ten percent (10%) of the Shares
entitled to vote on such election or matter.
Section 8. Conduct of Shareholder's Meetings. The meetings
of the Shareholders shall be presided over by the Chairman of the
Board of Trustees, if any, or if he shall not be present, by the
President, or if he shall not be present, by a Vice-President, or
if neither the Chairman of the Board of Trustees, the President nor
any Vice-President is present, by a chairman to be elected at the
meeting. The Secretary of the Trust, if present, shall act as
Secretary of such meetings, or if he is not present, an Assistant
Secretary shall so act, if neither the Secretary nor an Assistant
Secretary is present, then the meeting shall elect its secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At
every meeting of the Shareholders, all proxies shall be received
and taken in charge of and all ballots shall be received and
canvassed by the secretary of the meeting, who shall decide all
questions touching the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed as provided in
Section 7, in which event such inspectors of election shall decide
all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and
property of the Trust shall be conducted and managed by a Board of
Trustees consisting of the number of initial Trustees, which number
may be increased or decreased as provided in Section 2 of this
Article. Each Trustee shall, except as otherwise provided herein,
hold office until the meeting of Shareholders of the Trust next
succeeding his election or until his successor is duly elected and
qualifies. Trustees need not be Shareholders.
Section 2. Increase or Decrease in Number of Trustees;
Removal. The Board of Trustees, by the vote of a majority of the
entire Board, may increase the number of Trustees to a number not
exceeding fifteen, and may elect Trustees to fill the vacancies
occurring for any reason, including vacancies created by any such
increase in the number of Trustees until the next annual meeting or
until their successors are duly elected and qualify; the Board of
Trustees, by the vote of a majority of the entire Board, may
likewise decrease the number of Trustees to a number not less than
three but the tenure of the office of any Trustee shall not be
affected by any such decrease. In the event that after the proxy
material has been printed for a meeting of Shareholders at which
Trustees are to be elected and any one or more nominees named in
such proxy material dies or become incapacitated, the authorized
number of Trustees shall be automatically reduced by the number of
such nominees, unless the Board of Trustees prior to the meeting
shall otherwise determine. A Trustee at any time may be removed
either with or without cause by resolution duly adopted by the
affirmative votes of the holders of the majority of the outstanding
Shares of the Trust, present in person or by proxy at any meeting
of Shareholders at which such vote may be taken, provided that a
quorum is present. Any Trustee at any time may be removed for
cause by resolution duly adopted at any meeting of the Board of
Trustees provided that notice thereof is contained in the notice of
such meeting and that such resolution is adopted by the vote of at
least two thirds of the Trustees whose removal is not proposed. As
used herein, "for cause" shall mean any cause which under
Massachusetts law would permit the removal of a Trustee of a
business trust.
Section 3. Place of Meeting. The Trustees may hold their
meetings, have one or more offices, and keep the books of the Trust
outside Massachusetts, at any office or offices of the Trust or at
any other place as they may from time to time by resolution
determine, or, in the case of meetings, as they may from time to
time by resolution determine or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
Section 4. Regular Meetings. Regular meetings of the Board
of Trustees shall be held at such time and on such notice, as the
Trustees may from time to time determine. One such regular meeting
during each fiscal year of the Trust shall be designated an annual
meeting of the Board of Trustees.
Section 5. Special Meetings. Special meetings of the Board
of Trustees may be held from time to time upon call of the Chairman
of the Board of Trustees, if any, the President or two or more of
the Trustees, by oral or telegraphic or written notice duly served
on or sent or mailed to each Trustee not less than one day before
such meeting. No notice need be given to any Trustee who attends
in person, or to any Trustee who in writing executed and filed with
the records of the meeting either before or after the holding
thereof, waives such notice. Such notice or waiver of notice need
not state the purpose or purposes of such meeting.
Section 6. Quorum. One-third of the Trustees then in office
shall constitute a quorum for the transaction of business, provided
that a quorum shall in no case be less than two Trustees. If at
any of the Board there shall be less than a quorum present (in
person or by open telephone line, to the extent permitted by the
Investment Company Act of 1940 (the "1940 Act")), a majority of
those present may adjourn the meeting from time to time until a
quorum shall have been obtained. The act of the majority of the
Trustees present at any meeting at which there is a quorum shall be
the act of the Board, except as may be otherwise specifically
provided by statute, by the Declaration of Trust or by these By-
Laws.
Section 7. Executive Committee. The Board of Trustees may,
by the affirmative vote of a majority of the entire Board, elect
from the Trustees an Executive Committee to consist of such number
of Trustees as the Board may from time to time determine. The
Board of Trustees by such affirmative vote shall have power at any
time to change the members of such Committee and may fill vacancies
in the Committee by election from the Trustees. When the Board of
Trustees is not in session, the Executive Committee shall have and
may exercise any or all of the powers of the Board of Trustees in
the management of the business and affairs of the Trust (including
the power to authorize the seal of the Trust to be affixed to all
papers which may require it) except as provided by law or by any
contract or agreement to which the Trust is a party and except the
power to increase or decrease the size of, or fill vacancies on the
Board. The Executive Committee, may fix its own rules of
procedure, and may meet when and as provided by such rules or by
resolution of the Board of Trustees, but in every case the presence
of a majority shall be necessary to constitute a quorum. In the
absence of any member of the Executive Committee, the members
thereof present at any meeting, whether or not they constitute a
quorum, may appoint a member of the Board of Trustees to act in the
place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint
other committees which shall in each case consist of such number of
members (not less than two) and shall have and may exercise such
powers as the Board may determine in the resolution appointing
them. A majority of all members of any such committee may
determine its action, and fix the time and place of its meetings,
unless the Board of Trustees shall otherwise provide. The Board of
Trustees shall have power at any time to change the members and
powers of any such committee, to fill vacancies, and to discharge
any such committee.
Section 9. Informal Action by and Telephone Meetings of
Trustees and Committees. Any action required or permitted to be
taken at any meeting of the Board of Trustees or any committee
thereof may be taken without a meeting, if a written consent to
such action is signed by all members of the Board, or of such
committee, as the case may be. Trustees or members of a committee
of the Board of Trustees may participate in a meeting by means of
a conference telephone or similar communications equipment; such
participation shall, except as otherwise required by the 1940 Act,
have the same effect as presence in person.
Section 10. Compensation of Trustees. Trustees shall be
entitled to receive such compensation from the Trust for their
services as may from time to time be voted by the Board of
Trustees.
Section 11. Dividends. Dividends or distribution payable on
the Shares of any Series may, but need not be, declared by specific
resolution of the Board as to each dividend or distribution; in
lieu of such specific resolutions, the Board may, by general
resolution, determine the method of computation thereof, the method
of determining the Shareholders of the Series to which they are
payable and the methods of determining whether and to which
Shareholders they are to be paid in cash or in additional Shares.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the
Trust may include a Chairman of the Board of Trustees, and shall
include a President, one or more Vice-Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and
a Treasurer. The Chairman of the Board of Trustees, if any, and
the President shall be selected from among the Trustees. The Board
of Trustees may also in its discretion appoint Assistant
Secretaries, Assistant Treasurers, and other officers, agents and
employees, who shall have authority and perform such duties as the
Board or the Executive Committee may determine. The Board of
Trustees may fill any vacancy which may occur in any office. Any
two offices, except those of President and Vice-President, may be
held by the same person, but no officer shall execute, acknowledge
or verify any instrument in more than one capacity, if such
instrument is required by law or these By-Laws to be executed,
acknowledged or verified by two or more officers.
Section 2. Term of Office. The term of office of all
officers shall be until their respective successors are chosen and
qualify; however, any officer may be removed from office at any
time with or without cause by the vote of a majority of the entire
Board of Trustees.
Section 3. Power and Duties. The officers of the Trust shall
have such powers and duties as generally pertain to their
respective offices, as well as such powers and duties as may from
time to time be conferred by the Board of Trustees or the Executive
Committee.
ARTICLE IV
SHARES
Section 1. Shares Certificates. Each Shareholder of any
Series of the Trust may be issued a certificate or certificates for
his Shares of that Series, in such form as the Board of Trustees
may from time to time prescribe, but only if and to the extent and
on the conditions described by the Board.
Section 2. Transfer of Shares. Shares of any Series shall be
transferable on the books of the Trust by the holder thereof in
person or by his duly authorized attorney or legal representative,
upon surrender and cancellation of certificates, if any, for the
same number of Shares of that Series, duly endorsed or accompanied
by proper instruments of assignment and transfer, with such proof
of the authenticity of the signature as the Trust or its agent may
reasonably require; in the case of shares not represented by
certificates, the same or similar requirements may be imposed by
the Board of Trustees.
Section 3. Share Ledgers. The share ledgers of the Trust,
containing the name and address of the Shareholders of each Series
of the Trust and the number of shares of that Series, held by them
respectively, shall be kept at the principal offices of the Trust
or, if the Trust employees a transfer agent, at the offices of the
transfer agent of the Trust.
Section 4. Lost, Stolen or Destroyed Certificates. The Board
of Trustees may determine the conditions upon which a new
certificate may be issued in place of a certificate which is
alleged to have been lost, stolen or destroyed; and may, in their
discretion, require the owner of such certificate or his legal
representative to give bond, with sufficient surety to the Trust
and the transfer agent, if any, to indemnify it and such transfer
agent against any and all loss or claims which may arise by reason
of the issue of a new certificate in the place of the one so lost,
stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the
Trust, in such form and bearing such inscriptions as it may
determine.
<PAGE>
ARTICLE VI
FISCAL YEAR
The fiscal year of the Trust shall be fixed by the Board of
Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Trust may be altered, amended, added to or
repealed by the Shareholders or by majority vote of the entire
Board of Trustees, but any such alteration, amendment, addition or
repeal of the By-Laws by action of the Board of Trustees may be
altered or repealed by the Shareholders.
orgzn\2202
Exhibit 24(b)4(i)
OPPENHEIMER U.S. GOVERNMENT TRUST
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.
(upper right box with heading: CLASS A SHARES
below cert. no.)
(centered
below boxes) OPPENHEIMER U.S. GOVERNMENT TRUST
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683810 105
(at left) is the owner of
(centered) FULLY PAID CLASS A SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER U.S. GOVERNMENT TRUST
(hereinafter called the "Fund"), transferable only on the
books of the Fund by the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
<PAGE>
WITNESS the facsimile seal of the Fund and the signatures
of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
_______________________ ___________________
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER U.S. GOVERNMENT TRUST
SEAL
1982
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMER MANAGEMENT
CORPORATION)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................ hereby sell(s), assign(s), and
transfer(s) unto
<PAGE>
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
beneficial interest [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 Fund with full power of substitution in the
premises.
Dated: ______________________
Signed: __________________________
___________________________________
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) face of the certificate in every particular
without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this "four hands"
watermark: logotype
________________________________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
edgar\220certa
Exhibit 24(b)4(ii)
OPPENHEIMER U.S. GOVERNMENT TRUST
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.
(upper right box with heading: CLASS C SHARES
below cert. no.)
(centered
below boxes) OPPENHEIMER U.S. GOVERNMENT TRUST
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683810 204
(at left) is the owner of
(centered) FULLY PAID CLASS C SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER U.S. GOVERNMENT TRUST
(hereinafter called the "Fund"), transferable only on the
books of the Fund by the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
<PAGE>
WITNESS the facsimile seal of the Fund and the signatures
of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
_______________________ ___________________
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER U.S. GOVERNMENT TRUST
SEAL
1982
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMER MANAGEMENT
CORPORATION)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................ hereby sell(s), assign(s), and
transfer(s) unto
<PAGE>
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
beneficial interest [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 Fund with full power of substitution in the
premises.
