OPPENHEIMER MANAGEMENT CORPORATION
2 World Trade Center, Suite 3400
New York, NY 10048-0203
October 28, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Oppenheimer Gold & Special Minerals Fund - Reg. No. 2-82590
File No. 811-3694
Written Representation of Counsel
To the Securities and Exchange Commission:
On behalf of Oppenheimer Gold & Special Minerals Fund (the
"Fund") and pursuant to Paragraph (e) of Rule 485 under the
Securities Act of 1933, as amended (the "1933 Act"), and in
connection with the Amendment on Form N-1A which is Post-Effective
Amendment No. 21 to the 1933 Act Registration Statement of the Fund
and Amendment No. 21 to its Registration Statement under the
Investment Company Act of 1940, as amended, the undersigned
counsel, who prepared or reviewed such Amendment, hereby represents
to the Commission, for filing with such Amendment, that said
Amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b) of Rule
485.
Sincerely,
Robert G. Zack
Senior Vice President and
Associate General Counsel
(212) 323-0250
<PAGE>
Registration No. 2-82590
File No. 811-3694
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. 21 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
AMENDMENT No. 21 / X /
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
(Address of Principal Executive Offices)
1-212-323-0200
(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
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On November 1, 1994 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(i)
/ / On ------------- pursuant to paragraph (a)(ii) of Rule
485(a)
_______________________________________________________________________
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended June 30, 1994, was filed on August 30, 1994.
<PAGE>
FORM N-1A
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
- --------- ------------------
1 Front Cover Page
2 Expenses; Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objectives and Policies; How the
Fund is Managed--Organization and History
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 How the Fund is Managed--Organization and History; The Transfer
Agent; Dividends, Capital Gains and Taxes
7 How to Buy Shares; How to Exchange Shares; Special Investor
Services; Service Plan; How to Sell Shares; Shareholder Account
Rules and Policies
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A Heading in Statement of
Item No. 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; Service Plan
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 Gold & Special Minerals Fund
Prospectus dated November 1, 1994
Oppenheimer Gold & Special Minerals Fund (the "Fund") is a mutual
fund that seeks capital appreciation as its investment objective. The
Fund does not invest to earn current income to distribute to shareholders.
In seeking its objective, the Fund invests mainly in securities of
companies engaged in mining, processing, fabricating or distributing gold
or other metals or minerals in the United States and in foreign countries.
Normally at least 50% of the Fund's investments are expected to be in
foreign securities. The Fund may also invest to a limited extent in gold
or silver bullion, other precious metals, strategic metals, and other
metals naturally occurring with such metals, and gold or silver coins.
The Fund also uses "hedging" instruments, to seek to reduce the risks of
market fluctuations that affect the value of the securities the Fund
holds.
Some investment techniques the Fund uses may be considered to be
speculative investment methods that may increase the risks of investing
in the Fund and may also increase the Fund's operating costs. You should
carefully review the risks associated with an investment in the Fund.
Please refer to "Investment Policies and Strategies" for more information
about the types of securities the Fund invests in and the risks of
investing in the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the November 1, 1994, Statement of Additional Information. For a
free copy, call Oppenheimer Shareholder Services, the Fund's Transfer
Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
Because of the Fund's investment policies and practices, the Fund's shares
may be considered to be speculative.
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
Overview of the Fund
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange
Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services, and
those expenses are subtracted from the Fund's assets to calculate the
Fund's net asset value per share. All shareholders therefore pay those
expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's business operating expenses that you
will bear indirectly. The numbers below are based on the Fund's expenses
during its last 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 "About Your Account," from
pages _____ through _____ for an explanation of how and when these charges
apply.
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75%
Sales Charge on Reinvested Dividends None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds None(1)
Exchange Fee $5.00(2)
(1) If you invest more than $1 million in shares of the Fund, 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) The fee is waived for automated exchanges, 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 (which is referred to in this Prospectus as the
"Manager"). The rates of the Manager's fees are set forth in "How The
Fund is Managed," below. The Fund has other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds its portfolio securities, audit fees and legal expenses. Those
expenses are detailed in the Fund's Financial Statements in the Statement
of Additional Information.
The numbers in the chart below are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of the Fund
for that year. The management fee and 12b-1 Plan fee rates have been
restated, however, because of changes to those fee rates that took effect
after the close of the last fiscal year. The management fee rates were
reduced, effective July 1, 1994, to 0.75% of the first $200 million of the
Fund's aggregate net assets (from 0.80%) and 0.72% (from 0.75%) on the
next $200 million. During the fiscal year, the actual management fee was
0.80% of the Fund's average net assets.
The "12b-1 Plan Fees" are the Service Plan Fees (which can be up to
0.25% of average annual net assets). The Service Plan fees previously
applied only to assets representing shares sold prior to April 1, 1991.
Because the Fund's shareholders approved a new 12b-1 Plan that applies to
all shares of the Fund effective July 1, 1994, the actual 12b-1 Plan fees
for the Fund's fiscal year ended June 30, 1994, are restated to show what
those fees would have been if the new Plan had been in effect during the
previous fiscal year. While the Fund's Board of Trustees has set the
Service Plan fees on assets representing shares purchased on or after
April 1, 1991 at 0.25%, it has limited the fees on assets representing
shares bought before that date to 0.15%. During the fiscal year, the
actual rate of the Service Plan fees was 0.13% of average annual net
assets, and actual total operating expenses were 1.31% of average annual
net assets.
The actual expenses of the Fund in future years may be more or less,
depending on a number of factors, including changes in the actual value
of the Fund's assets on which some of these fees are based.
Management Fees (Restated) .75%
12b-1 (Service Plan) Fees (Restated) .21%
Other Expenses .38%
Total Fund Operating Expenses 1.34%
- Example. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical example shown
below. Assume that you make a $1,000 investment in the Fund, and that the
Fund's annual return is 5%, and that its operating expenses are the ones
shown in the chart above (as restated). If you were to redeem your shares
at the end of each period shown below, your investment would incur the
following expenses by the end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$70 $98 $127 $210
This example shows the effect of expenses on an investment, but is
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which will vary.
<PAGE>
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below, with
references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing. Keep the Prospectus for
reference after you invest, particularly for information about your
account, such as how to sell or exchange shares.
- What Is The Fund's Investment Objective? The Fund's investment
objective is to seek capital appreciation (that is, growth in the value
of its shares). It does not invest to earn current income to pay to
shareholders.
- What Does the Fund Invest In? The Fund primarily invests in
common stocks (these are called "equity securities") or other types of
securities convertible into equity securities. It focuses on companies
that mine or produce gold or other metals and minerals. The Fund may also
invest in gold or silver bullion to a limited extent, and other precious
metals. The Fund may also use hedging instruments and some derivative
investments to try to manage investment risks. These investments are more
fully explained in "Investment Objective and Policies," starting on page
___.
- Who Manages the Fund? The Fund's investment advisor is
Oppenheimer Management Corporation, which (including a subsidiary) advises
investment company portfolios having over $28 billion in assets. The
Fund's portfolio manager, who is primarily responsible for the selection
of the Fund's securities, is James Ayer. The Manager is paid an advisory
fee by the Fund, based on its assets. The Fund's Board of Trustees,
elected by shareholders, oversees the investment advisor and the portfolio
manager. Please refer to "How the Fund is Managed," starting on page ___
for more information about the Manager and its fees.
- How Risky is the Fund? All investments carry risks to some
degree. It is important to remember that the Fund is designed for long-
term investing. The Fund's investments in stocks are subject to changes
in their value from a number of factors such as changes in general bond
and stock market movements, or the change in value of particular stocks
because of an event affecting the issuer. Because the Fund normally
invests heavily in foreign securities, it is subject to additional risks
associated with investing abroad, such as the effect of currency rate
changes on stock values. By focusing on investments in the gold and
metals industries, the Fund is sensitive to events that affect those
industries and its share price will be more volatile than funds that don't
concentrate investments in a limited group of industries. These changes
affect the value of the Fund's investments and its price per share. In
the OppenheimerFunds spectrum, the Fund is generally more volatile than
other stock funds, as well as income and growth funds and more
conservative income funds. While the Manager tries to reduce risks by
diversifying investments, by carefully researching securities before they
are purchased for the portfolio, and in some cases by using hedging
techniques, there is no guarantee of success in achieving the Fund's
objective and your shares may be worth more or less than their original
cost when you redeem them. Please refer to "Investment Objective and
Policies" starting on page ___ for a more complete discussion.
- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How To Buy Shares"
on page ___ for more details.
- Will I Pay a Sales Charge to Buy Shares? The Fund's shares are
offered with a front-end sales charge, starting at 5.75%, and reduced for
larger purchases. Please review "How To Buy Shares" starting on page ___
for more details.
- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How To Sell Shares" on page ___.
- How Has the Fund Performed? The Fund measures its performance by
quoting its average annual total return and cumulative total return, which
measure historical performance. Those returns can be compared to the
returns (over similar periods) of other funds. Of course, other funds may
have different objectives, investments, and levels of risk. The Fund's
performance can also be compared to broad market indices, which we have
done on page ___. Please remember that past performance does not
guarantee future results.
<PAGE>
Financial Highlights
The table on this page presents selected financial information about
the Fund, including per share data and expense ratios and other data based
on the Fund's average net assets. This information has been audited by
KPMG Peat Marwick LLP, the Fund's independent auditors, whose report on
the Fund's financial statements for the fiscal year ended June 30, 1994,
is included in the Statement of Additional Information.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1994 1993 1992 1991 1990 1989
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $12.32 $10.68 $10.36 $11.65 $12.58 $12.82
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .06 .16 .17 .14 .23
Net realized and unrealized
gain (loss) on investments
and foreign currency transactions .96 1.72 .35 (1.42) .54 .50
-------- -------- -------- -------- -------- --------
Total income (loss) from
investment operations 1.02 1.78 .51 (1.25) .68 .73
- ------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.06) (.14) (.19) (.04) (.27) (.18)
Distributions from net
realized gain on investments
and foreign currency transactions -- -- -- -- (1.34) (.79)
-------- -------- -------- -------- -------- --------
Total dividends and
distributions to shareholders (.06) (.14) (.19) (.04) (1.61) (.97)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $13.28 $12.32 $10.68 $10.36 $11.65 $12.58
======== ======== ======== ======== ======== =======
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 8.25% 17.15% 5.08% (10.71)% 3.10% 6.43%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $179,015 $158,982 $133,345 $150,907 $163,118 $120,198
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $175,093 $124,869 $137,906 $154,318 $154,079 $110,873
- ------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 13,478 12,908 12,486 14,564 13,999 9,552
- ------------------------------------------------------------------------------------------------------------------
Amount of debt outstanding
at end of year (in thousands) $-- $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------
Average amount of debt
outstanding throughout
each year (in thousands)(2) $-- $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------
Average number of shares
outstanding throughout
each year (in thousands)(3) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Average amount of debt per share
outstanding throughout each year $-- $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income .50% .61% 1.25% 1.67% 1.17% 1.97%
Expenses 1.31% 1.38% 1.38% 1.43% 1.37% 1.22%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 29.5% 23.9% 39.4% 113.3% 82.3% 111.7%
</TABLE>
<TABLE>
<CAPTION>
1988 1987 1986 1985
============================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $12.10 $6.43 $6.88 $8.21
- --------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .26 .15 .15 .01
Net realized and unrealized
gain (loss) on investments
and foreign currency transactions 3.39 5.66 (.58) (1.20)
-------- ------- ------- -------
Total income (loss) from
investment operations 3.65 5.81 (.43) (1.19)
- --------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.36) (.14) (.02) (.07)
Distributions from net
realized gain on investments
and foreign currency transactions (2.57) -- -- (.07)
-------- ------- ------- -------
Total dividends and
distributions to shareholders (2.93) (.14) (.02) (.14)
- --------------------------------------------------------------------------------------------
Net asset value, end of year $12.82 $ 12.10 $6.43 $6.88
======== ======= ======= =======
============================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 33.24% 92.35% (6.23)% (14.37)%
============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $107,264 $76,532 $29,080 $32,673
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 90,672 $49,947 $32,407 $27,809
- --------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 8,365 6,324 4,523 4,751
- --------------------------------------------------------------------------------------------
Amount of debt outstanding
at end of year (in thousands) $-- $-- $-- $500
- --------------------------------------------------------------------------------------------
Average amount of debt
outstanding throughout
each year (in thousands)(2) $-- $79 $366 $67
- --------------------------------------------------------------------------------------------
Average number of shares
outstanding throughout
each year (in thousands)(3) -- 5,253 4,743 4,023
- --------------------------------------------------------------------------------------------
Average amount of debt per share
outstanding throughout each year $-- $.02 $.08 $.02
- --------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.38% 2.10% 2.19% .43%
Expenses 1.22% 1.41% 1.61% 1.62%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 175.8% 191.7% 52.9% 12.1%
</TABLE>
(1) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal year, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal year. Sales charges are
not reflected in the total returns.
(2) Based upon daily outstanding borrowing.
(3) Based upon month-end balances.
(4) The lesser of purchases or sales of portfolio securities for a year,
divided by the monthly average of the market value of portfolio securities
owned during the year. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended June 30, 1994 were $52,444,667 and $48,139,367,
respectively.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to seek long-term capital
appreciation for shareholders. The Fund does not invest to seek current
income to pay to shareholders.
Investment Policies and Strategies. The Fund seeks its investment
objective by emphasizing investments in securities of companies involved
directly or indirectly in mining, fabricating, processing or otherwise
dealing in gold or other metals or minerals. This Prospectus refers to
those securities as "Mining Securities." The Manager expects that
ordinarily a substantial portion of the Fund's assets will be invested in
securities of gold mining companies.
The Fund will normally invest in common stocks or other equity
securities, as well as securities that are convertible into common stocks,
such as convertible preferred stock, convertible debentures, and warrants.
These securities may be traded on securities exchanges or in the over-the-
counter markets.
The Fund may also invest in gold or silver bullion, in other precious
metals, strategic metals, and other metals naturally occurring with
precious or strategic metals, in certificates representing an ownership
interest in those metals, and in gold or silver coins. These investments
are referred to as "Metal Investments." While the Fund may hold gold or
silver coins that have an active, quoted trading market, it will not hold
them for their value as "collectibles."
To seek the Fund's objective, the Fund's investment adviser,
Oppenheimer Management Corporation (the "Manager"), looks for Mining
Securities and Metal Investments that it believes may appreciate in value,
by continuously monitoring the gold and special minerals markets for new
developments and economic trends. When investing the Fund's assets, the
Manager considers many factors, including the financial condition of
particular companies as well as general economic conditions in the U.S.
relative to foreign economies, and the trends in domestic and foreign
stock markets.
The Fund may try to hedge against losses in the value of its
portfolio of securities by using hedging strategies described below. The
Fund's portfolio manager may employ special investment techniques in
selecting securities for the Fund. These are also described below.
Additional information may be found about them under the same headings in
the Statement of Additional Information.
- Can the Fund's Investment Objective and Policies Change? The
Fund has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those investment policies. The Fund's investment policies
and techniques are not "fundamental" unless this Prospectus or the
Statement of Additional Information says that a particular policy is
"fundamental." The Fund's investment objective is a fundamental policy.
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's Board
of Trustees may change non-fundamental policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus.
- Investment Risks. Because the Fund invests a substantial portion
of its assets in stocks, the value of the Fund's portfolio will be
affected by changes in the stock markets. At times, the stock markets can
be volatile, and stock prices can change substantially. This market risk
will affect the Fund's net asset value per share, which will fluctuate as
the values of the Fund's portfolio securities change. Not all stock
prices change uniformly or at the same time, and other factors can affect
a particular stock's prices (for example, poor earnings reports by an
issuer, loss of major customers, major litigation against an issuer, or
changes in government regulations affecting an industry). Not all of
these factors can be predicted.
As discussed below, the Fund attempts to limit market risks by
diversifying its investments, that is, by not holding a substantial amount
of stock of any one company and by not investing too great a percentage
of the Fund's assets in any one company. However, the Fund does
"concentrate" its investments in a group of related industries, and faces
certain special risks, discussed below, by doing so.
Because of the types of securities the Fund invests in and the
investment techniques the Fund uses, some of which may be speculative, the
Fund is designed for investors who are investing for the long-term and who
are willing to accept greater risks of loss of their investment in the
hope of achieving capital appreciation. It is not intended for investors
seeking assured income and preservation of capital. Investing for capital
appreciation entails the risk of loss of all or part of your investment.
Because changes in securities market prices can occur at any time, there
is no assurance that the Fund will achieve its investment objective, and
when you redeem your shares, they may be worth more or less than what you
paid for them.
- The Fund "Concentrates" in Mining Securities and Metal
Investments. Under the Investment Company Act of 1940 (the federal law
that principally regulates the operations of investment companies like the
Fund), "concentrating" investments means that a fund invests at least 25%
of its assets in a particular industry or group of industries. As a
fundamental policy, the Fund will concentrate its investments in Mining
Securities and Metal Investments. Under normal conditions (when the
Manager believes that the markets for Mining Securities and Metal
Investments are not in a volatile or unstable period), at least 80% and
up to 100% of the Fund's assets will be invested in Mining Securities and
Metal Investments. However, the Fund may not acquire additional Metal
Investments if acquiring them would result in more than 10% of the Fund's
total assets being invested in Metal Investments.
When market conditions are unstable, or there are adverse economic,
political or market conditions affecting Mining Securities and Metal
Investments, the Fund may invest substantial amounts of its assets in debt
securities, such as money market instruments or U.S. government
securities, as described in "Temporary Defensive Investments" below.
- Special Risks of Concentrating Investments in Mining Securities
and Metal Investments. Investments in Mining Securities and Metal
Investments are considered speculative and involve substantial risks and
special considerations. Investing in one segment of the stock market
rather than in a broad spectrum of types of companies makes the Fund's
share price particularly sensitive to market and economic events that
affect the mining and metal industries. These risks include: (i) the
risk that prices of gold and precious metals may fluctuate substantially;
(ii) the principal sources of the supply of gold are basically
concentrated in only five countries or territories: South Africa,
Australia, the Commonwealth of Independent States (which includes Russia
and certain other countries that were part of the former Soviet Union),
Canada and the United States; (iii) changes in international monetary
policies, economic and political conditions, all of which affect the
supply of gold and precious metals as well as the value of Metal
Investments and Mining Securities; (iv) possible regulation of Metal
Investments by the U.S. or foreign governments; and (v) possible adverse
tax consequences for the Fund in making Metal Investments, if holding
those investments should cause it to fail to qualify as a "regulated
investment company" under the Internal Revenue Code. The Statement of
Additional Information contains more details about those risks, which can
affect the Fund's net asset value per share and cause the value of an
investment in the Fund to fluctuate.
- Foreign Securities. Because over 90% of the world's gold
production currently is in foreign countries, it is anticipated that the
Fund will normally invest a substantial amount of its assets in securities
of foreign issuers. The Fund may purchase equity (and debt) securities
issued or guaranteed by foreign companies or foreign governments,
including foreign government agencies. The Fund may buy securities of
companies or governments in any country, developed or underdeveloped. The
Fund can invest up to 100% of its assets in foreign securities.
When more than 50% of its assets are invested in foreign securities
at the end of any fiscal year, the Fund may elect that Section 853 of the
Internal Revenue Code will apply to it to permit shareholders to take a
credit (or a deduction) on their own federal income tax returns for
foreign taxes paid by the Fund. "Dividends, Capital Gains and Taxes" in
the Statement of Additional Information contains further information about
this tax provision.
The Fund will hold foreign currency only in connection with the
purchase or sale of foreign securities. If the Fund's securities are held
abroad, the countries in which they are held and the sub-custodians
holding them must be approved by the Fund's Board of Trustees.
Foreign securities have special risks. For example, foreign issuers
are not subject to the same accounting and disclosure requirements that
U.S. companies are subject to. The value of foreign investments may be
affected by changes in foreign currency rates, exchange control
regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or abroad, or other
political and economic factors. More information about the risks and
potential rewards of investing in foreign securities is contained in the
Statement of Additional Information.
- Warrants. Warrants basically are options to purchase stock at
set prices that are valid for a limited period of time. The Fund may
invest up to 5% of its total assets in warrants. That 5% does not apply
to warrants the Fund acquired as part of units with other securities or
that were attached to other securities. No more than 2% of the Fund's
assets may be invested in warrants that are not listed on the New York or
American Stock Exchanges. These percentage limitations are fundamental
policies. For further details about these investments, see "Warrants" in
the Statement of Additional Information.
- Special Risks - Borrowing for Leverage. The Fund may borrow
money from banks to buy securities. The Fund will borrow only if it can
do so without putting up assets as security for a loan. This is a
speculative investment method known as "leverage." This investing
technique may subject the Fund to greater risks and costs than funds that
do not borrow. These risks may include the possibility that the Fund's net
asset value per share will fluctuate more than funds that don't borrow,
since the Fund pays interest on borrowings and interest expense affects
the Fund's share price. Borrowing for leverage is subject to limits under
the Investment Company Act, described in more detail in "Borrowing for
Leverage" in the Statement of Additional Information.
- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund may engage frequently in short-
term trading to try to achieve its objective. As a result, the Fund's
portfolio turnover may be higher than other mutual funds, although it is
not expected to be more than 100% each year. The "Financial Highlights,"
above, show the Fund's portfolio turnover rate during past fiscal years.
High turnover and short-term trading may cause the Fund to have
relatively larger brokerage costs than funds that do not engage in short-
term trading. Additionally, high portfolio turnover may affect the ability
of the Fund to qualify as a "regulated investment company" under the
Internal Revenue Code to enable the Fund to obtain tax deductions for
dividends and capital gains distributions the Fund pays to shareholders.
The Fund qualified in its last fiscal year and intends to do so in the
coming year, although it reserves the right not to qualify.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These involve
certain risks. The Statement of Additional Information contains more
information about these practices, including limitations on their use that
are intended to reduce some of the risks.
- Investing in Small, Unseasoned Companies. The Fund may invest
in securities of small, unseasoned companies. These are companies that
have been in operation for less than three years, counting the operations
of any predecessors. Securities of these companies may have limited
liquidity (which means that the Fund may have difficulty selling them at
an acceptable price when it wants to) and the prices of these securities
may be volatile. The Fund will not invest more than 5% of its net assets
in securities of small, unseasoned issuers.
- Writing Covered Calls. The Fund may write (that is, sell)
covered call options (calls) to raise cash for liquidity purposes (for
example, to meet redemption requirements) or for defensive reasons. The
Fund receives cash (called a premium) when it writes a call. The call
gives the buyer the ability to buy the security from the Fund at the call
price during the period in which the call may be exercised. If the value
of the security does not rise above the call price, it is likely that the
call will lapse without being exercised, while the Fund keeps the cash
premium (and the security).
The Fund may write calls only if certain conditions are met: (1)
after writing any call, not more than 25% of the Fund's total assets may
be subject to calls; (2) the calls must be listed on a domestic securities
exchange or quoted on the Automated Quotation System of the National
Association of Securities Dealers, Inc. (NASDAQ); and (3) each call must
be "covered" while it is outstanding; that means the Fund must own the
securities on which the call is written or it must own other securities
that are acceptable for the escrow arrangements required for calls. The
Fund can also write calls on foreign currencies (discussed below). The
Fund can also write covered calls on Futures Contracts it owns (these are
described in the next section), but these calls must be covered by
securities or other liquid assets the Fund owns, which the Fund must
segregate from its other assets so that it will be able to satisfy its
delivery obligations if the call is exercised.
