Registration No. 2-31661
File No. 811-1810
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. 61 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 23 / X /
OPPENHEIMER GLOBAL FUND
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On January 25, 1994, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / On _______________, pursuant to paragraph (a) of Rule 485
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended September 30, 1993 was filed on November 23, 1993.
<PAGE>
FORM N-1A
OPPENHEIMER GLOBAL FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Cover Page
2 Fund Expenses
3 Financial Highlights; Fund Performance Information
4 Cover Page; The Fund and Its Investment Policies; Special
Investment Methods; Investment Restrictions
5 Fund Expenses; Management of the Fund; Additional Information -
The Custodian and the Transfer Agent; Back Cover
5A Fund Performance Information
6 Management of the Fund; How to Redeem Shares; Dividends,
Distributions and Taxes; Additional Information
7 Fund Expenses; How to Buy Shares; Exchanges of Shares and
Retirement Plans; How to Redeem Shares; Back Cover
8 How to Redeem Shares; Exchanges of Shares and Retirement Plans
9 *
Part B of
Form N-1A
Item No. Statement of Additional Information Heading
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Investment Restrictions
14 Trustees and Officers; Investment Management Services
15 Investment Objective and Policies; Trustees and Officers - Major
Shareholders; Investment Management Services
16 Investment Management Services; Additional Information;
Distribution and Service Plans; Back Cover
17 Brokerage
18 Additional Information - Description of the Fund
19 Purchase, Redemption and Pricing of Shares; Automatic Withdrawal
Plan Provisions; Letters of Intent
20 Performance, Dividend and Tax Information
21 Investment Management Services; Additional Information - General
Distributor's Agreement; Distribution and Service Plans;
Brokerage; Financial Statements
22 Performance, Dividend and Tax Information
23 Financial Statements
_______________
* Not applicable or negative answer.
<PAGE>
OPPENHEIMER GLOBAL FUND
Supplement dated January 25, 1994
to the Prospectus dated January 25, 1994
The Prospectus is amended as follows:
The following paragraph is added after the last paragraph in
"Alternative Sales Arrangements" in the section entitled "How to Buy
Shares":
In addition to paying dealers the regular commission for sales
of Class A Shares stated in the table below in "Class A Shares," and
the commission for sales of Class B shares described in the second
paragraph of "Class B Distribution and Service Plan," below, the
Distributor will pay participating dealers an amount equal to 1.00%
of the offering price of shares of the Fund sold in "qualifying
transactions" from December 1, 1993, through February 28, 1994.
"Qualifying transactions" are aggregate sales (calculated at
offering price) by a registered representative of a participating
dealer of $250,000 or more of Class A and/or Class B shares of any
one or more of the following OppenheimerFunds (all three funds will
be included unless the participating dealer elects to exclude one or
more funds): the Fund, Oppenheimer Total Return Fund, Inc. and
Oppenheimer Strategic Income Fund. "Qualifying transactions" do not
include sales of Class A shares (i) at net asset value without sales
charge, (ii) subject to a contingent deferred sales charge, or (iii)
intended under a Letter of Intent.
January 25, 1994 PS330
<PAGE>
OPPENHEIMER GLOBAL FUND
Two World Trade Center, New York, NY 10048-0203
Telephone: 1-800-525-7048
Oppenheimer Global Fund (the "Fund") is a mutual fund with the
investment objective of capital appreciation. Current income is not an
objective. In seeking its objective, the Fund will invest a substantial
portion of its invested assets in securities of foreign issuers, "growth-
type" companies, cyclical industries and special situations which are
considered to have appreciation possibilities. The Fund's techniques may
be considered speculative investment methods and increase risks and costs
to the Fund. See "Special Investment Methods."
The Fund offers two classes of shares which may be purchased at a price
equal to their respective net asset value per share, plus a sales charge.
The investor may elect to purchase shares with a sales charge imposed (1)
at the time of purchase (the "Class A shares"), or (2) on a contingent
deferred basis (the "Class B shares"). Class B shares are also subject
to an asset-based sales charge. The contingent deferred sales charge will
be imposed on most redemptions of Class B shares within six years of
purchase. These alternatives permit an investor to choose the method of
purchasing shares that is more beneficial to that investor depending on
the amount of the purchase, the length of time the investor expects to
hold the shares and other circumstances. See "How to Buy Shares -
Alternative Sales Arrangements" below for further details.
This Prospectus sets forth concisely information about the Fund that
a prospective investor should know before investing. A Statement of
Additional Information about the Fund (the "Additional Statement"), dated
January 25, 1994, has been filed with the Securities and Exchange
Commission ("SEC") and is available without charge upon written request
to Oppenheimer Shareholder Services (the "Transfer Agent"), P.O. Box 5270,
Denver, Colorado 80217, or by calling the Transfer Agent at the toll-free
number shown above. The Additional Statement (which is incorporated in
its entirety by reference in this Prospectus) contains more detailed
information about the Fund and its management, including more complete
information as to certain risk factors.
Investors are advised to read and retain this Prospectus for future
reference. These securities may be considered to be speculative. Shares
of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is effective January 25, 1994.
<PAGE>
Table of Contents
Page
Fund Expenses
Financial Highlights
The Fund and Its Investment Policies
Special Investment Methods
Investment Restrictions
Management of the Fund
How to Buy Shares
Alternative Sales Arrangements
Class A Shares
Class A Sales Charge Table
Class A Contingent Deferred Sales Charge
Reduced Sales Charges for Class A Purchases
Class A Service Plan
Class B Shares
Class B Contingent Deferred Sales Charge
Class B Conversion Feature
Class B Distribution and Service Plan
Purchase Programs for Class A and Class B Shares
AccountLink
PhoneLink
Asset Builder Plans
How to Redeem Shares
Regular Redemption Procedures
Telephone Redemptions
Distributions from Retirement Plans
Automatic Withdrawal and Exchange Plans
Repurchase
Reinvestment Privilege
General Information on Redemptions
Exchanges of Shares and Retirement Plans
Dividends, Distributions and Taxes
Fund Performance Information
Additional Information
<PAGE>
Fund Expenses
The following table sets forth the fees that an investor in the Fund
might pay and the expenses paid by the Fund during its fiscal year ended
September 30, 1993 (as to Class A shares) and its fiscal period ended
September 30, 1993 (as to Class B shares). The public offering of Class
B shares of the Fund commenced on August 17, 1993.
Shareholder Transaction Expenses Class A Class B
Shares Shares
Maximum Sales Charge on Purchases
(as a percentage of offering price) 5.75% None
Sales Charge on Reinvested Dividends None None
Maximum Contingent Deferred
Sales Charge on Redemptions None(1) 5.0%(2)
Redemption Fee None None
Exchange Fee $5.00 $5.00
Annual Fund Operating Expenses Class A Class B
(as a percentage of average net assets) Shares Shares
Management Fees .67% .67%
12b-1 (Distribution and/or
Service Plan) Fees .10% 1.00%
Other Expenses .41% .73%
Total Fund Operating Expenses 1.18% 2.40%
________________
(1)Certain Class A share purchases of $1 million or more are not
subject to front-end sales charges, but a contingent deferred sales charge
(maximum of 1.0%) is imposed on the proceeds of such shares redeemed
within 18 months of the end of the calendar month of their purchase,
subject to certain conditions. See "How to Buy Shares - Class A
Contingent Deferred Sales Charge" below.
(2)A contingent deferred sales charge is imposed on the proceeds of
Class B shares redeemed within six years of their purchase, subject to
certain exceptions. That charge is imposed as a percentage of net asset
value at the time of purchase or redemption, whichever is less, and
declines from 5.0% in the first year that shares are held, to 4.0% in the
second year, 3.0% in the third and fourth years, 2.0% in the fifth year,
1.0% in the sixth year and eliminated thereafter. There is no charge on
Class B shares held for more than six years. See "How to Buy Shares -
Class B Contingent Deferred Sales Charge" below.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that an investor in shares of the Fund will
bear directly (Shareholder Transaction Expenses) or indirectly (Annual
Fund Operating Expenses). The sales charge rate shown for Class A shares
is the current maximum rate applicable to purchases of Class A shares of
the Fund. Investors in Class A shares may be entitled to reduced sales
charges based on the amount purchased or the value of shares already owned
and may be subject to a contingent deferred sales charge in limited
circumstances. See "How to Buy Shares - Class A Contingent Deferred Sales
Charge." "Other Expenses" includes such expenses as custodial and
transfer agent fees, audit, legal and other business operating expenses,
but excludes extraordinary expenses. For further details, see "Purchase,
Redemption and Pricing of Shares - Dual Class Methodology" and the Fund's
financial statements, both included in the Additional Statement.
The following examples apply the above-stated expenses and the current
maximum sales charge to a hypothetical $1,000 investment in shares of the
Fund over the time periods shown below, assuming a 5% annual rate of
return on the investment. The amounts shown below are the cumulative
costs of such hypothetical $1,000 investment for the periods shown and,
except as indicated in lines 3 and 4, assume that the shares are redeemed
at the end of each stated period.
1 year 3 years 5 years 10 years(1)
1. Class A shares $69 $93 $119 $192
2. Class B shares $74 $105 $148 $215
3. Class A shares, assuming no
redemption $69 $93 $119 $192
4. Class B shares, assuming no
redemption $24 $75 $128 $215
____________________
(1)Class B shares convert to Class A shares under the terms and conditions
described under "How to Buy Shares - Class B Conversion Feature."
Therefore, years 7 through 10 reflect the Class A expenses shown above.
Long-term shareholders of Class B shares could pay the economic
equivalent, through the asset-based sales charge and contingent deferred
sales charge imposed on Class B shares, of more than the maximum front-end
sales charges permitted under applicable regulatory requirements. The
Class B Conversion Feature is intended to minimize the likelihood that
this will occur.
These examples should not be considered a representation of past or
future expenses or performance. Expenses are subject to change and actual
performance and expenses may be less or greater than those illustrated
above.
<PAGE>
Financial Highlights
Selected data for a Class A share and Class B share of the Fund
outstanding throughout each period
The information in the table below has been audited by KPMG Peat
Marwick, independent auditors, whose report on the financial statements
of the Fund for the fiscal year ended September 30, 1993 (as to Class A
shares) and the fiscal period ended September 30, 1993 (as to Class B
shares), is included in the Additional Statement. The public offering of
Class B shares of the Fund commenced on August 17, 1993.
<TABLE>
<CAPTION>
Class A Class B
Year Ended Period Ended
September 30, September 30,
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1993+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share
Operating
Data:
Net asset
value,
beginning of
period $ 30.03 $ 32.05 $ 27.63 $ 30.43 $ 22.94 $ 38.29 $ 28.88 $ 17.36 $ 16.47 $ 22.99 $33.33
Income (loss)
from
investment
operations:
Net investment
income .26 .17 .05 .02 .20 .04 .05 .12 .14 .07 .03
Net realized
and
unrealized
gain (loss)
on
investments
and
translation
of assets
and
liabilities
in foreign
currencies 4.99 (1.50) 6.14 .29 9.11 (9.70) 13.28 11.56 1.71 (3.96) 1.63
Total income
(loss) from
investment
operations 5.25 (1.33) 6.19 .31 9.31 (9.66) 13.33 11.68 1.85 (3.89) 1.66
Dividends and
distributions
to
shareholders:
Dividends from
net
investment
income (.12) (.11) (.08) (.11) (.09) (.07) (.11) (.10) (.04) (.12) --
Distributions
from net
realized
gain on
investments (.12) (.58) (1.69) (3.00) (1.73) (5.62) (3.81) (.06) (.92) (2.51) --
Total
dividends
and
distributions
to
shareholders (.24) (.69) (1.77) (3.11) (1.82) (5.69) (3.92) (.16) (.96) (2.63) --
Net asset
value, end
of period $ 35.04 $ 30.03 $ 32.05 $ 27.63 $ 30.43 $ 22.94 $ 38.29 $ 28.88 $ 17.36 $ 16.47 $34.99
Total Return,
at Net Asset
Value** 17.67% (4.23)% 23.71% .79% 42.87% (25.17)% 52.65% 67.63% 12.00% (18.65)% 3.64%
Ratios/
Supplemental
Data:
Net assets,
end of
period (in
thousands) $1,388,773 $1,214,615 $1,076,336 $719,893 $522,866 $371,438 $601,417 $372,243 $231,645 $245,706 $6,028
Average net
assets (in
thousands) $1,213,098 $1,193,870 $ 898,592 $672,246 $445,819 $398,220 $473,418 $330,827 $225,843 $262,765 $2,939
Number of
shares
outstanding
at end of
period (in
thousands) 39,632 40,441 33,585 26,056 17,183 16,191 15,708 12,891 13,347 14,920 172
Amount of debt
outstanding
at end of
period (in
thousands) $ -- $60,000 $60,000 $60,000 $30,000 $30,000 $35,000 $22,000 $14,000 $ -- N/A
Average amount
of debt
outstanding
throughout
each period
(in
thousands)++ $18,247 $60,000 $60,000 $42,877 $30,000 $31,052 $26,290 $19,058 $ 3,877 $ 8,765
N/A
Average number
of shares
outstanding
throughout
each period
(in
thousands)+++ 39,853 37,435 30,607 21,982 16,968 17,173 15,099 13,205 14,476 14,113 N/A
Average amount
of debt per
share
outstanding
throughout
each period $ .46 $ 1.60 $ 1.96 $ 1.95 $ 1.77 $ 1.81 $ 1.74 $ 1.44 $ .27 $ .62 N/A
Ratios to
average net
assets:
Net investment
income .84% .55% .22% .16% .73% .15% .16% .47% .81% .35% 1.52%*
Expenses 1.18% 1.36% 1.65% 1.68% 1.90% 1.89% 1.49% 1.60% 1.21% 1.48% 2.40%*
Portfolio
turnover
rate*** 86.9% 18.0% 19.9% 27.2% 62.6% 25.2% 37.0% 25.2% 29.0% 50.3% 86.9%
<FN>
* Annualized.
** Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns.
*** The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1993 were $1,030,091,557 and $1,055,706,289,
respectively.
+ For the period from August 17, 1993 (inception of offering) to September 30,
1993.
++ Based upon daily outstanding borrowings.
+++ Based upon month-end balances.
</TABLE>
<PAGE>
The Fund and Its Investment Policies
The Fund is an open-end, diversified management investment company
presently organized as a Massachusetts business trust. It was initially
organized as a Maryland corporation in 1969. In seeking its objective of
capital appreciation, the Fund emphasizes investment in foreign and
domestic securities considered by the Fund's investment manager,
Oppenheimer Management Corporation (the "Manager"), to have appreciation
possibilities, primarily common stocks or securities having investment
characteristics of common stocks (such as convertible securities) of
"growth-type" companies. As a matter of fundamental policy, under normal
market conditions, the Fund will invest its total assets in securities of
issuers traded in markets in at least three different countries (which may
include the United States). The portfolio may also emphasize securities
of cyclical industries and "special situations" when the Manager believes
that they present opportunities for capital growth. The remainder of the
Fund's invested assets will be invested in securities for liquidity
purposes. The Fund's investment policies and practices are not
"fundamental" policies (as defined below) unless a particular policy is
identified as fundamental. The Board of Trustees of the Fund (the
"Board") may change non-fundamental policies without shareholder approval.
The Fund currently emphasizes investment in "foreign securities" (as
defined below), because the Manager believes that certain foreign
securities may present investment opportunities. "Foreign securities"
include securities issued by companies organized under the laws of
countries other than the United States that are traded on foreign
securities exchanges or foreign over-the-counter markets. Securities of
foreign issuers (i) represented by American Depository Receipts, (ii)
traded in the U.S. over-the-counter markets or (iii) listed on a U.S.
securities exchange are not considered "foreign securities" because they
are not subject to many of the special considerations and risks (discussed
below) that apply to investments in foreign securities traded and held
abroad. The Fund has no restrictions on the amount of its assets that may
be invested in securities of foreign issuers, and thus the relative amount
of such investments will change from time to time. The Fund may purchase
securities issued by issuers in any country, developed or underdeveloped.
As of September 30, 1993, approximately 82% of the Fund's net assets were
invested in foreign securities, and it is currently anticipated that the
Fund may continue to invest 80% or more of its total assets in foreign
securities. Risks of investing in foreign securities may include foreign
taxation, changes in currency rates or currency blockage, currency
exchange costs, and differences between domestic and foreign legal,
auditing, brokerage and economic standards. When more than 50% of its
assets are invested in foreign securities at the end of any fiscal year,
the Fund intends to elect the application of Section 853 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), discussed
under "Dividends, Distributions and Taxes." Securities held abroad by
foreign sub-custodians for the Fund may be held only in those countries
and by those sub-custodians approved from time to time by the Board under
applicable rules. See "Investment Objective and Policies - Foreign
Securities" in the Additional Statement for further discussion as to the
possible rewards and risks of investing in foreign securities.
The Fund invests in securities of smaller, less well-known companies
as well as those of large, well-known companies (not generally included
in the definition of "growth-type" companies). Current income is not a
consideration in the selection of portfolio securities, whether selected
for appreciation possibilities or liquidity purposes. The Fund is
intended for investors seeking capital appreciation over the long term and
who are willing to assume greater risks in the hope of achieving greater
gains, and is not meant for investors seeking assured income and
conservation of capital. The Fund's investment policies are speculative
and involve substantial risks, and no assurance can be given that the
Fund's investment objective will be met.
In an uncertain market or economic environment when it would be
appropriate to maintain a defensive position, the Fund may invest in debt
securities, such as rated or unrated bonds and debentures, cash
equivalents and preferred stocks. It is expected that short-term (i.e.,
those maturing in one year or less from the date of purchase) debt
securities will be emphasized for defensive or liquidity purposes, since
such securities usually may be disposed of quickly at prices not involving
significant losses. When circumstances warrant, securities may be sold
without regard to the length of time held, although short-term trading may
increase brokerage costs borne by the Fund.
Special Investment Methods
The Fund may use the following special investment methods when their
use appears appropriate to the Manager. Since certain of such investment
methods are speculative, they may subject an investment in the Fund to
relatively greater risks and costs than would be the case with an
investment in a fund that does not use such methods.
Special Situations
The Fund may invest in "special situations" that the Manager believes
may present opportunities for capital growth. A "special situation"
exists when a merger, reorganization, or other unusual development is
expected to occur which, in the opinion of the Manager, may prompt an
increase in the value of an issuer's securities, regardless of general
business conditions or the movement of the market as a whole. There is
a risk that the price of the security may decline if the anticipated
development fails to occur.
Small, Unseasoned Companies
The Fund may invest in securities of small, unseasoned companies as
well as those of large, well-known companies. In view of the limited
liquidity and volatility of price movements of the former, the Fund will
not permit a substantial portion of its assets to be invested in
securities of companies (including their predecessors) that have operated
less than three years. See "Investment Objective and Policies - Small,
Unseasoned Companies" in the Additional Statement for a further discussion
of the risks involved in such investments.
Restricted and Illiquid Securities
The Fund will not purchase or otherwise acquire securities that may
be illiquid by virtue of the absence of a readily available market or
because their disposition would be subject to legal restrictions
("restricted securities") if, as a result, more than 15% of its net assets
(taken at current value) would be invested in securities that are illiquid
(including repurchase agreements maturing in more than seven days). This
policy does not limit purchases of restricted securities eligible for
resale to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), that are
determined to be liquid by the Board, or by the Manager under Board-
approved guidelines. Such guidelines take into account trading activity
for such securities and the availability of reliable pricing information,
among other factors. If there is a lack of trading interest in particular
Rule 144A securities, the Fund's holdings of those securities may be
illiquid. The Fund currently intends to invest no more than 10% of its
net assets in illiquid and restricted securities, excluding securities
eligible for resale pursuant to Rule 144A under the Securities Act that
are determined to be liquid by the Board or by the Manager under Board-
approved guidelines. If due to changes in relative market values of the
Fund's portfolio securities, more than 15% of the Fund's assets consisted
of illiquid securities, the Manager would consider appropriate steps to
protect the Fund's flexibility. There may be undesirable delays in
selling such securities at prices representing their fair value. See
"Investment Objective and Policies - Restricted and Illiquid Securities"
in the Additional Statement for further details.
Warrants and Rights
The Fund may invest up to 5% of its total assets in warrants and
rights (other than those that have been acquired in units or are attached
to other securities). No more than 2% of the Fund's total assets may be
invested in warrants that are not listed on either The New York Stock
Exchange or The American Stock Exchange. Warrants are options to purchase
equity securities at specified prices valid for a specific period of time.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. For further
details, see "Investment Objective and Policies - Warrants and Rights" in
the Additional Statement.
Repurchase Agreements
The Fund may acquire securities subject to repurchase agreements to
generate income for liquidity purposes to meet anticipated redemptions,
or pending the investment of proceeds from sales of Fund shares or
settlement of purchases of portfolio investments. The Fund's repurchase
agreements will be fully collateralized. However, if the seller of the
securities fails to pay the agreed-upon repurchase price on the delivery
date, the Fund's risks may include the costs of disposing of the
collateral for the agreement and losses that might result from any delays
in foreclosing on the collateral. The Fund's investments in repurchase
agreements maturing in more than seven days are subject to the limitation
described above on illiquid or restricted securities. There is no limit
on the amount of the Fund's net assets that may be subject to repurchase
agreements maturing in seven days or less. See "Investment Objective and
Policies - Repurchase Agreements" in the Additional Statement for more
details.
Loans of Portfolio Securities
The Fund has entered into a Securities Lending Agreement and Guaranty
(the "Securities Lending Agreement") with The Bank of New York pursuant
to which portfolio securities of the Fund may be loaned to brokers,
dealers and other financial institutions. The Securities Lending
Agreement provides, among other things, for the division of responsibility
and income between the Fund and The Bank of New York and that loans must
be adequately collateralized and may be made only in conformity with the
Fund's Securities Lending Guidelines. The value of the securities loaned
may not exceed 25% of the value of the Fund's total assets. The Fund
presently does not intend that the value of the securities loaned in the
current fiscal year will exceed 5% of the value of the Fund's total
assets. In connection with securities lending, the Fund might experience
risks of delay in receiving additional collateral, risks of delay in the
return of the loaned securities or loss of rights in the collateral should
the borrower fail financially (although the Fund is the beneficiary of a
guaranty provided by The Bank of New York, under certain circumstances).
See "Investment Objectives and Policies - Loans of Portfolio Securities"
in the Additional Statement for further information.
Borrowing
From time to time, the Fund may increase its ownership of securities
by borrowing up to 10% of the value of its net assets from banks on an
unsecured basis and investing the borrowed funds (on which the Fund will
pay interest), subject to the 300% asset coverage requirement of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
Purchasing securities with borrowed funds is a speculative investment
method known as leverage. There are risks associated with leveraging
purchases of portfolio securities by borrowing, including possible
reduction of income and increased fluctuation of net asset value per
share. The Fund may be subject to relatively greater risks and costs than
a fund that does not use leverage. For further discussion of such risks
and other details, see "Financial Highlights" above and "Investment
Objective and Policies -Borrowing" in the Additional Statement.
Covered Call Options and Hedging
The Fund may write (i.e., sell) covered call options to generate
income for liquidity or defensive reasons. For hedging purposes it may
purchase certain put and call options, Stock Index Futures (described
below) and options on Stock Index Futures and broadly-based stock indices
and enter into interest rate swap transactions, all of which are referred
to as "Hedging Instruments." In general, the Fund may use Hedging
Instruments (i) to attempt to protect against declines in the market value
of the Fund's portfolio securities or Stock Index Futures, and thus
protect the Fund's net asset value per share against downward market
trends, or (ii) to establish a position in the equity securities markets
as a temporary substitute for purchasing particular equity securities.
The Fund will not use Hedging Instruments for speculation. The principal
risks associated with covered calls and hedging are described below and
in greater detail under "Investment Objective and Policies - Covered Calls
and Hedging" in the Additional Statement.
-Writing Covered Call Options. The Fund may sell (i.e., write) call
options ("calls") if: (i) after any sale, not more than 25% of the Fund's
total assets are subject to calls; (ii) the calls are listed on a domestic
securities exchange or quoted on the Automated Quotation System of the
National Association of Securities Dealers, Inc. ("NASDAQ"); and (iii) the
calls are "covered," i.e., the Fund owns the securities or Futures subject
to the call (or other securities acceptable for applicable escrow
arrangements) while the call is outstanding.
-Purchasing Puts and Calls. The Fund may purchase put options
("puts") which relate to: (i) securities held by it; (ii) Stock Index
Futures (whether or not it holds such Stock Index Futures in its
portfolio); or (iii) broadly-based stock indices. The Fund may not write
puts other than those it previously purchased. The Fund may purchase
calls as to securities, broadly-based stock indices or Stock Index
Futures, or to effect a "closing purchase transaction" to terminate its
obligation on a call it has previously written. A call or put may be
purchased only if, after such purchase, the value of all put and call
options held by the Fund would not exceed 5% of the Fund's total assets.
