Registration No. 2-14586
File No. 811-847
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. 110 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
AMENDMENT NO. 28 / X /
OPPENHEIMER FUND
- -----------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center
New York, New York 10048-0203
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(Address of Principal Executive Offices)
(212) 323-0200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
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(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 November 1, 1995, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on _______, pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on ---------- pursuant to paragraph (a)(ii)
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 June 30, 1995, was filed on August 28, 1995.
<PAGE>
FORM N-1A
OPPENHEIMER FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and Policies
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 Dividends, Capital Gains and Taxes
7 How to Buy Shares; How to Exchange Shares; Special Investor
Services; Service Plan For Class A Shares; Distribution and
Service Plan For Class C Shares; How to Sell Shares
8 How to Sell Shares
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information
10 Cover Page
11 Cover Page
12 *
13 Investment Objectives and Policies; Other Investment
Techniques and Strategies; Additional Investment
Restrictions
14 How the Fund is Managed - Trustees and Officers of the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed - Distribution and Service Plans
17 Brokerage Policies of the Fund
18 Additional Information About the Fund
19 Your Investment Account -- How to Buy Shares; How to Sell
Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 Financial Statements
- --------------------
*Not applicable or negative answer.
<PAGE>
Oppenheimer Fund
Prospectus dated November 1, 1995
Oppenheimer Fund is a mutual fund with the primary investment
objective of seeking capital appreciation. Its secondary objective is to
achieve income consistent with growth in capital.
The Fund attempts to achieve its objectives through investment in
common stocks that offer growth possibilities while retaining a flexible
approach to investment. In its operations, the Fund may utilize the
following special techniques when such use appears appropriate: hedging,
short-term trading, investment in foreign securities, and investment of
up to 10% of the Fund's net assets in restricted securities. Some
investment techniques the Fund may use may be considered to be speculative
investment methods that may increase the risks of investing in the Fund
and may also increase the Fund's operating costs. You should carefully
review the risks associated with an investment in the Fund. Please refer
to "Investment Policies and Strategies" for more information about the
types of securities the Fund invests in and the risks of investing in the
Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the November 1, 1995, Statement of Additional Information. For a
free copy, call Oppenheimer Shareholder Services, the Fund's Transfer
Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
(OppenheimerFunds logo)
Shares of the Fund are not deposits or obligations of any bank, are
not guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
A B O U T T H E F U N D
3 Expenses
5 A Brief Overview of the Fund
7 Financial Highlights
10 Investment Objective and Policies
16 How the Fund is Managed
18 Performance of the Fund
A B O U T Y O U R A C C O U N T
21 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
33 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
35 How to Sell Shares
By Mail
By Telephone
37 How to Exchange Shares
38 Shareholder Account Rules and Policies
40 Dividends, Capital Gains and Taxes
<PAGE>
A B O U T T H E F U N D
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services, and
those expenses are subtracted from the Fund's assets to calculate the
Fund's net asset value per share. All shareholders therefore pay those
expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's operating expenses that you will bear
indirectly. The numbers below are based on the Fund's expenses during its
fiscal year ended June 30, 1994.
-- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to pages 21 through 40 for an
explanation of how and when these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge5.75% None None
on Purchases (as a % of
offering price)
Sales Charge on None None None
on Reinvested Dividends
Deferred Sales ChargeNone(1) 5% in the 1% if shares
(as a % of the lower of first year, are redeemed
the original purchase declining to within 12 months
price or redemption 1% in the of purchase(2)
proceeds) sixth year
and eliminated
thereafter(2)
Exchange Fee None None None
</TABLE>
1. If you invest $1 million or more ($500,000 or more for purchases by
OppenheimerFunds prototype 401(k) plans) in Class A shares, you may have
to pay a sales charge of up to 1% if you sell your shares within 18
calendar months from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares - Class A Shares," below.
2. See "How to Buy Shares - Class B Shares" and "How to Buy Shares - Class
C Shares," below.
-- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (referred to in this Prospectus as the "Manager").
The rates of the Manager's fees are set forth in "How the Fund is
Managed," below. The Fund has other regular expenses for services, such
as transfer agent fees, custodial fees paid to the bank that holds its
portfolio securities, audit fees and legal and other expenses. Those
expenses are detailed in the Fund's Financial Statements in the Statement
of Additional Information.
The numbers in the table below are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of each class
of the Fund's shares for that year. The "12b-1 Distribution Plan Fees"
for Class A shares are the service plan fees. For Class B and Class C
shares, the Distribution Plan Fees are the service plan fees and the
asset-based sales charge. The service fee for each class is 0.25% of
average annual net assets of the class (for Class A shares, it is a
maximum of 0.25%), and the asset-based sales charge for Class B and Class
C shares is 0.75%. These plans are described in greater detail in "How
to Buy Shares."
The actual expenses for each class of shares in future years may be
more or less, depending on a number of factors, including the actual
amount of the assets represented by each class of shares. Class B shares
were not publicly offered during the fiscal year ended June 30, 1995.
Therefore, the Annual Fund Operating Expenses for Class B shares are
estimates based on expenses that would have been payable if Class B shares
had been outstanding during that fiscal period.
Class A Class B Class C
Shares Shares Shares
Management Fees 0.74% 0.74% 0.74%
12b-1 Distribution
Plan Fees 0.14% 1.00% 1.00%
Other Expenses 0.41% 0.46% 0.46%
Total Fund Operating
Expenses 1.29% 2.20% 2.20%
-- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples shown
below. Assume that you make a $1,000 investment in each class of shares
of the Fund, and the Fund's annual return is 5%, and that its operating
expenses for each class are the ones shown in the Annual Fund Operating
Expenses table above. If you were to redeem your shares at the end of
each period shown below, your investment would incur the following
expenses by the end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years*
Class A Shares $70 $96 $124 $204
Class B Shares $72 $99 $138 $209
Class C Shares $32 $69 $118 $253
If you did not redeem your investment, it would incur the following
expenses:
Class A Shares $70 $96 $124 $204
Class B Shares $22 $69 $118 $209
Class C Shares $22 $69 $118 $253
* The Class B expenses in years 7 through 10 are based on the Class A
expenses shown above, because the Fund automatically converts your Class
B shares into Class A shares after six years. Because of the asset-based
sales charge and the contingent deferred sales charge imposed on Class B
and Class C shares of the Fund, long-term Class B and Class C shareholders
could bear expenses that would be the economic equivalent of more than the
maximum front-end sales charge permitted under applicable regulatory
requirements. For Class B shareholders, the automatic conversion of Class
B shares to Class A Shares is designed to minimize the likelihood that
this will occur. Please refer to "How to Buy Shares - Class B Shares" for
more information.
These examples show the effect of expenses on an investment, but are
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which will vary.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below, with
references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing in the Fund. Keep the Prospectus
for reference after you invest, particularly for information about your
account, such as how to sell or exchange shares.
-- What Is The Fund's Investment Objective? The Fund's investment
objective is to seek capital appreciation.
-- What Does the Fund Invest In? To achieve its objective, the Fund
primarily invests in common stocks that offer growth possibilities while
retaining a flexible approach to investment. The Fund may also write
covered calls and use certain derivative investments and hedging
instruments to try to manage investment risks. These investments are more
fully explained in "Investment Objective and Policies" starting on page
__.
-- Who Manages the Fund? The Fund's investment adviser (the
"Manager") is Oppenheimer Management Corporation, which (including a
subsidiary) manages investment company portfolios having over $38 billion
in assets as of September 30, 1995. The Manager is paid an advisory fee
by the Fund, based on its assets. The Fund's portfolio manager is Richard
Rubinstein, who is employed by the Manager. He is primarily responsible
for the selection of the Fund's securities. The Fund's Board of Trustees,
elected by shareholders, oversees the investment adviser and the portfolio
manager. Please refer to "How the Fund is Managed," starting on page ___
for more information about the Manager and its fees.
-- How Risky is the Fund? All investments carry risks to some
degree. The Fund's investments in stocks and bonds are subject to changes
in their value from a number of factors such as changes in general bond
and stock market movements. The change in value of particular stocks or
bonds may result from an event affecting the issuer, or changes in
interest rates that can affect stock and bond prices. These changes
affect the value of the Fund's investments and its share prices for each
class of its shares. The Fund is more aggressive than most growth and
income funds but less aggressive than aggressive growth funds. In
addition, there are certain risks associated with the foreign securities
the Fund may purchase and the hedging strategies the Manager may utilize.
While the Manager tries to reduce risks by diversifying investments, by
carefully researching securities before they are purchased for the
portfolio, and in some cases by using hedging techniques, there is no
guarantee of success in achieving the Fund's objectives and your shares
may be worth more or less than their original cost when you redeem them.
Please refer to "Investment Objectives and Policies" starting on page ___
for a more complete discussion of the Fund's investment risks.
-- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How To Buy Shares"
on page 21 for more details.
-- Will I Pay a Sales Charge to Buy Shares? The Fund offers the
individual investor three classes of shares. All classes have the same
investment portfolio, but different expenses. Class A shares are offered
with a front-end sales charge, starting at 5.75%, and reduced for larger
purchases. Class B and Class C shares are offered without a front-end
sales charge, but may be subject to a contingent deferred sales charge if
redeemed within 6 years or 12 months of purchase, respectively. There is
also an annual asset-based sales charge on Class B shares and Class C
shares. Please review "How To Buy Shares" starting on page ___ for more
details, including a discussion about factors you and your financial
advisor should consider in determining which class may be appropriate for
you.
-- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How To Sell Shares" on page ___. The Fund also
offers exchange privileges to other Oppenheimer funds, described in "How
To Exchange Shares" on page _____.
-- How Has the Fund Performed? The Fund measures its performance
by quoting its average annual total return and cumulative total return,
which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds
may have different objectives, investments, and levels of risk. The
Fund's performance can also be compared to broad market indices, which we
have done on page ___. Please remember that past performance does not
guarantee future results.
<PAGE>
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data and expense ratios
and other data based on the Fund's average net assets. This information
has been audited by KPMG Peat Marwick LLP, the Fund's independent
auditors, whose report on the Fund's financial statements for the fiscal
year ended June 30, 1995, is included in the Statement of Additional
Information. Class B shares were not offered during the periods shown.
Accordingly, no information on Class B shares is reflected in the tables
below or in the Fund's financial statements for the fiscal year ended June
30, 1995.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
YEAR ENDED JUNE 30,
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Per Share Operating Data:
Net asset value, beginning of period $ 10.55 $ 10.41 $ 9.72 $ 9.31 $ 9.06 $ 9.17
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .31 .07 .11 .16 .26 .32
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions 1.58 .55 1.15 .84 .69 .23
------- ------- ------- ------- ------- -------
Total income (loss) from investment
operations 1.89 .62 1.26 1.00 .95 .55
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.02) (.03) (.10) (.32) (.22) (.25)
Distributions from net realized gain
on investments, options written
and foreign currency transactions (1.08) (.45) (.47) (.27) (.48) (.41)
------- ------- ------- ------- ------- -------
Total dividends and distributions
to shareholders (1.10) (.48) (.57) (.59) (.70) (.66)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.34 $10.55 $10.41 $9.72 $9.31 $9.06
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
- --------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(2) 19.60% 5.84% 13.33% 11.22% 11.65% 6.04%
- --------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $270,381 $237,281 $216,180 $209,495 $202,509 $196,076
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $254,011 $229,976 $212,660 $221,369 $189,994 $206,259
- --------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 23,837 22,485 20,769 21,555 21,748 21,639
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.10% .69% 1.05% 1.71% 2.91% 3.36%
Expenses 1.29% 1.16% 1.10% 1.09% 1.07% 1.04%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 34.1% 41.6% 35.6% 58.2% 105.8% 79.5%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------
YEAR ENDED JUNE 30,
1989 1988 1987 1986 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 8.36 $ 12.16 $ 12.48 $ 9.69 $ 10.49 $ 11.08
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .21 .13 .06 .11 .03 .02
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions .82 (1.40) .79 2.88 1.75 (.14)
------- ------- ------- ------- ------- -------
Total income (loss) from investment
operations 1.03 (1.27) .85 2.99 1.78 (.12)
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.17) (.17) (.02) (.20) -- (.02)
Distributions from net realized gain
on investments, options written
and foreign currency transactions (.05) (2.36) (1.15) -- (1.08) (.45)
------- ------- ------- ------- ------- -------
Total dividends and distributions
to shareholders (.22) (2.53) (1.17) (.20) (1.08) (.47)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.17 $ 8.36 $ 12.16 $ 12.48 $ 11.19 $ 10.49
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
- ------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(2) 12.60% (12.30)% 8.44% 31.24% 18.57% (1.24)%
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $208,166 $213,301 $273,756 $284,604 $2,154 $294
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $201,556 $224,367 $261,686 $268,929 $1,100 $108
- ------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 22,705 25,514 22,518 22,802 193 28
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.49% 1.51% .52% .89% .48% .05%(3)
Expenses 1.07% 1.04% .99% 1.01% 2.20% 2.44%(3)
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 96.6% 118.8% 59.1% 43.8% 34.1% 41.6%
<FN>
1. For the period from December 1, 1993 (inception of offering) to June 30,
1994.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1995 were $78,020,991 and $90,967,856, respectively.
</TABLE>
<PAGE>
Investment Objective and Policies
Objective. The Fund's primary objective is to seek capital
appreciation. Its secondary objective is to achieve income consistent
with growth in capital.
Investment Policies and Strategies. In seeking its primary investment
objective of capital appreciation, the Fund invests principally in common
stocks that, in the judgment of the Fund's investment adviser, Oppenheimer
Management Corporation (the "Manager"), offer growth possibilities.
However, the Manager follows a flexible approach to investment at all
times. Investments may also include preferred stocks, convertible
securities, and rights or warrants. The Fund will not invest more than
5% of its total assets in securities of issuers that have operated less
than three years, including the operation of predecessors. To achieve its
secondary objective of income consistent with capital growth, the Fund
seeks investments in dividend-paying common stocks consistent with its
primary objective of capital appreciation, and may also invest in
corporate debt securities and obligations of U.S. and foreign governments
(see "Foreign Securities," below) and may engage in certain special
investment methods to enhance income, such as writing covered call options
(described below).
-- Can the Fund's Investment Objective and Policies Change? The
Fund has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those policies. The Fund's investment policies and
practices are not "fundamental" unless the Prospectus or Statement of
Additional Information says that a particular policy is "fundamental."
The Fund's investment objective is a fundamental policy.
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's Board
of Trustees may change non-fundamental policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus.
-- Stock Investment Risks. Because the Fund may invest a
substantial portion of its assets in stocks, the value of the Fund's
portfolio will be affected by changes in the stock markets. At times, the
stock markets can be volatile, and stock prices can change substantially.
This market risk will affect the Fund's net asset values per share, which
will fluctuate as the values of the Fund's portfolio securities change.
Not all stock prices change uniformly or at the same time, not all stock
markets move in the same direction at the same time, and other factors can
affect a particular stock's prices (for example, poor earnings reports by
an issuer, loss of major customers, major litigation against an issuer,
and changes in government regulations affecting an industry). Not all of
these factors can be predicted.
The Fund attempts to limit market risks by diversifying its
investments, that is, by not holding a substantial amount of the stock of
any one company and by not investing too great a percentage of the Fund's
assets in any one company. Expanding the Fund's investment policies to
emphasize investments in emerging growth companies worldwide serves to
diversify the Fund's investments across a number of sectors, in addition
to the biotechnology sector. Because changes in market prices can occur
at any time, there is no assurance that the Fund will achieve its
investment objective, and when you redeem your shares, they may be worth
more or less than what you paid for them.
-- Foreign Securities. The Fund may purchase equity and debt
securities issued or guaranteed by foreign companies or foreign
governments or their agencies. The Fund may buy securities of companies
in any country, developed or underdeveloped. There is no limit on the
amount of the Fund's assets that may be invested in foreign securities.
Foreign currency will be held by the Fund only in connection with the
purchase or sale of foreign securities.
-- Foreign securities have special risks. There are special risks
in investing in foreign securities. Because the Fund may buy securities
denominated in foreign currencies or traded primarily in foreign markets,
a change in the value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in
that foreign currency. Investments in securities of issuers in non-
industrialized countries generally involve more risk and may be considered
to be highly speculative. Foreign issuers are not subject to the same
accounting and disclosure requirements that U.S. companies are subject to.
The value of foreign investments may be affected by other factors,
including exchange control regulations, expropriation or nationalization
of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental economic or monetary policy in the
U.S. or abroad, or other political and economic factors.
In addition, it is generally more difficult to obtain court judgments
outside the U.S. if the Fund were to sue a foreign issuer or broker.
Additional costs may be incurred because foreign brokerage commissions may
be higher than U.S. rates, and there are additional custodial costs
associated with holding securities abroad.
-- Special Situations. The Fund may invest in securities of
companies that are in "special situations" that the Manager believes
present opportunities for capital growth. A "special situation" may be
an event such as a proposed merger, reorganization, or other unusual
development that is expected to occur and which may result in an increase
in the value of a company's securities regardless of general business
conditions or the movement of prices in the securities market as a whole.
There is a risk that the price of the security may decline if the
anticipated development fails to occur. Although the Fund may invest in
companies for the purpose of influencing their managerial policy, the Fund
has not made any such investment, and has no present intention of doing
so.
-- Warrants and Rights. Warrants basically are options to purchase
stock at set prices that are valid for a limited period of time. Rights
are similar to warrants but normally have a short duration and are
distributed by the issuer to its shareholders. The Fund may invest up to
5% of its net assets in warrants and rights. Warrants the Fund has
acquired in units or that are attached to other securities are not subject
to this limitation. No more than 2% of the Fund's net assets may be
invested in warrants that are not listed on the New York or American Stock
Exchanges. For further details about these investments, see "Warrants and
Rights" in the Additional Statement.
-- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund may engage in short-term
trading to try to achieve its objective. The "Financial Highlights,"
above, show the Fund's portfolio turnover rate during past fiscal years.
High turnover and short-term trading may cause the Fund to have relatively
larger commission expenses and transaction costs than funds that do not
engage in short-term trading. Additionally, high portfolio turnover may
affect the ability of the Fund to qualify as a "regulated investment
company" under the Internal Revenue Code for tax deductions for dividends
and capital gain distributions the Fund pays to shareholders. The Fund
qualified in its last fiscal year and intends to do so in the coming year,
although it reserves the right not to qualify.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These techniques
involve certain risks. The Statement of Additional Information contains
more information about these practices, including limitations on their use
that may help reduce some of the risks.
-- Concentration of Investments. The Fund reserves the right to
concentrate up to 50% of its assets in any one industry and may do so when
the Manager deems it appropriate to seek to achieve the Fund's investment
objectives. Such concentration would possibly occur only when trends in
the market as a whole were considered unfavorable but at the same time a
particular industry was believed to afford better-than-average prospects.
Except in that case, it is not the intention of the Fund to concentrate
more than 25% of the value of its total assets in any one industry.
-- Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, put and call options, forward
contracts, and options on futures and broadly-based stock indices. These
are all referred to as "hedging instruments." The Fund does not use
hedging instruments for speculative purposes, and has limits on the use
of them, described below. The hedging instruments the Fund may use are
described below and in greater detail in "Other Investment Techniques and
Strategies" in the Statement of Additional Information.
The Fund may buy and sell options, futures and forward contracts for
a number of purposes. It may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or
to establish a position in the securities market as a temporary substitute
for purchasing individual securities. Some of these strategies, such as
selling futures, buying puts and writing covered calls, hedge the Fund's
portfolio against price fluctuations. Other hedging strategies, such as
buying futures and call options, tend to increase the Fund's exposure to
the securities market.
Forward contracts are used to try to manage foreign currency risks
on the Fund's foreign investments. Foreign currency options are used to
try to protect against declines in the dollar value of foreign securities
the Fund owns, or to protect against an increase in the dollar cost of
buying foreign securities. Writing covered call options may also provide
income to the Fund for liquidity purposes.
-- Futures. The Fund may buy and sell futures contracts that relate
to (1) interest rates (these are referred to as Interest Rate Futures),
(2) broadly-based securities indices (these are referred to as Financial
Futures) or (3) foreign currencies (these are referred to as Forward
Contracts).
-- Put and Call Options. The Fund may buy and sell certain kinds of
put options (puts) and call options (calls). Calls the Fund buys or sells
must be listed on a securities exchange, or quoted on the Automated
Quotation System of the National Association of Securities Dealers, Inc.
("NASDAQ"), or traded in the over-the-counter market. In the case of puts
and calls on a foreign currency, they must be traded on a securities or
commodities exchange or in the over-the-counter market, or must be quoted
by recognized dealers in those options. A call or put option may not be
purchased if the value of all the Fund's put and call options would exceed
5% of the Fund's total assets.
The Fund may buy calls on securities, broadly-based securities
indices, foreign currencies, Interest Rate Futures or Financial Futures.
The Fund may also purchase "relative performance call options" (these are
call options that have a cash settlement based on the difference between
the returns on two market indices). The Fund may buy calls to terminate
its obligation on a cal the Fund previously wrote.
The Fund may write (that is, sell) call options. Each call the Fund
writes must be "covered" while the call is outstanding. That means the
Fund must own the investment on which the call was written or it must own
other securities that are acceptable for the escrow arrangements required
for calls. The Fund may write calls on Futures contracts it owns, but
these calls must be covered by securities or other liquid assets the Fund
owns and segregated to enable it to satisfy its obligations if the call
is exercised. After writing any call, not more than 25% of the Fund's
total assets may be subject to calls. When the Fund writes a call, it
receives cash (called a premium). The call gives the buyer the ability
to buy the investment on which the call was written from the Fund at the
call price during the period in which the call may be exercised. If the
value of the investment does not rise above the call price, it is likely
that the call will lapse without being exercised, while the Fund keeps the
cash premium (and the investment).
The Fund may buy and sell put options. Buying a put on an investment
gives the Fund the right to sell the investment at a set price to a seller
of a put on that investment. The Fund can buy those puts that relate to
securities the Fund owns, broadly-based securities indices, foreign
currencies, or Interest Rate Futures or Financial Futures (whether or not
the Fund holds the particular Future in its portfolio). Writing puts
requires the segregation of liquid assets to cover the put. The Fund will
not write a put if it will require more than 25% of the Fund's total
assets to be segregated to cover the put obligation.
-- Forward Contracts. Forward contracts are foreign currency
exchange contracts. The are used to buy or sell foreign currency for
future delivery at a fixed price. The Fund uses them to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that the
Fund has bought or sold, or to protect against possible losses from
changes in the relative values of the U.S. dollar and a foreign currency.
The Fund limits its exposure in foreign currency exchange contracts in a
particular foreign currency to the amount of its assets denominated in
that currency or a closely-correlated currency. The Fund may also use
"cross-hedging" where the Fund hedges against changes in currencies other
than the currency in which a security it holds is denominated.
-- Interest Rate Swaps. In an interest rate swap, the Fund and
another party exchange their right to receive, or their obligation to pay,
interest on a security. For example, they may swap a right to receive
floating rate payments for the right to receive fixed rate payments. The
Fund enters into swaps only on securities it owns. The Fund may not enter
into swaps with respect to more than 25% of its total assets. Also, the
Fund will segregate liquid assets (such as cash or U.S. Government
securities) to cover any amounts it could owe under swaps that exceed the
amounts it is entitled to receive, and it will adjust that amount daily,
as needed.
-- Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than what is
required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce the Fund's return. The Fund could also
experience losses if the prices of its futures and options positions were
not correlated with its other investments or if it could not close out a
position because the market for the future or option was illiquid.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. For example, if a covered call written by the Fund is
exercised on an investment that has increased in value, the Fund will be
required to sell the investment at the call price and will not be able to
realize any profit if the investment has increased in value above the call
price. In writing a put, there is a risk that the Fund may be required
to buy the underlying security at a disadvantageous price. The use of
forward contracts may reduce the gain that would otherwise result from a
change in the relationship between the U.S. dollar and a foreign currency.
These risks are described in greater detail in the Statement of Additional
Information.
-- Derivative Investments. In general, a "derivative investment" is
a specially designed investment whose performance is linked to the
performance of another investment or security, such as an option, future,
index or currency. In the broadest sense, exchange-traded options and
futures contracts and other hedging instruments the Fund may use may be
defined as "derivative" investments.
Examples of derivative investments the Fund may invest in include
"index-linked" notes whose principal and/or interest payments depend on
the performance of one or more market indices, such as the S & P 500
Index. Other examples include "debt exchangeable for common stock" of an
issuer or "equity-linked debt securities" of an issuer. At maturity, the
principal amount of the debt security is exchanged for common stock of the
issuer or is payable in an amount based on the issuer's common stock price
at the time of maturity. In either case there is a risk that the amount
payable at maturity will be less than the principal amount of the
debt.
Another example is currency-indexed securities. These are typically
short-term or intermediate-term debt securities whose maturity and/or
interest rates are determined by reference to one or more specified
foreign currencies.
There are special risks in investing in derivative investments. The
company issuing the instrument may fail to pay the amount due on the
maturity of the instrument. Also, the underlying investment or security
might not perform the way the Manager expected it to perform. Markets,
underlying securities and indices may move in a direction not anticipated
by the Manager. The performance of derivative investments may also be
influenced by interest rate and stock market changes in the U.S. and
abroad. All of this can mean that the Fund will realize less principal
or income from the investment than expected. Certain derivative
investments held by the Fund may be illiquid. Please refer to "Illiquid
and Restricted Securities."
-- Illiquid and Restricted Securities. Under the policies established
by the Fund's Board of Trustees, the Manager determines the liquidity of
certain of the Fund's investments. Investments may be illiquid because of
the absence of an active trading market, making it difficult to value them
or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot
be sold publicly until it is registered under the Securities Act of 1933.
The Fund currently intends to invest no more than 10% of its net assets
in illiquid or restricted securities (that limit may increase to 15% if
certain state laws are changed or the Fund's shares are no longer sold in
those states). Certain restricted securities, eligible for resale to
qualified institutional purchasers, are not subject to that limit.
-- Loans of Portfolio Securities. To raise cash for liquidity
purposes, the Fund may lend its portfolio securities to certain types of
eligible borrowers approved by the Board of Trustees. Each loan must be
collateralized in accordance with applicable regulatory requirements.
After any loan, the value of the securities loaned must not exceed 25% of
the value of the Fund's total assets. There are some risks in connection
with securities lending. The Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the
loaned securities. The Fund presently does not intend to engage in loans
of securities that will exceed 5% of the value of the Fund's total assets
in the coming year.
-- Repurchase Agreements. The Fund may enter into repurchase
agreements. They are used primarily for liquidity purposes. In a
repurchase transaction, the Fund buys a security and simultaneously sells
it to the vendor for delivery at a future date.
Repurchase agreements must be fully collateralized. However, if the
vendor fails to pay the resale price on the delivery date, the Fund may
incur costs in disposing of the collateral and may experience losses if
there is any delay in its ability to do so. The Fund will not enter into
a repurchase agreement that causes more than 10% of its net assets to be
subject to repurchase agreements having a maturity beyond seven days.
There is no limit on the amount of the Fund's net assets that may be
subject to repurchase agreements of seven days or less.
-- Temporary Defensive Investments. When stock market prices are
falling or in other unusual economic or business circumstances, the Fund
may invest all or a portion of its assets in defensive securities.
Securities selected for defensive purposes may include debt securities,
such as rated or unrated bonds and debentures, and preferred stocks, cash
or cash equivalents, such as U.S. Treasury bills and other short-term
obligations of the U.S. Government, its agencies or instrumentalities, or
commercial paper rated "A-1" or better by Standard & Poor's Corporation
or "P-1" or better by Moody's Investors Service, Inc.
Other Investment Restrictions. The Fund has other investment restrictions
which are fundamental policies. Under these fundamental policies, the
Fund cannot do any of the following:
-- 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.
-- Deviate from the restrictions listed under "Concentration of
Investments."
All of the percentage restrictions described above and elsewhere in
this Prospectus apply only at the time the Fund purchases a security, and
the Fund need not dispose of a security merely because the Fund's assets
have changed or the security has increased in value relative to the size
of the Fund. There are other fundamental policies discussed in the
Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was originally incorporated in New
York in 1958 but was reorganized in 1985 as a Massachusetts business
trust. The Fund is an open-end, diversified management investment company,
with an unlimited number of authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible
under Massachusetts law for protecting the interests of shareholders. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and provides more information about them
and the officers of the Fund. Although the Fund is not required by law
to hold annual meetings, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder approval,
to divide unissued shares of the Fund into two or more classes. The Board
has done so, and the Fund currently has three classes of shares, Class A,
Class B and Class C. All classes invest in the same investment portfolio.
Each class has its own dividends and distributions and pays certain
expenses which may be different for the different classes. Each class may
have a different net asset value. Each share has one vote at shareholder
meetings, with fractional shares voting proportionally on matters
submitted to the vote of shareholders. Only shares of a particular class
vote as a class on matters that affect that class alone. Shares are
freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Fund's investments and handles its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Board
of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. The Agreement sets forth the fees paid by the
Fund to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager (including a subsidiary) currently manages investment companies,
including other Oppenheimer funds, with assets of more than $38 billion
as of September 30, 1995, and with more than 2.8 million shareholder
accounts. The Manager is owned by Oppenheimer Acquisition Corp., a
holding company that is owned in part by senior officers of the Manager
and controlled by Massachusetts Mutual Life Insurance Company.
-- Portfolio Manager. The Portfolio Manager of the Fund is Richard
H. Rubinstein. He has been the person principally responsible for the
day-to-day management of the Fund's portfolio since June, 1990. During
the past five years, Mr. Rubinstein has been a Senior Vice President of
the Manager and a Vice President of the Fund, and has also served as an
officer of other Oppenheimer funds.
-- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 0.75% of the first $200 million of
aggregate net assets, 0.72% of the next $200 million, 0.69% of the next
$200 million, 0.66% of the next $200 million and 0.60% of aggregate net
assets over $800 million. The Fund's management fee for its last fiscal
year was 0.74% of average annual net assets for both Class A shares and
for Class C shares, which may be higher than the rate paid by some other
mutual funds.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal fees and
auditing costs. Those expenses are paid out of the Fund's assets and are
not paid directly by shareholders. However, those expenses reduce the net
asset value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
-- The Distributor. The Fund's shares are sold through dealers,
brokers and other financial institutions that have a sales agreement with
Oppenheimer Funds Distributor, Inc., a subsidiary of the Manager that acts
as the Fund's Distributor. The Distributor also distributes the shares
of the other "Oppenheimer funds" and is sub-distributor for funds managed
by a subsidiary of the Manager.
-- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund on an "at-cost" basis. It also
acts as the shareholder servicing agent for the other Oppenheimer funds.
Shareholders should direct inquiries about their account to the Transfer
Agent at the address and toll-free number shown below in this Prospectus
and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return" and "average annual total return" to illustrate its performance.
The performance of each class of shares is shown separately, because the
performance of each class of shares will usually be different, as a result
of the different kinds of expenses each class bears. These returns
measure the performance of a hypothetical account in the Fund over various
periods, and do not show the performance of each shareholder's account
(which will vary if dividends are received in cash or shares are sold or
purchased). The Fund's performance information may help you see how well
your investment in the Fund has done over time and to compare it to other
funds or market indices, as we have done below.
It is important to understand that the Fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary, depending on
market conditions, the composition of the portfolio, expenses and which
class of shares you purchase.
-- Total Returns. There are different types of total returns used to
measure the Fund's performance. Total return is the change in value of
a hypothetical investment in the Fund over a given period, assuming that
all dividends and capital gains distributions are reinvested in additional
shares. The cumulative total return measures the change in value over the
entire period (for example, ten years). An average annual total return
shows the average rate of return for each year in a period that would
produce the cumulative total return over the entire period. However,
average annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted for Class A shares, they include the
payment of the maximum initial sales charge. When total returns are shown
for Class B and Class C shares, they reflect the effect of the applicable
contingent deferred sales charge. Total returns may also be quoted at
"net asset value," without considering the effect of the sales charges,
and those returns would be reduced if the sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended June 30, 1995,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
-- Management's Discussion of Performance. During the Fund's fiscal
year ended June 30, 1995, the U.S. stock markets declined in response to
action by Federal Reserve Board to raise interest rates. The Manager took
advantage of the market decline as an opportunity to add to the growth
stock portion of the Fund's portfolio. The Fund sold several of its
foreign holdings because of the generally higher level of foreign
currencies against the U.S. dollar, particularly in Europe. In selecting
new investments, the Fund's Manager focused on the financial services and
industrial companies sectors, and allocated a portion of the Fund's
portfolio to economically sensitive stocks and value stocks, notably those
that the Manager believed had temporarily fallen in price.