If a covered call written by the Fund is exercised on a security that
has increased in value, the Fund will be required to sell the security at
the call price and will not be able to realize any profit if the security
has increased in value above the call price. The Fund will not write or
purchase any call that will cause the value of the Fund's calls on a
particular security to exceed 3% of the Fund's total assets. That
restriction applies to warrants on a security but not to calls purchased
in closing transactions discussed in the next section.
- Hedging With Options, Futures and Forward Contracts. The Fund
may buy and sell options, futures and forward contracts to try to manage
its exposure to declining prices on its portfolio securities or to
establish a position in the equity securities market as a temporary
substitute for purchasing individual securities. Some of these strategies,
such as selling futures, buying puts and writing covered calls, hedge the
Fund's portfolio against price fluctuations. Other hedging strategies,
such as buying futures and buying call options, tend to increase the
Fund's exposure to the market as a temporary substitute for purchasing
securities. Forward contracts are used to try to manage foreign currency
risks on the Fund's foreign investments.
The Fund may buy and sell futures contracts only if they relate to
broadly-based stock indices (these are referred to as "Stock Index
Futures"), as described in the Statement of Additional Information. That
limitation is a fundamental policy. The Fund may also purchase certain
kinds of put and call options, forward contracts and options on Stock
Index Futures, broadly-based stock indices and foreign currencies. These
are all referred to as "hedging instruments." The Fund does not use
hedging instruments for speculative purposes. The hedging instruments the
Fund may use are described below and in greater detail in "Other
Investment Techniques and Strategies" in the Statement of Additional
Information.
Puts and Calls. The Fund may purchase put options ("puts"). Buying
a put on an investment gives the Fund the right to sell the investment at
a set price to a seller of a put on that investment. The Fund can buy
only those puts that relate to (1) securities or Stock Index Futures, (2)
broadly-based stock indices, or (3) foreign currencies. The Fund can buy
a put on a security or Stock Index Future whether or not the Fund owns the
particular security or Stock Index Future in its portfolio. The Fund may
not sell a put other than a put that it previously purchased.
The Fund may purchase calls only on securities, broadly-based stock
indices, foreign currencies, or Stock Index Futures, or to terminate its
obligation on a call the Fund previously wrote. A call or put may not be
purchased if as a result of that purchase the value of all of the Fund's
put and call options would exceed 10% of the Fund's total assets.
The Fund may buy or sell foreign currency puts and calls only if they
are traded on a securities or commodities exchange or over-the-counter
market, or are quoted by recognized dealers in those options. Foreign
currency options are used to protect against declines in the dollar value
of foreign securities the Fund owns, or to protect against an increase in
the dollar cost of buying foreign securities.
Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future
delivery at a fixed price. The Fund uses them to try to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that the
Fund has bought or sold, or to protect against possible losses from
changes in the relative values of the U.S. dollar and foreign currency.
Hedging instruments can be volatile investments and may involve
special risks. In the broadest sense, exchange-traded options and futures
contracts and other hedging instruments the Fund can use may be defined
as "derivative" investments. In general, a derivative investment is a
specially-designed investment whose performance is linked to the
performance of another investment or security. The use of hedging
instruments requires special skills and knowledge of investment techniques
that are different than what is required for normal portfolio management.
If the Manager uses a hedging instrument at the wrong time or judges
market conditions incorrectly, hedging strategies may reduce the Fund's
return. The Fund could also experience losses if the prices of its futures
and options positions were not correlated with its other investments or
if it could not close out a position because the market for the future or
option were illiquid.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. The use of forward contracts may reduce the gain that would
otherwise result from a change in the relationship between the U.S. dollar
and a foreign currency. To limit its exposure in foreign currency
exchange contracts, the Fund limits its exposure to the amount of its
assets denominated in the foreign currency. These risks are described in
greater detail in the Statement of Additional Information.
- Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments. Investments
may be illiquid because of the absence of an active trading market, making
it difficult to value them or dispose of them promptly at an acceptable
price. A restricted security is one that has a contractual restriction on
its resale or which cannot be sold publicly until it is registered under
the Securities Act of 1933.
The Fund will not invest more than 10% of its net assets in illiquid
or restricted securities (that limit may increase to 15% if certain state
laws are changed or the Fund's shares are no longer sold in those states).
The Fund's percentage limitation on these investments does not apply to
certain restricted securities that are eligible for resale to qualified
institutional purchasers.
- Loans of Portfolio Investments. To raise cash for liquidity
purposes, the Fund may lend its portfolio investments to brokers, dealers
and other financial institutions approved by the Board of Trustees. Each
loan must be collateralized in accordance with applicable regulatory
requirements. As a fundamental policy, these loans are limited to not more
than 25% of the value of the Fund's total assets. There are some risks
in connection with securities lending. The Fund might experience a delay
in receiving additional collateral to secure a loan, or a delay recovering
loaned securities if the borrower defaults. The Fund presently does not
intend to make loans of investments that will exceed 5% of the value of
the Fund's total assets in the coming year. This limit is not a
fundamental policy.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date.
These are used primarily for cash liquidity purposes. 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 fails to pay the resale price on the delivery date, the Fund may
incur costs in disposing of the collateral and may experience losses if
there is any delay in its ability to do so. The Fund will not enter into
a repurchase agreement that causes more than 10% of its net assets to be
subject to repurchase agreements having a maturity beyond seven days.
- Short Sales "Against-the-Box". In a short sale, the seller does
not own the security that is sold, but normally borrows the security to
fulfill its delivery obligation. The seller later buys the security to
repay the loan, in the expectation that the price of the security will be
lower when the purchase is made, resulting in a gain. The Fund may not
sell securities short except in collateralized transactions referred to
as short sales "against-the-box," where the Fund owns an equivalent amount
of the securities sold short. This technique is primarily used for tax
purposes. No more than 15% of the Fund's net assets will be held as
collateral for short sales at any one time.
- Temporary Defensive Investments. Under unusual economic,
political or business circumstances adversely affecting Mining Securities
or Metal Investments, the Fund may depart from its usual policy of
concentrating at least 80% of its assets in those investments. Instead,
the Fund may invest a portion of its assets in other types of securities
for "defensive purposes." Securities selected for defensive purposes will
usually be short-term securities and may include debt securities. These
may be rated or unrated bonds and debentures, preferred stocks, cash or
cash equivalents, such as U.S. Treasury Bills and other short-term
obligations of the U.S. Government, its agencies or instrumentalities, or
commercial paper rated "A-1" or better by Standard & Poor's Corporation
or "P-1" or better by Moody's Investors Service, Inc. For defensive
purposes, the Fund may also invest for capital appreciation in equity
securities other than Mining Securities.
Other Investment Restrictions. The Fund has other investment restrictions
which are fundamental policies. Under these fundamental policies, the Fund
cannot do any of the following: (1) invest in Metal Investments if, as a
result, more than 10% of the Fund's total assets would be invested in
Metal Investments; (2) invest either more than 10% of its total assets in
the securities of any one issuer, or, with respect to 75% of its total
assets, invest more than 5% of its total assets in securities of any one
issuer (for this purpose, an "issuer" is one other than the U.S.
Government or its agencies or instrumentalities); (3) acquire more than
10% of the outstanding voting securities of any one issuer; (4) invest in
other open-end investment companies, or invest more than 10% of its net
assets in closed-end investment companies, including small business
investment companies (and investments in closed-end investment companies
may be made only in open-market purchases and only at commission rates
that are not in excess of normal brokerage commissions); (5) lend money
(this does not prohibit the Fund from acquiring publicly-distributed debt
securities that the Fund's other investment policies and restrictions
permit it to purchase, and the Fund may also make loans of portfolio
securities and Metal Investments (as described above); or (6) deviate from
the percentage limitations on investments set forth in the sections of
"Other Investment Techniques and Strategies" above, (other than those
under "Illiquid and Restricted Securities").
All of the percentage restrictions described above and elsewhere in
this Prospectus (other than the percentage limits that apply to borrowing,
described in the Statement of Additional Information) apply only at the
time the Fund purchases a security. The Fund need not dispose of a
security merely because the size of the Fund's assets has changed or the
security has increased in value relative to the size of the Fund. There
are other fundamental policies discussed in the Statement of Additional
Information.
How the Fund is Managed
Organization and History. The Fund was originally incorporated in
Maryland in 1983 but was reorganized in 1985 as a Massachusetts business
trust. The Fund is an open-end, diversified management investment company,
with an unlimited number of authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and provides more information about them
and the officers of the Fund. Although the Fund is not required by law
to hold annual meetings, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.
Presently, the Fund has only one class of shares. However, the Board
of Trustees has the power, without shareholder approval, to divide
unissued shares of the Fund into two or more classes. These classes could
have different dividends and distributions and could be subject to
different expenses. Shares of the Fund are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Fund's investments and handles its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Board
of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. The Agreement sets forth the fees paid by the
Fund to the Manager, and describes the expenses that the Fund is
responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $28 billion as
of September 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 Manager has designated a Portfolio
Manager as the person principally responsible for the day-to-day
management of the Fund's portfolio. James C. Ayer, Jr. has been a
Portfolio Manager of the Fund since September, 1993. Since July 16, 1994,
he has been the principal Portfolio Manager and since August 1, 1994 he
has also been a Vice President of the Fund. He is an Assistant Vice
President of the Manager. Prior to joining the Manager in 1992, Mr. Ayer
was an international equities investment officer with Brown Brothers
Harriman & Co.
- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 0.75% of the first $200 million of
aggregate net assets, 0.72% of the next $200 million, 0.69% of the next
$200 million, 0.66% of the next $200 million and 0.60% of average net
assets over $800 million. The Fund's management fee for its last fiscal
year was 0.80% of average annual net assets of the Fund, which may be
higher than the rate paid by some other mutual funds. That rate reflected
higher management fee rates that were in effect during the Fund's last
fiscal year, of 0.80% of the first $200 million of average net assets and
0.75% of the next $200 million. The current rates became effective July
1, 1994.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Fund's Distributor.
The Distributor also distributes the shares of other mutual funds managed
by the Manager (the "OppenheimerFunds") and is sub-distributor for funds
managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
account to the Transfer Agent at the address and toll-free numbers shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return" and "average annual total return" to illustrate its performance.
This performance information may be useful to help you see how well your
investment has done and to compare it to other funds or market indices,
as we have done below.
It is important to understand that the Fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio and
expenses.
- 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 shares of the Fund, they reflect
the payment of the maximum initial sales charge. Total returns may also
be quoted "at net asset value," without considering the effect of the
sales charge, and those returns would be reduced if sales charges were
deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended June 30, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the Fund's past
fiscal year, which was marked by slow growth and low inflation in the U.S.
and other industrialized economies, industrial demand for gold continued
to outpace mining output, which tended to enhance gold-stock prices. The
Fund's portfolio manager shifted the emphasis of the gold stock portion
of the portfolio away from North American companies to companies in other
regions where production and exploration has been increasing, such as
Latin America. The Manager emphasized selection of stocks of companies
with proven exploration capabilities and improving production profiles.
Additionally, the Manager increased the Fund's investment in stocks of
producers and refiners of other precious and industrial metals, such as
nickel, platinum and copper, as the prices of those metals had
strengthened during that period along with the general strengthening of
worldwide economies.
- Comparing the Fund's Performance to the Market. The chart below
shows the performance of a hypothetical $10,000 investment in shares of
the Fund held until June 30, 1994, over a ten-year period, with all
dividends and capital gains distributions reinvested in additional shares.
The graph reflects the deduction of the 5.75% current maximum initial
sales charge on shares of the Fund.
The Fund's performance is compared to the performance of the Morgan
Stanley World Index, an unmanaged index of issuers listed on the stock
exchanges of 20 foreign countries and the U.S. That index is widely
recognized as a measure of global stock market performance. Index
performance reflects the reinvestment of dividends but does not consider
the effect of expenses or taxes. Also, the Fund's performance reflects
the effect of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited
to the securities in the Morgan Stanley World Index, as the Fund's
investments are concentrated in one group of industries while the Index
includes companies from different industries with different degrees of
volatility and returns. Moreover, the index data does not reflect any
assessment of the risk of the investments included in the index.
Oppenheimer Gold & Special Minerals Fund
Comparison of Change in Value
of a $10,000 Hypothetical Investment in:
Oppenheimer Gold & Special Minerals Fund
and Morgan Stanley World Index
(Graph)
Past performance is not predictive of future performance.
Average Annual Total Returns of the Fund at 6/30/94
1-Year 5-Year 10-Year
------ ------ -------
2.03% 2.94% 9.74%
ABOUT YOUR ACCOUNT
How to Buy Shares
When you buy shares of the Fund, you pay an initial sales charge (on
investments up to $1 million). If you purchase shares of the Fund as part
of an investment of at least $1 million in shares of one or more
OppenheimerFunds, you will not pay any initial sales charge, but if you
sell any of those shares within 18 months after your purchase, you may pay
a contingent deferred sales charge, which will vary depending on the
amount you invested. Sales charges are described below.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250
(if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or you
can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements with
the Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service.
- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares. However, we
recommend that you discuss your investment first with a financial advisor,
to be sure it is appropriate for you.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member. You can then transmit funds electronically to purchase shares,
to send redemption proceeds, and to transmit dividends and distributions.
Shares are purchased for your account on AccountLink on the regular
business day the Distributor is instructed by you to initiate the ACH
transfer to buy shares. You can provide those instructions automatically,
under an Asset Builder Plan, described below, or by telephone instructions
using OppenheimerFunds PhoneLink, also described below. You should request
AccountLink privileges on the application or dealer settlement
instructions used to establish your account. Please refer to "AccountLink"
below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and
up to four other OppenheimerFunds) automatically each month from your
account at a bank or other financial institution under an Asset Builder
Plan with AccountLink. Details are on the Application and in the Statement
of Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver. In most cases, to enable you to receive that
day's offering price, the Distributor must receive your order by 4:00
P.M., New York time (all references to time in this Prospectus mean "New
York time"). The net asset value is determined as of that time on each
day The New York Stock Exchange is open (which is a "regular business
day").
If you buy shares through a dealer, the dealer must receive your
order by 4:00 P.M. on a regular business day and transmit it to the
Distributor so that it is received before the Distributor's close of
business that day, which is normally 5:00 P.M. The Distributor may reject
any purchase order for the Fund's shares, in its sole discretion.
The public offering price is normally net asset value plus an initial
sales charge. However, in some cases, described below, purchases are not
subject to an initial sales charge, and the offering price will be the net
asset value. In some cases, reduced sales charges may be available, as
described below. Out of the amount you invest, the Fund receives the net
asset value to invest for your account. The sales charge varies depending
on the amount of your purchase. A portion of the sales charge may be
retained by the Distributor and allocated to your dealer as commission.
The current sales charge rates and commissions paid to dealers and brokers
are as follows:
- --------------------------------------------------------------------------
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- --------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
- --------------------------------------------------------------------------
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.
- Contingent Deferred Sales Charge. There is no initial sales
charge on purchases of Class A shares of any one or more OppenheimerFunds
aggregating $1 million or more (shares of the Fund and other
OppenheimerFunds that offer only one class of shares that has no class
designation are considered "Class A shares" for this purpose). However,
the Distributor pays dealers of record commissions on such purchases in
an amount equal to the sum of 1.0% of the first $2.5 million, plus 0.50%
of the next $2.5 million, plus 0.25% of share purchases over $5 million.
That commission will be paid only on the amount of those purchases in
excess of $1 million that were not previously subject to a front-end sales
charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge will
be deducted from the redemption proceeds. That sales charge will be equal
to 1.0% of the aggregate net asset value of either (1) the redeemed shares
(not including shares purchased by reinvestment of dividends or capital
gain distributions) or (2) the original cost of the shares, whichever is
less. However, the contingent deferred sales charge paid on such shares
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 contingent deferred sales charge is waived in certain
cases described in "Waivers of Sales Charges" below.
No contingent deferred sales charge is charged on exchanges of shares
under the Fund's Exchange Privilege (described below). However, if the
shares acquired by exchange are redeemed within 18 months of the end of
the calendar month of the purchase of the exchanged shares, the sales
charge will apply.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges. You may be eligible to buy shares of the Fund at
reduced sales charge rates in one or more of the following ways:
- Right of Accumulation. To qualify for a lower sales charge
rate, you and your spouse can add together Fund shares you purchase for
your individual accounts, or jointly, or on behalf of your children who
are minors, under trust or custodial accounts. A fiduciary can count all
shares purchased for a trust, estate or other fiduciary account (including
one or more employee benefit plans of the same employer) that has multiple
accounts.
Additionally, you can add together current purchases of shares of the
Fund and Class A shares of other OppenheimerFunds. You can also include
shares of the Fund and Class A shares of other 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 Distributor. The reduced
sales charge will apply only to current purchases and must be requested
when you buy your shares.
- Letter of Intent. Under a Letter of Intent, you may purchase
shares of the Fund and Class A shares of other OppenheimerFunds during a
13-month period at the reduced sales charge rate that applies to the total
amount of the intended purchases. This can include purchases made up to
90 days before the date of the Letter. More information is contained in
the Application and in "Reduced Sales Charges" in the Statement of
Additional Information.
- Waivers of Sales Charges. No sales charge is imposed on sales of
shares of the Fund to the following investors: (1) the Manager or its
affiliates; (2) present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced Sales
Charges" in the Statement of Additional Information) of the Fund, the
Manager and its affiliates, and retirement plans established by them for
their employees; (3) registered management investment companies, or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (4) dealers or brokers that
have a sales agreement with the Distributor, if they purchase shares for
their own accounts or for retirement plans for their employees; (5)
employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered
into sales arrangements with such dealers or brokers (and are identified
to the Distributor) or with the Distributor; the purchaser must certify
to the Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's spouse or
minor children); (6) dealers, brokers or registered investment advisers
that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment
products made available to their clients; (7) dealers, brokers or
registered investment advisers that have entered into an agreement with
the Distributor to sell shares to defined contribution employee retirement
plans for which the dealer, broker or investment adviser provides
administrative services.
Additionally, no sales charge is imposed on shares that are (a)
issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, or (c) purchased by
the reinvestment of dividends or other distributions reinvested from the
Fund or other OppenheimerFunds (other than Oppenheimer Cash Reserves) or
unit investment trusts for which reinvestment arrangements have been made
with the Distributor. There is a further discussion of this policy in
"Reduced Sales Charges" in the Statement of Additional Information.
The contingent deferred sales charge does not apply to purchases at
net asset value described above and is also waived if shares are redeemed
in the following cases: (1) retirement distributions or loans to
participants or beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans ("Retirement Plans"),
(2) returns of excess contributions made to Retirement Plans, (3)
Automatic Withdrawal Plan payments that are limited to no more than 12%
of the original account value annually, (4) involuntary redemptions of
shares by operation of law or under the procedures set forth in the Fund's
Declaration of Trust or adopted by the Board of Trustees, and (5) if, at
the time an order is placed for Class A shares that would otherwise be
subject to the Class A contingent deferred sales charge, the dealer agrees
to accept the dealer's portion of the commission payable on the sale in
installments of 1/18th of the commission per month (with no further
commission payable if the shares are redeemed within 18 months of
purchase).
- Service Plan. The Fund has adopted a Service Plan to reimburse
the Distributor for a portion of its costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund.
Reimbursement is made quarterly at an annual rate that may not exceed
0.25% of the average annual net assets of the Fund. The Fund's Board of
Trustees has set the annual rate for assets representing shares of the
Fund sold on or after April 1, 1991 at 0.25%, and has set the annual rate
for assets representing shares sold before April 1, 1991, at 0.15% (the
Board has the authority to increase that rate but to no more than 0.25%).
The Distributor uses all of those fees to compensate dealers, brokers,
banks and other financial institutions quarterly for providing personal
service and maintenance of accounts of their customers that hold shares
of the Fund and to reimburse itself (if the Fund's Board of Trustees
authorizes such reimbursements, which it has not yet done) for its other
expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of shares of the Fund held
in accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of the Fund. For more details, please refer
to "Service Plan" in the Statement of Additional Information.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions. These include purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges 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 worth $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 OppenheimerFunds account is $25. These exchanges are subject to the
terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in shares of the Fund or Class A shares of other OppenheimerFunds without
paying a sales charge. This privilege applies to Fund shares that you
purchased with an initial sales charge. It also applies to 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
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment, including SARSEP-IRAs
- Pension and Profit-Sharing Plans for self-employed persons and
other employers
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing or by telephone. You can
also set up Automatic Withdrawal Plans to redeem shares on a regular
basis, as described above. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special
situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525-7048, for
assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive
a check
- A redemption check is not payable to all shareholders listed on
the account statement
- A redemption check is not sent to the address of record on your
statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as
an Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other business, or
as a fiduciary, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your 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 statement, 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, in any 7-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account statement. This service is not available within 30 days of
changing the address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
Selling Shares Through Your Dealer. The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their
customers. Brokers or dealers may charge for that service. Please refer
to "Special Arrangements for Repurchase of Shares from Dealers and
Brokers" in the Statement of Additional Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges made by brokers on Fund/SERV and
for automated exchanges between already established accounts on PhoneLink,
described below. To exchange shares, you must meet several conditions:
- Shares of the fund selected for exchange must be available for
sale in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other OppenheimerFunds. For example, you can exchange
shares of this Fund only for Class A shares of another fund. At present,
not all of the OppenheimerFunds offer the same classes of shares. If a
fund has only one class of shares that does not have a class designation,
they are "Class A" shares for exchange purposes. In some cases, sales
charges may be imposed on exchange transactions. Certain OppenheimerFunds
offer Class A shares and 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 a
service representative at 1-800-525-7048. That list can change from time
to time.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from
the other fund in the exchange transaction on the same regular business
day on which the Transfer Agent receives an exchange request by 4:00 P.M.
that is in proper form. However, either fund may delay the purchase of
shares of the fund you are exchanging into if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For
example, the receipt of multiple exchange requests from a dealer in a
"market-timing" strategy might require the sale of securities at a time
or price disadvantageous to the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege
at any time. Although the Fund will attempt to provide you notice
whenever it is reasonably able to do so, it may impose these changes at
any time.
- For tax purposes, exchanges of shares involve a redemption of
the shares of the fund you own and a purchase of shares of the other fund,
which may result in a capital gain or loss. For more information about
taxes affecting exchanges, please refer to "How to Exchange Shares" in the
Statement of Additional Information.
- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined for shares of the Fund as
of 4:00 P.M. each day The New York Stock Exchange is open by dividing the
value of the Fund's net assets by the number of shares that are
outstanding. The Fund's Board of Trustees has established procedures to
value the Fund's securities to determine net asset value. In general,
securities values are based on market value. There are special procedures
for valuing illiquid and restricted securities, call options, hedging
instruments and Metal Investments. 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 or improperly.
- The redemption price for shares will vary from day to day because
the value of the securities in the Fund's portfolio fluctuates. 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 to have your bank provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $500 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
- Under unusual circumstances, shares of the fund may be redeemed
"in kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to "How to Sell
Shares" in the Statement of Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or Employer Identification Number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of 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 charge when redeeming certain
shares of the Fund.
- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report to
shareholders having the same last name and address on the Fund's records.