Dated: ______________________
Signed: __________________________
___________________________________
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) face of the certificate in every particular
without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this "four hands"
watermark: logotype
________________________________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
edgar\220certc
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 22nd day of October, 1990, by and
between OPPENHEIMER U.S. GOVERNMENT TRUST (hereinafter called the
"Trust"), and OPPENHEIMER MANAGEMENT CORPORATION (hereinafter
called the "Manager").
WITNESSETH:
WHEREAS, the Trust is an open-end diversified management
investment company registered as such with the Securities and
Exchange Commission (the "Commission") pursuant to the Investment
Company Act of 1940 (the "Investment Company Act"), and the
Management Company is a registered investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, it is
agreed by and between the parties hereto as follows:
1. In General
The Manager agrees, all as more fully set forth herein,
to act as investment adviser to the Trust with respect to the
investment of its assets; to supervise and arrange the purchases of
securities for and the sale of securities held in the portfolio of
the Trust; and to furnish facilities and furnish and supervise
personnel as shall be required to provide effective administration
of the Trust.
2. Duties and Obligations of the Manager with respect to
investments of assets of the Trust
(a) Subject to the succeeding provisions of this section
and subject to the direction and control of the Board of Trustees,
the Manager shall:
(i) Regularly provide investment advice and
recommendations to the Trust with respect to its investments,
investment policies and the purchase and sale of securities;
(ii) Supervise continuously the investment program
of the Trust and the composition of its portfolio; and
(iii) Arrange, subject to the provisions of
paragraph "4" hereof, for the purchase of securities and other
investments and for the sale of securities and other investments
held in the portfolio of the Trust.
(b) Any investment advice furnished by the Manager under
this section shall at all times conform to, and be in accordance
with, any requirements imposed by: (1) the provisions of the
Investment Company Act of 1940, and of any rules or regulations in
force thereunder; (2) any other applicable provision of law; (3)
the provisions of the Declaration of Trust and By-Laws of the Trust
as amended from time to time; (4) any policies and determinations
of the Board of Trustees of the Trust; and (5) the terms of the
registration statement of the Trust, as amended from time to time
under the Securities Act of 1933 and the Investment Company Act of
1940.
(c) Nothing in this Agreement shall prevent the Manager
or any officer thereof from acting as investment adviser for any
other person, firm or corporation and shall not in any way limit or
restrict the manager or any of its directors, officers,
stockholders or employees from buying, selling or trading any
securities for its or their own accounts or for the accounts of
others for whom it or they may be acting, provided, however, that
the Manager expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
3. Trust Administration and Allocation of Expenses
The Manager shall at its expense provide all executive,
administration and clerical personnel as shall be required to
provide effective administration for the Trust including the
compilation and maintenance of such records with respect to its
operations as may reasonably be required;
the preparation and filing of such reports with respect thereto as
shall be required by the Securities and Exchange Commission;
composition of periodic reports with respect to its operations for
the shareholders of the Trust; composition of proxy materials for
meetings of the Trust's shareholders; and the composition of such
registration statements as may be required by federal securities
laws for continuous public sale of shares of the Trust. The Manager
shall, at its own cost and expense, also provide the Trust with
adequate office space, facilities and equipment. All other costs
and expenses not expressly assumed by the Manager under this
Agreement shall be paid by the Trust, including, but not limited to
(i) interests and taxes; (ii) insurance premiums for fidelity and
other coverage requisite to its operations; (iii) compensation and
expenses of its Trustees other than those associated or affiliated
with the Manager; (iv) legal and audit expenses; (v) custodian and
transfer agent fees and expenses, and brokerage commissions, if
any; (vi) expenses incident to the redemption of its shares; (vii)
expenses incident to the issuance of its shares against payment
therefor by or on behalf of the subscribers thereto; (viii) fees
and expenses, other than as hereinabove provided, incident to the
registration, under Federal law, of shares of the Trust for public
sale; (ix) expenses of printing and mailing periodic reports with
respect to its operations and notices and proxy materials to
shareholders of the Trust; (x) except as noted above, all other
expenses incidental to holding meetings of the Trust's
shareholders; (xi) payments under the Trust's Distribution Plan and
Agreement; and (xii) such non-recurring expenses as may arise,
including litigation affecting the Trust and the legal obligation
which the Trust may have to indemnify its officers and Trustees
with respect thereto.
4. Portfolio Transactions and Brokerage
The Manager is authorized, for the purchase and sale of
the Trust's portfolio securities, to employ such securities dealers
as may, in the best judgment of the Manager, implement the policy
of the Trust to obtain prompt and reliable execution of orders at
the most favorable net price. Consistent with this policy, the
Manager is authorized to direct the execution of the Trust's
portfolio transactions to dealers furnishing statistical
information or research deemed by the Manager to be useful or
valuable to the performance of its investment advisory functions
for the Trust.
5. Compensation of the Manager
The Trust agrees to pay the Manager and the Manager
agrees to accept as full compensation for all services rendered by
the manager as such, an annual fee payable monthly on the net asset
value of the Trust as of the close of business each day at the
following annual rates:
.75% of the first $200 million of net assets of the Fund;
plus
.70% of the next $200 million; plus
.65% of the next $400 million; plus
.60% of net assets over $800 million.
6. Use of Name
The Manager hereby grants to the Trust a royalty-free,
non-exclusive license to use the name "Oppenheimer" in the name of
the Trust and any trademarks or service marks, whether or not
registered, which it may own. To the extent necessary to protect
OMC's rights to the name "Oppenheimer" under applicable law, such
license shall allow OMC to inspect and, subject to control by the
Fund's Board, control the nature and quality of services offered by
the Fund under such name. The license may be terminated by the
Manager upon termination of this agreement in which case the Trust
shall have no further right to use the name "Oppenheimer" in its
name or otherwise or any of such marks, and the Trust, the holders
of its shares, and its officers and Trustees shall promptly take
whatever action may be necessary to change its name accordingly.
The name "Oppenheimer" or any of said marks may be used or licensed
by the Manager in connection with any of its activities, or
licensed by the Manager to any other party, and the Trust, the
holders of its shares, and its Trustees and officers agree to take
promptly whatever action may be necessary to permit such use or license.
7. Duration and Termination
(a) This Agreement shall go into effect on the date
first set forth above. It shall continue in effect until December
31, 1991, and thereafter from year to year, but only so long as
such continuance is specifically approved at least annually (a) by
the Board of Trustees, including the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the Investment Company Act of
1940) of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (b) by the vote of the
holders of a "majority" (as so defined) of the outstanding voting
securities of the Trust and by such aforementioned vote of the
Board of Trustees.
(b) This Agreement may be terminated by the Manager at
any time without penalty upon giving the Trust sixty days' written
notice (which notice may be waived by the Trust) and may be
terminated by the Trust at any time without penalty upon giving the
Manager sixty days' notice (which notice may be waived by the
Manager), provided that such termination by the Trust shall be
directed or approved by the vote of a majority of all of the Board
of Trustees of the Trust in office at the time or by the vote of
the holders of a "majority" (as defined in the Investment Company
Act of
1940) of the voting securities of the Trust at the time outstanding
and entitled to vote. This Agreement shall automatically terminate
in the event of its assignment (as "assignment" is defined in the
Investment Company Act of 1940).
8. Liability
(a) In the absence of willful misfeasance, bad faith
gross negligence or reckless disregard of its obligations or duties
under this Agreement, the Manager shall not be liable to this Trust
or any shareholder for any act or omission in performing the
services required by this Agreement or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment.
(b) The Manager understands and agrees that the
obligations of the Trust under this Agreement are not binding upon
any Trustee or shareholder of the Trust personally, but bind only,
the Trust and the Trust's property; the Manager represents that it
has notice of the provisions of the Declaration of Trust of the
Trust disclaiming shareholder liability for acts or obligations of
the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized
officers as of the day and year first above written.
ATTEST: OPPENHEIMER U.S. GOVERNMENT TRUST
/s/Mitchell J. Lindauer /s/ Robert G. Galli, Secretary
- ----------------------- ------------------------------
Mitchell J. Lindauer Robert G. Galli
ATTEST: OPPENHEIMER MANAGEMENT
CORPORATION
/s/ Mitchell J. Lindauer Robert G. Zack, Senior Vice President
- ------------------------ -------------------------------------
Mitchell J. Lindauer Robert G. Zack
AGREEMENT AND PLAN OF REORGANIZATION
Agreement and Plan of Reorganization ("Agreement") dated as of
February 28, 1991, between Oppenheimer U.S. Government Trust
("Government Trust") and MassMutual Integrity Funds ("Trust") on
behalf of its series MassMutual U.S. Government Securities Fund
("GSF").
PLAN OF REORGANIZATION
The reorganization will comprise (i) the acquisition by
Government Trust of substantially all of the assets of GSF in
exchange for Government Trust's assumption of certain of the
liabilities of GSF then existing and the issuance of shares of
Government Trust to GSF and (ii) the distribution of such shares by
GSF pro rata to its shareholders in complete liquidation and
termination of GSF and in exchange for all of GSF's outstanding
shares, each GSF shareholder being entitled to receive that
proportion of the Government Trust shares to be received by GSF
which the number of GSF shares owned by each such shareholder bears
to the number of outstanding GSF shares, all subject to the terms
hereof. It is intended that the reorganization described herein
shall be a reorganization within the meaning of Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the
"Code").
AGREEMENT
1. GSF and Government Trust (individually, a "Fund" and
collectively, the "Funds") each represents and warrants to and
agrees with the other Fund that:
(a) It is, or in the case of GSF it is a series of, an
unincorporated voluntary association duly established and validly
existing under the laws of The Commonwealth of Massachusetts and
has power to own all of its properties and assets and to carry out
this Agreement. It is not required to qualify as a foreign
association in any jurisdiction in which it is not so qualified.
It has all necessary federal, state and local authorizations to
carry on its business as now being conducted and to carry out this
Agreement.
(b) The Trust and Government Trust are each registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end management investment company, and such registration is
in full force and effect.
(c) Its statement of assets and liabilities, statement of
operations and statement of changes in net assets and schedule of
investments (indicating market values) for the years ended June 30,
1990 (for Government Trust) and December 31, 1989 (for GSF), have
been audited by KPMG Peat Marwick (for Government Trust) and by
Coopers & Lybrand (for GSF), independent auditors, and furnished to
the other Fund together with such unaudited financial statements
and schedule of investments (indicting market values) for the six
month period ending June 30, 1990. Said statements of assets and
liabilities and schedules of investments fairly present its
financial position as of such dates and said statements of
operations and changes in net assets fairly reflect its results of
operations and changes in financial position for the periods
covered thereby in conformity with generally accepted accounting
principles.
(d) Its Prospectus and Statement of Additional Information
dated November 1, 1990 (for Government Trust) and May 1, 1990 as
supplemented January 24, 1991 (for GSF) previously furnished to the
other Fund, did not and does not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(e) There are no material legal, administrative or other
proceedings pending or, to its knowledge, threatened against it.
(f) It has no known material liabilities, contingent or
otherwise, other than those shown on its statement of assets and
liabilities as of June 30, 1990, and those incurred in the ordinary
course of its business as an investment company since June 30,
1990. Prior to the Exchange Date (as defined in Section 9), it
will advise the other Fund of all material liabilities, contingent
or otherwise, incurred by it subsequent to June 30, 1990, except
for portfolio securities purchased which have not settled.
(g) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by it of
the transactions contemplated by this Agreement, except such as may
be required under the Securities Act of 1933, as amended (the "1933
Act"), the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the 1940 Act or state securities laws (which term as
used herein shall include the securities laws of the District of
Columbia and of Puerto Rice).
