OPPENHEIMER SERIES FUND, INC.
CONNECTICUT MUTUAL LIQUID ACCOUNT
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held April 24, 1996
To the Shareholders:
Notice is hereby given that a Special Meeting of the Shareholders of
Connecticut Mutual Liquid Account (the "Liquid Fund" or the "Fund"), a
series of Oppenheimer Series Fund, Inc. (the "Company"), an open-end,
management investment company, will be held at OppenheimerFunds, Inc.,
3410 South Galena Street, Denver, Colorado 80231, at 10:00 A.M., Denver
time, on April 24, 1996, and any adjournments thereof (the "Meeting"), for
the following purposes:
1.To consider and vote upon approval of the Agreement and Plan of
Reorganization dated as of March 18, 1996 (the "Reorganization
Agreement") by and among Liquid Fund and Oppenheimer Money Market
Fund, Inc. ("OMMF"), and the transactions contemplated thereby (the
"Reorganization"), including (i) the transfer of substantially all
the assets of Liquid Fund to OMMF in exchange solely for the issuance
of shares of OMMF, (ii) the distribution of such shares of OMMF to
shareholders of Liquid Fund in liquidation of Liquid Fund, and (iii)
the cancellation of the outstanding shares of the Fund (the
"Proposal"); and
2.To act upon such other matters as may properly come before the
Meeting.
The Reorganization is more fully described in the accompanying Proxy
Statement and Prospectus and a copy of the Reorganization Agreement is
attached as Exhibit A thereto. Liquid Fund's shareholders of record at
the close of business on March 18, 1996 are entitled to notice of, and to
vote at, the Meeting. Please read the Proxy Statement and Prospectus
carefully before telling us, through your proxy or in person, how you wish
your shares to be voted. The Board of Directors of the Company recommends
a vote in favor of the Reorganization. WE URGE YOU TO SIGN, DATE AND MAIL
THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Directors,
Andrew J. Donohue, Secretary
March 18, 1996
Shareholders who do not expect to attend the Meeting are requested to
indicate voting instructions on the enclosed proxy and to date, sign and
return it in the accompanying postage-paid envelope. To avoid unnecessary
duplicate mailings, we ask your cooperation in promptly mailing your proxy
no matter how large or small your holdings may be.
QUESTIONS AND ANSWERS ABOUT THE PROPOSED REORGANIZATION
1. What is the Reorganization?
The proposed Reorganization provides for the transfer of substantially all
the assets of Connecticut Mutual Liquid Account ("Liquid Fund" or the
"Fund") to Oppenheimer Money Market Fund, Inc. ("OMMF"), the issuance of
shares of OMMF to Liquid Fund for distribution to its shareholders and the
cancellation of the outstanding shares of Liquid Fund. The value of the
shares of OMMF issued in the Reorganization will be equal to the value of
the shares previously held in the Liquid Fund.
2. What are the reasons for the Reorganization?
On February 14, 1996, at a meeting of Liquid Fund's shareholders, the
Fund's shareholders voted to approve the appointment of OppenheimerFunds,
Inc. ("OFI") as the Fund's investment adviser. In the proxy statement
dated December 18, 1995 and the supplement dated January 19, 1996 (the
"1995 Proxy Statement") relating to that meeting, the Fund's shareholders
were advised that at a later date they would vote on the merger of the
Fund into a comparable Oppenheimer mutual fund.
3. What benefits to shareholders may result from this transaction?
The Directors of Liquid Fund believe that combining these two funds may
benefit shareholders of Liquid Fund by allowing the Fund to capitalize on
expected economies of scale in the provision of the following services:
accounting, legal, transfer agency, insurance, custody and administration.
4. Who is paying the expenses of the Reorganization?
All expenses of the Reorganization will be paid by Massachusetts Mutual
Life Insurance Company [which is the indirect parent of G.R. Phelps & Co.,
Inc. ("Phelps")], the administrator and previous investment manager of the
Fund and of OFI, the Fund's new investment manager.
5. Who is OppenheimerFunds, Inc.?
OppenheimerFunds, Inc. and its subsidiaries are engaged principally in the
business of managing, distributing and servicing registered investment
companies. OFI is indirectly controlled by Massachusetts Mutual Life
Insurance Company ("MassMutual") which controls Phelps as a result of the
merger of MassMutual and Connecticut Mutual Life Insurance Company on
February 29, 1996, as described in the 1995 Proxy Statement. As of March
1, 1996, OppenheimerFunds, Inc. and a subsidiary had assets of more than
$50 billion under management in more than 40 mutual funds.