-Stock Index Futures. The Fund may buy and sell futures contracts
only if they relate to broadly-based stock indices ("Stock Index Futures"
or "Futures"). A stock index is "broadly-based" if it includes stocks
that are not limited to issuers in any particular industry or group of
industries. Stock Index Futures 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 underlying
stocks in the index is made.
-Foreign Currency Options. The Fund may purchase and write puts and
calls on foreign currencies that are traded on a securities or commodities
exchange or quoted by major recognized dealers in such options, for the
purpose of protecting against declines in the dollar value of foreign
securities and against increases in the dollar cost of foreign securities
to be acquired. If a rise is anticipated 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.
-Forward Contracts. The Fund may enter into foreign currency
exchange contracts ("Forward Contracts"), which obligate the seller to
deliver and the purchaser to take a specific amount of foreign currency
at a specific future date for a fixed price. The Fund may enter into a
Forward Contract in order to "lock in" the U.S. dollar price of a security
denominated in a foreign currency which it has purchased or sold but which
has not yet settled, or to protect against a possible loss resulting from
an adverse change in the relationship between the U.S. dollar and a
foreign currency. There is a risk that 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. Forward
Contracts include standardized foreign currency futures contracts which
are traded on exchanges and are subject to procedures and regulations
applicable to other Futures. The Fund may also enter into a Forward
Contract to sell a foreign currency denominated in a currency other than
that in which the underlying security is denominated. This is done in the
expectation that there is a greater correlation between the foreign
currency of the Forward Contract and the foreign currency of the
underlying investment than between the U.S. dollar and the foreign
currency of the underlying investment. This technique is referred to as
"cross hedging." The success of cross hedging is dependent on many
factors, including the ability of the Manager to correctly identify and
monitor the correlation between foreign currencies and the U.S. dollar.
To the extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the cross
currency hedge. The Fund will not speculate in foreign currency exchange.
There is no limitation as to the percentage of the Fund's assets that may
be committed to foreign currency exchange contracts. The Fund does not
enter into such Forward Contracts or maintain a net exposure in such
contracts to the extent that the Fund would be obligated to deliver an
amount of foreign currency in excess of the value of the Fund's assets
denominated in that currency, or enter into a "cross hedge" unless it is
denominated in a currency or currencies that the Manager believes will
have price movements that tend to correlate closely with the currency in
which the investment being hedged is denominated. See "Investment
Objective and Policies - Additional Information about Hedging Instruments
and Their Use - Tax Aspects of Covered Calls and Hedging Instruments" in
the Additional Statement for a discussion of the tax treatment of Forward
Contracts.
-Interest Rate Swap Transactions. The Fund may enter into interest
rate swaps. In an interest rate swap, the Fund and another party exchange
their respective commitments to pay or receive interest on a security
(e.g., an exchange of floating rate payments for fixed rate payments).
The Fund will not use interest rate swaps for leverage. Swap transactions
will be entered into only as to security positions held by the Fund. The
Fund may not enter into swap transactions with respect to more than 50%
of its total assets. The Fund will segregate liquid assets (e.g., cash,
U.S. Government securities or other appropriate high grade debt
obligations) equal to the net excess, if any, of its obligations over its
entitlements under the swap and will mark to market that amount daily.
The interest rate risk of a swap is that the Fund will incur a net payment
obligation as a result of movements in interest rates. The credit risk
of a swap depends on the counterparty's ability to perform. The value of
the swap may decline if the counterparty's creditworthiness deteriorates.
If the counterparty defaults, the Fund risks the loss of the net amount
of interest payments that it is contractually entitled to receive. The
Fund may be able to reduce or eliminate its exposure to losses under swap
agreements either by assigning them to another party, or by entering into
an offsetting swap agreement with the same counterparty or another
creditworthy counterparty. See "Investment Objective and Policies -
Covered Calls and Hedging" in the Additional Statement for further
details.
-Risks of Options and Futures Trading. "Investment Objective and
Policies - Covered Calls and Hedging" in the Additional Statement contains
more information about options and Futures, Forward Contracts, options on
Futures contracts and foreign currencies, interest rate swap transactions,
asset segregation requirements for Forward Contracts, the payment of
premiums for options trades, and on the tax effects, risks and possible
benefits to the Fund from options trading, and information as to the
Fund's other limitations (which are not fundamental policies) on
investment in Futures and options thereon. There are certain risks in
writing calls. If a call written by the Fund is exercised, the Fund
forgoes any profit from any increase in the market price above the call
price of the underlying investment on which the call was written. The
principal risks of Futures trading are: (a) possible imperfect correlation
between the prices of the Futures and the market value of the debt
securities in the Fund's portfolio; (b) possible lack of a liquid
secondary market for closing out a Futures position; (c) the need for
additional skills and techniques beyond those required for normal
portfolio management; and (d) losses on Futures resulting from interest
rate movements not anticipated by the Manager.
Short Sales Against-the-Box
The Fund may not sell securities short except in transactions
referred to as "short sales against-the-box." No more than 15% of the
Fund's net assets will be held as collateral for such short sales at any
one time. See "Investment Objective and Policies - Short Sales Against-
the-Box" in the Additional Statement for further details.
Investment Restrictions
The Fund has certain investment restrictions that, together with its
investment objective, are fundamental policies changeable only by a vote
of a "majority" (as defined in the Investment Company Act) of the Fund's
outstanding voting securities. Under some of those restrictions, the Fund
cannot: (1) buy securities issued or guaranteed by any one issuer (except
the U.S. Government or any of its agencies or instrumentalities) if with
respect to 75% of its total assets, more than 5% of the Fund's total
assets would be invested in securities of that issuer, or the Fund would
then own more than 10% of that issuer's voting securities; (2) concentrate
investments in any particular industry; therefore the Fund will not
purchase the securities of companies in any one industry if, thereafter,
more than 25% of the value of the Fund's assets would consist of
securities of companies in that industry; or (3) deviate from the
percentage requirements listed under "Borrowing," "Warrants and Rights"
and "Short Sales Against-the-Box." The percentage restrictions described
above and in the Additional Statement apply only at the time of investment
and require no action by the Fund as a result of subsequent changes in
value of the investments or size of the Fund. A supplementary list of
investment restrictions is contained in "Investment Restrictions" in the
Additional Statement.
Management of the Fund
The Board has overall responsibility for the management of the Fund
under the laws of Massachusetts governing the responsibilities of trustees
of business trusts. Subject to the authority of the Board, the Manager
is responsible for the day-to-day management of the Fund's business,
supervises the investment operations of the Fund and the composition of
its portfolio and furnishes the Fund advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities pursuant to an investment advisory agreement (the "Agreement")
with the Fund.
Subject to the Agreement, the Manager may 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 broker-dealers for the Fund's
portfolio transactions. Under the Agreement, the Fund pays a management
fee to the Manager at the following annual rates, which are higher than
those paid by most other investment companies: 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; 0.60% of the next
$200 million; and 0.57% of aggregate net assets in excess of $1.0 billion.
"Investment Management Services" in the Additional Statement contains more
information about the Agreement, including a more complete description of
expense reimbursement arrangements, exculpation provisions and brokerage
practices of the Fund.
William B. Wilby, a Vice President of the Manager, serves as the
Portfolio Manager and a Vice President of the Fund and has been primarily
responsible for the day-to-day management of the Fund's portfolio since
December 1992. During the past five years, Mr. Wilby has also served as
an officer and portfolio manager for other OppenheimerFunds, prior to
which he was international investment strategist at Brown Brothers,
Harriman & Co. and a Managing Director and Portfolio Manager at AIG Global
Investors. For more information about the Fund's other officers and
Trustees, see "Trustees and Officers" in the Additional Statement.
The Manager has operated as an investment adviser since April 30,
1959. The Manager and its affiliates currently advise U.S. investment
companies with assets aggregating over $25 billion as of September 30,
1993, and having more than 1.8 million shareholder accounts. The Manager
is owned by Oppenheimer Acquisition Corp., a holding company owned in part
by senior management of the Manager and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company which also advises pension plans and investment companies.
How to Buy Shares
Alternative Sales Arrangements
Two classes of shares of the Fund are offered under the Fund's
"Alternative Sales Arrangements." The investor may elect to purchase
shares with a sales charge imposed (1) at the time of purchase or on a
contingent deferred basis on redemptions of shares purchased in amounts
over $1 million (the "Class A shares"), or (2) on a contingent deferred
basis (the "Class B shares"). The contingent deferred sales charge will
be imposed on most redemptions of Class B shares within six years of
purchase. The Alternative Sales Arrangements permit an investor to choose
the method of purchasing shares that is more beneficial to that investor
depending on the amount of the purchase, the length of time the investor
expects to hold the shares and other relevant circumstances. The Fund's
distributor, Oppenheimer Funds Distributor, Inc. (the "Distributor"), will
not knowingly accept any order of $1 million or more for Class B shares
of one or more of the "Eligible Funds" listed in "Right of Accumulation"
below on behalf of a single investor (not including dealer "street name"
or omnibus accounts) because it generally will be more advantageous for
such investor to purchase Class A shares of such Eligible Fund(s) instead.
Investors should understand that the purpose and function of the deferred
sales charge and asset-based sales charge with respect to Class B shares
are the same as those of the initial sales charge with respect to Class
A shares. Any financial intermediaries or other person entitled to
receive compensation for selling or servicing Fund shares may receive
different compensation with respect to one class of shares than the other.
The two classes of shares each represent an interest in the same
portfolio of investments of the Fund. However, as described in this
Prospectus, each class has different shareholder privileges and features.
The net income attributable to Class B shares and the dividends payable
on Class B shares will be reduced by incremental expenses borne solely by
that class, including the asset-based sales charge to which Class B shares
are subject. For further information, see "Purchase, Redemption and
Pricing of Shares" in the Additional Statement.
The Fund's shares of either class may be purchased through any dealer
or broker that has a sales agreement with the Distributor, a subsidiary
of the Manager. There are two ways to make an initial investment: either
(1) complete an OppenheimerFunds New Account Application and mail it with
payment to the Distributor at P.O. Box 5270, Denver, Colorado 80217 (if
no dealer or broker is named in the Application, the Distributor will be
listed as the dealer of record); or (2) order the shares through your
dealer or broker. Be certain to specify whether you intend to purchase
Class A shares or Class B shares. If no such instructions are provided,
initial investments will be made in Class A shares and subsequent
investments will be made in the same class as the most recent previous
investment.
The minimum initial investment is $1,000, except as otherwise
described in this Prospectus. Subsequent purchases must be at least $25
and may be made (1) through authorized dealers or brokers, (2) by
forwarding payment to the Distributor at the address above with the names
of all account owners, the account number and the name of the Fund, (3)
automatically through Asset Builder Plans, or (4) by telephone using
AccountLink, described below. Under an Asset Builder Plan, military
allotment plan, 403(b)(7) custodial plan or Automatic Exchange Plan,
initial and subsequent investments must be at least $25. The minimum
initial and subsequent purchase requirements are waived on purchases made
by reinvesting dividends from any of the "Eligible Funds" listed in "Right
of Accumulation," below, or by reinvesting distributions from unit
investment trusts for which reinvestment arrangements have been made with
the Distributor. No share certificates will be issued for Class B shares,
and no share certificates will be issued for Class A shares unless
specifically requested in writing by an investor or the dealer or broker.
The net asset value per share of each class is determined as of 4:00
P.M. (all references to time in this Prospectus mean New York time) each
day The New York Stock Exchange is open (a "regular business day") by
dividing the value of the Fund's net assets attributable to that class by
the number of shares of the class outstanding. The Board has established
procedures for valuing the Fund's securities. In general, those
valuations are based on market value, with special provisions for: (i)
securities not having readily-available market quotations; (ii) short-term
debt securities; and (iii) covered calls and Hedging Instruments. Further
details are in "Purchase, Redemption and Pricing of Shares" in the
Additional Statement. The net asset values per share of Class A and Class
B shares are expected to be substantially the same; however, from time to
time the net asset value of each class may differ, due to differences in
expenses borne by each class, as described under "Purchase, Redemption and
Pricing of Shares - Dual Class Methodology" in the Additional Statement.
All purchase orders received by the Distributor at its address in
Denver, Colorado prior to 4:00 P.M. on a regular business day are
processed at that day's offering price. However, an order received by the
Distributor from a dealer or broker after the offering price is determined
that day will receive such offering price if the order was received by
the dealer or broker from its customer prior to 4:00 P.M., and was
transmitted to and received by the Distributor prior to its close of
business that day (normally 5:00 P.M.). Purchase orders received on other
than a regular business day will be executed on the next succeeding
regular business day. The Distributor, in its sole discretion, may accept
or reject any order for the purchase of the Fund's shares. The sale of
shares will be suspended during any period in which the determination of
net asset value is suspended, and may be suspended by the Board whenever
the Board judges it in the best interest of the Fund to do so.
Class A Shares
Class A shares are sold at their offering price, which (as that term
is used in this Prospectus and the Additional Statement) is net asset
value plus a front-end sales charge, except that as to certain purchases
described below that are not subject to a front-end sales charge, the
offering price is net asset value. The offering price is determined as
of 4:00 P.M. each regular business day. Class A shares may not be
converted into Class B shares.
The following table shows the regular front-end sales charge rates
for Class A shares for a "single purchaser" (defined below), together
with the dealer discounts paid to authorized dealers and the agency
commissions paid to authorized brokers (collectively, "commissions"):
Front-End
Front-End Sales Charge
Sales Charge as Approximate
as Percentage Percentage Commission as
of Offering of Amount Percentage of
Amount of Purchase Price 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%
$1 million or more None* None* None*
* See "Class A Contingent Deferred Sales Charge," below.
Under certain circumstances, commissions up to the amount of the
entire sales charge may be reallowed to dealers or brokers, who then may
be deemed to be "underwriters" as defined in the Securities Act.
Commission rates may vary among the funds for which the Manager and its
affiliates act as investment advisers.
The Distributor may advance up to 13 months' commissions to
dealers that have entered into special arrangements with the Distributor
as to purchases made by their clients under Oppenheimer Asset Builder
Plans. If a registered representative of a securities dealer sells more
than $2.5 million of Class A shares of "Eligible Funds" other than "Money
Market Funds" (as that term is defined below) in a calendar year, the
dealer firm is eligible to send such representative, with a guest, to a
three-day sales conference (generally held in a resort), if one is
sponsored and held by the Distributor; or in lieu of sending such
representative that firm may, at its option, receive the equivalent cash
value of such award as additional commission. The Distributor may, from
time to time, enter into arrangements with specific dealers whereby the
Distributor may make additional payments to that dealer based, in part,
on that dealer meeting certain sales criteria. Such additional payments
may be based on sales for a specific period of time, shares of certain or
all of the "Eligible Funds" held by the dealer and/or its customers, or
some combination thereof.
Dealers whose sales of shares of "Eligible Funds" other than
"Money Market Funds" under OppenheimerFunds-sponsored 403(b)(7) custodial
plans exceed a rate of $5 million per year, calculated per calendar
quarter, will receive monthly one-half of the Distributor's retained
commission on such sales. Dealers whose sales of such plans exceed a rate
of $10 million per year, calculated per calendar quarter, will receive the
Distributor's entire retained commission on such sales.
- Class A Contingent Deferred Sales Charge. On certain purchases
of Class A shares of any one or more "Eligible Funds" by a "single
purchaser" aggregating $1 million or more, the Distributor will pay
authorized dealers a commission equal to the sum of 1.0% of the first $2.5
million, 0.50% of the next $2.5 million, and 0.25% of share purchases in
excess of $5 million. However, that commission will be paid only on the
amount of those share purchases in excess of $1 million that were not
previously subject to a front-end sales charge and dealer commission (the
shares with respect to which this commission is paid are called "Class A
CDSC Shares"). A contingent deferred sales charge (the "Class A CDSC")
will be deducted from the redemption proceeds of Class A CDSC Shares
redeemed within 18 months of the end of the calendar month of their
purchase. The Class A CDSC will be an amount equal to 1.0% of the lesser
of either (1) the aggregate net asset value of the Class A CDSC Shares
(not including shares purchased by reinvestment of dividends or capital
gains) or (2) the original cost of such shares. However, the total Class
A CDSC paid on the redemption of those shares shall not exceed the
aggregate commissions paid to dealers on all Class A CDSC Shares of all
"Eligible Funds" purchased by that "single purchaser."
The Class A CDSC does not apply to purchases at net asset value
described in "Other Circumstances" below and will be waived in the case
of redemptions of shares made for: (i) retirement distributions (or loans)
to participants or beneficiaries from retirement plans qualified under
Section 401(a) of the Internal Revenue Code, or from Individual Retirement
Accounts ("IRAs"), 403(b)(7) custodial plans, deferred compensation plans
created under Section 457 of the Internal Revenue Code or other employee
benefit plans (collectively, "Retirement Plans"); (ii) returns of excess
contributions to Retirement Plans; (iii) Automatic Withdrawal Plan
payments limited to no more than 12% of the original account value
annually; and (iv) involuntary redemptions of shares by operation of law
or under procedures set forth in the Fund's Declaration of Trust or as
adopted by the Board (collectively, "Involuntary Redemptions"). See
"Transfers" in "Purchase, Redemption and Pricing of Shares" in the
Additional Statement for further details.
Some or all of the proceeds of redeemed shares on which a Class
A CDSC was paid at the time of redemption and which are subsequently
reinvested under the "Reinvestment Privilege" (described below) may be
reinvested within six months of redemption without sales charge at net
asset value on the reinvestment date if the investor notifies the
Distributor that the privilege applies. Additionally, no Class A CDSC is
charged on exchanges, pursuant to the Fund's Exchange Privilege (described
below), of shares purchased subject to a Class A CDSC, except that if the
Class A shares acquired by exchange are redeemed within 18 months of the
end of the calendar month of the initial purchase of the exchanged shares,
the Class A CDSC will apply. In determining whether a Class A CDSC is
payable, and the amount of any such charge, shares not subject to a CDSC
are redeemed first, including shares purchased by reinvestment of
dividends and capital gains distributions, and then other shares are
redeemed in the order of purchase.
- Reduced Sales Charges for Class A Purchases. The Class A sales
charge rates in the table above may be reduced as follows:
Right of Accumulation. In calculating the sales charge rate
applicable to current purchases of Class A shares, a "single purchaser"
is entitled to accumulate current purchases with the greater of: (1)
amounts previously paid for, or (2) the current value (at offering price)
of, Class A shares of certain other "Eligible Funds" and of the Fund if
sold subject to an initial sales charge and if the investment is still
held in one of the Eligible Funds. The Eligible Funds are those for which
the Distributor or an affiliate acts as the distributor and include the
following: (i) the Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer
California Tax-Exempt Fund, Oppenheimer Pennsylvania Tax-Exempt Fund,
Oppenheimer Florida Tax-Exempt Fund, Oppenheimer High Yield Fund,
Oppenheimer Total Return Fund, Inc., Oppenheimer Mortgage Income Fund,
Oppenheimer Insured Tax-Exempt Bond Fund, Oppenheimer Intermediate Tax-
Exempt Bond Fund, Oppenheimer Investment Grade Bond Fund, Oppenheimer
Value Stock Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer
Strategic Income Fund, Oppenheimer Strategic Investment Grade Bond Fund,
Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short-
Term Income Fund, Oppenheimer Discovery Fund, Oppenheimer Target Fund,
Oppenheimer Champion High Yield Fund, Oppenheimer Time Fund, Oppenheimer
U.S. Government Trust, Oppenheimer Government Securities Fund, Oppenheimer
Global Environment Fund, Oppenheimer Main Street Income & Growth Fund,
Oppenheimer Main Street California Tax-Exempt Fund, Oppenheimer Global
Growth & Income Fund, Oppenheimer Global Bio-Tech Fund, Oppenheimer Fund,
Oppenheimer Asset Allocation Fund, Oppenheimer Special Fund, Oppenheimer
Equity Income Fund, and Oppenheimer Gold & Special Minerals Fund; and (ii)
the following "Money Market Funds": Centennial Tax Exempt Trust,
Centennial Money Market Trust, Centennial America Fund, L.P., Centennial
Government Trust, Centennial California Tax Exempt Trust, Centennial New
York Tax Exempt Trust, Oppenheimer Money Market Fund, Inc., Daily Cash
Accumulation Fund, Inc., Oppenheimer Cash Reserves and Oppenheimer Tax-
Exempt Cash Reserves. There is an initial sales charge on the purchase
of Class A shares of each Eligible Fund except the Money Market Funds
(under certain circumstances described herein, redemption proceeds of
Money Market Fund shares may be subject to a CDSC). The reduced sales
charge applies only to current purchases.
The term "single purchaser" refers to: (i) an individual; (ii) an
individual and spouse purchasing shares of the Fund for their own account
or for trust or custodial accounts for their minor children; or (iii) a
fiduciary purchasing for any one trust, estate or fiduciary account,
including employee benefit plans created under Sections 401 or 457 of the
Internal Revenue Code, including related plans of the same employer. To
be entitled to a reduced sales charge under the Right of Accumulation, at
the time of purchase the purchaser must ask the Distributor for such
entitlement and provide the account number(s) for shares of Eligible Funds
owned by the "single purchaser," and the age of any minor children for
whom shares are held.
Letter of Intent. By initially investing at least $1,000 and
submitting a Letter of Intent (the "Letter") to the Distributor, a "single
purchaser" may purchase Class A shares of the Fund and other Eligible
Funds (other than the Money Market Funds) during a 13-month period at the
reduced sales charge rates, or at net asset value but subject to the Class
A CDSC, if applicable, applying to the aggregate amount of the intended
purchases stated in the Letter. The Letter may apply to purchases made
up to 90 days before the date of the Letter. The Fund and the Distributor
reserve the right to amend or terminate such program at any time without
prior notice. For further details, including escrow requirements, see
"Letters of Intent" in the Additional Statement.
Other Circumstances. No sales charge is imposed on Class A shares
of the Fund: (i) sold to the Manager or its affiliates, or to present and
former officers, trustees or directors and employees (and their "immediate
families," as defined in "Reduced Sales Charges" in the Additional
Statement) of the Fund, the Manager and its affiliates, and to retirement
plans established by them for employees; (ii) issued in plans of
reorganization, such as mergers, asset acquisitions and exchange offers,
to which the Fund is a party; (iii) sold to registered investment
companies or to separate accounts of insurance companies having an
agreement with the Manager or the Distributor; (iv) sold to dealers or
brokers that have a sales agreement with the Distributor, for their own
account or for retirement plans for their employees, or sold to employees
(and their spouses) of such dealers or brokers or of financial
institutions, which have entered into a sales arrangement with such dealer
or broker or the Distributor (and are identified to the Distributor by
such dealer or broker); the purchaser must certify to the Distributor at
the time of purchase that such purchase is for its own account (or for the
benefit of such employee's minor children); (v) purchased by the
reinvestment of (a) loan repayments by a participant in a retirement plan
for which the Manager or its affiliates act as sponsor, or (b) dividends
or other distributions reinvested from the Fund or other "Eligible Funds"
(other than the Cash Reserves Funds) or from unit investment trusts for
which reinvestment arrangements have been made with the Distributor; (vi)
sold to unit investment trusts as an investment for previously purchased
and unexpired investment plans or annuity contracts permitting additional
periodic purchases of Fund shares; and (vii) sold to dealers, brokers or
registered investment advisers that have entered into an agreement with
the Distributor providing specifically for the use of Fund shares in
particular investment products made available to the clients of the
dealer, broker or registered investment adviser. "Reduced Sales Charges"
in the Additional Statement discusses this policy.
- Class A Service Plan. The Fund has adopted a service plan (the
"Class A Plan") pursuant to Rule 12b-1 of the Investment Company Act under
which the Fund will reimburse the Distributor quarterly for a portion of
its costs incurred in connection with the personal service and maintenance
of accounts that hold Class A shares. The Distributor will use such fees
received from the Fund in their entirety: (i) to compensate brokers,
dealers, banks and other institutions ("Recipients") each quarter for
providing personal service and maintenance of accounts that hold Class A
shares, and (ii) to reimburse itself (to the extent authorized by the
Board) for its other expenditures under the Class A Plan and its direct
costs for personal service and maintenance of accounts. For the fiscal
year ended September 30, 1993 the Board has not presently authorized any
reimbursement to the Distributor under (ii) above. The services to be
provided under the Class A Plan include, but are not limited to, the
following: answering routine inquiries from the Recipient's customers
concerning the Fund, providing such customers with information on their
investment in Class A 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.
The Distributor will be reimbursed only for quarterly payments
made to each Recipient at a rate not to exceed 0.0625% (0.25% annually)
of the average during the calendar quarter of the aggregate net asset
value of Class A shares of the Fund, computed as of the close of each
business day, held in accounts of the Recipient or its customers; that
rate may be reduced for such assets which are attributable to sales prior
to April 1, 1991.