However, each shareholder may call the Transfer Agent at 1-800-525-7048
to ask that copies of those materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends from net investment income on an
annual basis and normally pays those dividends to shareholders in
December, but the Board of Trustees can change that date. The Board may
also cause the Fund to declare dividends after the close of the Fund's
fiscal year (which ends June 30th). Because the Fund does not have an
objective of seeking current income, the amounts of dividends it pays, if
any, will likely be small.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of capital gains following the end of its
fiscal year. Long-term capital gains will be separately identified in the
tax information the Fund sends you after the end of the year. Short-term
capital gains are treated as dividends for tax purposes. There can be no
assurances that the Fund will pay any capital gains distributions in a
particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or have
them sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds Account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you held your
shares. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Distributions are subject to
federal income tax and may be subject to state or local taxes. Your
distributions are taxable when paid, whether you reinvest them in
additional shares or take them in cash. Every year the Fund will send you
and the IRS a statement showing the amount of all taxable distributions
you received in the previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy shares on
or just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. Generally speaking, 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 GOLD & SPECIAL MINERALS FUND
Graphic material included in Prospectus of Oppenheimer Gold & Special
Minerals Fund: "Comparison of Total Return of Oppenheimer Gold & Special
Minerals Fund with the Morgan Stanley World Index- Change in Value of a
$10,000 Hypothetical Investment"
A linear graph will be included in the Prospectus of Oppenheimer Gold
& Special Minerals Fund (the "Fund") depicting the initial account value
and subsequent account value of a hypothetical $10,000 investment in the
Fund. The graph will cover each of the Fund's last ten fiscal years from
6/30/84 through 6/30/94. The graph will compare such values with
hypothetical $10,000 investments over the same time periods in the Morgan
Stanley World 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 Morgan Stanley World Index,
is set forth in the Prospectus under "Performance of the Fund - Comparing
the Fund's Performance to the Market."
Fiscal Year Oppenheimer Gold & Morgan Stanley
(Period) Ended Special Minerals Fund World Index
-------------- --------------------- --------------
06/30/84 $9,425 $10,000
06/30/85 $8,070 $12,659
06/30/86 $7,568 $19,724
06/30/87 $14,557 $28,089
06/30/88 $19,395 $27,794
06/30/89 $20,643 $31,263
06/30/90 $21,283 $33,479
06/30/91 $19,004 $31,839
06/30/92 $19,969 $33,182
06/30/93 $23,392 $38,740
06/30/94 $25,323 $42,707
<PAGE>
Oppenheimer Gold & Special Minerals Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent OPPENHEIMER
Oppenheimer Shareholder Services Gold & Special Minerals Fund
P.O. Box 5270 Prospectus
Denver, Colorado 80217 Effective November 1, 1994
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street OppenheimerFunds
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information,
and, if given or made, such information and representations must not be
relied upon as having been authorized by the Fund, Oppenheimer Management
Corporation, Oppenheimer Funds Distributor, Inc. or any affiliate thereof.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
<PAGE>
Oppenheimer Gold & Special Minerals Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated November 1, 1994
This Statement of Additional Information of Oppenheimer Gold &
Special Minerals Fund is not a Prospectus. This document contains
additional information about the Fund and supplements information in the
Prospectus dated November 1, 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 2
Investment Policies and Strategies 2
Other Investment Techniques and Strategies 4
Other Investment Restrictions 16
How the Fund is Managed 16
Organization and History 16
Trustees and Officers of the Fund 17
The Manager and Its Affiliates 21
Brokerage Policies of the Fund 22
Performance of the Fund 24
Service Plan 26
About Your Account 27
How To Buy Shares 27
How To Sell Shares 33
How To Exchange Shares 36
Dividends, Capital Gains and Taxes 38
Additional Information About the Fund 39
Financial Information About the Fund 41
Independent Auditors' Report 41
Financial Statements 42
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Set forth below is
supplemental information about those policies and the types of securities
in which the Fund invests, as well as the strategies the Fund may use to
try to achieve its objective. Capitalized terms used in this Statement
of Additional Information have the same meaning as those terms have in the
Prospectus.
In selecting securities for the Fund's portfolio, the Fund's investment
advisor, Oppenheimer Management Corporation (the "Manager"), evaluates the
merits of securities primarily through the exercise of its own investment
analysis. This may include, among other things, evaluation of the history
of the issuer's operations, prospects for the industry of which the issuer
is part, the issuer's financial condition, the issuer's pending product
developments and developments by competitors, the effect of general market
and economic conditions on the issuer's business, and legislative
proposals or new laws that might affect the issuer. Current income is not
a consideration in the selection of portfolio securities for the Fund,
whether for appreciation, defensive or liquidity purposes. The fact that
a security has a low yield or does not pay current income will not be an
adverse factor in selecting securities to try to achieve the Fund's
investment objective of capital appreciation unless the Manager believes
that the lack of yield might adversely affect appreciation possibilities.
The portion of the Fund's assets allocated to securities selected for
capital appreciation and the investment techniques used will depend upon
the judgment of the Fund's Manager as to the future movement of the equity
securities markets. If the Manager believes that economic conditions
favor a rising market, the Fund will emphasize securities and investment
methods selected for high capital growth. If the Manager believes that
a market decline is likely, defensive securities and investment methods
may be emphasized (See "Temporary Defensive Investments," below).
- Investing in Mining Securities and Metal Investments. The type of
securities that will be emphasized in the Fund's portfolio are Mining
Securities and Metal Investments. Mining Securities are securities of
companies engaged in mining, processing, or distributing gold and other
metals or minerals. Metal Investments consist of gold or silver bullion,
other precious metals, strategic metals, other metals naturally occurring
with such metals, certificates representing an ownership interest in such
metals, and gold or silver coins.
- Special Risks of Concentrating Investments in Mining Securities and
Metal Investments. Investments in Mining Securities and Metal Investments
involve additional risks and considerations not typically associated with
other types of investments: (i) the risk of substantial price
fluctuations of gold and precious metals; (ii) the concentration of gold
supply is mainly in five territories (South Africa, Australia, the
Commonwealth of Independent States (the former Soviet Union), Canada and
the United States), and the prevailing economic and political conditions
of these countries may have a direct effect on the production and
marketing of gold and sales of central bank gold holdings; (iii)
unpredictable international monetary policies, economic and political
conditions; (iv) possible U.S. governmental regulation of Metal
Investments, as well as foreign regulation of such investments; and (v)
possible adverse tax consequences for the Fund in making Metal
Investments, if it fails to qualify as a "regulated investment company"
under the Internal Revenue Code.
Because the Fund concentrates its investments in Mining Securities and
Metal Investments, an adverse change with respect to any of these risk
factors could have a significant negative effect on the Fund's net asset
value per share. These risks are discussed in greater detail below.
- Risk of Price Fluctuations. The prices of precious and strategic
metals are affected by various factors such as economic conditions,
political events, governmental monetary and regulatory policies and market
events. The prices of Mining Securities and Metal Investments held by the
Fund may fluctuate sharply, which will affect the value of the Fund's
shares.
- Concentration of Source of Gold Supply and Control of Gold Sales.
Currently, the four largest producers of gold are the Republic of South
Africa, the Commonwealth of Independent States (which includes Russia and
certain other countries that were part of the former Soviet Union), Canada
and the United States. Economic and political conditions in those
countries may have a direct effect on the production and marketing of gold
and on sales of central bank gold holdings. In South Africa, the
activities of companies engaged in gold mining are subject to the policies
adopted by the Ministry of Mines. The Reserve Bank of South Africa, as
the sole authorized sales agent for South African gold, has an influence
on the price and timing of sales of South African gold. Political and
social conditions in South Africa are still somewhat unsettled and may
pose certain risks to the Fund (in addition to the risks described below
under the caption "Foreign Securities"), because the Fund may hold a
portion of its assets in securities of South African issuers.
- Unpredictable International Monetary Policies, Economic and
Political Conditions. There is the possibility that unusual international
monetary or political conditions may make the Fund's portfolio assets less
liquid, or that the value of the Fund's assets might be more volatile,
than would be the case with other investments. In particular, the price
of gold is affected by its direct and indirect use to settle net balance
of payments deficits and surpluses between nations. Because the prices
of precious or strategic metals may be affected by unpredictable
international monetary policies and economic conditions, there may be
greater likelihood of a more dramatic fluctuation of the market prices of
the Fund's investments than of other investments.
- Commodities Regulations. The trading of Metal Investments in the
United States could become subject to the rules that govern the trading
of agricultural and certain other commodities and commodity futures. In
the opinion of the Fund's counsel, at present the Fund's permitted Metal
Investments are either not subject to regulation by the Commodity Futures
Trading Commission ("CFTC") or an exemption from regulation is available.
The absence of CFTC regulation may adversely affect the continued
development of an orderly market in Metal Investments trading in the
United States. The development of a regulated futures market in Metal
Investments trading may affect the development of a market in, and the
price of, Metal Investments in the United States.
- Effect on the Fund's Tax Status. By making Metal Investments, the
Fund risks failing to qualify as a regulated investment company under the
Internal Revenue Code. If the Fund should fail to qualify, it would lose
the beneficial tax treatment accorded to qualifying investment companies
under Subchapter M of the Code. Failure to qualify would occur if in any
fiscal year the Fund either (a) derived 10% or more of its gross income
(as defined in the Internal Revenue Code, which disregards losses for this
purpose) from sales or other dispositions of Metal Investments, or (b)
held more than 50% of its net assets in the form of Metal Investments or
in securities not meeting certain tests under the Internal Revenue Code
(see "Dividends, Capital Gains and Taxes"). Accordingly, the Fund will
endeavor to manage its portfolio within the limitations described above,
and the Fund has adopted an investment restriction limiting the amount of
its total assets that can be invested in Metal Investments. There can be
no assurance that the Fund will qualify in every fiscal year.
Furthermore, to comply with the limitations described above, the Fund may
be required to make investment decisions the Manager would otherwise not
make, foregoing the opportunity to realize gains, if necessary, to permit
the Fund to qualify. See "Investment Restrictions."
- Warrants. Warrants basically are options to purchase equity
securities at set prices valid for a specified period of time. The prices
of warrants do not necessarily move in a manner parallel to the prices of
the underlying securities. The price the Fund pays for a warrant will be
lost unless the warrant is exercised prior to its expiration. Warrants
have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
Other Investment Techniques and Strategies
- Writing Covered Calls. As described in the Prospectus, the Fund
may write covered calls. When the Fund writes a call on an investment, it
receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment) regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing
purchase transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the premium
received on the call the Fund has written is more or less than the price
of the call the Fund subsequently purchased. A profit may also be
realized if the call lapses unexercised, because the Fund retains the
underlying investment and the premium received. Those profits are
considered short-term capital gains for Federal income tax purposes, as
are premiums on lapsed calls, and when distributed by the Fund are taxable
as ordinary income. If the Fund could not effect a closing purchase
transaction due to the lack of a market, it would have to hold the
callable investment until the call lapsed or was exercised.
The Fund may also write calls on Futures without owning a futures
contract or deliverable securities, provided that at the time the call is
written, the Fund covers the call by segregating in escrow an equivalent
dollar value of deliverable securities or liquid assets. The Fund will
segregate additional liquid assets if the value of the escrowed assets
drops below 100% of the current value of the Future. In no circumstances
would an exercise notice as to a Future put the Fund in a short futures
position.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the facilities of
the Options Clearing Corporation ("OCC"), as to the investments on which
the Fund has written options that are traded on exchanges, or as to other
acceptable escrow securities, so that no margin will be required from the
Fund for such option transactions. OCC will release the securities
covering a call on the expiration of the call or when the Fund enters into
a closing purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally higher
than on general securities transactions, are payable on writing or
purchasing a call.
- Hedging With Options and Futures Contracts. The Fund may use
hedging instruments for the purposes described in the Prospectus. When
hedging to attempt to protect against declines in the market value of the
Fund's portfolio, or to permit the Fund to retain unrealized gains in the
value of portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may: (i) sell Stock
Index Futures, (ii) buy puts, or (iii) write covered calls on securities
held by it or on Stock Index Futures (as described in the Prospectus).
When hedging to establish a position in the equity securities markets as
a temporary substitute for the purchase of individual equity securities
the Fund may: (i) buy Stock Index Futures, or (ii) buy calls on Stock
Index Futures or securities. Normally, the Fund would then purchase the
equity securities and terminate the hedging portion.
The Fund's strategy of hedging with Futures and options on Futures will
be incidental to the Fund's investment activities in the underlying cash
market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be
subsequently developed, to the extent such investment methods are
consistent with the Fund's investment objective, and are legally
permissible and disclosed in the Prospectus. Additional information about
the hedging instruments the Fund may use is provided below.
- Stock Index Futures. As described in the Prospectus, the Fund may
invest in Stock Index Futures only if they relate to broadly-based stock
indices. A stock index is considered to be broadly-based if it includes
stocks that are not limited to issuers in any particular industry or group
of industries. A stock index assigns relative values to the common stocks
included in the index and fluctuates with the changes in the market value
of those stocks. Stock indices cannot be purchased or sold directly.
Stock index futures are contracts based on the future value of the
basket of securities that comprise the underlying stock index. The
contracts obligate the seller to deliver, and the purchaser to take, cash
to settle the futures transaction or to enter into an offsetting contract.
No physical delivery of the securities underlying the index is made on
settling the futures obligation. No monetary amount is paid or received
by the Fund on the purchase or sale of a Stock Index Future. Upon
entering into a Futures transaction, the Fund will be required to deposit
an initial margin payment, in cash or U.S. Treasury bills, with the
futures commission merchant (the "futures broker"). Initial margin
payments will be deposited with the Fund's Custodian in an account
registered in the futures broker's name; however, the futures broker can
gain access to that account only under certain specified conditions. As
the Future is marked to market (that is, its value on the Fund's books is
changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures
broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may elect
to close out its position by taking an opposite position, at which time
a final determination of variation margin is made and additional cash is
required to be paid by or released to the Fund. Any gain or loss is then
realized by the Fund on the Future for tax purposes. Although Stock Index
Futures by their terms call for settlement by the delivery of cash, in
most cases the settlement obligation is fulfilled without such delivery
by entering into an offsetting transaction. All futures transactions are
effected through a clearing house associated with the exchange on which
the contracts are traded.
- Purchasing Puts and Calls. The Fund may purchase calls to protect
against the possibility that the Fund's portfolio will not participate in
an anticipated rise in the securities market. When the Fund purchases a
call (other than in a closing purchase transaction), it pays a premium
and, except as to calls on stock indices, has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. In
purchasing a call, the Fund benefits only if the call is sold at a profit
or if, during the call period, the market price of the underlying
investment is above the sum of the call price, transaction costs, and the
premium paid, and the call is exercised. If the call is not exercised or
sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the right
to purchase the underlying investment. When the Fund purchases a call on
a stock index, it pays a premium, but settlement is in cash rather than
by delivery of the underlying investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to puts
on stock indices, has the right to sell the underlying investment to a
seller of a corresponding put on the same investment during the put period
at a fixed exercise price. Buying a put on an investment the Fund owns
(a "protective put") enables the Fund to attempt to protect itself during
the put period against a decline in the value of the underlying investment
below the exercise price by selling the underlying investment at the
exercise price to a seller of a corresponding put. If the market price
of the underlying investment is equal to or above the exercise price and
as a result the put is not exercised or resold, the put will become
worthless at its expiration and the Fund will lose the premium payment and
the right to sell the underlying investment. However, the put may be sold
prior to expiration (whether or not at a profit).
Puts and calls on broadly-based stock indices or Stock Index Futures
are similar to puts and calls on securities or futures contracts except
that all settlements are in cash and gain or loss depends on changes in
the index in question (and thus on price movements in the stock market
generally) rather than on price movements of individual securities or
futures contracts. When the Fund buys a call on a stock index or Stock
Index Future, it pays a premium. If the Fund exercises the call during
the call period, a seller of a corresponding call on the same investment
will pay the Fund an amount of cash to settle the call if the closing
level of the stock index or Future upon which the call is based is greater
than the exercise price of the call. That cash payment is equal to the
difference between the closing price of the call and the exercise price
of the call times a specified multiple (the "multiplier") which determines
the total dollar value for each point of difference. When the Fund buys
a put on a stock index or Stock Index Future, it pays a premium and has
the right during the put period to require a seller of a corresponding
put, upon the Fund's exercise of its put, to deliver cash to the Fund to
settle the put if the closing level of the stock index or Stock Index
Future upon which the put is based is less than the exercise price of the
put. That cash payment is determined by the multiplier, in the same
manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock Index
Future not owned by it, the put protects the Fund to the extent that the
index moves in a similar pattern to the securities the Fund holds. The
Fund can either resell the put or, in the case of a put on a Stock Index
Future, buy the underlying investment and sell it at the exercise price.
The resale price of the put will vary inversely with the price of the
underlying investment. If the market price of the underlying investment
is above the exercise price, and as a result the put is not exercised, the
put will become worthless on the expiration date. In the event of a
decline in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its loss on
its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause
the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds is within the
Fund's control, holding a put might cause the Fund to sell the related
investments for reasons that would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys or sells a
call, put or an underlying investment in connection with the exercise of
a put or call. Those commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value of
the underlying investments and, consequently, put and call options offer
large amounts of leverage. The leverage offered by trading in options
could result in the Fund's net asset value being more sensitive to changes
in the value of the underlying investments.
- Options on Foreign Currency. The Fund may write and purchase puts
and calls on foreign currencies that are traded on a securities or
commodities exchange or over-the-counter markets or are quoted by major
recognized dealers in such options. It does so to protect against
declines in the dollar value of foreign securities and against increases
in the dollar cost of foreign securities to be acquired. If the Manager
anticipates a rise in the dollar value of a foreign currency in which
securities to be acquired are denominated, the increased cost of such
securities may be partially offset by purchasing calls or writing puts on
that foreign currency. If a decline in the dollar value of a foreign
currency is anticipated, the decline in value of portfolio securities
denominated in that currency may be partially offset by writing calls or
purchasing puts on that foreign currency. However, in the event of
currency rate fluctuations adverse to the Fund's position, it would lose
the premium it paid and transactions costs.
A call written on a foreign currency by the Fund is covered if the Fund
owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of
other foreign currency held in its portfolio. A call may be written by
the Fund on a foreign currency to provide a hedge against a decline due
to an expected adverse change in the exchange rate in the U.S. dollar
value of a security which the Fund owns or has the right to acquire and
which is denominated in the currency underlying the option. This is a
cross-hedging strategy. In such circumstances, the Fund collateralizes
the option by maintaining in a segregated account with the Fund's
custodian, cash or U.S. Government Securities in an amount not less than
the value of the underlying foreign currency in U.S. dollars marked-to-
market daily.
- Forward Contracts. A Forward Contract involves bilateral
obligations of one party to purchase, and another party to sell, a
specific currency at a future date (which may be any fixed number of days
from the date of the contract agreed upon by the parties), at a price set
at the time the contract is entered into. These contracts are generally
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. Some forward
contracts are standardized foreign currency futures contracts that are
traded on exchanges and are subject to procedures and regulations that
apply to other Futures.
The Fund may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund
owns or intends to acquire, but it does fix a rate of exchange in advance.
In addition, although Forward Contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit
any potential gain that might result should the value of the currencies
increase. The Fund will not speculate with Forward Contracts or foreign
currency exchange rates.
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when
the Fund anticipates receipt of dividend payments in a foreign currency,
the Fund may desire to "lock-in" the U.S. dollar price of the security or
the U.S. dollar equivalent of such payment by entering into a Forward
Contract, for a fixed amount of U.S. dollars per unit of foreign currency,
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction (this is called a "transaction hedge"). The Fund
will thereby be able to protect itself against a possible loss resulting
from an adverse change in the relationship between the currency exchange
rates during the period between the date on which the security is
purchased or sold, or on which the payment is declared, and the date on
which such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions (this is called a "position hedge"). In a
position hedge, for example, when the Fund believes that a foreign
currency may suffer a substantial decline against the U.S. dollar, it may
enter into a forward sale contract to sell an amount of that foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated in that foreign currency, or when the Fund believes
that the U.S. dollar may suffer a substantial decline against a foreign
currency, it may enter into a forward purchase contract to buy that
foreign currency for a fixed dollar amount. The Fund may also enter into
a forward contract to sell a different foreign currency for a fixed U.S.
dollar amount if the Fund believes that the U.S. dollar value of the
currency to be sold pursuant to the forward contract will fall whenever
there is a decline in the U.S. dollar value of the currency in which
portfolio securities of the Fund are denominated (this is referred to as
a "cross-hedge"). The Fund will not enter into a "cross-hedge" unless it
is denominated in a currency or currencies that the Manager believes will
have price movements that tend to correlate closely with the currency in
which the investment being hedged is denominated. The success of cross
hedging depends on many factors, including the ability of the Manager to
correctly identify and monitor the correlation between foreign currencies
and the U.S. dollar. To the extent that the correlation is not identical,
the Fund may experience losses or gains on both the underlying security
and the cross hedge.
The Fund will not enter into Forward Contracts or maintain a net
exposure in such contracts to the extent that the Fund would be obligated
to deliver an amount of foreign currency in excess of the value of the
Fund's portfolio securities denominated in that currency. However, to
avoid excess transaction costs, the Fund may maintain a net exposure to
Forward Contracts in excess of the value of the Fund's portfolio
securities denominated in that currency provided the excess amount is
"covered" by liquid, high grade debt securities, denominated in either
that foreign currency or U.S. dollars, at least equal at all times to the
amount of the excess. The Fund's Custodian will place cash or U.S.
Government securities or other liquid high-quality debt securities in a
separate account having a value equal to the total amount of the Fund's
commitments under Forward Contracts entered into for position hedges and
cross hedges. If the value of the securities placed in the separate
account declines, additional cash or securities will be placed in the
account on a daily basis so that the account value will equal the Fund's
commitments. As an alternative, the Fund may purchase a call option
permitting the Fund to purchase the amount of foreign currency being
hedged by a forward sale contract at a price no higher than the Forward
Contract price, or the Fund may purchase a put option permitting the Fund
to sell the amount of foreign currency subject to a forward purchase
contract at a price as high or higher than the Forward Contract price.
Unanticipated changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such contracts.
The precise matching of the Forward Contract amounts and the value of
the securities involved will not generally be possible because the future
value of such securities in foreign currencies will change as a
consequence of market movements in the value of these securities between
the date the Forward Contract is entered into and the date it is sold.
Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot (i.e., cash) market (and bear the expense of
such purchase), if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some
of the foreign currency received upon the sale of the portfolio security
if its market value exceeds the amount of foreign currency the Fund is
obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-
term hedging strategy is highly uncertain. Forward Contracts involve the
risk that anticipated currency movements will not be accurately predicted,
causing the Fund to sustain losses on these contracts and incur
transactions costs.
At or before the maturity of a Forward Contract requiring the Fund to
sell a currency, the Fund may either sell a portfolio security and use the
sale proceeds to make delivery of the currency or retain the security and
offset its contractual obligation to deliver the currency by purchasing
a second contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency that it is obligated to
deliver. Similarly, the Fund may close out a Forward Contract requiring
it to purchase a specified currency by entering into a second contract
entitling it to sell the same amount of the same currency on the maturity
date of the first contract. The Fund would realize a gain or loss as a
result of entering into such an offsetting Forward Contract under either
circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first
contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are
involved. Because such contracts are not traded on an exchange, the Fund
must evaluate the credit and performance risk of the counterparty under
a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time
to time, and there are costs to the Fund of currency conversion. Foreign
exchange dealers do not charge a fee for conversion, by they do seek to
realize a profit based on the difference between the prices at which they
buy and sell various currencies. Thus, a dealer may offer to sell a
foreign currency to the Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to resell that currency to the dealer.
- Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain restrictions and guidelines with respect to its use
of Futures and options on Futures by the Commodity Futures Trading
Commission ("CFTC"). In particular, the Fund is exempted from
registration with the CFTC as a "commodity pool operator" if the Fund
complies with the requirements of Rule 4.5 adopted by the CFTC. Under
that Rule, the Fund will not, as to any positions, whether long, short or
a combination thereof, enter into Futures transactions and options thereon
for which the aggregate initial margins and premiums exceed 5% of the fair
market value of the Fund's assets, with certain exclusions as defined in
the Rule. Under the Rule, the Fund also must use short Futures and
Futures options positions solely for "bona fide hedging purposes" within
the meaning and intent of the applicable provisions of the Commodities
Exchange Act.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of options
that may be written or held by a single investor or group of investors
acting in concert, regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through one or more
brokers. Thus the number of options which the Fund may write or hold may
be affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser
that is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Stock Index Future, the Fund will maintain, in a segregated
account or accounts with its Custodian, cash or readily-marketable, short-
term (maturing in one year or less) debt instruments in an amount equal
to the market value of the securities underlying such Future, less the
margin deposit applicable to it.
- Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code (although it reserves the right not to qualify). That
qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Stock Index Futures, held for less than three
months, whether or not they were purchased on the exercise of a call held
by the Fund; (ii) purchasing options which expire in less than three
months; (iii) effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv) exercising
puts or calls held by the Fund for less than three months; or (v) writing
calls on investments held less than three months.
Certain foreign currency exchange contracts (Forward Contracts) in
which the Fund may invest are treated as "section 1256 contracts." Gains
or losses relating to section 1256 contracts generally are characterized
under the Internal Revenue Code as 60% long-term and 40% short-term
capital gains or losses. However, foreign currency gains or losses
arising from certain section 1256 contracts (including Forward Contracts)
generally are treated as ordinary income or loss. In addition, section
1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses are
treated as thought they were realized. These contracts also may be
marked-to-market for purposes of the excise tax applicable to investment
company distributions and for other purposes under rules prescribed
pursuant to the Internal Revenue Code. An election can be made by the
Fund to exempt these transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a
position(s) making up a straddle is allowed only to the extent such loss
exceeds any unrecognized gain in the offsetting positions making up the
straddle. Disallowed loss is generally allowed at the point where there
is no unrecognized gain in the offsetting positions making up the
straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates which occur between the time the Fund
accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on disposition
of debt securities denominated in a foreign currency and on disposition
foreign currency forward contracts, gains or losses attributable to
fluctuations in the value of a foreign currency between the date of
acquisition of the security or contract and the date of the disposition
also are treated as an ordinary gain or loss. Currency gains and losses
are offset against market gains and losses before determining a net
"section 988" gain or loss under the Internal Revenue Code, which may
increase or decrease the amount of the Fund's investment company income
available for distribution to its shareholders.
- Risks of Hedging With Options and Futures. An option position may
be closed out only on a market that provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option. In addition to the risks
associated with hedging that are discussed in the Prospectus and above,
there is a risk in using short hedging by (i) selling Stock Index Futures
or (ii) purchasing puts on stock indices or Stock Index Futures to attempt
to protect against declines in the value of the Fund's equity securities.
The risk is that the prices of Stock Index Futures will correlate
imperfectly with the behavior of the cash (i.e., market value) prices of
the Fund's equity securities. The ordinary spreads between prices in the
cash and futures markets are subject to distortions, due to differences
in the natures of those markets. First, all participants in the futures
markets are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may
close out futures contracts through offsetting transactions which could
distort the normal relationship between the cash and futures markets.
Second, the liquidity of the futures markets depends on participants
entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery,
liquidity in the futures markets could be reduced, thus producing
distortion. Third, from the point of view of speculators, the deposit
requirements in the futures markets are less onerous than margin
requirements in the securities markets. Therefore, increased
participation by speculators in the futures markets may cause temporary
price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the equity securities being hedged and movements in the price of
the hedging instruments, the Fund may use hedging instruments in a greater
dollar amount than the dollar amount of equity securities being hedged if
the historical volatility of the prices of the equity securities being
hedged is more than the historical volatility of the applicable index.
It is also possible that if the Fund has used hedging instruments in a
short hedge, the market may advance and the value of equity securities
held in the Fund's portfolio may decline. If that occurred, the Fund would
lose money on the hedging instruments and also experience a decline in
value in its portfolio securities. However, while this could occur for
a very brief period or to a very small degree, over time the value of a
diversified portfolio of equity securities will tend to move in the same
direction as the indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of individual
equity securities (long hedging) by buying Stock Index Futures and/or
calls on such Futures, on securities or on stock indices, it is possible
that the market may decline. If the Fund then concludes not to invest in
equity securities at that time because of concerns as to a possible
further market decline or for other reasons, the Fund will realize a loss
on the hedging instruments that is not offset by a reduction in the price
of the equity securities purchased.
- Borrowing for Leverage. From time to time, the Fund may borrow
from banks on an unsecured basis to invest the borrowed funds in portfolio
securities. Borrowing is subject to the restrictions stated in the
Prospectus. Pursuant to the requirements of the Investment Company Act
of 1940 (the "Investment Company Act"), any borrowing for this purpose
will only be made if the value of the Fund's assets, less its liabilities
other than borrowings, is equal to at least 300% of all borrowings
including the proposed borrowing. If the value of the Fund's assets, when
computed in that manner, should fail to meet the 300% asset coverage
requirement, the Fund is required to reduce its bank debt within three
days to the extent necessary to meet that coverage requirement. To do so,
the Fund may have to sell a portion of its investments at a time when it
would otherwise not want to sell the securities. Interest on money the
Fund borrows is an expense the Fund would not otherwise incur, so that
during periods of substantial borrowings, its expenses may increase more
than the expenses of funds that do not borrow.
- Investing in Small, Unseasoned Companies. The securities of small,
unseasoned companies may have a limited trading market, which may
adversely affect the Fund's ability to sell them and can reduce the price
the Fund might be able to obtain for them. If other investors trade the
same securities when the Fund attempts to dispose of its holdings, the
Fund may receive lower prices than might otherwise be obtained, because
of the thinner market for such securities.
- Foreign Securities. "Foreign securities" include equity and debt
securities of companies organized under the laws of countries other than
the United States and debt securities of foreign governments, that are
traded on foreign securities exchanges or in the foreign over-the-counter
markets. Securities of foreign issuers that are represented by American
Depository Receipts or that are listed on a U.S. securities exchange or
traded in the U.S. over-the-counter markets are not considered "foreign
securities" for the purpose of the Fund's investment allocations, because
they are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held abroad.
Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers, including the
opportunity to invest in foreign issuers that appear to offer growth
potential, or in foreign countries with economic policies or business
cycles different from those of the U.S., or to reduce fluctuations in
portfolio value by taking advantage of foreign stock markets that do not
move in a manner parallel to U.S. markets. If the Fund's portfolio
securities are held abroad, the countries in which they may be held and
the sub-custodians holding them must be approved by the Fund's Board of
Trustees under applicable rules of the Securities and Exchange Commission.
- Risks of Foreign Investing. Investments in foreign securities
present special additional risks and considerations not typically
associated with investments in domestic securities: reduction of income
by foreign taxes; fluctuation in value of foreign portfolio investments
due to changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of public
information about foreign issuers; lack of uniform accounting, auditing
and financial reporting standards comparable to those applicable to
domestic issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity on foreign markets than in the U.S.;
less regulation of foreign issuers, stock exchanges and brokers than in
the U.S.; greater difficulties in commencing lawsuits; higher brokerage
commission rates than in the U.S.; increased risks of delays in settlement
of portfolio transactions or loss of certificates for portfolio
securities; possibilities in some countries of expropriation, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and unfavorable differences between the U.S. economy and
foreign economies. In the past, U.S. Government policies have
discouraged certain investments abroad by U.S. investors, through
taxation or other restrictions, and it is possible that such restrictions
could be re-imposed.
- Restricted and Illiquid Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933, the
Fund may have to cause those securities to be registered. The expenses
of registration of restricted securities may be negotiated by the Fund
with the issuer at the time such securities are purchased by the Fund,
if such registration is required before such securities may be sold
publicly. When registration must be arranged because the Fund wishes to
sell the security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would be
permitted to sell them. The Fund would bear the risks of any downward
price fluctuation during that period. The Fund may also acquire, through
private placements, securities having contractual restrictions on their
resale, which might limit the Fund's ability to dispose of such securities
and might lower the amount realizable upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those percentage
restrictions do not limit purchases of restricted securities that are
eligible for sale to qualified institutional purchasers pursuant to Rule
144A under the Securities Act of 1933, provided that those securities have
been determined to be liquid by the Board of Trustees of the Fund or by
the Manager under Board-approved guidelines. Those guidelines take into
account the trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's holding
of that security may be deemed to be illiquid.
- Loans of Portfolio Investments. The Fund may lend its portfolio
investments subject to the restrictions stated in the Prospectus.
Repurchase transactions are not considered "loans" for the purpose of the
Fund's limit on the percentage of its assets that can be loaned. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must at least equal the value of the
loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities).
To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund.
When it lends securities, the Fund receives amounts equal to the dividends
or interest on loaned securities and also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the borrower. The
Fund may also pay reasonable finder's, custodian and administrative fees.
The terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important
matter.
- Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Fund
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor"
is a U.S. commercial bank or the U.S. branch of a foreign bank or a
broker-dealer which has been designated a primary dealer in government
securities, which must meet credit requirements set by the Fund's Board
of Trustees from time to time. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective
for the period during which the repurchase agreement is in effect. The
majority of these transactions run from day to day, and delivery pursuant
to the resale typically will occur within one to five days of the
purchase. Repurchase agreements are considered "loans" under the
Investment Company Act, collateralized by the underlying security. The
Fund's repurchase agreements require that at all times while the
repurchase agreement is in effect, the value of the collateral must equal
or exceed the repurchase price to fully collateralize the repayment
obligation. Additionally, the Manager will impose creditworthiness
requirements to confirm that the vendor is financially sound and will
continuously monitor the collateral's value.
- Short Sales Against-the-Box. In this type of short sale, while the
short position is open, the Fund must own an equal amount of the
securities sold short, or by virtue of ownership of other securities have
the right, without payment of further consideration, to obtain an equal
amount of the securities sold short. Short sales against-the-box may be
made to defer, for Federal income tax purposes, recognition of gain or
loss on the sale of securities "in the box" until the short position is
closed out. They may also be used to protect a gain on the security "in-
the-box" when the Fund does not want to sell it and recognize a capital
gain. No more than 15% of the Fund's net assets may be held as collateral
for these short sales.
- Temporary Defensive Investments. If economic, political or
financial conditions adversely affect Mining Securities or Metal
Investments, the Fund may depart from its usual concentration policy and
may commit an increasing portion of its assets to defensive securities.
These may include the types of securities described in the Prospectus.
When investing for defensive purposes, the Fund will normally emphasize
investment in short-term debt securities (that is, securities maturing in
one year or less from the date of purchase), since those types of
securities are generally more liquid and usually may be disposed of
quickly without significant gains or losses so that the Manager may have
liquid assets when it wishes to make investments in securities for
appreciation possibilities.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in
the Prospectus. There are additional investment restrictions that the Fund
must follow that are also fundamental policies. Fundamental policies and
the Fund's investment objective cannot be changed without the vote of a
"majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such a "majority" vote is defined as the vote of
the holders of the lesser of (1) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present, or (2) more than 50% of the
outstanding shares.
Under these additional restrictions, the Fund cannot: (1) invest in
commodities or commodities contracts; Metal Investments shall not be
deemed an investment in a commodity for the purpose of the Fund's
investment restrictions; however, the Fund may buy and sell any of the
hedging instruments permitted by any of its other non-fundamental or
fundamental policies, whether or not any such hedging instrument is
considered to be a commodity; (2) invest in real estate or in interests
in real estate, but may purchase readily marketable securities of
companies holding real estate or interests therein; (3) purchase
securities on margin; however, the Fund may make margin deposits in
connection with any of the hedging instruments permitted by any of its
other fundamental or non-fundamental policies; (4) mortgage, hypothecate
or pledge any of its assets; however, this does not prohibit the escrow
arrangements contemplated by the option activities of the Fund or other
collateral or margin arrangements in connection with any of the hedging
instruments permitted by any of its other fundamental or non-fundamental
policies; (5) underwrite securities of other companies, except insofar as
the Fund might be deemed to be an underwriter in the resale of any
securities held in its portfolio; (6) invest in or hold securities of any
issuer if those officers and trustees or directors of the Fund or its
adviser owning individually more than .5% of the securities of such issuer
together own more than 5% of the securities of such issuer; (7) invest in
interests in oil or gas exploration or development programs; or (8) invest
in companies for the purpose of acquiring control or management thereof.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the Fund is
not required to hold, and does not plan to hold, regular annual meetings
of shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law, or when a shareholder
meeting is called by the Trustees or upon proper request of the
shareholders. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund valued
at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with
other shareholders to request a meeting to remove a Trustee, the Trustees
will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the
applicants' expense, or the Trustees may take such other action as set
forth under Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and
their principal occupations and business affiliations during the past five
years are listed below. The address of each Trustee and officer is Two
World Trade Center, New York, New York 10048-0203, unless another address
is listed below. All of the Trustees are also trustees of Oppenheimer
Fund, Oppenheimer Global Fund, Oppenheimer Time Fund, Oppenheimer Growth
Fund, Oppenheimer Target Fund, Oppenheimer Discovery Fund, Oppenheimer
Global Growth & Income Fund, Oppenheimer Global Emerging Growth Fund,
Oppenheimer Global Environment 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 U.S.
Government Trust, Oppenheimer Multi-Sector Income Trust and Oppenheimer
Multi-Government Trust (the "New York-based OppenheimerFunds"). Messrs.
Spiro, Bishop, Bowen, Donohue, Farrar and Zack respectively hold the same
offices with the other New York-based OppenheimerFunds as with the Fund.
As of October 3, 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
122 East 42nd Street, New York, New York 10168
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of The Research Institute
of America.
Robert G. Galli, Trustee*
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 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
257 West 39th Street, New York, New York 10081
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. (irrigation
equipment), Texas Instruments, Inc. (electronics) and The Vigoro
Corporation (fertilizer manufacturer); formerly (in descending
chronological order) Counsellor to the President (Bush) for Domestic
Policy, Chairman of the Republican National Committee, Secretary of
the U.S. Department of Agriculture, and U.S. Trade Representative.
James C. Ayer, Jr., Vice President and Portfolio Manager
Assistant Vice President of the Manager; formerly an international
equities investment officer with Brown Brothers Harriman & Co., a
bank.
Andrew J. Donohue, Secretary
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-dealer)
and First Investors Management Company, Inc. (broker-dealer and
investment adviser), and a director and an officer of First Investors
Family of Funds and First Investors Life Insurance Company.
George C. Bowen, Treasurer
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President and
Treasurer of the Distributor and HarbourView; Senior Vice President,
Treasurer, Assistant Secretary and a director of Centennial; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of
other OppenheimerFunds.
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.
- ----------------------
* A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
- Remuneration of Trustees. The officers of the Fund are affiliated
with the Manager. They and the Trustees of the Fund who are affiliated
with the Manager (Mr. Spiro, who is both an officer and Trustee, and Mr.
Galli) 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 $519,440. 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 $70,659 as of June 30,
1994.
- Major Shareholders. As of October 3, 1994, no person owned of
record or was known by the Fund to own beneficially 5% or more of the
Fund's outstanding shares.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Messrs. Galli and Spiro)
serve as Trustees of the Fund.
- The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
corporate administration for the Fund, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributors Agreement
are paid by the Fund. The advisory agreement lists examples of expenses
paid by the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including
litigation costs. For the Fund's fiscal years ended June 30, 1992, 1993,
and 1994, the management fees paid by the Fund to the Manager were
$1,241,149, $1,061,114, and $1,414,294, 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 so long as it has acted with due
care and in good faith, the Manager shall not be liable for any loss
sustained by reason of any investment, the adoption of any investment
policy, or the purchase, sale or retention of securities, irrespective of
whether the determinations of the Manager relative thereto shall have been
based, wholly or partly, upon the investigation or research of any other
individual, firm or corporation believed by it to be reliable. However,
the Agreement does not protect the Manager against liability by reason of
its willful misfeasance, bad faith or gross negligence in the performance
of its duties or its reckless disregard of its obligations and duties
under the Agreement. The Agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with other investment companies for
which it may act as investment adviser or general distributor. If the
Manager shall no longer act as investment adviser to the Fund, the right
of the Fund to use the name "Oppenheimer" as part of its name may be
withdrawn.
- The Distributor. Under its General Distributor's Agreement with
the Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of shares but is not obligated to sell a
specific number of shares. Expenses normally attributable to sales,
(other than those expenses paid under the Distribution Plan, but including
advertising and the cost of printing and mailing prospectuses, other than
those furnished to existing shareholders), are borne by the Distributor.
During the Fund's fiscal years ended June 30, 1992, 1993, and 1994, the
aggregate sales charges on sales of the Fund's shares were $641,811,
$760,498, and $1,175,491, respectively, of which the Distributor and an
affiliated broker-dealer retained in the aggregate $153,640, $202,086 and
$277,123 in those respective years. For additional information about
distribution of the Fund's shares and the expenses connected with such
activities, please refer to "Service Plan," below.
- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions
paid to the extent consistent with the interest and policies of the Fund
as established by its Board of Trustees.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be higher
than another qualified broker would have charged if a good faith
determination is made by the Manager that the commission is fair and
reasonable in relation to the services provided. Subject to the foregoing
considerations, the Manager may also consider sales of shares of the Fund
and other investment companies managed by the Manager or its affiliates
as a factor in the selection of brokers for the Fund's portfolio
transactions.
Description of Brokerage Practices Followed by the Manager. Subject to
the provisions of the advisory agreement, and the procedures and rules
described above, allocations of brokerage are made by portfolio managers
of the Manager under the supervision of the Manager's executive officers.
Transactions in securities other than those for which an exchange is the
primary market are generally done with principals or market makers.
Transactions in Metal Investments will be made through recognized dealers
in such investments or, in the case of certificates representing such
investments, directly with the issuers of such certificates. In
connection with transactions on foreign exchanges, the Fund may be
required to pay fixed brokerage commissions and thereby forego the benefit
of negotiated commissions available in U.S. markets. Brokerage
commissions are paid primarily for effecting transactions in listed
securities and are otherwise paid only if it appears likely that a better
price or execution can be obtained. When the Fund engages in an option
transaction, ordinarily the same broker will be used for the purchase or
sale of the option and any transaction in the securities to which the
option relates. When possible, concurrent orders to purchase or sell the
same security by more than one of the accounts managed by the Manager or
its affiliates are combined. The transactions effected pursuant to such
combined orders are averaged as to price and allocated in accordance with
the purchase or sale orders actually placed for each account.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid in
commission dollars.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and by enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolio or being considered for purchase. The Board of
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 Service Plan described below)
annually reviews information furnished by the Manager as to the
commissions paid to brokers furnishing such services so that the Board may
ascertain whether the amount of such commissions was reasonably related
to the value or benefit of such services.
During the Fund's fiscal years ended June 30, 1992, 1993, and 1994,
total brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were $329,238,
$140,807 and $568,856, respectively. During the fiscal year ended June
30, 1994, $119,530 was paid to brokers as commissions in return for
research services; the aggregate dollar amount of those transactions was
$27,250,489. The transactions giving rise to those commissions were
allocated in accordance with the Manager's internal allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to
time the "average annual total return," "cumulative total return,"
"average annual total return at net asset value" and "total return at net
asset value" of an investment in shares of the Fund may be advertised.
An explanation of how these total returns are calculated 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 shares of the Fund for the 1, 5, and 10-
year periods ending as of the most recently-ended calendar quarter prior
to the publication of the advertisement. This enables an investor to
compare the Fund's performance to the performance of other funds for the
same periods. However, a number of factors should be considered before
using such information as a basis for comparison with other investments.
An investment in the Fund is not insured; its returns and share prices are
not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a prediction or
representation by the Fund of future returns. The returns of shares of the
Fund are affected by portfolio quality, the type of investments the Fund
holds and its operating expenses.
- Average Annual Total Returns. The Fund's "average annual total
return" is an average annual compounded rate of return for each year in
a specified number of years. It is the rate of return based on the change
in value of a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over
an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return
on an annual basis. Cumulative total return is determined as follows:
ERV - P
- ------- = Total Return
P
In calculating total returns for shares of the Fund, the current
maximum sales charge of 5.75% (as a percentage of the offering price) is
deducted from the initial investment ("P")(unless the return is shown at
net asset value, as described below). Total returns also assume that all
dividends and capital gains distributions during the period are reinvested
to buy additional shares at net asset value per share, and that the
investment is redeemed at the end of the period. The "average annual
total returns" on an investment in shares of the Fund for the one, five
and ten year periods ended June 30, 1994 were 2.03%, 2,94% and 9.74%,
respectively. The cumulative "total return" on shares of the Fund for the
ten year period ended June 30, 1994 was 153.23%.
- 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. 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 shares for the ten-year period ended June 30, 1994 was 168.68%. The
average annual total returns at net asset value for the one, five and ten-
year periods ended June 30, 1994, for shares of the Fund were 8.25%, 4.17%
and 10.39%, respectively.
Total return information may be useful to investors in reviewing the
performance of the Fund. However, when comparing total return of an
investment in shares of the Fund with that of other alternatives,
investors should understand that as the Fund is an aggressive equity fund
seeking capital appreciation, its shares are subject to greater market
risks than shares of funds having other investment objectives and that the
Fund is designed for investors who are willing to accept greater risk of
loss in the hopes of realizing greater gains.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its shares by Lipper Analytical Services, Inc. ("Lipper"), a
widely-recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods based on categories
relating to investment objectives. The performance of the Fund is ranked
against (i) all other funds and (ii) all other gold-oriented funds. The
Lipper performance rankings are based on total returns that include the
reinvestment of capital gain distributions and income dividends but do not
take sales charges or taxes into consideration.
From time to time the Fund may publish the ranking of its performance
by Morningstar, Inc., an independent mutual fund monitoring service that
ranks mutual funds, including the Fund, monthly in broad investment
categories (equity, taxable bond, municipal bond and hybrid) based on
risk-adjusted investment return. Morningstar calculates investment return
by measuring a fund's three, five and ten-year average annual total
returns (when available) in excess of 90-day U.S. Treasury bill returns
after considering sales charges and expenses. Morningstar asseses risk
by measuring fund performance below 90-day U.S. Treasury bill monthly
returns. Risk and return are combined to produce star rankings reflecting
performance relative to the average fund in a fund's category. Five stars
is the "highest" ranking (top 10%), four stars is "above average" (next
22.5%), three stars is "average" (next 35%), two stars is "below average"
(next 22.5%) and one star is "lowest" (bottom 10%). Morningstar ranks the
Fund in relation to other equity funds. Rankings are subject to change.
From time to time, the Fund's Manager may publish rankings or ratings
of the Manager (or the Transfer Agent), by independent third-parties, on
the investor services provided by them to shareholders of the
OppenheimerFunds, other than performance rankings of the OppenheimerFunds
themselves. These ratings or rankings of shareholder/investor services
may compare the OppenheimerFunds services to those of other mutual fund
families selected by the rating or ranking services, and may be based upon
the opinions of the rating or ranking service itself, using its own
research or judgment, or based upon surveys of investors, brokers,
shareholders or others.
Service Plan
The Fund has adopted a Service Plan under Rule 12b-1 of the Investment
Company Act pursuant to which the Fund will reimburse the Distributor
quarterly for all or a portion of its costs incurred in connection with
the servicing of the shares of the Fund, as described in the Prospectus.
The Plan has been approved by a vote of (i) the Board of Trustees of the
Fund, including a majority of the Independent Trustees, cast in person at
a meeting called for the purpose of voting on that Plan, and (ii) the
holders of a "majority" (as defined in the Investment Company Act) of the
shares of the Fund.