(h) The registration statement (the "Registration Statement")
filed with the Securities and Exchanges Commission (the
"Commission") by Government Trust on form N-14 relating to the
shares of beneficial interest, no par value, of Government Trust
issuable hereunder and the proxy statement of GSF included therein
(the "Proxy Statement") on the effective date of the Registration
Statement and insofar as they relate to the Fund, (i) will comply
in all material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder
and (ii) will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the
time of the shareholders' meeting referred to in Section 6(a) and
on the Exchange Date, the prospectus contained in the Registration
Statement of which the Proxy Statement is a part (the
"Prospectus"), as amended or supplemented, insofar as it relates to
the Fund, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(i) It is an will at all times through the Exchange Date be a
"regulated investment company" within the meaning of Section 851 of
the Code (a "RIC").
2. GSF represents and warrants to and agrees with Government Trust
that:
(a) GSF has filed or will file all federal and state tax
returns which, to the knowledge of the Trust's officers, are
required to be filed by GSF and has paid or will pay all federal
and state taxes shown to be due on said returns or on any
assessments received by GSF. All tax liabilities of GSF have been
adequately provided for, and no tax deficiency or liability of GSF
has been asserted, and no question with respect thereto has been
raised, by the Internal Revenue Service (the "IRS") or by any state
or local tax authority for taxes in excess of those already paid.
(b) At both the Valuation Time (as defined in Section 4(d)
hereof) and the Exchange Date, GSF will have the full right, power
and authority to sell, assign, transfer and deliver its portfolio
securities and any other assets of GSF to be transferred to
Government Trust pursuant to this Agreement. At the Exchange Date,
subject only to the delivery of GSF's portfolio securities and any
such other assets as contemplated by this Agreement, Government
Trust will acquire GSF's portfolio securities and any such other
assets subject to no encumbrances, liens or security interests
whatsoever and without any restrictions upon the transfer thereof.
(c) No registration under the 1933 Act of any of GSF's
portfolio securities would be required if they were, as of the time
of such transfer, the subject of a public distribution by either of
GSF or Government Trust.
(d) All of the issued and outstanding shares of beneficial
interest of GSF have been offered for sale and sold in conformity
will all applicable federal and state securities laws. Government
Trust represents and warrants to and agrees with GSF that (a) by
the Exchange Date, the shares of beneficial interest of Government
Trust to be issued to GSF will have been duly authorized and, when
issued and delivered pursuant to this Agreement, will be legally
and validly issued by Government Trust and will be fully paid and
nonassessable, except as described in its Registration Statement,
and no shareholder of Government Trust will have any preemptive
right of subscription or purchase in respect thereof; and (b) all
tax liabilities of Government Trust have been adequately provided
for, and no tax deficiency or liability of Government Trust has
been asserted and, except as expressly disclosed, no question with
respect thereto has been raised, by the IRS or by any state or
local tax authority for taxes in excess of those already paid.
4.(a) Subject to the requisite approval of the shareholders of
GSF and to the other terms and conditions contained herein, GSF
agrees to transfer to Government Trust, and Government Trust agrees
to acquire from GSF, on the Exchange Date all of the assets of
every kind and nature of GSF existing on the Exchange Date (except
amounts reserved by GSF to pay its debts and expenses which amounts
GSF shall after the payment of such debts and expenses pay to
Government Trust for distribution to GSF's shareholders) in
exchange for the assumption by Government Trust of any liabilities
of GSF existing on the Exchange Date for portfolio securities
purchased which have not settled, and the issuance by Government
Trust of that number of shares of beneficial interest of Government
Trust (the "Shares") provided for in Section 5. Pursuant to this
Agreement GSF will as soon as practicable after the Exchange Date
distribute the Shares pro rata to the shareholders of GSF in
exchange for their shares of beneficial interest of GSF and be
liquidated in accordance with the Trust's Agreement and Declaration
of Trust.
(b) GSF will pay or cause to be paid to Government Trust any
dividend or interest payments received by it on or after the
Exchange Date with respect to the Assets transferred to Government
Trust hereunder; provided, however, that if the payment of such
dividend or interest payments to Government Trust would cause GSF
to lose its status as a RIC, then Government Trust shall distribute
such payments to the shareholders of GSF as the agent of GSF.
(c) Government Trust will retain any dividend or interest
payments received by it after the Valuation Time with respect to
the assets transferred to Government Trust hereunder, without
regard to the payment date thereof; provided, however, that if the
receipt of such dividend or interest payments by Government Trust
would cause GSF to lose its status as a RIC, then Government Trust
shall distribute such dividend and interest payments to the
shareholders o GSF as agent of GSF.
(d) The Valuation Time shall be 4:00 P.M. Boston time on March
27, 1991, or such day as may be mutually agreed upon in writing by
the parties hereto (the "Valuation Time").
(e) GSF will discharge all of its liabilities, so far as may
be possible, prior to the Exchange Date. Government Trust, in any
event, will not assume the liabilities of GSF (except liabilities
for portfolio securities purchased which have not settled, which
liabilities will be assumed by Government Trust).
(f) Portfolio securities or written evidence acceptable to
Government Trust of record ownership thereof by The Depository
Trust Company or through the Federal Reserve Book Entry System or
any other depository approved by GSF pursuant to Rule 17f-4 under
the 1934 Act shall be presented by GSF to Government Trust or, at
its request, to its custodian bank, for examination no later than
five business days preceding the Exchange Date, and shall be
delivered, or transferred by appropriate transfer or assignment
documents, by GSF on the Exchange Date to Government Trust duly
endorsed in proper form for transfer in such condition as to
constitute good delivery thereof in accordance with the custom of
brokers and shall be accompanied by all necessary state transfer
stamps, if any, or a check for the appropriate purchase price
thereof. The cash delivered shall be in the form of certified or
bank cashiers checks or by bank wire payable to the order of
Government Trust.
(g) If, at the Exchange Date, GSF is unable to make delivery
under Section 4(f) to Government Trust of any of its portfolio
securities or cash for the reason that any of such securities
purchased by GSF or the cash proceeds of a sale of portfolio
securities, prior to the Exchange Date have not yet been delivered
to it or GSF's custodian, then the delivery requirements of Section
4(f) with respect to said undelivered securities or cash will be
waived and GSF will deliver to Government Trust by or on the
Exchange Date and with respect to said undelivered securities or
cash executed copies of an agreement or agreements of assignment in
a form reasonably satisfactory to Government Trust, together with
such other documents, including a due bill or due bills and
brokers' confirmation slips as may reasonably be required by
Government Trust.
5. On the Exchange Date Government Trust will deliver to GSF
a number of Shares having an aggregate net asset value equal to the
value of the assets of GSF transferred hereunder less any
liabilities of GSF assumed by Government Trust, determined as
provided in this Section 5.
(a) The net asset value of the Shares and the value of the
assets of GSF transferred hereunder and any liabilities of GSF to
be assumed by Government Trust shall be determined as of the
Valuation Time.
(b) The net asset value of the Shares shall be computed in
accordance with Government Trust's prospectus and the net assets of
GSF shall be valued in the same manner.
(c) No adjustment to the number of Shares to be delivered to
GSF shall be made for any unrealized capital gains or losses of
GSF's or Government Trust's net assets.
Government Trust shall issue the Shares to GSF in one
certificate (excluding any fractional share) registered in the name
of GSF. GSF shall distribute the Shares to its shareholders by
redelivering such certificate to Government Trust's transfer agent,
which will as soon as practicable set up open accounts with
Government Trust for each GSF shareholder in accordance with
written instructions furnished by GSF. With respect to any GSF
shareholder holding GSF certificates as of the Exchange Date,
Government Trust will not permit such shareholder to receive
dividends and other distributions (although dividends and other
distributions shall be credited to the account of such
shareholder), receive Government Trust certificates, exchange
Shares credited to such shareholder's account for shares of other
investment companies managed by Oppenheimer Management Corporation
or pledge or redeem Shares until Government Trust is notified by
GSF or its agent that such shareholder has surrendered all
outstanding GSF certificates issued to such shareholder or posted
adequate bond. GSF will request the shareholders of GSF to
surrender their outstanding GSF certificates, or post adequate bond
for lost certificates.
6. All fees and expenses, including legal, accounting,
printing, filing and proxy solicitation expenses, portfolio
transfer taxes (if any) or other similar expenses incurred in
connection with the transactions contemplated by this Agreement
will be paid by the party incurring such expenses, it being
understood that all expenses relating to obtaining the approval of
the shareholders of GSF pursuant to Section 7(a) shall be deemed to
be expenses of GSF and all expenses relating to the registration
under federal and state securities laws of shares of Government
Trust to be issued to GSF pursuant to Section 5 shall be deemed to
be expenses of Government Trust.
7.(a) GSF agrees to call a meeting of its shareholders as soon
as is practicable after the effective date of the Registration
Statement to consider (i) transferring its assets to Government
Trust as herein provided, (ii) adopting this Agreement and (iii)
authorizing the liquidation and dissolution of GSF, and it shall be
a condition to the obligations of each of the parties hereto that
the holders of at least a majority of the outstanding voting
securities of GSF as defined in Section 2(a)(42) of the 1940 Act
shall have voted in favor of such matters at such a meeting on or
before the Valuation Time.
(b) GSF agrees that the liquidation and dissolution of GSF
will be effected in the manner provided in the Trust's Agreement
and Declaration of Trust, in accordance with applicable law, and
that on and after the Exchange Date GSF shall not conduct any
business except in connection with its liquidation and dissolution.
8. Government Trust agrees to advise GSF promptly if at any
time prior to the Exchange Date the assets of GSF include any
assets that Government Trust is not permitted, or reasonably
believes to be unsuitable for it, to acquire, including without
limitation any security that, prior to its acquisition by GSF,
Government Trust has informed GSF is unsuitable for Government
Trust to acquire.
9. Delivery of the assets of GSF to be transferred shall be
made as provided for in Section 4(f) and delivery of the Shares
shall be made at the offices of Ropes & Gray, One International
Place, Boston, Massachusetts, at 5:00 P.M. on March 28, 1991, or at
such other time and date agreed to by GSF and Government Trust (the
"Exchange Date").
10. The obligations of each Fund hereunder shall be subject to
the following conditions:
(a) That this Agreement shall have been adopted and the
transactions contemplated hereby shall have been approved by the
affirmative vote of the holders of at least a majority of the
outstanding voting securities (as defined in Section 2(a) (42) of
the 1940 Act) of GSF.
(b) That the other Fund shall have furnished it with such
other Fund's statements of assets and liabilities, together with a
list of such other Fund's portfolio securities, together with each
such security's respective adjusted tax basis, with values
determined as provided in Section 5 of this Agreement, all as of
the Valuation Time, certified on such other Fund's behalf by such
other Fund's President (or any Vice President) and Treasurer, and
a certificate of both such officers, dated the Exchange Date, that
there has been no material adverse change in such other Fund's
financial position since June 30, 1990, other than (i) changes in
such other Fund's portfolio securities since that date or (ii)
changes in the market value of such other Fund's portfolio
securities or (iii) changes due to net redemptions of its shares,
dividends paid or losses from operations.
(c) That the other Fund shall have furnished to it a
statement, dated the Exchange Date, signed by such other Fund's
President (or any Vice President) or Treasurer certifying that as
of the Valuation Time and as of the Exchange Date all
representations and warranties of such other Fund made in this
Agreement are true and correct in all material respects as of such
date and that the other Fund has complied with all the agreements
and satisfied all the conditions on such other Fund's part to be
performed or satisfied at or prior to such dates.