The Class A Plan has the effect of increasing annual expenses of
Class A shares of the Fund by up to 0.25% of the class's average annual
net assets from what its expenses would otherwise be. In addition, the
Manager and the Distributor may, under the Class A Plan, from time to time
from their own resources (which, as to the Manager, may include profits
derived from the advisory fee it receives from the Fund) make similar
payments to Recipients for distribution and administrative services they
perform. For further details, see "Distribution and Service Plans" in the
Additional Statement.
Class B Shares
Class B shares are sold at net asset value per share without the
imposition of a sales charge at the time of purchase.
- Class B Contingent Deferred Sales Charge. A contingent deferred
sales charge (the "Class B CDSC") will be deducted from the redemption
proceeds of Class B shares redeemed within six years of the end of the
calendar month of their purchase (not including shares purchased by
reinvestment of dividends or capital gains). The charge will be assessed
on an amount equal to the lesser of the then current net asset value or
the original purchase price of the Class B shares being redeemed.
Accordingly, no Class B CDSC will be imposed on amounts representing
increases in net asset value above the initial purchase price. In
determining whether a Class B CDSC applies to a redemption, Class B shares
are redeemed in the following order: (i) those acquired pursuant to
reinvestment of dividends or distributions, (ii) those held for over six
years, and (iii) those held longest during the six-year period.
Proceeds from the Class B CDSC are paid to the Distributor to
reimburse it for its expenses related to providing distribution-related
services to the Fund in connection with the sale of Class B shares. The
combination of the Class B CDSC and the distribution fee retained by the
Distributor (as described under "Class B Distribution and Service Plan")
facilitates the sale of Class B shares without a sales charge being
deducted at the time of purchase. Any CDSC required to be imposed on
Class B share redemptions will be assessed according to the following
schedule:
Contingent
Year(s) Since End Deferred
of Month in Which Sales Charge
Purchase Order in That Year (as %
Was Accepted of Applicable Proceeds)
0-1 5.0%
1-2 4.0%
2-3 3.0%
3-4 3.0%
4-5 2.0%
5-6 1.0%
6 or more None
In the table above, a "year" is a period of twelve months. In
determining the amount of the Class B CDSC that applies and when Class B
shares convert as described in the following paragraph, all purchases
shall be considered as having been made on the first regular business day
of the month in which the purchase was made. The Class B CDSC will be
waived upon the request of the shareholder for redemptions for: (1)
distributions to participants or beneficiaries from Retirement Plans,
which distributions are made either (a) under an Automatic Withdrawal Plan
(described under "How to Redeem Shares") after the participant attains age
59-1/2, and which are limited to no more than 10% of the account value
annually (determined in the first year, as of the date the redemption
request is received by the Transfer Agent, and in subsequent years, as of
the most recent anniversary of that date) or (b) following the
participant's or beneficiary's (i) "disability" (as defined in the
Internal Revenue Code) that occurs since the account was established or
(ii) death; (2) redemptions other than from Retirement Plans following the
(i) death or (ii) complete disability (as evidenced by a certificate from
the U.S. Social Security Administration), of all persons individually
owning such shares of record and not as fiduciaries or agents that
occurred since the account was established and (3) returns of excess
contributions to such Retirement Plans. In addition, no Class B CDSC is
imposed on shares of the Fund (i) sold to the Manager or its affiliates;
(ii) sold to registered investment companies or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor; (iii) issued in plans of reorganization, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or
(iv) redeemed in Involuntary Redemptions. See "Transfers" in "Purchase,
Redemption and Pricing of Shares" in the Additional Statement for details.
- Class B Conversion Feature. At the end of the month, seventy-two
months after the end of the month in which an investor's purchase order
for Class B shares is accepted, such "Matured Class B shares"
automatically will convert to Class A shares, on the basis of the relative
net asset value of the two classes, without the imposition of any sales
load or other charge. Each time any Matured Class B shares convert to
Class A shares, any Class B shares acquired by the reinvestment of
dividends or distributions on such Matured Class B shares that are still
held will also convert to Class A shares, on the same basis. The
conversion feature is intended to relieve holders of Matured Class B
shares of the asset-based sales charge under the Class B Plan (as defined
below) after such shares have been outstanding long enough that the
Distributor may have been compensated for distribution expenses related
to such shares.
The conversion of Matured Class B shares to Class A shares is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or a tax adviser, to
the effect that the conversion of Matured Class B shares does not
constitute a taxable event for the holder under Federal income tax law.
If such a private letter ruling or opinion is no longer available, the
automatic conversion feature may be suspended, in which event no further
conversions of Matured Class B shares would occur while such suspension
remained in effect. Although Matured Class B shares could then be
exchanged for Class A shares on the basis of the relative net asset value
of the two classes, without the imposition of a sales charge or fee, such
exchange could constitute a taxable event for the holder, and absent such
exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.
- Class B Distribution and Service Plan. The Fund has adopted a
plan of distribution (the "Class B Plan") pursuant to Rule 12b-1 of the
Investment Company Act, under which it will compensate the Distributor for
its services and costs incurred in connection with the distribution and
service of the Fund's Class B shares. Pursuant to the Class B Plan, the
Fund will pay the Distributor an asset-based sales charge of 0.75% per
annum on Class B shares outstanding for six years or less, plus a service
fee of 0.25% per annum, in each case on the average during the month (as
to the asset-based sales charge) and the calendar quarter (as to the
service fee) of the aggregate net asset value of Class B shares of the
Fund computed as of the close of each business day. Asset-based sales
charges and service fees will be paid by the Fund to the Distributor
monthly and quarterly, respectively.
The Distributor will use the service fee payment to compensate
Recipients for providing personal service and the maintenance of
shareholder accounts that hold Class B shares, examples of which are
described under "Class A Service Plan," above. Service fee payments by
the Distributor to Recipients will be made (i) in advance for the first
year Class B shares are outstanding, following the purchase of such
shares, in an amount equal to 0.25% of the average during the calendar
quarter of the aggregate net asset value of the Class B shares, computed
as of the close of each business day, purchased by the Recipient or its
customers and (ii) thereafter, on a quarterly basis, at an annual rate of
0.25% of the average during the calendar quarter of the aggregate net
asset value of Class B shares, computed as of the close of each business
day, held in accounts of the Recipient or its customers. Other terms and
options under the Class B Plan for payment of the service fee by the
Distributor to Recipients, and other terms and conditions of the Class B
Plan are described under "Distribution and Service Plans" in the
Additional Statement.
The Distributor currently expects to pay sales commissions from its
own resources to authorized dealers or brokers at the time of sale equal
to 3.75% of the purchase price of Fund shares sold by such dealer or
broker, and to advance the first year service fee of 0.25%. The asset-
based sales charge and service fee payments by the Fund to the Distributor
under the Class B Plan are intended to allow it to recoup such sales
commissions and service fee advances, as well as financing costs. The
Distributor anticipates that it will take a number of years to recoup the
sales commissions paid to authorized brokers or dealers from the Fund's
payments to the Distributor under the Class B Plan.
Asset-based sales charge payments are designed to permit an investor
to purchase shares of the Fund without the assessment of a front-end sales
load and at the same time permit the Distributor to compensate brokers and
dealers in connection with the sale of shares of the Fund. The
Distributor's actual distribution expenses for any given year may exceed
the aggregate of payments received pursuant to the Class B Plan and
contingent deferred sales charges, and such expenses will be carried
forward and paid in future years. The Fund will be charged only for
interest expenses, carrying charges or other financial costs that are
directly related to the carry-forward of actual distribution expenses.
At September 30, 1993, the end of the Class B Plan period, the Distributor
had incurred unreimbursed expenses under the Class B Plan of $243,297
(equal to 4.0% of the Fund's net assets attributable to Class B shares of
the Fund on that date) which have been carried over into the present Class
B Plan year.
The Class B Plan contains a provision that contractually obligates
the Fund to continue payments to the Distributor for certain expenses it
incurred for Class B shares sold prior to termination of the Class B Plan.
If the Class B Plan is terminated, the Distributor is entitled to continue
to receive the asset-based sales charge of 0.75% per annum on Class B
shares sold prior to termination until the Distributor has recovered its
Class B distribution expenses (incurred prior to termination) from such
payments and from the Class B CDSC.
The Fund believes that under applicable accounting standards, its
obligation under the Class B Plan to pay any asset-based sales charges in
future periods is not required to be recognized as a liability. In the
future, if applicable accounting standards should be deemed to require
that obligation to be recognized as a liability, a decrease in the net
asset value per share of Class B shares could result. Were that to occur,
such decrease would affect all Class B shares regardless of how long the
shares were held. Furthermore, Class B shareholders would continue to
remain subject to the Class B CDSC. The accounting treatment of the
Fund's obligations under the Class B Plan for future payments is discussed
in "Distribution and Service Plans" in the Additional Statement. The
accounting standards now used are currently under review by the American
Institute of Certified Public Accountants and it is possible that those
standards will change and that the Class B Plan would be changed as a
result.
The Class B Plan has the effect of increasing annual expenses of
Class B shares of the Fund by up to 1.00% of the class's average annual
net assets from what its expenses would otherwise be. In addition, the
Manager and the Distributor may, under the Class B Plan, from time to time
from their own resources (which, as to the Manager, may include profits
derived from the advisory fee it receives from the Fund) make payments to
Recipients for distribution and administrative services they perform. For
further details, see "Distribution and Service Plans" in the Additional
Statement.
Purchase Programs for Class A and Class B Shares
- AccountLink. OppenheimerFunds AccountLink is a means to link a
shareholder's Fund account with an account at a U.S. bank or other
financial institution that is an Automated Clearing House ("ACH") member.
AccountLink can be used to transmit funds by electronic funds transfers
for account transactions, including subsequent share purchases. The
minimum investment by AccountLink is $25. Purchases of up to $250,000 may
be made by telephone using AccountLink (the maximum is $100,000 if the
transaction is done by PhoneLink, described below). To speak to service
operators to initiate such purchases, call the Distributor at 1-800-852-
8457. All such calls will be recorded. To initiate such purchases
automatically using PhoneLink, call 1-800-533-3310. Shares will be
purchased on the regular business day the Distributor is instructed to
initiate the ACH 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 three
days after the ACH transfer is initiated. If such Federal Funds are
received after that time, dividends will begin to accrue on the next
regular business day after such Federal Funds are received.
AccountLink may also be used as a means of transmitting redemption
proceeds to a designated bank account (see "How to Redeem Shares") or to
transmit distributions paid by the Fund directly to a bank account (see
"Dividends, Distributions and Taxes - Dividends and Distributions").
AccountLink privileges must be requested on the application used to buy
shares or the dealer settlement instructions establishing the account, or
on subsequent signature-guaranteed instructions to the Transfer Agent from
all shareholders of record for an account, and such privileges thereupon
apply to each shareholder of record and the dealer representative of
record unless and until the Transfer Agent receives written instructions
from a shareholder of record canceling such privileges. Changes of bank
account information must be made by signature-guaranteed instructions to
the Transfer Agent by all shareholders of record for an account. The
Transfer Agent, the Fund and the Distributor have adopted reasonable
procedures to confirm that telephone instructions under AccountLink
(described above) and "PhoneLink", "Telephone Redemptions" and the
"Exchange Privilege" (described below) are genuine, by requiring callers
to provide tax identification number(s) and other account data and by
recording calls and confirming such transactions in writing. If the
Transfer Agent and the Distributor do not use such procedures, they may
be liable for losses due to unauthorized transactions, but otherwise they
will not be liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine. The Fund reserves the
right to amend, suspend or discontinue AccountLink privileges at any time
without prior notice.
- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders of the Fund to initiate account
transactions automatically by telephone, including exchanges between
existing accounts (see "Exchange Privilege," below), redemptions (see "How
to Redeem Shares - Telephone Redemptions," below) and purchases (see
"AccountLink," above). PhoneLink transactions may be done automatically
using a touchtone telephone provided that the shareholder uses a Personal
Identification Number ("PIN") which may be obtained through PhoneLink by
calling 1-800-533-3310. If an account has multiple owners, the Transfer
Agent or the Distributor may rely on any instructions initiated through
PhoneLink using a PIN. The Fund reserves the right to amend, suspend or
discontinue PhoneLink privileges at any time without prior notice.
- Asset Builder Plans. Investors may purchase shares of the Fund
(and up to four other Eligible Funds) automatically under Asset Builder
Plans. With AccountLink, Asset Builder Plans may be used to make regular
monthly investments ($25 minimum) from the investor's account at a bank
or other financial institution. See "AccountLink" above for details. 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 Redeem
Shares." Asset Builder Plans also enable shareholders of Oppenheimer Tax-
Exempt Cash Reserves or Oppenheimer Cash Reserves to use those accounts
for monthly automatic purchases of shares of the Fund and up to four other
Eligible Funds.
There is a sales charge on the purchase of certain Eligible Funds,
and an application should be obtained from the Transfer Agent and
completed and a prospectus of the selected fund(s) (available from the
Distributor) should be obtained before initiating payments. The amount
of the Asset Builder investment may be changed or the automatic
investments terminated at any time by writing to the Transfer Agent. A
reasonable period (approximately 15 days) is required after 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.
How to Redeem Shares
Regular Redemption Procedures
To redeem some or all shares in an account (whether or not
represented by certificates) under the Fund's regular redemption
procedures, a shareholder must send the following items to the Transfer
Agent, Oppenheimer Shareholder Services, P.O. Box 5270, Denver, Colorado
80217 (send courier or Express Mail deliveries to 10200 E. Girard Avenue,
Building D, Denver, Colorado 80231): (1) a written request for redemption
signed by all registered owners exactly as the shares are registered,
including fiduciary titles, if any, and specifying the account number and
the dollar amount or number of shares to be redeemed; (2) a guarantee of
the signatures of all registered owners on the redemption request or on
the endorsement on the share certificate or accompanying stock power, by
a U.S. bank, trust company, credit union or savings association, or a
foreign bank having 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, registered
securities association or clearing agency; (3) any share certificates
issued for any of the shares to be redeemed; and (4) any additional
documents which may be required by the Transfer Agent for redemption by
corporations, partnerships or other organizations, executors,
administrators, trustees, custodians, or guardians, or from an
OppenheimerFunds-sponsored retirement plan, or if the redemption is
requested by anyone other than the shareholder(s) of record, or to
demonstrate eligibility for waiver of the Class B CDSC on the grounds of
age or disability. Transfers of shares are subject to similar
requirements.
A signature guarantee is not required for redemptions of $50,000 or
less, requested by and payable to all shareholders of record, to be sent
to the address of record for that account. To avoid delay in redemption
or transfer, shareholders having questions about these requirements should
contact the Transfer Agent in writing or by calling 1-800-525-7048 before
submitting a request. From time to time, the Transfer Agent in its
discretion may waive any or certain of the foregoing requirements in
particular cases. Redemption or transfer requests will not be honored
until the Transfer Agent receives all required documents in the proper
form. Shareholders owning shares of both classes must specify whether
they intend to redeem Class A or Class B shares.
Telephone Redemptions
To redeem shares by telephone through a service representative, call
the Transfer Agent at 1-800-852-8457. To use PhoneLink to redeem shares
automatically, without a service representative, call 1-800-533-3310.
Under either method of telephone redemptions, proceeds may be paid by
check or through AccountLink as described below. The Transfer Agent may
record any calls. Telephone redemptions may not be available if all lines
are busy, and shareholders would have to use the Fund's regular redemption
procedures described above. Requests received by the Transfer Agent prior
to 4:00 P.M. on a regular business day will be processed at the net asset
value per share determined that day. Telephone redemption privileges are
not available for newly purchased (within the prior 15 days) shares for
OppenheimerFunds-sponsored retirement plans, or for shares represented by
certificates.
Telephone redemption privileges apply automatically to each
shareholder and the dealer representative of record unless the Transfer
Agent receives cancellation instructions from a shareholder of record.
If an account has multiple owners, the Transfer Agent may rely on the
instructions of any one owner. Telephone redemption privileges may be
amended, suspended or discontinued by the Fund at any time without prior
notice.
-Telephone Redemptions Paid by Check. For redemption proceeds paid
by check, amounts up to $50,000 may be redeemed by telephone once in each
seven-day period, and the check must be payable to the shareholder(s) of
record and sent to the address of record for the account. Telephone
redemptions paid by check are not available within 30 days of a change of
the address of record.
-Redemptions Paid Through AccountLink. If AccountLink privileges
have been established for an account, any amount may be redeemed by
telephone, wire or written instructions to the Transfer Agent, and the ACH
transfer of the redemption proceeds to the designated bank account
normally will be initiated by the Transfer Agent on the next bank business
day after the redemption. There are no dollar or frequency limitations
on telephone redemptions sent to a designated bank account through
AccountLink. No dividends are paid on the proceeds of redeemed shares
awaiting transmittal by ACH transfer. See "AccountLink" under "How to Buy
Shares" for instructions on establishing this privilege.
Distributions From Retirement Plans
Requests for distributions from OppenheimerFunds-sponsored IRAs,
403(b)(7) custodial plans, or pension or profit-sharing plans for which
the Manager or its affiliates act as sponsors should be addressed to
"First Interstate Bank of Denver, N.A., c/o Oppenheimer Shareholder
Services" at the above address, and 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 redemption requirements above. 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 such plans are subject to additional 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 Trustee, the Fund, the Manager, the Distributor 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 penalties assessed.
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 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 the 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 purchases while participating in an Automatic
Withdrawal Plan. For further details, refer to "Automatic Withdrawal Plan
Provisions" in the Additional Statement. Class B shareholders normally
should not establish withdrawal plans because of the imposition of the
Class B CDSC on such withdrawals (except where the Class B CDSC is waived
as described in "Class B Contingent Deferred Sales Charge").
Shareholders can also authorize the Transfer Agent to exchange a
predetermined amount of shares of the Fund for shares of up to five other
"Eligible Funds" (minimum $25 per fund account) automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. Exchanges made pursuant to such plans are subject to the
conditions and terms applicable to exchanges described in "Exchange
Privilege," below.
Repurchase
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 by the Distributor 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 are received by the dealer or
broker from its customers prior to 4:00 P.M. and are 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 documents, with
signature(s) guaranteed as described above.
Reinvestment Privilege
Within six months of a redemption of Class A shares or Class B
shares on which a Class B CDSC was paid, the investor may reinvest all or
part of the redemption proceeds in Class A shares of the Fund or any of
the Eligible Funds into which shares of the Fund are exchangeable as
described below. The reinvestment price will be the net asset value next
computed after the Transfer Agent receives the reinvestment order, and
will not be subject to a sales charge, but only if the reinvestment order
requests this privilege. A realized gain on the redemption is taxable,
and reinvestment will not alter any capital gains tax payable on that
gain. If there has been a loss on the redemption, some or all of the loss
may not be tax deductible, depending on the timing and amount reinvested
in the Fund. Under the Internal Revenue Code, if the redemption proceeds
of shares on which sales charges were paid are reinvested in shares of the
Fund or another Eligible Fund within 90 days of the payment of the sales
charge, the shareholder's basis in the Fund shares redeemed may not
include the amount of the sales charge paid, thereby reducing the loss or
increasing the gain recognized from the redemption. 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.
General Information on Redemptions
The redemption price will be the Fund's net asset value per share
next determined after the Transfer Agent receives redemption instructions
in proper form. The market value of the securities in the Fund's
portfolio is subject to daily fluctuations and the net asset value of each
class of the Fund's shares will fluctuate accordingly. Therefore, the
redemption value may be more or less than the investor's cost. Under
certain unusual circumstances, shares may be redeemed in kind (i.e., by
payment in portfolio securities). The Fund may involuntarily redeem small
accounts (if the account has fallen below $500 in value for reasons other
than market value fluctuations) and may redeem shares in amounts
sufficient to compensate the Distributor for any loss due to cancellation
of a share purchase order; for details, see "Purchase, Redemption and
Pricing of Shares" in the Additional Statement. Under the Internal
Revenue Code, the Fund may be required to impose "backup" withholding of
Federal income tax at the rate of 31% from dividends, distributions and
redemption proceeds (including exchanges), if the shareholder has not
furnished the Fund a certified tax identification number or has not
complied with provisions of the Internal Revenue Code relating to
reporting dividends.
Payment for redeemed shares is made ordinarily in cash and forwarded
within seven days of the Transfer Agent's receipt of redemption
instructions in proper form, except under unusual circumstances as
determined by the SEC. The Transfer Agent may delay forwarding a
redemption check for recently purchased shares only until the purchase
payment has cleared, which may take up to 15 days or more from the
purchase date. Such delay may be avoided if the shareholder arranges
telephone or written assurance satisfactory to the Transfer Agent from the
bank upon which the purchase payment was drawn. The Fund makes no charge
for redemption. Dealers or brokers may charge a fee for handling
redemption transactions, but such charge can be avoided by requesting the
redemption directly by the Fund through the Transfer Agent. Under certain
circumstances, the Class A and Class B CDSCs described under "How to Buy
Shares" may apply to the proceeds of redemptions.
Exchanges of Shares and Retirement Plans
Exchange Privilege
Shares of the Fund and of the Eligible Funds listed in "Right of
Accumulation" may be exchanged at net asset value per share at the time
of exchange, without sales charge, if all of the following conditions are
met: (1) shares of the fund selected for exchange are available for sale
in the shareholder's state of residence; (2) the respective prospectuses
of the funds the shares of which are to be exchanged and acquired offer
the Exchange Privilege to the investor; (3) newly-purchased (by initial
or subsequent investment) shares are held in an account for at least seven
days and all other shares at least one day prior to the exchange; and (4)
the aggregate net asset value of shares surrendered for exchange is at
least equal to the minimum investment requirements of the fund the shares
of which are to be acquired.
In addition to the conditions stated above, shares of a particular
class of an Eligible Fund may be exchanged only for shares of the same
class of another Eligible Fund. If a Fund has only one class of shares
that is not otherwise denominated, its shares shall be considered "Class
A" shares for this purpose. Certain of the Eligible Funds offer Class A,
Class B and/or Class C shares, and a list can be obtained by calling the
Distributor at 1-800-525-7048, or by referring to "Purchase, Redemption
and Pricing of Shares" in the Additional Statement. Funds offering Class
C shares are referred to, as a group, as the "OppenheimerFunds Advisors
Portfolio." In addition, Class A shares of Eligible Funds may be
exchanged for shares of any Money Market Fund; shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
Eligible Funds offered with a sales charge upon payment of the sales
charge or, if applicable, may be used to purchase shares of Eligible Funds
subject to a CDSC; and shares of the Fund acquired by reinvestment of
dividends or distributions from any other Eligible Fund or from any unit
investment trust for which reinvestment arrangements have been made with
the Distributor may be exchanged at net asset value for shares of any
Eligible Fund. No CDSC is imposed on exchanges of shares of either class
purchased subject to a CDSC. However, when Class A shares acquired by
exchange of Class A shares purchased subject to a Class A CDSC are
redeemed within 18 months of the end of the calendar month of the initial
purchase of the exchanged Class A shares, the Class A CDSC is imposed on
the redeemed shares (see "Class A Contingent Deferred Sales Charge,"
above), and the Class B CDSC is imposed on Class B shares redeemed within
six years of the end of the calendar month of the initial purchase of the
exchanged Class B shares (see "Class B Contingent Deferred Sales Charge,"
above).
-How to Exchange Shares. An exchange may be made by either: (1)
submitting an OppenheimerFunds Exchange Authorization Form to the Transfer
Agent, signed by all registered owners, or (2) telephone exchange
instructions to the Transfer Agent by a shareholder or the dealer
representative of record for an account. The Fund may modify, suspend or
discontinue either of these exchange privileges at any time on 60 days'
notice, if such notice is required by regulations adopted under the
Investment Company Act. The Fund reserves the right to reject telephone
or written requests submitted in bulk on behalf of 10 or more accounts.
Telephone and written exchange requests must be received by the Transfer
Agent by 4:00 P.M. on a regular business day to be effected that day. The
number of shares exchanged may be less than the number requested if the
number requested would include shares subject to a restriction cited above
or shares covered by a certificate that is not tendered with such request.
Only the shares available for exchange without restriction will be
exchanged.
When Class B shares are redeemed to effect an exchange, the
priorities described in "How to Buy Shares" for the imposition of the
Class B CDSC for redeeming such shares will be followed in determining the
order in which shares are exchanged. Shareholders should take into
account the effect of any exchange on the applicability and rate of any
CDSC that may be imposed in the subsequent redemption of remaining shares.
Shareholders owning shares of both classes must specify whether they
intend to exchange Class A or Class B shares.