In addition, under the Plan the Manager and the Distributor, in their
sole discretion, from time to time may use their own resources (which, in
the case of the Manager, may include profits from the advisory fee it
receives from the Fund) to make payments to brokers, dealers or other
financial institutions (each is referred to as a "Recipient" under the
Plan) for distribution and administrative services they perform. The
Distributor and the Manager may, in their sole discretion, increase or
decrease the amount of payments they make from their own resources to
Recipients.
Unless terminated as described below, the Plan continues in effect from
year to year but only as long as its continuance is specifically approved
at least annually by the Fund's Board of Trustees and its Independent
Trustees by a vote cast in person at a meeting called for the purpose of
voting on such continuance. The Plan may be terminated at any time by the
vote of a majority of the Independent Trustees or by the vote of the
holders of a "majority" (as defined in the Investment Company Act) of the
outstanding shares of the Fund. The Plan may not 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 Plan is in effect, the Treasurer of the Fund shall provide
a written report 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, including the allocations on which it is based, will
be subject to the review and approval of the Independent Trustees in the
exercise of their fiduciary duty. The Plan further provides that while
it is in effect, the selection and nomination of those Trustees of the
Fund who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision on selection or nomination is approved by a majority of the
Independent Trustees.
Under the Plan, no payment will be made to any Recipient in any quarter
if the aggregate net asset value of all Fund shares held by the Recipient
for itself and its customers, does not exceed a minimum amount, if any,
that may be determined from time to time by a majority of the Fund's
Independent Trustees. The Board of Trustees currently has set no minimum
amount of assets. While the maximum fee rate under the Plan is 0.25% of
average annual net assets of the Fund, the Board of Trustees has set the
maximum rate for assets representing shares of the Fund acquired on or
before April 1, 1991, at 0.15% for assets representing shares of the Fund
acquired after April 1, 1991. For the fiscal year ended June 30, 1994,
payments under the Plan totalled $225,720, all of which was paid by the
Distributor to Recipients, including $3,838 paid to MML Investor Services,
Inc., an affiliate of the Distributor.
Any unreimbursed expenses incurred by the Distributor with respect to
shares for any fiscal year may not be recovered in subsequent years.
Payments received by the Distributor under the Plan will not be used to
pay any interest expense, carrying charge, or other financial costs, or
allocation of overhead by the Distributor.
ABOUT YOUR ACCOUNT
How To Buy Shares
Determination of Net Asset Values Per Share. The net asset value per
share of shares of the Fund is determined each day The New York Stock
Exchange (the "NYSE") is open, as of 4:00 P.M., New York time, that day,
by dividing the value of the Fund's net assets by the number of shares
outstanding. The NYSE's most recent annual announcement (which is subject
to change) states that it will close on New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. It may also close on other days. The Fund may invest
a substantial portion of its assets in foreign securities primarily listed
on foreign exchanges or over-the-counter markets which may trade on
Saturdays or customary U.S. business holidays on which the NYSE is closed.
Because the Fund's net asset value will not be calculated on those days,
the Fund's net asset value per share may be significantly affected on such
days when shareholders may not purchase or redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) equity
securities traded on a securities exchange or on NASDAQ for which last
sale information is regularly reported are valued at the last reported
sale price on their primary exchange or NASDAQ that day (or, in the
absence of sales that day, at values based on the last sales prices of the
preceding trading day, or closing bid and asked prices); (ii) securities
traded on NASDAQ and other unlisted equity securities for which last sale
prices are not regularly reported but for which over-the-counter market
quotations are readily available are valued at the highest closing bid
price at the time of valuation, or, if no closing bid price is reported,
on the basis of a closing bid price obtained from a dealer who maintains
an active market in that security; (iii) debt securities having a maturity
in excess of 60 days are valued at the mean between the bid and asked
prices determined by a portfolio pricing service approved by the Board or
obtained from active market makers on the basis of reasonable inquiry;
(iv) short-term debt securities having a remaining maturity of 60 days or
less are valued at cost, adjusted for amortization of premiums and
accretion of discounts; (v) securities (including restricted securities)
not having readily-available market quotations are valued at fair value
under the Board's procedures; (vi) Metal Investments are valued at their
respective fair market values determined on the basis of the mean between
the last current bid and asked prices on exchanges or obtained from dealer
quotations; and (vii) securities traded on foreign exchanges are valued
at the closing or last sales prices reported on a principal exchange, or,
if none, at the mean between closing bid and asked prices and reflect
prevailing rates of exchange taken from the closing price on the London
foreign exchange market that day.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the NYSE.
Events affecting the values of foreign securities traded in stock markets
that occur between the time their prices are determined and the close of
the NYSE will not be reflected in the Fund's calculation of net asset
value unless the Board of Trustees or the Manager, under procedures
established by the Board of Trustees, determines that the particular event
would materially affect the Fund's net asset value, in which case an
adjustment would be made. Foreign currency will be valued as close to the
time fixed for the valuation date as is reasonably practicable. The
values of securities denominated in foreign currency will be converted to
U.S. dollars at the prevailing rates of exchange at the time of valuation.
Puts, calls and Futures held by the Fund are valued at the last sales
price on the principal exchange on which they are traded, or on NASDAQ,
as applicable, or, if there are no sales that day, in accordance with (i),
above. Forward currency contracts are valued at the closing price on the
London foreign exchange market. When the Fund writes an option, an amount
equal to the premium received by the Fund is included in the Fund's
Statement of Assets and Liabilities as an asset, and an equivalent
deferred credit is included in the liability section. The deferred credit
is "marked-to-market" to reflect the current market value of the option.
In determining the Fund's gain on investments, if a call written by the
Fund is exercised, the proceeds are increased by the premium received.
If a call or put written by the Fund expires, the Fund has a gain in the
amount of the premium; if the Fund enters into a closing purchase
transaction, it will have a gain or loss depending on whether the premium
was more or less than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the
Fund.
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
transfer to buy the shares. Dividends will begin to accrue on such shares
on the day the Fund receives Federal Funds for such purchase through the
ACH system before 4:00 P.M., which is normally 3 days after the ACH
transfer is initiated. The Distributor and the Fund are not responsible
for any delays. If the Federal Funds are received after 4:00 P.M.,
dividends will begin to accrue on the next regular business day after such
Federal Funds are received.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained under Right of Accumulation and Letters of
Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No
sales charge is imposed in certain other circumstances described in the
Prospectus because the Distributor incurs little or no selling expenses.
The term "immediate family" refers to one's spouse, children,
grandchildren, grandparents, parents, parents-in-law, brothers and
sisters, sons- and daughters-in-law, a sibling's spouse and a spouse's
siblings.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Time Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion High Yield Fund
Oppenheimer Investment Grade Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Mortgage Income Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Environment Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Diversified Income Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of
each of the OppenheimerFunds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent ("Letter") is the investor's
statement of intention to purchase shares of the Fund (and Class A shares
of other eligible OppenheimerFunds sold with a front-end sales charge)
during the 13-month period from the investor's first purchase pursuant to
the Letter (the "Letter of Intent period"), which may, at the investor's
request, include purchases made up to 90 days prior to the date of the
Letter. The Letter states the investor's intention to make the aggregate
amount of purchases (excluding any purchases made by reinvestments of
dividends or distributions or purchases made at net asset value without
sales charge), which together with the investor's holdings of such funds
(calculated at their respective public offering prices calculated on the
date of the Letter) will equal or exceed the amount specified in the
Letter. This enables the investor to obtain the reduced sales charge rate
(as set forth in the Prospectus) applicable to purchases of shares in that
amount (the "intended purchase amount"). Each purchase under the Letter
will be made at the public offering price applicable to a single lump-sum
purchase of shares in the intended purchase amount, as described in the
Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent period
do not equal or exceed the intended purchase amount, the commissions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual purchases. If total eligible purchases during the
Letter of Intent period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set
forth in the applicable prospectus, the sales charges paid will be
adjusted to the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid to the
dealer over the amount of commissions that apply to the actual amount of
purchases. The excess commissions returned to the Distributor will be
used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly
after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value to 5% of the
intended purchase amount specified in the Letter shall be held in escrow
by the Transfer Agent. For example, if the intended purchase amount is
$50,000, the escrow shall be shares valued in the amount of $2,500
(computed at the public offering price adjusted for a $50,000 purchase).
Any dividends and capital gains distributions on the escrowed shares will
be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding
of which may be counted toward completion of the Letter) do not include
any shares sold without a front-end sales charge or without being subject
to a Class A contingent deferred sales charge unless (for the purpose of
determining completion of the obligation to purchase shares under the
Letter) the shares were acquired in exchange for shares of one of the
OppenheimerFunds whose shares were acquired by payment of a sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in
the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those
accounts for monthly automatic purchases of shares of up to four other
OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
- Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board of
Trustees of the Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make payment
of a redemption order wholly or partly in cash. In that case the Fund may
pay the redemption proceeds in whole or in part by a distribution "in
kind" of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets
of the Fund during any 90-day period for any one shareholder. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage or
other costs in selling the securities for cash. The method of valuing
securities used to make redemptions in kind will be the same as the method
the Fund uses to value it portfolio securities described above under
"Determination of Net Asset Values Per Share" and that valuation will be
made as of the time the redemption price is determined.
- Involuntary Redemptions. The Fund's Board of Trustees has the right
to cause the involuntary redemption of the shares held in any account if
the aggregate net asset value of those shares is less than $500 or such
lesser amount as the Board may fix. The Board of Trustees will not cause
the involuntary redemption of shares in an account if the aggregate net
asset value of the shares has fallen below the stated minimum solely as
a result of market fluctuations. Should the Board elect to exercise this
right, it may also fix, in accordance with the Investment Company Act, the
requirements for any notice to be given to the shareholders in question
(not less than 30 days), or the Board may set requirements for granting
permission to the Shareholder to increase the investment, and set other
terms and conditions so that the shares would not be involuntarily
redeemed.
Reinvestment Privilege. Within six months of a redemption, a shareholder
may reinvest all or part of the redemption proceeds of shares of the Fund.
The reinvestment may be made without sales charge only in shares of the
Fund or Class A shares of 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 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, then each account shall be allocated a
proportionate number of shares that are not subject to the contingent
deferred sales charge, determined by the ratio of the number of shares
held in the account immediately prior to the transfer.
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 share purchases, shareholders should not make regular
additional share purchases while participating in an Automatic Withdrawal
Plan.
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated
below and in the provisions of the OppenheimerFunds Application relating
to such Plans, as well as the Prospectus. These provisions may be amended
from time to time by the Fund and/or the Distributor. When adopted, such
amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for Class A shares of other OppenheimerFunds automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange Plan.
The minimum amount that may be exchanged to each other fund account is
$25. Exchanges made under these plans are subject to the restrictions
that apply to exchanges as set forth in "How to Exchange Shares" in the
Prospectus and below in this Statement of Additional Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who
executed the Plan authorization and application submitted to the Transfer
Agent. The Transfer Agent shall incur no liability to the Planholder for
any action taken or omitted by the Transfer Agent in good faith to
administer the Plan. Certificates will not be issued for shares of the
Fund purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the records of
the Fund. Any share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the
shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to
the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent
to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
OppenheimerFunds that have a single class without a class designation are
deemed "Class A" shares for this purpose, and all OppenheimerFunds offer
"Class A" shares (except for Oppenheimer Strategic Diversified Income
Fund).
Class A shares of OppenheimerFunds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund
purchased without a sales charge may be exchanged for shares of
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge). Shares
of this Fund acquired by reinvestment of dividends or distributions from
any other of the OppenheimerFunds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may
be exchanged at net asset value for Class A shares of any of the
OppenheimerFunds. No contingent deferred sales charge is imposed on
exchanges of shares 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 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 contingent deferred sales charge is imposed on the redeemed shares
(see "Contingent Deferred Sales Charge" in the Prospectus). 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.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of,
the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction
for corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by
the Fund which may qualify for the deduction is limited to the aggregate
amount of qualifying dividends that the Fund derives from its portfolio
investments that the Fund has held for a minimum period, usually 46 days.
A corporate shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less. To the extent the
Fund's dividends are derived from gross income from option premiums,
interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for
the deduction.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from January
1 through December 31 of that year and 98% of its capital gains realized
in the period from November 1 of the prior year through October 31 of the
current year, or else the Fund must pay an excise tax on the amounts not
distributed. While it is presently anticipated that the Fund will meet
those requirements, the Fund's Board of Trustees and the Manager might
determine in a particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would
reduce the amount of income or capital gains available for distribution
to shareholders.
If the Fund has more than 50% of its total assets invested in foreign
securities at the end of its fiscal year, it may elect the application of
Section 853 of the Internal Revenue Code to permit shareholders to take
a credit (or, at their option, a deduction) for foreign taxes paid by the
Fund. Under Section 853, shareholders would be entitled to treat the
foreign taxes withheld from interest and dividends paid to the Fund from
its foreign investments as a credit on their federal income taxes. As an
alternative, shareholders could, if to their advantage, treat the foreign
tax withheld as a deduction from gross income in computing taxable income
rather than as a tax credit. In substance, the Fund's election would
enable shareholders to benefit from the same foreign tax credit or
deduction that would be received if they had been the record owners of the
Fund's foreign securities and had paid foreign taxes on the income
received.
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 distribution. The Fund qualified
during its last fiscal year, and intends to qualify in current and future
years, but reserves the right not to do so. The Internal Revenue Code
contains a number of complex tests relating to such qualification in which
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
"Investment Objective and Policies-Tax Aspects of Hedging Instruments" in
the Statement of Additional Information). If it did not so qualify, the
Fund would be treated for tax purposes as an ordinary corporation and
receive no tax deduction for payments made to shareholders.
The Fund's investments in Metal Investments could result in the Fund's
failing to meet the Internal Revenue Code's prescribed income or asset
tests to qualify as a "regulated investment company." This would occur
if, during a fiscal year, the Fund either (i) derived 10% or more of its
gross income from Metal Investments, or (ii) held more than 50% of its net
assets, determined at the end of each fiscal quarter, in Metal Investments
and/or securities (other than U.S. Government securities) as to which
securities either (a) the Fund had more than 5% of its total assets
invested; or (b) the Fund held more than 10% of the outstanding voting
securities of the issuer of such securities. Accordingly, the Fund will
endeavor to manage its portfolio within the above limitations, but there
can be no assurance that it will be successful in doing so.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect
to reinvest all dividends and/or capital gains distributions in Class A
shares of the same class of any of the other OppenheimerFunds listed in
"Reduced Sales Charges," above, at net asset value without sales charge.
To elect this option, a shareholder must notify the Transfer Agent in
writing and either have an existing account in the fund selected for
reinvestment or must obtain a prospectus for that fund and an application
from the Distributor to establish an account. The investment will be made
at the net asset value per share in effect at the close of business on the
payable date of the dividend or distribution. Dividends and/or
distributions from shares of other OppenheimerFunds may be invested in
shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on the
portfolio securities and handling the delivery of such securities to and
from the Fund. The Manager has represented to the Fund that the banking
relationships between the Manager and the Custodian have been and will
continue to be unrelated to and unaffected by the relationship between the
Fund and the Custodian. It will be the practice of the Fund to deal with
the Custodian in a manner uninfluenced by any banking relationship the
Custodian may have with the Manager and its affiliates.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Gold & Special
Minerals Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Gold & Special Minerals Fund as of June 30,
1994, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in
the ten-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned as of June 30, 1994,
by correspondence with the custodian and brokers; and where confirmations
were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer Gold & Special Minerals Fund as of June 30, 1994,
the results of its operations for the year then ended, the changes in its
net assets for each of the years in the two-year period then ended, and
the financial highlights for each of the years in the ten-year period then
ended, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
July 22, 1994
<PAGE>
STATEMENT OF INVESTMENTS June 30, 1994
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE (1)
==================================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--6.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with
The First Boston Corp., 4.125%,
dated 6/30/94, to be repurchased at $10,801,237 on 7/1/94,
collateralized by U.S. Treasury Nts., 4%, 1/31/96, with a value
of $11,028,673 (Cost $10,800,000) $10,800,000 $10,800,000
==================================================================================================================================
CORPORATE BONDS AND NOTES--1.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Coeur d'Alene Mines Corp., 6.375% Cv. Sub. Debs., 1/31/04 2,000,000 1,830,000
--------------------------------------------------------------------------------------------------
Agnico Eagle Mines 3.5% Sr. Nts., 1/31/04 1,500,000 1,237,500
-----------
Total Convertible Corporate Bonds and Notes (Cost $3,256,800) 3,067,500
UNITS
==================================================================================================================================
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Ashton Mining of Canada, Inc. Wts., Exp. 10/95 100,000 55,011
--------------------------------------------------------------------------------------------------
Minera Rayrock, Inc. Wts., Exp. 6/95 170,000 43,068
-----------
Total Rights, Warrants and Certificates (Cost $68,278) 98,079
SHARES
==================================================================================================================================
PREFERRED STOCKS--3.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Battle Mountain Gold Co., Cv. 34,500 2,113,125
--------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co., $4.00 Cv., Series A 26,666 1,796,622
--------------------------------------------------------------------------------------------------
Hecla Mining Co., $3.50 Cv., Series B 40,000 1,980,000
-----------
Total Preferred Stocks (Cost $5,363,441) 5,889,747
==================================================================================================================================
COMMON STOCKS--87.3%
- ----------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--85.3%
- ----------------------------------------------------------------------------------------------------------------------------------
ALUMINUM--0.8% Hindalco Industries Ltd., GDR(1) 38,000 1,387,000
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS: SPECIALTY--0.8% Minerals Technologies, Inc. 50,000 1,450,000
- ----------------------------------------------------------------------------------------------------------------------------------
COPPER--3.3% Freeport-McMoRan Copper & Gold, Inc., Cl. A 201,955
4,493,499
--------------------------------------------------------------------------------------------------
Zambia Copper Investments Ltd.(1) 410,000 1,499,819
-----------
5,993,318
- ----------------------------------------------------------------------------------------------------------------------------------
DIAMOND MINING Ashton Mining Ltd. 733,900 1,662,296
AND MARKETING--1.7% --------------------------------------------------------------------------------------------------
Ashton Mining of Canada, Inc.(1) 400,000 506,682
--------------------------------------------------------------------------------------------------
Pure Gold Resources, Inc.(1) 1,250,000 307,629
--------------------------------------------------------------------------------------------------
Texas Star Resources Corp.(1) 250,000 579,066
-----------
3,055,673
- ----------------------------------------------------------------------------------------------------------------------------------
GOLD MINING: AUSTRALIA--9.2% Gold Mines of Kalgoorlie Ltd. 2,097,604
1,869,791
--------------------------------------------------------------------------------------------------
Highlands Gold Ltd. 1,500,000 1,479,568
--------------------------------------------------------------------------------------------------
Lynas Gold Ltd.(1) 3,000,000 547,988
--------------------------------------------------------------------------------------------------
Newcrest Mining Ltd. 1,000,000 4,727,310
--------------------------------------------------------------------------------------------------
Niugini Mining Ltd.(1) 366,000 1,347,788
--------------------------------------------------------------------------------------------------
Placer Pacific Ltd. 1,500,000 3,452,325
--------------------------------------------------------------------------------------------------
Renison Goldfields Consolidated Ltd.(1) 400,000 1,318,094
--------------------------------------------------------------------------------------------------
Ross Offshore Co.(1) 2,500,000 1,771,828
-----------
16,514,692
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE(1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
GOLD MINING: CANADA--23.9% American Barrick Resources Corp. 200,000 $
4,775,000
--------------------------------------------------------------------------------------------------
Cambior, Inc. 283,500 3,642,416
--------------------------------------------------------------------------------------------------
Canarc Resources Corp.(1) 282,500 715,708
--------------------------------------------------------------------------------------------------
Canarc Resources Corp.(1)(2) 450,000 1,140,065
--------------------------------------------------------------------------------------------------
Dayton Mining Corp., Units(1) 300,000 890,314
--------------------------------------------------------------------------------------------------
Glamis Gold Ltd. 500,000 3,438,205
--------------------------------------------------------------------------------------------------
Hemlo Gold Mines, Inc. 600,000 5,157,307
--------------------------------------------------------------------------------------------------
Kinross Gold(1) 300,000 1,248,611
--------------------------------------------------------------------------------------------------
Minera Rayrock, Inc., Cl. A(1) 340,000 583,264
--------------------------------------------------------------------------------------------------
Monarch Resources(1)(2) 300,000 1,009,746
--------------------------------------------------------------------------------------------------
Pegasus Gold, Inc. 250,000 4,000,000
--------------------------------------------------------------------------------------------------
Placer Dome, Inc. 310,000 6,665,000
--------------------------------------------------------------------------------------------------
Prime Resource Group, Inc.(1) 175,000 1,140,036
--------------------------------------------------------------------------------------------------
Rayrock Yellowknife Resources, Inc.(1) 103,000 1,267,431
--------------------------------------------------------------------------------------------------
Rayrock Yellowknife Resources, Inc.(1)(2) 30,000 369,155
--------------------------------------------------------------------------------------------------
Royal Oak Mines, Inc.(1) 200,000 812,500
--------------------------------------------------------------------------------------------------
Royalstar Resources Ltd.(1) 900,000 1,022,775
--------------------------------------------------------------------------------------------------
TVX Gold, Inc.(1)(2) 425,000 2,371,461
--------------------------------------------------------------------------------------------------
Teck Corp., Cl. B, Sub. Vtg. 150,000 2,483,650
-----------
42,732,644
- ----------------------------------------------------------------------------------------------------------------------------------
GOLD MINING: Anglo American Corp. of South Africa Ltd., ADR 75,000
3,600,000
SOUTH AFRICA--11.1% --------------------------------------------------------------------------------------------------
Ashanti Goldfields(1)(2) 170,000 3,495,625
--------------------------------------------------------------------------------------------------
Driefontein Consolidated Ltd., ADR 300,000 4,087,500
--------------------------------------------------------------------------------------------------
Free State Consolidated Gold Mines Ltd., ADR 250,000 3,468,750
--------------------------------------------------------------------------------------------------
Hartebeestfontein Gold Mining Co. 350,000 1,729,805
--------------------------------------------------------------------------------------------------
Randfontein Estates Gold Mining, ADR 200,000 1,787,640
--------------------------------------------------------------------------------------------------
Southvaal Holdings Ltd., ADR 58,000 1,628,443
-----------
19,797,763
- ----------------------------------------------------------------------------------------------------------------------------------
GOLD MINING: Battle Mountain Gold Co., CL. A 150,000 1,537,500
UNITED STATES--5.7% --------------------------------------------------------------------------------------------------
Crown Resources Corp.(1) 300,000 1,650,000
--------------------------------------------------------------------------------------------------
Hecla Mining Co.(1) 100,000 1,062,500
--------------------------------------------------------------------------------------------------
Homestake Mining Co. 150,000 2,812,500
--------------------------------------------------------------------------------------------------
Newmont Gold Co. 80,000 3,120,000
-----------
10,182,500
- ----------------------------------------------------------------------------------------------------------------------------------
GOLD RELATED Euro-Nevada Mining Corp. Ltd. 228,300 5,701,158
INVESTMENT--9.5% --------------------------------------------------------------------------------------------------
Franco-Nevada Mining Ltd. 80,000 4,256,135
--------------------------------------------------------------------------------------------------
Horsham Corp., Sub. Vtg. 114,500 1,574,698
--------------------------------------------------------------------------------------------------
Newmont Mining Corp. 137,291 5,525,963
-----------
17,057,954
</TABLE>
<PAGE>
STATEMENTS OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE (1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
METALS: DIVERSIFIED--7.9% Elkem AS(1) 150,000 $ 2,052,010
-------------------------------------------------------------------------------------------------
Falconbridge(1)(2) 150,000 1,845,773
-------------------------------------------------------------------------------------------------
Freeport-McMoRan, Inc. 150,000 2,437,500
-------------------------------------------------------------------------------------------------
Svedala Industry AB, Free 125,000 2,439,982
-------------------------------------------------------------------------------------------------
Trelleborg AB, Series B Free Shares(1) 190,267 2,550,269
-------------------------------------------------------------------------------------------------
Western Mining Corp. Holdings Ltd. 519,989 2,739,298
-----------
14,064,832
- ---------------------------------------------------------------------------------------------------------------------------------
METALS: MISCELLANEOUS--3.1% Korea Zinc Co.(1) 75,000 1,742,184
-------------------------------------------------------------------------------------------------
NV Union Miniere SA(1) 25,000 1,996,247
-------------------------------------------------------------------------------------------------
Pasminco Ltd.(1) 1,500,000 1,753,562
-----------
5,491,993
- ---------------------------------------------------------------------------------------------------------------------------------
NICKEL--1.6% Inco Ltd. 70,000 1,706,250
-------------------------------------------------------------------------------------------------
QNI Ltd.(1) 1,000,000 1,147,122
-----------
2,853,372
- ---------------------------------------------------------------------------------------------------------------------------------
PLATINUM MINING--2.5% Rustenburg Platinum Holdings Ltd., ADR 230,000
4,522,741
- ---------------------------------------------------------------------------------------------------------------------------------
SPECIAL MINERAL Engelhard Corp. 225,000 5,681,250
-------------------------------------------------------------------------------------------------
PRODUCERS--4.2% Johnson Matthey PLC 250,000 1,921,658
------------
7,602,908
- ---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--2.0%
- ---------------------------------------------------------------------------------------------------------------------------------
MACHINERY: DIVERSIFIED--2.0% Australian National Industries Ltd. 1,000,000
1,329,784
-------------------------------------------------------------------------------------------------
Tampella AB(1) 724,333 2,226,374
------------
3,556,158
------------
Total Common Stocks (Cost $128,196,156) 156,263,548
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $147,684,675) 98.4%
176,118,874
- ---------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6% 2,895,984
--------- ------------
NET ASSETS 100.0% $179,014,858
=========
============
</TABLE>
(1) Non-income producing security.