(d) That each Fund shall have received an opinion of counsel
to the other Fund, in form satisfactory to it and dated the
Exchange Date, to the effect that (i) the other Fund is an
unincorporated voluntary association duly established and validly
existing in conformity with the laws of The Commonwealth of
Massachusetts, (ii) this Agreement has been duly authorized,
executed and delivered by the other Fund and, assuming that the
Registration Statement, the Prospectus and the Proxy Statement
comply with the 1933 Act, the 1934 Act and the 1940 Act and
assuming due authorization, execution and delivery of this
Agreement by it, is a valid and binding obligation of the other
Fund according to its terms (qualified as to the application of the
bankruptcy or other insolvency laws, the availability of injunctive
relief and such statements relating to the scope of counsel's
review and its responsibilities and liabilities as are customary
under the circumstances), (iii) solely in the case of the opinion
to be received by Government Trust, GSF has power to sell, assign,
transfer and deliver the assets transferred by it hereunder and,
upon consummation of the transactions contemplated hereby in
accordance with the terms of this Agreement, GSF will have duly
transferred such assets to Government Trust, (iv) solely in the
case of the opinion to be received by GSF, the Shares are duly
authorized and upon delivery to GSF as provided in this Agreement
will be validly issued and will be fully paid and (except as set
forth in the November 1, 1990 statement of additional information
of Government Trust) nonassessable by Government Trust and no
shareholder of Government Trust has any preemptive right of
subscription or purchase in respect thereof, (v) the execution and
delivery of this Agreement did not and the consummation of the
transactions contemplated hereby will not, violate Government
Trust's or the Trust's Agreement and Declaration of Trust, as the
case may be, or any provision of any agreement known to such
counsel to which the other Fund is a party or by which it is bound,
(vi) no consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
other Fund of the transactions contemplated herein, except such as
have been obtained under the 1993 Act, the 1934 Act and the 1940
Act and such as may be required under state securities or blue sky
laws, (vii) the Registration Statement, the Prospectus and the
Proxy Statement and each amendment thereof and supplement thereto,
as of their respective effective dates and only insofar as they
relate to the other Fund, complied as to form in all material
respects with the requirements of the 1933 Act, the 1934 Act and
the 1940 Act and the applicable rules and regulations of the
Commission thereunder, (viii) the descriptions in the Registration
Statement, the Prospectus and the Proxy Statement of statutes,
legal and governmental proceedings and contracts and other
documents, only insofar as they relate to the other Fund, are
accurate and fairly present the information required to be shown,
and (ix) such counsel do not know of any legal or governmental
proceedings, only insofar as they relate to the other Fund,
required to be described in the Registration Statement, the
Prospectus or the Proxy Statement which are not described as
required, nor of any contracts or documents, only insofar as they
relate to the other Fund, of a character required to be described
in the Registration Statement, the Prospectus or the Proxy
Statement or to be filed as exhibits to the Registration Statement
which are not described and filed as required. Such opinion shall
also state that, while such counsel have not verified, and are not
passing upon and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in
the Registration Statement, the Prospectus or the Proxy Statement
or any amendment thereof or supplement thereto, they have generally
reviewed and discussed such statements with certain officers of the
other Fund and its auditors and that in the course of such review
and discussion no facts came to the attention of such counsel which
led them to believe that, on the respective effective dates of the
Registration Statement and any amendment thereof or supplement
thereto and only insofar as they relate to the other Fund either
the Registration Statement, the Prospectus or the Proxy Statement
or any amendment thereof or supplement thereto contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. Such opinion may state that such counsel
do not express any opinion or belief as to the financial statements
or other financial data or as to the information relating to the
Fund receiving the opinion contained in the Registration Statement,
the Prospectus or the Proxy Statement, or any amendment thereof or
supplement thereto, and that such opinion is solely for the benefit
of the Fund receiving the opinion, its trustees and its officers.
(e) That the Registration Statement shall have become
effective under the 1933 Act, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of
it, contemplated by the Commission.
(f) That each Fund shall have received from the Commission
such order or orders as counsel to such Fund deem reasonably
necessary or desirable under the 1933 Act and the 1940 Act in
connection with the transactions contemplated hereby, and that all
such order shall be in full force and effect.
(g) That all proceedings taken by the other Fund in connection
with the transactions contemplated by this Agreement and all
documents incidental thereto shall be satisfactory in form and
substance to it and its counsel and that each Fund shall have
received an opinion of counsel as to such other matters as such
Fund shall reasonably deem necessary or desirable.
(h) That there shall not be any material litigation pending
with respect to the matters contemplated by this Agreement.
11. The obligations of Government Trust hereunder shall also
be subject to the following conditions:
(a) That GSF shall delivered to Government Trust tax returns
for the year ended December 31, 1990 and the period from January 1,
1991 to the Exchange Date.
(b) That Government Trust shall have received an opinion of
independent auditors or counsel to the effect that for federal
income tax purposes (i) no gain or loss will be recognized by
Government Trust upon its receipt of the assets of GSF transferred
to Government Trust pursuant to this Agreement in exchange for the
Shares and the assumption of certain liabilities of GSF, (ii) the
basis in the hands of Government Trust of the assets of GSF will be
the same as the basis of such assets in the hands of GSF
immediately prior to such transfer and (iii) Government Trust will
include in its holding period for each asset acquired from GSF the
periods during which each such asset was held by GSF.
(c) That the assets of GSF to be acquired by Government Trust
shall include no assets which Government Trust, by reason of
charter limitations or investment restrictions disclosed in the
prospectus or statement of additional information of Government
Trust in effect on the Exchange Date, may not properly acquire.
(d) That prior to the Exchange Date, GSF shall have declared
a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the
shareholders of GSF all of GSF's investment company taxable income
for its taxable years ending on or after December 31, 1990 and on
or prior to the Exchange Date (computed without regard to any
deduction or dividends paid), and all of its net capital gain
realized in each of its taxable years ending on or after December
31, 1990 and on or prior to the Exchange Date.
(e) That GSF shall have furnished to Government Trust a
certificate, signed by the President (or any Vice President) and
the Treasurer of GSF, as to the adjusted tax bases in the hands of
GSF of the securities delivered to Government Trust pursuant to
this Agreement together with any such other evidence as to such
adjusted tax bases as Government Trust may reasonably request.
(f) That GSF's custodian shall have delivered to Government
Trust a certificate identifying all of the assets of GSF held by
such custodian as of the Valuation Time.
(g) That GSF's transfer agent shall have delivered to
Government Trust (1) the originals or true copies of all of the
records of GSF in the possession of such transfer agent as of the
Exchange Date and (2) a certificate setting forth the number of
shares of GSF outstanding as of the Valuation Time and the name and
address of each holder of record of any such shares and the number
of shares held of record by each such shareholder.
(h) That all of the issued and outstanding shares of
beneficial interest of GSF shall have been offered for sale and
sold in conformity with all applicable federal and state securities
laws and, to the extent that any audit of the records of GSF or its
transfer agent by Government Trust or its agents shall have
revealed otherwise, either (i) GSF shall have taken all actions
that in the opinion of Government Trust or its counsel are
necessary to remedy any prior failure on the part of GSF to have
offered for sale and sold such shares in conformity with such laws
or (ii) GSF shall have furnished surety, or deposited assets in
escrow, for the benefit of Government Trust in amounts sufficient
and upon terms satisfactory, in the opinion of Government Trust or
its counsel, to indemnify Government Trust against any expense,
loss, claim, damage or liability whatsoever that may be asserted or
threatened by reason of such failure on the part of GSF to have
offered and sold such shares in conformity with such laws.
12. The obligations of GSF hereunder also shall be subject to
the following conditions:
That GSF shall have received an opinion of its counsel to the
effect that for federal income tax purposes (i) no gain or loss
will be recognized by GSF upon transfer of its assets to Government
Trust in exchange for the shares and the assumption of certain
liabilities of GSF or on the distribution by GSF in liquidation to
its shareholders of the Shares, (ii) no gain or loss will be
recognized by the shareholders of GSF on the distribution to them
by GSF of Shares in exchange for their shares of GSF, (ii) the
basis of the Shares a GSF shareholder receives in place of his or
her GSF shares in connection with this Agreement will be the same
as the basis of his or her GSF shares exchanged and (iv) a GSF
shareholder's holding period for Government Trust Shares will be
determined by including the period for which he or she held GSF
shares exchanged therefore, provided that he or she held such GSF
shares as a capital asset.
13. Each of GSF and Government Trust represents that there is
no person who has dealt with it who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or
commission arising out of the transactions contemplated by this
Agreement.
14. GSF and Government Trust may terminate this Agreement by
mutual agreement and either Fund may waive any condition to its
obligations hereunder. If the transactions contemplated by this
Agreement have not been substantially completed by June 30, 1991,
this Agreement shall automatically terminate on that date, unless
a later date is agreed to by GSF and Government Trust.
15. Pursuant to Rule 145 under the 1933 Act, Government Trust
will, in connection with the issuance of any shares of Government
Trust to any person who at the time of the transaction contemplated
hereby is deemed to be an affiliate of a party to the transaction
pursuant to Rule 145(c), cause to be affixed upon the certificates
(if any) issued to such person a legend as follows:
"THESE SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
TO OPPENHEIMER U.S. GOVERNMENT TRUST OR ITS PRINCIPAL
UNDERWRITER UNLESS (I) A REGISTRATION STATEMENT WITH RESPECT
THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933 OR (II)
IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO
OPPENHEIMER U.S. GOVERNMENT TRUST SUCH REGISTRATION IS NOT
REQUIRED."
and, further, Government Trust will issue stop transfer
instructions to Government Trust's transfer agent with respect to
such shares. GSF will provide Government Trust on the Exchange
Date with the name of any GSF shareholder who is to the knowledge
of GSF an affiliate of GSF on such date.
16. All covenants, agreements, representations and warranties
made under this Agreement and any certificates delivered pursuant
to this Agreement shall be deemed to have been material and relied
upon by each of the parties, notwithstanding any investigation made
by them or on their behalf.
17. Shareholders of GSF who immediately prior to the Exchange
Date have adopted any plan or arrangement offered by both
Government Trust and GSF shall retain the same rights and
privileges under such plan or arrangement with respect to the
shares of Government Trust after the Exchange Date to the extent
that Government Trust offers a substantially similar plan or
arrangement.
18. This Agreement supersedes all previous correspondence and
oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to
such subject matter, may not be changed except by a letter of
agreement signed by each party hereto and shall be construed in
accordance with and governed by the laws of The Commonwealth of
Massachusetts.
19. No representations, warranties or covenants in or pursuant
to this Agreement (including certificates of officers) shall
survive the Exchange Date.
20. A copy of the Agreement and Declaration of Trust of
Government Trust and the Trust, as amended, is on file with the
Secretary of State of The Commonwealth of Massachusetts, and notice
is hereby given that this instrument is executed on behalf of the
respective trustees of Government Trust and the Trust as trustees
and not individually and that the obligations of
Government Trust and the Trust under this instrument are not
binding upon any of Government Trust and the Trust trustees,
officers or shareholders of Government Trust or the Trust
individually but are binding only upon the respective assets and
property of Government Trust or the Fund.
This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be deemed to be
an original.