-Telephone Exchanges. Telephone exchange requests may be placed
through a service representative by calling the Transfer Agent at 1-800-
852-8457 or automatically by PhoneLink, by calling 1-800-533-3310. If all
telephone exchange lines are busy (which might occur, for example, during
periods of substantial market fluctuations), shareholders might not be
able to request telephone exchanges and would have to submit written
exchange requests. Telephone exchange calls may be recorded by the
Transfer Agent. Telephone exchanges are subject to the rules described
above. By exchanging shares by telephone, the shareholder is
acknowledging receipt of a prospectus of the fund to which the exchange
is made and that for full or partial exchanges, any special account
features such as Asset Builder Plans, Automatic Withdrawal or Exchange
Plans and retirement plan contributions will be switched to the new
account unless the Transfer Agent is otherwise instructed. Telephone
exchange privileges automatically apply to each shareholder of record and
the dealer representative of record unless and until the Transfer Agent
receives written instructions from the shareholder(s) of record canceling
such privileges. If an account has multiple owners, the Transfer Agent
may rely on the instructions of any one owner. The Transfer Agent
reserves the right to require shareholders to confirm in writing their
election of telephone exchange privileges for an account. Shares acquired
by telephone exchange must be registered exactly as the account from which
the exchange was made. Certificated shares are not eligible for telephone
exchange.
-General Information on Exchanges. 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 in its discretion reserves the right to
refuse any exchange request that will disadvantage it, for example, if the
receipt of multiple exchange requests from a dealer might require the
disposition of securities at a time or a price disadvantageous to the
Fund.
The Eligible Funds have different investment objectives and
policies. For complete information, including sales charges and expenses,
a prospectus of the fund into which the exchange is being made should be
read prior to an exchange. A $5 service charge will be deducted from the
account to which the exchange is made to help defray administrative costs.
That charge is waived for telephone exchanges made by PhoneLink between
existing accounts. Dealers or brokers who process exchange orders on
behalf of their customers may charge for their services. Those charges
may be avoided by requesting the Fund directly to exchange shares. For
Federal tax purposes, an exchange is treated as a redemption and purchase
of shares. See "How to Redeem Shares - Reinvestment Privilege" for a
discussion of certain tax effects of exchanges. No sales commissions are
paid by the Distributor on exchanges of shares (unless a front-end sales
charge is assessed on the exchange).
Pursuant to telephone exchange agreements with the Distributor,
certain dealers, brokers and investment advisers may exchange their
client's Fund shares by telephone, subject to the terms of the agreements
and the Distributor's right to reject or suspend such telephone exchanges
at any time. Because of the restrictions and procedures under those
agreements, such exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders
directly, as described above.
Retirement Plans
The Distributor has available forms of: (i) pension and profit-
sharing plans for corporations and self-employed individuals, (ii) IRAs,
including Simplified Employee Pension Plans ("SEP IRAs"), and (iii)
403(b)(7) tax-deferred custodial plans for employees of qualified
employers. The minimum investment for pension or profit-sharing plans is
$250, and also for IRAs unless they are purchased under an Asset Builder
Plan. The Fund and the Distributor reserve the right to discontinue
offering its shares to such plans at any time without prior notice. For
further details, including administrative fees, the appropriate retirement
plan should be requested from the Distributor.
Dividends, Distributions and Taxes
This discussion relates solely to Federal tax laws and is not
exhaustive; a qualified tax adviser should be consulted. The Fund's
dividends and distributions may also be subject to state and local
taxation. See "Tax Aspects of Covered Calls and Hedging Instruments" and
"Tax Status of the Fund's Dividends and Distributions" in the Additional
Statement for more information on the tax aspects of the Fund's
investments in Hedging Instruments and other tax matters.
Dividends and Distributions
The Fund intends to declare dividends separately for Class A and
Class B shares from net investment income, if any, on an annual basis in
December each year, on a date set by the Board. As current income is not
an objective of the Fund, the amount of dividends, if any, will likely be
small. In addition, distributions may be made annually in December out
of any net short-term or long-term capital gains derived from the sale of
securities, premiums from expired calls written by the Fund, and net
profits from hedging transactions realized in the twelve months ending on
October 31 of that year. The Fund may make a supplemental distribution
of capital gains and ordinary income following the end of its fiscal year.
A shareholder purchasing Fund shares immediately prior to the declaration
of a dividend or capital gain distribution will receive a distribution
subject to income tax, and the distribution will have the effect of
reducing the Fund's net asset value per share by the amount of the
distribution. Any long-term capital gains distributions and any non-
taxable return of capital will be identified separately when tax
information is distributed by the Fund. There is no fixed dividend rate
and there can be no assurance as to the payment of any dividends or the
realization of any gains. Differences in net asset value between Class
A and Class B shares will be reflected in such distributions.
All dividends and capital gains distributions are automatically
reinvested in shares of the same class at net asset value, as of a date
selected by the Board, unless the shareholder notifies the Transfer Agent
in writing to pay dividends or capital gains distributions in cash, or to
reinvest them in another Eligible Fund, as described in "Performance,
Dividend and Tax Information" in the Additional Statement. That request
must be received prior to the record date for a dividend to be effective
as to that dividend. Dividends and distributions may be automatically
transferred to a designated account at a financial institution. See
"AccountLink" in "How to Buy Shares" and the OppenheimerFunds New Account
Application for more details. For existing accounts, such privileges may
be established only by signature-guaranteed instructions of all
shareholders to the Transfer Agent. Dividends, distributions and the
proceeds of the redemption of Fund shares represented by checks returned
to the Transfer Agent by the Postal Service as undeliverable are
reinvested in shares of Oppenheimer Money Market Fund, Inc. as promptly
as possible after the return of such checks to the Transfer Agent to
enable the investor to earn a return on otherwise idle funds.
The amount of a class's distributions may vary from time to time
depending upon market conditions, the composition of the Fund's portfolio,
expenses borne by the Fund, or borne separately by that class as described
in "Purchase, Redemption and Pricing of Shares - Dual Class Methodology"
in the Additional Statement. Dividends are calculated in the same manner,
at the same time, and on the same day for shares of each class. However,
dividends on Class B shares are expected to be lower than on Class A
shares on a pro rata basis as a result of the asset-based sales charge on
Class B shares, and such dividends also will differ in amount as a
consequence of any difference in the net asset value between Class A and
Class B shares.
Tax Status of the Fund's Dividends and Distributions
Dividends paid by the Fund derived from net investment income or net
short-term capital gains are taxable to shareholders as ordinary income,
whether received in cash or reinvested. Long-term capital gains
distributions, if any, are taxable as long-term capital gains, whether
received in cash or reinvested and regardless of how long Fund shares have
been held. For information as to "backup" withholding on dividends, see
"How to Redeem Shares - General Information on Redemptions," above.
The Fund currently intends to invest more than 50% of its total
assets in securities of foreign issuers, and when its assets are so
invested at the end of any fiscal year in which it qualifies as a
"regulated investment company" under the Internal Revenue Code, it may
elect the application of Section 853 of the Internal Revenue Code to
permit shareholders to take a credit (or a deduction) for foreign income
taxes paid by the Fund. The Fund elected the application of Section 853
in its fiscal year ended September 30, 1993. Such foreign tax credit or
deduction is subject to certain limitations under the Internal Revenue
Code. See "Tax Status of the Fund's Dividends and Distributions" in the
Additional Statement for further discussion of this provision.
Tax Status of the Fund
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on
amounts paid by it as dividends and distributions. The Fund so 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 qualification which the
Fund might not meet in any particular year. For example, if the Fund
derives 30% or more of its gross income from the sale of securities held
for less than three months, it may fail to qualify (see "Tax Aspects of
Covered Calls and Hedging Instruments" in the Additional Statement). If
it did not qualify, the Fund would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for dividends and
distributions paid to shareholders.
Fund Performance Information
Total Return Information
From time to time, the "average annual total return," "total return"
and "total return at net asset value" of an investment in each class of
shares of the Fund may be advertised. The "average annual total return"
of each class for a particular period is computed by determining the
average annual compounded rate of return over the period, using the
initial amount invested at the beginning of the period and the redeemable
value of the investment at the end of the period. The "total return" of
each class for a period is a cumulative rate of return of a hypothetical
investment over the entire period, also using the initial amount invested
and the redeemable value at the end of the period. The initial amount
invested assumes the payment of the Fund's current maximum initial sales
charge applicable to Class A shares, or the Class B CDSC applicable to the
period for which the Class B shares are outstanding. The Fund may also
quote a "total return at net asset value" of each class which is total
return calculated without considering either initial sales charge. The
redeemable value of the investment assumes that all dividends and capital
gains distributions have been reinvested at net asset value without sales
charge. The "average annual total return," "total return" and "total
return at net asset value" indicate the investment results an investor
would have experienced over the stated period from changes in share price
and reinvestment of dividends and distributions. All such performance
information is based on historical earnings and is not intended to
indicate future performance. "Performance, Dividend and Tax Information"
in the Additional Statement contains more information about calculating
the Fund's returns and other performance information.
Management's Discussion of Performance
During the Fund's fiscal year ended September 30, 1993, the Fund's
foreign investments reflected a shift by the Manager toward emerging
growth markets in Asia and Latin America, and a reduction in European
investments. During this time, the Manager diversified the Fund's U.S.
investments among a broad range of industries perceived to have growth
opportunities. During the past fiscal year, the performance of the
securities markets was impacted by a number of economic factors, which as
to the European markets included slow growth rates and currency turmoil
and as to the U.S. markets included a low interest rate environment.
Comparison of Total Return of Oppenheimer Global Fund
and the Morgan Stanley World Index - Change in Value
of a $10,000 Hypothetical Investment
(PERFORMANCE GRAPH)
Past performance is not predictive of future performance.
Oppenheimer Global Fund
Average Annual Total Returns of Class A shares
at 9/30/93
1 Year 5 Year 10 Year
10.91% 13.59% 12.68%
Cumulative Total Returns of Class B shares
at 9/30/93
1 Year 5 Year Life
N/A N/A (1.36)%
The performance graph set forth above compares the Fund's total
return (i) over a ten year period with respect to Class A shares and (ii)
since the public offering of Class B shares (August 17, 1993) with respect
to Class B shares, in each case against the performance of the Morgan
Stanley World Index, an unmanaged index of issuers listed on the stock
exchanges of 20 foreign countries and the United States and widely
recognized as a measure of global stock market performance. The Morgan
Stanley World Index includes a factor for the reinvestment of dividends
but does not reflect expenses or taxes. The Fund's return on Class A
shares reflects the deduction of the current maximum sales charge of
5.75%, on Class B shares reflects the maximum Class B CDSC deduction, and,
in each case, includes reinvestment of all dividends and capital gains
distributions, but does not consider taxes.
Additional Information
Description of the Fund and Its Shares
The Board is empowered to issue full and fractional shares of one
or more series and classes of series. Shares of one series having two
classes (Class A and Class B) have been authorized, which constitute the
shares of beneficial interest described herein. Series have separate
assets and liabilities and are transferable without restriction. Classes
of series represent an interest in a particular series but, as explained
in this Prospectus, each class has different dividends, distributions and
expenses, and may have different net asset values. Class B shares will
automatically convert to Class A shares seventy-two months after an
investor's purchase order for Class B shares is accepted. See "How to Buy
Shares - Class B Conversion Feature."
Each shareholder is entitled to one vote per share held (and a
fractional vote for a fractional share) on matters submitted to his or her
vote. Only shareholders of a particular class vote on matters affecting
only that class. On all other matters submitted to a vote of the
shareholders, the holders of separate classes vote together as a single
class. Shares do not have preemptive or subscription or cumulative voting
rights. The Trustees may divide or combine the shares of a class into a
greater or lesser number of shares without thereby changing the
proportionate beneficial interest in the Fund. The Fund does not
anticipate holding annual meetings. Under certain circumstances,
shareholders of the Fund have the right to remove a Trustee. Although the
Fund's Declaration of Trust states that when issued, shares are fully-paid
and nonassessable, shareholders may be held personally liable as
"partners" for the Fund's obligations; however, the risk of a shareholder
incurring any financial loss is limited to the relatively remote
circumstances in which the Fund is unable to meet its obligations. See
"Additional Information" in the Additional Statement for details.
The Custodian and the Transfer Agent
The Custodian of the assets of the Fund is The Bank of New York.
The Manager and its affiliates presently have banking relationships with
the Custodian. See "Additional Information" in the Additional Statement
for further information. The Fund's cash balances in excess of $100,000
held by the Custodian are not protected by Federal deposit insurance.
Such uninsured balances at times may be substantial.
The Transfer Agent, a division of the Manager, acts as transfer
agent and shareholder servicing agent on an at-cost basis for the Fund and
certain of the other open-end funds advised by the Manager, and as
transfer agent for unit investment trusts for the accumulation of shares
of one of such funds. Shareholders should direct any inquiries to the
Transfer Agent at the address or toll-free phone number listed on the back
cover of this Prospectus.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER GLOBAL FUND
Graphic material included in Prospectus of Oppenheimer Global Fund:
"Comparison of Total Return of Oppenheimer Global Fund and 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 Global
Fund (the "Fund") depicting the initial account value and subsequent
account value of a hypothetical $10,000 investment in (i) Class A shares
of the Fund during the past 10 fiscal years and (ii) Class B shares of the
Fund during the period August 17, 1993 (first public offering of Class B
shares) to September 30, 1993, in each case comparing such values with the
same 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 "Fund Performance Information - Management's
Discussion of Performance." Information with respect to Class B shares
will not be included in the graph since such shares were publicly sold
commencing on August 17, 1993.
Class A shares
Fiscal Year Oppenheimer Morgan Stanley
Ended Global Fund World Index
09/30/83 $9,425 $10,000
09/30/84 $7,667 $10,569
09/30/85 $8,587 $13,230
09/30/86 $14,394 $21,073
09/30/87 $21,973 $30,425
09/30/88 $16,443 $28,621
09/30/89 $23,493 $36,003
09/30/90 $23,678 $28,402
09/30/91 $29,291 $35,583
09/30/92 $28,037 $35,430
09/30/93 $32,992 $42,831
Class B shares
Fiscal Period Oppenheimer Morgan Stanley
Ended Global Fund World Index
08/17/93 $10,000 $10,000
09/30/83 (1) $9,864 $9,187
_________________________
(1) From commencement of first public offering of Class B shares (8/17/93)
to 9/30/93.
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent 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, New York 10015
Independent Auditors
KPMG Peat Marwick
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus or the Additional Statement, and if given or made, such
information and representations must not be relied upon as having been
authorized by the Fund, Oppenheimer Management Corporation, Oppenheimer
Funds Distributor, Inc. or any affiliate thereof. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby in any state to any person to whom it is
unlawful to make such an offer in such state.
PR330 (1/94) *Printed on recycled paper
Prospectus
OPPENHEIMER
Global Fund
Effective January 25, 1994
(OppenheimerFunds Logo)
<PAGE>
Prospectus and
New Account Application
OPPENHEIMER
Global Fund
Effective January 25, 1994
(OppenheimerFunds Logo)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OPPENHEIMER GLOBAL FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
This Statement of Additional Information (the "Additional Statement")
is not a Prospectus. This Additional Statement should be read together
with the Prospectus (the "Prospectus"), dated January 25, 1994, of
Oppenheimer Global Fund (the "Fund"), which may be obtained upon written
request to Oppenheimer Shareholder Services ("the Transfer Agent"), P.O.
Box 5270, Denver, Colorado 80217 or by calling the Transfer Agent at the
toll-free number shown above.
TABLE OF CONTENTS
Page
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .2
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 12
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 13
Investment Management Services. . . . . . . . . . . . . . . . . . . . . 16
Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Purchase, Redemption and Pricing of Shares. . . . . . . . . . . . . . . 28
Distribution and Service Plans. . . . . . . . . . . . . . . . . . . . . 21
Performance, Dividend and Tax Information . . . . . . . . . . . . . . . 24
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . 27
Automatic Withdrawal Plan Provisions. . . . . . . . . . . . . . . . . . 29
Letters of Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . 33
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 34
This Additional Statement is effective January 25, 1994.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described in the
Prospectus. Supplemental information about those policies is set forth
below. Certain capitalized terms used in this Additional Statement and
not otherwise defined herein are defined in the Prospectus.
Securities of Growth-Type Companies. The Fund may emphasize securities
of "growth-type" companies. Such issuers typically are those the goods
or services of which have relatively favorable long-term prospects for
increasing demand, or ones which develop new products, services or markets
and normally retain a relatively large part of their earnings for
research, development and investment in capital assets. They may include
companies in the natural resources fields or those developing industrial
applications for new scientific knowledge having potential for
technological innovation, such as nuclear energy, oceanography, business
services and new customer products.
Small, Unseasoned Companies. The securities of small, unseasoned
companies may have a limited trading market, which may adversely affect
the Fund's ability to dispose of them and can result in such securities
being priced lower than might otherwise be the case. If other investors
holding the same securities as the Fund sell them 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. Investments in foreign securities offer potential
benefits not available from investing solely in securities of domestic
issuers, such as the opportunity to invest in foreign issuers that appear
to offer growth potential, or to invest in foreign countries with economic
policies or business cycles different from those of the U.S. or foreign
stock markets that do not move in a manner parallel to U.S. markets,
thereby reducing fluctuations in portfolio value. If the Fund's
securities are held abroad, the countries in which such securities may be
held and the sub-custodians holding them must be approved by the Fund's
Board of Trustees under applicable Securities and Exchange Commission
("SEC") rules. In buying foreign securities, the Fund may convert U.S.
dollars into foreign currency, but only to effect securities transactions
on foreign securities exchanges and not to hold such currency as an
investment.
Investing in foreign securities involves special additional risks and
considerations not typically associated with investing in securities of
issuers traded in the U.S. These include: reduction of income by foreign
taxes; fluctuation in value of foreign portfolio investments due to
changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of public
information about foreign issuers; lack of uniform accounting, auditing
and financial reporting standards comparable to those applicable to
domestic issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity in foreign markets than in the U.S.;
less regulation of foreign issuers, stock exchanges and brokers than in
the U.S.; greater difficulties in commencing lawsuits against foreign
issuers; higher brokerage commission rates than in the U.S.; increased
risks of delays in settlement of portfolio transactions; possibilities in
some countries of expropriation or nationalization of assets, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and 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.
A number of current significant political demographic and economic
developments may affect investments in foreign securities and in
securities of companies with operations overseas. Such developments
include dramatic political changes in government and economic policies in
several Eastern European countries, Germany and the republics comprising
the former Soviet Union, as well as unification of the European Economic
Community. The course of any of one or more of these events and the
effect on trade barriers, competition and markets for consumer goods and
services is uncertain. With roughly two-thirds of all outstanding equity
securities now traded outside of the United States (source: Morgan
Stanley), the Fund's global scope enables it to attempt to take advantage
of other world markets and companies and seek to protect itself against
declines in any single economy.
Warrants and Rights. Warrants are options to purchase equity securities
at specified prices valid for a specific period of time. Their prices do
not necessarily move parallel to the prices of the underlying securities.
The price paid for a warrant will be foregone unless the warrant is
exercised prior to expiration. Rights are similar to warrants, but
normally have a short duration and are distributed directly by the issuer
to its shareholders. Warrants and rights have no voting rights, receive
no dividends and have no rights with respect to the assets of the issuer.
Restricted and Illiquid Securities. The expenses of registration of
restricted securities that are subject to legal restriction on resale
(excluding securities that may be resold by the Fund pursuant to Rule
144A, as explained in the Prospectus) may be negotiated at the time such
securities are purchased by the Fund. When registration is required, a
considerable period may elapse between the decision to sell the securities
and the time the Fund would be permitted to sell them. Thus, the Fund may
not be able to obtain as favorable a price as that prevailing at the time
of the decision to sell. The Fund also may acquire securities through
private placements. Such securities may have contractual resale
restrictions on their resale, which might prevent their resale by the Fund
at a time when such resale would be desirable.
Repurchase Agreements. In a repurchase transaction, at the time the Fund
acquires a security it simultaneously resells it to an approved vendor (a
U.S. commercial bank or the U.S. branch of a foreign bank, or a broker-
dealer meeting Board-established credit guidelines, and which has been
designated a primary dealer in government securities) for delivery on an
agreed-upon future date. The repurchase price exceeds the purchase price
by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. The majority
of these transactions run from day to day, and delivery pursuant to the
resale typically will occur within one to five days of the purchase.
Repurchase agreements are considered "loans" under the Investment Company
Act of 1940, as amended (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 Fund's
investment manager, Oppenheimer Management Corporation (the "Manager"),
will impose creditworthiness requirements to confirm that the vendor is
financially sound and will continuously monitor the collateral's value.
Loans of Portfolio Securities. The Fund may lend its portfolio securities
pursuant to the Securities Lending Agreement and Guaranty (the "Securities
Lending Agreement") with The Bank of New York, subject to the restrictions
stated in the Prospectus. The Fund will lend such portfolio securities
to attempt to increase the Fund's income. Under the Securities Lending
Agreement and applicable regulatory requirements (which are subject to
change), the loan collateral must, on each business day, be at least equal
to the value of the loaned securities and must consist of cash, bank
letters of credit or securities of the U.S. Government (or its agencies
or instrumentalities), or other cash equivalents in which the Fund is
permitted to invest. To be acceptable as collateral, letters of credit
must obligate a bank to pay to The Bank of New York, as agent, amounts
demanded by the Fund if the demand meets the terms of the letter. Such
terms of the letter and the issuing bank must be satisfactory to The Bank
of New York and the Fund. The Fund will receive, pursuant to the
Securities Lending Agreement, the following: (a) all income, dividends
and distributions received in respect of loaned securities; (b) an annual
securities lending fee of $500,000; and (c) 25% of all annual net income
from securities lending transactions exceeding $1,500,000. The Bank of
New York has agreed, in general, to guarantee the obligations of borrowers
to return loaned securities and to be responsible for expenses relating
to securities lending. The Fund will be responsible for risks associated
with the investment of cash collateral. The term of the Securities
Lending Agreement is thirty-six months subject to termination by The Bank
of New York or the Fund. The Fund may incur a termination fee if it
terminates the Securities Lending Agreement during this term. The terms
of the Fund's loans must also meet applicable tests under the Internal
Revenue Code and permit the Fund to reacquire loaned securities on five
business days' notice or in time to vote on any important matter.
Borrowing. From time to time, the Fund may increase its ownership of
securities by borrowing from banks on an unsecured basis and investing the
borrowed funds, subject to the restrictions stated in the Prospectus. Any
such borrowing will be made only from banks, and pursuant to the
requirements of the Investment Company Act, will be made only to the
extent that the value of the Fund's assets, less its liabilities other
than borrowings, is equal to at least 300% of all borrowings including the
proposed borrowing. If the value of the Fund's assets so computed should
fail to meet the 300% asset coverage requirement, the Fund is required
within three days to reduce its bank debt to the extent necessary to meet
such requirement and may have to sell a portion of its investments at a
time when independent investment judgment would not dictate such sale.
Interest on money borrowed is an expense the Fund would not otherwise
incur, so that it may have little or no net investment income during
periods of substantial borrowings. Borrowing for investment increases both
investment opportunity and risk. Since substantially all of the Fund's
assets fluctuate in value whereas borrowing obligations are fixed, when
the Fund has outstanding borrowings, its net asset value per share will
tend to fluctuate more when its portfolio assets fluctuate in value than
would otherwise would be the case.
Covered Calls and Hedging. As described in the Prospectus, the Fund may
write covered calls or employ one or more types of Hedging Instruments.
When hedging to attempt to protect against declines in the market value
of the Fund's portfolio, to permit the Fund to retain unrealized gains in
the value of portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may: (i) sell Stock
Index Futures, (ii) buy puts, or (iii) write covered calls on securities
or on Stock Index Futures (as described in the Prospectus). When hedging
to permit the Fund to establish a position in the equities market as a
temporary substitute for purchasing particular equity securities (which
the Fund will normally purchase, and then terminate that hedging
position), the Fund may buy: (a) Stock Index Futures; or (b) calls on such
Futures or securities held by it. The Fund's strategy of hedging with
Futures and options on Futures will be incidental to the Fund's activities
in the underlying cash market. Additional information about covered calls
and the Hedging Instruments the Fund may use is provided below. In the
future, the Fund may employ hedging instruments and strategies that are
not presently contemplated but which may be developed, to the extent such
investment methods are consistent with the Fund's investment objective,
are legally permissible and are adequately disclosed.
Writing Covered Call Options. When the Fund writes a call on a
security, it receives a premium and agrees to sell the callable investment
to a purchaser of a corresponding call during the call period (usually not
more than nine 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 option transaction costs and the premium received
on the call written is more or less than the price of the call
subsequently purchased. A profit may also be realized if the call lapses
unexercised, because the Fund retains the related investment and the
premium received. If the Fund could not effect a closing purchase
transaction due to a lack of a market, it would have to hold the callable
investments until the call lapsed or was exercised.
Stock Index Futures. A stock index, which cannot be purchased or sold
directly, assigns relative values to the common stocks included in the
index and fluctuates with the changes in the market value of those stocks.