-- Comparing the Fund's Performance to the Market. The graphs below
show the performance of a hypothetical $10,000 investment in each class
of shares of the Fund held until June 30, 1995; in the case of Class A
shares, over a ten-year period, and in the case of Class C shares, from
the inception of the Class on December 1, 1993, with all dividends and
capital gains distributions reinvested in additional shares. The graph
reflects the deduction of the 5.75% maximum initial sales charge on Class
A shares and the 1.0% contingent deferred sales charge on Class C shares
during the first 12 months. Class B shares were not publicly offered
during the fiscal year ended June 30, 1995. Accordingly, no performance
information is presented on Class B shares in the graphs below.
The Fund's performance is compared to the performance of the S&P 500
Index, a broad-based index of equity securities widely regarded as a
general measurement of the performance of the U.S. equity securities
market. Index performance reflects the reinvestment of dividends but does
not consider the effect of capital gains or transaction costs, and none
of the data below shows the effect of taxes. Also, the Fund's performance
reflects the effect of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited
to the securities in the S&P 500 index, which tend to be securities of
larger, well-capitalized companies. Moreover, the index data does not
reflect any assessment of the risk of the investments included in the
index.
Comparison of Change in Value
of $10,000 Hypothetical Investment in:
Oppenheimer Fund and the
S&P 500 Index
[Graph]
Past performance is not predictive of future performance.
Average Annual Total Returns of Class A Shares at 6/30/95
1-Year 5-Year 10-Year
12.72% 10.92% 9.61%
Average Annual Total Returns of Class C Shares at 6/30/95
1-Year Life*
17.57% 10.51%
_________________________________________
* Class C shares of the Fund first publicly sold on 12/1/93.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Classes of Shares. The Fund offers investors three different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will
likely have different share prices.
-- Class A Shares. If you buy Class A shares, you pay an initial
sales charge on investments up to $1 million (up to $500,000 for purchases
by OppenheimerFunds prototype 401(k) plans). If you purchase Class A
shares as part of an investment of at least $1 million ($500,000 for
OppenheimerFunds prototype 401(k) plans) in shares of one or more
Oppenheimer funds, you will not pay an initial sales charge, but if you
sell any of those shares within 18 months of buying them, you may pay a
contingent deferred sales charge. The amount of that sales charge will
vary depending on the amount you invested. Sales charge rates are
described in "Buying Class A Shares" below.
-- Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within six
years of buying them, you will normally pay a contingent deferred sales
charge. That sales charge varies depending on how long you own your
shares. It is described in "Buying Class B Shares" below.
-- Class C Shares. If you buy Class C shares, you pay no sales
charge at the time of purchase, but if you sell your shares within 12
months of buying them, you will normally pay a contingent deferred sales
charge of 1%. It is described in "Buying Class C Shares," below.
Which Class of Shares Should You Choose? Once you decide that the Fund
is an appropriate investment for you, the decision as to which class of
shares is better suited to your needs depends on a number of factors which
you should discuss with your financial advisors. The Fund's operating
costs that apply to a class of shares and the effect of the different
types of sales charges on your investment will vary your investment
results over time. The most important factors are how much you plan to
invest and how long you plan to hold your investment. If your goals and
objectives change over time and you plan to purchase additional shares,
you should re-evaluate those factors to see if you should consider another
class of shares.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We used the
sales charge rates that apply to Class A, Class B and Class C, and
considered the effect of the asset-based sales charge on Class B and Class
C expenses (which will affect your investment return). For the sake of
comparison, we have assumed that there is a 10% rate of appreciation in
your investment each year. Of course, the actual performance of your
investment cannot be predicted and will vary, based on the Fund's actual
investment returns, and the operating expenses borne by each class of
shares, and which class of shares you invest in. The factors discussed
below are not intended to be investment advice, guidelines or
recommendations, because each investor's financial considerations are
different. The discussion below of the factors to consider in purchasing
a particular class of shares assumes that you will purchase only one class
of shares and not a combination of shares of different classes.
-- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, knowing how long you
expect to hold your investment will assist you in selecting the
appropriate class of shares. Because of the effect of class-based
expenses, your choice will also depend on how much you plan to invest.
For example, the reduced sales charges available for larger purchases of
Class A shares may, over time, offset the effect of paying an initial
sales charge on your investment (which reduces the amount of your
investment dollars used to buy shares for your account), compared to the
effect over time of higher class-based expenses on Class B or Class C
shares, for which no initial sales charge is paid.
-- Investing for the Short Term. If you have a short-term
investment horizon (that is, you plan to hold your shares for not more
than six years), you should probably consider purchasing Class A or Class
C shares rather than Class B shares, because of the effect of the Class
B contingent deferred sales charge if you redeem in less than 7 years, as
well as the effect of the Class B asset-based sales charge on the
investment return for that class in the short-term. Class C shares might
be the appropriate choice (especially for investments of less than
$100,000), because there is no initial sales charge on Class C shares, and
the contingent deferred sales charge does not apply to amounts you sell
after holding them one year.
However, if you plan to invest more than $100,000 for the shorter
term, then the more you invest and the more your investment horizon
increases toward six years, Class C shares might not be as advantageous
as Class A shares. That is because the annual asset-based sales charge on
Class C shares will have a greater impact on your account over the longer
term than the reduced front-end sales charge available for larger
purchases of Class A shares. For example, Class A might be more
advantageous than Class C (as well as Class B) for investments of more
than $100,000 expected to be held for 5 or 6 years (or more). For
investments over $250,000 expected to be held 4 to 6 years (or more),
Class A shares may become more advantageous than Class C (and B). If
investing $500,000 or more, Class A may be more advantageous as your
investment horizon approaches 3 years or more.
And for most investors who invest $1 million or more, in most cases
Class A shares will be the most advantageous choice, no matter how long
you intend to hold your shares. For that reason, the Distributor normally
will not accept purchase orders of $500,000 or $1 million or more of Class
B or Class C shares, respectively, from a single investor.
-- Investing for the Longer Term. If you are investing for the
longer term, for example, for retirement, and do not expect to need access
to your money for seven years or more, Class B shares may be an
appropriate consideration, if you plan to invest less than $100,000. If
you plan to invest more than $100,000 over the long term, Class A shares
will likely be more advantageous than Class B shares or C shares, as
discussed above, because of the effect of the expected lower expenses for
Class A shares and the reduced initial sales charges available for larger
investments in Class A shares under the Fund's Right of Accumulation.
Of course, these examples are based on approximations of the effect
of current sales charges and expenses on a hypothetical investment over
time, using the assumed annual performance return stated above, and
therefore should not be relied on as rigid guidelines.
-- Are There Differences in Account Features That Matter to You?
Because some account features may not be available to Class B and Class
C shareholders, or other features (such as Automatic Withdrawal Plans)
might not be advisable (because of the effect of contingent deferred sales
charge) in non-retirement accounts for Class B and Class C shareholders,
you should carefully review how you plan to use your investment account
before deciding which class of shares to buy. For example, share
certificates are not available for Class B or Class C shares and if you
are considering using your shares as collateral, that may be a factor.
Additionally, the dividends payable to Class B and Class C shareholders
will be reduced by the additional expenses borne solely by that class,
such as the asset-based sales charge to which Class B and Class C shares
are subject, as described below and in the Statement of Additional
Information.
-- How Does It Affect Payments to My Broker? A salesperson, such as
a broker, or any other person who is entitled to receive compensation for
selling Fund shares may receive different compensation for selling one
class than for selling another class. It is important that investors
understand that the purpose of the contingent deferred sales charge and
asset-based sales charges for Class B and Class C shares is the same as
the purpose of the front-end sales charge on sales of Class A shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250
(if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying shares
by reinvesting dividends from the Fund or other Oppenheimer funds (a list
of them appears in the Statement of Additional Information, or you can ask
your dealer or call the Transfer Agent), or by reinvesting distributions
from unit investment trusts that have made arrangements with the
Distributor.
-- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service. When you buy shares, be sure
to specify Class A, Class B or Class C shares. If you do not choose, your
investment will be made in Class A shares.
-- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
-- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares. However, we
recommend you discuss your investment first with a financial advisor, to
be sure that it is appropriate for you.
-- Buying Shares Through OppenheimerFunds AccountLink You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member. You can then transmit funds electronically to purchase shares,
to have the Transfer Agent send redemption proceeds, or to transmit
dividends and distributions. Shares are purchased for your account on the
regular business day the Distributor is instructed by you to initiate the
ACH transfer to buy shares. You can provide those instructions
automatically, under an Asset Builder Plan, described below, or by
telephone instructions using OppenheimerFunds PhoneLink, also described
below. You should request AccountLink privileges on the application or
dealer settlement instructions used to establish your account. Please
refer to "AccountLink" below for more details.
-- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other Oppenheimer funds) automatically each month from your
account at a bank or other financial institution under an Asset Builder
Plan with AccountLink. Details are on the Application and in the
Statement of Additional Information.
-- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver. "In most cases, to enable you to receive that
day's offering price, the Distributor must receive your order by the time
of day The New York Stock Exchange closes, which is normally 4:00 P.M.,
but may be earlier on some days (all references to time in this Prospectus
mean "New York Time"). The net asset value of each class of shares is
determined as of that time on each day The New York Stock Exchange is open
(which is a "regular business day"). If you buy shares through a dealer,
the dealer must receive your order by the close of The New York Stock
Exchange on a regular business day and transmit it to the Distributor so
that it is received before the Distributor's close of business that day,
which is normally 5:00 P.M. The Distributor may reject any purchase order
for the Fund's shares, in its sole discretion.
Buying Class A Shares. Class A shares are sold at their offering price,
which is normally net asset value plus an initial sales charge. However,
in some cases, described below, purchases are not subject to an initial
sales charge, and the offering price will be the net asset value. In some
cases, reduced sales charges may be available, as described below. Out
of the amount you invest, the Fund receives the net asset value to invest
for your account. The sales charge varies depending on the amount of your
purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer. The current sales charge rates
and commissions paid to dealers and brokers are as follows:
Front-End Front-End Commission
Sales Charge Sales Charge as Percentage
As Percentage of As Percentage ofof
Offering
Amount of Purchase Offering Price Amount InvestedPrice
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04%1.60%
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
-- Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more of the
Oppenheimer funds in the following cases:
-- purchases aggregating $1 million or more, or
-- purchases by an OppenheimerFunds prototype 401(k) plan that: (1)
buys shares costing $500,000 or more or (2) has, at the time of purchase,
100 or more eligible participants, or (3) certifies that it projects to
have annual plan purchases of $200,000 or more.
Shares of any class of the Oppenheimer funds that offers only one
class of shares that has no class designation are considered "Class A
shares" for this purpose. The Distributor pays dealers of record
commissions on those purchases in an amount equal to the sum of 1.0% of
the first $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
of purchases over $5 million. That commission will be paid only on the
amount of those purchases in excess of $1 million ($500,000 for purchases
by OppenheimerFunds prototype 401(k) plans) that were not previously
subject to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge
(called the "Class A contingent deferred sales charge") will be deducted
from the redemption proceeds. That sales charge will be equal to 1.0% of
either (1) the aggregate net asset value of the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original cost of the shares, whichever is less.
The Class A contingent deferred sales charge will not exceed the aggregate
amount of the commissions the Distributor paid to your dealer on all Class
A shares of all Oppenheimer funds you purchased subject to the Class A
contingent deferred sales charge. In determining whether a contingent
deferred sales charge is payable, the Fund will first redeem shares that
are not subject to the sales charge, including shares purchased by
reinvestment of dividends and capital gains, and then will redeem other
shares in the order that you purchased them. The Class A contingent
deferred sales charge is waived in certain cases described in "Waivers of
Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges
of shares under the Fund's Exchange Privilege (described below). However,
if the shares acquired by exchange are redeemed within 18 months of the
end of the calendar month of the purchase of the exchanged shares, the
sales charge will apply.
-- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of Oppenheimer funds
(other than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of the
following ways:
-- Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your
spouse can add together Class A and Class B shares you purchase for your
individual accounts, or jointly, or for trust or custodial accounts on
behalf of your children who are minors. A fiduciary can count all shares
purchased for a trust, estate or other fiduciary account (including one
or more employee benefit plans of the same employer) that has multiple
accounts.
Additionally, you can add together current purchases of Class A and
Class B shares of the Fund and other Oppenheimer funds to reduce the sales
charge rate that applies to current purchases of Class A shares. You can
also include Class A and Class B shares of Oppenheimer funds you
previously purchased subject to an initial or contingent deferred sales
charge to reduce the sales charge rate for current purchases of Class A
shares, provided that you still hold your investment in one of the
Oppenheimer funds. The value of those shares will be based on the greater
of the amount you paid for the shares or their current value (at offering
price). The Oppenheimer funds are listed in "Reduced Sales Charges" in
the Statement of Additional Information, or a list can be obtained from
the Distributor. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
-- Letter of Intent. Under a Letter of Intent, if you purchase Class
A shares or Class A and Class B shares of the Fund and other Oppenheimer
funds during a 13-month period, you can reduce the sales charge rate that
applies to your purchases of Class A shares. The total amount of your
intended purchases of both Class A and Class B shares will determine the
reduced sales charge rate for the Class A shares purchased during that
period. This can include purchases made up to 90 days before the date of
the Letter. More information is contained in the Application and in
"Reduced Sales Charges" in the Statement of Additional Information.
-- Waivers of Class A Sales Charges. The Class A sales charges are
not imposed in the circumstances described below. There is an explanation
of this policy in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers. Class A shares purchased by the following investors are not
subject to any Class A sales charges:
-- the Manager or its affiliates;
-- present or former officers, directors, trustees and employees (and
their "immediate families" as defined in "Reduced Sales Charges" in the
Statement of Additional Information) of the Fund, the Manager and its
affiliates, and retirement plans established by them for their employees;
-- registered management investment companies, or separate accounts
of insurance companies having an agreement with the Manager or the
Distributor for that purpose;
-- dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
-- employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and are
identified to the Distributor) or with the Distributor; the purchaser must
certify to the Distributor at the time of purchase that the purchase is
for the purchaser's own account (or for the benefit of such employee's
spouse or minor children);
-- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor providing specifically for
the use of shares of the Fund in particular investment products made
available to their clients (those clients may be charged a transaction fee
by their dealer, broker, or adviser for the purchase or sale of Fund
shares); or
-- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor to sell shares to defined
contribution employee retirement plans for which the dealer, broker or
investment adviser provides administration services.
Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions. Class A shares issued or purchased in the following
transactions are not subject to Class A sales charges:
-- shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party,
-- shares purchased by the reinvestment of loan repayments by a
participant in a retirement plan for which the Manager or its affiliates
acts as sponsor,
-- shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds (other
than Oppenheimer Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the Distributor, or
-- shares purchased and paid for with the proceeds of shares redeemed
in the past 12 months from a mutual fund (other than a fund managed by the
Manager or any of its subsidiaries) on which an initial sales charge or
contingent deferred sales charge was paid (this waiver also applies to
shares purchased by exchange of shares of Oppenheimer Money Market Fund,
Inc. that were purchased and paid for in this manner); this waiver must
be requested when the purchase order is placed for your shares of the
Fund, and the Distributor may require evidence of your qualification for
this waiver.
Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions. The Class A contingent deferred sales charge does not apply
to purchases of Class A shares at net asset value without sales charge as
described in the two sections above. It is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
-- for retirement distributions or loans to participants or
beneficiaries from qualified retirement plans, deferred compensation plans
or other employee benefit plans, including OppenheimerFunds prototype
401(k) plans (these are all referred to as "Retirement Plans");
-- to return excess contributions made to Retirement Plans;
-- to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value;
-- involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder Account Rules
and Policies," below);
-- if, at the time a purchase order is placed for Class A shares that
would otherwise be subject to the Class A contingent deferred sales
charge, the dealer agrees in writing to accept the dealer's portion of the
commission payable on the sale in installments of 1/18th of the commission
per month (and no further commission will be payable if the shares are
redeemed within 18 months of purchase); or
-- for distributions from OppenheimerFunds prototype 401(k) plans for
any of the following cases or purposes: (1) following the death or
disability (as defined in the Internal Revenue Code) of the participant
or beneficiary (the death or disability must occur after the participant's
account was established); (2) hardship withdrawals, as defined in the
plan; (3) under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code; (4) to meet the minimum distribution requirements
of the Internal Revenue Code; (5) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal Revenue
Code, or (6) separation from service.
-- Service Plan for Class A Shares. The Fund has adopted a Service
Plan for Class A shares to reimburse the Distributor for a portion of its
costs incurred in connection with the personal service and maintenance of
shareholder accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. The Distributor uses all
of those fees to compensate dealers, brokers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares and to reimburse
itself (if the Fund's Board of Trustees authorizes such reimbursements,
which it has not yet done) for its other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of Class A shares held in
accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of Class A shares. For more details, please
refer to "Distribution and Service Plans" in the Statement of Additional
Information.
Buying Class B Shares. Class B shares are sold at net asset value per
share without an initial sales charge. However, if Class B shares are
redeemed within 6 years of their purchase, a contingent deferred sales
charge will be deducted from the redemption proceeds. That sales charge
will not apply to shares purchased by the reinvestment of dividends or
capital gains distributions. The charge will be assessed on the lesser of
the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class B contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 6 years, and (3) shares held the longest during the
6-year period. The contingent deferred sales charge is not imposed in the
circumstances described in "Waivers of Class B and Class C Sales Charges"
below.
The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
Contingent Deferred Sales Charge
Years Since Beginning of Month In on Redemptions in that Year
Which Purchase Order Was Accepted (As % of Amount Subject to Charge)
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases are considered
to have been made on the first regular business day of the month in which
the purchase was made.
-- Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to Class
A shares. This conversion feature relieves Class B shareholders of the
asset-based sales charge that applies to Class B shares under the Class
B Distribution and Service Plan, described below. The conversion is based
on the relative net asset value of the two classes, and no sales load or
other charge is imposed. When Class B shares convert, any other Class B
shares that were acquired by the reinvestment of dividends and
distributions on the converted shares will also convert to Class A shares.
The conversion feature is subject to the continued availability of a tax
ruling described in "Alternative Sales Arrangements - Class A, Class B and
Class C Shares" in the Statement of Additional Information.
-- Distribution and Service Plan for Class B Shares. The Fund has
adopted a Distribution and Service Plan for Class B shares to compensate
the Distributor for its services in distributing Class B shares and
servicing accounts. Under the Plan, the Fund pays the Distributor an
annual "asset-based sales charge" of 0.75% per year on Class B shares that
are outstanding for 6 years or less. The Distributor also receives a
service fee of 0.25% per year. Both fees are computed on the average
annual net assets of Class B shares, determined as of the close of each
regular business day. The asset-based sales charge allows investors to buy
Class B shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell Class B shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class B shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fees increase
Class B expenses by 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for
the first year after Class B shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the fee on a
quarterly basis. The Distributor pays sales commissions of 3.75% of the
purchase price to dealers from its own resources at the time of sale. The
Fund pays the asset-based sales charge to the Distributor for its services
rendered in connection with the distribution of Class B shares. Those
payments, retained by the Distributor, are at a fixed rate which is not
related to the Distributor's expenses. The services rendered by the
Distributor include paying and financing the payment of sales commissions,
service fees, and other costs of distributing and selling Class B shares.
If the Plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the service fee and/or the asset-
based sales charge to the Distributor as to shares sold before the Plan
was terminated.
-- Waiver of Class B Sales Charge. The Class B contingent deferred
sales charge will be waived under the circumstances described below under
"Waivers of Class B and Class C Sales Charge."
Buying Class C Shares. Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are
redeemed within 12 months of their purchase, a contingent deferred sales
charge of 1.0% will be deducted from the redemption proceeds. That sales
charge will not apply to shares purchased by the reinvestment of dividends
or capital gains distributions. The charge will be assessed on the lesser
of the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class C contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 12 months, and 3) shares held the longest during the
12-month period.
-- Waivers of Class B and Class C Sales Charges. The Class B and
Class C contingent deferred sales charges will not be applied to shares
purchased in certain types of transactions nor will it apply to shares
redeemed in certain circumstances as described below. The reasons for this
policy are in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers for Redemptions of Shares in Certain Cases. The Class B and
Class C contingent deferred sales charge will be waived for redemptions
of shares in the following cases:
-- distributions to participants or beneficiaries from Retirement
Plans, if the distributions are made (a) under an Automatic Withdrawal
Plan after the participant reaches age 59-1/2, as long as the payments are
no more than 10% of the account value annually (measured from the date the
Transfer Agent receives the request), or (b) following the death or
disability (as defined in the Internal Revenue Code) of the participant
or beneficiary (the death or disability must have occurred after the
account was established);
-- redemptions from accounts other than Retirement Plans following
the death or disability of the last surviving shareholder (the death or
disability must have occurred after the account was established, and for
disability you must provide evidence of a determination of disability by
the Social Security Administration);
-- returns of excess contributions to Retirement Plans;
-- distributions from IRAs (including SEP-IRAs and SAR/SEP accounts)
before the participant is age 59-1/2, and distributions from 403(b)(7)
custodial plans or pension or profit sharing plans before the participant
is age 59-1/2 but only after the participant has separated from service,
if the distributions are made in substantially equal periodic payments
over the life (or life expectancy) of the participant or the joint lives
(or joint life and last survivor expectancy) of the participant and the
participant's designated beneficiary (and the distributions must comply
with other requirements for such distributions under the Internal Revenue
Code and may not exceed 10% of the account value annually, measured from
the date the Transfer Agent receives the request);
-- for distributions from OppenheimerFunds prototype 401(k) plans (1)
for hardship withdrawals; (2) under a Qualified Domestic Relations Order,
as defined in the Internal Revenue Code; (3) to meet minimum distribution
requirements as defined in the Internal Revenue Code; (4) to make
"substantially equal periodic payments" as described in Section 72(t) of
the Internal Revenue Code; or (5) for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
-- shares sold to the Manager or its affiliates;
-- shares sold to registered management investment companies or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
-- shares issued in plans of reorganization to which the Fund is a
party; or
-- shares redeemed in involuntary redemptions as described below.
-- Distribution and Service Plan for Class C Shares. The Fund has
adopted a Distribution and Service Plan for Class C shares to pay the
Distributor for its services in distributing Class C shares and servicing
accounts. Under the Plan, the Fund pays the Distributor an annual "asset-
based sales charge" of 0.75% per year on Class C shares. The Distributor
also receives a service fee of 0.25% per year. Both fees are computed on
the average annual net assets of Class C shares, determined as of the
close of each regular business day. The asset-based sales charge allows
investors to buy Class C shares without a front-end sales charge while
allowing the Distributor to compensate dealers that sell Class C shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class C shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fees increase
Class C expenses by 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for
the first year after Class B shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the service fee
on a quarterly basis. The Distributor pays sales commissions of 0.75% of
the purchase price to dealers from its own resources at the time of sale.
The total up-front commission paid by the Distributor to the dealer at the
time of sale is 1.0% of the purchase price. The Distributor plans to pay
the asset-based sales charge as an on-going commission to the dealer on
Class C shares that have been outstanding for a year or more.
Because the Distributor's actual expenses in selling Class C shares
may be more than the payments it receives from contingent deferred sales
charges collected on redeemed shares and from the Fund under the
Distribution and Service Plan for Class C shares, those expenses may be
carried over and paid in future years. If the Plan is terminated by the
Fund, the Board of Directors may allow the Fund to continue payments of
the asset-based sales charge to the Distributor for certain expenses it
incurred before the Plan was terminated.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to
your account at your bank or other financial institution to enable you to
send money electronically between those accounts to perform a number of
types of account transactions. These include purchases of shares by
telephone (either through a service representative or by PhoneLink,
described below), automatic investments under Asset Builder Plans, and
sending dividends and distributions or Automatic Withdrawal Plan payments
directly to your bank account. Please refer to the Application for details
or call the Transfer Agent for more information.
AccountLink privileges may be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges by sending signature-guaranteed
instructions to the Transfer Agent. AccountLink privileges will apply to
each shareholder listed in the registration on your account as well as to
your dealer representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank
account information must be made by signature-guaranteed instructions to
the Transfer Agent signed by all shareholders who own the account.
-- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
-- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be
used on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
-- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
-- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another Oppenheimer funds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
-- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
Oppenheimer funds account on a regular basis:
-- Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive payments
of at least $50 on a monthly, quarterly, semi-annual or annual basis. The
checks may be sent to you or sent automatically to your bank account on
AccountLink. You may even set up certain types of withdrawals of up to
$1,500 per month by telephone. You should consult the Application and
Statement of Additional Information for more details.
-- Automatic Exchange Plans. You can authorize the Transfer Agent
to automatically exchange an amount you establish in advance for shares
of up to five other Oppenheimer funds on a monthly, quarterly, semi-annual
or annual basis under an Automatic Exchange Plan. The minimum purchase
for each Oppenheimer funds account is $25. These exchanges are subject
to the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A or
Class B shares of the Fund, you have up to 6 months to reinvest all or
part of the redemption proceeds in Class A shares of the Fund or other
Oppenheimer funds without paying a sales charge. This privilege applies
to Class A or Class B shares that you purchased subject to an initial
sales charge and to Class A and Class B shares on which you paid a
contingent deferred sales charge when you redeemed them. It does not
apply to Class C shares. You must be sure to ask the Distributor for this
privilege when you send your payment. Please consult the Statement of
Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
-- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
-- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
-- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment, including SAR/SEP-
IRAs
-- Pension and Profit-Sharing Plans for self-employed persons and
small business owners
-- 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing or by telephone. You can
also set up Automatic Withdrawal Plans to redeem shares on a regular
basis, as described above. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special
situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525-7048, for
assistance.
-- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
-- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
-- You wish to redeem more than $50,000 worth of shares and receive
a check
-- The redemption check is not payable to all shareholders listed on
the account statement
-- The redemption check is not sent to the address of record on your
account statement
-- Shares are being transferred to a Fund account with a different
owner or name
-- Shares are redeemed by someone other than the owners (such as an
Executor)
-- Where Can I Have My Signature Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If
you are signing on behalf of a corporation, partnership or other business,
or as a fiduciary, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
-- Your name
-- The Fund's name
-- Your Fund account number (from your account statement)
-- The dollar amount or number of shares to be redeemed
-- Any special payment instructions
-- Any share certificates for the shares you are selling
-- The signatures of all registered owners exactly as the account is
registered; and
-- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell shares.
Use the following address for requests Send courier or Express Mail
by mail: requests to:
Oppenheimer Shareholder Services Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217 10200 E. Girard Ave., Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price on a regular business day, your call must be received by the
Transfer Agent by the close of The New York Stock Exchange that day, which
is normally 4:00 P.M. but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan or under a share
certificate by telephone.
-- To redeem shares through a service representative, call 1-800-
852-8457
-- To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address
on the account statement, or, if you have linked your Fund account to your
bank account on AccountLink, you may have the proceeds wired to that bank
account.
-- Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, once in any 7-day period. The check must be
payable to all owners of record of the shares and must be sent to the
address on the account statement. This service is not available within
30 days of changing the address on an account.
-- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be transferred.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on behalf
of their customers. Brokers or dealers may charge for that service.
Please refer to "Special Arrangements for Repurchase of Shares from
Dealers and Brokers" in the Statement of Additional Information for more
details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
-- Shares of the fund selected for exchange must be available for
sale in your state of residence
-- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
-- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
-- You must meet the minimum purchase requirements for the fund you
purchase by exchange
-- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other Oppenheimer funds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At
present Oppenheimer Money Market Fund, Inc. offers only one class of
shares, which are considered to be Class A shares for this purpose. In
some cases, sales charges may be imposed on exchange transactions. Please
refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
Exchanges may be requested in writing or by telephone:
-- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
-- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1-800-525-7048. The list can change
from time to time.
There are certain exchange policies you should be aware of:
-- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request that is in proper
form by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days. However, either fund
may delay the purchase of shares of the fund you are exchanging into up
to seven days if it determines it would be disadvantaged by a same-day
transfer of the proceeds to buy shares. For example, the receipt of
multiple exchange requests from a dealer in a "market-timing" strategy
might require the sale of portfolio securities at a time or price
disadvantageous to the Fund.
-- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
-- The Fund may amend, suspend or terminate the exchange privilege
at any time. Although the Fund will attempt to provide you notice
whenever it is reasonably able to do so, it may impose these changes at
any time.
-- For tax purposes, exchanges of shares involve a redemption of the
shares of the Fund you own and a purchase of the shares of the other fund,
which may result in a capital gain or loss. For more information about
taxes affecting exchanges, please refer to "How to Exchange Shares" in the
Statement of Additional Information.
-- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
The Distributor has entered into agreements with certain dealers and
investment advisers permitting them to exchange their clients' shares by
telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a
result, those exchanges may be subject to notice requirements, delays and
other limitations that do not apply to shareholders who exchange their
shares directly by calling or writing the Transfer Agent.
Shareholder Account Rules and Policies
-- Net Asset Value Per Share is determined for each class of shares
as of the close of The New York Stock Exchange, which is normally 4:00
P.M. but may be earlier on some days, on each day the Exchange is open by
dividing the value of the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding. The Fund's Board of
Trustees has established procedures to value the Fund's securities to
determine net asset value. In general, securities values are based on
market value. There are special procedures for valuing illiquid and
restricted securities and obligations for which market values cannot be
readily obtained. These procedures are described more completely in the
Statement of Additional Information.
-- The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the offering
may be suspended by the Board of Trustees at any time the Board believes
it is in the Fund's best interest to do so.
-- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
-- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither the Transfer Agent nor the Fund will
be liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine. If you are unable to reach the
Transfer Agent during periods of unusual market activity, you may not be
able to complete a telephone transaction and should consider placing your
order by mail.
-- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
-- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously.
-- The redemption price for shares will vary from day to day because
the value of the securities in the Fund's portfolio fluctuates, and the
redemption price, which is the net asset value per share, will normally
be different for Class A, Class B and Class C shares. Therefore, the
redemption value of your shares may be more or less than their original
cost.
-- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. For accounts registered
in the name of a broker-dealer, payment will be forwarded within 3
business days. The Transfer Agent may delay forwarding a check or
processing a payment via AccountLink for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much
as 10 days from the date the shares were purchased. That delay may be
avoided if you purchase shares by certified check or arrange with your
bank to provide telephone or written assurance to the Transfer Agent that
your purchase payment has cleared.
-- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $200 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
-- Under unusual circumstances, shares of the Fund may be redeemed
"in kind," which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to "How to Sell
Shares" in the Statement of Additional Information for more details.
-- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or Employer Identification Number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of income.
-- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described in "How To Buy Shares," you may be
subject to a contingent deferred sales charges when redeeming certain
Class A, Class B and Class C shares.
-- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report to
shareholders having the same last name and address on the Fund's records.
However, each shareholder may call the Transfer Agent at 1-800-525-7048
to ask that copies of those materials be sent personally to that
shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A, Class B and
Class C shares from net investment income on an annual basis and normally
pays those dividends to shareholders in December, but the Board of
Trustees can change that date. The Board may also cause the Fund to
declare dividends after the close of the Fund's fiscal year (which ends
June 30). Because the Fund does not have an objective of seeking current
income, the amounts of dividends it pays, if any, will likely be small.
Also, dividends paid on Class A shares generally are expected to be higher
than for Class B and Class C shares because expenses allocable to Class
B and Class C shares will generally be higher.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of dividends and capital gains following the
end of its fiscal year. Long-term capital gains will be separately
identified in the tax information the Fund sends you after the end of the
year. Short-term capital gains are treated as dividends for tax purposes.
There can be no assurances that the Fund will pay any capital gains
distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
-- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
-- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
-- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or have
them sent to your bank on AccountLink.
-- Reinvest Your Distributions in Another Oppenheimer Funds Account.
You can reinvest all distributions in another Oppenheimer funds account
you have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. Dividends paid from short-term capital gains
and net investment income are taxable as ordinary income. Distributions
are subject to federal income tax and may be subject to state or local
taxes. Your distributions are taxable when paid, whether you reinvest
them in additional shares or take them in cash. Every year the Fund will
send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year.
-- "Buying a Dividend": When a fund goes ex-dividend, its share price
is reduced by the amount of the distribution. If you buy shares on or
just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
-- Taxes on Transactions: Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. Generally speaking, a
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them.
-- Returns of Capital: In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders. A non-
taxable return of capital may reduce your tax basis in your Fund
shares.
This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER FUND
Graphic material included in Prospectus of Oppenheimer Fund:
"Comparison of Total Return of Oppenheimer Fund and the S&P 500 Index -
Change in Value of a $10,000 Hypothetical Investment."
A linear graph will be included in the Prospectus of Oppenheimer Fund
(the "Fund") depicting the initial account value and subsequent account
value of a hypothetical $10,000 investment in the Fund. In the case of
the Fund's Class A shares, that graph will cover each of the Fund's last
ten fiscal years from 6/30/85 through 6/30/94 and in the case of the
Fund's Class C shares will cover the period from inception of the class
(December 1, 1993) through 6/30/95. The graph will compare such values
with hypothetical $10,000 investments over the same time periods in the
S&P 500 Index. Class B shares of the Fund were not publicly offered prior
to 11/1/95, and thus no performance information is included as to Class
B shares.