6. Do the Oppenheimer funds have a sales charge?
Yes, the Oppenheimer funds impose a sales charge, other than their money
market funds (certain of which have an asset-based sales charge on certain
classes of shares), such as OMMF. However, there will be no commission
or sales load of any kind charged in connection with this Reorganization.
7. May I exchange between other Oppenheimer funds without an exchange fee?
Yes. As a shareholder of an Oppenheimer fund after the Reorganization,
you will be able to make exchanges into the same class of shares of other
Oppenheimer funds without payment of any exchange fees. When you exchange
shares for shares of an Oppenheimer fund with a sales charge, you will be
subject to that sales charge. Exchange privileges may be modified or
discontinued at any time.
8. Where can I get prospectuses and other information on the Oppenheimer
funds?
Call OppenheimerFunds Distributor, Inc. at 1-(800) 255-2755. They will
be pleased to supply you with all the information, including prospectuses,
which you will need to make an investment decision.
9. Whom do I contact about my account or to initiate a transaction in my
account?
For information about your account or to initiate a transaction in your
account, you may continue to contact your registered representative at
your broker/dealer or, in the alternative, OppenheimerFunds Services at
1-(800) 525-7048.
10. Will this Reorganization result in any tax liability to Liquid Fund,
OMMF or to me as a shareholder?
The Reorganization is intended to qualify for federal income tax purposes
as a tax-free reorganization. The aggregate tax basis of OMMF shares
received by you will be the same as the aggregate tax basis of your Liquid
Fund shares prior to the Reorganization and the holding period of the
shares of OMMF to be received by you will include the period during which
Liquid Fund shares surrendered in exchange therefore were held, provided
that those Liquid Fund shares were held as capital assets.
<PAGE>
OPPENHEIMER SERIES FUND, INC.
CONNECTICUT MUTUAL LIQUID ACCOUNT
Two World Trade Center
New York, New York 10048-0203
PROXY STATEMENT AND PROSPECTUS
OPPENHEIMER MONEY MARKET FUND, INC.
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
This Proxy Statement and Prospectus is being furnished to shareholders of
Connecticut Mutual Liquid Account (the "Liquid Fund" or the "Fund"), a
series of Oppenheimer Series Fund, Inc. (the "Company"), an open-end,
management investment company, in connection with the solicitation by the
Board of Directors of the Company (the "Board") of proxies to be used at
the Special Meeting of Shareholders of Liquid Fund, to be held at
OppenheimerFunds, Inc., 3410 South Galena Street, Denver, Colorado 80231,
at 10:00 A.M., Denver time, on April 24, 1996, and any adjournments
thereof (the "Meeting"). It is expected that this Proxy Statement and
Prospectus will be mailed to shareholders on or about March 22, 1996.
At the Meeting, shareholders of the Fund will be asked to consider and
vote upon approval of the Agreement and Plan of Reorganization, dated as
of March 18, 1996 (the "Reorganization Agreement"), by and among Liquid
Fund and Oppenheimer Money Market Fund, Inc., ("OMMF"), and the
transactions contemplated by the Reorganization Agreement (the
"Reorganization"). The Reorganization Agreement provides for the transfer
of substantially all the assets of Liquid Fund to OMMF in exchange for the
issuance of shares of OMMF, the distribution of such shares of OMMF to
shareholders of Liquid Fund in liquidation of Liquid Fund and the
cancellation of the outstanding shares of the Fund. A copy of the
Reorganization Agreement is attached hereto as Exhibit A and is
incorporated by reference herein. As a result of the proposed
Reorganization, each shareholder of Liquid Fund will receive that number
of shares of OMMF having an aggregate net asset value equal to the net
asset value of such shareholder's shares of the Liquid Fund. This
transaction is being structured as a tax-free reorganization. See
"Approval of the Reorganization."
OMMF currently offers one class of shares without designation. No front-
end sales charge is imposed at the time of purchase and shares are not
subject to a contingent deferred sales charge upon redemption. Holders
of Liquid Fund shares will receive shares of OMMF and no sales charge will
be imposed on the shares received by the Fund's shareholders.