No payment will be made or received by the Fund on the purchase or sale
of a Stock Index Future. Stock Index Futures 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 underlying stocks in the index is made. Generally,
contracts are closed out with offsetting transactions prior to the
expiration date of the contract. Upon entering into a Futures
transaction, the Fund will be required to deposit an initial margin
payment, in cash or U.S. Treasury bills with the futures commission
merchant (the "futures broker"). The initial margin will be deposited
with the 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 specified conditions. As the Future is marked to market 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. Although Stock Index Futures by their terms call for settlement
by the delivery of cash, in most cases the obligation is fulfilled 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 Calls and Puts. When the Fund purchases a call (other than
in a closing purchase transaction), it pays a premium and, except as to
calls on stock indices or Stock Index Futures, has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. When the
Fund purchases a call on a stock index or Stock Index Future it pays a
premium, but settlement is in cash rather than by delivery of the
underlying investment to the Fund. In purchasing a call, the Fund
benefits only if the call is sold at a profit or if, during the call
period, the market price of the underlying investment is above the sum of
the call price plus the transaction costs and the premium paid for the
call and the call is exercised. If the call is not exercised or sold
(whether or not at a profit), it will become worthless at its expiration
date and the Fund will lose its premium payment and the right to purchase
the underlying investment.
When the Fund purchases a put, it pays a premium and, except as to
puts on stock indices or Stock Index Futures, has the right to sell the
underlying investment to a seller of a corresponding put on the same
investment during the put period at a fixed exercise price. Buying a put
on an investment the Fund owns enables the Fund to attempt to protect
itself during the put period against a decline in the value of the
underlying investment below the exercise price by selling such underlying
investment at the exercise price to a seller of a corresponding put. If
the market price of the underlying investment is equal to or above the
exercise price and, as a result, the put is not exercised or resold, the
put will become worthless at its expiration date and the Fund will lose
its premium payment and the right to sell the underlying investment. The
put may, however, be sold prior to expiration (whether or not at a
profit).
Buying a put on either a stock index or a Stock Index Future permits
the Fund to either resell the put or buy the underlying investment and
sell it at the exercise price. The resale price of the put will vary
inversely with the price of the underlying investment. If the market
price of the underlying investment is above the exercise price and, as a
result, the put is not exercised or resold, the put will become worthless
on its expiration date. In the event of a decline in the stock market,
the Fund could exercise or sell the put at a profit to attempt to offset
some or all of its loss on its portfolio securities. When the Fund
purchases a put on a stock index, or on a Stock Index Future not held by
it, the put protects the Fund to the extent that the index moves in a
similar pattern to the securities held by the Fund. In the case of a put
on a stock index or Stock Index Future, settlement is in cash rather than
by the Fund's delivery of the underlying investment.
Options on Foreign Currencies. The Fund intends to write and purchase
calls on foreign currencies. A call written on a foreign currency by the
Fund is covered if the Fund owns the underlying foreign currency covered
by the call or has an absolute and immediate right to acquire that foreign
currency without additional cash consideration (or for additional cash
consideration held in a segregated account by its Custodian) upon
conversion or exchange of other foreign currency held in its portfolio.
A call may be written by the Fund on a foreign currency to provide a hedge
against a decline in the U.S. dollar value of a security which the Fund
owns or has the right to acquire and which is denominated in the currency
underlying the option due to an expected adverse change in the exchange
rate. This is a cross-hedging strategy. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account with the
Fund's Custodian cash or 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 foreign currency exchange contract ("Forward
Contract") involves bilateral obligations of one party to purchase, and
another party to sell, a specific currency at a future date (which may be
any fixed number of days from the date of the contract agreed upon by the
parties), at a price set at the time the contract is entered into. These
contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers.
No price is paid or received upon the purchase or sale of a Forward
Contract.
The Fund may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund
owns or intends to acquire, but it does fix a rate of exchange in advance.
In addition, although Forward Contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit
any potential gain that might result should the value of the currencies
increase. The Fund will not speculate with Forward Contracts or foreign
currency exchange rates.
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when
the Fund anticipates receipt of dividend payments in a foreign currency,
the Fund may desire to "lock-in" the U.S. dollar price of the security or
the U.S. dollar equivalent of such payment by entering into a Forward
Contract, for a fixed amount of U.S. dollars per unit of foreign currency,
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction ("transaction hedge"). The Fund will thereby be
able to protect itself against a possible loss resulting from an adverse
change in the relationship between the currency exchange rates during the
period between the date on which the security is purchased or sold, or on
which the payment is declared, and the date on which such payments are
made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions ("position hedge"). In a position hedge, for
example, when the Fund believes that foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a forward
sale contract to sell an amount of that foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in
such foreign currency, or when the Fund believes that the U.S. dollar may
suffer a substantial decline against a foreign currency, it may enter into
a forward purchase contract to buy that foreign currency for a fixed
dollar amount. In this situation the Fund may, in the alternative, enter
into a forward contract to sell a different foreign currency for a fixed
U.S. dollar amount where the Fund believes that the U.S. dollar value of
the currency to be sold pursuant to the forward contract will fall
whenever there is a decline in the U.S. dollar value of the currency in
which portfolio securities of the Fund are denominated ("cross hedge").
The Fund's Custodian will place cash or U.S. Government securities or
other liquid high-quality debt securities in a separate account of the
Fund having a value equal to the aggregate amount of the Fund's
commitments under forward contracts entered into with respect to 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 value of the account will
equal the amount of the Fund's commitments with respect to such contracts.
As an alternative to maintaining all or part of the separate account, the
Fund may purchase a call option permitting the Fund to purchase the amount
of foreign currency being hedged by a forward sale contract at a price no
higher than the forward contract price, or the Fund may purchase a put
option permitting the Fund to sell the amount of foreign currency subject
to a forward purchase contract at a price as high or higher than the
forward contract price. Unanticipated changes in currency prices may
result in poorer overall performance for the Fund than if it had not
entered into such contracts.
The precise matching of the Forward Contract amounts and the value of
the securities involved will not generally be possible because the future
value of such securities in foreign currencies will change as a
consequence of market movements in the value of these securities between
the date the Forward Contract is entered into and the date it is sold.
Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot (i.e., cash) market (and bear the expense of
such purchase), if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some
of the foreign currency received upon the sale of the portfolio security
if its market value exceeds the amount of foreign currency the Fund is
obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-
term hedging strategy is highly uncertain. Forward Contracts involve the
risk that anticipated currency movements will not be accurately predicted,
causing the Fund to sustain losses on these contracts and transactions
costs.
At or before the maturity of a Forward Contract requiring the Fund to
sell a currency, the Fund may either sell a portfolio security and use the
sale proceeds to make delivery of the currency or retain the security and
offset its contractual obligation to deliver the currency by purchasing
a second contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency that it is obligated to
deliver. Similarly, the Fund may close out a Forward Contract requiring
it to purchase a specified currency by entering into a second contract
entitling it to sell the same amount of the same currency on the maturity
date of the first contract. The Fund would realize a gain or loss as a
result of entering into such an offsetting Forward Contract under either
circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first
contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are
involved. Because such contracts are not traded on an exchange, the Fund
must evaluate the credit and performance risk of each particular
counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time
to time, and investors should be aware of the costs of currency
conversion. Foreign exchange dealers do not charge a fee for conversion,
but they do seek to realize a profit based on the difference between the
prices at which they buy and sell various currencies. Thus, a dealer may
offer to sell a foreign currency to the Fund at one rate, while offering
a lesser rate of exchange should the Fund desire to resell that currency
to the dealer.
Interest Rate Swap Transactions. Swap agreements entail both interest
rate risk and credit risk. There is a risk that, based on movements of
interest rates in the future, the payments made by the Fund under a swap
agreement will have been greater than those received by it. Credit risk
arises from the possibility that the counterparty will default. If the
counterparty to an interest rate swap defaults, the Fund's loss will
consist of the net amount of contractual interest payments that the Fund
has not yet received. The Manager will monitor the creditworthiness of
counterparties to the Fund's interest rate swap transactions on an ongoing
basis. The Fund will enter into swap transactions with appropriate
counterparties pursuant to master netting agreements. A master netting
agreement provides that all swaps done between the Fund and that
counterparty under the master agreement shall be regarded as parts of an
integral agreement. If on any date amounts are payable in the same
currency in respect of one or more swap transactions, the net amount
payable on that date in that currency shall be paid. In addition, the
master netting agreement may provide that if one party defaults generally
or on one swap, the counterparty may terminate the swaps with that party.
Under such agreements, if there is a default resulting in a loss to one
party, the measure of that party's damages is calculated by reference to
the average cost of a replacement swap with respect to each swap (i.e.,
the mark-to-market value at the time of the termination of each swap).
The gains and losses on all swaps are then netted, and the result is the
counterparty's gain or loss on termination. The termination of all swaps
and the netting of gains and losses on termination is generally referred
to as "aggregation."
Additional Information about Hedging Instruments and Their Use. The
Fund's Custodian, or a securities depository acting for the Custodian,
will act as the Fund's escrow agent through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has
written options traded on exchanges, or as to other acceptable escrow
securities, so that no margin will be required for such transactions. OCC
will release the securities on the expiration of the calls or upon the
Fund's entering into a closing purchase transaction.
An option position may be closed out only on a market which provides
secondary trading for options of the same series and there is no assurance
that a liquid secondary market will exist for any particular option. The
Fund's option activities may affect its portfolio turnover rate and
brokerage commissions. The exercise by the Fund of puts on securities
will cause the sale of related portfolio investments, increasing portfolio
turnover. Although such exercise is within the Fund's control, holding
a put might cause the Fund to sell the related investments for reasons
which would not exist in the absence of the put. The Fund will pay a
brokerage commission each time it buys a call or put, sells a call, or
buys or sells an underlying investment in connection with the exercise of
a call or put. Commissions payable on writing or purchasing a call are
normally higher than on general securities transactions on a relative
basis. Premiums paid for options as to underlying investments are small
in relation to the market value of such 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 investment.
Regulatory Aspects of Hedging Instruments. The Fund must operate
within certain restrictions as to its long and short positions in Futures
and options thereon under a rule ("CFTC Rule") adopted by the Commodity
Futures Trading Commission ("CFTC)" under the Commodity Exchange Act (the
"CEA"), which exempts the Fund from registration with the CFTC as a
"commodity pool operator" (as defined under the CEA) if it complies with
the CFTC Rule. Under these restrictions, the Fund will not, as to any
position, whether long, short or a combination thereof, enter into Futures
and options thereon for which the aggregate initial margins and premiums
exceed 5% of the fair market value of its net assets, with certain
exclusions as defined in the CFTC Rule. Under the restrictions, the Fund
also must, as to its short positions, use Futures and options thereon
solely for bona fide hedging purposes within the meaning and intent of the
applicable provisions of the CEA.
Transactions in options by the Fund are subject to limitations
established by each of the exchanges governing the maximum number of
options which may be written or held by a single investor or group of
investors acting in concert, regardless of whether the options were
written or purchased on the same or different exchanges or are held in one
or more accounts or through one or more different exchanges or futures
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 having an
affiliated investment adviser. Position limits also apply to Futures.
An exchange may order the liquidation of positions found to be in
violation of those limits and may impose certain other sanctions. 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 of 1986, as amended (the "Internal Revenue Code"). One of
the tests for such qualification is that less than 30% of its gross income
(irrespective of losses) must be derived from gains realized on the sale
of securities held for less than three months. Due to this limitation,
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) writing calls on investments held less than three months; (iii)
purchasing calls or puts which expire in less than three months; (iv)
effecting closing transactions with respect to calls or puts purchased
less than three months previously; and (v) exercising puts or calls held
by the Fund for less than three months.
Certain foreign currency exchange contracts ("Forward Contracts") in
which the Fund may invest are treated as "section 1256 contracts." Gains
or losses relating to section 1256 contracts generally are characterized
under the Internal Revenue Code as 60% long-term and 40% short-term
capital gains or losses. However, foreign currency gains or losses
arising from certain section 1256 contracts (including Forward Contracts)
generally are treated as ordinary income or loss. In addition, section
1256 contracts held by the Fund at the end of each taxable year are
"marked to market" with the result that unrealized gains or losses are
treated as though they were realized. These contracts also may be marked-
to-market for purposes of the excise tax applicable to investment company
distributions and for other purposes under rules prescribed pursuant to
the Internal Revenue Code. An election can be made by the Fund to exempt
these transactions from this mark to market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a position
making up a straddle is allowed only to the extent such loss exceeds any
unrecognized gain in the offsetting positions making up the straddle.
Disallowed loss is generally allowed at the point where there is no
unrecognized gain in the offsetting positions making up the straddle, or
the offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates that occur between the time the Fund
accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on disposition
of debt securities denominated in a foreign currency and on disposition
of foreign currency forward contracts, gains or losses attributable to
fluctuations in the value of a foreign currency between the date of
acquisition of the security or contract and the date of disposition also
are treated as ordinary gain or loss. Currency gains and losses are
offset against market gains and losses before determining a net "Section
988" gain or loss under the Internal Revenue Code, which may increase or
decrease the amount of the Fund's investment company income available for
distribution to its shareholders.
Possible Risk Factors in Hedging. In addition to the risks with
respect to Futures and options 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 that the
prices of the Futures or applicable index will correlate imperfectly with
the behavior of the cash (i.e., market value) prices of the Fund's equity
securities. The ordinary spreads between prices in the cash and futures
markets are subject to distortions due to differences in the natures of
those markets. First, all participants in the futures markets are subject
to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close out futures
contracts through off-setting 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 off-setting
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 such equity securities being
hedged is more than the historical volatility of the applicable index.
It is also possible that where 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 this occurred, the Fund would
lose money on the Hedging Instruments and also experience a decline in
value in its equity 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 by buying Stock Index Futures and/or calls on such
Futures, on securities or on stock indices, it is possible that the market
may decline. If the Fund then concludes not to invest in equity
securities at that time because of concerns as to possible further market
decline or for other reasons, the Fund will realize a loss on the Hedging
Instruments that is not offset by a reduction in the price of the equity
securities purchased.
Short Sales Against-the-Box. In such short sales, while the short
position is open, the Fund must own an equal amount of such securities,
or by virtue of ownership of 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.
INVESTMENT RESTRICTIONS
The Fund's significant investment restrictions are described in the
Prospectus. The following are also fundamental policies, and together with
the Fund's fundamental policies described in the Prospectus, cannot be
changed without the approval of a "majority" of the Fund's outstanding
voting securities. Such a "majority" vote is defined in the Investment
Company Act as the vote of the holders of the lesser of: (i) 67% or more
of the shares present or represented by proxy at a shareholders meeting,
if the holders of more than 50% of the outstanding shares are present or
represented by proxy; or (ii) more than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot: (1) invest in
companies for the primary purpose of acquiring control or management
thereof; (2) invest in commodities or in commodities contracts; other
than the Hedging Instruments permitted by any of its other fundamental
policies, whether or not any such Hedging Instrument is considered to be
a commodity or a commodity contract; (3) invest in real estate or in
interests in real estate, but may purchase readily marketable securities
of companies holding real estate or interests therein; (4) purchase
securities on margin; however, the Fund may make margin deposits in
connection with any of the Hedging Instruments permitted by any of its
other fundamental policies; (5) lend money, but the Fund may invest in all
or a portion of an issue of bonds, debentures, commercial paper, or other
similar corporate obligations of the types that are usually purchased by
institutions, whether or not publicly distributed, provided that such
obligations which are not publicly distributed shall be subject to the
limits on the amount set forth in the Prospectus under the caption
"Restricted and Illiquid Securities"; the Fund may also make loans of
portfolio securities, subject to the restrictions set forth in the
Prospectus and above under the caption "Loans of Portfolio Securities";
(6) mortgage or pledge any of its assets; such prohibition against
mortgaging or pledging does not prohibit the escrow arrangements
contemplated by the writing of covered call options or other collateral
or margin arrangements in connection with any of the Hedging Instruments
permitted by any of its other fundamental policies; (7) underwrite
securities of other companies, except insofar as it might be deemed to be
an underwriter for purposes of the Securities Act of 1933 in the resale
of any securities held in its own portfolio; (8) invest or hold securities
of any issuer if those officers and directors or trustees of the Fund or
its adviser owning individually more than 1/2 of 1% of the securities of
such issuer together own more than 5% of the securities of such issuer;
or (9) invest in other open-end investment companies, or invest more than
5% of its net assets at the time of purchase in closed-end investment
companies, including small business investment companies, nor make any
such investments at commission rates in excess of normal brokerage
commissions. The percentage restrictions described above and in the
Prospectus apply only at the time of investment and require no action by
the Fund as a result of subsequent changes in relative values.
In connection with the qualification of its shares in certain states,
the Fund has undertaken that in addition to the above, it will not: (1)
invest more than 5% of its assets in securities of issuers, including
their predecessors, which have been in continuous operation for less than
three continuous years; or (2) invest any part of its assets in oil, gas
or other mineral exploration or development programs. In the event that
the Fund's shares cease to be qualified under such laws or if such
undertaking(s) otherwise cease to be operative, the Fund would not be
subject to such restrictions.
TRUSTEES AND OFFICERS
The Fund's Trustees and officers and their principal occupations and
business affiliations during the past five years are set forth below. The
address for each, except as noted, is Two World Trade Center, New York,
New York 10048-0203. Except for Mr. Wilby, each serves in similar
capacities with Oppenheimer Fund, Oppenheimer Time Fund, Oppenheimer
Special Fund, Oppenheimer Pennsylvania Tax-Exempt Fund, Oppenheimer Tax-
Free Bond Fund, Oppenheimer Money Market Fund, Inc., Oppenheimer Target
Fund, Oppenheimer U.S. Government Trust, Oppenheimer New York Tax-Exempt
Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer Asset Allocation Fund, Oppenheimer Gold & Special
Minerals Fund, Oppenheimer Discovery Fund, Oppenheimer Mortgage Income
Fund, Oppenheimer Global Growth & Income Fund, Oppenheimer Global Bio-Tech
Fund, Oppenheimer Global Environment Fund, Oppenheimer Multi-Sector Income
Trust and Oppenheimer Multi-Government Trust (collectively, the "New York-
based OppenheimerFunds"). As of December 31, 1993, the Trustees and
officers of the Fund as a group beneficially owned less than 1% of its
outstanding shares.
LEON LEVY, Chairman of the Board of Trustees
General Partner of Odyssey Partners, L.P. (investment partnership) and
Chairman of Avatar Holdings, Inc. (real estate development).
LEO CHERNE, Trustee
386 Park Avenue South, New York, New York 10016
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of The Research Institute of
America.
EDMUND T. DELANEY, Trustee
5 Gorham Road, Chester, Connecticut 06412
Attorney-at-law; formerly a member of the Connecticut State Historical
Commission and Counsel to Copp, Berall & Hempstead (a law firm).
ROBERT G. GALLI, Trustee*
Vice Chairman of the Manager and Vice President and Counsel of Oppenheimer
Acquisition Corp. ("OAC"), the Manager's parent holding company; formerly
he held the following positions: a director of the Manager and Oppenheimer
Funds Distributor, Inc. (the "Distributor"), Vice President and a director
of HarbourView Asset Management Corporation ("HarbourView") and Centennial
Asset Management Corporation ("Centennial"), investment adviser
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, D.C. 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 Institute, Bard College; Member of the U.S.
Competitiveness Policy Counsel; Adjunct Professor of New York University;
formerly New York State Comptroller.
RUSSELL S. REYNOLDS, JR., Trustee
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House, the
Greenwich Historical Society and Greenwich Hospital.
SIDNEY M. ROBBINS, Trustee
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions, Graduate
School of Business, Columbia University; Visiting Professor of Finance,
University of Hawaii; a director of The Korea Fund, Inc. and The Malaysia
Fund, Inc. (closed-end investment companies); a member of the Board of
Advisors, Olympus Private Placement Fund, L.P.; Professor Emeritus of
Finance, Adelphi University.
DONALD W. SPIRO, President and Trustee*
Chairman Emeritus and a director of the Manager; formerly Chairman of the
Manager and the Distributor.
PAULINE TRIGERE, Trustee
550 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and sale of
women's fashions).
CLAYTON K. YEUTTER, Trustee
1325 Merrie Ridge Road, McLean, Virginia 22101
Counsel to Hogan & Hartson (a law firm); a director of B.A.T. Industries,
Ltd. (tobacco and financial services), Caterpillar, Inc. (machinery),
ConAgra, Inc. (food and agricultural products), FMC Corp. (chemicals and
machinery), Lindsay Manufacturing Co. and Texas Instruments, Inc.
(electronics); formerly (in descending chronological order) Deputy
Chairman, Bush/Quayle Presidential Campaign; Counsellor to the President
(Bush) for Domestic Policy; Chairman of the Republican National Committee,
Secretary of the U.S. Department of Agriculture, and U.S. Trade
Representative, Executive Office of the President.
WILLIAM L. WILBY, Vice President and Portfolio Manager
Vice President of the Manager and HarbourView; an officer of other
OppenheimerFunds; formerly international investment strategist at Brown
Brothers, Harriman & Co., prior to which he was a Managing Director and
Portfolio Manager at AIG Global Investors.
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, 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
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 and Assistant Secretary and a director of Centennial; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of other
OppenheimerFunds; formerly Senior Vice President/Comptroller and Secretary
of OAMC.
LYNN M. COLUCCY, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Vice President and Assistant Treasurer of the Manager; an officer of other
OppenheimerFunds; formerly Vice President/Director of Internal Audit of
the Manager.
ROBERT G. ZACK, Assistant Secretary
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI, SFSI; an officer of other OppenheimerFunds.
____________________________________
*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 (including Mr. Spiro)
are affiliated with the Manager and receive no salary or fee from the
Fund. During the fiscal year ended September 30, 1993, the remuneration
(including expense reimbursements) paid by the Fund to all Trustees of the
Fund (except Messrs. Spiro and Galli) in the aggregate for services as
Trustees and as members of one or more committees totalled $77,539. 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. At September 30, 1993, the Fund had
accrued $158,960 for its projected benefit obligations under the plan.
Major Shareholders. As of December 31, 1993, no person owned of record
or was known by the Fund to own beneficially 5% or more of the Fund's
outstanding Class A or Class B shares.
INVESTMENT MANAGEMENT SERVICES
The Manager is wholly-owned by OAC, a holding company ultimately
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 serve as officers of the Fund, and two of whom (Messrs. Spiro and
Galli) serve as Trustees of the Fund.
The management fee is payable monthly to the Manager under the terms
of the investment advisory agreement between the Manager and the Fund (the
"Agreement"), and is computed on the net assets of the Fund as of the
close of business each day. The Agreement requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
administration for the Fund, including the compilation and maintenance of
records with respect to its operations, the preparation and filing of
specified reports, and the 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 Agreement or by the Distributor
are paid by the Fund. The Agreement lists examples of expenses paid by
the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, certain insurance premiums, 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. On August 3, 1993, shareholders
of the Fund approved a new Agreement providing for the current management
fee rates stated in the Prospectus. During the period December 12, 1991
to August 2, 1993, independent of the Fund's investment advisory agreement
then in effect, the Manager voluntarily agreed to reduce its management
fee to the current management fee rates. During the Fund's fiscal years
ended September 30, 1991, 1992 and 1993, the management fees paid by the
Fund to the Manager were $6,227,674, $7,949,934 and $8,063,451,
respectively.
The Agreement contains no expense limitation. However, independently
of the Agreement, the Manager has undertaken that the total expenses of
the Fund in any fiscal year, exclusive of taxes, interest, brokerage
commissions, distribution assistance payments and any extraordinary non-
recurring expenses, including litigation shall not exceed the most
stringent state regulatory limitation on fund expenses applicable to the
Fund. At present, the most stringent limitation is imposed by California
and limits expenses (with specified exclusions) to 2.5% of the first $30
million of average annual net assets, 2.0% of the next $70 million of
average net assets and 1.5% of average net assets in excess of $100
million. The payment of the management fee will be reduced so that at no
time will there be accrued but unpaid liability under the above expense
limitation. 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 during which expenses are limited. The Manager reserves
the right to amend or terminate this expense undertaking at any time.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence in the performance of its duties, or reckless
disregard for its obligations and duties thereunder, the Manager is not
liable for any loss sustained by reason of good faith errors or omissions
in connection with any matters to which the Agreement relates. 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.
BROKERAGE
Provisions of the Investment Advisory Agreement. One of the duties of the
Manager under the Agreement is to arrange the portfolio transactions for
the Fund. In doing so, the Manager is authorized by the Agreement to
employ broker-dealers ("brokers") 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
or base its selection on "posted" rates but is expected to be aware of the
current rates of eligible brokers and to minimize the commissions paid to
the extent consistent with the provisions of the Agreement and the
interests and policies of the Fund as established by its Board of
Trustees.
Under the Agreement, the Manager is authorized to select brokers which
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 of 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. Subject to the provisions of the
Agreement, when brokers are used for the Fund's portfolio transactions,
allocations of the Fund's brokerage are made by portfolio managers under
the supervision of executive officers of the Manager. Transactions in
securities other than those for which an exchange is the primary market
are generally done with principals or market makers. Brokerage
commissions are paid primarily for effecting transactions in listed
securities and otherwise only if it appears likely that a better price or
execution can be obtained. When the Fund engages in an option
transaction, ordinarily the same broker will be used for the purchase or
sale of the option and any transactions in the securities to which the
option relates. When possible, concurrent orders to purchase or sell the
same security by more than one of the accounts managed by the Manager or
its affiliates are combined. Transactions effected pursuant to such
combined orders are averaged as to price and allocated in accordance with
the purchase or sale orders actually placed for each account.