Set forth below are the relevant data points that will appear on the
linear graph. Additional information with respect to the foregoing,
including a description of the S&P 500 Index, is set forth in the
Prospectus under "Performance of the Fund - Comparing the Fund's
Performance to the Market."
Fiscal Year Oppenheimer S&P 500
Ended Fund A Index
06/30/85 $ 9,425 $10,000
06/30/86 $12,371 $13,600
06/30/87 $13,415 $17,000
06/30/88 $11,764 $15,800
06/30/89 $13,247 $19,100
06/30/90 $14,046 $22,200
06/30/91 $15,683 $23,900
06/30/92 $17,443 $27,100
06/30/93 $19,768 $30,700
06/30/94 $20,923 $31,200
06/30/95 $25,025 $39,300
Fiscal Period Oppenheimer S&P 500
Ended Fund C Index
12/1/93 $10,000 $10,000
06/30/94 $ 9,877 $ 9,618
06/30/95 $11,711 $11,794
<PAGE>
Oppenheimer Fund
Two World Trade Center
New York, NY 10048-0203
1-800-525-7048
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
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 LLP
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, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement, and if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
PR401.1095.R Printed on recycled paper
<PAGE>
Oppenheimer Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated November 1, 1995
This Statement of Additional Information of Oppenheimer Fund is not
a Prospectus. This document contains additional information about the
Fund and supplements information in the Prospectus dated November 1, 1995.
It should be read together with the Prospectus, which may be obtained by
writing to the Fund's Transfer Agent, Oppenheimer Shareholder Services at
P.O. Box 5270, Denver, Colorado 80217 or by calling the Transfer Agent at
the toll-free number shown above.
<TABLE>
<CAPTION>
Contents
Page
<S> <C>
About the Fund
Investment Objective and Policies. . . . . . . . . . . . . .
Investment Objective and Policies. . . . . . . . . . . . . .
Investment Policies and Strategies. . . . . . . . . . .
Other Investment Techniques and Strategies. . . . . . .
Other Investment Restrictions . . . . . . . . . . . . .
How the Fund is Managed. . . . . . . . . . . . . . . . . . .
Organization and History. . . . . . . . . . . . . . . .
Trustees and Officers of the Fund . . . . . . . . . . .
The Manager and Its Affiliates. . . . . . . . . . . . .
Brokerage Policies of the Fund . . . . . . . . . . . . . . .
Performance of the Fund. . . . . . . . . . . . . . . . . . .
Distribution and Service Plans . . . . . . . . . . . . . . .
About Your Account
How To Buy Shares. . . . . . . . . . . . . . . . . . . . . .
How To Sell Shares . . . . . . . . . . . . . . . . . . . . .
How To Exchange Shares . . . . . . . . . . . . . . . . . . .
Dividends, Capital Gains and Taxes . . . . . . . . . . . . .
Additional Information About the Fund. . . . . . . . . . . .
Financial Information About the Fund
Independent Auditors' Report . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . .
Appendix A: Industry Classifications . . . . . . . . . . . .A-1
</TABLE>
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Set forth below is
supplemental information about those policies and the types of securities
in which the Fund invests, as well as the strategies the Fund may use to
try to achieve its objective. Capitalized terms used in this Statement
of Additional Information have the same meaning as those terms have in the
Prospectus.
In selecting securities for the Fund's portfolio, the Fund's investment
advisor, Oppenheimer Management Corporation (the "Manager"), evaluates the
merits of securities primarily through the exercise of its own investment
analysis. This may include, among other things, evaluation of the history
of the issuer's operations, prospects for the industry of which the issuer
is part, the issuer's financial condition, the issuer's pending product
developments and developments by competitors, the effect of general market
and economic conditions on the issuer's business, and legislative
proposals or new laws that might affect the issuer. Current income is not
a consideration in the selection of portfolio securities for the Fund,
whether for appreciation, defensive or liquidity purposes. The fact that
a security has a low yield or does not pay current income will not be an
adverse factor in selecting securities to try to achieve the Fund's
investment objective of capital appreciation unless the Manager believes
that the lack of yield might adversely affect appreciation possibilities.
The portion of the Fund's assets allocated to securities and methods
selected for capital appreciation will depend upon the judgment of the
Fund's Manager as to the future movement of the equity securities markets.
If the Manager believes that economic conditions favor a rising market,
the Fund will emphasize securities and investment methods selected for
high capital growth. If the Manager believes that a market decline is
likely, defensive securities and investment methods will be emphasized
(See "Temporary Defensive Investments," below).
-- Foreign Securities. "Foreign securities" include equity and debt
securities of companies organized under the laws of countries other than
the United States and debt securities of foreign governments that are
traded on foreign securities exchanges or in the foreign over-the-counter
markets. Securities of foreign issuers that are represented by American
Depository Receipts or that are listed on a U.S. securities exchange or
traded in the U.S. over-the-counter markets are not considered "foreign
securities" for the purpose of the Fund's investment allocations, because
they are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held abroad.
Investing in foreign securities offer potential benefits not
available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear to
offer growth potential, or in foreign countries with economic policies or
business cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of foreign stock
markets that do not move in a manner parallel to U.S. markets. 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. If the Fund's
portfolio securities are held abroad, the countries in which they may be
held and the sub-custodians holding them must be approved by the Fund's
Board of Trustees where required under applicable rules of the Securities
and Exchange Commission.
-- Risks of Foreign Investing. Investing in foreign securities
involves special additional risks and considerations not typically
associated with investing in securities of issuers traded in the U.S.
These include: reduction of income by foreign taxes; fluctuation in value
of foreign portfolio investments due to changes in currency rates and
control regulations (e.g., currency blockage); transaction charges for
currency exchange; lack of public information about foreign issuers; lack
of uniform accounting, auditing and financial reporting standards
comparable to those applicable to domestic issuers; less volume on foreign
exchanges than on U.S. exchanges; greater volatility and less liquidity
on foreign markets than in the U.S.; less regulation of foreign issuers,
stock exchanges and brokers than in the U.S.; greater difficulties in
commencing lawsuits against foreign issuers; higher brokerage commission
rates than in the U.S.; increased risks of delays in settlement of
portfolio transactions or loss of certificates for portfolio securities
because of the lesser speed and reliability of mail service between the
U.S. and foreign countries than within the U.S.; possibilities in some
countries of expropriation or nationalization of assets, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and differences (which may be favorable or unfavorable)
between the U.S. economy and foreign economies. From time to time, 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. 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 SEC rules.
-- Warrants and Rights. The prices of warrants do not necessarily
move in a manner parallel to the prices of the underlying securities. The
price the Fund pays for a warrant will be lost unless the warrant is
exercised prior to its expiration. Rights and warrants have no voting
rights, receive no dividends and have no rights with respect to the assets
of the issuer.
Other Investment Techniques and Strategies
-- Hedging with Options and Futures Contracts. The Fund may use
hedging instruments for the purposes described in the Prospectus. When
hedging to attempt to protect against declines in the market value of the
Fund's portfolio, to permit the Fund to retain unrealized gains in the
value of portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may: (1) sell Stock
Index Futures, (2) buy puts, or (3) write covered calls on securities or
on 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: (1) buy Futures, or (2) buy calls on such Futures or on
securities. Normally, the Fund would then purchase the equity securities
and terminate the hedging portion.
The Fund's strategy of hedging with Futures and options on Futures
will be incidental to the Fund's investment activities in the underlying
cash market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be developed,
to the extent such investment methods are consistent with the Fund's
investment objective, and are legally permissible and disclosed in the
Prospectus. Additional information about the hedging instruments the Fund
may use is provided below.
-- Writing Covered Calls. As described in the Prospectus, the Fund
may write covered calls. When the Fund writes a call on an investment,
it receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment), regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing purchase
transaction." A profit or loss will be realized, depending upon whether
the net of the option transaction costs and the premium received on the
call written was more or less than the price of the call subsequently
purchased. A profit may also be realized if the call lapses unexercised,
because the Fund retains the related investments and the premium received.
If the Fund could not effect a closing purchase transaction due to the
lack of a market, it would have to hold the callable investments until the
call lapsed or was exercised.
The Fund may also write calls on Futures without owning a futures
contract or deliverable securities, provided that at the time the call is
written, the Fund covers the call by segregating in escrow an equivalent
dollar value of liquid assets. The Fund will segregate additional liquid
assets if the value of the escrowed assets drops below 100% of the current
value of the Future. In no circumstances would an exercise notice as to
a Future put the Fund in a short futures position.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the facilities of
the Options Clearing Corporation ("OCC"), as to the investments on which
the Fund has written options that are traded on exchanges, or as to other
acceptable escrow securities, so that no margin will be required from the
Fund for such option transactions. OCC will release the securities
covering a call on the expiration of the call or when the Fund enters into
a closing purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally higher
than on general securities transactions, are payable on writing or
purchasing a call.
-- Writing Put Options. A put option on an investment gives the
purchaser the right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the option period.
Writing a put covered by segregated liquid assets equal to the exercise
price of the put has the same economic effect to the Fund as writing a
covered call. The premium the Fund receives from writing a put option
represents a profit, as long as the price of the underlying investment
remains above the exercise price. However, the Fund has also assumed the
obligation during the option period to buy the underlying investment from
the buyer of the put at the exercise price, even though the value of the
investment may fall below the exercise price. If the put expires
unexercised, the Fund (as the writer of the put) realizes a gain in the
amount of the premium less transaction costs. If the put is exercised,
the Fund must fulfill its obligation to purchase the underlying investment
at the exercise price, which will usually exceed the market value of the
investment at that time. In that case, the Fund may incur a loss, equal
to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs
incurred.
When writing put options on securities or on foreign currencies, to
secure its obligation to pay for the underlying security, the Fund will
deposit in escrow liquid assets with a value equal to or greater than the
exercise price of the underlying securities. The Fund therefore foregoes
the opportunity of investing the segregated assets or writing calls
against those assets. As long as the obligation of the Fund as the put
writer continues, it may be assigned an exercise notice by the broker-
dealer through whom such option was sold, requiring the Fund to take
delivery of the underlying security against payment of the exercise price.
The Fund has no control over when it may be required to purchase the
underlying security, since it may be assigned an exercise notice at any
time prior to the termination of its obligation as the writer of the put.
This obligation terminates upon expiration of the put, or such earlier
time at which the Fund effects a closing purchase transaction by
purchasing a put of the same series as that previously sold. Once the
Fund has been assigned an exercise notice, it is thereafter not allowed
to effect a closing purchase transaction.
The Fund may effect a closing purchase transaction to realize a
profit on an outstanding put option it has written or to prevent an
underlying security from being put. Furthermore, effecting such a closing
purchase transaction will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by the deposited
assets, or to utilize the proceeds from the sale of such assets for other
investments by the Fund. The Fund will realize a profit or loss from a
closing purchase transaction if the cost of the transaction is less or
more than the premium received from writing the option. As above for
writing covered calls, any and all such profits described herein from
writing puts are considered short-term gains for Federal tax purposes, and
when distributed by the Fund, are taxable as ordinary income.
-- Purchasing Puts and Calls. The Fund may purchase calls to protect
against the possibility that the Fund's portfolio will not participate in
an anticipated rise in the securities market. When the Fund purchases a
call it pays a premium (other than in a closing purchase transaction),
and, except as to calls on securities indices or 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 an index or Future, settlement is in
cash rather than by delivery of the underlying investment to the Fund.
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 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 indices, has the right to sell the underlying investment to a
seller of a corresponding put on the same investment during the put period
at a fixed exercise price. Buying a put on an investment the Fund owns
(a "protective put") enables the Fund to attempt to protect itself during
the put period against a decline in the value of the underlying investment
below the exercise price by selling 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. However, the put
may be sold prior to expiration (whether or not at a profit).
Puts and calls on broadly-based indices or Futures are similar to
puts and calls on securities or futures contracts except that all
settlements are in cash and gain or loss depends on changes in the index
in question (and thus on price movements in the market generally) rather
than on price movements of individual securities or futures contracts.
When the Fund buys a call on an index or Future, it pays a premium. If
the Fund exercises the call during the call period, a seller of a
corresponding call on the same investment will pay the Fund an amount of
cash to settle the call if the closing level of the index or Future upon
which the call is based is greater than the exercise price of the call.
That cash payment is equal to the difference between the closing price of
the call and the exercise price of the call times a specified multiple
(the "multiplier") which determines the total dollar value for each point
of difference. When the Fund buys a put on an index or Future, it pays
a premium and has the right during the put period to require a seller of
a corresponding put, upon the Fund's exercise of its put, to deliver cash
to the Fund to settle the put if the closing level of the index or Future
upon which the put is based is less than the exercise price of the put.
That cash payment is determined by the multiplier, in the same manner as
described above as to calls.
When the Fund purchases a put on an index, or on a Future not owned
by it, the put protects the Fund to the extent that the index moves in a
similar pattern to the securities the Fund holds. The Fund can either
resell the put or, in the case of a put on a Future, buy the underlying
investment and sell it at the exercise price. The resale price of the put
will vary inversely with the price of the underlying investment. If the
market price of the underlying investment is above the exercise price, and
as a result the put is not exercised, the put will become worthless on the
expiration date. In the event of a decline in price of the underlying
investment, the Fund could exercise or sell the put at a profit to attempt
to offset some or all of its loss on its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause
the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds within the Fund's
control, holding a put might cause the Fund to sell the related
investments for reasons which would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys a put or call,
sells a call, or buys or sells an underlying investment in connection with
the exercise of a put or call. Such commissions may be higher on a
relative basis than those which would apply to direct purchases or sales
of such underlying investments. 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 investments.
-- Options on Foreign Currencies. The Fund intends to write and
purchase calls and puts on foreign currencies. The Fund may purchase and
write puts and calls on foreign currencies that are traded on a securities
or commodities exchange or over-the-counter markets or are quoted by major
recognized dealers in such options. It does so to protect against
declines in the dollar value of foreign securities and against increases
in the dollar cost of foreign securities to be acquired. If the Manager
anticipates a rise in the dollar value of a foreign currency in which
securities to be acquired are denominated, the increased cost of such
securities may be partially offset by purchasing calls or writing puts on
that foreign currency. If a decline in the dollar value of a foreign
currency is anticipated, the decline in value of portfolio securities
denominated in that currency may be partially offset by writing calls or
purchasing puts on that foreign currency. However, in the event of
currency rate fluctuations adverse to the Fund's position, it would lose
the premium it paid and transaction costs.
A call written on a foreign currency by the Fund is covered if the
Fund owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash consideration held
in a segregated account by its Custodian) upon conversion or exchange of
other foreign currency held in its portfolio. A call may be written by
the Fund on a foreign currency to provide a hedge against a decline 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 covers the option by
maintaining in a segregated account with the Fund's Custodian, cash or
U.S. government securities or other liquid, high grade debt securities in
an amount equal to the exercise price of the option.
-- Futures. No payment is paid or received by the Fund on the
purchase or sale of a Future. Upon entering into a Futures transaction,
the Fund will be required to deposit an initial margin payment with the
futures commission merchant (the "futures broker"). The initial margin
payment 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 expiration
of the Future, if the Fund elects to close out its position by taking an
opposite position, a final determination of variation margin is made, and
additional cash is required to be paid by or released to the Fund. Any
loss or gain is then realized. All futures transactions are effected
through a clearinghouse associated with the exchange on which the
contracts are traded.
-- Forward Contracts. A Forward Contract involves bilateral
obligations of one party to purchase, and another party to sell, a
specific currency at a future date (which may be any fixed number of days
from the date of the contract agreed upon by the parties), at a price set
at the time the contract is entered into. These contracts are traded in
the interbank market conducted directly between currency traders (usually
large commercial banks) and their customers.
The Fund may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund
owns or intends to acquire, but it does fix a rate of exchange in advance.
In addition, although Forward Contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit
any potential gain that might result should the value of the currencies
increase.
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when
the Fund anticipates receipt of dividend payments in a foreign currency,
the Fund may desire to "lock-in" the U.S. dollar price of the security or
the U.S. dollar equivalent of such payment. To do so, the Fund enters
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. 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 either situation the Fund may, in the alternative,
enter into a forward contract to sell a different foreign currency for a
fixed U.S. dollar amount where the Fund believes that the U.S. dollar
value of the currency to be sold pursuant to the forward contract will
fall whenever there is a decline in the U.S. dollar value of the currency
in which portfolio securities of the Fund are denominated ("cross hedge").
The Fund will not enter into such Forward Contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of
the value of the Fund's portfolio securities or other assets denominated
in that currency or a closely-correlated currency. The Fund, however, in
order to avoid excess transactions and transaction costs, may maintain a
net exposure to Forward Contracts in excess of the value of the Fund's
portfolio securities or other assets denominated in that currency or a
closely-correlated currency provided the excess amount is "covered" by
liquid, high-grade debt securities, denominated in any currency, at least
equal at all times to the amount of such excess. As an alternative, the
Fund may purchase a call option permitting the Fund to purchase the amount
of foreign currency being hedged by a forward sale contract at a price no
higher than the forward contract price or the Fund may purchase a put
option permitting the Fund to sell the amount of foreign currency subject
to a forward purchase contract at a price as high or higher than the
forward contract price. Unanticipated changes in currency prices may
result in poorer overall performance for the Fund than if it had not
entered into such contracts.
The precise matching of the Forward Contract amounts and the value
of the securities involved will not generally be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of these securities between
the date the Forward Contract is entered into and the date it is sold.
Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot (i.e., cash) market (and bear the expense
of such purchase), if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some
of the foreign currency received upon the sale of the portfolio security
if its market value exceeds the amount of foreign currency the Fund is
obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-
term hedging strategy is highly uncertain. Forward Contracts involve the
risk that anticipated currency movements will not be accurately predicted,
causing the Fund to sustain losses on these contracts and transactions
costs.
At or before the maturity of a Forward Contract requiring the Fund
to sell a currency, the Fund may either sell a portfolio security and use
the sale proceeds to make delivery of the currency or retain the security
and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on
the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund may close out a Forward
Contract requiring it to purchase a specified currency by entering into
a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would
realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate
or rates between the currencies involved moved between the execution dates
of the first contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are
involved. Because such contracts are not traded on an exchange, the Fund
must evaluate the credit and performance risk of each particular
counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time
to time, and investors should be aware of the costs of currency
conversion. Foreign exchange dealers do not charge a fee for conversion,
but they do seek to realize a profit based on the difference between the
prices at which they buy and sell various currencies. Thus, a dealer may
offer to sell a foreign currency to the Fund at one rate, while offering
a lesser rate of exchange should the Fund desire to resell that currency
to the dealer.
-- Interest Rate Swap Transactions. Swap agreements entail both
interest rate risk and credit risk. There is a risk that, based on
movements of interest rates in the future, the payments made by the Fund
under a swap agreement will have been greater than those received by it.
Credit risk arises from the possibility that the counterparty will
default. If the counterparty to an interest rate swap defaults, the
Fund's loss will consist of the net amount of contractual interest
payments that the Fund has not yet received. The Manager will monitor the
creditworthiness of counterparties to the Fund's interest rate swap
transactions on an ongoing basis. The Fund will enter into swap
transactions with appropriate counterparties pursuant to master netting
agreements. A master netting agreement provides that all swaps done
between the Fund and 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." The Fund will not
invest more than 25% of its total assets to interest rate swaps.
-- Additional Information About Hedging Instruments and Their Use.
The Fund's Custodian, or a securities depository acting for the Custodian,
will act as the Fund's escrow agent, through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has
written options traded on exchanges or as to other acceptable escrow
securities, so that no margin will be required for such transactions. OCC
will release the securities on the expiration of the option or upon the
Fund's entering into a closing transaction. An option position may be
closed out only on a market which provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option.
When the Fund writes an over-the-counter("OTC") option, it will enter
into an arrangement with a primary U.S. Government securities dealer,
which would establish a formula price at which the Fund would have the
absolute right to repurchase that OTC option. That formula price would
generally be based on a multiple of the premium received for the option,
plus the amount by which the option is exercisable below the market price
of the underlying security (that is, the extent to which the option is
"in-the-money"). When the Fund writes an OTC option, it will treat as
illiquid (for purposes of the limit on its assets that may be invested in
illiquid securities, stated in the Prospectus) the mark-to-market value
of any OTC option held by it. The Securities and Exchange
Commission is evaluating whether OTC options should be considered liquid
securities, and the procedure described above could be affected by the
outcome of that evaluation.
The Fund's option activities may affect its turnover rate and
brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate in a manner beyond the Fund's control. The exercise by the
Fund of puts on securities or Futures may cause the sale of related
investments, also increasing portfolio turnover. Although such exercise
is within the Fund's control, holding a put might cause the Fund to sell
the related investments for reasons which would not exist in the absence
of the put. The Fund will pay a brokerage commission each time it buys
or sells a put, a call, or an underlying investment in connection with the
exercise of a put or call. Such commissions may be higher than those
which would apply to direct purchases or sales of the underlying
investments. Premiums paid for options are small in relation to the
market value of the related investments, and consequently, put and call
options offer large amounts of leverage. The leverage offered by trading
in options could result in the Fund's net asset value being more sensitive
to changes in the value of the underlying investments.
-- Regulatory Aspects of Hedging Instruments. The Fund must operate
within certain restrictions as to its positions in Futures and options
thereon under a rule ("CFTC Rule") adopted by the Commodity Futures
Trading Commission ("CFTC") under the Commodity Exchange Act (the "CEA"),
which exempts the Fund from registration with the CFTC as a "commodity
pool operator" (as defined under the CEA) if it complies with the CFTC
Rule. Under these restrictions, the Fund will not, as to any positions,
whether short, long or a combination thereof, enter into Futures and
options thereon for which the aggregate initial margins and premiums
exceed 5% of the fair market value of its net assets, with certain
exclusions as defined in the CFTC Rule. Under the restrictions, the Fund
also must, as to its short positions, use Futures and options thereon
solely for bona fide hedging purposes within the meaning and intent of the
applicable provisions of the CEA.
Transactions in options by the Fund are subject to limitations
established by each of the exchanges governing the maximum number of
options which may be written or held by a single investor or group of
investors acting in concert, regardless of whether the options were
written or purchased on the same or different exchanges or are held in one
or more accounts or through one or more different exchanges or 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 or an affiliated investment
adviser. Position limits also apply to Futures. An exchange may order
the liquidation of positions found to be in violation of those limits and
may impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Stock Index Future, the Fund will maintain in a segregated
account or accounts with its Custodian, cash or readily marketable short-
term (maturing in one year or less) debt instruments in an amount equal
to the market value of the securities underlying such Future, less the
margin deposit applicable to it.
-- Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code (although it reserves the right not to qualify). That
qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Futures, held for less than three months, whether
or not they were purchased on the exercise of a call held by the Fund;
(ii) purchasing calls or puts which expire in less than three months;
(iii) effecting closing transactions with respect to calls or puts
purchased less than three months previously; (iv) exercising puts or calls
held by the Fund for less than three months; or (v) writing calls on
investments held for less than three months.
Certain foreign currency exchange contracts ("Forward Contracts") in
which the Fund may invest are treated as "section 1256 contracts." Gains
or losses relating to section 1256 contracts generally are characterized
under the Internal Revenue Code as 60% long-term and 40% short-term
capital gains or losses. However, foreign currency gains or losses
arising from certain section 1256 contracts (including Forward Contracts)
generally are treated as ordinary income or loss. In addition, section
1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses are
treated as though they were realized. These contracts also may be marked-
to-market for purposes of the excise tax applicable to investment company
distributions and for other purposes under rules prescribed pursuant to
the Internal Revenue Code. An election can be made by the Fund to exempt
these transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may
affect the character 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 on each trade before determining
a net "Section 988" gain or loss under the Internal Revenue Code for that
trade, which may increase or decrease the amount of the Fund's investment
company income available for distribution to its shareholders.
-- Risks of Hedging with Options and Futures. An option position may
be closed out only on a market that provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option. In addition to the risks
associated with respect to hedging that are discussed in the Prospectus
and above, there is a risk in using short hedging by (i) selling Futures
or (ii) purchasing puts on indices or Futures to attempt to protect
against declines in the value of the Fund's securities. The risk is 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
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 offsetting
transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures
markets could be reduced, thus producing distortion. Third, from the
point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the 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 securities being hedged if the
historical volatility of the prices of such 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 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
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
securities will tend to move in the same direction as the indices upon
which the Hedging Instruments are based.
-- Derivative Investments. Certain currency-indexed securities
purchased by the Fund may have a payout factor tied to a multiple of the
movement of the U.S. dollar (or the foreign currency in which the security
is denominated) against the movement in the U.S. dollar, the foreign
currency, another currency, or an index. Such securities may be subject
to increased principal risk and increased volatility than comparable
securities without a payout factor in excess of one, but the Manager
believes the increased yield justifies the increased risk.
-- Illiquid and Restricted Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933, the
Fund may have to cause those securities to be registered. The expenses
of registration of restricted securities may be negotiated by the Fund
with the issuer at the time such securities are purchased by the Fund,
if such registration is required before such securities may be sold
publicly. When registration must be arranged because the Fund wishes to
sell the security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would be
permitted to sell them. The Fund would bear the risks of any downward
price fluctuation during that period. The Fund may also acquire, through
private placements, securities having contractual restrictions on their
resale, which might limit the Fund's ability to dispose of such securities
and might lower the amount realizable upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those percentage
restrictions do not limit purchases of restricted securities that are
eligible for sale to qualified institutional purchasers pursuant to Rule
144A under the Securities Act of 1933, provided that those securities have
been determined to be liquid by the Board of Trustees of the Fund or by
the Manager under Board-approved guidelines. Those guidelines take into
account the trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's holding
of that security may be deemed to be illiquid.
-- Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must at least equal the value of the
loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities).
To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund.
When it lends securities, the Fund receives amounts equal to the dividends
or interest on loaned securities and also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the borrower. The
Fund may also pay reasonable finder's, custodian and administrative fees.
The terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important
matter.
-- Repurchase Agreements. In a repurchase transaction, the Fund
acquires a security from, and simultaneously resells it to, an approved
vendor. An "approved vendor" is a commercial bank or the U.S. branch of
a foreign bank or a broker-dealer which has been designated a primary
dealer in government securities which must meet credit requirements set
by the Fund's Board of Trustees from time to time. The repurchase price
exceeds the purchase price by an amount that reflects an agreed-upon
interest rate effective for the period during which the repurchase
agreement is in effect. The majority of these transactions run from day
to day, and delivery pursuant to the resale typically will occur within
one to five days of the purchase. Repurchase agreements are considered
"loans" under the Investment Company Act of 1940 (the "Investment Company
Act"), collateralized by the underlying security. The Fund's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the
Manager will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the collateral's
value.
-- Temporary Defensive Investments. When the equity markets in
general are declining, the Fund may commit an increasing portion of its
assets to defensive securities. These may include the types of securities
described in the Prospectus. When investing for defensive purposes, the
Fund will normally emphasize investment in short-term debt securities
(that is, securities maturing in one year or less from the date of
purchase), since those types of securities are generally more liquid and
usually may be disposed of quickly without significant gains or losses so
that the Manager may have liquid assets when it wishes to make investments
in securities for appreciation possibilities.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in
the Prospectus. There are additional investment restrictions that the
Fund must follow that are also fundamental policies. Fundamental policies
and the Fund's investment objectives, cannot be changed without the vote
of a "majority" of the Fund's outstanding voting securities.
Under the Investment Company Act, such a "majority" vote is defined
as the vote of the holders of the lesser of (i) 67% or more of the shares
present or represented by proxy at such meeting, if the holders of more
than 50% of the outstanding shares are present, or (ii) more than 50% of
the outstanding shares. Under these additional restrictions, the Fund
cannot:
-- make short sales;
-- invest in commodities or 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 commodity contract;
-- invest in real estate or in interests in real estate, but may
purchase readily marketable securities of companies holding real estate
or interests therein;
-- purchase or sell 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;
-- mortgage, hypothecate or pledge any of its assets; however, this
does not prohibit the escrow arrangements contemplated by the writing of
covered call options or other collateral or margin arrangements in
connection with any of the Hedging Instruments permitted by any of its
other fundamental policies;
-- borrow money in excess of 5% of its gross assets taken at current
value, and then only as a temporary measure for extraordinary or emergency
purposes;
-- invest in or acquire shares of any other investment company or
trust except in connection with a plan of merger, consolidation or
reorganization; however, this policy shall not prevent the Fund from
investing in the securities issued by a real estate investment trust,
provided that such trust is not permitted to invest in real estate or
interests in real estate other than mortgages or other security interests;
-- underwrite securities of other companies except insofar as it
might be deemed to be an underwriter in the resale of any securities held
in its own portfolio; or
-- purchase or retain the securities of any issuer if those officers,
trustees and directors of the Fund or the Manager who beneficially own
individually more than .5% of the securities of such issuer together own
more than 5% of the securities of such issuer.
In connection with the qualification of its shares in certain states,
the Fund has undertaken that in addition to the above, as a non-
fundamental policy, the Fund will not (i) invest in oil, gas or other
mineral leases or (ii) invest in real estate limited partnership
interests. In the event 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.
How the Fund Is Managed
Organization and History. Each share of the Fund represents an
interest in the Fund proportionately equal to the interest of each other
share of the same class and entitle the holder to one vote per share (and
a fractional vote for a fractional share) on matters submitted to their
vote at shareholders' meetings. Shareholders of the Fund and of the
Trust's other series vote together in the aggregate on certain matters at
shareholders' meetings, such as the election of Trustees and ratification
of appointment of auditors for the Trust. Shareholders of a particular
series or class vote separately on proposals which affect that series or
class, and shareholders of a series or class which is not affected by that
matter are not entitled to vote on the proposal. For example, only
shareholders of a series, such as the Fund, vote exclusively on any
material amendment to the investment advisory agreement with respect to
the series. Only shareholders of a class of a series vote on certain
amendments to the Distribution and/or Service Plans if the amendments
affect that class.
The Trustees are authorized to create new series and classes of
series. The Trustees may reclassify unissued shares of the Trust or its
series or classes into additional series or classes of shares. The
Trustees may also divide or combine the shares of a class into a greater
or lesser number of shares without thereby changing the proportionate
beneficial interest of a shareholder in the Fund. Shares do not have
cumulative voting rights or preemptive or subscription rights. Shares may
be voted in person or by proxy.
As a Massachusetts business trust, the Fund is not required to hold,
and does not plan to hold, regular annual meetings of shareholders. The
Fund will hold meetings when required to do so by the Investment Company
Act or other applicable law, or when a shareholder meeting is called by
the Trustees or upon proper request of the shareholders. Shareholders
have the right, upon the declaration in writing or vote of two-thirds of
the outstanding shares of the Fund, to remove a Trustee. The Trustees
will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of its outstanding
shares. In addition, if the Trustees receive a request from at least 10
shareholders (who have been shareholders for at least six months) holding
shares of the Fund valued at $25,000 or more or holding at least 1% of the
Fund's outstanding shares, whichever is less, stating that they wish to
communicate with other shareholders to request a meeting to remove a
Trustee, the Trustees will then either make the Fund's shareholder list
available to the applicants or mail their communication to all other
shareholders at the applicants' expense, or the Trustees may take such
other action as set forth under Section 16(c) of the Investment Company
Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers
and their principal occupations and business affiliations during the past
five years are set forth below. The address for each, Trustee and
officer, is Two World Trade Center, New York, New York 10048-0203, unless
another address is listed below. All of the Trustees are also Trustees
or Directors of Oppenheimer Global Fund, Oppenheimer Growth Fund,
Oppenheimer Money Market Fund, Inc., Oppenheimer Target Fund, Oppenheimer
Tax-Free Bond Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer
California Tax-Exempt Fund, Oppenheimer Multi-State Tax-Exempt Trust,
Oppenheimer Asset Allocation Fund, Oppenheimer Global Emerging Growth
Fund, Oppenheimer Global Growth & Income Fund, Oppenheimer Gold & Special
Minerals Fund, Oppenheimer Discovery Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Mortgage Income Fund, Oppenheimer Multi-Government
Trust and Oppenheimer Multi-Sector Income Trust (collectively, the "New
York-based Oppenheimer funds"). As of October 6, 1995, all of the Fund's
Trustees and officers as a group beneficially owned less than 1% of the
Fund's outstanding shares of the Fund. That statement does not include
ownership of shares held of record by an employee benefit plan for
employees of the Manager (one of the Trustees of the fund listed below,
Ms. Macaskill, and one of the officers, Mr. Donohue, are trustees of that
plan, other than the shares beneficially owned under the plan by the
officers of the Fund listed above.