As its objective, OMMF seeks the maximum current income that is consistent
with stability of principal. OMMF seeks to achieve this objective by
investing in "money market" securities meeting specific credit quality
standards. Liquid Fund seeks as high a level of current income as is
consistent with preservation of capital and maintenance of liquidity by
investing in money market instruments. Liquid Fund invests in high-
quality, short-term securities that present minimal credit risk. While
both Liquid Fund and OMMF (collectively referred to as the "funds") seek
to maintain a net asset value of $1.00 per share, there can be no
assurance that they will do so. Investments in the funds are neither
insured nor guaranteed by the U.S. government. See "Comparison Between
OMMF and Liquid Fund - Comparison of Investment Objectives, Policies and
Restrictions."
OMMF has filed with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form N-14 (the "Registration Statement")
relating to the registration of shares of OMMF to be offered to the
shareholders of the Liquid Fund pursuant to the Reorganization Agreement.
This Proxy Statement and Prospectus relating to the Reorganization also
constitutes a Prospectus of OMMF filed as part of such Registration
Statement. Information contained or incorporated by reference herein
relating to OMMF has been prepared by and is the responsibility of OMMF.
Information contained or incorporated by reference herein relating to the
Liquid Fund has been prepared by and is the responsibility of the Liquid
Fund.
This Proxy Statement and Prospectus sets forth concisely information about
OMMF that a prospective investor should know before voting on the
Reorganization. The following documents have been filed with the SEC and
are available without charge upon written request to the transfer and
shareholder servicing agent for the funds, OppenheimerFunds Services
("OFS"), at P.O. Box 5270, Denver, Colorado 80217, or by calling 1-800-
525-7048 (a toll-free number) and are incorporated herein by reference:
(i) a Prospectus for the Company, dated October 1, 1995, together with the
supplement to that Prospectus dated March 18, 1996; (ii) a Statement of
Additional Information about the Company, dated October 1, 1995 (the
"Fund's Statement of Additional Information"), together with a supplement
dated March 18, 1996; (iii) a Prospectus for OMMF, dated May 1, 1995, as
supplemented January 5, 1996; (iv) a Statement of Additional Information
for OMMF, dated May 1, 1995, together with a supplement dated July 14,
1995 (the "OMMF Statement of Additional Information"); and (iv) a
Statement of Additional Information relating to the Reorganization
described in this Proxy Statement and Prospectus (the "Statement of
Additional Information"), dated March 18, 1996 and filed as part of the
Registration Statement, which Statement of Additional Information
includes, among other things, the Company's Prospectus, the Company's
Statement of Additional Information and the OMMF Statement of Additional
Information, which contains more detailed information about OMMF and its
management.
Investors are advised to read and retain this Proxy Statement and
Prospectus for future reference.
Shares of OMMF are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated March 18, 1996.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
COMPARATIVE FEE TABLES
SYNOPSIS
Parties to the Reorganization
The Reorganization
Tax Consequences of the Reorganization
Investment Objectives and Policies
Investment Advisory and Distribution Plan Fees
Purchases, Exchanges and Redemptions
PRINCIPAL RISK FACTORS
INVESTMENT IN MONEY MARKET SECURITIES
Investment in Money Market Securities
APPROVAL OF THE REORGANIZATION (The Proposal)
Background
Board Approval of the Reorganization
Regulatory Approval of the Reorganization
Reasons for the Reorganization
The Reorganization
Tax Aspects of the Reorganization
Capitalization Table (Unaudited)
COMPARISON BETWEEN OMMF AND LIQUID FUND
Comparison of Investment Objectives, Policies and Restrictions
Special Investment Methods
Investment Restrictions
OMMF Performance
Additional Comparative Information
INFORMATION CONCERNING THE MEETING
The Meeting
Record Date; Vote Required; Share Information
Proxies
Costs of the Solicitation and the Reorganization
MISCELLANEOUS
Financial Information
Public Information
OTHER BUSINESS
EXHIBIT A -Agreement and Plan of Reorganization, dated as of March 18,
1996, by and between Oppenheimer Money Market Fund, Inc. and
Oppenheimer Series Fund, Inc.
COMPARATIVE FEE TABLES
Transaction Charges
Shareholders pay certain expenses directly, such as sales charges and
account transaction charges. The schedule of such charges for both OMMF
and the Fund is noted below.
<TABLE>
<CAPTION>
Liquid Fund OMMF
<S> <C> <C>
Maximum Sales Charge
on Purchases None None
Maximum Sales Load Imposed on
Reinvested Dividends None None
Redemption Fee None None(1)
Exchange Fee None None
</TABLE>
(1) There is a $10 transaction fee for redemptions paid by Federal Funds
wire, but not for redemptions paid by check or by ACH wire through
AccountLink, or for check writing privileges.