(2) Restricted security--See Note 5 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
<TABLE>
<S> <C> <C>
===================================================================================================================================
ASSETS Investments, at value (cost $147,684,675)--see accompanying statement $176,118,874
---------------------------------------------------------------------------------------------------
Cash 1,224,968
---------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 2,291,259
Dividends and interest 593,538
---------------------------------------------------------------------------------------------------
Other 96,781
------------
Total assets 180,325,420
===================================================================================================================================
LIABILITIES Payables and other liabilities:
Shares of beneficial interest redeemed 1,061,528
Service plan fees--Note 4 58,503
Other 190,531
------------
Total liabilities 1,310,562
===================================================================================================================================
NET ASSETS $179,014,858
============
===================================================================================================================================
COMPOSITION OF Paid-in capital $163,915,373
NET ASSETS ---------------------------------------------------------------------------------------------------
Undistributed net investment income 793,753
---------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment and foreign currency transactions (14,128,555)
---------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 28,434,287
------------
Net assets--applicable to 13,478,386 shares of beneficial interest outstanding $179,014,858
============
</TABLE>
<TABLE>
<S> <C>
===================================================================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
$13.28
===================================================================================================================================
MAXIMUM OFFERING PRICE PER SHARE (net asset value plus sales charge of 5.75% of offering price)
$14.09
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
<TABLE>
<S> <C> <C>
==================================================================================================================================
INVESTMENT INCOME Dividends (net of withholding taxes of $195,330) $
2,612,976
--------------------------------------------------------------------------------------------------
Interest 550,266
-----------
Total income 3,163,242
==================================================================================================================================
EXPENSES Management fees--Note 4 1,414,294
--------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 458,789
--------------------------------------------------------------------------------------------------
Service plan fees--Note 4 225,720
--------------------------------------------------------------------------------------------------
Shareholder reports 77,740
--------------------------------------------------------------------------------------------------
Trustees' fees and expenses 26,489
--------------------------------------------------------------------------------------------------
Legal and auditing fees 34,151
--------------------------------------------------------------------------------------------------
Other 60,129
-----------
Total expenses 2,297,312
==================================================================================================================================
NET INVESTMENT INCOME 865,930
==================================================================================================================================
REALIZED AND UNREALIZED GAIN Net realized gain (loss) from:
(LOSS) ON INVESTMENTS AND Investments 15,581,840
FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions
(57,557)
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (5,573,999)
Translation of assets and liabilities denominated in foreign currencies 1,964,639
-----------
Net realized and unrealized gain on investments and foreign currency transactions 11,914,923
</TABLE>
<TABLE>
<S> <C>
==================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$12,780,853
===========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1994 1993
==================================================================================================================================
<S> <C> <C> <C>
OPERATIONS Net investment income $ 865,930 $ 762,165
--------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency transactions 15,524,283 954,449
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments and translation of assets and liabilities denominated
in foreign currencies (3,609,360) 20,425,829
------------ ------------
Net increase in net assets resulting from operations 12,780,853 22,142,443
==================================================================================================================================
DIVIDENDS TO Dividends from net investment income
SHAREHOLDERS ($.059 and $.136 per share, respectively) (776,209) (1,698,280)
==================================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions--Note 2 8,028,555 5,192,486
==================================================================================================================================
NET ASSETS Total increase 20,033,199 25,636,649
--------------------------------------------------------------------------------------------------
Beginning of year 158,981,659 133,345,010
------------ ------------
End of year (including undistributed net investment
income of $793,753 and $786,012, respectively) $179,014,858 $158,981,659
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1994 1993 1992 1991 1990 1989
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $12.32 $10.68 $10.36 $11.65 $12.58 $12.82
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .06 .16 .17 .14 .23
Net realized and unrealized
gain (loss) on investments
and foreign currency transactions .96 1.72 .35 (1.42) .54 .50
-------- -------- -------- -------- -------- --------
Total income (loss) from
investment operations 1.02 1.78 .51 (1.25) .68 .73
- ------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.06) (.14) (.19) (.04) (.27) (.18)
Distributions from net
realized gain on investments
and foreign currency transactions -- -- -- -- (1.34) (.79)
-------- -------- -------- -------- -------- --------
Total dividends and
distributions to shareholders (.06) (.14) (.19) (.04) (1.61) (.97)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $13.28 $12.32 $10.68 $10.36 $11.65 $12.58
======== ======== ======== ======== ======== =======
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 8.25% 17.15% 5.08% (10.71)% 3.10% 6.43%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $179,015 $158,982 $133,345 $150,907 $163,118 $120,198
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $175,093 $124,869 $137,906 $154,318 $154,079 $110,873
- ------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 13,478 12,908 12,486 14,564 13,999 9,552
- ------------------------------------------------------------------------------------------------------------------
Amount of debt outstanding
at end of year (in thousands) $-- $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------
Average amount of debt
outstanding throughout
each year (in thousands)(2) $-- $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------
Average number of shares
outstanding throughout
each year (in thousands)(3) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Average amount of debt per share
outstanding throughout each year $-- $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income .50% .61% 1.25% 1.67% 1.17% 1.97%
Expenses 1.31% 1.38% 1.38% 1.43% 1.37% 1.22%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 29.5% 23.9% 39.4% 113.3% 82.3% 111.7%
</TABLE>
<TABLE>
<CAPTION>
1988 1987 1986 1985
============================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $12.10 $6.43 $6.88 $8.21
- --------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .26 .15 .15 .01
Net realized and unrealized
gain (loss) on investments
and foreign currency transactions 3.39 5.66 (.58) (1.20)
-------- ------- ------- -------
Total income (loss) from
investment operations 3.65 5.81 (.43) (1.19)
- --------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.36) (.14) (.02) (.07)
Distributions from net
realized gain on investments
and foreign currency transactions (2.57) -- -- (.07)
-------- ------- ------- -------
Total dividends and
distributions to shareholders (2.93) (.14) (.02) (.14)
- --------------------------------------------------------------------------------------------
Net asset value, end of year $12.82 $ 12.10 $6.43 $6.88
======== ======= ======= =======
============================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 33.24% 92.35% (6.23)% (14.37)%
============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $107,264 $76,532 $29,080 $32,673
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 90,672 $49,947 $32,407 $27,809
- --------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 8,365 6,324 4,523 4,751
- --------------------------------------------------------------------------------------------
Amount of debt outstanding
at end of year (in thousands) $-- $-- $-- $500
- --------------------------------------------------------------------------------------------
Average amount of debt
outstanding throughout
each year (in thousands)(2) $-- $79 $366 $67
- --------------------------------------------------------------------------------------------
Average number of shares
outstanding throughout
each year (in thousands)(3) -- 5,253 4,743 4,023
- --------------------------------------------------------------------------------------------
Average amount of debt per share
outstanding throughout each year $-- $.02 $.08 $.02
- --------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.38% 2.10% 2.19% .43%
Expenses 1.22% 1.41% 1.61% 1.62%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 175.8% 191.7% 52.9% 12.1%
</TABLE>
(1) Assumes a hypothetical initial investment on the business day before
the first day of the fiscal year, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
year. Sales charges are not reflected in the total returns.
(2) Based upon daily outstanding borrowing.
(3) Based upon month-end balances.
(4) The lesser of purchases or sales of portfolio securities for a year,
divided by the monthly average of the market value of portfolio securities
owned during the year. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the year ended June 30, 1994 were $52,444,667
and $48,139,367, respectively.
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
====================================================================================================================================
1. SIGNIFICANT Oppenheimer Gold & Special Minerals Fund (the Fund) is registered under the
ACCOUNTING POLICIES Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The Fund's
investment advisor is Oppenheimer Management Corporation
(the Manager). The following is a summary of significant
accounting policies consistently followed by the Fund.
-------------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued
at 4:00 p.m. (New York time) on each trading day. Listed and
unlisted securities for which such information is regularly
reported are valued at the last sale price of the day or, in the
absence of sales, at values based on the closing bid or asked
price or the last sale price on the prior trading day. Long-term
debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Long-term debt securities
which cannot be valued by the approved portfolio pricing
service are valued by averaging the mean between the bid and
asked prices obtained from two active market makers in such
securities. Short-term debt securities having a remaining maturity of 60 days or less
are valued at cost (or last determined market value) adjusted for amortization to
maturity of any premium or discount. Securities for which market quotes are not
readily available are valued under procedures established by the Board of Trustees to
determine fair value in good faith.
-------------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The
accounting records of the Fund are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are translated
into U.S. dollars at the closing rates of exchange. Amounts related to the purchase
and sale of securities and investment income are translated at the rates of exchange
prevailing on the respective dates of such transactions.
The Fund generally enters into forward currency exchange
contracts as a hedge, upon the purchase or sale of a security denominated in a
foreign currency. Risks may arise from the potential inability of the counterparty to
meet the terms of the contract and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes in
market values of securities held and reported with all other foreign currency gains
and losses in the Fund's results of operations.
-------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System
or to have segregated within the custodian's vault, all securities
held as collateral for repurchase
agreements. If the seller of the agreement defaults and the value of the collateral
declines, or if the seller enters an insolvency proceeding, realization of the value
of the collateral by the Fund may be delayed or limited.
-------------------------------------------------------------------------------------
FEDERAL INCOME TAXES. The Fund intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated investment
companies and to distribute
all of its taxable income, including any net realized gain on investments not offset
by loss carryovers, to shareholders. Therefore, no federal income tax provision is
required. At June 30, 1994, the Fund had available for federal income tax purposes an
unused capital loss carryover of approximately $13,838,821, $10,585,991 of which will
expire in 2000 and $3,252,830 in 2001.
-------------------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years
of service and fees paid to each trustee during the years of service.
During the year ended June 30, 1994, a
provision of $11,049 was made for the Fund's projected benefit obligations, resulting
in an accumulated liability of $70,659 at June 30, 1994. No payments have been made
under the plan.
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
-------------------------------------------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective
July 1, 1993, the
Fund adopted Statement of Position 93-2: Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital Distributions
by Investment Companies. As a result, the Fund changed the classification of
distributions to shareholders to better disclose the differences between financial
statement amounts and distributions determined in accordance with income tax
regulations. Accordingly, subsequent to June 30, 1993, amounts have been reclassified
to reflect an increase in paid-in capital of $2,749, a decrease in undistributed net
investment income of $81,980, and a decrease in undistributed capital loss on
investments of $79,231.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<S> <C>
====================================================================================================================================
1. SIGNIFICANT ACCOUNTING OTHER. Investment transactions are accounted for on the date the
investments are
POLICIES (CONTINUED) purchased or sold (trade date) and dividend income is recorded on the
ex-dividend
date. Discount on securities purchased is amortized over the life of the respective
securities, in accordance with federal income tax requirements. Realized gains and
losses on investments and unrealized appreciation and depreciation are determined on
an identified cost basis, which is the same basis used for federal income tax
purposes.
====================================================================================================================================
2. SHARES OF The Fund has authorized an unlimited number of no par value shares of beneficial
BENEFICIAL INTEREST interest. Transactions in shares of beneficial interest were as follows:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1994 YEAR ENDED JUNE 30, 1993
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 16,319,300 $218,789,343 8,221,891 $85,718,322
Dividends reinvested 48,817 596,985 170,363 1,572,218
Redeemed (15,798,058) (211,357,773) (7,969,879) (82,098,054)
---------- ------------ --------- -----------
Net increase 570,059 $ 8,028,555 422,375 $ 5,192,486
========== ============ ========= ===========
</TABLE>
<TABLE>
<S> <C>
====================================================================================================================================
3. UNREALIZED GAINS AND At June 30, 1994, net unrealized appreciation of investments of $28,434,287
was
LOSSES ON INVESTMENTS composed of gross appreciation of $35,694,846, and gross depreciation of
$7,260,559.
====================================================================================================================================
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance with the investment
advisory
AND OTHER TRANSACTIONS agreement with the Fund which provides for an annual fee of .80% on the
first $200
WITH AFFILIATES million of average net assets, .75% on the next $200 million, .69% on the next
$200
million, .66% on the next $200 million and .60% on average net assets in excess of
$800 million. Effective July 1, 1994, the management fee rates will change solely
with respect to the first and second $200 million of average net assets as follows:
.75% on the first $200 million and .72% on the next $200 million of average net
assets. The Manager has agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable regulatory limit on Fund
expenses.
For the year ended June 30, 1994, commissions (sales charges
paid by investors) on sales of Fund shares totaled $1,175,491, of which $277,123 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the Manager,
as general distributor, and by an affiliated broker-dealer.
Oppenheimer Shareholder Services (OSS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of providing such services are
allocated ratably to these companies.
Under an approved service plan, the Fund may expend up to .25%
of its net assets annually to reimburse OFDI for costs incurred in connection with
the personal service and maintenance of accounts that hold shares of the Fund (prior
to July 1, 1994, reimbursements were made with respect to shares sold subsequent to
April 1, 1991), including amounts paid to brokers, dealers, banks and other
institutions. During the year ended June 30, 1994, OFDI paid $3,838 to an affiliated
broker/dealer as reimbursement for personal service and maintenance expenses.
====================================================================================================================================
5. RESTRICTED SECURITIES The Fund owns securities purchased in private placement transactions, without
registration under the Securities Act of 1933 (the Act). The securities are valued
under methods approved by the Board of Trustees as reflecting fair value, and amount
to $10,231,825, or 5.7% of the Fund's net assets, at June 30, 1994. The Fund may not
invest more than 10% of its net assets (determined at the time of purchase) in
restricted or illiquid securities.
</TABLE>
<TABLE>
<CAPTION>
VALUATION
PER UNIT
AS OF
JUNE 30,
SECURITY ACQUISITION DATE COST PER UNIT 1994
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ashanti Goldfields(1) 4/19/94 $20.00 $20.56
-------------------------------------------------------------------------------------
Canarc Resources Corp. 6/6/94 $ 2.15 $ 2.53
-------------------------------------------------------------------------------------
Falconbridge(1) 6/10/94 $13.47 $12.31
-------------------------------------------------------------------------------------
Monarch Resources(1) 6/31/94 $ 3.25 $ 3.37
-------------------------------------------------------------------------------------
Rayrock Yellowknife Resources, Inc.(1) 5/31/94 $13.00 $12.31
-------------------------------------------------------------------------------------
TVX Gold, Inc. 6/23/93-10/20/93 $ 4.38 $ 5.58
</TABLE>
(1) Transferable under Rule 144A of the Act.
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, NY 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24 Financial Statements and Exhibits
(a) Financial Statements
(1) Condensed Financial Information (See Part A, Prospectus):
Filed herewith.
(2) Report of Independent Auditors (see Part B, Statement of
Additional Information): Filed herewith.
(3) Statement of Investments (see Part B, Statement of
Additional Information): Filed herewith.
(4) Statement of Assets and Liabilities (see Part B, Statement
of Additional Information): Filed herewith.
(5) Statement of Operations (see Part B, Statement of Additional
Information): Filed herewith.
(6) Statements of Changes in Net Assets (see Part B, Statement
of Additional Information): Filed herewith.
(7) Notes to Financial Statements (see Part B, Statement of
Additional Information): Filed herewith.
(8) Independent Auditors' Consent: Filed herewith.
(b) Exhibits
Exhibit
Number Description
------- -----------------------------------------
(1) Declaration of Trust October 7, 1985: Filed with Post-
Effective Amendment No. 20 to Registrant's Registration
Statement, 9/2/94, and incorporated by reference herein.
(i) Form of Amended and Restated Declaration of Trust: Filed
herewith.
(2) By-Laws amended as of 8/6/87: Previously filed with Post-
Effective Amendment No. 20, 9/2/94, to the Registrant's
Registration Statement, 9/2/94, and incorporated herein by
reference.
(3) Not applicable.
(4) Specimen Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 5 to Registrant's
Registration Statement, 11/1/85, and refiled herewith
pursuant to Item 102 of Regulation S-T, and incorporated
herein by reference.
(5) Investment Advisory Agreement dated June 20, 1991:
Previously filed with Registrant's Post-Effective Amendment
No. 20, 9/2/94, and incorporated herein by reference.
(6) (a) General Distributor's Agreement dated 12/10/92:
Previously filed with Registrant's Post-Effective
Amendment No. 18 to Registrant's Registration
Statement, 8/2/93, and incorporated herein by
reference.
(b) Form of Oppenheimer Funds Distributor, Inc. Dealer
Agreement: Filed with Post-Effective Amendment No. 14 of
Oppenheimer Main Street Funds, Inc. (Reg. No. 33-17850),
9/30/94, and incorporated herein by reference.
(c) Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14
of Oppenheimer Main Street Funds, Inc. (Reg. No. 33-
17850), 9/30/94, and incorporated herein by reference.
(d) Broker Agreement between Oppenheimer Funds Management,
Inc. and Newbridge Securities dated 10/1/86: Previously
filed with Post-Effective Amendment No. 25 of Oppenheimer
Special Fund (Reg. No. 2-45272), 11/1/86, and refiled
with Post-Effective Amendment No. 45, of Oppenheimer
Special Fund (Reg. No. 2-45272) 8/22/94, pursuant to Item
102 of Regulation S-T, and incorporated herein by
reference.
(e) Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement: Filed with Post-Effective Amendment No. 14
of Oppenheimer Main Street Funds, Inc. (Reg. No. 33-
17850), 9/30/94, and incorporated herein by reference.
(7) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant - 6/7/90): Previously filed with
Post-Effective Amendment No. 97 of Oppenheimer Fund (Reg.
No. 2-14586), 8/30/90, refiled with Post-Effective Amendment
No. 45 of Oppenheimer Growth Fund (Reg. No. 2-45272),
8/22/94, pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(8) Custody Agreement dated 11/12/92: Previously filed with
Registrant's Post-Effective Amendment No. 18 to Registrant's
Registration Statement, 8/2/93, and incorporated herein by
reference.
(9) Agreement and Plan of Reorganization and Liquidation dated
10/10/85 by and between Registrant and Oppenheimer Gold &
Special Minerals Fund, Inc.: Filed with Registrant's Post-
Effective Amendment No. 20, 9/2/94, and incorporated herein
by reference.
(10) Opinion and Consent of Counsel dated 10/4/85: Filed with
Registrant's Post-Effective Amendment No. 20, 9/2/94, and
incorporated herein by reference.
(11) Not applicable.
(12) Not applicable.
(13) Investment Letter dated 5/31/83 from Oppenheimer Management
Corporation to Registrant: Filed with Registrant's Post-
Effective Amendment No. 20, 9/2/94, and incorporated herein
by reference.
(14) (a) Form of Standardized and Non-Standardized Profit-
Sharing Plan and Money Purchase Pension Plan for
self-employed persons and corporations: Previously
filed with Post-Effective Amendment No. 3 of
Oppenheimer Global Growth & Income Fund (Reg. No.
33-33799), 1/31/92, and incorporated herein by
reference.
(b) Form of Individual Retirement Account Trust Agreement:
Previously filed with Post-Effective Amendment No. 21 of
Oppenheimer U.S. Government Trust (Reg. No. 2-76645),
8/25/93, and incorporated herein by reference.
(c) Form of Tax Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-exempt
organizations: Previously filed with Post-Effective
Amendment No. 47 of Oppenheimer Growth Fund (Reg. No. 2-
45272), 10/21/94, and incorporated herein by reference.
(d) Form of Simplified Employee Pension IRA: Previously
filed with Post-Effective Amendment No. 42 of Oppenheimer
Equity Income Fund (Reg. No. 2-33043), 11/1/94, and
incorporated herein by reference.
(e) Form of SAR-SEP Simplified Employee Pension IRA: Filed
with Post-Effective Amendment No. 19 to the Registration
Statement for Oppenheimer Integrity Funds (File No.
2-76547), 3/1/94, and incorporated herein by reference.
(15) Service Plan and Agreement dated June 10, 1993: Filed
herewith.
(16) Performance Data Computation Schedule: Filed herewith.
(17) Financial Data Schedule: Filed herewith.
-- Powers of Attorney (including certified Board resolutions):
Previously filed with Post-Effective Amendment No. 18 to
Registrant's Registration Statement, 8/2/93, 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 as of
Title of Class September 30, 1994
--------------- ------------------
Shares of Beneficial Interest 23,569
ITEM 27 Indemnification
Reference is made to paragraphs (c) through (g) of Section 12 of
Article SEVENTH of Registrant's Declaration of Trust filed as
Exhibit 24(b)(1) to this Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid
by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such trustee, officer or controlling person, Registrant will,
unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
ITEM 28 Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser
of the Registrant; it and certain subsidiaries and affiliates
act in the same capacity for other registered investment
companies as described in Parts A and B hereof.
(b) For information as to the business, profession, vocation or
employment of a substantial nature of each of the principal
officers and the directors of Oppenheimer Management
Corporation, reference is made to Parts A and B of this
Registration Statement and to the registration on Form ADV filed
under the Investment Advisers Act of 1940 by Oppenheimer
Management Corporation, which is incorporated herein by
reference.
ITEM 29 Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the General Distributor
of Registrant's shares, and is also the general distributor of
each of other open-end registered investment companies for which
Oppenheimer Management Corporation is the investment adviser,
as described in Parts A and B of this Registration Statement.
(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) Not applicable.
ITEM 30 Location of Accounts and Records
The accounts, books and other documents required to be maintained
by Registrant pursuant to Section 31(a) of the Investment Company
Act of 1940 and rules promulgated thereunder are in the possession
of Oppenheimer Management Corporation, at its offices at 3410 South
Galena Street, Denver, Colorado 80231.