OPPENHEIMER U.S. GOVERNMENT TRUST
By: ____________________________
Title: Secretary
MASSMUTUAL INTEGRITY FUNDS on behalf of
MASSMUTUAL U.S. GOVERNMENT SECURITIES FUND
By: ____________________________
Title:
merge\220
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated this 5th day of
August, 1991, by and between Advance America Funds, Inc. ("Advance
America"), a Maryland corporation, regarding its U.S. Government
Fund portfolio (the "Fund"), and Oppenheimer U.S. Government Trust
("OUSGT"), a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of
the management type; and
WHEREAS, the parties hereto desire to provide for the
reorganization pursuant to Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code") of the Fund through
the acquisition by OUSGT of substantially all of the assets of the
Fund in exchange for the shares of beneficial interest ("shares")
of OUSGT and the assumption by OUSGT of certain liabilities of the
Fund, which shares of OUSGT are thereafter to be distributed by the
Fund pro rata to its shareholders in complete liquidation of the
Fund and complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. The parties hereto hereby adopt a Plan of Reorganization
pursuant to Section 368(a)(1) of the Code as follows: The
reorganization will be comprised of the acquisition of
substantially all of the properties and assets of the Fund in
exchange for shares of OUSGT and the assumption by OUSGT of certain
liabilities of the Fund, followed by the distribution of such OUSGT
shares to the shareholders of the Fund in exchange for their shares
of the Fund, all upon and subject to the terms of the Agreement
hereinafter set forth.
The share transfer books of the Fund will be permanently
closed at the close of business on the Valuation Date (as
hereinafter defined) and only redemption requests received in
proper form on or prior to the close of business on the Valuation
Date shall be fulfilled by the Fund; redemption requests received
by the Fund after that date shall be treated as requests for the
redemption of the shares of OUSGT to be distributed to the
shareholder in question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the
assets of the Fund on that date, excluding a cash reserve (the
"Cash Reserve") to be retained by the Fund sufficient in its
discretion for the payment of the expenses of the Fund's
dissolution and its liabilities, but not in excess of the amount
contemplated by Section 10E, shall be delivered as provided in
Section 8 to OUSGT, in exchange for and against delivery to the
Fund on the Closing Date of a number of shares of OUSGT having an
aggregate net asset value equal to the value of the assets of the
Fund so transferred and delivered.
3. The net asset value of shares of OUSGT and the value of
the assets of the Fund to be transferred shall in each case be
determined as of the close of business of the New York Stock
Exchange on the Valuation Date. The computation of the net asset
value of the shares of OUSGT and the Fund shall be done in the
manner used by OUSGT and the Fund, respectively, in the computation
of such net asset value per share as set forth in their respective
prospectuses. The methods used by OUSGT in such computation shall
be applied to the valuation of the securities of the Fund to be
transferred to OUSGT.
The Fund shall declare and pay, immediately prior to the
Valuation Date, a dividend or dividends which, together with all
previous such dividends, shall have the effect of distributing to
the Fund's shareholders all of the Fund's investment company
taxable income for taxable years ending on or prior to the Closing
Date (computed without regard to any dividends paid) and all of its
net capital gain, if any, realized in taxable years ending on or
prior to the Closing Date (after reduction for any capital loss
carry-forward).
4. The closing shall be at the office of Oppenheimer
Management Corporation (the "Agent"), Two World Trade Center, Suite
3400, New York, New York 10048, at 4:00 P.M. New York time on
October 18, 1991, or at such other time or place as the parties may
designate or as provided below (the "Closing Date"). The business
day preceding the Closing Date is herein referred to as the
"Valuation Date."
In the event that on the Valuation Date either party
has, pursuant to the Investment Company Act of 1940 (the "Act") or
any rule, regulation or order thereunder, suspended the redemption
of its shares or postponed payment therefor, the Closing Date shall
be postponed until the first business day after the date when both
parties have ceased such suspension or postponement; provided,
however, that if such suspension shall continue for a period of 60
days beyond the Valuation Date, then the other party to this
Agreement shall be permitted to terminate this Agreement without
liability to either party for such termination.
5. As soon as practicable after the closing, the Fund shall
distribute on a pro rata basis: to the shareholders of the Fund on
the Valuation Date the shares of OUSGT received by the Fund on the
Closing Date in exchange for the assets of the Fund in liquidation
and cancellation of the outstanding shares of the Fund; for the
purpose of the distribution by the Fund of such shares of OUSGT to
its shareholders, OUSGT will promptly cause the Agent to: (a)
credit an appropriate number of shares of OUSGT on the books of
OUSGT to each shareholder of the Fund in accordance with a list
(the "Shareholder List") of its shareholders received from the
Fund; and (b) confirm an appropriate number of shares of OUSGT to
each shareholder of the Fund; certificates for shares of OUSGT will
be issued upon written request of a former shareholder of the Fund
but only for whole shares with fractional shares credited to the
name of the shareholder on the books of OUSGT.
The Shareholder List shall indicate, as of the close of
business on the Valuation Date, the name and address of each
shareholder of the Fund, indicating his or her share balance. The
Fund agrees to supply the Shareholder List to OUSGT not later than
the Valuation Date. Shareholders of the Fund holding certificates
representing their shares shall not be required to surrender their
certificates to anyone in connection with the reorganization.
After the reorganization, however, it will be necessary for such
shareholders to surrender their certificates in order to redeem the
shares of OUSGT which they received.
6. Within one year after the closing, the Fund shall (a)
file a final annual report on Form N-SAR with the Securities and
Exchange Commission under the Investment Company Act of 1940 and
terminate its registration under the Act, (b) either pay or make
provision for payment of all of its liabilities and taxes, and (c)
either (i) transfer any remaining amount of the Cash Reserve to
OUSGT, if such remaining amount (as reduced by the estimated cost
of distributing it to shareholders) is not material (as defined
below) or (ii) distribute such remaining amount to the shareholders
of the Fund on the Valuation Date. Such remaining amount shall be
deemed to be material if the amount to be distributed, after
deduction of the estimated expenses of the distribution, equals or
exceeds one cent per share of the Fund outstanding on the Valuation
Date. Within one year after the closing of the reorganization of
the fourth and final series of Advance America, Advance America
shall effect its dissolution with the proper Maryland authorities
and terminate its registration under the Investment Company Act of
1940.
7. Prior to the Closing Date, there shall be coordination
between the parties as to their respective portfolios so that,
after the closing, OUSGT will be in compliance with all of its
investment policies and restrictions. At the closing, the Fund
shall deliver to OUSGT two copies of a list setting forth the
securities then owned by the Fund and the respective federal income
tax bases thereof.
8. Portfolio securities or written evidence acceptable to
OUSGT of record ownership thereof by The Depository Trust Company
or through the Federal Reserve Book Entry System or any other
depository approved by the Fund pursuant to Rule 17f-4 or Rule 17f-
5 under the Act shall be delivered, or transferred by appropriate
transfer or assignment documents, by the Fund on the Closing Date
to OUSGT, or at its direction, to its custodian bank, duly endorsed
in proper form for transfer in such condition as to constitute good
delivery thereof in accordance with the custom of brokers and shall
be accompanied by all necessary state transfer stamps, if any, or
a check for the appropriate purchase price thereof. The cash
delivered shall be in the form of certified or bank cashiers'
checks or by bank wire payable to the order of OUSGT for the
account of OUSGT. Shares of OUSGT representing the number of
shares of OUSGT being delivered against the securities and cash of
the Fund, registered in the name of the Fund, shall be transferred
to the Fund on the Closing Date. Such shares shall thereupon be
assigned by the Fund to its shareholders so that the shares of
OUSGT may be distributed as provided in Section 5.
If, at the Closing Date, the Fund is unable to make
delivery under this Section 8 to OUSGT of any of its portfolio
securities or cash for the reason that any of such securities
purchased by the Fund, or the cash proceeds of a sale of portfolio
securities, prior to the Closing Date have not yet been delivered
to it or the Fund's custodian, then the delivery requirements of
this Section 8 with respect to said undelivered securities or cash
will be waived and the Fund will deliver to OUSGT by or on the
Closing Date and with respect to said undelivered securities or
cash executed copies of an agreement or agreements of assignment in
a form reasonably satisfactory to OUSGT, together with such other
documents, including a due bill or due bills and brokers'
confirmation slips as may reasonably be required by OUSGT.
9. OUSGT shall not assume the liabilities (except for
portfolio securities purchased which have not settled and for
shareholder redemption and dividend checks outstanding) of the
Fund, but the Fund will, nevertheless, use its best efforts to
discharge all known liabilities, so far as may be possible, prior
to the Closing Date. The cost of printing the proxies and proxy
statements associated with this reorganization will be paid by the
Fund. The cost of mailing the proxies and proxy statements, and
the cost of the tax opinion will be split between the Fund and
OUSGT. Any documents such as existing prospectuses or annual
reports that are included in that mailing will be a cost of the
fund issuing the document. Any other out-of-pocket expenses of the
Fund and OUSGT associated with this reorganization, including
legal, accounting and transfer agent expenses, will be borne by the
Fund and OUSGT, respectively.
10. The obligations of OUSGT hereunder shall be subject to
the following conditions:
A. The Board of Directors of Advance America shall have
authorized the execution of Articles of Transfer pursuant to
Maryland law and the execution of this Agreement, and the
shareholders of the Fund shall have approved the Agreement and the
transactions contemplated herein, and Advance America shall have
furnished to OUSGT copies of resolutions to that effect certified
by the Secretary or an Assistant Secretary of Advance America; such
shareholder approval shall have been by the vote of the holders of
a majority of the outstanding voting securities of the Fund at a
meeting for which proxies have been solicited by the Proxy
Statement and Prospectus.
B. OUSGT shall have received an opinion dated the
Closing Date of counsel to Advance America, to the effect that (i)
Advance America is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland with
full corporate powers to carry on its business as then being
conducted and to enter into and perform this Agreement; and (ii)
that all corporate action necessary to make this Agreement,
according to its terms, valid, binding and enforceable on Advance
America and to authorize effectively the transactions contemplated
by this Agreement have been taken by Advance America.
C. The representations and warranties of Advance
America contained herein shall be true and correct at and as of the
Closing Date, and OUSGT shall have been furnished with a
certificate of the President or the Secretary or the Assistant
Secretary or the Treasurer of Advance America, dated the Closing
Date, to that effect.
D. On the Closing Date, Advance America shall have
furnished to OUSGT a certificate of the Treasurer of Advance
America as to the amount of the capital loss carry-over and net
unrealized appreciation or depreciation, if any, with respect to
the Fund as of the Closing Date.
E. The Cash Reserve shall not exceed 10% of the value
of the net assets, nor 30% in value of the gross assets, of the
Fund at the close of business on the Valuation Date.
F. A Registration Statement filed by OUSGT under the
Securities Act of 1933 on Form N-14 and containing a preliminary
form of the Proxy Statement and Prospectus shall have become
effective under that Act not later than December 31, 1991.
G. On the Closing Date, OUSGT shall have received a
letter of Robert G. Galli, attorney-at-law, or other counsel
acceptable for OUSGT, stating that nothing has come to his
attention which in his judgment would indicate that as of the
Closing Date there were any material actual or contingent
liabilities of the Fund arising out of litigation brought against
the Fund or claims asserted against it, or pending or to the best
of his knowledge threatened litigation not reflected in or apparent
by the most recent audited financial statements and footnotes
thereto of the Fund delivered to OUSGT. Such letter may also
include such additional statements relating to the scope of the
review conducted by such counsel and his responsibilities and
liabilities as are not unreasonable under the circumstances.
H. OUSGT shall have received an opinion, dated the
Closing Date, of Deloitte & Touche, to the same effect as the
opinion contemplated by Section 11 E. of this Agreement.
I. OUSGT shall have received at the closing all of the
assets of the Fund to be conveyed hereunder, which assets shall be
free and clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever.
11. The obligations of the Fund hereunder shall be subject
to the following conditions:
A. The Board of Trustees of OUSGT shall have authorized
the execution of this Agreement, Articles of Transfer of the Fund
pursuant to Maryland law, and the execution of this Agreement, and
the transactions contemplated thereby, and OUSGT shall have
furnished to the Fund copies of resolutions to that effect
certified by the Secretary or an Assistant Secretary of OUSGT.