Expenses of OMMF and Liquid Fund; Pro Forma Expenses
The funds each pay a variety of expenses directly for management of their
assets, administration, distribution of their shares and other services,
and those expenses are reflected in the net asset value per share of each
of OMMF and Liquid Fund. The following calculations are based on the
expenses of OMMF and Liquid Fund for the 12 months ended December 31,
1995. The pro forma fees reflect what the fee schedules would have been
at December 31, 1995 if the Reorganization had occurred 12 months prior
to that date.
<TABLE>
<CAPTION>
Pro Forma
Liquid Fund OMMF Combined Fund
<S> <C> <C> <C>
Management Fees 0.50% 0.44% 0.44%
12b-1 Fees None None None
Other Expenses 0.46% 0.46% 0.46%
Total Fund Operating Expenses 0.96% 0.90% 0.90%
</TABLE>
(1) Liquid Fund's Rule 12b-1 Plan was terminated effective March 18, 1996.
During the fiscal year ended December 31, 1995, Liquid Fund's
distributor agreed not to impose any reimbursement to which it would
otherwise have been entitled pursuant to the Liquid Fund's Rule 12b-1
distribution plan. Absent such an agreement, Liquid Fund would have
incurred distribution expenses pursuant to its Rule 12b-1 Plan of
0.10% of the average daily net assets of that Fund and the Total Fund
Operating expenses would have been 1.06% of such assets.
Hypothetical Examples
To attempt to show these expenses over time, the examples shown below have
been created. Assume that you make a $1,000 investment in either the
Liquid Fund or OMMF or the new combined fund and that the annual return
is 5% and that the operating expenses for each fund are the ones shown in
the chart above. If you were to redeem your shares at the end of each
period shown below, your investment would incur the following expenses by
the end of each period shown:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Oppenheimer Money Market Fund, Inc. $9 $29 $50 111
Connecticut Mutual
Liquid Account
$10 $31 $53 $118
Pro Forma Combined
Fund
$ 9 $29 $50 $111
</TABLE>
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus and
presents key considerations for shareholders of the Fund to assist them
in determining whether to approve the Reorganization. This synopsis is
only a summary and is qualified in its entirety by the more detailed
information contained in or incorporated by reference in this Proxy
Statement and Prospectus and the Exhibit hereto. Shareholders should
carefully review this Proxy Statement and Prospectus and the Agreement and
Plan of Reorganization which is an Exhibit hereto in their entirety and,
in particular, the current Prospectus of OMMF which accompanies this Proxy
Statement and Prospectus and is incorporated by reference herein.
Parties to the Reorganization
OMMF is a diversified, open-end, management investment company
incorporated in 1973 as a Maryland corporation. OMMF is located at 3410
South Galena Street, Denver, Colorado 80231. OppenheimerFunds, Inc.
("OFI") acts as investment adviser to OMMF. OppenheimerFunds Distributor,
Inc. ("OFDI"), a subsidiary of OFI, acts as the distributor of OMMF's
shares. Additional information about OMMF is set forth below.
Liquid Fund is a series of Oppenheimer Series Fund, Inc. (the "Company"),
an open-end, management investment company organized as a multi-series
Maryland corporation on December 9, 1981 that changed its name from
Connecticut Mutual Investment Accounts, Inc. on March 18, 1996. The
following changes took effect March 1, 1996: the Fund's address changed
to Two World Trade Center, New York, NY 10048-0203, OFI became the Fund's
investment adviser and the Fund's Rule 12b-1 Plan was terminated. On
March 18, 1996, OFS became Liquid Fund's transfer agent and shareholder
servicing agent; and OFDI became the distributor of the Fund's shares.
Additional information about the Liquid Fund is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of substantially
all the assets of the Fund to OMMF in exchange for the issuance of shares
of OMMF to the shareholders of Liquid Fund, in liquidation of Liquid Fund.
The Reorganization Agreement also provides for the distribution by the
Fund of these shares of OMMF to the Fund shareholders in liquidation of
the Fund. As a result of the Reorganization, each fund shareholder will
receive that number of full and fractional OMMF shares equal in value to
such shareholder's pro rata interest in the net assets transferred to OMMF
as of the Valuation Date (as hereinafter defined). For further
information about the Reorganization see "Approval of the Reorganization"
below.