ITEM 31 Management Services
Not applicable.
ITEM 32 Undertakings
(a) Not applicable.
(b) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and State
of New York on the 27th day of October, 1994.
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
By: /s/ Donald W. Spiro*
--------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees October 27, 1994
Leon Levy
/s/ Donald W. Spiro* President, Principal
- -------------------- Executive Officer
Donald W. Spiro and Trustee October 27, 1994
/s/ George Bowen* Treasurer and
- ----------------- Principal Financial
George Bowen and Accounting
Officer October 27, 1994
/s/ Leo Cherne* Trustee October 27, 1994
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee October 27, 1994
- ----------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee October 27, 1994
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee October 27, 1994
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee October 27, 1994
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee October 27, 1994
- --------------------
Edward V. Regan
/s/ Sidney M. Robbins* Trustee October 27, 1994
- ----------------------
Sidney M. Robbins
/s/ Russell S. Reynolds, Jr.* Trustee October 27, 1994
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Pauline Trigere* Trustee October 27, 1994
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee October 27, 1994
- -----------------------
Clayton K. Yeutter
*By:/s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
EXHIBIT INDEX
Form N-1A
Item No. Description
- --------- -----------------------------------------------
24(b)(1) Form of Amended and Restated Declaration of Trust
24(b)(4) Specimen Share Certificate
24(b)(11) Independent Auditors' Consent
24(b)(15) Service Plan and Agreement dated June 10, 1993
24(b)(16) Performance Data Computation Schedule
24(b)(17) Financial Data Schedule
-- Resignation of Edmund T. Delaney
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Oppenheimer Gold & Special Minerals Fund:
We consent to the use of our report dated July 22, 1994 included herein and to
the reference to our firm under the heading "Financial Highlights" in the
Prospectus.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Denver, Colorado
October 27, 1994
Exhibit 24(b)4(i)
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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 GOLD & SPECIAL MINERALS FUND
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683910 103
(at left) is the owner of
(centered) FULLY PAID CLASS A SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
(hereinafter called the "Fund"), transferable only on the
books of the Fund by the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
<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 GOLD & SPECIAL MINERALS FUND
SEAL
1985
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
SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
AND
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FOR CLASS A SHARES
SERVICE PLAN AND AGREEMENT (the "Plan") dated the 10th day of June, 1993,
by and between OPPENHEIMER GOLD & SPECIAL MINERALS FUND (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
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.
(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 of
Qualified Holdings that are attributable to sales made on or after
April 1, 1991, 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 charges or
other financial costs, or allocation of overhead by 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 owned beneficially or of record by the Recipient or by its
Customers that are attributable to sales made on and after April 1,
1991 (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 the 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 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.
(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 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 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. 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 GOLD & SPECIAL MINERALS FUND
By:_____________________________________________
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:______________________________________________
Katherine P. Feld,
Vice President & Secretary
FORM OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
This AMENDED AND RESTATED DECLARATION OF TRUST, made as of ____________,
by and among the individuals executing this Amended and Restated
Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer Gold & Special Minerals
Fund (the "Trust"), a trust fund under the laws of the Commonwealth of
Massachusetts for the investment and reinvestment of funds contributed
thereto under a Declaration of Trust dated October 7, 1985;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall henceforth be held and
managed under this Amended and Restated Declaration of Trust IN TRUST as
herein set forth below.
FIRST: This Trust shall be known as OPPENHEIMER GOLD & SPECIAL
MINERALS FUND. The address of the Trust is Two World Trade Center, New
York, New York 10048-0203. The Registered Agent for Service in
Massachusetts is Massachusetts Mutual Life Insurance Company, 1295 State
Street, Springfield, Massachusetts 01111, Attention: Stephen Kuhn, Esq.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust that are defined
in the 1940 Act (defined below) shall have the meanings given to them in
the 1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the
Board of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from
time to time.
4. "Class" means a class of a series of Shares (as defined
below) of the Trust established and designated under or in accordance with
the provisions of Article FOURTH.
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" means this Amended and Restated
Declaration of Trust as it may be amended or restated from time to time.
7. The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations of the Commission thereunder, all as amended
from time to time.
8. "Series" refers to Series of Shares of the Trust established
and designated under or in accordance with the provisions of Article
FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust or any Series or Class of the
Trust (as the context may require) shall be divided from time to time and
includes fractions of Shares as well as whole Shares.
11. The "Trust" refers to the Massachusetts business trust
created by this Declaration of Trust, as amended or restated from time to
time.
12. "Trustees" refers to the individual trustees in their
capacity as trustees hereunder of the Trust and their successor or
successors for the time being in office as such trustees.
THIRD:
The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
financial futures contracts, indexes, debentures, notes, mortgages and/or
other obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein,
or in any property or assets) created or issued by any issuer (which term
"issuer" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof be deemed to include any persons,
firms, associations, corporations, syndicates, combinations,
organizations, governments, or subdivisions thereof) and in financial
instruments (whether they are considered as securities or commodities);
and to exercise, as owner or holder of any securities or financial
instruments, all rights, powers and privileges in respect thereof; and to
do any and all acts and things for the preservation, protection,
improvement and enhancement in value of any or all such securities or
financial instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings, to the extent permitted by the 1940 Act and
by the Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such Series and Classes and
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including without limitation thereto,
securities) now or hereafter permitted by the laws of the Commonwealth of
Massachusetts and by this Declaration of Trust, as the Trustees may
determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more Series or Classes that
may have been established and designated from time to time, all without
the vote or consent of the Shareholders of the Trust, in any manner and
to the extent now or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in New York, Colorado and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or to the extent now or
hereafter permitted by the laws of Massachusetts, as a member of, or as
the owner or holder of any stock of, or share of interest in, any issuer,
and in connection therewith or make or enter into such deeds or contracts
with any issuers and to do such acts and things and to exercise such
powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of a similar or dissimilar
nature, not expressed; provided, however, that the Trust shall not carry
on any business, or exercise any powers, in any state, territory, district
or country except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into
Shares, all without par value, but the Trustees shall have the authority
from time to time, without shareholder approval, to create one or more
Series of Shares in addition to the Series specifically established and
designated in Part 3 of this Article FOURTH, and to divide the shares of
any Series into two or more Classes pursuant to Part 2 of this Article
FOURTH, all as they deem necessary or desirable, to establish and
designate such Series and Classes, and to fix and determine the relative
rights and preferences as between the different Series or Classes of
Shares as to right of redemption and the price, terms and manner of
redemption, liabilities and expenses to be borne by any Series or Class,
special and relative rights as to dividends and other distributions and
on liquidation, sinking or purchase fund provisions, conversion on
liquidation, conversion rights, and conditions under which the several
Series or Classes of Shares shall have individual voting rights or no
voting rights. Except as aforesaid, all Shares of the different Series
shall be identical.
(a) The number of authorized Shares and the number of Shares of
each Series and each Class of a Series that may be issued is unlimited,
and the Trustees may issue Shares of any Series or Class of any Series for
such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without
action or approval of the Shareholders. All Shares when so issued on the
terms determined by the Trustees shall be fully paid and non-assessable.
The Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series into one or more Series or
Classes of Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares
of any Series reacquired by the Trust.
(b) The establishment and designation of any Series or any Class
of any Series in addition to that established and designated in Part 3 of
this Article FOURTH shall be effective upon the execution by a majority
of the Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such Series or such
Class of such Series, or as otherwise provided in such instrument. At any
time that there are no Shares outstanding of any particular Series
previously established and designated, the Trustees may by an instrument
executed by a majority of their number abolish that Series and the
establishment and designation thereof. Each instrument referred to in
this paragraph shall be an amendment to this Declaration of Trust, and the
Trustees may make any such amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold
and dispose of Shares of any Series or any Class of any Series of the
Trust to the same extent as if such person were not a Trustee, officer or
other agent of the Trust; and the Trust may issue and sell or cause to be
issued and sold and may purchase Shares of any Series or Class of any
Series from any such person or any such organization subject only to the
general limitations, restrictions or other provisions applicable to the
sale or purchase of Shares of such Series or Class generally.
2. The Trustees shall have the authority from time to time, without
obtaining shareholder approval, to divide the Shares of any Series into
two or more Classes as they deem necessary or desirable, and to establish
and designate such Classes. In such event, each Class of a Series shall
represent interests in the designated Series of the Trust and have such
voting, dividend, liquidation and other rights as may be established and
designated by the Trustees. Expenses related directly or indirectly to
the Shares of a Class of a Series may be borne solely by such Class (as
shall be determined by the Trustees) and, as provided in Article FIFTH,
a Class of a Series may have exclusive voting rights with respect to
matters relating solely to such Class. The bearing of expenses solely by
a Class of Shares of a Series shall be appropriately reflected (in the
manner determined by the Trustees) in the net asset value, dividend and
liquidation rights of the Shares of such Class of a Series. The division
of the Shares of a Series into Classes and the terms and conditions
pursuant to which the Shares of the Classes of a Series will be issued
must be made in compliance with the 1940 Act. No division of Shares of
a Series into Classes shall result in the creation of a Class of Shares
having a preference as to dividends or distributions or a preference in
the event of any liquidation, termination or winding up of the Trust, to
the extent such a preference is prohibited by Section 18 of the 1940 Act
as to the Trust.
The relative rights and preferences of Shares of different
Classes shall be the same in all respects except that, unless and until
the Board of Trustees shall determine otherwise: (i) when a vote of
Shareholders is required under this Declaration of Trust or when a meeting
of Shareholders is called by the Board of Trustees, the Shares of a Class
shall vote exclusively on matters that affect that Class only, (ii) the
expenses related to a Class shall be borne solely by such Class (as
determined and allocated to such Class by the Trustees from time to time
in a manner consistent with parts 2 and 3 of this Article FOURTH); and
(iii) pursuant to paragraph 10 of Article NINTH, the Shares of each Class
shall have such other rights and preferences as are set forth from time
to time in the then-effective Prospectus and/or Statement of Additional
Information relating to the Shares. Dividends and distributions on one
class may differ from the dividends and distributions on another Class,
and the net asset value of the Shares of one Class may differ from the net
asset value of the Shares of another Class.
3. Without limiting the authority of the Trustees set forth in part
1 of this Article FOURTH to establish and designate any further Series,
the Trustees hereby establish one Series of Shares having the same name
as the Trust. The Shares of that Series and any Shares of any further
Series or Classes that may from time to time be established and designated
by the Trustees shall (unless the Trustees otherwise determine with
respect to some further Series or Classes at the time of establishing and
designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, shall irrevocably belong to that Series for
all purposes, subject only to the rights of creditors, and shall be so
recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are herein
referred to as "assets belonging to" that Series. In the event that there
are any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any
particular Series (collectively "General Items"), the Trustees shall
allocate such General Items to and among any one or more of the Series
established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable; and any
General Items so allocated to a particular Series shall belong to that
Series. Each such allocation by the Trustees shall be conclusive and
binding upon the shareholders of all Series for all purposes.
(b) (1) Liabilities Belonging to Series. The assets belonging
to each particular Series shall be charged with the liabilities of the
Trust in respect of that Series and all expenses, costs, charges and
reserves attributable to that Series. Any general liabilities, expenses,
costs, charges and reserves of the Trust which are not identifiable as
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 allocations described in the
two preceding sentences shall be subject to the 1940 Act and any release,
rule, regulation, interpretation or order thereunder relating to such
allocations. The liabilities, expenses, costs, charges and reserves
allocated and so charged to each Class are herein referred to as
"liabilities belonging to" that Class. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be conclusive
and binding upon the holders of all Classes for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series or Class may be paid to the holders of Shares of that
Series or Class, with such frequency as the Trustees may determine, which
may be daily or otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may determine,
from such of the income and capital gains, accrued or realized, from the
assets belonging to that Series, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to such Series or
Class. All dividends and distributions on Shares of a particular Series
or Class shall be distributed pro rata to the shareholders of such Series
or Class in proportion to the number of Shares of such Series or Class
held by such shareholders at the date and time of record established for
the payment of such dividends or distributions, except that in connection
with any dividend or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on Shares as
to which the Shareholder's purchase order and/or payment have not been
received by the time or times established by the Trustees under such
program or procedure. Such dividends and distributions may be made in
cash or Shares or a combination thereof as determined by the Trustees or
pursuant to any program that the Trustees may have in effect at the time
for the election by each Shareholder of the mode of the making of such
dividend or distribution to that Shareholder. Any such dividend or
distribution paid in Shares will be paid at the net asset value thereof
as determined in accordance with paragraph 13 of Article SEVENTH.
(d) Liquidation. In the event of the liquidation or
dissolution of the Trust, the Shareholders of each Series and all Classes
of each Series that have been established and designated shall be entitled
to receive, as a Series or Class, when and as declared by the Trustees,
the excess of the assets belonging to that Series over the liabilities
belonging to that Series or Class. The assets so distributable to the
Shareholders of any particular Class and Series shall be distributed among
such Shareholders in proportion to the number of Shares of such Class of
that Series held by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series or Class
shall be transferable, but transfers of Shares of a particular Class or
Series will be recorded on the Share transfer records of the Trust
applicable to such Series or Class only at such times as Shareholders
shall have the right to require the Trust to redeem Shares of such Series
or Class and at such other times as may be permitted by the Trustees.
(f) Equality. All Shares of each Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to such Series or any Class of that
Series), and each Share of any particular Series shall be equal to each
other Share of that Series and Shares of each Class of a Series shall be
equal to each other Share of such Class; but the provisions of this
sentence shall not restrict any distinctions permissible under this
Article FOURTH that may exist with respect to Shares of a Series or the
different Classes of a Series. The Trustees may from time to time divide
or combine the Shares of any particular Class or Series into a greater or
lesser number of Shares of that Class or Series without thereby changing
the proportionate beneficial interest in the assets belonging to that
Class or Series or in any way affecting the rights of Shares of any other
Class or Series.
(g) Fractions. Any fractional Share of any Class and Series,
if any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Class and Series,
including those rights and obligations with respect to voting, receipt of
dividends and distributions, redemption of Shares, and liquidation of the
Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that (i) holders of Shares of any Series shall have the right to
exchange said Shares into Shares of one or more other Series of Shares,
(ii) holders of shares of any Class shall have the right to exchange said
Shares into Shares of one or more other Classes of the same or a different
Series, and/or (iii) the Trust shall have the right to carry out exchanges
of the aforesaid kind, in each case in accordance with such requirements
and procedures as may be established by the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Class and Series that has been established and designated. No
certification certifying the ownership of Shares need be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as
to who are the Shareholders and as to the number of Shares of each Class
and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other
person to accept orders for the purchase or sale of Shares that conform
to such authorized terms and to reject any purchase or sale orders for
Shares whether or not conforming to such authorized terms.
FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the
election of Trustees when that issue is submitted to them, (b) with
respect to the amendment of this Declaration of Trust except where the
Trustees are given authority to amend the Declaration of Trust without
shareholder approval, (c) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders, and (d) with
respect to those matters relating to the Trust as may be required by the
1940 Act or required by law, by this Declaration of Trust, or the By-Laws
of the Trust or any registration statement of the Trust filed with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust will not hold shareholder meetings unless
required by the 1940 Act, the provisions of this Declaration of Trust, or
any other applicable law.
3. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote on each matter submitted to a vote of the
Shareholders of the affected Series for each Share standing in his name
on the books of the Trust on the date, fixed in accordance with the By-
Laws, for determination of Shareholders of the affected Series entitled
to vote at such meeting (except, if the Board so determines, for Shares
redeemed prior to the meeting), and each such Series shall vote separately
("Individual Series Voting"); a Series shall be deemed to be affected when
a vote of the holders of that Series on a matter is required by the 1940
Act; provided, however, that as to any matter with respect to which a vote
of Shareholders is required by the 1940 Act or by any applicable law that
must be complied with, such requirements as to a vote by Shareholders
shall apply in lieu of Individual Series Voting as described above. If
the shares of a Series shall be divided into Classes as provided in
Article FOURTH, the shares of each Class shall have identical voting
rights except that the Trustees, in their discretion, may provide a Class
of a Series with exclusive voting rights with respect to matters which
relate solely to such Classes. If the Shares of any Series shall be
divided into Classes with a Class having exclusive voting rights with
respect to certain matters, the quorum and voting requirements described
below with respect to action to be taken by the Shareholders of the Class
of such Series on such matters shall be applicable only to the Shares of
such Class. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the right to
receive dividends. The presence in person or by proxy of the holders of
one-third of the Shares, or of the Shares of any Series or Class of any
Series, outstanding and entitled to vote thereat shall constitute a quorum
at any meeting of the Shareholders or of that Series or Class,
respectively; provided however, that if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires an affirmative
vote of a majority, or more than a majority, of the shares outstanding and
entitled to vote, then in such event the presence in person or by proxy
of the holders of a majority of the shares outstanding and entitled to
vote at such a meeting shall constitute a quorum for all purposes. If at
any meeting of the Shareholders there shall be less than a quorum present,
the Shareholders or the Trustees present at such meeting may, without
further notice, adjourn the same from time to time until a quorum shall
attend, but no business shall be transacted at any such adjourned meeting
except such as might have been lawfully transacted had the meeting not
been adjourned.
4. Each Shareholder of a Series or Class, upon request to the
Trust in proper form determined by the Trust, shall be entitled to require
the Trust to redeem from the net assets of that Series or Class all or
part of the Shares of such Series or Class standing in the name of such
Shareholder. The method of computing such net asset value, the time at
which such net asset value shall be computed and the time within which the
Trust shall make payment therefor, shall be determined as hereinafter
provided in Article SEVENTH of this Declaration of Trust. Notwithstanding
the foregoing, the Trustees, when permitted or required to do so by the
1940 Act, may suspend the right of the Shareholders to require the Trust
to redeem Shares.
5. No Shareholder shall, as such holder, have any right to
purchase or subscribe for any security of the Trust which it may issue or
sell, other than such right, if any, as the Trustees, in their discretion,
may determine.
6. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
SIXTH:
1. The persons who shall act as initial Trustees until the
first meeting or until their successors are duly chosen and qualify are
the initial trustees executing this Declaration of Trust or any
counterpart thereof. However, the By-Laws of the Trust may fix the number
of Trustees at a number greater or lesser than the number of initial
Trustees and may authorize the Trustees to increase or decrease the number
of Trustees, to fill any vacancies on the Board which may occur for any
reason, including any vacancies created by any such increase in the number
of Trustees, to set and alter the terms of office of the Trustees and to
lengthen or lessen their own terms of office or make their terms of office
of indefinite duration, all subject to the 1940 Act. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be
Shareholders.
2. A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative vote of the holders
of two-thirds of the outstanding Shares, present in person or by proxy at
any meeting of Shareholders called for such purpose; such a meeting shall
be called by the Trustees when requested in writing to do so by the record
holders of not less than ten per centum of the outstanding Shares. A
Trustee may also be removed by the Board of Trustees as provided in the
By-Laws of the Trust.
3. The Trustees shall make available a list of names and
addresses of all Shareholders as recorded on the books of the Trust, upon
receipt of the request in writing signed by not less than ten Shareholders
(who have been Shareholders for at least six months), holding shares of
the Trust valued at not less than $25,000 at current offering price (as
defined in the Trust's Prospectus and/or Statement of Additional
Information) or holding not less than 1% in amount of the entire amount
of Shares issued and outstanding; such request must state that such
Shareholders wish to communicate with other shareholders with a view to
obtaining signatures to a request for a meeting to take action pursuant
to Part 2 of this Article SIXTH and be accompanied by a form of
communication to the Shareholders. The Trustees may, in their discretion,
satisfy their obligation under this Part 3 by either making available the
Shareholder list to such Shareholders at the principal offices of the
Trust, or at the offices of the Trust's transfer agent, during regular
business hours, or by mailing a copy of such communication and form of
request, at the expense of such requesting Shareholders.
4. If and when the Trust has outstanding two or more series of
Shares pursuant to Article FOURTH of this Declaration of Trust, each
Series shall be considered as if it were a separate common-law Trust
covered by Section 16(c) of the 1940 Act and Parts 2 and 3 of this Article
SIXTH. However, the Trust may at any time or from time to time apply to
the Commission for one or more exemptions from all or part of said Section
16(c) of the 1940 Act, and, if an exemptive order or orders are issued by
the Commission, such order or orders shall be deemed part of Section 16(c)
for the purposes of Parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust, the Trustees
and the Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders
or the Trustees and shall have accepted this Trust, the Trust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he or she shall be
deemed a Trustee hereunder.
2. The death, declination, resignation, retirement, removal,
or incapacity of the Trustees, or any one of them, shall not operate to
annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of the
assets of the Trust shall at all times be considered as vested in the
Trustees. No Shareholder shall have, as a holder of beneficial interest
in the Trust, any authority, power or right whatsoever to transact
business for or on behalf of the Trust, or on behalf of the Trustees, in
connection with the property or assets of the Trust, or in any part
thereof.
4. The Trustees in all instances shall act as principals, and
are and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute, and to authorize the officers and agents of the Trust to make and
execute, any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration of
Trust providing for the conduct of the business of the Trust and to
amend and repeal them to the extent that they do not reserve that
right to the Shareholders;
(b) to elect and remove such officers and appoint and terminate
such officers as they consider appropriate with or without cause;
(c) to employ a bank or trust company as custodian of any
assets of the Trust subject to any conditions set forth in this
Declaration of Trust or in the By-Laws;
(d) to retain a transfer agent and shareholder servicing agent,
or both;
(e) to provide for the distribution of Shares either through
a principal underwriter or the Trust itself or both;
(f) to set record dates in the manner provided for in the By-
Laws of the Trust;
(g) to delegate such authority as they consider desirable to
any officers of the Trust and to any agent, custodian or underwriter;
(h) to vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property held in Trust
hereunder; and to execute and deliver powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities held in
trust hereunder;
(j) to hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form,
or either in its own name or in the name of a custodian or a nominee
or nominees, subject in either case to proper safeguards according
to the usual practice of Massachusetts business trusts or investment
companies;
(k) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent to
any contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with
respect to any security held in the Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including,
but not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws,
distributions of income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted
by the 1940 Act and the Trust's fundamental policy thereunder as to
borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations,
partnerships, trusts, associations or other persons; and
(p) to change the name of the Trust or any Class or Series of
the Trust as they consider appropriate without prior shareholder
approval.
5. No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the Trustees,
or to see to the application of any payments made or property transferred
to the Trustees or upon their order.
6. (a) The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay by way of subscription
to any Shares or otherwise. There is hereby expressly disclaimed
shareholder liability for the acts and obligations of the Trust. Every
note, bond, contract or other undertaking issued by or on behalf of the
Trust or the Trustees relating to the Trust shall include a recitation
limiting the obligation represented thereby to the Trust and its assets
(but the omission of such recitation shall not operate to bind any
Shareholder).
(b) Whenever this Declaration of Trust calls for or
permits any action to be taken by the Trustees hereunder, such action
shall mean that taken by the Board of Trustees by vote of the majority of
a quorum of Trustees as set forth from time to time in the By-Laws of the
Trust or as required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all
such additional powers as are reasonably implied from the powers herein
contained such as may be necessary or convenient in the conduct of any
business or enterprise of the Trust, to do and perform anything necessary,
suitable, or proper for the accomplishment of any of the purposes, or the
attainment of any one or more of the objects, herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively whether any
moneys, securities, or other properties of the Trust are, for the purposes
of this Trust, to be considered as capital or income and in what manner
any expenses or disbursements are to be borne as between capital and
income whether or not in the absence of this provision such moneys,
securities, or other properties would be regarded as capital or income and
whether or not in the absence of this provision such expenses or
disbursements would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into
classes and prescribe the tenure of office of the several classes, but no
class of Trustee shall be elected for a period shorter than that from the
time of the election following the division into classes until the next
meeting and thereafter for a period shorter than the interval between
meetings or for a period longer than five years, and the term of office
of at least one class shall expire each year.