Leon Levy, Chairman of the Board of Trustees; Age 70
General Partner of Odyssey Partners, L.P. (investment partnership) and
Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee; Age 83
386 Park Avenue South, New York, New York 10016
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of The Research Institute of
America.
Robert G. Galli, Trustee*; Age 62
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 Oppenheimer funds and
Executive Vice President and General Counsel of the Manager and the
Distributor.
Benjamin Lipstein, Trustee; Age 72
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; a director of Sussex Publishers, Inc.
(Publishers of Psychology Today and Mother Earth News) and Spy Magazine,
L.P.
Bridget A. Macaskill, Trustee*; Age 47
President, Chief Executive Officer and a Director of the Manager; Chairman
and a Director of SSI, Vice President and a Director of OAC; a Director
of HarbourView and of Oppenheimer Partnership Holdings, Inc., a holding
company subsidiary of the Manager; formerly an Executive Vice President
of the Manager.
Elizabeth B. Moynihan, Trustee; Age 66
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the American Schools of
Oriental Research, the Freer Gallery of Art (Smithsonian Institution), the
Institute of Fine Arts (New York University) and National Building Museum;
a member of the Trustees Council, Preservation League of New York State;
a member of the Indo-U.S. Sub-Commissions on Education and Culture.
Kenneth A. Randall, Trustee; Age 68
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; Age 65
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of New York;
President of Jerome Levy Economics Institute, a member of the U.S.
Competitiveness Policy Council; a director of GranCare, Inc. (health care
provider); formerly New York State Comptroller and trustee, New York State
and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age 63
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Historical Society and Greenwich Hospital.
Sidney M. Robbins, Trustee; Age 83
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. (a closed-end
investment company); 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*; Age 69
Chairman Emeritus and a director of the Manager; formerly Chairman of the
Manager and Oppenheimer Funds Distributor, Inc. (the "Distributor").
Pauline Trigere, Trustee; Age 82
498 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; Age 64
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, Hogan & Hartson (a law firm); a director of B.A.T. Industries,
Ltd. (tobacco and financial services), Caterpillar, Inc. (machinery),
ConAgra, Inc. (food and agricultural products), FMC Corp. (chemicals and
machinery), Lindsay Manufacturing Co. (irrigation equipment), Texas
Instruments, Inc. (electronics) and The Vigoro Corporation (fertilizer
manufacturer); formerly (in descending chronological order) 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.
Richard H. Rubinstein, Vice President and Portfolio Manager; Age 47
Vice President of the Manager; an officer of other OppenheimerFunds.
Andrew J. Donohue, Secretary; Age 45
Executive Vice President and General Counsel of Oppenheimer Management
Corporation ("OMC") (the "Manager") and Oppenheimer Funds Distributor,
Inc. (the "Distributor"); an officer of other Oppenheimer funds; formerly
Senior Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a law
firm); an officer of First Investors Corporation (a broker-dealer) and
First Investors Management Company, Inc. (broker-dealer and investment
adviser); director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age 59
3410 South Galena Street Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President and
Treasurer of the Distributor and HarbourView; Senior Vice President,
Treasurer, Assistant Secretary and a director of Centennial; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of other
Oppenheimer funds.
Robert Bishop, Assistant Treasurer; Age 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other Oppenheimer funds; formerly a Fund Controller for the Manager,
prior to which he was an Accountant for Yale & Seffinger, P.C., an
accounting firm, and previously an Accountant and Commissions Supervisor
for Stuart James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for the Manager,
prior to which he was an International Mutual Fund Supervisor for Brown
Brothers Harriman & Co., a bank, and previously a Senior Fund Accountant
for State Street Bank & Trust Company, before which he was a sales
representative for Central Colorado Planning.
Robert G. Zack, Assistant Secretary; Age 47
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 are affiliated
with the Manager; they and the Trustees of the Fund who are affiliated
with the Manager (Ms. Macaskill and Messrs. Galli and Spiro; Mr. Spiro is
also an officer) receive no salary or fee from the Fund. The Trustees of
the Fund (excluding Ms. Macaskill and Messrs. Galli and Spiro) received
the total amounts shown below (i) from the Fund, during its fiscal year
ended June 30, 1995, and (ii) from the New York-based Oppenheimer funds
(including the Fund) listed in the first paragraph of this section (and
from Oppenheimer Global Environment Fund, Oppenheimer Mortgage Income Fund
and Oppenheimer Time Fund), which ceased operation following the
acquisition of their assets by certain other Oppenheimer funds.
<TABLE>
<CAPTION>
Retirement Total
Benefits Compensation
Aggregate Accrued as From All
Compensation Part of New York-based
Name and Position from Fund Fund Expenses Oppenheimer funds1
<S> <C> <C> <C>
Leon Levy $6,040 ($979) $141,000.00
Chairman and Trustee
Leo Cherne $2,949 ($478) $ 68,800.00
Audit Committee
Member and Trustee
Benjamin Lipstein $3,693 ($598) $ 86,200.00
Study Committee
Member and Trustee
Elizabeth B. Moynihan$2,596 ($421) $ 60,625.00
Study Committee
Member2 and Trustee
Kenneth A. Randall $3,359 ($544) $ 78,400.00
Audit Committee
Member and Trustee
Edward V. Regan $2,409 ($390) $ 56,275.00
Audit Committee
Member2 and Trustee
Russell S. Reynolds, Jr.$2,233 ($362) $ 52,100.00
Trustee
Sidney M. Robbins $5,233 ($848) $122,100.00
Study Committee
Chairman, Audit
Committee Vice-Chairman
and Trustee
Pauline Trigere $2,233 ($362) $ 52,100.00
Trustee
Clayton K. Yeutter $2,233 ($362) $ 52,100.00
Trustee
______________________
1For the 1994 calendar year.
2Committee position held during a portion of the period shown.
</TABLE>
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. Because each Trustee's retirement benefits will depend
on the amount of the Trustee's future compensation and length of service,
the amount of those benefits cannot be determined at this time, nor can
the Fund estimate the number of years of credited service that will be
used to determine those benefits. [No sums were accrued during the fiscal
year ended June 30, 1995 for the Fund's projected retirement benefit
obligations.] The accumulated liability for the Fund's projected benefit
obligations at June 30, 1995 was $63,984.
Major Shareholders. As of October 6, 1995, the two entities that owned
of record or was known by the Fund to own beneficially 5% or more of the
Fund's outstanding shares were Merrill Lynch Pierce Fenner & Smith Inc.,
4800 Deer Lake Drive E FL3, Jacksonville, FL 32246-6484, which owned
24,191,000 Class C shares (8.68%) and NFSC FEBO Ruthann Labranche, 7
Rogers Ave., Bellport, NY 11713, which owned 22,055.030 Class C shares
(7.91%).
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom may also
serve as officers of the Fund, and two of whom (Messrs. Spiro and Galli)
serve as Trustees of the Fund.
The Manager and the Fund have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees,
including portfolio managers, that would compete with or take advantage
of the Fund's portfolio transactions. Compliance with the Code of Ethics
is carefully monitored and strictly enforced by the Manager.
-- The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
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 advisory
agreement or by the Distributor under the General Distributor's Agreement
are paid by the Fund. The advisory agreement lists examples of expenses
paid by the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, 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. For the Fund's fiscal years
ended June 30, 1993, 1994 and 1995, the management fees paid by the Fund
to the Manager were $1,591,554, $1,715,675 and $1,896,121,
respectively.
The advisory agreement contains no expense limitation. However,
independently of the advisory agreement, the Manager has voluntarily
undertaken that the total expenses of the Fund in any fiscal year
(including the management fee but excluding taxes, interest, brokerage
fees, distribution plan payments, and extraordinary non-recurring
expenses, such as litigation costs) shall not exceed the most stringent
expense limitation imposed under state law applicable to the Fund.
Pursuant to the undertaking, the Manager's fee will be reduced at the end
of a month so that there will not be any accrued but unpaid liability
under this undertaking. Currently, the most stringent state expense
limitation is imposed by California, and limits the Fund's expenses (with
specified exclusions) to 2.5% of the first $30 million of average 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 Manager reserves the
right to terminate or amend the undertaking at any time. Any assumption
of the Fund's expenses under this limitation would lower the Fund's
overall expense ratio and increase its total return during any period for
which expenses are limited.
The advisory agreement provides that so long as it has acted with due
care and in good faith, the Manager shall not be liable for any loss
sustained by reason of any investment, the adoption of any investment
policy, or the purchase, sale or retention of securities, irrespective of
whether the determinations of the Manager relative thereto shall have been
based, wholly or partly, upon the investigation or research of any other
individual, firm or corporation believed by it to be reliable. However,
the advisory agreement does not protect the Manager against liability by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties or its reckless disregard of its obligations and
duties under the advisory agreement. The advisory agreement permits the
Manager to act as investment adviser for any other person, firm or
corporation and to use the name "Oppenheimer" in connection with its other
investment activities. If the Manager shall no longer act as investment
adviser to the Fund, the right of the Fund to use the name "Oppenheimer"
as part of its corporate name may be withdrawn.
-- The Distributor. Under its General Distributor's Agreement with
the Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of the Fund's Class A, Class B and Class C
shares but is not obligated to sell a specific number of shares. Expenses
normally attributable to sales, including advertising and the cost of
printing and mailing prospectuses, other than those furnished to existing
shareholders, are borne by the Distributor. During the Fund's fiscal
years ended June 30, 1993, 1994 and 1995, the aggregate amount of sales
charge on sales of the Fund's Class A shares was $153,936, $537,507 and
$1,275,166, respectively, of which the Distributor and an affiliated
broker-dealer retained $64,652, $140,880 and $280,415 in those respective
years. For the fiscal year ended June 30, 1995, sales charges advanced
to broker/dealers by the Distributor on sales of the Fund's Class C shares
totalled $13,900, of which $454 was paid to an affiliated broker/dealer.
During the fiscal year ended June 30, 1995, the Distributor collected $651
in contingent deferred sales charges upon the redemption of Class C
shares. Class B shares were not publicly offered during the fiscal year
ended June 30, 1995. For additional information about distribution of the
Fund's shares and the expenses connected with such activities, please
refer to "Distribution and Service Plans," below.
-- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
transfer agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers including
"affiliated" brokers as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors, implement
the policy of the Fund to obtain, at reasonable expense, the "best
execution" (prompt and reliable execution at the most favorable price
obtainable) of such transactions. The Manager need not seek competitive
commission bidding, but is expected to minimize the commissions paid to
the extent consistent with the interests and policies of the Fund as
established by its Board of Trustees.
Under the advisory 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 reasonable in
relation to the services provided. Subject to the foregoing
considerations, the Manager may also consider sales of shares of the Fund
and other investment companies managed by the Manager or its affiliates
as a factor in the selection of brokers for the Fund's portfolio
transactions.
Description of Brokerage Practices Followed by the Manager. Subject
to the provisions of the advisory agreement, the procedures and rules
described above, allocations of brokerage are generally made by the
Manager's portfolio traders upon recommendations from the Manager's
portfolio managers. In certain instances portfolio managers may directly
place trades and allocate brokerage, also subject to the provisions of the
advisory agreement and the procedures and rules described above. In
either case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those for which
an exchange is the primary market are generally done with principals or
market makers. Brokerage commissions are paid primarily for effecting
transactions in listed securities or for certain fixed-income agency
transactions in the secondary market, and 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. Where possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager or its affiliates are combined. The transactions
effected pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed
for each account. Option commissions may be relatively higher than those
which would apply to direct purchases and sales of portfolio
securities.
Most purchases of money market instruments and debt obligations are
principal transactions at net prices. For those transactions, instead of
using a broker the Fund normally deals directly with the selling or
purchasing principal or market maker unless it is determined that a better
price or execution can be obtained by using a broker. Purchases of these
securities from underwriters include a commission or concession paid by
the issuer to the underwriter, and purchases from dealers include a spread
between the bid and asked price. The Fund seeks to obtain prompt
execution of such orders at the most favorable net price.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research 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 Board has also permitted the Manager to use
stated commissions on secondary fixed-income agency trades to obtain
research where the broker has represented to Manager that: (i) the trade
is not from or for the broker's own inventory, (ii) the trade was executed
by the broker of an agency basis at the stated commission, and (iii) the
trade is not a riskless principal transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and 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, 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 Fund's fiscal years ended June 30, 1993, 1994 and 1995,
total brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were $399,597,
$406,111 and $349,512, respectively. During the fiscal year ended June
30, 1995, $136,967 was paid to brokers as commissions in return for
research services; the aggregate dollar amount of those transactions was
$39,265,577. The transactions giving rise to those commissions were
allocated in accordance with the internal allocation procedures described
above.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to
time the "average annual total return," "cumulative total return" "average
annual total return at net asset value" and "total return at net asset
value" of an investment in each class of shares of the Fund may be
advertised. An explanation of how these total returns and total returns
are calculated for each class and the components of those calculations is
set forth below.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include the
average annual total returns for each class of shares of the Fund for the
1, 5, and 10-year periods (or the life of the class, if less) ending as
of the most recently-ended calendar quarter prior to the publication of
the advertisement. This enables an investor to compare the Fund's
performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using such
information as a basis for comparison with other investments. An
investment in the Fund is not insured; its returns and share prices are
not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a prediction or
representation by the Fund of future returns. The returns of Class A,
Class B and Class C shares of the Fund are affected by portfolio quality,
the type of investments the Fund holds and its operating expenses
allocated to the particular class. Class B shares of the Fund were not
publicly offered prior to November 1, 1995, and thus no performance
information is given below as to Class B shares for the various periods
ended June 30, 1995.
-- Average Annual Total Returns. The "average annual total return"
of each class is an average annual compounded rate of return for each year
in a specified number of years. It is the rate of return based on factors
which include a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
-- Cumulative Total Returns. The cumulative "total return"
calculation measures the change in value of a hypothetical investment of
$1,000 over an entire period of years. Its calculation uses some of the
same factors as average annual total return, but it does not average the
rate of return on an annual basis. Cumulative total return is determined
as follows:
ERV - P
------- = Total Return
P
In calculating total returns for Class A shares, the current maximum
sales charge of 5.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown at net asset
value, as described below). For Class B shares, the payment of the
applicable contingent deferred sales charge of (5.0% for the first year,
4.0% for the second year, 3.0% for the third and fourth years, 2.0% in the
fifth year, 1.0% in the sixth year and none thereafter) is applied to the
investment result for the time period shown (unless the total return is
shown at net asset value as described below. For Class C shares, the 1.0%
contingent deferred sales charge is applied to the investment result for
the one-year period (or less). Total returns also assume that all
dividends and capital gains distributions during the period are reinvested
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 June 30, 1995, were 12.72%, 10.92%
and 9.61%, respectively. The Fund's "cumulative total return" for Class
A shares for the ten-year period ended June 30, 1995, was 150.25%. 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 on Class C shares for the year
ended June 30, 1995 was 17.57% and the average annual total return for the
period December 1, 1993 (the commencement of the offering of the shares)
through June 30, 1995 was 10.51%. The cumulative total return on Class
C shares for the period December 1, 1993 through June 30, 1995 was
17.10%.
-- Total Returns at Net Asset Value. From time to time the Fund
may also quote an average annual total return at net asset value or a
cumulative total return at net asset value for Class A, Class B or Class
C shares. Each is based on the difference in net asset value per share
at the beginning and the end of the period for a hypothetical investment
in that class of shares (without considering front-end or contingent
deferred sales charges) and takes into consideration the reinvestment of
dividends and capital gains distributions.
The cumulative total return at net asset value of the Fund's Class
A shares for the ten-year period ended June 30, 1995, was 165.51%. The
average annual total returns at net asset value for the one, five and ten-
year periods ended June 30, 1995 for Class A shares were 19.60%, 12.24%
and 10.26%, respectively. The cumulative total return at net asset value
of the Fund's Class C shares for the period December 1, 1993 (commencement
of the offering of shares) through June 30, 1995 was 17.1%. The average
annual total return at net asset value for the one year ended June 30,
1995 and the period December 1, 1993 through June 30, 1995 for the Fund's
Class C shares were 18.57% and 10.51%, respectively.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A, Class B or Class C shares. However,
when comparing total return of an investment in Class A, Class B or Class
C shares of the Fund with that of other alternatives, investors should
understand that as the Fund is an equity fund seeking capital
appreciation, its shares are subject to greater market risks and
volatility than shares of funds having other investment objectives.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B or Class C shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent service, which
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods based on categories
relating to investment objectives. The performance of the Fund's classes
are ranked against: (i) all other funds, (ii) all other growth funds and
(iii) all other growth funds in a specific size category. The Lipper
performance analysis includes the reinvestment of capital gain
distributions and income dividends but does not take sales charges or
taxes into consideration.
From time to time the Fund may publish the ranking of the performance
of its Class A, Class B or Class C shares by Morningstar, Inc., an
independent mutual fund monitoring service, that ranks various mutual
funds, including the Fund, monthly in broad investment categories (equity,
taxable bond, municipal bond and hybrid) based on risk-adjusted investment
return. Investment return measures a fund's three, five and ten-year
average annual total returns (when available) in excess of 90-day U.S.
Treasury bill returns after considering sales charges and expenses. Risk
reflects fund performance below 90-day U.S. Treasury bill monthly returns.
Risk and return are combined to produce star rankings reflecting
performance relative to the average fund in a fund's category. Five stars
is the "highest" ranking (top 10%), four stars is "above average" (next
22.5%), three stars is "average" (next 35%), two stars is "below average"
(next 22.5%) and one star is "lowest" (bottom 10%). Morningstar ranks the
Fund in relation to other rated equity funds. Rankings are subject to
change.
The total return on an investment made in shares of the Fund may be
compared with performance for the same period of either the Dow Jones
Industrial Average ("Dow") or the Standard & Poor's 500 Index ("S&P 500"),
both of which are widely recognized indices of stock market performance.
Both indices consist of unmanaged groups of common stocks; the Dow
consists of thirty such issues. The performance of both indices includes
a factor for the reinvestment of income dividends. Neither index reflects
reinvestment of capital gains or takes sales charges into consideration,
as these items are into applicable to indices. The performance of the
Fund's Class A, Class B or Class C shares may also be compared in
publications to (i) the performance of various market indices or to other
investments for which reliable performance data is available, and (ii) to
averages, performance rankings or other benchmarks prepared by recognized
mutual fund statistical services.
Investors may also wish to compare the Fund's Class A, Class B or
Class C return to the returns on fixed income investments available from
banks and thrift institutions, such as certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed
or variable time deposits, and various other instruments such as Treasury
bills. However, the Fund's returns and share price are not guaranteed by
the FDIC or any other agency and will fluctuate daily, while bank
depository obligations may be insured by the FDIC and may provide fixed
rates of return, and Treasury bills are guaranteed as to principal and
interest by the U.S. government.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and a
Distribution and Service Plan for Class B and Class C shares of the Fund
under Rule 12b-1 of the Investment Company Act pursuant to which the Fund
makes payments to the Distributor in connection with the distribution
and/or servicing of the shares of that class as described in the
Prospectus. Each Plan has been approved by a vote of (i) the Board of
Trustees of the Fund, including a majority of the "Independent Trustees,"
cast in person at a meeting called for the purpose of voting on that Plan,
and (ii) the holders of a "majority" (as defined in the Investment Company
Act) of the shares of each class. For the Distribution and Service Plan
for the Class B and Class C shares, that vote was cast by the Manager as
the sole initial holder of Class B and Class C shares of the Fund.
In addition, under the Plans the Manager and the Distributor, in
their sole discretion, from time to time may use their own resources
(which, in the case of the Manager, may include profits from the advisory
fee it receives from the Fund) to make payments to brokers, dealers or
other financial institutions (each is referred to as a "Recipient" under
the Plans) for distribution and administrative services they perform at
no cost to the Fund. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of payments they make from
their own resources to Recipients.
Unless terminated as described below, each plan continues in effect
from year to year but only as long as 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 that class. Neither Plan may be amended
to increase materially the amount of payments to be made unless such
amendment is approved by shareholders of the Class affected by the
amendment. In addition, because Class B shares of the Fund automatically
convert into Class A shares after six years, the Fund is required to
obtain the approval of Class B as well as Class A shareholders for a
proposed amendment to the Class A Plan that would materially increase the
amount to be paid by Class A shareholders under the Class A Plan. Such
approval must be by a "majority" of the Class A and Class B shares (as
defined in the Investment Company Act), voting separately by class. All
material amendments must be approved by the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at least
quarterly on the amount of all payments made pursuant to each Plan, the
purpose for which the payment was made and the identity of each Recipient
that received any such payment. The report for the Class C Plan shall
also include the distribution costs for that quarter, and such costs for
previous fiscal periods that 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 on any such selection or nomination is approved by a
majority of the Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the
fee at the maximum rate and set no minimum amount.
For the fiscal year ended June 30, 1995, payments under this Class
A Plan totaled $351,088, all of which was paid by the Distributor to
Recipients, including $4,031 paid to an affiliate of 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. Payments received by the Distributor
under the Class A Plan will not be used to pay any interest expense,
carrying charges, or other financial costs, or allocation of overhead by
the Distributor.
The Class B and Class C Plans allow the service fee payment to be
paid by the Distributor to Recipients in advance for the first year such
shares are outstanding, and thereafter on a quarterly basis, as described
in the Prospectus. The advance payment is based on the net assets of the
shares sold. An exchange of shares does not entitle the Recipient to an
advance service fee payment. In the event shares are redeemed during the
first year such shares are outstanding, the Recipient will be obligated
to repay a pro rata portion of such advance payment to the Distributor.
Payments made under Class C Plan during the fiscal year ended June 30,
1995 totalled $10,956 of which $9,881 was retained by the Distributor and
$7 was paid to a dealer affiliated with the Distributor. Since no Class
B shares were outstanding during the Fund's fiscal year June 30, 1995, no
payments were made under the Class B Plan.
Although the Class B and Class C Plans permit the Distributor to
retain both the asset-based sales charges and the service fees on 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 and Class C Plan by the
Board. Initially, the Board has set no minimum holding period. All
payments under the Class B and Class C Plan are subject to the limitations
imposed by the Rule of Fair Practice of the National Association of
Securities Dealers, Inc.
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. Payments received by the
Distributor under the Class A Plan will not be used to pay any interest
expense, carrying charges, or other financial costs, or allocation of
overhead by the Distributor.
The Class B Plan provides for the Distributor to be compensated at
a flat rate, whether the Distributor's distribution expenses are more or
less than the amounts paid by the Fund during that period. The Class C
Plan allows for the carryforward of distribution expenses, to be recovered
from the asset-based sales charge in subsequent fiscal periods. The
asset-based sales charge paid to the Distributor by the Fund under both
the Class B and Class C 12b-1 Plans 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 and Class C
shares: (i) financing the advance of the service fee payment to Recipients
under the Class B and Class C Plan, (ii) compensation and expenses of
personnel employed by the Distributor to support distribution of Class B
and Class C shares, and (iii) costs of sales literature, advertising and
prospectuses (other than those furnished to current shareholders) and
state "blue sky" registration fees.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C Shares. The
availability of three classes of shares permits an investor to choose the
method of purchasing shares that is more beneficial to the investor
depending on the amount of the purchase, the length of time the investor
expects to hold shares and other relevant circumstances. Investors should
understand that the purpose and function of the deferred sales charge and
asset-based sales charge with respect to Class B and Class C shares are
the same as those of the initial sales charge with respect to Class A
shares. Any salesperson or other person entitled to receive compensation
for selling Fund shares may receive different compensation with respect
to one class of shares than the other. The Distributor will not accept
(i) any order for $500,000 or more of Class B or (ii) any order for $1
million or more of Class C shares on behalf of a single investor (not
including dealer "street name" or omnibus accounts) because generally it
will be more advantageous for that investor to purchase Class A shares of
the Fund instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class
B and Class C shares and the dividends payable on Class B and Class C
shares will be reduced by incremental expenses borne solely by that class,
including the asset-based sales charge to which Class B and Class C shares
are subject.
The conversion of Class B shares to Class A shares after six years
is subject to the continuing availability of a private letter ruling from
the Internal Revenue Service, or an opinion of counsel or tax adviser, to
the effect that the conversion of Class B shares does not constitute a
taxable event for the holder under Federal income tax law. If such a
revenue ruling or opinion is no longer available, the automatic conversion
feature may be suspended, in which event no further conversions of Class
B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a
sales charge or fee, such exchange could constitute a taxable event for
the holder, and absent such exchange, Class B shares might continue to be
subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares recognizes
two types of expenses. General expenses that do not pertain specifically
to any class are allocated pro rata to the shares of each class, based on
the percentage of the net assets of such class to the Fund's total net
assets, and then equally to each outstanding share within a given class.
Such general expenses include (i) management fees, (ii) legal, bookkeeping
and audit fees, (iii) printing and mailing costs of shareholder reports,
Prospectuses, Statements of Additional Information and other materials for
current shareholders, (iv) fees to Independent Trustees, (v) custodian
expenses, (vi) share issuance costs, (vii) organization and start-up
costs, (viii) interest, taxes and brokerage commissions, and (ix) non-
recurring expenses, such as litigation costs. Other expenses that are
directly attributable to a class are allocated equally to each outstanding
share within that class. Such expenses include (i) Distribution and/or
Service Plan fees, (ii) incremental transfer and shareholder servicing
agent fees and expenses, (iii) registration fees and (iv) shareholder
meeting expenses, to the extent that such expenses pertain to a specific
class rather than to the Fund as a whole.
Determination of Net Asset Value Per Share. The net asset values per
share of Class A, Class B and Class C shares of the Fund are determined
as of the close of business of The New York Stock Exchange (the
"Exchange") on each day that the Exchange is open, by dividing the value
of the Fund's net assets attributable to that class by the total number
of Fund shares of that class outstanding. The Exchange normally closes
at 4:00 P.M. New York time, but may close earlier on some days (for
example, in case of weather emergencies or days falling before a holiday).
The Exchange's most recent annual holiday schedule (which is subject to
change) states that it will close on New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It may also close on other days. The Fund may invest a
substantial portion of its assets in foreign securities primarily listed
on foreign exchanges which may trade on Saturdays or customary U.S.
business holidays on which the Exchange is closed. Because the Fund's net
asset values will not be calculated on those days, the Fund's net asset
value per share may be significantly affected on such days when
shareholders may not purchase or redeem shares.
The Trust's Board of Trustees has established procedures for the
valuation of the Trust's securities generally as follows: (i) equity
securities traded on a U.S. securities exchange or on NASDAQ for which
last sale information is regularly reported are valued at the last
reported sale price on their primary exchange or NASDAQ that day (or, in
the absence of sales that day, at values based on the last sale prices of
the preceding trading day or closing bid and asked prices); (ii)
securities actively traded on a foreign securities exchange are valued at
the last sales price available to the pricing service approved by the
Trust's Board of Trustees or to the Manager as reported by the principal
exchange on which the security is traded; (iii) unlisted foreign
securities or listed foreign securities not actively traded are valued as
in (i) above, if available, or at the mean between "bid" and "asked"
prices obtained from active market makers in the security on the basis of
reasonable inquiry; (iv) long-term debt securities having a remaining
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
Trust's Board of Trustees or obtained from active market makers in the
security on the basis of reasonable inquiry; (v) debt instruments having
a maturity of more than one year when issued, and non-money market type
instruments having a maturity of one year or less when issued, which have
a remaining maturity of 60 days or less are valued at the mean between the
"bid" and "asked" prices determined by a pricing service approved by the
Trust's Board of Trustees or obtained from active market makers in the
security on the basis of reasonable inquiry; (vi) money market-type debt
securities having a maturity of less than one year when issued that having
a remaining maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; and (vii) securities
(including restricted securities) not having readily-available market
quotations are valued at fair value under the Board's procedures.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the Exchange.
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 Exchange 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 values, in which case an adjustment
would be made. Foreign currency, including forward contracts, will be
valued at the closing price in the London foreign exchange market that day
as provided by a reliable bank, dealer or pricing service. The values of
securities denominated in foreign currency will be converted to U.S.
dollars at the closing price in the London foreign exchange market that
day as provided by a reliable bank, dealer or pricing service. In the
case of U.S. government securities and corporate bonds, where last sale
information is not generally available, such pricing procedures may
include "matrix" comparisons to the prices for comparable instruments on
the basis of quality, yield, maturity and other special factors involved.
The Trustees will monitor the accuracy of pricing services by comparing
prices used for portfolio evaluation to actual sales prices of selected
securities.
Puts, calls and Futures are valued at the last sales price on the
principal exchanges on which they are traded or on NASDAQ, as applicable,
or, if there are no sales that day, in accordance with (i) above. When
the Fund writes an option, an amount equal to the premium received by the
Fund is included in the Fund's Statement of Assets and Liabilities as an
asset, and an equivalent deferred credit is included in the liability
section. The deferred credit is adjusted ("marked-to-market") to reflect
the current market value of the option. If a call written by the Fund is
exercised, the proceeds are increased by the premium received.
AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $25.00. Shares will be purchased on the regular
business day the Distributor is instructed to initiate the Automated
Clearing House transfer to buy shares. Dividends will begin to accrue on
such shares on the day the Fund receives Federal Funds for the purchase
through the ACH system before the close of The New York Stock Exchange
that day, which is normally three days after the ACH transfer is
initiated. The Exchange normally closes at 4:00 P.M., but may close
earlier on certain days. If Federal Funds are received on a business day
after the close of the Exchange, the shares will be purchased and
dividends will begin to accrue on the next regular business day. The
proceeds of ACH transfers are normally received by the Fund 3 days after
the transfers are initiated. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in
ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and
expenses realized by the Distributor, dealers and brokers making such
sales. No sales charge is imposed in certain circumstances described in
the Prospectus because the Distributor or dealer or broker incurs little
or no selling expenses. The term "immediate family" refers to one's
spouse, children, grandchildren, parents, grandparents, parents-in-law,
brothers and sisters, sons-and daughters-in-law, siblings, a sibling's
spouse and a spouse's siblings.
-- The Oppenheimer Funds. The Oppenheimer funds are those mutual
funds for which the Distributor acts as the distributor or the sub-
distributor and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer International Bond Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares
of each of the Oppenheimer funds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
-- Letters of Intent. A Letter of Intent (referred to as a "Letter")
is an investor's statement in writing to the Distributor of the intention
to purchase Class A shares or Class A and Class B shares of the Fund (and
other OppenheimerFunds) during a 13-month period (the "Letter of Intent
period"), which may, at the investor's request, include purchases made up
to 90 days prior to the date of the Letter. The Letter states the
investor's intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those funds,
will equal or exceed the amount specified in the Letter. Purchases made
by reinvestment of dividends or distributions of capital gains and
purchases made at net asset value without sales charge do not count toward
satisfying the amount of the Letter. A Letter enables an investor to
count the Class A and Class B shares purchased under the Letter to obtain
the reduced sales charge rate on purchases of Class A shares of the Fund
(and of other Oppenheimer funds) that applies under the Right of
Accumulation to current purchases of Class A shares. Each purchase under
the Letter will be made at the public offering price applicable to a
single lump-sum purchase of shares in the intended purchase amount, as
described in the Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
For purchases of shares of the Fund and other OppenheimerFunds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the
Transfer Agent will not hold shares in escrow. If the intended purchase
amount under the Letter entered into by an OppenheimerFunds prototype
401(k) plan is not purchased by the plan by the end of the Letter of
Intent period, there will be no adjustment of commissions paid to the
broker-dealer or financial institution of record for accounts held in the
name of that plan.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended purchase amount, the
commissions previously paid to the dealer of record for the account and
the amount of sales charge retained by the Distributor will be adjusted
to the rates applicable to actual purchases. If total eligible purchases
during the Letter of Intent period exceed the intended purchase amount and
exceed the amount needed to qualify for the next sales charge rate
reduction set forth in the applicable prospectus, the sales charges paid
will be adjusted to the lower rate, but only if and when the dealer
returns to the Distributor the excess of the amount of commissions allowed
or paid to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such
purchase, promptly after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
-- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in value
to 5% of the intended purchase amount specified in the Letter shall be
held in escrow by the Transfer Agent. For example, if the intended
purchase amount is $50,000, the escrow shall be shares valued in the
amount of $2,500 (computed at the public offering price adjusted for a
$50,000 purchase). Any dividends and capital gains distributions on the
escrowed shares will be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding
of which may be counted toward completion of a Letter) include (a) Class
A shares sold with a front-end sales charge or subject to a Class A
contingent deferred sales charge, (b) Class B shares of other Oppenheimer
funds acquired subject to a contingent deferred sales charge, and (c)
Class A or Class B shares of other Oppenheimer funds acquired in exchange
for either (i) Class A shares of one of the other Oppenheimer funds that
were acquired subject to a Class A initial or contingent deferred sales
charge or (ii) Class B shares of one of the other Oppenheimer funds that
were acquired subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as described
in the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How to Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those
accounts for monthly automatic purchases of shares of up to four other
Oppenheimer funds.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
-- Involuntary Redemptions. The Fund's Board of Trustees has the
right to cause the involuntary redemption of the shares held in any
account if the aggregate net asset value of those shares is less than $200
or such lesser amount as the Board may fix. The Board of Trustees will
not cause the involuntary redemption of shares in an account if the
aggregate net asset value of the shares has fallen below the stated
minimum solely as a result of market fluctuations. Should the Board elect
to exercise this right, it may also fix, in accordance with the Investment
Company Act, the requirements for any notice to be given to the
shareholders in question (not less than 30 days), or the Board may set
requirements for the Shareholder to increase the investment, and set other
terms and conditions so that the shares would not be involuntarily
redeemed.
-- Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board of
Trustees of the Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make payment
of a redemption order wholly or partly in cash. In that case the Fund may
pay the redemption proceeds in whole or in part by a distribution "in
kind" of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets
of the Fund during any 90-day period for any one shareholder. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage or
other costs in selling the securities for cash. The method of valuing
securities used to make redemptions in kind will be the same as the method
the Fund uses to value it portfolio securities described above under
"Determination of Net Asset Values Per Share" and that valuation will be
made as of the time the redemption price is determined.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of (i)
Class A shares that you purchased subject to an initial sales charge, or
(ii) Class C shares on which you paid a contingent deferred sales charge
when you redeemed them. The reinvestment may be made without sales charge
only in Class A shares of the Fund or any of the other Oppenheimer funds
into which shares of the Fund are exchangeable as described below, at the
net asset value next computed after the Transfer Agent receives the
reinvestment order. The shareholder must ask the Distributor for that
privilege at the time of reinvestment. Any capital gain that was realized
when the shares were redeemed is taxable, and reinvestment will not alter
any capital gains tax payable on that gain. If there has been a capital
loss on the redemption, some or all of the loss may not be tax deductible,
depending on the timing and amount of the reinvestment. Under the
Internal Revenue Code, if the redemption proceeds of Fund shares on which
a sales charge was paid are reinvested in shares of the Fund or another
of the Oppenheimer funds within 90 days of payment of the sales charge,
the shareholder's basis in the shares of the Fund that were redeemed may
not include the amount of the sales charge paid. That would reduce the
loss or increase the gain recognized from the redemption. However, in
that case the sales charge would be added to the basis of the shares
acquired by the reinvestment of the redemption proceeds. The Fund may
amend, suspend or cease offering this reinvestment privilege at any time
as to shares redeemed after the date of such amendment, suspension or
cessation.
Transfer of Shares. Shares are not subject to the payment of a contingent
deferred sales charge at the time of transfer to the name of another
person or entity (whether the transfer occurs by absolute assignment, gift
or bequest, not involving, directly or indirectly, a public sale). The
transferred shares will remain subject to the contingent deferred sales
charge, calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the
transferring shareholder. If less than all shares held in an account are
transferred, and some but not all shares in the account would be subject
to a contingent deferred sales charge if redeemed at the time of transfer,
the priorities described in the Prospectus under "How to Buy Shares" for
the imposition of the Class B or the Class C contingent deferred sales
charge will be followed in determining the order in which shares are
transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans
or pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address
listed in "How To Sell Shares" in the Prospectus or on the back cover of
this Statement of Additional Information. The request must: (i) state the
reason for the distribution; (ii) state the owner's awareness of tax
penalties if the distribution is premature; and (iii) conform to the
requirements of the plan and the Fund's other redemption requirements.
Participants (other than self-employed persons maintaining a plan account
in their own name) in OppenheimerFunds-sponsored prototype pension,
profit-sharing or 401(k) plans may not directly redeem or exchange shares
held for their account under those plans. The employer or plan
administrator must sign the request. Distributions from pension and
profit sharing plans are subject to special requirements under the
Internal Revenue Code and certain documents (available from the Transfer
Agent) must be completed before the distribution may be made.
Distributions from retirement plans are subject to withholding
requirements under the Internal Revenue Code, and IRS Form W-4P (available
from the Transfer Agent) must be submitted to the Transfer Agent with the
distribution request, or the distribution may be delayed. Unless the
shareholder has provided the Transfer Agent with a certified tax
identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have
tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not
be responsible for any tax penalties assessed in connection with a
distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. 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 if the Distributor receives an order from a dealer
or broker after the close of The New York Stock Exchange on a regular
business day, it will be processed at that day's net asset value if the
order was received by the dealer or broker from its customer prior to the
time the Exchange closes (normally that is 4:00 P.M., but may be earlier
on some days) and the order was transmitted to and received by the
Distributor prior to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been
redeemed upon the Distributor's receipt the required redemption documents
in proper form, with the signature(s) of the registered owners guaranteed
on the redemption document as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of
the Fund valued at $5,000 or more can authorize the Transfer Agent to
redeem shares (minimum $50) automatically on a monthly, quarterly, semi-
annual or annual basis under an Automatic Withdrawal Plan. Shares will
be redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges
(see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an Automatic
Withdrawal Plan. Class B and Class C shareholders should not establish
withdrawal plans that would require the redemption of shares held less
than 6 years or 12 months, respectively, because of the imposition of
contingent deferred sales charges on such withdrawals (except where the
Class B and Class C contingent deferred sales charges are waived as
described in the Prospectus under "Waivers of Class B and Class C
Contingent Deferred Sales Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such plans,
as stated below and in the provisions of the OppenheimerFunds Application
relating to such Plans, as well as the Prospectus. These provisions may
be amended from time to time by the Fund and/or the Distributor. When
adopted, such amendments will automatically apply to existing Plans.
-- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other Oppenheimer funds automatically
on a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional
Information.
-- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment. It may not be
desirable to purchase additional Class A shares while making automatic
withdrawals because of the sales charges that apply to purchases when
made. Accordingly, a shareholder normally may not maintain an Automatic
Withdrawal Plan while simultaneously making regular purchases of Class A
shares.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the "Planholder")
who executed the Plan authorization and application submitted to the
Transfer Agent. The Transfer Agent shall incur no liability to the
Planholder for any action taken or omitted by the Transfer Agent in good
faith to administer the Plan. Certificates will not be issued for shares
of the Fund purchased for and held under the Plan, but the Transfer Agent
will credit all such shares to the account of the Planholder on the
records of the Fund. Any share certificates held by a Planholder may be
surrendered unendorsed to the Transfer Agent with the Plan application so
that the shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be exchanged
only for shares of the same class of other Oppenheimer funds. Shares of
Oppenheimer funds that have a single class without a class designation are
deemed "Class A" shares for this purpose. All of the Oppenheimer funds
offer Class A, B and C shares except Oppenheimer Money Market Fund, Inc.,
Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial
Government Trust, Centennial New York Tax Exempt Trust, Centennial
California Tax Exempt Trust, Centennial America Fund, L.P., and Daily Cash
Accumulation Fund, Inc., which only offer Class A shares and Oppenheimer
Main Street California Tax Exempt Fund which only offers Class A and Class
B shares, (Class B and Class C shares of Oppenheimer Cash Reserves are
generally available only by exchange from the same class of shares of
other Oppenheimer funds or through OppenheimerFunds sponsored 401(k)
plans).
Class A shares of Oppenheimer funds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
Oppenheimer funds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of Oppenheimer
funds subject to a contingent deferred sales charge). Shares of this Fund
acquired by reinvestment of dividends or distributions from any other of
the Oppenheimer funds or from any unit investment trust for which
reinvestment arrangements have been made with the Distributor may be
exchanged at net asset value for shares of any of the Oppenheimer funds.
However, shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 12 months
prior to that purchase may subsequently be exchanged for shares of other
Oppenheimer funds without being subject to an initial or contingent
deferred sales charge, whichever is applicable. To qualify for that
privilege, the investor or the investor's dealer must notify the
Distributor of eligibility for this privilege at the time the shares of
Oppenheimer Money Market Fund, Inc. are purchased, and, if requested, must
supply proof of entitlement to this privilege. No contingent deferred
sales charge is imposed on exchanges of shares of any class purchased
subject to a contingent deferred sales charge. However, when Class A
shares acquired by exchange of Class A shares of other Oppenheimer funds
purchased subject to a Class A contingent deferred sales charge are
redeemed within 18 months of the end of the calendar month of the initial
purchase of the exchanged Class A shares, the Class A contingent deferred
sales charge is imposed on the redeemed shares (see "Class A Contingent
Deferred Sales Charge" in the Prospectus). The Class B contingent
deferred sales charge is imposed on Class B shares acquired by exchange
if they are redeemed within 6 years of the initial purchase of the
exchanged Class B shares. The Class C contingent deferred sales charge
is imposed on Class C shares acquired by exchange if they are redeemed
within 12 months of the initial purchase of the exchanged Class C
shares.
When Class A, Class B or Class C shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the
Prospectus for the imposition of the Class A, Class B or Class C
contingent deferred sales charge will be followed in determining the order
in which the shares are exchanged. Shareholders should take into account
the effect of any exchange on the applicability and rate of any contingent
deferred sales charge that might be imposed in the subsequent redemption
of remaining shares. Shareholders owning shares of more than one class
must specify whether they intend to exchange Class A, Class B or Class C
shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have
an existing account in, or obtain and acknowledge receipt of a prospectus
of, the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Dividends and Distributions. Dividends, distributions and the proceeds
of the redemption of Fund shares represented by checks returned to the
Transfer Agent by the Postal Service as undeliverable will be invested in
shares of Oppenheimer Money Market Fund, Inc., as promptly as possible
after the return of such checks to the Transfer Agent, to enable the
investor to earn a return on otherwise idle funds.
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction
for corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by
the Fund which may qualify for the deduction is limited to the aggregate
amount of qualifying dividends (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 the
shareholder for 45 days or less. To the extent the Fund derives a
significant portion of its gross income from option premiums, interest
income or short-term capital gains from the sale of securities, or
dividends from foreign corporations, its dividends will not qualify for
the deduction. It is expected that only a portion of dividends paid by
the Fund will qualify for the deduction.
Under the Internal Revenue Code, by December 31 each year the Fund
must distribute 98% of its taxable investment income earned from January
1 through December 31 of that year and 98% of its capital gains realized
in the period from November 1st of the prior year through 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 Manager might determine that in a particular year
that it might be in the best interests 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 total assets invested in foreign
securities at the end of its fiscal year, it may elect the application of
Section 853 of the Internal Revenue Code to permit shareholders to take
a credit (or, at their option, a deduction) for foreign taxes paid by the
Fund. Under Section 853, shareholders would be entitled to treat the
foreign taxes withheld from interest and dividends paid to the Fund from
its foreign investments as a credit on their federal income taxes. As an
alternative, shareholders could, if to their advantage, treat the foreign
tax withheld as a deduction from gross income in computing taxable income
rather than as a tax credit. In substance, the Fund's election would
enable shareholders to benefit from the same foreign tax credit or
deduction that would be received if they had been the record owners of the
Fund's foreign securities and had paid foreign taxes on the income
received.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on
amounts paid by it as dividends and distributions. The Fund qualified
during its last fiscal year, and intends to qualify in current and future
years, but reserves the right not to do so. The Internal Revenue Code
contains a number of complex tests relating to such qualification in which
the Fund derives 30% or more of its gross income from the sale of
securities held less than three months, it may fail to qualify (see "Tax
Aspects of Covered Calls and Hedging Instruments," above). If it did not
so qualify, the Fund would be treated for tax purposes as an ordinary
corporation and receive no tax deduction for payments made to
shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may
elect to reinvest all dividends and/or capital gains distributions in
shares of the same class of any of the other Oppenheimer funds listed in
"Reduced Sales Charges," above, at net asset value without sales charge.
To elect this option, the shareholder must notify the Transfer Agent in
writing and either must have an existing account in the fund selected for
reinvestment or must obtain a prospectus for that fund and an application
from the Distributor to establish an account. The investment will be made
at the net asset value per share in effect at the close of business on the
payable date of the dividend or distribution. Dividends and/or
distributions from shares of other Oppenheimer funds may be invested in
shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities and handling the delivery of
such securities to and from the Fund. The Manager has represented to the
Fund that 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.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
- ------------------------------------------------------------------------------
The Board of Directors and Shareholders of Oppenheimer Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Fund as of June 30, 1995, and the related statement
of operations for the year then ended, the statements of changes in net assets
for each of the years in the two-year period then ended and the financial
highlights for each of the years in the ten-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995, 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 Fund as of June 30, 1995, 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.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Denver, Colorado
July 24, 1995
<PAGE>
STATEMENT OF INVESTMENTS JUNE 30, 1995
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Past Due Interest Bonds, 7.313%,
3/31/05(1)
(Cost $2,091,629) $ 4,000,000 $ 2,467,500
- -----------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND NOTES--0.6%
- -----------------------------------------------------------------------------------------------------------------------------------
MEDIQ, Inc., 7.50% Exchangeable Sub. Debs., 7/15/03
(Cost $1,734,001) 1,850,000 1,572,500
SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--85.7%
- -----------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--7.7%
- -----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--4.0% ARCO Chemical Co. 42,900 1,946,588
--------------------------------------------------------------------------------------
Bayer AG, Sponsored ADR 170,000 4,225,061
--------------------------------------------------------------------------------------
Georgia Gulf Corp. 26,000 848,250
--------------------------------------------------------------------------------------
Goldschmidt (T.H.) AG 1,553 863,946
--------------------------------------------------------------------------------------
IMC Global, Inc.(5) 24,800 1,342,300
--------------------------------------------------------------------------------------
Praxair, Inc. 68,800 1,720,000
-----------
10,946,145
- -----------------------------------------------------------------------------------------------------------------------------------
GOLD--0.4% Santa Fe Pacific Gold Corp.(5) 92,800 1,125,200
- -----------------------------------------------------------------------------------------------------------------------------------
METALS--2.0% Brush Wellman, Inc. 151,400 3,236,175
--------------------------------------------------------------------------------------
Inland Steel Industries, Inc.(5) 75,600 2,305,800
-----------
5,541,975
- -----------------------------------------------------------------------------------------------------------------------------------
PAPER--1.3% Georgia-Pacific Corp. 15,200 1,318,600
--------------------------------------------------------------------------------------
Louisiana-Pacific Corp. 38,000 997,500
--------------------------------------------------------------------------------------
MacMillan Bloedel Ltd. 89,700 1,267,013
-----------
3,583,113
- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--11.6%
- -----------------------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING--1.3% Chromcraft Revington, Inc.(2) 50,000 1,062,500
--------------------------------------------------------------------------------------
Fiat SpA(2) 350,000 1,233,659
--------------------------------------------------------------------------------------
General Motors Corp. 24,000 1,125,000
-----------
3,421,159
- -----------------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--4.7% AMR Corp.(2)(5) 18,200
1,358,175
--------------------------------------------------------------------------------------
Brunswick Corp. 50,000 850,000
--------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc.(2)(5) 25,300 891,825
--------------------------------------------------------------------------------------
Cracker Barrel Old Country Store, Inc. 65,800 1,357,125
--------------------------------------------------------------------------------------
Eastman Kodak Co.(5) 25,500 1,545,938
--------------------------------------------------------------------------------------
International Game Technology 44,800 688,800
--------------------------------------------------------------------------------------
King World Productions, Inc.(2)(5) 56,500 2,288,250
--------------------------------------------------------------------------------------
Mattel, Inc.(5) 136,875 3,558,750
--------------------------------------------------------------------------------------
Shaw Brothers (Hong Kong) Ltd. 320,000 299,837
-----------
12,838,700
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
MEDIA--2.2% Bowne & Co., Inc. 40,000 $ 685,000
--------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special(5) 130,000 2,413,125
--------------------------------------------------------------------------------------
Tele-Communications, Inc., Cl. A(2) 44,400 1,040,625
--------------------------------------------------------------------------------------
Time Warner, Inc.(5) 45,100 1,854,735
-----------
5,993,485
- -----------------------------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL--1.6% Authentic Fitness Corp.(2) 81,000 1,356,750
--------------------------------------------------------------------------------------
Cone Mills Corp.(2) 144,300 1,857,863
--------------------------------------------------------------------------------------
Price/Costco, Inc.(2)(5) 78,800 1,280,500
-----------
4,495,113
- -----------------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--1.8% Best Buy Co., Inc.(2) 26,000 692,250
--------------------------------------------------------------------------------------
CML Group, Inc. 87,800 691,425
--------------------------------------------------------------------------------------
Justin Industries, Inc. 70,000 770,000
--------------------------------------------------------------------------------------
Toys 'R' Us, Inc.(2) 51,000 1,491,750
--------------------------------------------------------------------------------------
Venture Stores, Inc. 138,000 1,362,750
-----------
5,008,175
- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--16.7%
- -----------------------------------------------------------------------------------------------------------------------------------
BEVERAGES--1.3% Guinness PLC 182,000 1,369,542
--------------------------------------------------------------------------------------
Whitman Corp. 104,300 2,020,813
-----------
3,390,355
- -----------------------------------------------------------------------------------------------------------------------------------
FOOD--1.8% Chiquita Brands International, Inc. 2,223 31,122
--------------------------------------------------------------------------------------
Dairy Farm International Holdings Ltd. 370,000 318,200
--------------------------------------------------------------------------------------
McCormick & Co., Inc., Non-Vtg. 36,000 774,000
--------------------------------------------------------------------------------------
Nestle SA, Sponsored ADR 40,000 2,081,388
--------------------------------------------------------------------------------------
Sara Lee Corp. 61,700 1,758,450
-----------
4,963,160
- -----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--6.1% Abbott Laboratories(5) 6,000 243,000
--------------------------------------------------------------------------------------
Amgen, Inc.(2)(5) 20,400 1,640,925
--------------------------------------------------------------------------------------
Astra AB Free, Series A 37,250 1,148,460
--------------------------------------------------------------------------------------
Biosys, Inc.(2) 101,200 189,750
--------------------------------------------------------------------------------------
Bristol-Myers Squibb Co.(5) 48,000 3,270,000
--------------------------------------------------------------------------------------
Chiron Corp.(2)(5) 5,273 342,745
--------------------------------------------------------------------------------------
Ciba-Geigy AG 2,425 1,776,472
--------------------------------------------------------------------------------------
Genzyme Corp.(2)(5) 38,001 1,520,007
--------------------------------------------------------------------------------------
Lilly (Eli) & Co.(5) 6,000 471,000
--------------------------------------------------------------------------------------
Medeva PLC 342,944 1,363,974
--------------------------------------------------------------------------------------
Mylan Laboratories, Inc.(5) 42,400 1,303,800
--------------------------------------------------------------------------------------
NBTY, Inc.(2) 195,000 1,267,500
--------------------------------------------------------------------------------------
Schering AG 20,500 1,432,205
--------------------------------------------------------------------------------------
Smithkline Beecham PLC, ADR Equity Units (one ADR
represents five Equity Units; each Unit consists of one
Class B Ordinary Share and one share of Cumulative
Participating Preferred Stock)(3) 17,000 769,250
-----------
16,739,088
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES &
SERVICES--5.3% Manor Care, Inc.(5) 50,770 $ 1,478,674
--------------------------------------------------------------------------------------
Medtronic, Inc.(5) 22,400 1,727,600
--------------------------------------------------------------------------------------
Nellcor, Inc.(2)(5) 38,000 1,710,000
--------------------------------------------------------------------------------------
NovaCare, Inc.(2) 108,000 877,500
--------------------------------------------------------------------------------------
Pyxis Corp.(2)(5) 57,600 1,303,200
--------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 165,000 5,053,125
--------------------------------------------------------------------------------------
Value Health, Inc.(2) 27,600 890,100
--------------------------------------------------------------------------------------
Wellpoint Health Networks, Inc., Cl. A(2)(5) 46,900 1,324,925
-----------
14,365,124
- -----------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--0.3% Procter & Gamble Co. 12,000 862,500
- -----------------------------------------------------------------------------------------------------------------------------------
TOBACCO--1.9% Philip Morris Cos., Inc.(5) 55,100 4,098,063
--------------------------------------------------------------------------------------
RJR Nabisco Holdings Corp. 35,000 975,625
-----------
5,073,688
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY--4.4%
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES &
PRODUCERS--0.7% Landmark Graphics Corp.(2)(5) 41,600 1,060,800
--------------------------------------------------------------------------------------
Western Atlas, Inc.(2)(5) 20,000 887,500
-----------
1,948,300
- -----------------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED--3.7% Ashland Coal, Inc. 41,200 1,102,100
--------------------------------------------------------------------------------------
Ashland, Inc. 30,000 1,053,750
--------------------------------------------------------------------------------------
Atlantic Richfield Co. 12,100 1,327,975
--------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 10,000 1,218,750
--------------------------------------------------------------------------------------
Saga Petroleum AS, Cl. B 82,000 1,084,023
--------------------------------------------------------------------------------------
Total SA, Sponsored ADR 46,180 1,396,945
--------------------------------------------------------------------------------------
Unocal Corp. 88,000 2,431,000
--------------------------------------------------------------------------------------
Yukong Ltd., GDR(4) 1,438 11,948
--------------------------------------------------------------------------------------
Yukong Ltd., GDR(4) 3,294 27,369
--------------------------------------------------------------------------------------
Yukong Ltd., GDR(2)(4) 39,500 424,625
-----------
10,078,485
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--8.4%
- -----------------------------------------------------------------------------------------------------------------------------------
BANKS--3.9% Banco Frances del Rio de la Plata SA 126,000 762,539
--------------------------------------------------------------------------------------
Bankers Trust New York Corp.(5) 22,500 1,395,000
--------------------------------------------------------------------------------------
Chemical Banking Corp.(5) 49,600 2,343,600
--------------------------------------------------------------------------------------
Deutsche Bank, Sponsored ADR 60,000 2,913,036
--------------------------------------------------------------------------------------
NationsBank Corp. 58,700 3,147,788
-----------
10,561,963
- -----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--2.2% American Express Co. 42,000
1,475,250
--------------------------------------------------------------------------------------
CMAC Investment Corp. 31,900 1,383,663
--------------------------------------------------------------------------------------
H & R Block, Inc. 27,600 1,135,050
--------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.(5) 38,200 2,005,500
-----------
5,999,463
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
INSURANCE--2.3% Aetna Life & Casualty Co.(5) 21,600 $ 1,358,100
--------------------------------------------------------------------------------------
American International Group, Inc.(5) 13,000 1,482,000
--------------------------------------------------------------------------------------
American Re Corp. 42,000 1,564,500
--------------------------------------------------------------------------------------
Bankers Life Holding Corp. 53,300 1,012,700
--------------------------------------------------------------------------------------
UNUM Corp. 16,900 792,188
-----------
6,209,488
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--11.8%
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.9% General Electric Co. 44,000
2,480,500
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL MATERIALS--2.4% Corning, Inc. 36,500 1,195,375
--------------------------------------------------------------------------------------
Interpool, Inc.(2) 56,800 773,900
--------------------------------------------------------------------------------------
Masco Corp. 35,000 945,000
--------------------------------------------------------------------------------------
Owens-Corning Fiberglass Corp.(2) 77,000 2,839,375
--------------------------------------------------------------------------------------
U.S. Can Corp.(2) 53,500 835,938
-----------
6,589,588
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--0.9% Ecolab, Inc. 35,400 867,300
--------------------------------------------------------------------------------------
Huarte SA 98,650 888,005
--------------------------------------------------------------------------------------
Waste Management International PLC, Sponsored ADR(2)(5) 64,000 608,000
-----------
2,363,305
- -----------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING--3.6% Citic Pacific Ltd. 214,000 537,938
--------------------------------------------------------------------------------------
Harnischfeger Industries, Inc.(5) 36,000 1,246,500
--------------------------------------------------------------------------------------
Hutchison Whampoa Ltd. 132,000 638,035
--------------------------------------------------------------------------------------
Jardine Matheson Holdings Ltd. 100,936 741,880
--------------------------------------------------------------------------------------
Mannesmann AG 9,775 2,983,796
--------------------------------------------------------------------------------------
Pacific Dunlop Ltd. 326,000 683,993
--------------------------------------------------------------------------------------
Tenneco, Inc. 65,000 2,990,000
-----------
9,822,142
- -----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--4.0% Airborne Freight Corp.(5) 49,000 992,250
--------------------------------------------------------------------------------------
Burlington Northern, Inc.(5) 70,400 4,461,600
--------------------------------------------------------------------------------------
Consolidated Freightways, Inc. 71,500 1,581,938
--------------------------------------------------------------------------------------
Stolt-Nielsen SA 134,700 3,872,625
-----------
10,908,413
- -----------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--21.8%
- -----------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.7% General Dynamics Corp.(5) 34,500
1,530,938
--------------------------------------------------------------------------------------
McDonnell Douglas Corp.(5) 24,000 1,842,000
--------------------------------------------------------------------------------------
Rockwell International Corp. 27,300 1,248,975
-----------
4,621,913
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--3.8% Bay Networks, Inc.(2) 32,847
$1,359,045
--------------------------------------------------------------------------------------
Cabletron Systems, Inc.(2)(5) 5,000 266,250
--------------------------------------------------------------------------------------
Moore Corp. Ltd. 37,400 827,475
--------------------------------------------------------------------------------------
Proxima Corp.(2) 30,000 716,250
--------------------------------------------------------------------------------------
Sun Microsystems, Inc.(2)(5) 19,500 945,750
--------------------------------------------------------------------------------------
Tandem Computers, Inc.(2)(5) 114,000 1,838,250
--------------------------------------------------------------------------------------
Xerox Corp.(5) 37,000 4,338,250
-----------
10,291,270
- -----------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--6.8% BMC Software, Inc.(2)(5) 22,800
1,761,300
--------------------------------------------------------------------------------------
Computer Associates International, Inc. 29,400 1,991,850
--------------------------------------------------------------------------------------
Delrina Corp.(2) 94,000 1,292,500
--------------------------------------------------------------------------------------
Electronic Arts, Inc.(2)(5) 55,400 1,502,725
--------------------------------------------------------------------------------------
Informix Corp.(2)(5) 60,000 1,522,500
--------------------------------------------------------------------------------------
Marcam Corp.(2) 80,600 1,098,175
--------------------------------------------------------------------------------------
Microsoft Corp.(2)(5) 21,000 1,897,875
--------------------------------------------------------------------------------------
Nintendo Co. Ltd. 45,000 2,581,272
--------------------------------------------------------------------------------------
Novell, Inc.(2) 140,100 2,793,244
--------------------------------------------------------------------------------------
Symantec Corp.(2)(5) 70,000 2,021,250
-----------
18,462,691
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS--6.5% Advanced Micro Devices, Inc.(5) 35,373 1,286,693
--------------------------------------------------------------------------------------
General Motors Corp., Cl. H 28,700 1,133,650
--------------------------------------------------------------------------------------
Hewlett-Packard Co.(5) 34,000 2,533,000
--------------------------------------------------------------------------------------
Intel Corp.(5) 149,400 9,458,888
--------------------------------------------------------------------------------------
Kyocera Corp. 12,000 986,573
--------------------------------------------------------------------------------------
Philips Electronics NV 19,000 803,867
--------------------------------------------------------------------------------------
Samsung Electronics Co. 9,104 1,467,206
-----------
17,669,877
- -----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-
TECHNOLOGY--3.0% Airtouch Communications, Inc.(2)(5) 45,500 1,296,750
--------------------------------------------------------------------------------------
AT&T Corp. 24,000 1,275,000
--------------------------------------------------------------------------------------
ECI Telecommunications Ltd. 57,500 787,031
--------------------------------------------------------------------------------------
Kinnevik Investments AB Free, Series B 31,500 960,366
--------------------------------------------------------------------------------------
MCI Communications Corp. 108,000 2,376,000
--------------------------------------------------------------------------------------
Rogers Cantel Mobile Communications, Inc., Sub. Cl. B(2) 62,000 1,472,500
--------------------------------------------------------------------------------------
Technology Resources Industries Berhad(2) 42,000 120,591
-----------
8,288,238
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--3.3%
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.1% Central Puerto SA, ADR(4) 5,000 $ 95,030
--------------------------------------------------------------------------------------
Korea Electric Power Co.(2) 30,000 1,123,640
--------------------------------------------------------------------------------------
Verbund Oest Electriz 25,200 1,848,499
-----------
3,067,169
- -----------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.5% Hong Kong & China Gas 743,040 1,185,982
- -----------------------------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES--1.7% BCE, Inc. 34,000 1,092,250
--------------------------------------------------------------------------------------
US West, Inc. 86,800 3,613,050
-----------
4,705,300
-----------
Total Common Stocks (Cost $171,838,828) 233,601,067
- -----------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--1.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Alumax, Inc., $4.00 Cv., Series A 7,333 985,372
--------------------------------------------------------------------------------------
Chiquita Brands International, Inc., $1.32 Depositary
Shares 45,000 630,000
--------------------------------------------------------------------------------------
Cyprus Amax Minerals Co., $4.00 Cv., Series A 20,666 1,291,625
--------------------------------------------------------------------------------------
Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C 36,300 2,123,550
-----------
Total Preferred Stocks (Cost $4,007,871) 5,030,547
FACE
AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--11.9% Repurchase agreement with First Chicago Capital Markets,
6.125%, dated 6/30/95, to be repurchased at $32,400,529 on
7/3/95, collateralized by U.S. Treasury Bonds, 11.25%,
2/15/15, with a value of $3,303,730, U.S. Treasury Nts.,
4.75%--7.875%, 3/31/96--8/15/01, with a value of
$21,610,380, and U.S. Treasury Bills maturing 9/28/95--
12/14/95, with a value of $8,149,932 (Cost $32,384,000) $32,384,000 32,384,000
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $212,056,329) 100.9% 275,055,614
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.9) (2,520,139)
----------- ------------
NET ASSETS 100.0% $272,535,475
----------- ------------
----------- ------------
<FN>
1. Represents the current interest
rate for a variable rate security.
2. Non-income producing security.
3. Units may be comprised of several
components, such as debt and equity
and/or warrants to purchase equity
at some point in the future.
4. Represents a security sold under
Rule 144A, which is exempt from
registration under the Securities
Act of 1933, as amended. This
security has been determined to be
liquid under guidelines established
by the Board of Trustees.