For the reasons set forth below under "Approval of the Reorganization -
Board Approval of the Reorganization," the Board, including the Directors
who are not "interested persons" of the Company (the "Independent
Directors"), as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act"), has concluded that the Reorganization
is in the best interests of the Fund and its shareholders and that the
interests of existing Fund shareholders will not be diluted as a result
of the Reorganization, and recommends approval of the Reorganization by
Fund shareholders. The Board of Directors of OMMF has also approved the
Reorganization and determined that the interests of existing OMMF
shareholders will not be diluted as a result of the Reorganization. If
the Reorganization is not approved, the Fund will continue in existence
and the Board will determine whether to pursue alternative actions.
"Approval of the Reorganization" sets forth certain information with
respect to the background of the Reorganization, including other
transactions and agreements entered into, or contemplated to be entered
into, by OFI, Phelps and their respective affiliates.
Approval of the Reorganization will require the affirmative vote of the
holders of a majority of Liquid Fund's shares outstanding and entitled to
vote.
Tax Consequences of the Reorganization
As a condition to the closing of the Reorganization, Liquid Fund and OMMF
will have received an opinion from Arthur Andersen LLP, tax adviser to the
Fund, to the effect that the Reorganization will qualify as a tax-free
reorganization for Federal income tax purposes. As a result of such tax-
free reorganization, no gain or loss would be recognized by Liquid Fund,
OMMF, or the shareholders of either fund for Federal income tax purposes,
except to the extent the shareholders of Liquid Fund may realize taxable
income or gain if a distribution is made to them of any portion of the
"Cash Reserve," as defined below. For further information about the tax
consequences of the Reorganization, see "Approval of the Reorganization -
Tax Aspects of the Reorganization" below.
Investment Objectives and Policies
As its objective, OMMF seeks the maximum current income that is consistent
with stability of principal. OMMF seeks to achieve this objective by
investing in "money market" securities meeting specific credit quality
standards. These are short-term highly liquid securities that meet
specific credit quality standards under the 1940 Act. Because of their
large denominations, money market investments are generally unavailable
to the smaller investor. The money market securities OMMF invests in may
include U.S. Government securities, repurchase agreements, certificates
of deposit and high quality commercial paper issued by companies.
OMMF's investments may also include floating and variable rate notes,
obligations of foreign banks that are payable in the U.S. or in London,
England and foreign branches of U.S. banks, bank loan participation
agreements and asset-backed securities. In addition, OMMF may lend its
portfolio securities to attempt to increase its income. OMMF may also
invest in securities that are considered illiquid because of the absence
of an active trading market and securities that have a contractual
restriction on their resale or which cannot be sold publicly until they
are registered under the Securities Act of 1933.
Liquid Fund seeks as high a level of current income as is consistent with
preservation of capital and maintenance of liquidity by investing in money
market instruments. Money market instruments are high-quality, short-term
securities that present minimal credit risk. They consist of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, commercial paper of U.S. and non-U.S. issuers and
certificates of deposit, banker's acceptances, bank deposits of U.S. and
non-U.S. banks (including Eurodollar and Yankee dollar deposits) and
short-term corporate debt securities. These instruments are denominated
in U.S. dollars and may carry fixed and variable interest rates.
To comply with Rule 2a-7 under the 1940 Act (the "Rule") each fund may
purchase only money market instruments that are within the two highest
rating categories of major rating agencies (e.g. Moody's Investors
Service, Inc. ("Moody's") or Standard and Poor's Rating Group ("S&P")).
Each fund will not invest more than 5% of its total assets in securities
that, although of high quality, have not been rated in the highest short-
term category or, if, unrated, have been judged by OFI to be of equivalent
quality. Within this 5% limitation, the fund will not invest more than
1% of its total assets, or $1 million, whichever is greater, in securities
(other than U.S. Government Securities) of any single issuer.
Each fund intends to hold its investments until maturity, but may sell
them prior to maturity for a number of reasons, including: to shorten or
lengthen that average maturity of that fund's portfolio; to increase
yield; to maintain the quality of the portfolio; or to maintain a stable
share value. The funds may also enter into repurchase agreements and
invest in other money market obligations approved by their respective
Board of Directors.
Shareholders of the Fund should consider the differences in investment
objectives and policies of the funds. See "Comparison Between OMMF and
Liquid Fund - Comparison of Investment Objective, Policies and
Restrictions."