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 these
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid for in
commission dollars. The research services provided by brokers broaden the
scope and supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and enabling
the Manager to obtain market information for the valuation of securities
held in the Fund's portfolio or being considered for purchase. The Board
of Trustees, including the "Independent Trustees" of the Fund who are not
"interested persons," as defined in the Investment Company Act, annually
reviews information furnished by the Manager as to the commissions paid
to brokers furnishing such services in an effort to ascertain that the
amount of such commissions was reasonably related to the value or benefit
of such services.
During the fiscal years ended September 30, 1991, 1992 and 1993, total
brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were
$1,450,382, $2,082,406, and $11,654,448, respectively. During the fiscal
year ended September 30, 1993, $480,211 was paid to brokers as commissions
in return for research services (including special research, statistical
information and execution); the aggregate amount of those transactions was
$204,016,616. The transactions giving rise to those commissions were
allocated in accordance with the internal allocation procedures described
above.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Determination of Net Asset Value Per Share. The net asset values per
share of Class A and Class B shares of the Fund is determined as of 4:00
P.M. each day the New York Stock Exchange (the "NYSE") is open (a "regular
business day") by dividing the value of the Fund's net assets attributable
to that class by the total number of shares of that class outstanding.
The NYSE's most recent annual holiday schedule states that it will close
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. The NYSE may also
close on other days. The Fund may invest a substantial portion of its
assets in foreign securities primarily listed on foreign exchanges which
trade on Saturdays or other customary U.S. business holidays on which the
NYSE is closed. Because the Fund's offering price and net asset value
will not be calculated on those days, the Fund's net asset value per share
of its Class A and Class B shares may be significantly affected on such
days, when shareholders will not have the ability to purchase or redeem
shares.
The Fund's Board of Trustees has established procedures for the
valuation of its securities: (i) equity securities traded on a securities
exchange or on NASDAQ are valued at the last sale prices on their primary
exchange or NASDAQ that day (or, in the absence of sales that day, at
values based on the last sales price of the preceding trading day, or
closing bid and asked prices); (ii) NASDAQ and other unlisted equity
securities for which last sales 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) securities (including restricted securities) not having readily-
available market quotations are valued at fair value under the Board's
procedures; (iv) 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 Fund's Board of Trustees or
obtained from an active market maker in that security; (v) short-term debt
securities having a remaining maturity of 60 days or less are valued at
cost, adjusted for amortization of premiums and accretion of discounts;
and (vi) securities traded on foreign exchanges or in foreign over-the-
counter markets are valued as determined by a portfolio pricing service
approved by the Board, based upon 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 to convert their values
to U.S. dollars. Foreign currency will be valued as close to the time
fixed for the valuation date as is reasonably practicable. The value of
securities denominated in foreign currency will be converted to U.S.
dollars at the prevailing rates of exchange at the time of valuation.
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 such 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 its net asset
value unless the Board of Trustees, or the Manager under procedures
established by the Board, determines that the particular event would
materially affect the Fund's net asset value, in which case an adjustment
would be made.
Puts, calls and Futures are valued at the last sale prices on the
principal exchanges on which they are traded or on NASDAQ, as applicable,
or, if there are no sales, in accordance with (i) above. When the Fund
writes an option, an amount equal to the premium received by the Fund is
included in its Statement of Assets and Liabilities as an asset, and an
equivalent deferred credit is included in the liability section. The
deferred credit is adjusted ("marked to market") to reflect the current
market value of the option.
Dual Class Methodology. The methodology for calculating the net asset
value, dividends and distributions of the Fund's Class A and Class B
shares recognizes two types of expenses. General expenses that do not
pertain specifically to either class are allocated pro rata to the shares
of each class, based on the percentage of the Fund's aggregate net assets
represented by the net assets of that class. General expenses include (i)
management fees, (ii) legal, bookkeeping and audit fees, (iii) printing
and mailing costs of shareholder reports, prospectuses, Additional
Statements and other materials for current shareholders, (iv) fees to
independent Trustees, (v) custodian expenses, (vi) share issuance costs,
(vii) organization and start-up costs, (viii) interest, taxes and
brokerage commissions, and (ix) non-recurring expenses, such as litigation
costs. Other expenses that are directly attributable to a class are
allocated equally to each outstanding share within that class. Such
expenses include (a) Distribution and Service Plan fees, (b) incremental
transfer agent and shareholder servicing agent fees and expenses, (c)
registration fees, and (d) shareholder meeting expenses, to the extent
that such expenses pertain to a specific class rather than to the Fund as
a whole.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and
reduction in expenses realized by the Distributor, dealers and brokers
making such sales. No sales charge is imposed in certain circumstances
as described in the Prospectus, because the Distributor or dealer or
broker incurs little or no selling expenses. The term "immediate family"
refers to one's spouse, children, grandchildren, grandparents, parents,
parents-in-law, brothers and sisters, sons- and daughters-in-law, a
sibling's spouse and a spouse's siblings.
Redemptions. Information on how to redeem shares of the Fund is stated
in the Prospectus. The Prospectus states that payment for shares tendered
for redemption is ordinarily made in cash. However, if the Board of
Trustees determines that it would be detrimental to the best interests of
the remaining shareholders of the Fund to make payment wholly in cash the
redemption price may be paid 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 SEC rules. 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 of the Fund 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 converting the assets
to cash. The method of valuing securities used to make redemptions in
kind will be the same as the method of valuing portfolio securities
described above under "Determination of Net Asset Value Per Share," and
such valuation will be made as of the same time the redemption price is
determined.
The Fund's Board of Trustees has the right to cause the involuntary
redemption of shares held in any account if the aggregate net asset value
of such shares is less than $500 or such lesser amount as the Board may
decide. The Fund's Board of Trustees will not cause the involuntary
redemption of shares in an account if the aggregate net asset value of
such 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 may set requirements for permission to allow
the shareholder to increase the investment so that the share would not be
involuntarily redeemed.
Cancellation of Purchase Orders. Cancellation of purchase orders for Fund
shares (for example, when checks submitted to purchase shares are returned
to the Fund unpaid) causes a loss to be incurred when the net asset value
of the Fund's shares on the date of cancellation is less than on the
purchase date. That loss is equal to the difference in net asset value
times 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 Distributor may seek other
redress.
Transfers. Shareholders owning shares of both classes must specify
whether they intend to transfer Class A or Class B shares. Shares are not
subject to the payment of a CDSC of either class at the time of transfer
(to another related party, by absolute assignment, gift or bequest, not
involving, directly or indirectly, a public sale). The transferred shares
will remain subject to the CDSC, 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 CDSC if redeemed at the time of transfer,
then shares will be transferred in the order described in "How to Buy
Shares -Class B Contingent Deferred Sales Charge" in the Prospectus for
the imposition of the Class B CDSC on redemptions.
Exchanges of Class B Shares. As stated in the Prospectus, shares of a
particular class of Eligible Funds having more than one class of shares
may be exchanged only for shares of the same class of another Eligible
Fund. All of the Eligible Funds offer Class A shares, but only the
following other Eligible Funds offer Class B shares:
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Investment Grade Bond Fund
Oppenheimer Value Stock Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer Government Securities Fund
Oppenheimer High Yield Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Mortgage Income Fund
Oppenheimer Cash Reserves
Oppenheimer Special Fund
Oppenheimer Equity Income Fund
Oppenheimer Main Street California Tax-Exempt Fund
DISTRIBUTION AND SERVICE PLANS
The Fund has adopted a separate Plan for each class of shares of the
Fund under Rule 12b-1 of the Investment Company Act pursuant to which the
Fund will reimburse the Distributor quarterly for all or a portion of its
costs incurred in connection with the distribution and/or servicing of the
shares of that class, as described in the Prospectus. Each Plan has been
approved: (i) by a vote of the Board of Trustees of the Fund, including
a majority of the "Independent Trustees" (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 Plans or in any agreements relating to the Plans) cast in person at
a meeting called for the purpose of voting on the Plan; and (ii) by the
vote of the holders of a "majority" (as defined under the Investment
Company Act) of the shares of such class (for the Class B Plan, such vote
having been cast by the Manager as the sole initial holder of Class B
shares of the Fund). In approving each Plan, the Board determined that
it is likely that the Plan will benefit the shareholders of the respective
class of the Fund.
Each Plan shall, unless terminated as described below, continue in
effect from year to year only as long as such continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. Either Plan may be terminated at
any time by the vote of a majority of the Independent Trustees or by the
vote of the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding shares of the respective class. Neither Plan may
be amended to increase materially the amount of payments to be made unless
such amendment is approved by shareholders of the Class affected by the
amendment. All material amendments must be approved by the Independent
Trustees.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Trustees at least
quarterly on the amount of all payments made pursuant to the Plan, the
purpose for the payment and the identity of each Recipient that received
any such payment. The report for the Class B Plan shall also include the
distribution costs for that quarter, and such costs for previous fiscal
periods that are carried forward, as explained in the Prospectus and
below. Those reports, including the allocations on which they are based,
will be subject to the review and approval of the Independent Trustees in
the exercise of their fiduciary duty. Each Plan further provides that
while it is in effect, the selection and nomination of those Trustees of
the Fund who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision as to any such selection or nomination is approved by a majority
of such Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the
fee at the maximum rate and set no minimum amount. The Plans permit the
Distributor and the Manager to make additional distribution payments to
Recipients from their own resources (including profits from advisory fees)
at no cost to the Fund. The Distributor and the Manager may, in their
sole discretion, increase or decrease the amount of distribution
assistance payments they make to Recipients from their own assets.
Prior to July 1, 1993, the Class A Plan (the "Prior Class A Plan")
provided that payments will be made only as to Class A shares acquired on
or after April 1, 1991. On August 3, 1993, shareholders approved the
current Class A Plan, which provides for payments to be made as described
in the Prospectus. For the fiscal year ended September 30, 1993, the Fund
reimbursed the Distributor $874,935 and $388,370 pursuant to the Prior
Class A Plan and the current Class A Plan, respectively, all of which was
paid to Recipients, including $53,614 and $23,043 to a broker-dealer that
is an affiliate of the Distributor. Payments received by the Distributor
under the Class A Plan will not be used to pay any interest expense,
carrying charge, or other financial costs, or allocation of overhead by
the Distributor. Any unreimbursed expenses incurred with respect to Class
A shares for any fiscal quarter by the Distributor may not be recovered
under the Class A Plan in subsequent fiscal quarters.
The Class B Plan allows the service fee payment to be paid by the
Distributor to Recipients in advance for the first year Class B shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net assets of the Class
B shares sold. An exchange of shares does not entitle the Recipient to
an advance service fee payment. In the event Class B shares are redeemed
during the first year such shares are outstanding, the Recipient will be
obligated to repay a pro rata portion of such advance payment to the
Distributor. Although the Class B Plan permits the Distributor to retain
both the asset-based sales charges and the service fee on Class B shares,
or to pay Recipients the service fee on a quarterly basis, without payment
in advance, the Distributor intends to pay the service fee to Recipients
in the manner described above. A minimum holding period may be
established from time to time under the Class B Plan by the Board.
Initially, the Board has set no minimum holding period. All payments
under the Class B Plan are subject to the limitations on such plans
imposed by the National Association of Securities Dealers, Inc. Rules of
Fair Practice. The Class B Plan allows for the carry-forward of
distribution expenses, to be recovered from asset-based sales charges in
subsequent fiscal periods, as described in the Prospectus. For the fiscal
period from August 17, 1993 (inception of the class) to September 30,
1993, payments under the Class B Plan totalled $3,811 which were retained
by the Distributor and of which $2,858 was attributable to the asset-based
sales charge and the remainder attributable to the service fee.
The asset-based sales charge paid to the Distributor by the Fund under
the Class B Plan is intended to allow the Distributor to recoup the cost
of sales commissions paid to authorized brokers and dealers at the time
of sale, plus financing costs, as described in the Prospectus. Such
payments may also be used to pay for the following expenses in connection
with the distribution of Class B shares: (i) financing the advance of the
service fee payment to Recipients under the Class B Plan, (ii)
compensation and expenses of personnel employed by the Distributor to
support distribution of Class B shares, and (iii) costs of sales
literature, advertising and prospectuses (other than those furnished to
current shareholders) and state "blue sky" registration fees.
The Fund believes that current accounting standards do not require the
Fund to record as a current liability its obligation under the Class B
Plan to carry over and continue payments of the asset-based sales charge
to the Distributor in the future to reimburse it for expenses incurred as
to Class B shares sold prior to the termination of the plan. Those
accounting standards are currently being reviewed by the AICPA, as
discussed in the prospectus. If those accounting standards should be
changed to require the Fund to recognize that obligation for future
payments as a current liability, the Fund's Board would consider other
alternatives to that provision of the Class B Plan, because otherwise the
treatment of such expenses as a current liability could result in a
decrease in the net asset value per Class B share. Such decrease would
affect all then-outstanding Class B shares regardless of how long they had
been held. Furthermore, Class B shareholders whose shares had not matured
would continue to remain subject to the Class B CDSC.
The Glass-Steagall Act and other applicable laws and regulations,
among other things, generally prohibit Federally-chartered or supervised
banks from engaging in the business of underwriting, selling or
distributing securities as principals. Accordingly, the Distributor may
pay banks only for sales made on an agency basis or for performance of
administrative and shareholder servicing functions. It is the
understanding of the Manager and the Distributor that the Glass-Steagall
Act and other applicable laws and regulations do not prohibit banks and
other financial institutions from providing services described above. In
addition, certain banks and financial institutions may be required to
register as dealers under state law. However, judicial or administrative
decisions or interpretations of such laws, as well as changes in either
Federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries or affiliates could prevent
certain banks from continuing to perform all or a part of these services.
If a bank were so prohibited, shareholders of the Fund who were clients
of such bank would be permitted to remain as shareholders, and if that
bank could no longer provide those service functions, alternate means for
continuing the servicing of such shareholders would be sought. In such
event, shareholders serviced by such bank might no longer be able to avail
themselves of any automatic investment or other services then being
provided by such bank. The Fund's Board of Trustees will consider
appropriate modifications to the Fund's operations, including
discontinuance of payments under the Plan to such institutions, in the
event of any future change in such laws or regulations which may adversely
affect the ability of such institutions to provide these services. It is
not expected that shareholders would suffer any adverse financial
consequences as a result of any of those occurrences.
PERFORMANCE, DIVIDEND AND TAX INFORMATION
Performance Information. As described in the Prospectus, from time to
time, the "average annual total return", "total return" and "total return
at net asset value" of an investment in each class of shares of the Fund
may be advertised. An explanation of how average annual total return and
total return are calculated and the components of those calculations is
set forth below. The public sale of Class B shares of the Fund commenced
on August 17, 1993.
The "average annual total return" of each class is an average annual
compounded rate of return. It is the rate of return based on factors
which include a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") with an Ending Redeemable
Value ("ERV") of that investment, according to the following formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
The "total return" calculation uses the same factors, but does not
average the rate of return on an annual basis. Total return measures the
cumulative (rather than the average) change in value of a hypothetical
investment over a stated period. Total return is determined as follows:
ERV - P
- ------- = Total Return
P
Both formulas assume (i) for Class A shares, the payment of the Fund's
current maximum sales charge of 5.75% (as a percentage of the offering
price) on the initial investment ("P"), and (ii) for Class B shares, the
payment of the contingent deferred sales charge of 5% for the first year,
4% for the second year, 3% for the third and fourth years, 2% for the
fifth year, 1% for the sixth year, applied as described in "How to Buy
Shares" in the Prospectus. The formulas also assume that all dividends
and capital gains distributions during the period are reinvested at net
asset value per share, and that the investment is redeemed at the end of
the period. The "average annual total returns" on an investment in Class
A shares of the Fund (using the method described above) for the one, five
and ten-year periods ended September 30, 1993, was 10.91%, 13.59%, and
12.68%, respectively. The "total return" on Class A shares for the ten-
year period ended September 30, 1993, was 229.92%. During a portion of
the periods for which total returns are shown, the Fund's maximum sales
charge rate was higher; as a result, performance returns on actual
investments during those periods may be lower than the results shown. The
"average annual total return" and "total return" on Class B shares for the
period August 17, 1993 to September 30, 1993 were (10.49)% and (1.36)%,
respectively.
From time to time the Fund may also quote a "total return at net asset
value" for a class of shares to describe the rate of return on an
investment in the Fund. It is based on the difference in net asset value
per share at the beginning and the end of the period (without considering
sales charge) and takes into consideration the reinvestment of dividends
and capital gains (as with total return, above). The Fund's return at net
asset value on Class A shares for the one year period ended September 30,
1993 was 17.67% and the Fund's return at net asset value on Class B shares
for the period from August 17, 1993 to September 30, 1993 was 3.64%.
From time to time the return on an investment in the Fund may be
compared to the returns on other investments at specified fixed rates of
return over a 10-year period. The chart below illustrates the returns on
hypothetical investments having the fixed rates of return illustrated,
assuming (i) there is no sales charge on the investment, (ii) earnings are
reinvested at the end of each year and (iii) each investment is made on
the first day of each year in the periods shown.
Value on September 30, 1993
Investment Assumed Average Annual Return
5% 10% 15% 20%
Single $1,000 $ 1,629 $ 2,594 $ 4,046 $ 6,192
Annual $1,000 $13,208 $17,533 $23,350 $31,151
Total return information may be useful to investors in reviewing the
Fund's performance. However, certain factors should be considered before
using such information as a basis for comparison with alternative
investments. No adjustment is made for taxes payable on distributions.
An investment in the Fund is not insured; its total return is not
guaranteed and will fluctuate over time. Total return for any given past
period is not an indication or representation by the Fund of future rates
of return on its shares. The Fund's total return is affected by portfolio
quality, portfolio maturity, type of investments held and operating
expenses. When comparing the total return of an investment in Class A or
Class B shares with that of other investment instruments, investors should
understand that certain other investment alternatives such as money market
instruments, certificates of deposit, U.S. Government securities or bank
accounts provide a return which remains relatively constant over time and
also that bank accounts may be insured. Investors should also understand,
when comparing the Fund's total return with that of other investment
alternatives, that since the Fund is an equity fund seeking capital
appreciation, its shares are subject to greater market risks than certain
other investments. The current price per share is listed daily in
newspaper financial sections.
From time to time the Fund may publish the ranking of the performance
of its Class A or Class B shares by Lipper Analytical Services, Inc.
("Lipper"), a widely-recognized independent service. Lipper monitors the
performance of regulated investment companies, including the Fund, and
ranks their performance for various periods based on categories relating
to investment objectives. The performance of the Fund is ranked against
(i) all other funds, (ii) all other global funds and (iii) all other
global funds in a specific size category. The Lipper performance analysis
includes the reinvestment of capital gains distributions and income
dividends but does not take sale charges or taxes into consideration.
From time to time the Fund may publish the ranking of the performance
of its Class A or Class B shares by Morningstar, Inc. ("Morningstar"), an
independent mutual fund monitoring service that ranks various mutual
funds, including the Fund, based upon the fund's three, five and ten-year
average annual total returns (when available) and a risk factor that
reflects fund performance relative to three-month U.S. Treasury bill
monthly returns. Such returns are adjusted for fees and sales loads. The
ratings represent a fund's historical risk/reward ratio relative to other
funds in its class. There are five ranking categories with a
corresponding number of stars: highest (5 stars), above average (4
stars), neutral (3 stars), below average (2 stars) and lowest (1 star).
Morningstar ranks the Fund in relation to other rated equity funds.
The total return on an investment made in Class A or Class B shares
of the Fund may be compared with performance for the same period of the
Morgan Stanley World Index, an unmanaged index of issuers listed on the
stock exchanges of 20 foreign countries and the United States and widely
recognized as a measure of global stock market performance. The
performance of such Index includes a factor for the reinvestment of
dividends but does not reflect expenses or taxes.
From time to time, the Fund may include in its advertisements and
sales literature performance information about the Fund's Class A or Class
B shares cited in other newspapers and periodicals, such as The New York
Times, which may include performance quotations from other sources,
including Lipper or Morningstar.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect
to reinvest all dividends and/or capital gains distributions in shares of
the same class of any of the other funds listed in the Prospectus as
"Eligible Funds," at net asset value without sales charge. Class B
shareholders should be aware that as of the date of this Additional
Statement, not all Eligible Funds offer Class B shares. The names of such
Funds are listed under "Exchanges of Class B Shares," above. To elect
this option, the 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.
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and distributions is explained in the
Prospectus under the caption "Dividends, Distributions and Taxes."
Special provisions of the Internal Revenue Code govern 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 (generally,
dividends from domestic corporations) which the Fund derives from its
portfolio investments held for a minimum period, usually 46 days. A
corporate shareholder will not be eligible for the deduction on dividends
paid on shares held by that shareholder for 45 days or less. To the
extent the Fund's dividends are derived from gross income from option
premiums, interest income, short-term gains from the sale of securities
or dividends from foreign corporations, its 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
from November 1 of the prior year to October 31 of that year or else must
pay an excise tax on the amounts not distributed. While it is presently
anticipated that the Fund's distributions will meet those requirements,
the Fund's Board and the Manager may determine in a particular year that
it would be in the best interest of shareholders not to distribute income
or capital gains at the mandated levels and to pay the excise tax on the
undistributed amounts, which would reduce the amount available for
distribution to shareholders.
If the Fund has more than 50% of its assets invested in securities of
foreign issuers 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 a deduction) for foreign taxes paid by
the Fund. Under Section 853, shareholders would include in gross income
both cash dividends received from the Fund and the income taxes paid by
the Fund with respect to, or withheld from, interest and dividends paid
to the Fund from its foreign investments. Shareholders would generally
be entitled to treat the foreign taxes withheld as a credit on their
Federal income taxes. In effect, a portion of the shareholder's Federal
income taxes would be paid to other governments. 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 income taxes on the income received.
ADDITIONAL INFORMATION
Description of the Fund. 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 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 highly unlikely and 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 Fund, and any shareholder of the Fund, agrees under the Fund's
Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings
with the Fund, and the Trustees shall have no personal liability to any
such person, to the extent permitted by law.
It is not contemplated that regular annual meetings of shareholders
will be held. 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 shareholders 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 in the aggregate shares of the Fund valued at $25,000 or
more or holding 1% or more of the Fund's outstanding shares, whichever is
less, 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 in Section 16(c) of the Investment
Company Act.
The Custodian and the Transfer Agent. The Custodian's responsibilities
include safeguarding and controlling the Fund's portfolio securities and
handling the delivery of portfolio securities to and from the Fund. The
Manager has represented to the Fund that its banking relationships with
the Custodian have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the Custodian. It
will be the practice of the Fund to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates.
Oppenheimer Shareholder Services, as transfer agent, is responsible
for maintaining the Fund's shareholder registry and shareholder accounting
records, and for shareholder servicing and administrative functions.
General Distributor's Agreement. Under the General Distributor's
Agreement between the Fund and the Distributor, the Distributor acts as
the Fund's principal underwriter in the continuous public offering of the
Fund's Class A and Class B shares but is not required to sell a specific
amount of shares. Expenses normally attributable to sales (other than
those paid under the Distribution Plan), 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 September 30, 1991, 1992 and 1993, the aggregate amount
of sales charges on sales of the Fund's Class A shares was $10,637,341,
$12,026,496, and $4,864,818, respectively, of which the Distributor and
an affiliated broker-dealer retained in the aggregate $2,097,395 in 1991,
$3,494,475 in 1992 and $1,356,117 in 1993.
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 investment companies advised
by the Manager.
AUTOMATIC WITHDRAWAL PLAN PROVISIONS
By requesting an Automatic Withdrawal Plan, the shareholder agrees to
the terms and conditions applicable to such plans, as stated below and
elsewhere in the Application for such Plans, the Prospectus and this
Additional Statement as they may be amended from time to time by the Fund
and/or the Distributor. When adopted, such amendments will automatically
apply to existing Plans.
Fund shares will be redeemed as necessary to meet withdrawal payments.
Shares acquired without a sales charge will be redeemed first and
thereafter, shares acquired with reinvested dividends and distributions
followed by shares acquired with a sales charge will be redeemed to the
extent necessary to make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted. Payments made to
shareholders under such plans should not be considered as a yield or
income on investment. Purchases of additional shares concurrently with
withdrawals are undesirable because of sales charges on purchases when
made. Accordingly, a shareholder may not maintain an Automatic Withdrawal
Plan while simultaneously making regular purchases. The Fund reserves the
right to amend, suspend or cease offering such plans at any time without
prior notice.
1. The Transfer Agent will administer the Automatic Withdrawal Plan
(the "Plan") as agent for the person (the "Planholder") who executed the
Plan authorization and application submitted to the Transfer Agent.