These securities amount to $558,972
or .21% of the Fund's net assets,
at June 30, 1995.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
5. A sufficient amount of liquid assets
as been designated to cover outstanding
call options, as follows:
<TABLE>
<CAPTION>
SHARES
SUBJECT EXPIRATION EXERCISE PREMIUM MARKET
VALUE
TO CALL DATE PRICE RECEIVED SEE NOTE 1
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
AMR Corp. 2,800 1/96 $ 80 $ 13,300 $ 11,550
---------------------------------------------------------------------------------------------
AMR Corp. 3,600 8/95 65 12,492 37,800
---------------------------------------------------------------------------------------------
Abbott Laboratories 6,000 8/95 35 15,944 38,250
---------------------------------------------------------------------------------------------
Advanced Micro Devices, Inc. 7,000 1/96 45 14,665 14,000
---------------------------------------------------------------------------------------------
Aetna Life & Casualty Co. 4,200 7/95 55 8,274 33,075
---------------------------------------------------------------------------------------------
Airborne Freight Corp. 4,900 8/95 23 11,490 2,144
---------------------------------------------------------------------------------------------
Airtouch Communications, Inc. 9,000 7/95 30 12,105 2,813
---------------------------------------------------------------------------------------------
American International Group, Inc. 2,600 2/96 120 20,071 16,250
---------------------------------------------------------------------------------------------
Amgen, Inc. 8,400 7/95 65 24,947 128,100
---------------------------------------------------------------------------------------------
Amgen, Inc. 12,000 7/95 80 26,639 25,500
---------------------------------------------------------------------------------------------
BMC Software, Inc. 6,400 8/95 65 42,207 85,600
---------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 4,400 1/96 70 11,968 8,250
---------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 5,600 7/95 65 9,282 3,850
---------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 5,600 7/95 70 5,432 2,800
---------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 9,600 9/95 65 9,312 39,600
---------------------------------------------------------------------------------------------
Burlington Northern, Inc. 14,000 7/95 55 31,079 119,000
---------------------------------------------------------------------------------------------
Cabletron Systems, Inc. 2,000 7/95 50 6,502 8,250
---------------------------------------------------------------------------------------------
Cabletron Systems, Inc. 2,000 7/95 55 3,846 2,625
---------------------------------------------------------------------------------------------
Chemical Banking Corp. 10,000 12/95 50 25,769 20,625
---------------------------------------------------------------------------------------------
Chiron Corp. 3,200 7/95 70 14,304 2,000
---------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc. 5,000 12/95 40 5,162 8,125
---------------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special 23,400 7/95 18 22,697 33,638
---------------------------------------------------------------------------------------------
Eastman Kodak Co. 5,000 7/95 55 4,850 29,375
---------------------------------------------------------------------------------------------
Electronic Arts, Inc. 12,600 9/95 25 37,421 48,825
---------------------------------------------------------------------------------------------
General Dynamics Corp. 5,000 8/95 45 17,974 6,875
---------------------------------------------------------------------------------------------
Genzyme Corp. 5,100 10/95 45 17,059 9,881
---------------------------------------------------------------------------------------------
Harnischfeger Industries, Inc. 7,200 2/96 40 10,317 8,550
---------------------------------------------------------------------------------------------
Hewlett-Packard Co. 6,000 11/95 80 26,819 20,250
---------------------------------------------------------------------------------------------
IMC Global, Inc. 6,200 7/95 50 24,613 25,575
---------------------------------------------------------------------------------------------
Informix Corp. 12,000 2/96 28 38,069 36,000
---------------------------------------------------------------------------------------------
Informix Corp. 12,000 8/95 20 24,044 69,000
---------------------------------------------------------------------------------------------
Inland Steel Industries, Inc. 14,400 9/95 35 17,567 6,300
---------------------------------------------------------------------------------------------
Intel Corp. 29,600 7/95 43 43,955 636,400
---------------------------------------------------------------------------------------------
King World Productions, Inc. 11,200 8/95 40 19,263 35,000
---------------------------------------------------------------------------------------------
King World Productions, Inc. 11,200 11/95 45 33,263 23,800
---------------------------------------------------------------------------------------------
Landmark Graphics Corp. 8,200 10/95 25 17,178 20,500
---------------------------------------------------------------------------------------------
Lilly (Eli) & Co. 6,000 7/95 70 20,819 53,250
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Footnote 5. (Continued)
<TABLE>
<CAPTION>
SHARES
SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
TO CALL DATE PRICE RECEIVED SEE NOTE 1
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
Manor Care, Inc. 10,000 1/96 $ 35 $ 11,050 $ 8,750
-------------------------------------------------------------------------------
Manor Care, Inc. 10,000 7/95 30 16,574 5,000
-------------------------------------------------------------------------------
Mattel, Inc. 27,000 10/95 25 29,564 64,125
-------------------------------------------------------------------------------
McDonnell Douglas Corp. 2,000 8/95 45 20,189 64,000
-------------------------------------------------------------------------------
McDonnell Douglas Corp. 6,600 11/95 65 21,251 91,575
-------------------------------------------------------------------------------
Medtronic, Inc. 4,400 8/95 60 13,618 75,900
-------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 8,000 1/96 55 29,759 30,000
-------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 8,000 7/95 35 31,134 141,000
-------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 8,000 7/95 40 13,791 102,000
-------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 8,000 7/95 45 6,800 61,000
-------------------------------------------------------------------------------
Microsoft Corp. 3,200 7/95 70 6,704 64,400
-------------------------------------------------------------------------------
Microsoft Corp. 4,600 10/95 80 26,311 64,400
-------------------------------------------------------------------------------
Mylan Laboratories, Inc. 10,400 7/95 35 10,738 650
-------------------------------------------------------------------------------
Nellcor, Inc. 7,600 7/95 35 18,087 73,150
-------------------------------------------------------------------------------
Nellcor, Inc. 7,600 7/95 40 9,747 38,000
-------------------------------------------------------------------------------
Nellcor, Inc. 7,600 10/95 45 21,621 24,700
-------------------------------------------------------------------------------
Philip Morris Cos., Inc. 11,000 9/95 65 24,419 116,875
-------------------------------------------------------------------------------
Price/Costco, Inc. 13,000 7/95 15 14,235 17,875
-------------------------------------------------------------------------------
Pyxis Corp. 11,400 7/95 25 24,595 713
-------------------------------------------------------------------------------
Santa Fe Pacific Gold
Corp. 18,000 12/95 15 17,459 12,375
-------------------------------------------------------------------------------
Sun Microsystems, Inc. 7,600 7/95 40 16,684 65,550
-------------------------------------------------------------------------------
Sun Microsystems, Inc. 3,800 10/95 45 8,198 24,700
-------------------------------------------------------------------------------
Sun Microsystems, Inc. 3,800 10/95 55 11,286 9,500
-------------------------------------------------------------------------------
Symantec Corp. 14,000 1/96 35 25,829 26,250
-------------------------------------------------------------------------------
Symantec Corp. 14,000 7/95 20 40,305 120,750
-------------------------------------------------------------------------------
Tandem Computers, Inc. 23,000 7/95 20 19,547 1,915
--------------------------------------------------------------------------------
Time Warner, Inc. 9,000 12/95 45 16,604 12,375
-------------------------------------------------------------------------------
Waste Management Inter-
national PLC, Sponsored
ADR 15,400 9/95 13 13,090 3,850
-------------------------------------------------------------------------------
Wellpoint Health Networks,
Inc., Cl. A 7,400 7/95 35 20,590 616
-------------------------------------------------------------------------------
Western Atlas, Inc. 4,000 12/95 50 7,880 3,500
-------------------------------------------------------------------------------
Xerox Corp. 7,400 7/95 110 18,277 55,500
----------- -----------
$ 1,266,634 $ 3,054,420
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS Investments, at value (including repurchase agreements of $32,384,000)
(cost $212,056,329)--see accompanying statement $275,055,614
---------------------------------------------------------------------------------------------
Cash 48,820
---------------------------------------------------------------------------------------------
Receivables:
Investments sold and margin on options written 2,318,235
Interest and dividends 580,982
Shares of beneficial interest sold 109,089
---------------------------------------------------------------------------------------------
Other 28,704
------------
Total assets 278,141,444
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Unrealized depreciation on forward foreign currency exchange contracts--Note 6 113
---------------------------------------------------------------------------------------------
Options written, at value (premiums received $1,266,634)--
see accompanying statement--Note 4 3,054,420
---------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,363,348
Shares of beneficial interest redeemed 817,990
Distribution and service plan fees--Note 5 93,355
Transfer and shareholder servicing agent fees 8,399
Trustees' fees 71,816
Other 196,528
------------
Total liabilities 5,605,969
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $272,535,475
------------
------------
- -----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF
NET ASSETS Paid-in capital $193,111,156
---------------------------------------------------------------------------------------------
Undistributed net investment income 3,477,408
---------------------------------------------------------------------------------------------
Accumulated net realized gain from investments, written options and
foreign currency transactions 14,735,357
---------------------------------------------------------------------------------------------
Net unrealized appreciation on investments, written options and translation
of assets and liabilities denominated in foreign currencies 61,211,554
------------
Net assets $272,535,475
------------
------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE Class A Shares:
Net asset value and redemption price per share (based on net assets of
$270,381,085 and 23,837,013 shares of beneficial interest outstanding) $11.34
Maximum offering price per share (net asset value plus sales charge of 5.75%
of offering price) $12.03
---------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $2,154,390 and 192,527 shares of beneficial interest outstanding) $11.19
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Interest $ 1,884,046
---------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $90,716) 4,230,903
-----------
Total income 6,114,949
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 5 1,896,121
---------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 5 351,088
Class C--Note 5 10,956
---------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 480,800
---------------------------------------------------------------------------------------------
Shareholder reports 270,809
---------------------------------------------------------------------------------------------
Custodian fees and expenses 59,056
---------------------------------------------------------------------------------------------
Legal and auditing fees 44,273
---------------------------------------------------------------------------------------------
Trustees' fees and expenses 30,730
---------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,242
Class C 572
---------------------------------------------------------------------------------------------
Other 162,449
-----------
Total expenses 3,308,096
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,806,853
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain on:
GAIN ON INVESTMENTS, Investments 17,841,154
OPTIONS WRITTEN AND Closing and expiration of option contracts written--Note 4
1,185,394
FOREIGN CURRENCY Foreign currency transactions 717,080
-----------
TRANSACTIONS Net realized gain 19,743,628
---------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 22,179,415
Translation of assets and liabilities denominated in foreign currencies 1,260,855
-----------
Net change 23,440,270
-----------
Net realized and unrealized gain on investments, options written and
foreign currency transactions 43,183,898
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $45,990,751
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1995 1994
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS Net investment income $ 2,806,853 $ 1,591,019
---------------------------------------------------------------------------------------------
Net realized gain on investments, options written and
foreign currency transactions 19,743,628 18,028,894
---------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments and translation of assets and liabilities
denominated in foreign currencies 23,440,270 (7,734,744)
------------ ------------
Net increase in net assets resulting from operations 45,990,751 11,885,169
- -----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.0214 and $.033 per share, respectively) (498,859)
(665,882)
SHAREHOLDERS Class C ($.02 per share) -- (2)
---------------------------------------------------------------------------------------------
Distributions from net realized gain on investments,
options written and foreign currency transactions:
Class A ($1.0829 and $.4495 per share, respectively) (24,601,920) (9,068,819)
Class C ($1.0829 and $.4495 per share, respectively) (100,620) (41)
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from Class A
TRANSACTIONS beneficial interest transactions--Note 2 12,428,700 18,939,597
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class C
beneficial interest transactions--Note 2 1,742,306 304,968
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 34,960,358 21,394,990
---------------------------------------------------------------------------------------------
Beginning of period 237,575,117 216,180,127
------------ ------------
End of period (including undistributed net investment income
of $3,477,408 and $1,028,422, respectively) $272,535,475 $237,575,117
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
YEAR ENDED JUNE 30,
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Per Share Operating Data:
Net asset value, beginning of period $ 10.55 $ 10.41 $ 9.72 $ 9.31 $ 9.06 $ 9.17
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .31 .07 .11 .16 .26 .32
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions 1.58 .55 1.15 .84 .69 .23
------- ------- ------- ------- ------- -------
Total income (loss) from investment
operations 1.89 .62 1.26 1.00 .95 .55
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.02) (.03) (.10) (.32) (.22) (.25)
Distributions from net realized gain
on investments, options written
and foreign currency transactions (1.08) (.45) (.47) (.27) (.48) (.41)
------- ------- ------- ------- ------- -------
Total dividends and distributions
to shareholders (1.10) (.48) (.57) (.59) (.70) (.66)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.34 $10.55 $10.41 $9.72 $9.31 $9.06
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
- --------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(2) 19.60% 5.84% 13.33% 11.22% 11.65% 6.04%
- --------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $270,381 $237,281 $216,180 $209,495 $202,509 $196,076
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $254,011 $229,976 $212,660 $221,369 $189,994 $206,259
- --------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 23,837 22,485 20,769 21,555 21,748 21,639
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.10% .69% 1.05% 1.71% 2.91% 3.36%
Expenses 1.29% 1.16% 1.10% 1.09% 1.07% 1.04%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 34.1% 41.6% 35.6% 58.2% 105.8% 79.5%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------
YEAR ENDED JUNE 30,
1989 1988 1987 1986 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 8.36 $ 12.16 $ 12.48 $ 9.69 $ 10.49 $ 11.08
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .21 .13 .06 .11 .03 .02
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions .82 (1.40) .79 2.88 1.75 (.14)
------- ------- ------- ------- ------- -------
Total income (loss) from investment
operations 1.03 (1.27) .85 2.99 1.78 (.12)
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.17) (.17) (.02) (.20) -- (.02)
Distributions from net realized gain
on investments, options written
and foreign currency transactions (.05) (2.36) (1.15) -- (1.08) (.45)
------- ------- ------- ------- ------- -------
Total dividends and distributions
to shareholders (.22) (2.53) (1.17) (.20) (1.08) (.47)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.17 $ 8.36 $ 12.16 $ 12.48 $ 11.19 $ 10.49
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
- ------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(2) 12.60% (12.30)% 8.44% 31.24% 18.57% (1.24)%
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $208,166 $213,301 $273,756 $284,604 $2,154 $294
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $201,556 $224,367 $261,686 $268,929 $1,100 $108
- ------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 22,705 25,514 22,518 22,802 193 28
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.49% 1.51% .52% .89% .48% .05%(3)
Expenses 1.07% 1.04% .99% 1.01% 2.20% 2.44%(3)
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 96.6% 118.8% 59.1% 43.8% 34.1% 41.6%
<FN>
1. For the period from December 1, 1993 (inception of offering) to June 30,
1994.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1995 were $78,020,991 and $90,967,856, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
19 Oppenheimer Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Fund (the Fund) is registered under
ACCOUNTING POLICIES the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment
company. The Fund's investment advisor is
Oppenheimer Management Corporation (the Manager).
The Fund offers both Class A and Class C shares.
Class A shares are sold with a front-end sales
charge. Class C shares may be subject to a
contingent deferred sales charge. Both classes of
shares have identical rights to earnings, assets
and voting privileges, except that each class has
its own distribution and/or service plan, expenses
directly attributable to a particular class and
exclusive voting rights with respect to matters
affecting a single class. The following is a
summary of significant accounting policies
consistently followed by the Fund.
--------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are
valued at the close of the New York Stock Exchange
on each trading day. Listed and unlisted
securities for which such information is regularly
reported are valued at the last sale price of the
day or, in the absence of sales, at values based
on the closing bid or asked price or the last sale
price on the prior trading day. Long-term and
short-term "non-money market" debt securities are
valued by a portfolio pricing service approved by
the Board of Trustees. Such securities which
cannot be valued by the approved portfolio pricing
service are valued using dealer-supplied
valuations provided the Manager is satisfied that
the firm rendering the quotes is reliable and that
the quotes reflect current market value, or under
consistently applied procedures established by the
Board of Trustees to determine fair value in good
faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days
or less are valued at cost (or last determined
market value) adjusted for amortization to
maturity of any premium or discount. Forward
contracts are valued based on the closing prices
of the forward currency contract rates in the
London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. Options
are valued based upon the last sale price on the
principal exchange on which the option is traded
or, in the absence of any transactions that day,
the value is based upon the last sale price on the
prior trading date if it is within the spread
between the closing bid and asked prices. If the
last sale price is outside the spread, the closing
bid or asked price closest to the last reported
sale price is used.
--------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting
records of the Fund are maintained in U.S.
dollars. Prices of securities denominated in
foreign currencies are translated into U.S.
dollars at the closing rates of exchange. Amounts
related to the purchase and sale of securities and
investment income are translated at the rates of
exchange prevailing on the respective dates of
such transactions.
The effect of changes in foreign
currency exchange rates is separately identified
from the fluctuations arising from changes in
market values of securities held and reported with
all other foreign currency gains and losses in the
Fund's results of operations.
--------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the
custodian to take possession, to have legally
segregated in the Federal Reserve Book Entry
System or to have segregated within the
custodian's vault, all securities held as
collateral for repurchase agreements. The market
value of the underlying securities is required to
be at least 102% of the resale price at the time
of purchase. If the seller of the agreement
defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the
Fund may be delayed or limited.
--------------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS AND
LOSSES. Income, expenses (other than those
attributable to a specific class) and gains and
losses are allocated daily to each class of shares
based upon the relative proportion of net assets
represented by such class. Operating expenses
directly attributable to a specific class are
charged against the operations of that class.
<PAGE>
- --------------------------------------------------------------------------------
1. SIGNIFICANT FEDERAL TAXES. The Fund intends to continue to
ACCOUNTING POLICIES comply with provisions of the Internal Revenue
(CONTINUED) Code applicable to regulated investment companies
and to distribute all of its taxable income,
including any net realized gain on investments not
offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax
provision is required.
--------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted
a nonfunded retirement plan for the Fund's
independent trustees. Benefits are based on years
of service and fees paid to each trustee during
the years of service. During the year ended June
30, 1995, the Fund's projected benefit obligations
were reduced by $5,493, and a payment of $1,182
was made to a retired trustee, resulting in an
accumulated liability of $63,984 at June 30, 1995.
--------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
distributions to shareholders are reported on the
ex-dividend date.
--------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS.
Net investment income (loss) and net realized gain
(loss) may differ for financial statement and tax
purposes primarily because of the recognition of
certain foreign currency gains (losses) as
ordinary income (loss) for tax purposes. The
character of the distributions made during the
year from net investment income or net realized
gains may differ from their ultimate
characterization for federal income tax purposes.
Also, due to timing of dividend distributions, the
fiscal year in which amounts are distributed may
differ from the year that the income or realized
gain (loss) was recorded by the Fund.
During the year ended June 30, 1995, the
Fund changed the classification of distributions
to shareholders to better disclose the differences
between financial statement amounts and
distributions determined in accordance with income
tax regulations. Accordingly, during the year
ended June 30, 1995, amounts have been
reclassified to reflect an increase in
undistributed net investment income of $140,992,
and a decrease in accumulated net realized gain on
investments of $140,992.
--------------------------------------------------
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 The Fund has authorized an unlimited number of no
BENEFICIAL INTEREST par value shares of beneficial interest.
Transactions in shares of beneficial interest were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1995 YEAR ENDED JUNE 30, 1994(1)
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 6,673,759 $71,435,301 3,600,642 $39,529,238
Dividends and distributions reinvested 2,364,103 23,168,217 816,887 8,879,570
Redeemed (7,685,964) (82,174,818) (2,701,648) (29,469,211)
--------- ---------- --------- ----------
Net increase 1,351,898 $12,428,700 1,715,881 $18,939,597
--------- ---------- --------- ----------
--------- ---------- --------- ----------
- ------------------------------------------------------------------------------------------------------
Class C:
Sold 183,982 $1,948,887 29,766 $323,590
Dividends and distributions reinvested 8,876 86,189 -- --
Redeemed (28,381) (292,770) (1,716) (18,622)
-------- ---------- ------- --------
Net increase 164,477 $1,742,306 28,050 $304,968
------- --------- ------ ---------
------- --------- ------ ---------
<FN>
1. For the year ended June 30, 1994 for Class A shares and for the period from
December 1, 1993 (inception of offering) to June 30, 1994 for Class C shares.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
-------------------------------------------------
3. UNREALIZED GAINS AND At June 30, 1995, net unrealized appreciation on
LOSSES ON INVESTMENT investments, options written and forward foreign
currency exchange contracts of $61,211,386 was
composed of gross appreciation of $70,427,680, and
gross depreciation of $9,216,294.
--------------------------------------------------
4. OPTION ACTIVITY The Fund may buy and sell put and call options, or
write covered put and call options on portfolio
securities in order to produce incremental
earnings or protect against changes in the value
of portfolio securities. The Fund generally
purchases put options or writes covered call
options to hedge against adverse movements in the
value of portfolio holdings. When an option is
written, the Fund receives a premium and becomes
obligated to sell or purchase the underlying
security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last
sale price on the principal exchange on which the
option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a
gain or loss upon the expiration or closing of the
option transaction. When an option is exercised,
the proceeds on sales for a written call option,
the purchase cost for a written put option, or the
cost of the security for a purchased put or call
option is adjusted by the amount of premium
received or paid.
In this report, securities designated to
cover outstanding call options are noted in the
Statement of Investments. Shares subject to call,
expiration date, exercise price, premium received
and market value are detailed in a footnote to the
Statement of Investments. Options written are
reported as a liability in the Statement of Assets
and Liabilities. Gains and losses are reported in
the Statement of Operations.
The risk in writing a call option is that the
Fund gives up the opportunity for profit if the
market price of the security increases and the
option is exercised. The risk in writing a put
option is that the Fund may incur a loss if the
market price of the security decreases and the
option is exercised. The risk in buying an option
is that the Fund pays a premium whether or not the
option is exercised. The Fund also has the
additional risk of not being able to enter into a
closing transaction if a liquid secondary market
does not exist.
Written option activity for the year ended June
30, 1995 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
--------------------------
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Options outstanding at June 30, 1994 2,727 $848,716
- -------------------------------------------------------------------------------------------
Options written 10,843 2,606,274
- -------------------------------------------------------------------------------------------
Options canceled in closing purchase transactions (1,937) (568,132)
- -------------------------------------------------------------------------------------------
Options expired prior to exercise (4,051) (1,043,300)
- -------------------------------------------------------------------------------------------
Options exercised (1,590) (576,924)
------- ----------
Options outstanding at June 30, 1995 5,992 $1,266,634
------- ----------
------- ----------
</TABLE>
- --------------------------------------------------------------------------------
5. MANAGEMENT FEES AND Management fees paid to the Manager were in
OTHER TRANSACTIONS accordance with the investment advisory agreement
WITH AFFILIATES with the Fund which provides for a fee of .75% on
the first $200 million of average annual net
assets with a reduction of .03% on each $200
million thereafter to $800 million, and .60% on
net assets in excess of $800 million. The Manager
has agreed to reimburse the Fund if aggregate
expenses (with specified exceptions) exceed the
most stringent state regulatory limit on Fund
expenses.
For the year ended June 30, 1995, commissions
(sales charges paid by investors) on sales of
Class A shares totaled $1,275,166, of which
$280,415 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an
affiliated broker/dealer. Sales charges advanced
to broker/dealers by OFDI on sales of the Fund's
Class C shares totaled $13,900, of which $454 was
paid to an affiliated broker/dealer. During the
period ended June 30, 1995, OFDI received
contingent deferred sales charges of $651 upon
redemption of Class C shares.
<PAGE>
- --------------------------------------------------------------------------------
5. MANAGEMENT FEES AND Oppenheimer Shareholder Services (OSS), a division
OTHER TRANSACTIONS of the Manager, is the transfer and shareholder
WITH AFFILIATES servicing agent for the Fund, and for other
(CONTINUED) registered investment companies. OSS's total costs
of providing such services are allocated ratably
to these companies.
Under separate approved plans, each class may
expend up to .25% of its net assets annually to
reimburse OFDI for costs incurred in connection
with the personal service and maintenance of
accounts that hold shares of the Fund, including
amounts paid to brokers, dealers, banks and other
institutions. In addition, Class C shares are
subject to an asset-based sales charge of .75% of
net assets annually, to reimburse OFDI for sales
commissions paid from its own resources at the
time of sale and associated financing costs. In
the event of termination or discontinuance of the
Class C plan, the Board of Trustees may allow the
Fund to continue payment of the asset-based sales
charge to OFDI for distribution expenses incurred
on Class C shares sold prior to termination or
discontinuance of the plan. During the year ended
June 30, 1995, OFDI paid $4,031 to an affiliated
broker/dealer as reimbursement for Class A
personal service and maintenance expenses, and
retained $9,881 as reimbursement for Class C sales
commissions and service fee advances, as well as
financing costs.
-------------------------------------------------
6. FORWARD CONTRACTS A forward foreign currency exchange contract
(forward contract) is a commitment to purchase or
sell a foreign currency at a future date, at a
negotiated rate.
The Fund uses forward contracts to seek to manage
foreign currency risks. They may also be used to
tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge
upon the purchase or sale of a security
denominated in a foreign currency. In addition,
the Fund may enter into such contracts as a hedge
against changes in foreign currency exchange rates
on portfolio positions.
Forward contracts are valued based on the closing
prices of the forward currency contract rates in
the London foreign exchange markets on a daily
basis as provided by a reliable bank or dealer.
The Fund will realize a gain or loss upon the
closing or settlement of the forward transaction.
Unrealized gains and losses on outstanding
contracts (unrealized appreciation or depreciation
on forward contracts) are reported in the
Statement of Assets and Liabilities. Realized
gains and losses are reported with all other
foreign currency gains and losses in the Fund's
Statement of Operations.
Risks include the potential inability of the
counterparty to meet the terms of the contract and
unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At June 30, 1995, outstanding forward contracts to sell foreign currencies were
as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXCHANGE CONTRACT VALUATION AS OF APPRECIATION
CONTRACTS TO SELL DATE AMOUNT JUNE 30, 1995 (DEPRECIATION)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
German Deutsche Mark 7/5/95 54,488 $54,601 $(113)
</TABLE>
<PAGE>
Appendix A
Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Transmission
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
A-1
<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 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 LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements
(1) Financial Highlights (see Parts A and B): Filed
herewith.
(2) Independent Auditors' Report (see Part B): Filed
herewith.
(3) Statement of Investments (see Part B): Filed herewith.
(4) Statement of Assets and Liabilities (see Part B): Filed
herewith.
(5) Statement of Operations (see Part B): Filed herewith.
(6) Statements of Changes in Net Assets (see Part B): Filed
herewith.
(7) Notes to Financial Statements (see Part B): Filed
herewith.
(b) Exhibits
(1) Amended and Restated Declaration of Trust dated 8/30/95:
Filed herewith.
(2) By-Laws amended through 8/6/87: Previously filed with
Post-Effective Amendment No. 93 to Registrant's Registration Statement,
10/28/88, refiled pursuant to Item 102 of Regulation S-T with Registrant's
Post-Effective Amendment No. 107, 8/19/94, and incorporated herein by
reference.
(3) Not applicable.
(4) (i) Specimen Class A Share Certificate: Filed with
Registrant's Post-Effective Amendment No. 107, 8/19/94, and incorporated
herein by reference.
(ii) Specimen Class B Share Certificate: Filed with
Registrant's Post-Effective Amendment No. 109, 8/31/95, and incorporated
herein by reference.
(iii) Specimen Class C Share Certificate: Filed with
Registrant's Post-Effective Amendment No. 107, 8/19/94, and incorporated
herein by reference.
(5) Investment Advisory Agreement dated 6/20/91: Previously
filed with Post-Effective Amendment No. 99 to Registrant's Registration
Statement, 8/23/91, refiled pursuant to Item 102 of Regulation S-T with
Registrant's Post-Effective Amendment No. 107, 8/19/94, and incorporated
herein by reference.
(6) (i) General Distributor's Agreement dated 12/10/92:
Filed with Post-Effective Amendment No. 104 to Registrant's Registration
Statement, 8/25/93, and incorporated herein by reference.
(ii) Form of Dealer Agreement of Oppenheimer Funds
Distributor, Inc. - Filed with Post-Effective Amendment No. 14 of
Oppenheimer Main Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(iii) Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement - Filed with Post-Effective Amendment No. 14 of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(iv) Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement - Filed with Post-Effective Amendment No. 14 of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(v) Broker Agreement between Oppenheimer Funds
Distributor, Inc. and Newbridge Securities dated 10/1/86: Previously
filed with Post-Effective Amendment No. 25 of Oppenheimer Special Fund
(Reg. No. 2-45272), 11/1/86, refiled with Post-Effective Amendment No. 45
of Oppenheimer Special Fund (Reg. No. 2-45272), 8/22/94, pursuant to Item
102 of Regulation S-T, and incorporated herein by reference.
(7) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant 6/7/90): Previously filed with Post-Effective
Amendment No. 97 to Registrant's Registration Statement, 8/30/90, and
incorporated herein by reference.
(8) Custody Agreement dated 8/5/92: Filed with Post-Effective
Amendment No. 103, of Registrant's Registration Statement, 10/28/92,
refiled pursuant to Item 102 of Regulation S-T with Registrant's Post-
Effective Amendment No. 107, 8/19/94, and incorporated herein by
reference.
(9) Not applicable.
(10) Opinion and Consent of Counsel dated 10/4/85: Previously
filed with Post-Effective Amendment No. 86, 10/16/85 to Registrant's
Registration Statement, refiled pursuant to Item 102 of Regulation S-T
with Registrant's Post-Effective Amendment No. 107, 8/19/94, and
incorporated herein by reference.
(11) Independent Auditors' Consent: Filed herewith.
(12) Not applicable.
(13) Not applicable.
(14) (i) Form of Individual Retirement Account Trust
Agreement: Filed as Exhibit 14 of Post-Effective Amendment No. 21 of
Oppenheimer U.S. Government Trust (Reg. No. 2-76645), 8/25/93, and
incorporated herein by reference.
(ii) Form of prototype Standardized and Non-Standardized
Profit-Sharing Plan and Money Purchase Pension Plan for self-employed
persons and corporations: Filed with Post-Effective Amendment No. 3 of
Oppenheimer Global Growth & Income Fund (File No. 33-33799), 1/31/92, and
refiled with Post-Effective Amendment No. 7 to the Registration Statement
of Oppenheimer Global Growth & Income Fund (Reg. No. 33-33799), 12/1/94,
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(iii) Form of Tax-Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-exempt organizations:
Filed with Post-Effective Amendment No. 47 to the Registration Statement
of Oppenheimer Growth Fund (Reg. No. 2-45272), 10/21/94, and incorporated
herein by reference.
(iv) Form of Simplified Employee Pension IRA: Filed with
Post-Effective Amendment No. 42 to the Registration Statement of
Oppenheimer Equity Income Fund (Reg. No. 2-33043), 10/28/94, and
incorporated herein by reference.
(v) Form of SAR-SEP Simplified Employee Pension IRA:
Filed with Registrant's Post-Effective Amendment No. 19, 3/1/94, and
incorporated herein by reference.
(vi) Form of Prototype 401(k) plan: Filed with Post-
Effective Amendment No. 7 to the Registration Statement of Oppenheimer
Strategic Income & Growth Fund (33-47378), 9/28/95, and incorporated
herein by reference.
(15) (i) Service Plan and Agreement dated 8/1/94 for Class
A shares under Rule 12b-1 of the Investment Company Act of 1940: Filed
herewith.
(ii) Distribution and Service Plan and Agreement dated
November 1, 1995 for Class B shares under Rule 12b-1 of the Investment
Company Act of 1940: Filed herewith.
(iii) Distribution and Service Plan and Agreement dated
December 1, 1993 for Class C shares under Rule 12b-1 of the Investment
Company Act of 1940: Filed with Registrant's Post-Effective Amendment No.
107, 8/19/94, and incorporated herein by reference.
(16) Performance Data Computation Schedule: Filed herewith.
(17) (a) Financial Data Schedule for Class A shares: Filed
herewith.
(b) Financial Data Schedule for Class C shares: Filed
herewith.
-- Powers of Attorney: Filed with Post-Effective Amendment No.
104 of Registrant's Registration Statement, 8/25/93, and incorporated
herein by reference.
(18) Oppenheimer Funds Multiple Class Plan under Rule 18f-3
dated 10/24/95: Filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer California Tax-Exempt Fund
(33-23566), 11/1/95, and incorporated herein by reference.
Item 25. Persons Controlled by or Under Common Control with Registrant
- -------- -------------------------------------------------------------
None.
Item 26. Number of Holders of Securities
- -------- -------------------------------
Number of Record
Holders as of
Title of Class October 6, 1995
- -------------- -----------------------
Shares of Beneficial Interest,
Class A shares 30,548
Shares of Beneficial Interest,
Class B shares 0
Shares of Beneficial Interest,
Class C shares 441
Item 27. Indemnification
- -------- ---------------
Reference is made to paragraphs (c) through (g) of Section 12 of
Article SEVENTH of Registrant's Declaration of Trust filed as Exhibit
24(b)(1) to this Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing provisions or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(a) Oppenheimer Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts
A and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals Fund
and Oppenheimer Global Emerging Growth
Fund.
Victor Babin, None.
Senior Vice President
Robert J. Bishop Assistant Treasurer of the Oppenheimer Funds
Assistant Vice President (listed below); previously a Fund
Controller for Oppenheimer Management
Corporation (the "Manager").
Bruce Bartlett Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc.,
Oppenheimer Main Street Funds, Inc. and
Oppenheimer Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager at First of America
Investment Corp.
George Bowen Treasurer of the New York-based
Senior Vice President Oppenheimer Funds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
Oppenheimer Funds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
adviser subsidiary of the Manager; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main
StreetAdvisers.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Vice President Formerly Vice President\Director of
Internal Audit of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
Senior Vice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer
Variable Account Funds, Oppenheimer Main
Street Funds, Inc. and Oppenheimer Target
Fund; Senior Vice President and Portfolio
Manager of Oppenheimer Strategic Income &
Growth Fund.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President Oppenheimer Funds; Vice President of the
& General Counsel Denver-based Oppenheimer Funds; Executive
Vice President, Director and General
Counsel of the Distributor; formerly Senior
Vice President and Associate General
Counsel of the Manager and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Variable Account Funds and
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the Oppenheimer
Assistant Vice President Funds; previously a Fund Controller for the
Manager.
Katherine P.Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board Acquisition Corp. ("OAC"), the Manager's
and Director parent holding company; President, CEO and
a director of HarbourView; a director of
SSI and SFSI; President, Director, Trustee,
and Managing General Partner of the Denver-
based Oppenheimer Funds; President and
Chairman of the Board of Main Street
Advisers, Inc.; formerly Chief Executive
Officer of the Manager.
Robert G. Galli, Trustee of the New York-based
Vice Chairman Oppenheimer Funds; Vice President and
Counsel of OAC; formerly he held the
following positions: a director of the
Distributor, Vice President and a director
of HarbourView and Centennial, a director
of SFSI and SSI, an officer of other
Oppenheimer Funds and Executive Vice
President & General Counsel of the Manager
and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Mildred Gottlieb Formerly served as a Strategy Consultant
Assistant Vice President for the Private Client Division of Merrill
Lynch.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Fund and
Oppenheimer Intermediate Tax Exempt Fund;
an officer of other Oppenheimer Funds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Bennett Inkeles, Formerly employed by Doremus & Company, an
Assistant Vice President advertising agency.
Frank Jennings Portfolio Manager of Oppenheimer Global
Vice President Growth & Income Fund. Formerly a Managing
Director of Global Equities at Paine
Webber's Mitchell Hutchins division.