B. The Fund's shareholders shall have approved this
Agreement and the transactions contemplated hereby, by an
affirmative vote of the holders of a majority of the outstanding
voting securities of the Fund, and the Fund shall have furnished
OUSGT copies of resolutions to that effect certified by the
Secretary or an Assistant Secretary of Advance America.
C. The Fund shall have received an opinion dated the
Closing Date of counsel to OUSGT, to the effect that (i) OUSGT is
a validly existing Massachusetts business trust with full power to
carry on its business as then being conducted and to enter into and
perform this Agreement; (ii) all action necessary to make this
Agreement, according to its terms, valid, binding and enforceable
upon OUSGT and to authorize effectively the transactions
contemplated thereby have been taken by OUSGT, and (iii) the shares
of OUSGT to be issued hereunder are duly authorized and when issued
will be validly issued, fully-paid and non-assessable, except as
otherwise set forth in OUSGT's Registration Statement.
D. The representations and warranties of OUSGT
contained herein shall be true and correct at and as of the Closing
Date, and the Fund shall have been furnished with a certificate of
the President or the Secretary or the Treasurer of OUSGT to that
effect dated the Closing Date.
E. The Fund shall have received an opinion of Deloitte
& Touche to the effect that the Federal tax consequences of the
transaction, if carried out in the manner outlined in this Plan of
Reorganization and in accordance with (i) the Fund's representation
that there is no plan or intention by any Fund shareholder who owns
5% or more of the Fund's outstanding shares, and, to Fund's best
knowledge, there is no plan or intention on the part of the
remaining Fund shareholders, to redeem, sell, exchange or otherwise
dispose of a number of OUSGT shares received in the transaction
that would reduce the Fund shareholders' ownership of OUSGT shares
to a number of shares having a value, as of the Closing Date (as
defined in the Reorganization Plan), of less than 50% of the value
of all of the formerly outstanding Fund shares as of the same date
(ii) the representation b each of the Fund and OUSGT, that, as of
the Closing Date, the Fund and OUSGT will qualify as regulated
investment companies or will meet the diversification test of
Section 368(a)(2)(F)(ii) of the Code; will be as follows:
1. The transactions contemplated by the
Reorganization Plan will qualify as a tax-free
"reorganization" within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986,
as amended, and under the regulations
promulgated thereunder.
2. The Fund and OUSGT will each qualify as a
"party to a reorganization" within the meaning
of Section 368(b)(2).
3. No gain or loss will be recognized by the
shareholders of the Fund upon the distribution
of shares of beneficial interest in OUSGT to
the shareholders of the Fund pursuant to
Section 354.
4. Under Section 361(a) no gain or loss will be
recognized by the Fund by reason of the
transfer of its assets solely in exchange for
shares of OUSGT.
5. Under Section 1032 no gain or loss will be
recognized by OUSGT by reason of the transfer
of the Fund's assets solely in exchange for
shares of OUSGT.
6. The stockholders of the Fund will have the same
tax basis and holding period for the shares of
beneficial interest in OUSGT that they receive
as they had for the Fund stock that they
previously held, pursuant to Sections 358(a)
and 1223(1), respectively.
7. The securities transferred by the Fund to OUSGT
will have the same tax basis and holding period
in the hands of OUSGT as they had for the Fund,
pursuant to Sections 362(b) and 1223(1),
respectively.
F. The Cash Reserve shall not exceed 10% of the value
of the net assets, nor 30% in value of the gross assets, of the
Fund at the close of business on the Valuation Date.
G. A Registration Statement filed by OUSGT under the
Securities Act of 1933 on Form N-14, containing a preliminary form
of the Proxy Statement and Prospectus shall have become effective
under that Act not later than December 31, 1991.
H. On the Closing Date, the Fund shall have received a
letter of Robert G. Galli, attorney-at-law, or other counsel
acceptable to the Fund, stating that nothing has come to his
attention which in his judgment would indicate that as of the
Closing Date there were any material actual or contingent
liabilities of OUSGT arising out of litigation brought against
OUSGT or claims asserted against it, or pending or, to the best of
his knowledge, threatened litigation not reflected in or apparent
by the most recent audited financial statements and footnotes
thereto of OUSGT delivered to the Fund. Such letter may also
include such additional statements relating to the scope of the
review conducted by such counsel and his responsibilities and
liabilities as are not unreasonable under the circumstances.
I. The Fund shall acknowledge receipt of the shares of
OUSGT as provided for in paragraph 2 of this Agreement.
12. Advance America hereby represents and warrants that:
(a) The financial statements of the Fund as at June 30, 1990
(audited) and December 31, 1990 (unaudited) heretofore furnished to OUSGT,
present fairly the financial position, results of operations, and changes
in net assets of the Fund as of that date, in conformity with generally
accepted accounting principles applied on a basis consistent with the
preceding year; and that from December 31, 1990 through the date hereof
there have not been, and through the Closing Date there will not be, any
material adverse change in the business or financial condition of the Fund,
it being agreed that a decrease in the size of the Fund due to a diminution
in the value of its portfolio and/or redemption of its shares shall not be
considered a material adverse change;
(b) Advance America has authority to transfer all of the assets
of the Fund to be conveyed hereunder free and clear of all liens,
encumbrances, security interests, restrictions and limitations whatsoever;
(c) The prospectus as amended and supplemented contained in
Advance America's Registration Statement under the Securities Act of 1933,
as amended, is true, correct and complete, conforms to the requirements of
the Securities Act of 1933 and does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Registration Statement, as amended, was, as of the date of the filing of
the last Post-Effective Amendment, true, correct and complete, conformed
to the requirements of the Securities Act of 1933 and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(d) There is no material contingent liability of Advance America
and no material legal, administrative or other proceedings pending or, to
the knowledge of Advance America, threatened against Advance America, not
reflected in such prospectus;
(e) There are no material contracts outstanding to which Advance
America is a party other than those ordinary in the conduct of its
business;
(f) Advance America is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland;
(g) All Federal and other tax returns and reports of Advance
America required by law to be filed have been filed, and all Federal and
other taxes shown due on said returns and reports have been paid or
provision shall have been made for the payment thereof and to the best of
the knowledge of Advance America no such return is currently under audit
and no assessment has been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of the Fund ended
June 30, 1991 have not been filed, such returns will be filed when required
and the amount of tax shown as due thereon shall be paid when due; and
(h) Advance America has elected to be treated as a regulated
investment company and, for each fiscal year of its operations, Advance
America has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and Advance
America intends to meet such requirements with respect to its current
taxable year.
13. OUSGT hereby represents and warrants that:
(a) The financial statements of OUSGT as at June 30, 1990
(audited) and December 31, 1990 (unaudited) heretofore furnished to the
Fund, present fairly the financial position, results of operations, and
changes in net assets of OUSGT, as of that date, in conformity with
generally accepted accounting principles applied on a basis consistent with
the preceding year; and that from December 31, 1990 through the date hereof
there have not been, and through the Closing Date there will not be, any
material adverse changes in the business or financial condition of OUSGT,
it being understood that a decrease in the size of OUSGT due to a
diminution in the value of its portfolio and/or redemption of its shares
shall not be considered a material or adverse change;
(b) The prospectus as amended and supplemented contained in
OUSGT's Registration Statement under the Securities Act of 1933, as
amended, is true, correct and complete, conforms to the requirements of the
Securities Act of 1933 and does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Registration Statement, as amended, was, as of the date of the filing of
the last Post-Effective Amendment, true, correct and complete, conformed
to the requirements of the Securities Act of 1933 and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(c) There is no material contingent liability of OUSGT and no
material, legal, administrative or other proceedings pending or, to the
knowledge of OUSGT, threatened against OUSGT, not reflected in such
prospectus;
(d) There are no material contracts outstanding to which OUSGT
is a party other than those ordinary in the conduct of its business and
there are no outstanding options or rights to acquire its shares;
(e) OUSGT is a validly existing Massachusetts business trust;
has all necessary and material Federal, state and local authorizations to
own all its properties and assets and to carry on its business as now being
conducted; the shares which it issues to the Fund pursuant to this
Agreement will be duly authorized, validly issued, fully-paid and non-
assessable, except as otherwise set forth in OUSGT's Registration
Statement; will conform to the description thereof contained in OUSGT's
Registration Statement, and will be duly registered under the Securities
Act of 1933 and in the states where registration is required; and OUSGT is
duly registered under the Investment Company Act of 1940 and such
registration has not been revoked or rescinded and is in full force and
effect;
(f) All Federal and other tax returns and reports of OUSGT
required by law to be filed have been filed, and all Federal and other
taxes shown due on said returns and reports have been paid or provision
shall have been made for the payment thereof and to the best of the
knowledge of OUSGT no such return is currently under audit and no
assessment has been asserted with respect to such returns and to the extent
such tax returns with respect to the taxable year of OUSGT ended June 30,
1991 have not been filed, such returns will be filed when required and the
amount of tax shown as due thereon shall be paid when due;
(g) OUSGT has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, OUSGT has met the
requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and OUSGT intends to meet such
requirements with respect to its current taxable year;
(h) OUSGT has no plan or intention (i) to dispose of any of the
assets transferred by the Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the shares issued by it in
the reorganization other than pursuant to valid requests of shareholders;
and
(i) After consummation of the transactions contemplated by the
Agreement, OUSGT intends to operate its business in a substantially
unchanged manner.
14. Each party hereby represents to the other that no broker or
finder has been employed by it with respect to this Agreement or the
transactions contemplated hereby. Each party also represents and warrants
to the other that the information concerning it in the Proxy Statement and
Prospectus will not as of its date contain any untrue statement of a
material fact or omit to state a fact necessary to make the statements
concerning it therein not misleading and that the financial statements
concerning it will present the information shown fairly in accordance with
generally accepted accounting principles applied on a basis consistent with
the preceding year. Each party also represents and warrants to the other
that this Agreement is valid, binding and enforceable in accordance with
its terms and that the execution, delivery and performance of this
Agreement will not result in any violation of, or be in conflict with, any
provision of any charter, by-laws, contract, agreement, judgment, decree
or order to which it is subject or to which it is a party. OUSGT hereby
represents to and covenants with the Fund that, if the reorganization
becomes effective, OUSGT will treat each shareholder of the Fund who
received any of its shares as a result of the reorganization as having made
the minimum initial purchase of shares of OUSGT received by such
shareholder for the purpose of making additional investments in shares of
such series, regardless of the value of the shares of OUSGT received.
15. OUSGT agrees that it will prepare and file a Registration
Statement under the Securities Act of 1933 on Form N-14 and which shall
contain a preliminary form of proxy statement and prospectus contemplated
by Rule 145 under the Securities Act of 1933. The final form of such proxy
statement and prospectus, as amended, is referred to in this Agreement as
the "Proxy Statement and Prospectus" and that term shall include any
prospectus to shareholders of OUSGT which is included in the material
mailed to the shareholders of the Fund. Each party agrees that it will use
its best efforts to have such Registration Statement declared effective and
to supply such information concerning itself for inclusion in the Proxy
Statement and Prospectus as may be necessary or desirable in this
connection.
16. The obligations of the parties under this Agreement shall be
subject to the right of either party to abandon and terminate this
Agreement without liability if the other party breaches any material
provision of this Agreement or if any material legal, administrative or
other proceeding shall be instituted or threatened between the date of this
Agreement and the Closing Date (i) seeking to restrain or otherwise
prohibit the transactions contemplated hereby and/or (ii) asserting a
material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all taken together shall constitute
one Agreement. The rights and obligations of each party pursuant to this
Agreement shall not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into this Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written acknowledgement of such waiver.