2. 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 now held by the 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. Those
shares will be carried on the Planholder's Plan Statement.
3. 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 may be paid in cash or reinvested.
4. Redemptions of shares in connection with disbursement payments
will be made at the net asset value per share determined on the redemption
date.
5. Checks or ACH payments will be transmitted three business days
prior to the date selected for receipt of the monthly or quarterly payment
(the date of receipt is approximate), according to the choice specified
in writing by the Planholder.
6. The amount and the interval of disbursement payments and the
address to which checks are to be mailed may be changed at any time by the
Planholder on written notification to the Transfer Agent. The Planholder
should allow at least two weeks' time in mailing such notification before
the required change can be put in effect.
7. 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 such 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 of such redemption to the Planholder.
8. The Plan may, at any time, be terminated by the Planholder on
written notice to the Transfer Agent, or by the Transfer Agent upon
receiving directions to that effect from the Fund. the Transfer Agent
will also terminate the Plan upon receipt of evidence satisfactory to it
of the death or legal incapacity of the Planholder. Upon termination of
the Plan by the Transfer Agent or the Fund, shares remaining unredeemed
will be held in an uncertificated account 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, his executor or guardian, or as otherwise appropriate.
9. For purposes of using shares held under the Plan as collateral,
the Planholder may request issuance of a portion of his shares in
certificated form. Upon written request from the Planholder, the Transfer
Agent will determine the number of shares as to which a certificate may
be issued, so as not to cause the withdrawal checks to stop because of
exhaustion of uncertificated shares needed to continue payments. Should
such uncertificated shares become exhausted, Plan withdrawals will
terminate.
10. The Transfer Agent shall incur no liability to the Planholder
for any action taken or omitted by the Transfer Agent in good faith.
11. In the event that the Transfer Agent shall cease to act as
transfer agent for the Fund, the Planholder will be deemed to have
appointed any successor transfer agent to act as his agent in
administering the Plan.
LETTERS OF INTENT
In submitting a Letter of Intent ("Letter") to purchase Class A shares
of the Fund and other OppenheimerFunds at a reduced sales charge, the
investor agrees to the terms of the Prospectus, the Application used to
buy such shares, and the language in this Additional Statement as to
Letters of Intent, as they may be amended from time to time by the Fund.
Such amendments will apply automatically to existing Letters.
A Letter is the investor's statement of intention to purchase Class
A shares of the Fund (and other eligible OppenheimerFunds sold with a
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 investor states the intention to make the
aggregate amount of purchases (excluding any 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 to obtain the reduced sales charge rate (as set forth in "How to
Buy Shares" in the Prospectus) applicable to purchases of shares in that
amount (the "intended 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 amount, as described in the applicable
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 such fund shares on the last day of that period,
do not equal or exceed the intended 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 amount will be held in escrow by the Fund's transfer agent
subject to the Terms of Escrow.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended 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 total purchases. If total eligible purchases during
the Letter of Intent period exceed the intended 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 refer to 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
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 amount specified in the Letter shall be held in
escrow by the Fund's transfer agent. For example, if the minimum amount
specified under the Letter 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 total minimum investment 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 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 of the Fund as attorney-in-fact to surrender
for redemption any or all escrowed shares.
5. The funds whose shares are eligible for purchase under the Letter
(or the holding of which may be counted toward completion of the Letter)
do not include any fund whose shares are 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 a fund (described as an "Eligible Fund" in the Prospectus)
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.
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders of Oppenheimer Global Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Global Fund as of September 30, 1993, 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 September 30,
1993, 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 Global Fund as of September 30, 1993, 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
/s/ KPGM Peat Marwick
- -----------------------
Denver, Colorado
October 21, 1993
<PAGE>
Statement of Investments September 30, 1993
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <S> <C> <C>
Repurchase Agreements -- 1.4%
Repurchase agreement with Morgan Guaranty Trust Co., 3.30%, $20,000,000 $ 20,000,000
dated 9/30/93 and maturing 10/1/93, collateralized by U.S.
Treasury Bills, 3.05%, 3/24/94, with a value of $20,412,797
(Cost $20,000,000)
Corporate Bonds and Notes -- Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99 4,500,000 5,051,250
1.0% (3)
International Container Terminal Services, Inc., 6% Cv. Sr. 2,000,000 2,770,000
Nts., 2/19/00 (3)
Saga Petroleum AS, 9% Cv. Debs., 12/31/99 22,894,000+ 5,631,696
Total Corporate Bonds and Notes (Cost $12,577,667) 13,452,946
Units Subject
Date/Price to Put
Put Options Purchased -- .0%
Hang Seng Index (Cost $513,218) 10/93/HKD 6,084 2,924,596 756
Units
Rights, Warrants and
Certificates -- .4%
Skandinaviska Enskilda Banken Group Rts., Exp. 10/93 1,240,000 3,668,732
Societa Finanziora Telefonica SPA Wts., Exp. 9/94 236,000 1,856,625
Svenska Handelsbanken, Inc. Rts., Exp. 10/93 100,000 332,849
Total Rights, Warrants and Certificates (Cost $4,396,513) 5,858,206
Shares
Common Stocks -- 97.1%
Basic Materials -- 3.6%
Gold -- .5% Minerals Technologies, Inc. 240,000 6,900,000
Paper and Forest Hansol Paper Ltd., Sponsored GDR* (3) 360,000 7,020,000
Products -- 1.6% Indah Kiat 4,636,000 4,844,230
Kimberly Clark de Mexico 630,000 8,083,869
Maderas y Sinteticos SA, ADR 150,000 2,775,000
22,723,099
Steel -- 1.5% Dofasco, Inc.* 413,300 4,834,716
Maruichi Malaysia Steel Tube Berhad 1,649,000 4,112,880
Pohang Iron & Steel Co. Ltd.* 225,000 8,888,119
Pusan Steel Pipe Corp. 99,000 2,713,098
20,548,813
Consumer Cyclicals -- 17.3%
Airlines -- .8% Vienna International Airport(1) 290,000 11,893,952
Automobiles -- .6% CONSORCIO G GRUPO DINA SA, Sponsored ADR 400,000 8,100,000
Broadcast Media -- 4.3% Comcast Corp., Cl. A Special 310,000 8,951,250
Grupo Televisa SA, ADS* 225,000 10,659,375
Rogers Communications, Inc., Cl. B* 800,000 12,128,318
Scandinavian Broadcasting System SA 315,000 5,945,625
Tele-Communications, Inc.* 290,000 7,250,000
Television Francaise I 170,000 14,734,975
59,669,543
Household Furnishings Electrolux AB, Series B Free 200,000 5,966,621
and Appliances -- 3.6% Oyl Industries Berhad 1,425,000 5,597,145
Philips Gloeilamp NV 850,000 17,230,209
Semi-Tech Ltd. 3,468,935 6,458,633
Singer Co. NV (The)* 240,000 9,000,000
Sony Corp. (4) 140,000 5,951,689
50,204,297
Publishing -- 1.3% Dun & Bradstreet Corp. (The) 100,000 6,250,000
Oriental Press Group 10,000,000 4,880,889
Time Warner, Inc. 190,000 7,742,500
18,873,389
Retail Stores - General Sears Roebuck de Mexico SA* 1,466,400 16,537,555
Merchandise Chains -- 1.5% SPAR Handels AG, Non-Vtg. 14,000 3,682,978
20,220,533
Retail - Specialty -- 2.4% Aoyama Trading Co. (4) 148,000 12,109,245
Castorama Dubois Investissements LP (2) 145,420 18,881,191
PT Modern Photo Film Co. 424,000 3,383,248
34,373,684
Retail - Specialty Giordano Holdings Ltd. 14,719,000 8,326,037
Apparel -- .6%
Textiles - Apparel Pang-Rim Cotton Spinning Co.* 90,000 2,677,546
Manufacturers -- .9% Tokyo Style Co. (4) 550,000 9,746,668
12,424,214
Toys -- 1.3% Nintendo Co.(4) 200,000 17,758,919
Consumer Non-Cyclicals -- 16.5%
Beverages - Alcoholic -- .8% Compania Cervecerias Unidas SA, Sponsored ADR (2) 310,000 $ 6,510,000
Jinro Ltd. 186,729 4,356,633
10,866,633
Beverages - Soft Buenos Aires Embotelladora SA, Sponsored ADR, Cl. B* 172,649 5,567,930
Drinks -- 1.1% Fomento Economico Mexicano SA, Sponsored Cl. B ADR* (2) 2,150,000 9,675,000
15,242,930
Cosmetics -- .4% Avon Products, Inc. 100,000 5,212,500
Drugs -- 4.2% Astra AB Free, Series A 1,250,000 25,734,135
PT Kalbe Farma 709,940 4,720,721
Roche Holdings AG 3,500 13,125,600
Sankyo Co. Ltd.(4) 300,000 8,483,560
Takeda Chemical Industries Ltd.(4) 550,000 7,102,625
59,166,641
Food Processing -- 1.4% CP Pokphand Co. 6,311,000 1,713,560
CP Prima PT 500,000 1,935,469
Japfa Comfeed 1,500,000 2,208,572
Molinos Rio de La Plata, Series B 773,300 7,624,647
PT Sinar Mass Agro Resources & Technology 2,430,000 6,520,987
20,003,235
Healthcare - Faulding (F.H.) & Co. Ltd. 2,893 12,323
Diversified -- .6% Novo-Nordisk AS, Series B 15,000 1,315,802
Schering AG 12,500 7,551,787
8,879,912
Healthcare - Chiron Corp.* 180,000 13,477,500
Miscellaneous -- 4.6% Gehe AG 21,155 5,345,221
Genzyme Corp.* 400,000 13,400,000
K-V Pharmaceutical Co., Cl. A(1) 441,800 4,528,450
K-V Pharmaceutical Co., Cl. B(1) 335,900 3,484,963
Neozyme II Corp., Units(1) 146,000 3,796,000
Plant Genetics Systems International NV(3) 637,280 10,342,684
Quintiles Transnational Corp.*(3) 318,473 5,716,590
Takare PLC 1,210,000 4,255,297
64,346,705
Hospital Community Psychiatric Centers 645,000 8,546,250
Management -- 1.6% Rhoen Klinikum AG Preference(1) 26,511 14,435,064
22,981,314
Housewares -- .6% Srithai Superware Co. Ltd. 1,030,000 7,802,980
Medical Products -- .5% Gambro AB, Series B* 146,681 6,907,491
Retail Stores - Food Dairy Farm International Holdings Ltd. 3,176,493 5,708,798
Chains -- .7% KFC Holdings 1,000,000 2,297,775
8,006,573
Energy -- 7.6%
Natural Gas - Renaissance Energy Ltd.* 240,000 5,951,860
Processing -- .7% Voest-Alpine Eisenbahnsysteme AG 35,460 4,161,897
10,113,757
Oil-Integrated Valero Energy Corp. 256,000 6,304,000
Domestic -- .5%
Oil - Integrated British Petroleum Co. PLC 180,000 10,687,500
International -- 3.0% Distribuidora Chilectra Metropolitan SA 95,100 2,710,350
Poco Petroleum Ltd.* 595,000 4,343,173
YPF Sociedad Anonima, Sponsored ADR* 548,000 13,905,500
YuKong Ltd. 349,886 10,193,326
41,839,849
Oil and Gas Drilling -- 2.4% Ampolex Ltd. 1,900,000 7,148,841
Compania Naviera Perez Co., Cl. A 800,000 4,364,364
Global Marine, Inc.* 2,135,000 10,675,000
Petroleum Geo-Services AS* 357,000 7,833,805
Transocean Drilling AS 410,000 2,951,182
32,973,192
Oil Well Services and JGC Corp. (2)(4) 360,000 6,922,585
Equipment -- 1.0% McDermott International, Inc. 260,000 7,345,000
14,267,585
Financial -- 11.3%
Financial Services - American Express Co. 240,000 $ 8,550,000
Miscellaneous -- 3.1% Coryo Securities Corp. 234,920 5,016,993
Industrial Finance Corp. 4,000,000 8,170,660
Morgan Stanley Group, Inc. 32,800 2,853,600
Peregrine Investment Holdings Ltd. 4,000,000 5,895,855
Phatra Thanakit Co. 14,900 274,217
Sangyoug Investment & Securities 200,000 5,061,290
SecomCo. Ltd.* (4) 100,000 6,899,962
42,722,577
Major Banks - Other -- 7.4% Banco de Galicia, Series B 1,188,947 9,402,102
Banco Frances del Rio de la Plata SA 300,000 4,125,000
Banco LatinoAmericano de Exportaciones SA, Cl. E 250,000 9,968,750
Bank Bali 1,659,500 4,729,194
C.S. Holdings 3,000 6,191,981
Deutsche Bank AG 11,800 5,558,727
Korea First Bank 400,000 5,234,115
PT Bank International Indonesia 3,000,000 8,691,800
PT Lippo Bank 3,500,000 8,810,541
PT Panin Bank 3,400,000 4,279,405
Shin Han Bank Ltd. 238,330 3,795,297
Skandinaviska Enskilda Banken Group(2) 1,240,000 6,726,009
Standard Chartered Bank PLC 1,050,000 14,833,305
Svenska Handelsbanken, Inc.*(2) 200,000 2,206,664
Swiss Bank Corp. 18,000 2,783,243
United Overseas Bank Ltd. 806,625 6,065,647
103,401,780
Money Center Banks -- .8% Bankers Trust New York Corp. 85,000 6,800,000
Citicorp 100,000 3,800,000
10,600,000
Industrial -- 20.5%
Building Materials International de Ceramica SA, Series B 770,000 3,527,792
Group -- .7% Sungei Way Holdings 1,800,000 7,034,727
10,562,519
Conglomerates -- 2.8% Commercial del Plata 594,400 3,272,479
Compagnie Generale des Eaux (2) 14,000 6,332,635
Hopewell Holdings Ltd. 10,000,000 7,822,352
Hutchison Whampoa Ltd. 1,493,000 4,574,990
Kinnevik Investments AB, Series B Free (2) 300,000 5,732,394
Sophus Berendsen AS, Series B 153,000 11,033,651
38,768,501
Containers - Metal and M C Packaging Corp Ltd. 6,650,000 2,923,362
Glass -- .2%
Containers - Paper -- .2% PT Surabaya Agung Industries* 1,921,500 2,829,180
Electrical Equipment -- 2.7% BBC Brown Boveri AG 32,000 19,881,506
Felten & Guilleaume Energietechnik AG 25,000 6,064,371
LEM Holdings SA(1) 25,200 5,113,107
PT Kabelmetal Indonesia(1) 810,000 2,231,370
Signalbau Huber AG Preference(1) 20,607 3,656,076
Supreme Cable Manufacturing 100,000 550,956
37,497,386
Engineering and BAU Holdings AF Preference(1) 151,400 13,079,507
Construction -- 7.2% Boskalis Westminster Koniniije(1)(2) 300,000 6,538,978
Danieli & Co., Non-Vtg. 1,632,000 5,635,024
Deutsche Babcock AG 93,300 10,833,791
Dong - AH Construction Industrial Co. 185,024 4,887,865
Foster Wheeler Corp. 200,000 6,250,000
Grontmij NV(1) 287,212 8,341,775
IHC Caland NV 900,000 17,998,539
Leighton Holdings Ltd.(1) 11,665,353 16,562,810
Nippon Densetsu Kogyo(4) 900 16,373
Nittoc Construction(4) 500,000 6,739,717
Taeyoung Corp. 155,020 3,731,640
100,616,019
Machinery - Bobst Bearers AG 6,980 6,519,631
Diversified -- .7% Schaerf AG Preference(1) 16,400 3,260,842
9,780,473
Manufacturing - Diversified CBI Industries, Inc. 265,000 6,691,250
Industrials -- 2.0%
Duewag AG 3,546 1,290,797
Madeco SA, ADR* 150,000 2,925,000
Mitsubishi Heavy Industries Ltd.(4) 1,200,000 7,284,550
Nylex Malaysia Berhad 1,856,000 4,045,970
Stewart & Stevenson Services, Inc. 60,000 2,805,000
Tipco Asphalt Co. Ltd. 541,700 3,373,249
28,415,816
Pollution Control -- 1.4% Elco Looser Holdings Inhaber 3,050 $ 5,462,936
GEA AG Preference 48,650 13,215,038
Ogden Projects, Inc. 51,600 806,250
19,484,224
Transportation - Kvaerner Industrier AS(1) 500,000 18,798,671
Miscellaneous -- 2.6% Sembawang Shipyard Ltd. 800,000 6,268,594
Singmarine Industries Ltd. 1,500,000 3,563,998
Unitor Ships Service AS 600,000 7,295,841
35,927,104
Technology -- 17.4%
Computer Software Microsoft Corp.* 185,300 15,287,250
and Services -- 3.0% Novell, Inc. 175,000 3,303,125
Sap AG Preference 12,326 9,426,158
SHL Systemhouse, Inc.* 1,017,000 9,788,625
Synopsys, Inc.* 90,000 4,275,000
42,080,158
Computer Systems -- .2% Cisco Systems, Inc. 60,000 3,000,000
Electronics - Solectron Corp.*(2) 62,000 3,394,500
Instrumentation -- .2%
Electronics - Intel Corp. 151,000 10,683,250
Semiconducters -- .8%
Telecommunications -- 13.2% Advanced Information Services Ltd. 501,500 9,309,078
American Telephone and Telegraph Co. 150,000 8,831,250
Carlton Communications PLC 1,000,000 11,208,783
Champion Technology Holdings 4,800,000 3,289,267
Korea Mobile Telecommunications 9,936 2,391,793
Millicom, Inc.* 7,000 176,750
Shinawatra Computer Communications Co. Ltd. 580,000 10,996,280
Societa Finanziora Telefonica SPA 9,000,000 24,735,983
Societa Italiana per L'Eserrcizio delle Telecomunicazioni 13,763,000 32,196,899
SPA(2)
Technology Resources Industries* 8,000,000 27,966,083
Telecommunication de Argentina, Cl. B 2,300,000 9,439,458
Telefonica de Argentina SA, Cl. B 650,000 3,058,064
Telefonica de Argentina SA, ADR, Cl. B(2) 130,000 6,110,000
Telefonica de Espana, ADS 100,000 3,575,000
Telefonos de Mexico SA, Sponsored ADR 300,000 15,150,000
Vodafone Group 2,012,702 15,150,400
183,585,088
Utilities -- 2.9%
Electric Companies -- 1.5% AES Corp. (The) 100,000 3,212,500
California Energy Co., Inc.* 150,000 2,756,250
Sithe Energies, Inc.* 300,000 3,975,000
Verbund Oest Electriz 200,500 10,987,638
20,931,388
Natural Gas -- .5% Hong Kong & China Natural Gas 3,600,000 6,888,841
Telephone (New) -- .9% Compania de Telefonos de Chile SA 152,500 12,562,188
Total Common Stocks (Cost $1,086,206,553) 1,353,586,131
Total Investments, at Value 99.9% 1,392,898,039
(Cost $1,123,693,951)
Other Assets Net of .1% 1,903,606
Liabilities
Net Assets 100.0% $1,394,801,645
<FN>
+ Face amount is reported in foreign currency.
* Non-income producing security.
(1) Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the year ended September 30,
1993. The aggregate fair value of all securities of affiliated companies as of
September 30, 1993 amounted to $100,098,827. Transactions during the period in
which the issuer was an affiliate are as follows:
</TABLE>
<TABLE>
<CAPTION>
Balance Balance
September 30, 1992 Gross Additions Gross Reductions September 30, 1993
Dividend
Shares Cost Shares Cost Shares Cost Shares Cost Income
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ambu
International,
Cl. B 45,000 $ 4,904,772 -- $ -- 45,000 $ 4,904,772 -- $ -- $ --
Bau Holdings
AF
Preference 132,890 14,601,347 19,910 1,952,393 1,400 171,218 151,400 16,382,522 --
Biomagnetic
Technologies,
Inc. 499,000 4,237,585 -- -- 499,000 4,237,585 -- -- --
Boskalis
Westminster
Koniniije -- -- 300,000 4,598,990 -- -- 300,000 4,598,990 --
Grontmij NV 253,380 7,268,279 33,832 654,499 -- -- 287,212 7,922,778 228,536
Kvaerner
Industrier
AS 235,531 7,908,348 264,469 7,344,006 -- -- 500,000 15,252,354 318,215
K-V
Pharmaceutical
Co., Cl.
A++ 487,112 2,551,984 -- -- 45,312 169,334 441,800 2,382,650 --
K-V
Pharmaceutical
Co., Cl.
B++ 360,000 1,292,390 -- -- 24,100 82,117 335,900 1,210,273 --
Leighton
Holdings
Ltd. 10,955,325 10,082,381 710,028 634,853 -- -- 11,665,353 10,717,234 741,893
LEM Holdings
SA 24,000 4,987,764 1,200 78,488 -- -- 25,200 5,065,252 189,512
Lindner
Holdings
AG 30,000 9,972,266 -- -- 30,000 9,972,266 -- -- --
Neozyme
Corp. 176,000 2,130,526 -- -- 176,000 2,130,526 -- -- --
Neozyme II
Corp.,
Units++ 190,000 2,870,805 -- -- 44,000 664,818 146,000 2,205,987 --
PT
Kabelmetal
Indonesia -- -- 810,000 1,781,696 -- -- 810,000 1,781,696 26,244
Receptech
Corp. 220,000 993,267 -- -- 220,000 993,267 -- -- --
Rhoen
Klinikum
AG
Preference 25,255 8,033,834 2,200 788,084 944 228,219 26,511 8,593,699 182,600
Schaerf AG
Preference 60,000 16,928,792 14,971 1,625,892 58,571 14,125,080 16,400 4,429,604 256,110
Signalbau
Huber AG
Preference 49,160 16,108,863 -- -- 28,553 8,823,320 20,607 7,285,543 166,371
Syncor
International
Corp. 619,000 4,980,850 -- -- 619,000 4,980,850 -- -- --
Vienna
International
Airport 202,500 9,680,486 87,500 4,054,362 -- -- 290,000 13,734,848 176,397
$129,534,539 $ 23,513,263 $ 51,483,372 $101,564,430 $2,285,868
<FN>
++ Not an affiliate as of September 30, 1993.
(2) Loaned security - See Note 5 of notes to financial statements.
(3) Restricted security - See Note 7 of notes to financial statements.
(4) Securities with an aggregate market value of $89,015,893 are segregated to
collateralize forward foreign currency exchange contracts.
See Note 6 of notes to financial statements.
</TABLE>
See accompanying notes to financial statements.
Statement of Assets and Liabilities September 30, 1993
<TABLE>
<S> <C> <C>
Assets Investments, at value (cost $1,123,693,951) - see accompanying statement $1,392,898,039
Collateral for securities loaned, at value - Note 5 54,128,000
Cash 1,300,366
Unrealized appreciation on forward foreign currency exchange contracts - Note 6 120,532
Receivables:
Investments sold 17,947,959
Dividends and interest 4,605,646
Shares of beneficial interest sold 3,263,587
Other 240,043
Total assets 147,504,172
Liabilities Collateral for securities loaned - Note 5 54,128,000
Payables and other liabilities:
Investments purchased 20,260,649
Shares of beneficial interest redeemed 4,229,227
Distribution assistance - Note 4 365,916
Other 718,735
Total liabilities 79,702,527
Net Assets $1,394,801,645
Composition of Paid-in capital $ 957,528,173
Net Assets Undistributed net investment income 9,918,309
Accumulated net realized gain from investment transactions 157,976,885
Net unrealized appreciation on investments and translation of assets and
liabilities in foreign currencies - Note 3 269,378,278
Net Assets $1,394,801,645
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of
$1,388,773,486 and 39,631,528 shares of beneficial interest outstanding) $ 35.04
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 37.18
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $6,028,159 and 172,282 shares of beneficial interest outstanding) $ 34.99
</TABLE>
See accompanying notes to financial statements.