Stephen Jobe, None.
Vice President
Heidi Kagan, None.
Assistant Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund and Oppenheimer Variable
Account Funds; Associate Portfolio Manager
of Oppenheimer Discovery Fund. Formerly a
Securities Analyst for Columbus Circle
Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director and Trustee of the New York
President, Chief Executive based Oppenheimer funds; Vice President
Officer and Director and a Director of OAC; Director of
HarbourView; Director of Main Street
Advisers, Inc.; and Chairman of Shareholder
Services, Inc.
Sally Marzouk, None.
Vice President
Marilyn Miller, Formerly a Director of marketing for
Vice President TransAmerica Fund Management Company.
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund,
Oppenheimer Multiple Strategies Fund,
Oppenheimer Asset Allocation Fund,
Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer High Income Fund, Oppenheimer
Variable Account Funds and Oppenheimer Bond
Fund; an officer of other Oppenheimer
Funds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Fund, Oppenheimer Intermediate Tax-Exempt
Fund, Oppenheimer Florida Tax-Exempt Fund,
Oppenheimer New Jersey Tax-Exempt Fund,
Oppenheimer Pennsylvania Tax-Exempt Fund,
Oppenheimer California Tax-Exempt Fund,
Oppenheimer New York Tax-Exempt Fund and
Oppenheimer Tax-Free Bond Fund; Vice
President of the New York Tax-Exempt Income
Fund, Inc.; Vice President of Oppenheimer
Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund.
Vice President and Portfolio Manager for
Oppenheimer Variable Account Funds.
Formerly Fund; Senior Investment Officer
and Portfolio Manager with Chemical Bank.
Russell Read, Formerly an International Finance Consultant
Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust; an officer of other
Oppenheimer Funds; formerly a Securities
Analyst for the Manager.
David Robertson, None.
Vice President
Adam Rochlin, Formerly a Product Manager for Metropolitan
Assistant Vice President Life Insurance Company.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund
and Oppenheimer U.S. Government Trust.
Formerly Vice President and Senior
Portfolio Manager for Delaware Investment
Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
Strategies Fund; an officer of other
Oppenheimer Funds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
James Ruff, None.
Executive Vice President
Ellen Schoenfeld, None.
Assistant Vice President
Diane Sobin, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Funds, Inc. and
Oppenheimre Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager for Dean Witter
InterCapital, Inc.
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus Oppenheimer Funds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund;
an officer of other Oppenheimer Funds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion Income Fund and
Oppenheimer High Yield Fund; an officer of
other Oppenheimer Funds.
John Stoma, Vice President Formerly Vice President of Pension
Marketing with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors Oppenheimer Funds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund. Formerly
Managing Director of Buckingham Capital
Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Jeffrey Van Giesen Formerly employed by Kidder Peabody Asset
Vice President Management.
Ashwin Vasan, Vice President and Portfolio Manager of
Vice President Oppenheimer Multi-Sector Income Trust,
Oppenheimer Multi-Government Trust and
Oppenheimer International Bond Fund; an
officer of other Oppenheimer Funds.
Valerie Victorson, None.
Vice President
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Centennial
America Fund, L.P., Centennial Government
Trust and Centennial Money Market Trust;
Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
Oppenheimer Funds.
Susan Wilson-Perez, None.
Vice President
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc.,
Centennial America Fund, L.P., Centennial
Government Trust, Centennial Money Market
Trust and Daily Cash Accumulation Fund,
Inc.; Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President of
Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the Oppenheimer
and Assistant Secretary Funds; Assistant Secretary of SSI, SFSI; an
officer of other Oppenheimer Funds.
Eva A. Zeff, An officer of certain Oppenheimer Funds;
Assistant Vice President formerly a Securities Analyst for the
Manager.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily
Cash Accumulation Fund, Inc.; Vice
President of Oppenheimer Multi-Sector
Income Trust; Vice President of Centennial;
an officer of other Oppenheimer Funds.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer
Funds and the Denver-based Oppenheimer Funds set forth below:
New York-based Oppenheimer Funds
--------------------------------
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based Oppenheimer Funds
------------------------------
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based Oppenheimer Funds, Oppenheimer Funds Distributor, Inc., Harbourview
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Shareholder Services, Centennial Asset Management Corporation, Centennial
Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
Item 29. Principal Underwriter
- -------- ---------------------
(a) Oppenheimer Funds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in Part A and B of
this Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Treasurer
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Mary Crooks+ Vice President None
Paul Delli Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary
President & Director
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Wendy Fishler* Vice President - None
Financial Institution Div.
Wayne Flanagan Vice President - None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Senior Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Hans Klehmet II Vice President None
26542 Love Lane
Ramona, CA 92065
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
664 Circuit Road
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
Bernard J. Wolocko Vice President None
33915 Grand River
Farmington, MI 48335
William Harvey Young+ Vice President None
</TABLE>
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
(c) Not applicable.
Item. 30 Location of Accounts and Records
- -------- --------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of Oppenheimer
Management Corporation, at its offices at 3410 South Galena Street,
Denver, Colorado 80231.
Item 31. Management Services
- -------- -------------------
Not applicable.
Item 32. Undertakings
- -------- ------------
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 27th day of October, 1995.
OPPENHEIMER FUND
By: /s/ Donald W. Spiro*
--------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees October 27, 1995
Leon Levy
/s/ Donald W. Spiro* President, Chief
- -------------------- Executive Officer
Donald W. Spiro and Trustee October 27, 1995
/s/ George Bowen* Treasurer and Chief
- ----------------- Financial and
George Bowen Accounting Officer October 27, 1995
/s/ Leo Cherne* Trustee October 27, 1995
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee October 27, 1995
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee October 27, 1995
- ----------------------
Benjamin Lipstein
/s/ Bridget A. Macaskill Trustee October 27, 1995
- --------------------------
Bridget A. Macaskill
/s/ Elizabeth B. Moynihan* Trustee October 27, 1995
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee October 27, 1995
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee October 27, 1995
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee October 27, 1995
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee October 27, 1995
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee October 27, 1995
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee October 27, 1995
- -----------------------
Clayton K. Yeutter
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER FUND
Registration No. 2-14586
Post-Effective Amendment No. 110
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
24(b)(1) Amended and Restated Declaration of Trust dated August
30, 1995
24(b)(11) Independent Auditors' Consent
24(b)(15)(i) Service Plan and Agreement for Class A Shares dated
August 1, 1994
24(b)(15)(ii) Distribution and Service Plan and Agreement for Class B
Shares dated November 1, 1995
24(b)(16) Performance Data Schedule
24(b)(17)(i) Financial Data Schedule for Class A
24(b)(17)(ii) Financial Data Schedule for Class C
Exhibit 24(b)(1)
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OPPENHEIMER FUND
This AMENDED AND RESTATED DECLARATION OF TRUST, made as of August 30,
1995, by and among the individuals executing this Amended and Restated
Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer Fund (the "Trust"), a
trust fund under the laws of the Commonwealth of Massachusetts for the
investment and reinvestment of funds contributed thereto under a
Declaration of Trust dated October 7, 1985;
WHEREAS, the Declaration of Trust was Amended and Restated as of
April 28, 1993 and May 12, 1994;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall henceforth be held and
managed under this Amended and Restated Declaration of Trust IN TRUST as
herein set forth below.
FIRST: This Trust shall be known as OPPENHEIMER FUND. The address
of the Trust is Two World Trade Center, New York, New York 10048-0203.
The Registered Agent for Service in Massachusetts is Massachusetts Mutual
Life Insurance Company, 1295 State Street, Springfield, Massachusetts
01111, Attention: Stephen Kuhn, Esq.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust that are defined in
the 1940 Act (defined below) shall have the meanings given to them in the
1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the Board
of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from time to
time.
4. "Class" means a class of a series of Shares (as defined below)
of the Trust established and designated under or in accordance with the
provisions of Article FOURTH.
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" means this Amended and Restated
Declaration of Trust as it may be amended or restated from time to time.
7. The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations of the Commission thereunder, all as amended
from time to time.
8. "Series" refers to series of Shares of the Trust established and
designated under or in accordance with the provisions of Article FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust or any Series or Class of the Trust
(as the context may require) shall be divided from time to time and
includes fractions of Shares as well as whole Shares.
11. The "Trust" refers to the Massachusetts business trust created
by this Declaration of Trust, as amended or restated from time to time.
12. "Trustees" refers to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors for
the time being in office as such trustees.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
financial futures contracts, indexes, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein,
or in any property or assets) created or issued by any issuer (which term
"issuer" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof be deemed to include any persons,
firms, associations, corporations, syndicates, business trusts,
partnerships, investment companies, combinations, organizations,
governments, or subdivisions thereof) and in financial instruments
(whether they are considered as securities or commodities); and to
exercise, as owner or holder of any securities or financial instruments,
all rights, powers and privileges in respect thereof; and to do any and
all acts and things for the preservation, protection, improvement and
enhancement in value of any or all such securities or financial
instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings, to the extent permitted by the 1940 Act and
by the Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such Series and Classes and
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including without limitation thereto,
securities) now or hereafter permitted by the laws of the Commonwealth of
Massachusetts and by this Declaration of Trust, as the Trustees may
determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any
Series or Class into one or more Series or Classes that may have been
established and designated from time to time, all without the vote or
consent of the Shareholders of the Trust, in any manner and to the extent
now or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in New York, Colorado and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or to the extent now or
hereafter permitted by the laws of Massachusetts, as a member of, or as
the owner or holder of any stock of, or share of interest in, any issuer,
and in connection therewith or make or enter into such deeds or contracts
with any issuers and to do such acts and things and to exercise such
powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of a similar or dissimilar
nature, not expressed; provided, however, that the Trust shall not carry
on any business, or exercise any powers, in any state, territory, district
or country except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into
Shares, all without par value. The Trustees shall have the authority from
time to time, without obtaining shareholder approval, to create one or
more Series of Shares (the proceeds of which may be invested in separate,
independently managed portfolios) in addition to the Series specifically
established and designated in Part 3 of this Article FOURTH, and to divide
the shares of any Series into two or more Classes pursuant to Part 2 of
this Article FOURTH, all as they deem necessary or desirable, to establish
and designate such Series and Classes, and to fix and determine the
relative rights and preferences as between the different Series or Classes
of Shares as to right of redemption and the price, terms and manner of
redemption, liabilities and expenses to be borne by any Series or Class,
special and relative rights as to dividends and other distributions and
on liquidation, sinking or purchase fund provisions, conversion on
liquidation, conversion rights, and conditions under which the several or
Classes of Shares shall have individual voting rights or no voting rights.
Except as aforesaid, all Shares of the different Series shall be
identical.
(a) The number of authorized Shares and the number of Shares of
each Series and each Class of a Series that may be issued is unlimited,
and the Trustees may issue Shares of any Series or Class of any Series for
such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without
action or approval of the Shareholders. All Shares when so issued on the
terms determined by the Trustees shall be fully paid and non-assessable.
The Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series into one or more Series or
Classes of Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares
of any Series reacquired by the Trust.
(b) The establishment and designation of any Series or any Class
of any Series in addition to that established and designated in Part 3 of
this Article FOURTH shall be effective with the effectiveness upon the
execution by a majority of the Trustees of an instrument setting forth
such establishment and designation and the relative rights and preferences
of such Series or such Class of such Series or as otherwise provided in
such instrument. At any time that there are no Shares outstanding of any
particular Series previously established and designated, the Trustees may
by an instrument executed by a majority of their number abolish that
Series and the establishment and designation thereof. If and to the
extent that the instrument referred to in this paragraph shall be an
amendment to this Declaration of Trust, and the Trustees may make any such
amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold
and dispose of Shares of any Series or Class of any Series of the Trust
to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued
and sold and may purchase Shares of any Series or Class of any Series from
any such person or any such organization subject only to the general
limitations, restrictions or other provisions applicable to the sale or
purchase of Shares of such Series or Class generally.
2. The Trustees shall have the authority from time to time, without
obtaining shareholder approval, to divide the Shares of any Series into
two or more Classes as they deem necessary or desirable, and to establish
and designate such Classes. In such event, each Class of a Series shall
represent interests in the designated Series of the Trust and have such
voting, dividend, liquidation and other rights as may be established and
designated by the Trustees. Expenses related directly or indirectly to
the Shares of a Class of a Series may be borne solely by such Class (as
shall be determined by the Trustees) and, as provided in Article FIFTH,
a Class of a Series may have exclusive voting rights with respect to
matters relating solely to such Class. The bearing of expenses solely by
a Class of Shares of a Series shall be appropriately reflected (in the
manner determined by the Trustees) in the net asset value, dividend and
liquidation rights of the Shares of such Class of a Series. The division
of the Shares of a Series into Classes and the terms and conditions
pursuant to which the Shares of the Classes of a Series will be issued
must be made in compliance with the 1940 Act. No division of Shares of
a Series into Classes shall result in the creation of a Class of Shares
having a preference as to dividends or distributions or a preference in
the event of any liquidation, termination or winding up of the Trust, to
the extent such a preference is prohibited by Section 18 of the 1940 Act
as to the Trust. The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired of any Series into
one or more Series or Classes of Series that may be established and
designated from time to time. The Trustees may hold as treasury Shares
(of the same or some other Series), reissue for such consideration and on
such terms as they may determine, or cancel, at their discretion from time
to time, any Shares of any Series reacquired by the Trust.
The relative rights and preferences of Shares of different
Classes shall be the same in all respects except that, unless and until
the Board of Trustees shall determine otherwise: (i) when a vote of
Shareholders is required under this Declaration of Trust or when a meeting
of Shareholders is called by the Board of Trustees, the Shares of a Class
shall vote exclusively on matters that affect that Class only, (ii) the
expenses related to a Class shall be borne solely by such Class (as
determined and allocated to such Class by the Trustees from time to time
in a manner consistent with parts 2 and 3 of this Article FOURTH); and
(iii) pursuant to paragraph 10 of Article NINTH, the Shares of each Class
shall have such other rights and preferences as are set forth from time
to time in the then-effective Prospectus and/or Statement of Additional
Information relating to the Shares. Dividends and distributions on one
class may differ from the dividends and distributions on another Class,
and the net asset value of the Shares of one Class may differ from the net
asset value of the Shares of another Class.
3. Without limiting the authority of the Trustees set forth in part
1 of this Article FOURTH to establish and designate any further Series,
the Trustees hereby establish one Series of Shares having the same name
as the Trust and said Shares shall be divided into such number of Classes
as shall be set forth from time to time in the then-effective prospectus
and/or statement of additional information relating to the Trust. The
Shares of that Series and any Shares of any further Series or Classes that
may from time to time be established and designated by the Trustees shall
(unless the Trustees otherwise determine with respect to some further
Series or Classes at the time of establishing and designating the same)
have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
for all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are
herein referred to as "assets belonging to" that Series. In the event
that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively "General Items"), the
Trustees shall allocate such General Items to and among any one or more
of the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series for all
purposes. No holder of Shares of any Series shall have any claim on or
right to any assets allocated or belonging to any other Series.
(b) (1) Liabilities Belonging to a Series. The assets
belonging to each particular Series shall be charged with the liabilities
of the Trust in respect of that Series and all expenses, costs, charges
and reserves attributable to that Series. Any general liabilities,
expenses, costs, charges and reserves of the Trust which are not
identifiable as belong to any particular Series shall be allocated and
charged by the Trustees to and among any one or more of the Series
established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable.
The liabilities, expenses, costs, charges and reserves allocated and so
charged to each Series are herein referred to as "liabilities belonging
to" that Series. Each allocation of liabilities, expenses, costs, charges
and reserves by the Trustees shall be conclusive and binding upon the
shareholders of all Series for all purposes. The Trustees shall have full
discretion, to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding
upon the Shareholders.
(2) Liabilities Belonging to a Class. If a Series is
divided into more than one Class, the liabilities, expenses, costs,
charges and reserves attributable to a Class shall be charged and
allocated to the Class to which such liabilities, expenses, costs, charges
or reserves are attributable. Any general liabilities, expenses, costs,
charges or reserves belonging to the Series which are not identifiable as
belonging to any particular Class shall be allocated and charged by the
Trustees to and among any one or more of the Classes established and
designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
allocations described in the two preceding sentences shall be subject to
the 1940 Act and any release, rule, regulation, interpretation or order
thereunder relating to such allocations. The liabilities, expenses,
costs, charges and reserves allocated and so charged to each Class are
herein referred to as "liabilities belonging to" that Class. Each
allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the holders of all Classes
for all purposes. No holder of Shares of any Class shall have any claim
on or right to any assets allocated or belonging to any other Class.
(c) Dividends. Dividends and distributions on Shares of a
particular Series or Class may be paid to the holders of Shares of that
Series or Class, with such frequency as the Trustees may determine, which
may be daily or otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine, from such of the income and capital gains, accrued or realized,
from the assets belonging to that Series, as the Trustees may determine,
after providing for actual and accrued liabilities belonging to such
Series or Class. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the
Shareholders of such Series or Class in proportion to the number of Shares
of such Series or Class held by such Shareholders at the date and time of
record established for the payment of such dividends or distributions,
except that in connection with any dividend or distribution program or
procedure the Trustees may determine that no dividend or distribution
shall be payable on Shares as to which the Shareholder's purchase order
and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination thereof as
determined by the Trustees or pursuant to any program that the Trustees
may have in effect at the time for the election by each Shareholder of the
mode of the making of such dividend or distribution to that Shareholder.
Any such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with paragraph 13 of
Article SEVENTH.
(d) Liquidation. In the event of the liquidation or dissolution
of the Trust, the Shareholders of each Series and all Classes of each
Series that have been established and designated shall be entitled to
receive, as a Series or Class, when and as declared by the Trustees, the
excess of the assets belonging to that Series over the liabilities
belonging to that Series or Class. The assets so distributable to the
Shareholders of any particular Class and Series shall be distributed among
such Shareholders in proportion to the number of Shares of such Class of
that Series held by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series or Class
shall be transferable, but transfers of Shares of a particular Class or
Series will be recorded on the Share transfer records of the Trust
applicable to such Series or Class only at such times as Shareholders
shall have the right to require the Trust to redeem Shares of such Series
or Class and at such other times as may be permitted by the Trustees.
(f) Equality. All Shares of each Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to such Series or any Class of that
Series), and each Share of any particular Series shall be equal to each
other Share of that Series and Shares of each Class of a Series shall be
equal to each other Share of such Class; but the provisions of this
sentence shall not restrict any distinctions permissible under this
Article FOURTH that may exist with respect to Shares of a Series or the
different Classes of a Series. The Trustees may from time to time divide
or combine the Shares of any particular Class or Series into a greater or
lesser number of Shares of that Class or Series without thereby changing
the proportionate beneficial interest in the assets belonging to that
Class or Series or in any way affecting the rights of Shares of any other
Class or Series.
(g) Fractions. Any fractional Share of any Class and Series,
if any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Class and Series,
including those rights and obligations with respect to voting, receipt of
dividends and distributions, redemption of Shares, and liquidation of the
Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that (i) holders of Shares of any Series shall have the right to
exchange said Shares into Shares of one or more other Series of Shares,
(ii) holders of shares of any Class shall have the right to exchange said
Shares into Shares of one or more other Classes of the same or a different
Series, and/or (iii) the Trust shall have the right to carry out exchanges
of the aforesaid kind, in each case in accordance with such requirements
and procedures as may be established by the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Class and Series that has been established and designated. No
certification certifying the ownership of Shares need be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as
to who are the Shareholders and as to the number of Shares of each Class
and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other
person to accept orders for the purchase or sale of Shares that conform
to such authorized terms and to reject any purchase or sale orders for
Shares whether or not conforming to such authorized terms.
(k) Shareholders of a Series shall not be entitled to
participate in a derivative or class action with respect to any matter
which may affect another Series or its Shareholders.
FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the
election of Trustees when that issue is submitted to them, (b) with
respect to the amendment of this Declaration of Trust except where the
Trustees are given authority to amend the Declaration of Trust without
shareholder approval, (c) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders, and (d) with
respect to those matters relating to the Trust as may be required by the
1940 Act or required by law, by this Declaration of Trust, or the By-Laws
of the Trust or any registration statement of the Trust filed with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust will not hold shareholder meetings unless required by
the 1940 Act, the provisions of this Declaration of Trust, or any other
applicable law. The Trustees may call a meeting of shareholders from time
to time.
3. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote on each matter submitted to a vote of the
Shareholders of the affected Series for each Share standing in his name
on the books of the Trust on the date, fixed in accordance with the By-
Laws, for determination of Shareholders of the affected Series entitled
to vote at such meeting (except, if the Board so determines, for Shares
redeemed prior to the meeting), and each such Series shall vote separately
("Individual Series Voting"); a Series shall be deemed to be affected when
a vote of the holders of that Series on a matter is required by the 1940
Act; provided, however, that as to any matter with respect to which a vote
of Shareholders is required by the 1940 Act or by any applicable law that
must be complied with, such requirements as to a vote by Shareholders
shall apply in lieu of Individual Series Voting as described above. If
the shares of a Series shall be divided into Classes as provided in
Article FOURTH, the shares of each Class shall have identical voting
rights except that the Trustees, in their discretion, may provide a Class
of a Series with exclusive voting rights with respect to matters which
relate solely to such Classes. If the Shares of any Series shall be
divided into Classes with a Class having exclusive voting rights with
respect to certain matters, the quorum and voting requirements described
below with respect to action to be taken by the Shareholders of the Class
of such Series on such matters shall be applicable only to the Shares of
such Class. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the right to
receive dividends. The presence in person or by proxy of the holders of
one-third of the Shares, or of the Shares of any Series or Class of any
Series, outstanding and entitled to vote thereat shall constitute a
quorum at any meeting of the Shareholders or of that Series or Class,
respectively; provided however, that if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires an affirmative
vote of a majority, or more than a majority, of the shares outstanding and
entitled to vote, then in such event the presence in person or by proxy
of the holders of a majority of the shares outstanding and entitled to
vote at such a meeting shall constitute a quorum for all purposes. If at
any meeting of the Shareholders there shall be less than a quorum present,
the Shareholders or the Trustees present at such meeting may, without
further notice, adjourn the same from time to time until a quorum shall
attend, but no business shall be transacted at any such adjourned meeting
except such as might have been lawfully transacted had the meeting not
been adjourned.
4. Each Shareholder of a Series or Class, upon request to the Trust
in proper form determined by the Trust, shall be entitled to require the
Trust to redeem from the net assets of that Series or Class all or part
of the Shares of such Series or Class standing in the name of such
Shareholder. The method of computing such net asset value, the time at
which such net asset value shall be computed and the time within which the
Trust shall make payment therefor, shall be determined as hereinafter
provided in Article SEVENTH of this Declaration of Trust. Notwithstanding
the foregoing, the Trustees, when permitted or required to do so by the
1940 Act, may suspend the right of the Shareholders to require the Trust
to redeem Shares.
5. No Shareholder shall, as such holder, have any right to purchase
or subscribe for any security of the Trust which it may issue or sell,
other than such right, if any, as the Trustees, in their discretion, may
determine.
6. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
SIXTH:
1. The persons who shall act as initial Trustees until the first
meeting or until their successors are duly chosen and qualify are the
initial trustees executing this Declaration of Trust or any counterpart
thereof. However, the By-Laws of the Trust may fix the number of Trustees
at a number greater or lesser than the number of initial Trustees and may
authorize the Trustees to increase or decrease the number of Trustees, to
fill any vacancies on the Board which may occur for any reason including
any vacancies created by any such increase in the number of Trustees, to
set and alter the terms of office of the Trustees and to lengthen or
lessen their own terms of office or make their terms of office of
indefinite duration, all subject to the 1940 Act. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be
Shareholders.
2. A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative vote of the holders
of two-thirds of the outstanding Shares, present in person or by proxy at
any meeting of Shareholders called for such purpose; such a meeting shall
be called by the Trustees when requested in writing to do so by the record
holders of not less than ten per centum of the outstanding Shares. A
Trustee may also be removed by the Board of Trustees as provided in the
By-Laws of the Trust.
3. The Trustees shall make available a list of names and addresses
of all Shareholders as recorded on the books of the Trust, upon receipt
of the request in writing signed by not less than ten Shareholders (who
have been shareholders for at least six months) holding shares of the
Trust valued at not less than $25,000 at current offering price (as
defined in the Trust's Prospectus and/or Statement of Additional
Information) or holding not less than 1% in amount of the entire amount
of Shares issued and outstanding; such request must state that such
Shareholders wish to communicate with other shareholders with a view to
obtaining signatures to a request for a meeting to take action pursuant
to Part 2 of this Article SIXTH and be accompanied by a form of
communication to the Shareholders. The Trustees may, in their discretion,
satisfy their obligation under this part 3 by either making available the
Shareholder list to such Shareholders at the principal offices of the
Trust, or at the offices of the Trust's transfer agent, during regular
business hours, or by mailing a copy of such communication and form of
request, at the expense of such requesting Shareholders.
4. If and when the Trust has outstanding two or more series of
Shares pursuant to Article FOURTH of this Declaration of Trust, each
Series shall be considered as if it were a separate common law trust
covered by Section 16(c) of the 1940 Act and Parts 2 and 3 of this Article
SIXTH. However, the Trust may at any time or from time to time apply to
the Commission for one or more exemptions from all or part of said Section
16(c) of the 1940 Act, and, if an exemptive order or orders are issued
by the Commission, such order or orders shall be deemed part of said
Section 16(c) for the purposes of Parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust, the Trustees
and the Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or
the Trustees and shall have accepted this Trust, the Trust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he or she shall be
deemed a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms
of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets
of the Trust shall at all times be considered as vested in the Trustees.
No Shareholder shall have, as a holder of beneficial interest in the
Trust, any authority, power or right whatsoever to transact business for
or on behalf of the Trust, or on behalf of the Trustees, in connection
with the property or assets of the Trust, or in any part thereof.
4. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute, and to authorize the officers and agents of the Trust to make and
execute, any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration of
Trust providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to the
Shareholders;
(b) to elect and remove such officers and appoint and terminate
such officers as they consider appropriate with or without cause;
(c) to employ a bank or trust company as custodian of any assets
of the Trust subject to any conditions set forth in this Declaration of
Trust or in the By-Laws;
(d) To retain a transfer agent and shareholder servicing agent,
or both;
(e) To provide for the distribution of Shares either through a
principal underwriter or the Trust itself or both;
(f) To set record dates in the manner provided for in the By-
Laws of the Trust;
(g) to delegate such authority as they consider desirable to any
officers of the Trust and to any agent, custodian or underwriter;
(h) to vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property held in Trust
hereunder; and to execute and deliver powers of attorney to such person
or persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities or property
as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities held in trust
hereunder;
(j) to hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form,
either in its own name or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the
usual practice of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern,
and to pay calls or subscriptions with respect to any security held in the
Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but
not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws,
distributions of income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted
by the 1940 Act and the Trust's fundamental policy thereunder as to
borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations, partnerships,
trusts, associations or other persons; and
(p) to change the name of the Trust or any Class or Series of
the Trust as they consider appropriate without prior shareholder approval.
5. No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
6. (a) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription to any Shares or
otherwise. There is hereby expressly disclaimed shareholder liability for
the acts and obligations of the Trust. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust shall include a recitation limiting the obligation
represented thereby to the Trust and its assets (but the omission of such
recitation shall not operate to bind any Shareholder).
(b) Whenever this Declaration of Trust calls for or permits any
action to be taken by the Trustees hereunder, such action shall mean that
taken by the Board of Trustees by vote of the majority of a quorum of
Trustees as set forth from time to time in the By-Laws of the Trust or as
required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the powers herein
contained such as may be necessary or convenient in the conduct of any
business or enterprise of the Trust, to do and perform anything necessary,
suitable, or proper for the accomplishment of any of the purposes, or the
attainment of any one or more of the objects, herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively whether any
moneys, securities, or other properties of the Trust are, for the purposes
of this Trust, to be considered as capital or income and in what manner
any expenses or disbursements are to be borne as between capital and
income whether or not in the absence of this provision such moneys,
securities, or other properties would be regarded as capital or income and
whether or not in the absence of this provision such expenses or
disbursements would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into classes
and prescribe the tenure of office of the several classes, but no class
of Trustee shall be elected for a period shorter than that from the time
of the election following the division into classes until the next meeting
and thereafter for a period shorter than the interval between meetings or
for a period longer than five years, and the term of office of at least
one class shall expire each year.
8. The Shareholders shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by any
committee of the Trustees may be removed at any time, with or without
cause, by vote of the Trustees.
10. If the By-Laws so provide, the Trustees shall have power to hold
their meetings, to have an office or offices and, subject to the
provisions of the laws of Massachusetts, to keep the books of the Trust
outside of said Commonwealth at such places as may from time to time be
designated by them. Action may be taken by the Trustees without a meeting
by unanimous written consent or by telephone or similar method of
communication.
11. Securities held by the Trust shall be voted in person or by
proxy by the President or a Vice-President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12. (a) Subject to the provisions of the 1940 Act, any Trustee,
officer or employee, individually, or any partnership of which any
Trustee, officer or employee may be a member, or any corporation or
association of which any Trustee, officer or employee may be an officer,
director, trustee, employee or stockholder, may be a party to, or may be
pecuniarily or otherwise interested in, any contract or transaction of the
Trust, and in the absence of fraud no contract or other transaction shall
be thereby affected or invalidated; provided that in case a Trustee, or
a partnership, corporation or association of which a Trustee is a member,
officer, director, trustee, employee or stockholder is so interested, such
fact shall be disclosed or shall have been known to the Trustees
or a majority thereof; and any Trustee who is so interested, or who is
also a director, officer, trustee, employee or stockholder of such other
corporation or a member of such partnership or association which is so
interested, may be counted in determining the existence of a quorum at any
meeting of the Trustees which shall authorize any such contract or
transaction, and may vote thereat to authorize any such contract or
transaction, with like force and effect as if he or she were not such
director, officer, trustee, employee or stockholder of such other trust
or corporation or association or a member of a partnership so interested.
(b) Specifically, but without limitation of the foregoing, the
Trust may enter into a management or investment advisory contract or
underwriting contract and other contracts with, and may otherwise do
business with any manager or investment adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or
affiliate of any such manager or investment adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation
relating to the Trust notwithstanding that the Trustees of the Trust may
be composed in part of partners, directors, officers or employees of any
such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm
or corporation, and in the absence of fraud the Trust and any such firm
or corporation may deal freely with each other, and no such contract or
transaction between the Trust and any such firm or corporation shall be
invalidated or in any way affected thereby, nor shall any Trustee or
officer of the Trust be liable to the Trust or to any Shareholder or
creditor thereof or to any other person for any loss incurred by it or him
or her solely because of the existence of any such contract or
transaction; provided that nothing herein shall protect any director or
officer of the Trust against any liability to the Trust
or to its security holders to which he or she would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
(c) As used in this paragraph the following terms shall have the
meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former Trustee
or officer of another trust or corporation whose securities are or were
owned by the Trust or of which the Trust is or was a creditor and who
served or serves in such capacity at the request of the Trust, and the
heirs, executors, administrators, successors and assigns of any of the
foregoing; however, whenever conduct by an indemnitee is referred to, the
conduct shall be that of the original indemnitee rather than that of the
heir, executor, administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which an indemnitee
is or was a party or is threatened to be made a party by reason of the
fact or facts under which he or she or it is an indemnitee as defined
above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an indemnitee in connection
with a covered proceeding; and
(v) the term "adjudication of liability" shall mean, as to
any covered proceeding and as to any indemnitee, an adverse determination
as to the indemnitee whether by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any covered
expenses in any covered proceeding if there has been an adjudication of
liability against such indemnitee expressly based on a finding of
disabling conduct.
(e) Except as set forth in paragraph (d) above, the Trust shall
indemnify any indemnitee for covered expenses in any covered proceeding,
whether or not there is an adjudication of liability as to such indemnitee
if a determination has been made that the indemnitee was not liable by
reason of disabling conduct by (1) a final decision on the merits of the
court or other body before which the covered proceeding was brought; or
(2) in the absence of such decision, a reasonable determination, based on
a review of the facts, by either (A) the vote of a majority of a quorum
of Trustees who are neither "interested persons" as defined in the 1940
Act nor parties to the covered proceedings, or (B) an independent legal
counsel in a written opinion; provided that such Trustees or counsel, in
making such determination, may but need not presume the absence of
disabling conduct on the part of the indemnitee by reason of the manner
in which the covered proceeding was terminated.