19. Advance America understands that the obligations of OUSGT under
this Agreement are not binding upon any Trustee or shareholder of OUSGT
personally, but bind only OUSGT and OUSGT's property. Advance America
represents that it has notice of the provisions of the Declaration of Trust
of OUSGT disclaiming shareholder and Trustee liability for acts or
obligations of OUSGT.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed and attested by its officers thereunto duly authorized on the
date first set forth above.
ADVANCE AMERICA FUNDS, INC.
Attest: Katherine P. Feld By: Jon S. Fossel
OPPENHEIMER U.S. GOVERNMENT
TRUST
Attest: Katherine P. Feld By: Robert G. Galli, Secretary
SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER U.S. GOVERNMENT TRUST AND
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS A SHARES
SERVICE PLAN AND AGREEMENT dated the 10th day of June, 1993, by and
between OPPENHEIMER U.S. GOVERNMENT TRUST (the "Fund") and
OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for
its Class A Shares described in the Fund's registration statement
as of the date this Plan takes effect, contemplated by and to
comply with Article III, Section 26 of the Rules of Fair Practice
of the National Association of Securities Dealers, pursuant to
which the Fund will reimburse the Distributor for a portion of its
costs incurred in connection with the personal service and the
maintenance of shareholder accounts ("Accounts") that hold Class A
Shares (the "Shares") of such series and class of the Fund. The
Fund may be deemed to be acting as distributor of securities of
which it is the issuer, pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act"), according to the terms of
this Plan. The Distributor is authorized under the Plan to pay
"Recipients," as hereinafter defined, for rendering services and
for the maintenance of Accounts. Such Recipients are intended to
have certain rights as third-party beneficiaries under this Plan.
2. Definitions. As used in this Plan, the following terms shall
have the following meanings:
(a)
"Recipient" shall mean any broker, dealer, bank or other
financial institution which: (i) has rendered services in
connection with the personal service and maintenance of Accounts;
(ii) shall furnish the Distributor (on behalf of the Fund) with
such information as the Distributor shall reasonably request to
answer such questions as may arise concerning such service; and
(iii) has been selected by the Distributor to receive payments
under the Plan. Notwithstanding the foregoing, a majority of the
Fund's Board of Trustees (the "Board") who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in
any agreements relating to this Plan (the "Independent Trustees")
may remove any broker, dealer, bank or other institution as a
Recipient, whereupon such entity's rights as a third party
beneficiary hereof shall terminate.
(b)
"Qualified Holdings" shall mean, as to any Recipient, all
Shares owned beneficially or of record by: (i) such Recipient,
or (ii) such customers, clients and/or accounts as to which such
Recipient is a fiduciary or custodian or co-fiduciary or co-
custodian (collectively, the "Customers"), but in no event shall
any such Shares be deemed owned by more than one Recipient for
purposes of this Plan. In the event that two entities would
otherwise qualify as Recipients as to the same Shares, the
Recipient which is the dealer of record on the Fund's books shall
be deemed the Recipient as to such Shares for purposes of this
Plan.
3. Payments for Distribution Assistance.
(a)
Under the Plan, the Fund will make payments to the
Distributor, within forty-five (45) days of the end of each
calendar quarter, in the amount of the lesser of: (i) .0625%
(.25% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of the Shares computed
as of the close of each business day, or (ii) the Distributor's
actual expenses under the Plan for that quarter of the type
approved by the Board. The Distributor will use such fee
received from the Fund in its entirety to reimburse itself for
payments to Recipients and for its other expenditures and costs
of the type approved by the Board incurred in connection with the
personal service and maintenance of Accounts including, but not
limited to, the services described in the following paragraph.
The Distributor may make Plan payments to any "affiliated person"
(as defined in the 1940 Act) of the Distributor if such
affiliated person qualifies as a Recipient.
The services to be rendered by the Distributor and Recipients
in connection with the personal service and the maintenance of
Accounts may include, but shall not be limited to, the
following: answering routine inquiries from the Recipient's
customers concerning the Fund, providing such customers with
information on their investment in shares, assisting in the
establishment and maintenance of accounts or sub-accounts in
the Fund, making the Fund's investment plans and dividend
payment options available, and providing such other
information and customer liaison services and the maintenance
of Accounts as the Distributor or the Fund may reasonably
request. It may be presumed that a Recipient has provided
services qualifying for compensation under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under
the Plan. In the event that either the Distributor or the
Board should have reason to believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering
appropriate services, then the Distributor, at the request of
the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is
providing appropriate services in this regard. If the
Distributor still is not satisfied, it may take appropriate
steps to terminate the Recipient's status as such under the
Plan, whereupon such entity's rights as a third-party
beneficiary hereunder shall terminate.
Payments received by the Distributor from the Fund under the
Plan will not be used to pay any interest expense, carrying
charge or other financial costs, or allocation of overhead of
the Distributor, or for any other purpose other than for the
payments described in this Section 3. The amount payable to
the Distributor each quarter will be reduced to the extent
that reimbursement payments otherwise permissible under the
Plan have not been authorized by the Board of Trustees for
that quarter. Any unreimbursed expenses incurred for any
quarter by the Distributor may not be recovered in later
periods.
(b)
The Distributor shall make payments to any Recipient
quarterly, within forty-five (45) days of the end of each
calendar quarter, at a rate not to exceed .0625% (.25% on an
annual basis) of the average during the calendar quarter of the
aggregate net asset value of the Shares computed as of the close
of each business day of Qualified Holdings (excluding Shares
acquired in reorganizations with investment companies for which
Oppenheimer Management Corporation or an affiliate acts as
investment adviser and which have not adopted a distribution plan
at the time of reorganization with the Fund). However, no such
payments shall be made to any Recipient for any such quarter in
which its Qualified Holdings do not equal or exceed, at the end
of such quarter, the minimum amount ("Minimum Qualified
Holdings"), if any, to be set from time to time by a majority of
the Independent Trustees. A majority of the Independent Trustees
may at any time or from time to time increase or decrease and
thereafter adjust the rate of fees to be paid to the Distributor
or to any Recipient, but not to exceed the rate set forth above,
and/or increase or decrease the number of shares constituting
Minimum Qualified Holdings. The Distributor shall notify all
Recipients of the Minimum Qualified Holdings and the rate of
payments hereunder applicable to Recipients, and shall provide
each such Recipient with written notice within thirty (30) days
after any change in these provisions. Inclusion of such
provisions or a change in such provisions in a revised current
prospectus shall be sufficient notice.
(c)
Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources
(which may include profits derived from the advisory fee it
receives from the Fund), or (ii) by the Distributor (a subsidiary
of OMC), from its own resources.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection or replacement of Independent Trustees and
the nomination of those persons to be Trustees of the Fund who are
not "interested persons" of the Fund shall be committed to the
discretion of the Independent Trustees. Nothing herein shall
prevent the Independent Trustees from soliciting the views or the
involvement of others in such selection or nomination if the final
decision on any such selection and nomination is approved by a
majority of the incumbent Independent Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the
Fund shall provide at least quarterly a written report to the
Fund's Board for its review, detailing the amount of all payments
made pursuant to this Plan, the identity of the Recipient of each
such payment, and the purposes for which the payments were made.
The report shall state whether all provisions of Section 3 of this
Plan have been complied with. The Distributor shall annually
certify to the Board the amount of its total expenses incurred that
year with respect to the personal service and maintenance of
Accounts in conjunction with the Board's annual review of the
continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall
be in writing and shall provide that: (i) such agreement may be
terminated at any time, without payment of any penalty, by vote of
a majority of the Independent Trustees or by a vote of the holders
of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding Shares of the Class, on not more than sixty days
written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its
"assignment" (as defined in the 1940 Act); (iii) it shall go into
effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of
voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long
as such continuance is specifically approved at least annually by
the Board and its Independent Trustees cast in person at a meeting
called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This
Plan has been approved by a vote of the Independent Trustees cast
in person at a meeting called on June 10, 1993 for the purpose of
voting on this Plan, and takes effect as of July 1, 1993. Unless
terminated as hereinafter provided, it shall continue in effect
until December 31, 1993 and from year to year thereafter or as the
Board may otherwise determine only so long as such continuance is
specifically approved at least annually by the Board and its
Independent Trustees cast in person at a meeting called for the
purpose of voting on such continuance. This Plan may be terminated
at any time by vote of a majority of the Independent Trustees or by
the vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class.
This Plan may not be amended to increase materially the amount of
payments to be made without approval of the Class A Shareholders,
in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Trustees.
8. Shareholder and Trustee Liability Disclaimer. The Distributor
understands and agrees that the obligations of the Fund under this
Plan are not binding upon any shareholder or Trustee of the Fund
personally, but only the Fund and the Fund's property. The
Distributor represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and
Trustee liability for acts or obligations of the Fund.
OPPENHEIMER U.S. GOVERNMENT TRUST
By: /S/ Robert G. Zack
-------------------------------------
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
-----------------------------------
Katherine P. Feld, Vice President &
Secretary
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS C SHARES OF
OPPENHEIMER U.S. GOVERNMENT TRUST
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the
1st day of December, 1993, by and between OPPENHEIMER U.S.
GOVERNMENT TRUST (the "Fund") and OPPENHEIMER FUNDS DISTRIBUTOR,
INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution plan
for Class C shares of the Fund (the "Shares"), contemplated by Rule
12b-1 (the "Rule") under the Investment Company Act of 1940 (the
"1940 Act"), pursuant to which the Fund will compensate the
Distributor for a portion of its costs incurred in connection with
the distribution of Shares, and the personal service and
maintenance of shareholder accounts that hold Shares ("Accounts").
The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients,"
as hereinafter defined, for rendering (1) distribution assistance
in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are
intended to have certain rights as third-party beneficiaries under
this Plan. The terms and provisions of this Plan shall be
interpreted and defined in a manner consistent with the provisions
and definitions contained in (i) the 1940 Act, (ii) the Rule, (iii)
Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor
(the "NASD Rules of Fair Practice") and (iv) any conditions
pertaining either to distribution related expenses or to a plan of
distribution, to which the Fund is subject under any order on which
the Fund relies, issued at any time by the Securities and Exchange
Commission.
2. Definitions. As used in this Plan, the following terms shall
have the following meanings:
(a)"Recipient" shall mean any broker, dealer, bank or other
institution which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has
provided administrative support services with respect to Shares
held by Customers (defined below) of the Recipient; (ii) shall
furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to
answer such questions as may arise concerning the sale of
Shares; and (iii) has been selected by the Distributor to
receive payments under the Plan. Notwithstanding the foregoing,
a majority of the Fund's Board of Trustees (the "Board") who are
not "interested persons" (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation
of this Plan or in any agreements relating to this Plan (the
"Independent Trustees") may remove any broker, dealer, bank or
other institution as a Recipient, whereupon such entity's rights
as a third-party beneficiary hereof shall terminate.
(b)"Qualified Holdings" shall mean, as to any Recipient, all
Shares owned beneficially or of record by: (i) such Recipient,
or (ii) such customers, clients and/or accounts as to which such
Recipient is a fiduciary or custodian or co-fiduciary or co-
custodian (collectively, the "Customers"), but in no event shall
any such Shares be deemed owned by more than one Recipient for
purposes of this Plan. In the event that two entities would
otherwise qualify as Recipients as to the same Shares, the
Recipient which is the dealer of record on the Fund's books
shall be deemed the Recipient as to such Shares for purposes of
this Plan.
3. Payments for Distribution Assistance and Administrative
Support Services.