Statement of Operations For the Year Ended September 30, 1993
<TABLE>
<S> <C> <C>
Investment Income Dividends:
Unaffiliated companies (less $1,833,945 of foreign tax withheld at source) $ 18,676,617
Affiliated companies (less $512,854 of foreign tax withheld at source) 2,285,868
Interest 3,066,099
Securities lending fees - Note 5 500,000
Total income 24,528,584
Expenses Management fees - Note 4 8,063,451
Transfer and shareholder servicing agent fees - Note 4 2,017,160
Distribution assistance:
Class A - Note 4 1,263,305
Class B - Note 4 3,811
Custodian fees and expenses 1,104,398
Interest 1,017,507
Shareholder reports 602,815
Trustees' fees and expenses 77,539
Legal and auditing fees 73,340
Registration and filing fees:
Class A 66,490
Class B 1,474
Other 30,138
Total expenses 14,321,428
Net Investment Income 10,207,156
Realized and Net realized gain on investments:
Unrealized Gain Unaffiliated companies 124,682,192
on Investments and Affiliated companies 10,699,532
Translation of Net realized gain 135,381,724
Assets and Liabilities
in Foreign Currencies
Net change in unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies:
Beginning of year 208,912,589
End of year - Note 3 269,378,278
Net change 60,465,689
Net Realized and Unrealized Gain on Investments and Translation of Assets and
Liabilities in Foreign Currencies 195,847,413
Net Increase in Net
Assets Resulting from
Operations $ 206,054,569
</TABLE>
See accompanying notes to financial statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended September 30,
1993 1992
<S> <C> <C> <C>
Operations Net investment income $ 10,207,156 $ 6,498,629
Net realized gain (loss) on investments 135,381,724 (9,372,318)
Net change in unrealized appreciation or
depreciation on investments and translation of
assets and liabilities in foreign currencies 60,465,689 (57,006,158)
Net increase (decrease) in net assets resulting
from operations 206,054,569 (59,879,847)
Dividends and Dividends from net investment income:
Distributions to Class A ($.119 and $.108 per share, respectively) (4,821,327) (3,652,055)
Shareholders Distributions from net realized gain on
investments:
Class A ($.122 and $.577 per share, respectively) (4,976,171) (19,511,444)
Beneficial Interest Net increase (decrease) in net assets resulting
Transactions from Class A beneficial interest transactions -
Note 2 (22,024,735) 221,322,076
Net increase in net assets resulting from Class B
beneficial interest transactions - Note 2 5,954,666 --
Net Assets Total increase 180,187,002 138,278,730
Beginning of year 1,214,614,643 1,076,335,913
End of year (including undistributed net
investment income of $9,918,309 and $4,532,480,
respectively) $1,394,801,645 $1,214,614,643
</TABLE>
See accompanying notes to financial statements.
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
Year Ended Period Ended
September 30, September 30,
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1993+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share
Operating
Data:
Net asset
value,
beginning of
period $ 30.03 $ 32.05 $ 27.63 $ 30.43 $ 22.94 $ 38.29 $ 28.88 $ 17.36 $ 16.47 $ 22.99 $33.33
Income (loss)
from
investment
operations:
Net investment
income .26 .17 .05 .02 .20 .04 .05 .12 .14 .07 .03
Net realized
and
unrealized
gain (loss)
on
investments
and
translation
of assets
and
liabilities
in foreign
currencies 4.99 (1.50) 6.14 .29 9.11 (9.70) 13.28 11.56 1.71 (3.96) 1.63
Total income
(loss) from
investment
operations 5.25 (1.33) 6.19 .31 9.31 (9.66) 13.33 11.68 1.85 (3.89) 1.66
Dividends and
distributions
to
shareholders:
Dividends from
net
investment
income (.12) (.11) (.08) (.11) (.09) (.07) (.11) (.10) (.04) (.12) --
Distributions
from net
realized
gain on
investments (.12) (.58) (1.69) (3.00) (1.73) (5.62) (3.81) (.06) (.92) (2.51) --
Total
dividends
and
distributions
to
shareholders (.24) (.69) (1.77) (3.11) (1.82) (5.69) (3.92) (.16) (.96) (2.63) --
Net asset
value, end
of period $ 35.04 $ 30.03 $ 32.05 $ 27.63 $ 30.43 $ 22.94 $ 38.29 $ 28.88 $ 17.36 $ 16.47 $34.99
Total Return,
at Net Asset
Value** 17.67% (4.23)% 23.71% .79% 42.87% (25.17)% 52.65% 67.63% 12.00% (18.65)% 3.64%
Ratios/
Supplemental
Data:
Net assets,
end of
period (in
thousands) $1,388,773 $1,214,615 $1,076,336 $719,893 $522,866 $371,438 $601,417 $372,243 $231,645 $245,706 $6,028
Average net
assets (in
thousands) $1,213,098 $1,193,870 $ 898,592 $672,246 $445,819 $398,220 $473,418 $330,827 $225,843 $262,765 $2,939
Number of
shares
outstanding
at end of
period (in
thousands) 39,632 40,441 33,585 26,056 17,183 16,191 15,708 12,891 13,347 14,920 172
Amount of debt
outstanding
at end of
period (in
thousands) $ -- $60,000 $60,000 $60,000 $30,000 $30,000 $35,000 $22,000 $14,000 $ -- N/A
Average amount
of debt
outstanding
throughout
each period
(in
thousands)++ $18,247 $60,000 $60,000 $42,877 $30,000 $31,052 $26,290 $19,058 $ 3,877 $ 8,765
N/A
Average number
of shares
outstanding
throughout
each period
(in
thousands)+++ 39,853 37,435 30,607 21,982 16,968 17,173 15,099 13,205 14,476 14,113 N/A
Average amount
of debt per
share
outstanding
throughout
each period $ .46 $ 1.60 $ 1.96 $ 1.95 $ 1.77 $ 1.81 $ 1.74 $ 1.44 $ .27 $ .62 N/A
Ratios to
average net
assets:
Net investment
income .84% .55% .22% .16% .73% .15% .16% .47% .81% .35% 1.52%*
Expenses 1.18% 1.36% 1.65% 1.68% 1.90% 1.89% 1.49% 1.60% 1.21% 1.48% 2.40%*
Portfolio
turnover
rate*** 86.9% 18.0% 19.9% 27.2% 62.6% 25.2% 37.0% 25.2% 29.0% 50.3% 86.9%
<FN>
* Annualized.
** Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns.
*** The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1993 were $1,030,091,557 and $1,055,706,289,
respectively.
+ For the period from August 17, 1993 (inception of offering) to September 30,
1993.
++ Based upon daily outstanding borrowings.
+++ Based upon month-end balances.
</TABLE>
See accompanying notes to financial statements.
Notes to Financial Statements
1. Significant Accounting Policies
Oppenheimer Global Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund's investment adviser is Oppenheimer Management Corporation
(the Manager). The Fund offers both Class A and Class B shares. Class A shares
are sold with a front-end sales charge. Class B shares may be subject to a
contingent deferred sales charge. Both classes of shares have identical rights
to earnings, assets and voting privileges, except that each class has its own
distribution plan, expenses directly attributable to a particular class and
exclusive voting rights with respect to matters affecting a single class.
Class B shares will automatically convert to Class A shares six years after
the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
Investment Valuation -- Portfolio securities are valued at 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. Forward foreign currency contracts are
valued at the forward rate on a daily basis.
Foreign Currency Translation -- The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in non-U.S.
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 foreign currency exchange contracts as
a hedge, upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Fund may enter into such contracts as a hedge
against changes in foreign currency exchange rates on portfolio positions. A
forward exchange contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. 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 is not separately
identified in the Fund's results of operations. Gains and losses on foreign
currency transactions are accounted for with the transactions that gave rise
to the exchange gain or loss.
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.
Allocation of Income, Expenses and Gains and Losses -- Income, expenses (other
than those attributable to a specific class) and gains and losses are
allocated daily to each class of shares based upon the relative proportion of
net assets represented by such class. Operating expenses directly attributable
to a specific class are charged against the operations of that class.
Federal Income Taxes -- The Fund intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income tax provision is required.
Trustees' Fees and Expenses -- The Fund has adopted a nonfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. The
accumulated liability for the Fund's projected benefit obligations was
$158,960 at September 30, 1993. No payments have been made under the plan.
Distributions to Shareholders -- Dividends and distributions to shareholders
are recorded on the ex-dividend date.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life
of the respective securities, in accordance with federal income tax
requirements. Realized gains and losses on investments and 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 Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1993+ September 30, 1992
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Class A:
Sold 9,261,030 $ 281,817,220 15,198,557 $ 487,396,320
Dividends and distributions reinvested 324,902 9,233,707 683,295 21,701,423
Redeemed (10,395,776) (313,075,662) (9,023,893) (297,775,667)
Net increase (decrease) (809,844) $ (22,024,735) 6,855,959 $ 221,322,076
Class B:
Sold 174,932 $ 6,018,401 -- $ --
Redeemed (2,650) (63,735) -- --
Net increase 172,282 $ 5,954,666 -- $ --
<FN>
+ For the year ended September 30, 1993 for Class A shares and for the period
from August 17, 1993 (inception of offering) to September 30, 1993 for Class B
shares.
</TABLE>
3. Unrealized Gains and Losses on Investments
At September 30, 1993, net unrealized appreciation of investments of
$269,204,088 was composed of gross appreciation of $297,886,773, and gross
depreciation of $28,682,685.
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .75% on
the first $200 million of net assets with a reduction of .03% on each $200
million thereafter to $800 million, .60% on the next $200 million and .57% on
net assets in excess of $1 billion. 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 September 30, 1993, commissions (sales charges paid by
investors) on sales of Class A shares totaled $4,864,818, of which $1,356,117
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 separate approved plans of distribution, each class may expend up to
.25% of its net assets annually to reimburse OFDI for costs incurred in
distributing shares of the Fund (prior to October 1, 1993, Class A
reimbursements were made with respect to shares sold subsequent to March 31,
1991), including amounts paid to brokers, dealers, banks and other
institutions. In addition, Class B shares are subject to an asset-based sales
charge of .75% of net assets annually, to reimburse OFDI for sales commissions
paid from its own resources at the time of sale and associated financing
costs. In the event of termination or discontinuance of the Class B plan of
distribution, the Fund would be contractually obligated to pay OFDI for any
expenses not previously reimbursed or recovered through contingent deferred
sales charges. During the year ended September 30, 1993, OFDI paid $76,657 to
an affiliated broker/dealer as reimbursement for Class A distribution-related
expenses and retained $3,811 as reimbursement for Class B distribution-related
expenses and sales commissions.
5. Securities Loaned
The Fund has entered into a securities lending arrangement with the custodian.
Under the terms of the agreement, the Fund receives an annual fee of $500,000,
plus 25% of the annual net income from lending transactions in excess of
$1,500,000. In exchange for such fees, the custodian is authorized to loan
securities on behalf of the Fund, against receipt of cash collateral at least
equal in value to the value of the securities loaned. The collateral is
invested by the custodian in money market instruments approved by the Manager.
As of September 30, 1993, the Fund had on loan securities valued at
$50,710,205. Cash of $54,128,000 was received as collateral for the loans, and
has been invested in the approved instruments identified below. The Fund bears
the risk of any deficiency in the amount of collateral available for return to
a borrower due to a loss in an approved investment.
<TABLE>
<CAPTION>
Security Valuation as of September 30, 1993
<S> <C>
Repurchase agreement with Goldman Sachs and Co., 3.80%,
dated 9/30/93 and maturing 10/1/93, collateralized by
Federal Home Loan Mortgage Corp. Bonds, 8.50%, 12/29/93,
with a value of $23,415,269 (Cost $23,415,269) $23,415,269
Repurchase agreement with Goldman Sachs and Co., 3.80%,
dated 9/30/93 and maturing 10/1/93, collateralized by
Federal National Mortgage Assn. Bonds, 4.50%-4.88%,
4/1/23-6/1/23, with a value of $19,546,281 (Cost
$19,546,281) 19,546,281
Repurchase agreement with Goldman Sachs and Co., 3.80%,
dated 9/30/93 and maturing 10/1/93, collateralized by U.S.
Treasury Bonds, STRIPS, 0%, 5/15/13, with a value of
$10,866,450 (Cost $10,866,450) 10,866,450
Repurchase agreement with Kidder Peabody and Co., 3.70%,
dated 9/30/93 and maturing 10/1/93, collateralized by U.S.
Treasury Bonds, STRIPS, 0%, 5/15/95, with a value of
$155,000 (Cost $155,000) 155,000
Repurchase agreement with Kidder Peabody and Co., 3.70%,
dated 9/30/93 and maturing 10/1/93, collateralized by
Student Loan Marketing Assn. Bonds, 8.50%, 6/30/95, with a
value of $145,000 (Cost $145,000) 145,000
Collateral for securities loaned (Cost $54,128,000) $54,128,000
</TABLE>
6. Forward Foreign Currency Exchange Contracts
At September 30, 1993, the Fund had outstanding forward exchange currency
contracts to sell foreign currencies as follows:
<TABLE>
<CAPTION>
Valuation
Expiration Contract as of Unrealized
Date Amount September 30, 1993 Appreciation
<S> <C> <C> <C> <C>
Japanese Yen 10/18/93 $63,421,455 $63,300,923 $120,532
</TABLE>
7. 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. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act that
are determined to be liquid by the Board of Trustees or by the Manager under
Board-approved guidelines. Restricted and illiquid securities amount to
$16,059,274, or 1.2% of the Fund's net assets, at September 30, 1993.
<TABLE>
<CAPTION>
Valuation
Acquisition Cost Per Unit as of
Security Date Per Unit September 30, 1993
<S> <C> <C> <C>
Banco Nacional de Mexico SA, 7% Exch.
Sub. Debs., 12/15/99+ 12/1/92 $100.00 $112.25
Hansol Paper Ltd., Sponsored GDR+ 2/4/93 $ 16.56 $ 19.50
International Container Terminal
Services, Inc., 6% Cv. Sr. Nts.,
2/19/00+ 2/19/93 $100.00 $138.50
Plant Genetics Systems International NV 5/27/92 $ 11.18 $ 16.23
Quintiles Transnational Corp. 8/2/93 $ 17.27 $ 17.95
<FN>
+ Transferable under Rule 144A of the Act.
</TABLE>
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent 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, New York 10015
Independent Auditors
KPMG Peat Marwick
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER GLOBAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements
1. Financial Highlights (See Part A): Filed herewith.
2. Independent Auditors' Report (See Part B): Filed herewith.
3. Statement of Investments (See Part B): Filed herewith.
4. Statement of Assets and Liabilities (See Part B): Filed herewith.
5. Statement of Operations (See Part B): Filed herewith.
6. Statements of Changes in Net Assets (See Part B): Filed herewith.
7. Notes to Financial Statements (See Part B): Filed herewith.
8. Independent Auditor's Consent: Filed herewith.
(b) Exhibits
Exhibit
Number Description
1. Amended and Restated Declaration of Trust as of 8/3/93:
Previously filed with Registrant's Post-Effective Amendment No.
60, 11/24/93, and incorporated herein by reference.
2. By-Laws amended as of 10/9/86: Previously filed with Registrant's
Post-Effective Amendment No. 48, 1/30/87, and incorporated herein
by reference.
3. Not applicable.
4. (i) Specimen Class A Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 60, 11/24/93,
and incorporated herein by reference.
(ii) Specimen Class B Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 60, 11/24/93,
and incorporated herein by reference.
5. Investment Advisory Agreement between Registrant and Oppenheimer
Management Corporation, made as of 8/3/93: Previously filed with
Registrant's Post-Effective Amendment No. 60, 11/24/93, and
incorporated herein by reference.
6. (i) General Distributor's Agreement dated December 10, 1992:
Previously filed with Registrant's Post-Effective
Amendment No. 59, 1/29/93, and incorporated herein by
reference.
(ii) Form of Oppenheimer Fund Management, Inc. Dealer
Agreement: Filed with Post-Effective Amendment No. 12 to
the Registration Statement of Oppenheimer Government
Securities Fund (Reg. No. 33-02769), 12/2/92, and
incorporated herein by reference.
(iii) Form of Oppenheimer Fund Management, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 12 to
the Registration Statement of Oppenheimer Government
Securities Fund (Reg. No. 33-02769), 12/2/92, and
incorporated herein by reference.
(iv) Form of Oppenheimer Fund Management, Inc. Agency
Agreement: Filed with Post-Effective Amendment No. 12 to
the Registration Statement of Oppenheimer Government
Securities Fund (Reg. No. 33-02769), 12/2/92, and
incorporated herein by reference.
(v) Broker Agreement between Oppenheimer Fund Management,
Inc. and Newbridge Securities dated 11/1/86: Previously
filed with Post-Effective Amendment No. 25 of Oppenheimer
Special Fund (Reg. No. 2-45272), 10/30/86, and
incorporated herein by reference.
7. Retirement Plan for Non-Interested Trustees, 6/7/90: Previously
filed with Post-Effective Amendment No. 34 of Oppenheimer Special
Fund (File No. 2-45272), 8/31/90, and incorporated herein by
reference.
8. Amended and Restated Custody Agreement dated 11/12/92 between
Registrant and The Bank of New York: Previously filed with
Registrant's Post-Effective Amendment No. 59, 1/29/93, and
incorporated herein by reference.
9. Agreement and Plan of Reorganization and Liquidation dated
10/10/85 by and between Registrant (formerly "Oppenheimer A.I.M.
Fund") and Oppenheimer A.I.M. Fund, Inc.: Previously filed with
Registrant's Post-Effective Amendment No. 46, 1/30/86, and
incorporated herein by reference.
10. Opinion and Consent of Counsel dated 3/2/87: Previously filed
with Registrant's Post-Effective Amendment No. 52, 1/27/89, and
incorporated herein by reference.
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. (i) Form of Individual Retirement Account Trust Agreement:
Filed with Post-Effective Amendment No. 21 to the
Registration Statement of Oppenheimer U.S. Government
Trust (Reg. No. 2-76645), 8/25/93, and incorporated
herein by reference.
(ii) Form of Individual Retirement Account (IRA) Plan:
Previously filed with Post-Effective Amendment No. 40 of
Oppenheimer Time Fund (File No. 2-39461), 11/1/88, and
incorporated herein by reference.
(iii) 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. 22 of Oppenheimer Directors Fund (File No.
2-62240), 2/1/90, and incorporated herein by reference.
(iv) Form of Simplified Employee Pension IRA: Previously filed
with Post-Effective Amendment No. 36 of Oppenheimer
Equity Income Fund (Reg. No. 2-33043), 10/23/91, and
incorporated herein by reference.
15. (i) Service Plan and Agreement for Class A Shares dated as of
June 10, 1993 between Registrant and Oppenheimer Funds
Distributor, Inc. pursuant to Rule 12b-1 under the
Investment Company Act of 1940: Previously filed with
Registrant's Post-Effective Amendment No. 60, 11/24/93,
and incorporated herein by reference.
(ii) Distribution and Service Plan and Agreement for Class B
Shares dated as of June 10, 1993 between Registrant and
Oppenheimer Funds Distributor, Inc. pursuant to Rule 12b-
1 under the Investment Company Act of 1940: Previously
filed with Registrant's Post-Effective Amendment No. 60,
11/24/93, and incorporated herein by reference.
16. Performance Data Computation Schedule: Filed herewith.
- -- Powers of Attorney and Certified Board Resolutions: Previously
filed with Registrant's Post-Effective Amendment No. 60,
11/24/93, 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 December 31, 1993
Class A Shares of Beneficial Interest 140,147
Class B Shares of Beneficial Interest 3,697
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 an 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. (a) Business and Other Connections of Investment Adviser
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.
(b) Business and Other Connections of Officers and Directors
of Investment Adviser
For information as to the business, profession, vocation
or employment of a substantial nature of each of the
directors and officers of Oppenheimer Management
Corporation, reference is made to Part B of this
Registration Statement and to the registration on Form ADV
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 the Fund's shares and is also general
distributor of certain of the other open-end registered
investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in
Parts A and B.
(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 and
rules promulgated thereunder are in 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 21st day of January, 1994.
OPPENHEIMER GLOBAL FUND
/s/ Donald W. Spiro*
by: --------------------------
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 and on the dates indicated:
Signatures: Title Date
- ----------- ----------------- --------------
/s/ Leon Levy* Chairman of the Board January 21, 1994
- ---------------------- of Trustees
Leon Levy
/s/ Donald W. Spiro* President, Principal January 21, 1994
- ---------------------- Executive Officer and
Donald W. Spiro Trustee
/s/ George Bowen* Treasurer and January 21, 1994
- ---------------------- Principal Financial
George Bowen and Accounting Officer
/s/ Leo Cherne* Trustee January 21, 1994
- ----------------------
Leo Cherne
/s/ Edmund T. Delaney* Trustee January 21, 1994
- ----------------------
Edmund T. Delaney
/s/ Robert G. Galli* Trustee January 21, 1994
- ----------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee January 21, 1994
- ----------------------
Benjamin Lipstein
/s/ Kenneth A. Randall* Trustee January 21, 1994
- ----------------------
Kenneth A. Randall
/s/ Sidney M. Robbins* Trustee January 21, 1994
- ----------------------
Sidney M. Robbins
/s/ Russell S. Reynolds Jr.* Trustee January 21, 1994
- ---------------------------
Russell S. Reynolds, Jr.
/s/ Pauline Trigere* Trustee January 21, 1994
- -----------------------
Pauline Trigere
/s/ Elizabeth B. Moynihan* Trustee January 21, 1994
- ----------------------
Elizabeth B. Moynihan
/s/ Clayton K. Yeutter* Trustee January 21, 1994
- -----------------------
Clayton K. Yeutter
/s/ Edward V. Regan* Trustee January 21, 1994
- ----------------------
Edward V. Regan
*By: /s/ Robert G. Zack
-------------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER GLOBAL FUND
EXHIBIT INDEX
Exhibit No. Description
24(a)(8) Independent Auditor's Consent
24(b)(16) Performance Data Computation Schedule
EXHIBIT 24(a)(8)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Oppenheimer Global Fund:
We consent to the use of our report dated October 21, 1993 included herein
and to the reference to our firm under the heading "Financial Highlights"
in the Prospectus.
KPMG Peat Marwick
/s/KPMG Peat Marwick
Denver, Colorado
January 18, 1994
Oppenheimer Global 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, which are
as follows:
Amount From
Distribution Amount From Long or
Reinvestment Investment Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
01/29/71 0.1700 0.0000 10.710
01/31/72 0.0000 1.0400 13.110
10/31/72 0.0000 0.9700 12.200
10/31/73 0.1600 0.0000 10.850
07/05/74 0.1200 0.0000 7.310
10/31/74 0.0750 0.0000 6.620
01/31/75 0.0500 0.0000 6.840
10/31/75 0.1100 0.0000 7.970
04/30/76 0.0600 0.0000 9.240
10/28/76 0.1000 0.0000 8.780
04/29/77 0.0700 0.0000 9.070
10/28/77 0.1400 0.0000 8.680
04/21/78 0.0800 0.0000 9.650
10/27/78 0.2200 0.0000 9.570
04/27/79 0.0900 0.0000 11.510
10/26/79 0.2200 0.0000 12.520
04/30/80 0.0900 0.0000 15.110
10/27/80 0.1550 1.6350 20.530
04/24/81 0.1000 0.0000 22.070
10/26/81 0.2300 3.7300 15.110
04/26/82 0.1000 0.0000 14.300
11/01/82 0.2200 0.0000 15.650
05/02/83 0.0700 0.0000 22.340
10/31/83 0.1000 2.4950 19.440
06/25/84 0.0170 0.0130 16.810
10/29/84 0.0400 0.9200 15.340
10/28/85 0.1000 0.0000 18.120
04/28/86 0.0000 0.0600 28.630
10/27/86 0.1100 3.0800 26.580
12/19/86 0.0000 0.7300 26.080
10/23/87 0.0700 4.3000 25.120
12/24/87 0.0000 1.3200 20.630
12/23/88 0.0850 1.7300 23.560
12/22/89 0.1100 3.0000 28.270
12/21/90 0.0800 1.6850 26.550
12/20/91 0.1080 0.5770 31.760
12/17/92 0.1190 0.1220 28.420
1. AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 9/30/93:
The formula for calculating average annual total return is as follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year Ten Year
$1,109.07 1 $1,891.02 .2 $3,299.19 .1
(--------) - 1 = 10.91% (---------) - 1 = 13.59% (---------) - 1 = 12.68%
$1,000 $1,000 $1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of
5.00% for the first year:
Inception (8/17/93)
$986.43 8.1111
(-------) - 1 = -10.49%
$1,000
2. TOTAL RETURNS FOR THE PERIODS ENDED 9/30/93:
The formula for calculating total return is as follows:
ERV - P
------- = Total Return
P
Examples:
Class A Shares
Ten Years (at Maximum Sales Charge) Ten Years (at NAV)
$3,299.19 - $1,000 $3,500.47 - $1,000
- -------------------- = 229.92% -------------------- = 250.05%
$1,000 $1,000
One Year (at NAV)
$1,176.73 - $1,000
-------------------- = 17.67%
$1,000
Class B Shares
Inception (8/17/93)(at Maximum Contingent Deferred Sales Charge)
$986.43 - $1,000
----------------- = -1.36%
$1,000
Inception (8/17/93)(at NAV)
$1,036.43 - $1,000
------------------- = 3.64%
$1,000
4. VALUES OF INVESTMENTS FOR A 10-YEAR PERIOD AT VARIOUS ASSUMED
AVERAGE ANNUAL RATES OF RETURN:
Amount of Value at
Investment Assumed Average Annual Return
5% 10% 15% 20%
Single $1,000 $1,629 $2,594 $4,046 $6,192
Annual $1,000 13,208 17,533 23,350 31,151
Values are calculated assuming investment at the beginning of the
period (each year in the case of annual $1,000 investments) and
reinvestment of earnings at the end of each year.