(f) Covered expenses incurred by an indemnitee in connection
with a covered proceeding shall be advanced by the Trust to an indemnitee
prior to the final disposition of a covered proceeding upon the request
of the indemnitee for such advance and the undertaking by or on behalf of
the indemnitee to repay the advance unless it is ultimately determined
that the indemnitee is entitled to indemnification hereunder, but only if
one or more of the following is the case: (i) the indemnitee shall
provide a security for such undertaking; (ii) the Trust shall be insured
against losses arising out of any lawful advances; or (iii) there shall
have been a determination, based on a review of the readily available
facts (as opposed to a full trial-type inquiry) that there is a reason to
believe that the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a written opinion
or by the vote of a majority of a quorum of trustees who are neither
"interested persons" as defined in the 1940 Act nor parties to the covered
proceeding.
(g) Nothing herein shall be deemed to affect the right of the
Trust and/or any indemnitee to acquire and pay for any insurance covering
any or all indemnitees to the extent permitted by the 1940 Act or to
affect any other indemnification rights to which any indemnitee may be
entitled to the extent permitted by the 1940 Act.
13. For purposes of the computation of net asset value, as in this
Declaration of Trust referred to, the following rules shall apply:
(a) The net asset value per Share of any Series, as of the time
of valuation on any day, shall be the quotient obtained by dividing the
value, as at such time, of the net assets of that Series (i.e., the value
of the assets of that Series less its liabilities exclusive of its
surplus) by the total number of Shares of that Series outstanding at such
time. The assets and liabilities of any Series shall be determined in
accordance with generally accepted accounting principles, provided,
however, that in determining the liabilities of any Series there shall be
included such reserves for taxes or contingent liabilities as may be
authorized or approved by the Trustees, and provided further that in
connection with the accrual of any fee or refund payable to or by an
investment advisor of the Trust for such Series, the amount of which
accrual is not definitely determinable as of any time at which the net
asset value of each Share of that Series is being determined due to the
contingent nature of such fee or refund, the Trustees are authorized to
establish from time to time formulae for such accrual, on the basis of the
contingencies in question to the date of such determination, or on such
other bases as the Trustees may establish.
(1) Shares of a Series to be issued shall be
deemed to be outstanding as of the time of the
determination of the net asset value per Share
applicable to such issuance and the net price thereof
shall be deemed to be an asset of that Series;
(2) Shares of a Series to be redeemed by the
Trust shall be deemed to be outstanding until the time
of the determination of the net asset value applicable
to such redemption, and thereupon, and until paid, the
redemption price thereof shall be deemed to be a
liability of that Series; and
(3) Shares of a Series voluntarily purchased or
contracted to be purchased by the Trust pursuant to
the provisions of paragraph 4 of Article FIFTH shall
be deemed to be outstanding until whichever is the
later of (i) the time of the making of such purchase
or contract of purchase, and (ii) the time at which
the purchase price is determined, and thereupon, and
until paid, the purchase price thereof shall be deemed
to be a liability of that Series.
(b) The Trustees are empowered, in their absolute discretion,
to establish other bases or times, or both, for determining the net asset
value per Share of any Series or Class in accordance with the 1940 Act and
to authorize the voluntary purchase by any Series or Class either directly
or through an agent, of Shares of any Series or Class upon such terms and
conditions and for such consideration as the Trustees shall deem advisable
in accordance with any such provision, rule or regulation.
14. Payment of the net asset value per Share of any Class and Series
properly surrendered to it for redemption shall be made by the Trust
within seven days, or as specified in any applicable law or regulation,
after tender of such stock or request for redemption to the Trust for such
purpose together with any additional documentation that may reasonably be
required by the Trust or its transfer agent to evidence the authority of
the tenderor or to make such requests plus any period of time during which
the right of the holders of the shares of such Class of that Series to
require the Trust to redeem such shares has been suspended. Any such
payment may be made in portfolio securities of such Class of that Series
and/or in cash, as the Trustees shall deem advisable, and no Shareholder
shall have a right, other than as determined by the Trustees, to have
Shares redeemed in kind.
15. The Trust shall have the right, at any time and without prior
notice to the Shareholder, to redeem Shares of the Class and Series held
by such Shareholder held in any account registered in the name of such
Shareholder for its current net asset value, if and to the extent that
such redemption is necessary to reimburse either that Series or Class of
the Trust or the distributor (i.e., principal underwriter) of the Shares
for any loss either has sustained by reason of the failure of such
Shareholder to make timely and good payment for Shares purchased or
subscribed for by such Shareholder, regardless of whether such Shareholder
was a Shareholder at the time of such purchase or subscription, subject
to and upon such terms and conditions as the Trustees may from time to
time prescribe.
EIGHTH: The name "Oppenheimer" included in the name of the Trust and
of any Series shall be used pursuant to a royalty-free, non-exclusive
license from Oppenheimer Management Corporation ("OMC"), incidental to and
as part of an advisory, management or supervisory contract which may be
entered into by the Trust with OMC. The license may be terminated by OMC
upon termination of such advisory, management or supervisory contract or
without cause upon 60 days' written notice, in which case neither the
Trust nor any Series or Class shall have any further right to use the name
"Oppenheimer" in its name or otherwise and the Trust, the Shareholders and
its officers and Trustees shall promptly take whatever action may be
necessary to change its name and the names of any Series or Classes
accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or the Shareholder's,
heirs, executors, administrators or other legal representatives or in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust estate to be held harmless
from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind the Trust, the Trust's officers or any Shareholder. All
persons extending credit to, doing business with, contracting with or
having or asserting any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under any such credit,
transaction, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall
be personally liable therefor; notice of such disclaimer shall be given
in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee
against any liability to which such Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee
hereunder.
3. The exercise by the Trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to
the provisions of paragraph 2 of this Article NINTH, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operations of this Declaration of Trust, contracts,
obligations, transactions or any other business the Trust may enter into,
and subject to the provisions of paragraph 2 of this Article NINTH, shall
be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be
required to give any bond as such, nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but subject
to the provisions of sub-sections (a), (b), (c) and (d) of this paragraph
4.
(a) The Trustees, with the favorable vote of the holders of a
majority as defined in the 1940 Act, of the outstanding Shares of any one
or more Series entitled to vote, may sell and convey the assets of that
Series (which sale may be subject to the retention of assets for the
payment of liabilities and expenses) to another issuer for a consideration
which may be or include securities of such issuer. Upon making provision
for the payment of liabilities, by assumption by such issuer or otherwise,
the Trustees shall distribute the remaining proceeds ratably among the
holders of the outstanding Shares of the Series the assets of which have
been so transferred.
(b) The Trustees, with the favorable vote of the holders of a
majority, as defined in the 1940 Act, of the outstanding Shares of any one
or more Series entitled to vote, may at any time sell and convert into
money all the assets of that Series. Upon making provisions for the
payment of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of that Series, the Trustees shall distribute the
remaining assets of that Series ratably among the holders of the
outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of a
majority, as defined in the 1940 Act, of the outstanding Shares of any one
or more Series entitled to vote, may otherwise alter, convert or transfer
the assets of the Series.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and (b),
and in subsection (c) where applicable, the Series the assets of which
have been so transferred shall terminate, and if all the assets of the
Trust have been so transferred, the Trust shall terminate and the Trustees
shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be
cancelled and discharged.
5. The original or a copy of this instrument and of each restated
declaration of trust or instrument supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each supplemental or restated declaration
of trust shall be filed with the Secretary of State of Massachusetts, as
well as any other governmental office where such filing may from time to
time be required. Anyone dealing with the Trust may rely on a certificate
by an officer of the Trust as to whether or not any such supplemental or
restated declarations of trust have been made and as to any matters in
connection with the Trust hereunder, and, with the same effect as if it
were the original, may rely on a copy certified by an officer of the Trust
to be a copy of this instrument or of any such supplemental or restated
declaration of trust. In this instrument or in any such supplemental or
restated declaration of trust, references to this instrument, and all
expressions like "herein", "hereof" and "hereunder" shall be deemed to
refer to this instrument as amended or affected by any such supplemental
or restated declaration of trust. This instrument may be executed in any
number of counterparts, each of which shall be deemed an original.
6. The Trust set forth in this instrument is created under and is
to be governed by and construed and administered according to the laws of
the Commonwealth of Massachusetts. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
7. The Board of Trustees is empowered to cause the redemption of
the Shares held in any account if the aggregate net asset value of such
Shares (taken at cost or value, as determined by the Board) has been
reduced to $200 or less upon such notice to the shareholder in question,
with such permission to increase the investment in question and upon such
other terms and conditions as may be fixed by the Board of Trustees in
accordance with the 1940 Act.
8. In the event that any person advances the organizational
expenses of the Trust, such advances shall become an obligation of the
Trust subject to such terms and conditions as may be fixed by, and on a
date fixed by, or determined with criteria fixed by the Board of Trustees,
to be amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of Trust
under any authorization to take action which is permitted by the 1940 Act
or any other applicable law, such action shall be deemed to have been
properly taken if such action is in accordance with the construction of
the 1940 Act or such other applicable law then in effect as expressed in
"no action" letters of the staff of the Commission or any release, rule,
regulation or order under the 1940 Act or any decision of a court of
competent jurisdiction, notwithstanding that any of the foregoing shall
later be found to be invalid or otherwise reversed or modified by any of
the foregoing.
10. Any action which may be taken by the Board of Trustees under
this Declaration of Trust or its By-Laws may be taken by the description
thereof in the then effective Prospectus and/or Statement of Additional
Information relating to the Shares under the Securities Act of 1933 or in
any proxy statement of the Trust rather than by formal resolution of the
Board.
11. Whenever under this Declaration of Trust, the Board of Trustees
is permitted or required to place a value on assets of the Trust, such
action may be delegated by the Board, and/or determined in accordance with
a formula determined by the Board, to the extent permitted by the 1940
Act.
12. If authorized by vote of the Trustees and, if a vote of
Shareholders is required under this Declaration of Trust, the favorable
vote of the holders of a "majority", as defined in the 1940 Act, of the
outstanding Shares entitled to vote, or by any larger vote which may be
required by applicable law in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a Declaration of
Trust supplemental hereto, which thereafter shall form a part hereof; any
such Supplemental or Restated Declaration of Trust may be executed by and
on behalf of the Trust and the Trustees by an officer or officers of the
Trust.
orgzn\400
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of this 30th day of August, 1995.
/s/ Leo Cherne /s/ Benjamin Lipstein
_______________________ ______________________________
Leo Cherne Benjamin Lipstein
50 East 79 Street 591 Breezy Hill Road
New York, NY 10021 Hillsdale, NY 12529
/s/ Robert G. Galli /s/ Donald W. Spiro
_______________________ ______________________________
Robert G. Galli Donald W. Spiro
11-54 Shearwater Court 399 Ski Trail
Jersey City, NJ 07305 Kinnelon, NJ 07405
/s/ Leon Levy /s/ Pauline Trigere
_______________________ ______________________________
Leon Levy Pauline Trigere
One Sutton Place South 525 Park Avenue
New York, NY 10022 New York, NY 10021
/s/ Sidney M. Robbins /s/ Kenneth A. Randall
_______________________ ______________________________
Sidney M. Robbins Kenneth A. Randall
50 Overlook Road 6 Whittaker's Mill
Ossining, NY 10562 Williamsburg, VA 23185
/s/ Russell S. Reynolds, Jr. /s/ Elizabeth B. Moynihan
_______________________ ______________________________
Russell S. Reynolds, Jr. Elizabeth B. Moynihan
39 Clapboard Ridge Road 801 Pennsylvania Avenue
Greenwich, CT 06830 Washington, D.C. 20004
/s/ Edward V. Regan /s/ Clayton K. Yeutter
_______________________ ______________________________
Edward V. Regan Clayton K. Yeutter
40 Park Avenue 1325 Merrie Ridge Road
New York, NY 10016 McLean, VA 22101
ORGZN\400
Exhibit 24(b)(11)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Oppenheimer Fund:
We consent to the use of our report dated July 24, 1995 included herein
and to the reference to our firm under the heading "Financial Highlights"
in Part A of the Registration Statement.
/s/ KPMG Peat Marwick LLP
- ---------------------------
KPMG Peat Marwick LLP
Denver, Colorado
October 24, 1995
Exhibit 24(b)(15)(i)
SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER FUND AND
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS A SHARES
SERVICE PLAN AND AGREEMENT dated the 1st day of August, 1994, by and
between OPPENHEIMER FUND (the "Fund") and OPPENHEIMER FUNDS DISTRIBUTOR,
INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for its Class
A Shares described in the Fund's registration statement as of the date
this Plan takes effect, contemplated by and to comply with Article III,
Section 26 of the Rules of Fair Practice of the National Association of
Securities Dealers, pursuant to which the Fund will reimburse the
Distributor for a portion of its costs incurred in connection with the
personal service and the maintenance of shareholder accounts ("Accounts")
that hold Class A Shares (the "Shares") of such series and class of the
Fund. The Fund may be deemed to be acting as distributor of securities
of which it is the issuer, pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act"), according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering services and for the maintenance of
Accounts. Such Recipients are intended to have certain rights as third-
party beneficiaries under this Plan.
2. Definitions. As used in this Plan, the following terms shall have
the following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other
financial institution which: (i) has rendered services in connection with
the personal service and maintenance of Accounts; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may arise
concerning such service; and (iii) has been selected by the Distributor
to receive payments under the Plan. Notwithstanding the foregoing, a
majority of the Fund's Board of Trustees (the "Board") who are not
"interested persons" (as defined in the 1940 Act) and who have no direct
or indirect financial interest in the operation of this Plan or in any
agreements relating to this Plan (the "Independent Trustees") may remove
any broker, dealer, bank or other institution as a Recipient, whereupon
such entity's rights as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively, the
"Customers"), but in no event shall any such Shares be deemed owned by
more than one Recipient for purposes of this Plan. In the event that two
entities would otherwise qualify as Recipients as to the same Shares, the
Recipient which is the dealer of record on the Fund's books shall be
deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments.
(a) Under the Plan, the Fund will make payments to the Distributor,
within forty-five (45) days of the end of each calendar quarter, in the
amount of the lesser of: (i) .0625% (.25% on an annual basis) of the
average during the calendar quarter of the aggregate net asset value of
the Shares computed as of the close of each business day, or (ii) the
Distributor's actual expenses under the Plan for that quarter of the type
approved by the Board. The Distributor will use such fee received from
the Fund in its entirety to reimburse itself for payments to Recipients
and for its other expenditures and costs of the type approved by the Board
incurred in connection with the personal service and maintenance of
Accounts including, but not limited to, the services described in the
following paragraph. The Distributor may make Plan payments to any
"affiliated person" (as defined in the 1940 Act) of the Distributor if
such affiliated person qualifies as a Recipient.
The services to be rendered by the Distributor and Recipients
in connection with the personal service and the maintenance of Accounts
may include, but shall not be limited to, the following: answering
routine inquiries from the Recipient's customers concerning the Fund,
providing such customers with information on their investment in shares,
assisting in the establishment and maintenance of accounts or sub-accounts
in the Fund, making the Fund's investment plans and dividend payment
options available, and providing such other information and customer
liaison services and the maintenance of Accounts as the Distributor or the
Fund may reasonably request. It may be presumed that a Recipient has
provided services qualifying for compensation under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under the Plan.
In the event that either the Distributor or the Board should have reason
to believe that, notwithstanding the level of Qualified Holdings, a
Recipient may not be rendering appropriate services, then the Distributor,
at the request of the Board, shall require the Recipient to provide a
written report or other information to verify that said Recipient is
providing appropriate services in this regard. If the Distributor still
is not satisfied, it may take appropriate steps to terminate the
Recipient's status as such under the Plan, whereupon such entity's rights
as a third-party beneficiary hereunder shall terminate.
Payments received by the Distributor from the Fund under the
Plan will not be used to pay any interest expense, carrying charge or
other financial costs, or allocation of overhead of the Distributor, or
for any other purpose other than for the payments described in this
Section 3. The amount payable to the Distributor each quarter will be
reduced to the extent that reimbursement payments otherwise permissible
under the Plan have not been authorized by the Board of Trustees for that
quarter. Any unreimbursed expenses incurred for any quarter by the
Distributor may not be recovered in later periods.
(b) The Distributor shall make payments to any Recipient quarterly,
within forty-five (45) days of the end of each calendar quarter, at a rate
not to exceed .0625% (.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares computed
as of the close of each business day of Qualified Holdings (excluding
Shares acquired in reorganizations with investment companies for which
Oppenheimer Management Corporation or an affiliate acts as investment
adviser and which have not adopted a distribution plan at the time of the
reorganization with the Fund). However, no such payments shall be made
to any Recipient for any such quarter in which its Qualified Holdings do
not equal or exceed, at the end of such quarter, the minimum amount
("Minimum Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Trustees. A majority of the Independent
Trustees may at any time or from time to time increase or decrease and
thereafter adjust the rate of fees to be paid to the Distributor or to any
Recipient, but not to exceed the rate set forth above, and/or increase or
decrease the number of shares constituting Minimum Qualified Holdings.
The Distributor shall notify all Recipients of the Minimum Qualified
Holdings and the rate of payments hereunder applicable to Recipients, and
shall provide each such Recipient with written notice within thirty (30)
days after any change in these provisions. Inclusion of such provisions
or a change in such provisions in a revised current prospectus shall
constitute sufficient notice.
(c) Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources (which
may include profits derived from the advisory fee it receives from the
Fund), or (ii) by the Distributor (a subsidiary of OMC), from its own
resources.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection or replacement of Independent Trustees and the nomination
of those persons to be Trustees of the Fund who are not "interested
persons" of the Fund shall be committed to the discretion of the
Independent Trustees. Nothing herein shall prevent the Independent
Trustees from soliciting the views or the involvement of others in such
selection or nomination if the final decision on any such selection and
nomination is approved by a majority of the incumbent Independent
Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund
shall provide at least quarterly a written report to the Fund's Board for
its review, detailing the amount of all payments made pursuant to this
Plan, the identity of the Recipient of each such payment, and the purposes
for which the payments were made. The report shall state whether all
provisions of Section 3 of this Plan have been complied with. The
Distributor shall annually certify to the Board the amount of its total
expenses incurred that year with respect to the personal service and
maintenance of Accounts in conjunction with the Board's annual review of
the continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at
any time, without payment of any penalty, by vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding Shares of the Class,
on not more than sixty days written notice to any other party to the
agreement; (ii) such agreement shall automatically terminate in the event
of its "assignment" (as defined in the 1940 Act); (iii) it shall go into
effect when approved by a vote of the Board and its Independent Trustees
cast in person at a meeting called for the purpose of voting on such
agreement; and (iv) it shall, unless terminated as herein provided,
continue in effect from year to year only so long as such continuance is
specifically approved at least annually by the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan
has been approved by a vote of the Independent Trustees cast in person at
a meeting called on January 11, 1994 for the purpose of voting on this
Plan, and takes effect as of July 1, 1994. Unless terminated as
hereinafter provided, it shall continue in effect until December 31, 1994
and from year to year thereafter or as the Board may otherwise determine
only so long as such continuance is specifically approved at least
annually by the Board and its Independent Trustees cast in person at a
meeting called for the purpose of voting on such continuance. This Plan
may be terminated at any time by vote of a majority of the Independent
Trustees or by the vote of the holders of a "majority" (as defined in the
1940 Act) of the Fund's outstanding voting securities of the Class. This
Plan may not be amended to increase materially the amount of payments to
be made without approval of the Class A Shareholders, in the manner
described above, and all material amendments must be approved by a vote
of the Board and of the Independent Trustees.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Fund under this Plan are not
binding upon any shareholder or Trustee of the Fund personally, but bind
only the Fund and the Fund's property. The Distributor represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder and Trustee liability for acts or obligations of
the Fund.
OPPENHEIMER FUND
By: /s/ Robert G. Zack
------------------------------------
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
-----------------------------------
Katherine P. Feld
Vice President and Secretary
OFMI/400
Exhibit 24(b)(15)(ii)
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 1st day
of November, 1995, by and between OPPENHEIMER FUND (the "Fund") and
OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service
plan for Class B shares of the Fund (the "Shares"), contemplated by Rule
12b-1 (the "Rule") under the Investment Company Act of 1940 (the "1940
Act"), pursuant to which the Fund will compensate the Distributor for its
services in connection with the distribution of Shares, and the personal
service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it
is the issuer, pursuant to the Rule, according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering (1) distribution assistance in
connection with the sale of Shares and/or (2) administrative support
services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms
and provisions of this Plan shall be interpreted and defined in a manner
consistent with the provisions and definitions contained in (i) the 1940
Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., or its
successor (the "NASD Rules of Fair Practice") and (iv) any conditions
pertaining either to distribution-related expenses or to a plan of
distribution, to which the Fund is subject under any order on which the
Fund relies, issued at any time by the Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have
the following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person
or entity which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has provided
administrative support services with respect to Shares held by
Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning the sale of Shares; and (iii) has been selected by
the Distributor to receive payments under the Plan. Notwithstanding
the foregoing, a majority of the Fund's Board of Trustees (the
"Board") who are not "interested persons" (as defined in the 1940
Act) and who have no direct or indirect financial interest in the
operation of this Plan or in any agreements relating to this Plan
(the "Independent Trustees") may remove any broker, dealer, bank or
other person or entity as a Recipient, whereupon such person's or
entity's rights as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed
owned by more than one Recipient for purposes of this Plan. In the
event that more than one person or entity would otherwise qualify as
Recipients as to the same Shares, the Recipient which is the dealer
of record on the Fund's books as determined by the Distributor shall
be deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) The Fund will make payments to the Distributor, (i) within
forty-five (45) days of the end of each calendar quarter, in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of the
Shares computed as of the close of each business day (the "Service
Fee"), plus (ii) within ten (10) days of the end of each month, in
the aggregate amount of 0.0625% (0.75% on an annual basis) of the
average during the month of the aggregate net asset value of Shares
computed as of the close of each business day (the "Asset-Based Sales
Charge") outstanding for six years or less (the "Maximum Holding
Period"). Such Service Fee payments received from the Fund will
compensate the Distributor and Recipients for providing
administrative support services with respect to Accounts. Such
Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor and Recipients for providing distribution
assistance in connection with the sale of Shares.
The administrative support services in connection with the
Accounts to be rendered by Recipients may include, but shall not be
limited to, the following: answering routine inquiries concerning
the Fund, assisting in the establishment and maintenance of accounts
or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment
options available, and providing such other information and services
in connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may
reasonably request.
The distribution assistance in connection with the sale of
Shares to be rendered by the Distributor and Recipients may include,
but shall not be limited to, the following: distributing sales
literature and prospectuses other than those furnished to current
holders of the Fund's Shares ("Shareholders"), and providing such
other information and services in connection with the distribution
of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for payment
under the Plan if it has Qualified Holdings of Shares to entitle it
to payments under the Plan. In the event that either the Distributor
or the Board should have reason to believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering
appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the
Distributor, at the request of the Board, shall require the Recipient
to provide a written report or other information to verify that said
Recipient is providing appropriate distribution assistance and/or
services in this regard. If the Distributor or the Board of Trustees
still is not satisfied, either may take appropriate steps to
terminate the Recipient's status as such under the Plan, whereupon
such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.0625% (0.25% on an annual basis)
of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by
the Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, to be set from
time to time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make
service fee payments ("Advance Service Fee Payments") to any
Recipient quarterly, within forty-five (45) days of the end of each
calendar quarter, at a rate not to exceed (i) 0.25% of the average
during the calendar quarter of the aggregate net asset value of
Shares, computed as of the close of business on the day such Shares
are sold, constituting Qualified Holdings sold by the Recipient
during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) 0.0625% (0.25% on an annual
basis) of the average during the calendar quarter of the aggregate
net asset value of Shares computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record
by the Recipient or by its Customers for a period of more than one
(1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to
Recipients that are, or may be, imposed by Article III, Section 26,
of the NASD Rules of Fair Practice. In the event Shares are redeemed
less than one year after the date such Shares were sold, the
Recipient is obligated and will repay to the Distributor on demand
a pro rata portion of such Advance Service Fee Payments, based on the
ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this
paragraph (b) may, at the Distributor's sole option, be made more
often than quarterly, and sooner than the end of the calendar
quarter. However, no such payments shall be made to any Recipient
for any such quarter in which its Qualified Holdings do not equal
or exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Trustees.
A majority of the Independent Trustees may at any time or from
time to time decrease and thereafter adjust the rate of fees to be
paid to the Distributor or to any Recipient, but not to exceed the
rate set forth above, and/or direct the Distributor to increase or
decrease the Minimum Holding Period or the Minimum Qualified
Holdings. The Distributor shall notify all Recipients of the Minimum
Qualified Holdings, Maximum Holding Period and Minimum Holding
Period, if any, and the rate of payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions.
Inclusion of such provisions or a change in such provisions in a
revised current prospectus shall constitute sufficient notice. The
Distributor may make Plan payments to any "affiliated person" (as
defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are
subject to reduction or elimination of such amounts under the limits
to which the Distributor is, or may become, subject under Article
III, Section 26, of the NASD Rules of Fair Practice. The
distribution assistance and administrative support services to be
rendered by the Distributor in connection with the Shares may
include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity
that sells Shares, and\or paying such persons Advance Service Fee
Payments in advance of, and\or greater than, the amount provided for
in Section 3(b) of this Agreement; (ii) paying compensation to and
expenses of personnel of the Distributor who support distribution of
Shares by Recipients; (iii) obtaining financing or providing such
financing from its own resources, or from an affiliate, for the
interest and other borrowing costs of the Distributor's unreimbursed
expenses incurred in rendering distribution assistance and
administrative support services to the Fund; (iv) paying other direct
distribution costs, including without limitation the costs of sales
literature, advertising and prospectuses (other than those furnished
to current Shareholders) and state "blue sky" registration expenses;
and (v) any service rendered by the Distributor that a Recipient may
render pursuant to part (a) of this Section 3. Such services include
distribution assistance and administrative support services rendered
in connection with Shares acquired (i) by purchase, (ii) in exchange
for shares of another investment company for which the Distributor
serves as distributor or sub-distributor, or (ii) pursuant to a plan
of reorganization to which the Fund is a party. In the event that
the Board should have reason to believe that the Distributor may not
be rendering appropriate distribution assistance or administrative
support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board
with a written report or other information to verify that the
Distributor is providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources
(which may include profits derived from the advisory fee it receives
from the Fund), or (ii) by the Distributor (a subsidiary of OMC),
from its own resources, from Asset-Based Sales Charge payments or
from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does
not obligate or in any way make the Fund liable to make any payment
whatsoever to any person or entity other than directly to the
Distributor. In no event shall the amounts to be paid to the
Distributor exceed the rate of fees to be paid by the Fund to the
Distributor set forth in paragraph (a) of this section 3.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Fund
who are not "interested persons" of the Fund ("Disinterested Trustees")
shall be committed to the discretion of such Disinterested Trustees.
Nothing herein shall prevent the Disinterested Trustees from soliciting
the views or the involvement of others in such selection or nomination if
the final decision on any such selection and nomination is approved by a
majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund
shall provide written reports to the Fund's Board for its review,
detailing services rendered in connection with the distribution of the
Shares, the amount of all payments made and the purpose for which the
payments were made. The reports shall be provided quarterly, and shall
state whether all provisions of Section 3 of this Plan have been complied
with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class, on not more than sixty days written notice to any other party
to the agreement; (ii) such agreement shall automatically terminate in the
event of its assignment (as defined in the 1940 Act); (iii) it shall go
into effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such agreement; and (iv) it shall, unless terminated as herein provided,
continue in effect from year to year only so long as such continuance is
specifically approved at least annually by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan
has been approved by a vote of the Board and its Independent Trustees cast
in person at a meeting called on March 16, 1995, for the purpose of voting
on this Plan, and shall take effect as of the date first set forth above.
Unless terminated as hereinafter provided, it shall continue in effect
until December 31, 1995 and from year to year thereafter or as the Board
may otherwise determine only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such continuance. This Plan may not be amended to increase materially the
amount of payments to be made without approval of the Class B
Shareholders, in the manner described above, and all material amendments
must be approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class. In the event of such termination, the Board and its
Independent Trustees shall determine whether the Distributor shall be
entitled to payment from the Fund of all or a portion of the Service Fee
and/or the Asset-Based Sales Charge in respect of Shares sold prior to the
effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Fund under this Plan are not
binding upon any Trustee or shareholder of the Fund personally, but bind
only the Fund and the Fund's property. The Distributor represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder and Trustee liability for acts or obligations of
the Fund.
OPPENHEIMER FUND
By: /s/ Robert G/ Zack
-----------------------------------
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
----------------------------------
Katherine P. Feld, Vice President
& Secretary
OFMI/400B
Oppenheimer Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are
calculated as described below, on the basis of the Fund's
distributions, for the past 10 years which are as follows:
<TABLE>
<CAPTION>
Distribution Amount From Amount From Long
Reinvestment Investment or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
<S> <C> <C> <C>
07/29/85 0.0500 0.0000 9.810
10/28/85 0.0500 0.0000 9.710
01/26/86 0.0500 0.0000 10.630
04/28/86 0.0500 0.0000 12.530
07/28/86 0.0000 1.0200 10.420
10/27/86 0.0200 0.0300 10.110
01/26/86 0.0000 0.0500 11.000
04/27/87 0.0000 0.0500 11.820
07/31/87 0.0000 1.8400 10.840
10/23/87 0.0500 0.0000 7.670
12/24/87 0.0400 0.5100 7.690
03/25/88 0.0400 0.0100 7.930
06/24/88 0.0400 0.0000 8.390
09/23/88 0.0400 0.0000 7.970
12/23/88 0.0500 0.0460 7.870
03/23/89 0.0400 0.0000 8.280
06/23/89 0.0400 0.0000 9.470
09/22/89 0.0400 0.0000 9.750
12/22/89 0.1250 0.4100 9.000
03/23/90 0.0400 0.0000 8.960
06/22/90 0.0400 0.0000 9.050
09/21/90 0.0400 0.0000 8.220
12/21/90 0.0950 0.4830 8.020
03/22/91 0.0400 0.0000 9.140
06/21/91 0.0400 0.0000 9.520
09/20/91 0.0400 0.0000 9.720
12/20/91 0.1980 0.2720 9.000
03/27/92 0.0400 0.0000 9.780
06/26/92 0.0400 0.0000 9.560
09/25/92 0.0400 0.0000 9.730
12/28/92 0.0440 0.4660 9.860
03/26/93 0.0200 0.0000 10.020
12/27/93 0.0330 0.4495 10.870
12/27/94 0.0214 1.0829 9.800
Class C Shares
12/27/93 0.0200 0.4495 10.870
12/27/94 0.0000 1.0829 9.710
</TABLE>
<PAGE>
Oppenheimer Fund
Page 2
1. Average Annual Total Returns for the Periods Ended 06/30/95:
The formula for calculating average annual total return is as
follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$1,127.22 1 $1,679.10 .2
(---------) - 1 = 12.72% (---------) - 1 = 10.92%
$1,000 $1,000
Ten Year
$2,502.48 .1
(---------) - 1 = 9.61%
$1,000
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00%
for the first year, and 0.00% for the inception year:
One Year Inception
$1,175.70 1 $1,171.04 .6327
(---------) - 1 = 17.57% (---------) - 1 = 10.51%
$1,000 $1,000
<PAGE>
Oppenheimer Fund
Page 3
1. Average Annual Total Returns for the Periods Ended 06/30/95
(continued):
Examples at NAV:
Class A Shares
One Year Five Year
$1,196.01 1 $1,781.50 .2
(---------) - 1 = 19.60% (---------) - 1 = 12.24%
$1,000 $1,000
Ten Year
$2,655.10 .1
(---------) - 1 = 10.26%
$1,000
Class C Shares
One Year Inception
$1,185.70 1 $1,171.04 .6327
(---------) - 1 = 18.57% (---------) - 1 = 10.51%
$1,000 $1,000
2. Cumulative Total Returns for the Periods Ended 06/30/95:
The formula for calculating cumulative total return is as follows:
ERV - P
------- = Cumulative Total Return
P
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$1,127.22 - $1,000 $1,679.10 - $1,000
------------------ = 12.72% ------------------ = 67.91%
$1,000 $1,000
Ten Year
$2,502.48 - $1,000
------------------ = 150.25%
$1,000
<PAGE>
Oppenheimer Fund
Page 4
2. Cumulative Total Returns for the Periods Ended 06/30/95
(continued):
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00%
for the first year, and 0.00% for the inception year:
One Year Inception Year
$1,175.70 - $1,000 $1,171.04 - $1,000
------------------ = 17.57% ------------------ = 17.10%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$1,196.01 - $1,000 $1,781.50 - $1,000
------------------ = 19.60% ------------------ = 78.15%
$1,000 $1,000
Ten Year
$2,655.10 - $1,000
------------------ = 165.51%
$1,000
Class C Shares
One Year Inception Year
$1,185.70 - $1,000 $1,171.04 - $1,000
------------------ = 18.57% ------------------ = 17.10%
$1,000 $1,000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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