(a)The Fund will make payments to the Distributor, within forty-
five (45) days of the end of each calendar quarter, in the
aggregate amount (i) of 0.0625% (0.25% on an annual basis) of
the average during the calendar quarter of the aggregate net
asset value of the Shares computed as of the close of each
business day (the "Service Fee"), plus (ii) 0.1875% (0.75% on an
annual basis) of the average during the calendar quarter of the
aggregate net asset value of the Shares computed as of the close
of each business day (the "Asset Based Sales Charge"). Such
Service Fee payments received from the Fund will compensate the
Distributor and Recipients for providing administrative support
services of the type approved by the Board with respect to
Accounts. Such Asset Based Sales Charge payments received from
the Fund will compensate the Distributor and Recipients for
providing distribution assistance in connection with the sale of
Shares.
The administrative support services in connection with the
Accounts to be rendered by Recipients may include, but shall not
be limited to, the following: answering routine inquiries
concerning the Fund, assisting in establishing and maintaining
accounts or sub-accounts in the Fund and processing Share
redemption transactions, making the Fund's investment plans and
dividend payment options available, and providing such other
information and services in connection with the rendering of
personal services and/or the maintenance of Accounts, as the
Distributor or the Fund may reasonably request. The
distribution assistance in connection with the sale of Shares to
be rendered by Recipients may include, but shall not be limited
to, the following: distributing sales literature and
prospectuses other than those furnished to current holders of
the Fund's Shares ("Shareholders"), and providing such other
information and services in connection with the distribution of
Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for
payment under the Plan if it has Qualified Holdings of Shares to
entitle it to payments under the Plan. In the event that either
the Distributor or the Board should have reason to believe that,
notwithstanding the level of Qualified Holdings, a Recipient may
not be rendering appropriate distribution assistance in
connection with the sale of Shares or administrative support
services for the Accounts, then the Distributor, at the request
of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is
providing appropriate distribution assistance and/or services in
this regard. If the Distributor still is not satisfied, it may
take appropriate steps to terminate the Recipient's status as
such under the Plan, whereupon such entity's rights as a third-
party beneficiary hereunder shall terminate.
(b)The Distributor shall make service fee payments to any
Recipient quarterly, within forty-five (45) days of the end of
each calendar quarter, at a rate not to exceed 0.0625% (0.25% on
an annual basis) of the average during the calendar quarter of
the aggregate net asset value of Shares, computed as of the
close of each business day constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers
for a period of more than the minimum period (the "Minimum
Holding Period"), if any, to be set from time to time by a
majority of the Independent Trustees. Alternatively, the
Distributor may, at its sole option, make service fee payments
("Advance Service Fee Payments") to any Recipient quarterly,
within forty-five (45) days of the end of each calendar quarter,
at a rate not to exceed (i) 0.25% of the average during the
calendar quarter of the aggregate net asset value of Shares
computed as of the close of business on the day such Shares are
sold, constituting Qualified Holdings sold by the Recipient
during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) 0.0625% (0.25% on an
annual basis) of the average during the calendar quarter of the
aggregate net asset value of Shares computed as of the close of
each business day, constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers
for a period of more than one (1) year, subject to reduction or
chargeback so that the Advance Service Fee Payments do not
exceed the limits on payments to Recipients that are, or may be,
imposed by Article III, Section 26, of the NASD Rules of Fair
Practice. The Advance Service Fee Payments described in part
(i) of the preceding sentence may, at the Distributor's sole
option, be made more often than quarterly, and sooner than the
end of the calendar quarter. In addition, the Distributor shall
make asset-based sales charge payments to any Recipient
quarterly, within forty-five (45) days of the end of each
calendar quarter, at a rate not to exceed 0.1875% (0.75% on an
annual basis) of the average during the calendar quarter of the
aggregate net asset value of Shares computed as of the close of
each business day constituting Qualified Holdings owned
beneficially or of record by the Recipient or its Customers for
a period of more than one (1) year. However, no such service
fee or asset-based sales charge payments (collectively, the
"Recipient Payments") shall be made to any Recipient for any
such quarter in which its Qualified Holdings do not equal or
exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Trustees. A majority of the
Independent Trustees may at any time or from time to time
decrease and thereafter adjust the rate of fees to be paid to
the Distributor or to any Recipient, but not to exceed the rates
set forth above, and/or direct the Distributor to increase or
decrease the Minimum Holding Period or the Minimum Qualified
Holdings. The Distributor shall notify all Recipients of the
Minimum Qualified Holdings or Minimum Holding Period, if any,
and the rates of Recipient Payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions.
Inclusion of such provisions or a change in such provisions in
a revised current prospectus shall constitute sufficient notice.
The Distributor may make Plan payments to any "affiliated
person" (as defined in the 1940 Act) of the Distributor if such
affiliated person qualifies as a Recipient.
(c)The Distributor is entitled to retain from the payments
described in Section 3(a) the aggregate amount of (i) the
Service Fee on Shares outstanding for less than the Minimum
Holding Period, (ii) the Asset-Based Sales Charge on Shares
outstanding for not more than one (1) year, plus (iii) any
additional Asset-Based Sales Charge payment which no Recipient
qualifies to receive, in each case computed as of the close of
each business day during that period and subject to reduction or
elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III,
Section 26, of the NASD Rules of Fair Practice. Such amount is
collectively referred to as the "Quarterly Limitation." The
distribution assistance and administrative support services in
connection with the sale of Shares to be rendered by the
Distributor may include, but shall not be limited to, the
following: (i) paying sales commissions to any broker, dealer,
bank or other institution that sell Shares, and\or paying such
persons Advance Service Fee Payments in advance of, and\or
greater than, the amount provided for in Section 3(a) of this
Agreement; (ii) paying compensation to and expenses of personnel
of the Distributor who support distribution of Shares by
Recipients; (iii) paying of or reimbursing the Distributor for
interest and other borrowing costs on unreimbursed Carry Forward
Expenses (as hereafter defined) at the rate paid by the
Distributor or, if such amounts are financed by the Distributor
from its own resources or by an affiliate, at the rate of 1% per
annum above the prime rate (which shall mean the most
preferential interest rate on corporate loans at large U.S.
money center commercial banks) then being reported in the
Eastern edition of the Wall Street Journal (or if such prime
rate is no longer so reported, such other rate as may be
designated from time to time by the Distributor with the
approval of the Independent Trustees); (iv) other direct
distribution costs of the type approved by the Board, including
without limitation the costs of sales literature, advertising
and prospectuses (other than those furnished to current
Shareholders) and state "blue sky" registration expenses; and
(v) any service rendered by the Distributor that a Recipient may
render pursuant to part (a) of this Section 3. The
Distributor's costs of providing the above-mentioned services
are hereinafter collectively referred to as "Distribution and
Service Costs." "Carry Forward Expenses" are Distribution and
Service Costs that are not paid in the fiscal quarter in which
they arise because they exceed the Quarterly Limitation. In the
event that the Board should have reason to believe that the
Distributor may not be rendering appropriate distribution
assistance or administrative support services in connection with
the sale of Shares, then the Distributor, at the request of the
Board, shall provide the Board with a written report or other
information to verify that the Distributor is providing
appropriate services in this regard.
(d)The excess in any fiscal quarter of (i) the Quarterly
Limitation plus any contingent deferred sales charge ("CDSC")
payments recovered by the Distributor on the proceeds of
redemption of Shares over (ii) Distribution and Service Costs
during that quarter, shall be applied in the following order of
priority: first to interest on unreimbursed Carry Forward
Expenses, second to reduce any unreimbursed Carry Forward
Expenses, third to reduce Distribution and Service Costs during
that quarter, and fourth, to reduce the Asset Based Sales Charge
payments by the Fund to the Distributor in that quarter. Carry
Forward Expenses shall be carried forward by the Fund until
payment can be made under the Quarterly Limitation.
(e)Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own
resources (which may include profits derived from the advisory
fee it receives from the Fund), or (ii) by the Distributor (a
subsidiary of OMC), from its own resources, from Asset Based
Sales Charge payments or from its borrowings.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those persons to be
Trustees of the Fund who are not "interested persons" of the Fund
("Disinterested Trustees") shall be committed to the discretion of
such Disinterested Trustees. Nothing herein shall prevent the
Disinterested Trustees from soliciting the views or the involvement
of others in such selection or nomination if the final decision on
any such selection and nomination is approved by a majority of the
incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the
Fund shall provide at least quarterly a written report to the
Fund's Board for its review, detailing distribution expenditures
properly attributable to the Shares, including the amount of all
payments made pursuant to this Plan, the identity of the Recipient
of each such payment, the amount paid to the Distributor and the
Distribution and Service Costs and Carry Forward Expenses for that
period. The report shall state whether all provisions of Section 3
of this Plan have been complied with. The Distributor shall
annually certify to the Board the amount of its total expenses
incurred that year and its total expenses incurred in prior years
and not previously recovered with respect to the distribution of
Shares in conjunction with the Board's annual review of the
continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall
be in writing and shall provide that: (i) such agreement may be
terminated at any time, without payment of any penalty, by a vote
of a majority of the Independent Trustees or by a vote of the
holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities of the Class, on not more than sixty
days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act); (iii) it shall go into
effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of
voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long
as such continuance is specifically approved at least annually by
a vote of the Board and its Independent Trustees cast in person at
a meeting called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This
Plan has been approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called on October 6, 1993 for
the purpose of voting on this Plan, and takes effect as of the date
first set forth above. Unless terminated as hereinafter provided,
it shall continue in effect from year to year from the date first
set forth above or as the Board may otherwise determine only so
long as such continuance is specifically approved at least annually
by a vote of the Board and its Independent Trustees cast in person
at a meeting called for the purpose of voting on such continuance.
This Plan may not be amended to increase materially the amount of
payments to be made without approval of the Class C Shareholders,
in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of
the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the 1940 Act) of the Fund's outstanding
voting securities of the Class. In the event of such termination,
the Board and its Independent Trustees shall determine whether the
Distributor is entitled to payment from the Fund of all Carry
Forward Expenses and related costs properly incurred in respect of
Shares sold prior to the effective date of such termination, and
whether the Fund shall continue to make payment to the Distributor
in the amount the Distributor is entitled to retain under part (c)
of Section 3 hereof, until such time as the Distributor has been
reimbursed for all such amounts by the Fund and by retaining CDSC
payments.
8. Disclaimer of Shareholder and Trustee Liability. The
Distributor understands that the obligations of the Fund under this
Plan are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property. The
Distributor represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and
Trustee liability for acts or obligations of the Fund.
OPPENHEIMER U.S. GOVERNMENT TRUST
By: /s/ Robert G. Zack
------------------------------------------
Robert G. Zack, Andrew J. Donohue, Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
-------------------------------------------
Katherine P. Feld, Vice President and Secretary
June 24, 1982
Oppenheimer U.S. Government Trust
Two Broadway
New York, New York 10004
Dear Sirs:
In connection with the public offering of shares without par
value of Oppenheimer U.S. Government Trust (the "Trust"), we have
examined such records and documents and have made such further
investigation and examination as we deemed necessary for the
purpose of this opinion.
It is our opinion that the indefinite number of shares covered
by the Trust's Registration Statement on Form N-1, when issued and
paid for in accordance with the terms of the offering, as set forth
in the prospectus forming a part of the Registration Statement,
will be, when such Registration shall have become effective,
legally issued, fully paid and non-assessable by the Trust to the
extent set forth in such prospectus.
We hereby consent to the filing of this opinion as an Exhibit
to the said Registration Statement and to the reference to us in
such prospectus.
Very truly yours,
Cole & Deitz
opinion\220