8. The Shareholders shall have the right to inspect the
records, documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by any
committee of the Trustees may be removed at any time, with or without
cause, by vote of the Trustees.
10. If the By-Laws so provide, the Trustees shall have power
to hold their meetings, to have an office or offices and, subject to the
provisions of the laws of Massachusetts, to keep the books of the Trust
outside of said Commonwealth at such places as may from time to time be
designated by them. Action may be taken by the Trustees without a meeting
by unanimous written consent or by telephone or similar method of
communication.
11. Securities held by the Trust shall be voted in person or
by proxy by the President or a Vice President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12. (a) Subject to the provisions of the 1940 Act, any
Trustee, officer or employee, individually, or any partnership of which
any Trustee, officer or employee may be a member, or any corporation or
association of which any Trustee, officer or employee may be an officer,
director, trustee, employee or stockholder, may be a party to, or may be
pecuniarily or otherwise interested in, any contract or transaction of the
Trust, and in the absence of fraud no contract or other transaction shall
be thereby affected or invalidated; provided that in case a Trustee, or
a partnership, corporation or association of which a Trustee is a member,
officer, director, trustee, employee or stockholder is so interested, such
fact shall be disclosed or shall have been known to the Trustees or a
majority thereof; and any Trustee who is so interested, or who is also a
director, officer, trustee, employee or stockholder of such other
corporation or a member of such partnership or association which is so
interested, may be counted in determining the existence of a quorum at any
meeting of the Trustees which shall authorize any such contract or
transaction, and may vote thereat to authorize any such contract or
transaction, with like force and effect as if he or she were not such
director, officer, trustee, employee or stockholder of such other trust
or corporation or association or a member of a partnership so interested.
(b) Specifically, but without limitation of the foregoing,
the Trust may enter into a management or investment advisory contract or
underwriting contract and other contracts with, and may otherwise do
business with any manager or investment adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or
affiliate of any such manager or investment adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation
relating to the Trust notwithstanding that the Trustees of the Trust may
be composed in part of partners, directors, officers or employees of any
such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm
or corporation, and in the absence of fraud the Trust and any such firm
or corporation may deal freely with each other, and no such contract or
transaction between the Trust and any such firm or corporation shall be
invalidated or in any way affected thereby, nor shall any Trustee or
officer of the Trust be liable to the Trust or to any Shareholder or
creditor thereof or to any other person for any loss incurred by it or him
or her solely because of the existence of any such contract or
transaction; provided that nothing herein shall protect any director or
officer of the Trust against any liability to the Trust or to its security
holders to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.
(c) As used in this paragraph the following terms shall
have the meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former
Trustee or officer of another trust or corporation whose securities
are or were owned by the Trust or of which the Trust is or was a
creditor and who served or serves in such capacity at the request of
the Trust, and the heirs, executors, administrators, successors and
assigns of any of the foregoing; however, whenever conduct by an
indemnitee is referred to, the conduct shall be that of the original
indemnitee rather than that of the heir, executor, administrator,
successor or assignee;
(ii) the term "covered proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, to which an indemnitee is
or was a party or is threatened to be made a party by reason of the
fact or facts under which he or she or it is an indemnitee as defined
above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an indemnitee in
connection with a covered proceeding; and
(v) the term "adjudication of liability" shall mean, as to
any covered proceeding and as to any indemnitee, an adverse
determination as to the indemnitee whether by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent.
(d) The Trust shall not indemnify any indemnitee for any
covered expenses in any covered proceeding if there has been an
adjudication of liability against such indemnitee expressly based on
a finding of disabling conduct.
(e) Except as set forth in paragraph (d) above, the Trust shall
indemnify any indemnitee for covered expenses in any covered
proceeding, whether or not there is an adjudication of liability as
to such indemnitee, if a determination has been made that the
indemnitee was not liable by reason of disabling conduct by (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 quorum of Trustees who are
neither "interested persons", as defined in the 1940 Act nor parties
to the covered proceedings, or (b) an independent legal counsel in
a written opinion; provided that such Trustees or counsel, in making
such determination, may but need not presume the absence of disabling
conduct on the part of the indemnitee by reason of the manner in
which the covered proceeding was terminated.
(f) Covered expenses incurred by an indemnitee in connection
with a covered proceeding shall be advanced by the Trust to an
indemnitee prior to the final disposition of a covered proceeding
upon the request of the indemnitee for such advance and the
undertaking by or on behalf of the indemnitee to repay the advance
unless it is ultimately determined that the indemnitee is entitled
to indemnification hereunder, but only if one or more of the
following is the case: (i) the indemnitee shall provide a security
for such undertaking; (ii) the Trust shall be insured against losses
arising out of any lawful advances; or (iii) there shall have been
a determination, based on a review of the readily available facts (as
opposed to a full trial-type inquiry) that there is a reason to
believe that the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a written
opinion or by the vote of a majority of a quorum of trustees who are
neither "interested persons" as defined in the 1940 Act nor parties
to the covered proceeding.
(g) Nothing herein shall be deemed to affect the right of the
Trust and/or any indemnitee to acquire and pay for any insurance
covering any or all indemnitees to the extent permitted by the 1940
Act or to affect any other indemnification rights to which any
indemnitee may be entitled to the extent permitted by the 1940 Act.
13. For purposes of the computation of net asset value, as in
this Declaration of Trust referred to, the following rules shall apply:
(a) The net asset value per Share of any Series, as of the time
of valuation on any day, shall be the quotient obtained by dividing
the value, as at such time, of the net assets of that Series (i.e.,
the value of the assets of that Series less its liabilities exclusive
of its surplus) by the total number of Shares of that Series
outstanding at such time. The assets and liabilities of any Series
shall be determined in accordance with generally accepted accounting
principles; provided, however, that in determining the liabilities
of any Series there shall be included such reserves for taxes or
contingent liabilities as may be authorized or approved by the
Trustees, and provided further that in connection with the accrual
of any fee or refund payable to or by an investment adviser of the
Trust for such Series, the amount of which accrual is not definitely
determinable as of any time at which the net asset value of each
Share of that Series is being determined due to the contingent nature
of such fee or refund, the Trustees are authorized to establish from
time to time formulae for such accrual, on the basis of the
contingencies in question to the date of such determination, or on
such other bases as the Trustees may establish.
(1) Shares of a Series to be issued shall be deemed to be
outstanding as of the time of the determination of the net asset
value per Share applicable to such issuance and the net price
thereof shall be deemed to be an asset of that Series;
(2) Shares of a Series to be redeemed by the Trust shall be
deemed to be outstanding until the time of the determination of
the net asset value applicable to such redemption and thereupon
and until paid the redemption price thereof shall be deemed to
be a liability of that Series; and
(3) Shares of a Series voluntarily purchased or contracted to
be purchased by the Trust pursuant to the provisions of
paragraph 4 of Article FIFTH shall be deemed to be outstanding
until whichever is the later of (i) the time of the making of
such purchase or contract of purchase, and (ii) the time of
which the purchase price is determined, and thereupon and until
paid, the purchase price thereof shall be deemed to be a
liability of that Series.
(b) The Trustees are empowered, in their absolute discretion,
to establish other bases or times, or both, for determining the net
asset value per Share of any Series or Class in accordance with the
1940 Act and to authorize the voluntary purchase by any Series or
Class, either directly or through an agent, of Shares of any Series
or Class upon such terms and conditions and for such consideration
as the Trustees shall deem advisable in accordance with any such
provision, rule or regulation.
14. Payment of the net asset value per Share of any Class and
Series properly surrendered to it for redemption shall be made by the
Trust within seven days, or as specified in any applicable law or
regulation, after tender of such stock or request for redemption to the
Trust for such purpose, together with any additional documentation that
may reasonably be required by the Trust or its transfer agent to evidence
the authority of the tenderor or to make such requests plus any period of
time during which the right of the holders of the Shares of such Class of
that Series to require the Trust to redeem such shares has been suspended.
Any such payment may be made in portfolio securities of such Class of that
Series and/or in cash, as the Trustees shall deem advisable, and no
Shareholder shall have a right, other than as determined by the Trustees,
to have Shares redeemed in kind.
15. The Trust shall have the right, at any time and without
prior notice to the Shareholder, to redeem Shares of the Class and Series
held by such Shareholder held in any account registered in the name of
such Shareholder for its current net asset value, if and to the extent
that such redemption is necessary to reimburse either that Series or Class
of the Trust or the distributor (i.e., principal underwriter) of the
Shares for any loss either has sustained by reason of the failure of such
Shareholder to make timely and good payment for Shares purchased or
subscribed for by such Shareholder, regardless of whether such Shareholder
was a Shareholder at the time of such purchase or subscription, subject
to and upon such terms and conditions as the Trustees may from time to
time prescribe.
EIGHTH: The name "Oppenheimer" included in the name of the Trust
and of any Series shall be used pursuant to a royalty-free, non-exclusive
license from Oppenheimer Management Corporation ("OMC"), incidental to and
as part of an advisory, management or supervisory contract which may be
entered into by the Trust with OMC. The license may be terminated by OMC
upon termination of such advisory, management or supervisory contract or
without cause upon 60 days' written notice, in which case neither the
Trust nor any Series or Class shall have any further right to use the name
"Oppenheimer" in its name or otherwise and the Trust, the Shareholders and
its officers and Trustees shall promptly take whatever action may be
necessary to change its name and the names of any Series or Classes
accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or the shareholder's heirs,
executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust estate to be held harmless
from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind the Trust, the Trust's officers or any Shareholder. All
persons extending credit to, doing business with, contracting with or
having or asserting any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under any such credit,
transaction, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall
be personally liable therefor; notice of such disclaimer shall be given
in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee against any liability to which such Trustee would
otherwise be subject by reasons 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 judgement or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operations of this Declaration of Trust, contracts,
obligations, transactions or any other business the Trust may enter into,
and subject to the provisions of paragraph 2 of this Article NINTH, shall
be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be
required to give any bond as such, nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but
subject to the provisions of sub-sections (a), (b), (c) and (d) of this
paragraph 4.
(a) The Trustees, with the favorable vote of the holders of a
majority as defined in the 1940 Act, of the outstanding Shares of any
one or more Series entitled to vote, may sell and convey the assets
of that Series (which sale may be subject to the retention of assets
for the payment of liabilities and expenses) to another issuer for
a consideration which may be or include securities of such issuer.
Upon making provision for the payment of liabilities, by assumption
by such issuer or otherwise, the Trustees shall distribute the
remaining proceeds ratably among the holders of the outstanding
Shares of the Series the assets of which have been so transferred.
(b) The Trustees, with the favorable vote of the holders of a
majority as defined in the 1940 Act, of the outstanding Shares of any
one or more Series entitled to vote, may at any time sell and convert
into money all the assets of that Series. Upon making provisions for
the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of that Series, the Trustees
shall distribute the remaining assets of that Series ratably among
the holders of the outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of a
majority as defined in the 1940 Act, of the outstanding Shares of any
one or more Series entitled to vote, may otherwise alter, convert or
transfer the assets of that 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 Massachusetts
Secretary of State, 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 an original.
6. The Trust set forth in this instrument is created under and
is to be governed by and construed and administered according to the laws
of the Commonwealth of Massachusetts. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
7. The Board of Trustees is empowered to cause the redemption
of the Shares held in any account if the aggregate net asset value of such
Shares (taken at cost or value, as determined by the Board) has been
reduced to $500 or less upon such notice to the shareholder in question,
with such permission to increase the investment in question and upon such
other terms and conditions as may be fixed by the Board of Trustees in
accordance with the 1940 Act.
8. In the event that any person advances the organizational
expenses of the Trust, such advances shall become an obligation of the
Trust subject to such terms and conditions as may be fixed by, and on a
date fixed by, or determined with criteria fixed by the Board of Trustees,
to be amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of
Trust under any authorization to take action which is permitted by the
1940 Act or any other applicable law, such action shall be deemed to have
been properly taken if such action is in accordance with the construction
of the 1940 Act or such other applicable law then in effect as expressed
in "no action" letters of the staff of the Commission or any release,
rule, regulation or order under the 1940 Act or any decision of a court
of competent jurisdiction, notwithstanding that any of the foregoing shall
later be found to be invalid or otherwise reversed or modified by any of
the foregoing.
10. Any action which may be taken by the Board of Trustees
under this Declaration of Trust or its By-Laws may be taken by the
description thereof in the then effective Prospectus and/or Statement of
Additional Information relating to the Shares under the Securities Act of
1933 or in any proxy statement of the Trust rather than by formal
resolution of the Board.
11. Whenever under this Declaration of Trust, the Board of
Trustees is permitted or required to place a value on assets of the Trust,
such action may be delegated by the Board, and/or determined in accordance
with a formula determined by the Board, to the extent permitted by the
1940 Act.
12. If authorized by vote of the Trustees and, if a vote of
shareholders is required under this Declaration of Trust, the favorable
vote of the holders of a "majority" as defined in the 1940 Act, of the
outstanding Shares entitled to vote, or by any larger vote which may be
required by applicable law in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a Declaration of
Trust supplemental hereto, which thereafter shall form a part hereof; any
such Supplemental or Restated Declaration of Trust may be executed by and
on behalf of the Trust and the Trustees by an officer or officers of the
Trust.
Oppenheimer Management Corporation
2 World Trade Center - Suite 3400
New York, NY 10048-0203
October 21, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oppenheimer Asset Allocation Fund - Reg. No. 2-86903,
File No. 811-3864
Oppenheimer California Tax-Exempt Fund - Reg. No. 33-23566
File No. 811-5586
Oppenheimer Discovery Fund - Reg. No. 33-371, File No. 811-4410
Oppenheimer Global Emerging Growth Fund - Reg. No. 33-18285,
File No. 811-5381
Oppenheimer Global Environment Fund - Reg. No. 33-32270,
File No. 811-5966
Oppenheimer Global Fund - Reg. No. 2-31661, File No. 811-1810
Oppenheimer Global Growth & Income Fund - Reg. No. 33-33799
File No. 811-6001
Oppenheimer Gold & Special Minerals Fund - Reg. No. 2-82590,
File No. 811-3694
Oppenheimer Growth Fund - Reg. No. 2-45272, File No. 811-2306
Oppenheimer Money Market Fund, Inc. - Reg. No. 2-49887,
File No. 811-2454
Oppenheimer Mortgage Income Fund - Reg. No. 33-6614,
File No. 811-4712
Oppenheimer Multi-Government Trust - Reg. No. 33-24885,
File No. 811-5670
Oppenheimer Multi-Sector Income Trust - Reg. No. 33-20191
File No. 811-5473
Oppenheimer Multi-State Tax-Exempt Trust - Reg. No. 33-30198
File No. 811-5867
Oppenheimer New York Tax-Exempt Fund - Reg. No. 2-91683,
File No. 811-4054
Oppenheimer Fund - Reg. No. 2-14586, File No. 811-847
Oppenheimer Target Fund - Reg. No. 2-69719, File No. 811-3105
Oppenheimer Time Fund - Reg. No. 2-39461, File No. 811-02171
Oppenheimer Tax-Free Bond Fund - Reg. No. 2-57116,
File No. 811-2668
Oppenheimer U.S. Government Trust - Reg. No. 2-76645,
File No. 811-3430
To the Securities and Exchange Commission:
Each of the above-captioned registered investment companies (the
"Registrants") hereby represents to the Securities and Exchange
Commission, pursuant to Rule 485(b)(2)(iv) under the Securities Act of
1933, as amended, and in connection with an amendment on Form N-1A to that
Registrant's Registration Statement under the Investment Company Act of
1940, that the resignation of Edmund T. Delaney as a Trustee of the
Registrants as of October 17, 1994, was not due to disagreement with any
Registrant as to any matter relating to any Registrant's operations,
policies or practices.
OPPENHEIMER ASSET ALLOCATION FUND
OPPENHEIMER CALIFORNIA TAX-EXEMPT FUND
OPPENHEIMER DISCOVERY FUND
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
OPPENHEIMER GLOBAL ENVIRONMENT FUND
OPPENHEIMER GLOBAL FUND
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
OPPENHEIMER GROWTH FUND
OPPENHEIMER MONEY MARKET FUND, INC.
OPPENHEIMER MORTGAGE INCOME FUND
OPPENHEIMER MULTI-GOVERNMENT TRUST
OPPENHEIMER MULTI-SECTOR INCOME TRUST
OPPENHEIMER MULTI-STATE TAX-EXEMPT TRUST
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
OPPENHEIMER FUND
OPPENHEIMER TARGET FUND
OPPENHEIMER TIME FUND
OPPENHEIMER TAX-FREE BOND FUND
OPPENHEIMER U.S. GOVERNMENT TRUST
By: --------------------------------------
Andrew J. Donohue, Secretary
PROSP/delaney
<PAGE>
Oppenheimer Management Corporation
2 World Trade Center - Suite 3400
New York, NY 10048-0203
October 21, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oppenheimer Asset Allocation Fund - Reg. No. 2-86903,
File No. 811-3864
Oppenheimer California Tax-Exempt Fund - Reg. No. 33-23566
File No. 811-5586
Oppenheimer Discovery Fund - Reg. No. 33-371, File No. 811-4410
Oppenheimer Global Emerging Growth Fund - Reg. No. 33-18285,
File No. 811-5381
Oppenheimer Global Environment Fund - Reg. No. 33-32270,
File No. 811-5966
Oppenheimer Global Fund - Reg. No. 2-31661, File No. 811-1810
Oppenheimer Global Growth & Income Fund - Reg. No. 33-33799
File No. 811-6001
Oppenheimer Gold & Special Minerals Fund - Reg. No. 2-82590,
File No. 811-3694
Oppenheimer Growth Fund - Reg. No. 2-45272, File No. 811-2306
Oppenheimer Money Market Fund, Inc. - Reg. No. 2-49887,
File No. 811-2454
Oppenheimer Mortgage Income Fund - Reg. No. 33-6614,
File No. 811-4712
Oppenheimer Multi-Government Trust - Reg. No. 33-24885,
File No. 811-5670
Oppenheimer Multi-Sector Income Trust - Reg. No. 33-20191
File No. 811-5473
Oppenheimer Multi-State Tax-Exempt Trust - Reg. No. 33-30198
File No. 811-5867
Oppenheimer New York Tax-Exempt Fund - Reg. No. 2-91683,
File No. 811-4054
Oppenheimer Fund - Reg. No. 2-14586, File No. 811-847
Oppenheimer Target Fund - Reg. No. 2-69719, File No. 811-3105
Oppenheimer Time Fund - Reg. No. 2-39461, File No. 811-02171
Oppenheimer Tax-Free Bond Fund - Reg. No. 2-57116,
File No. 811-2668
Oppenheimer U.S. Government Trust - Reg. No. 2-76645,
File No. 811-3430
To the Securities and Exchange Commission:
Each of the above-captioned registered investment companies (the
"Registrants") hereby represents to the Securities and Exchange
Commission, pursuant to Rule 485(b)(2)(iv) under the Securities Act of
1933, as amended, and in connection with an amendment on Form N-1A to that
Registrant's Registration Statement under the Investment Company Act of
1940, that the resignation of Edmund T. Delaney as a Trustee of the
Registrants as of October 17, 1994, was not due to disagreement with any
Registrant as to any matter relating to any Registrant's operations,
policies or practices.
OPPENHEIMER ASSET ALLOCATION FUND
OPPENHEIMER CALIFORNIA TAX-EXEMPT FUND
OPPENHEIMER DISCOVERY FUND
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
OPPENHEIMER GLOBAL ENVIRONMENT FUND
OPPENHEIMER GLOBAL FUND
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
OPPENHEIMER GROWTH FUND
OPPENHEIMER MONEY MARKET FUND, INC.
OPPENHEIMER MORTGAGE INCOME FUND
OPPENHEIMER MULTI-GOVERNMENT TRUST
OPPENHEIMER MULTI-SECTOR INCOME TRUST
OPPENHEIMER MULTI-STATE TAX-EXEMPT TRUST
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
OPPENHEIMER FUND
OPPENHEIMER TARGET FUND
OPPENHEIMER TIME FUND
OPPENHEIMER TAX-FREE BOND FUND
OPPENHEIMER U.S. GOVERNMENT TRUST
By: /s/ Andrew J. Donohue
--------------------------------
Andrew J. Donohue, Secretary
PROSP/delaney
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<NAME> GOLD & SPECIAL MINERALS FUND
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<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1993
<PERIOD-END> JUN-30-1994
<INVESTMENTS-AT-COST> 147684675
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<DISTRIBUTIONS-OF-INCOME> 776209
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16319300
<NUMBER-OF-SHARES-REDEEMED> 15798058
<SHARES-REINVESTED> 48817
<NET-CHANGE-IN-ASSETS> 20033199
<ACCUMULATED-NII-PRIOR> 786012
<ACCUMULATED-GAINS-PRIOR> (29732069)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1414294
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2297312
<AVERAGE-NET-ASSETS> 175093000
<PER-SHARE-NAV-BEGIN> 12.32
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .96
<PER-SHARE-DIVIDEND> .06
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.28
<EXPENSE-RATIO> 131
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Oppenheimer Gold & Special Minerals Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated as
described below, on the basis of the Fund's distributions, for the past 10
years which are as follows:
Distribution Amount from Amount from
Reinvestment Ordinary Long and Short-Term Reinvestment
(Ex) Date Income Capital Gains Price
Class A Shares
07/30/84 $0.0700 $0.0720 $ 6.510
07/29/85 0.0240 0.0000 7.120
07/28/86 0.1370 0.0000 6.190
07/31/87 0.1500 0.8800 12.890
12/24/87 0.2050 1.6900 11.520
12/23/88 0.1800 0.7900 11.460
12/22/89 0.2700 1.3400 14.210
12/21/90 0.0400 0.0000 9.770
12/20/91 0.1850 0.0000 9.580
12/17/92 0.1360 0.0000 8.770
12/23/93 0.0590 0.0000 13.830
1. AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 06/30/94:
The formula for calculating average annual total return is as follows:
1 ERV n
-------- = n (---------) - 1 average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
P = hypothetical initial investment of $1,000
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year Ten Year
$1,020.28 1 $1,156.18 0.2 $2,532.29 0.1
(----------) -1 =2.03% (---------) -1 =2.94% (------------) -1 =9.74%
$1,000.00 $1,000.00 $1,000.00
Examples at NAV:
One Year Five Year Ten Year
$1,082.52 1 $1,226.71 0.2 $2,686.77 0.1
(----------) -1 =8.25% (-----------) -1 =4.17% (----------) -1 =10.39%
$1,000.00 $1,000.00 $1,00.00<PAGE>
Oppenheimer Gold & Special Minerals Fund
Page 2
2. CUMULATIVE TOTAL RETURNS FOR THE PERIOD ENDED 06/30/94:
The formula for calculating cumulative total return is as follows:
ERV - P
--------- = Cumulative Total Return
P
Examples, assuming a maximum sales charge:
One Year Five Year
$1,020.28 - 1,000 $1,156.18 - 1,000
---------------- =2.03% ---------------- =15.62%
$1,000.00 $1,000.00
Ten Year
$2,532.29 - 1,000
- ----------------- = 153.23%
$1,000
Examples at NAV:
One Year Five Year
$1,082.52-1,000 $1,226.71-1,000
- ---------------- =8.25% -------------- =22.67%
$1,000.00 $1,000.00
Ten Year
$2,686.77 - $1,000
- ------------------ = 168.68%
$1,000