Investment Advisory and Distribution Plan Fees
The funds obtain investment management services from OFI pursuant to the
terms of their respective investment advisory agreements. Each fund's
management fee is payable to OFI monthly and is computed on the net asset
value of each fund as of the close of business each day. OMMF pays a
management fee which declines on additional assets as OMMF increases its
asset base, at the annual rate of 0.45% of the first $500 million of
aggregate net assets, 0.425% of the next $500 million, 0.40% of the next
$500 million, and 0.375% of net assets over $1.5 billion. Liquid Fund
pays a management fee which similarly declines, at an annual rate of 0.50%
of the first $200 million of net assets, 0.45% of the next $100 million
and 0.40% of net assets over $300 million.
Prior to March 18, 1996, Liquid Fund had a distribution plan pursuant to
Rule 12b-1 under the 1940 Act for distribution of its shares. Effective
March 18, 1996, the Company's Board of Directors terminated the Liquid
Fund plan. Because of an agreement between Liquid Fund and its
distributor prior to March 18, 1996, no payments were made pursuant to the
Liquid Fund plan during the Fund's three most recent fiscal years. OMMF
has not adopted a distribution and/or service plan pursuant to Rule 12b-1.
Purchases, Exchanges and Redemptions
Purchases. Purchases of shares of OMMF and the Fund may be made directly
through OFDI, or through any dealer, broker or financial institution that
has a sales agreement with OFDI. In addition, a shareholder of OMMF may
purchase shares automatically from an account at a domestic bank or other
financial institution under the "OppenheimerFunds AccountLink" service.
Shares of both funds are sold without an initial sales charge and are not
subject to a CDSC upon redemption. The OMMF shares to be issued under the
Reorganization Agreement will be issued by OMMF at net asset value without
a sales charge. Future dividends of OMMF, if any, may be reinvested
without sales charge.
Effective March 18, 1996, Liquid Fund shares are no longer available for
purchase by new investors, including shares purchased by exchange from any
other mutual fund. Existing Liquid Fund shareholders may purchase
additional shares through subsequent investment, investment of dividends
and distributions or exchange.
Exchanges. Shareholders of OMMF may exchange their shares at net asset
value for Class A shares of mutual funds within the Oppenheimer funds
family (46 other portfolios), subject to certain conditions, and the
requirement to pay a sales charge when exchanging shares for shares of a
fund that have a sales charge. Shares of Liquid Fund may only be
exchanged for Class A shares of another series of the Company (7 other
portfolios), subject to any applicable sales charge. OMMF offers an
automatic exchange plan providing for systematic exchanges from OMMF of
a specified amount for Class A shares of other funds within the
Oppenheimer funds family.
Redemptions. Shares of the Fund and shares of OMMF may be redeemed
without charge at their respective net asset values per share calculated
after the redemption order is received and accepted.
Shareholders of both funds may redeem their shares by written request or
by telephone request in certain stated amounts, or they may arrange to
have share redemption proceeds wired to a pre-designated account at a U.S.
bank or other financial institution that is an automated clearing house
("ACH") member. Check writing privileges on shares of each fund also
available. The Liquid Fund reserves the right to close any shareholder's
account having fewer than 100 shares once the account has been open at
least 24 months within 30 days notification by the Fund. OMMF has no
corresponding policy. The funds offer automatic withdrawal plans providing
for systematic withdrawals of a specified amount from the fund account.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in OMMF,
shareholders should carefully consider the following summary of risk
factors, relating to both OMMF and the Fund, in addition to the other
information set forth in this Proxy Statement and Prospectus. A complete
description of risk factors for each fund is set forth in the Prospectuses
of the funds and their respective Statements of Additional Information.
As a general matter, OMMF and the Fund are intended for investors seeking
high current income consistent with preservation of capital and not for
investors seeking capital appreciation. There is no assurance that either
OMMF or the Fund will achieve its investment objective and investment in
the funds is subject to investment risks, including the possible loss of
the principal invested. As described below, each fund generally invests
a certain percentage of its assets in money market instruments meeting
specific quality standards, designed to reduce (but not eliminate) the
risk that the issuers of such instruments will default in its payment
obligations ("credit risk").
Investment in Money Market Securities
The funds both seek their investment objective through investments
primarily in money market securities meeting quality standards consistent
with the Rule. The Rule defines an "Eligible Security" as one that has
been rated in one of the two highest short-term rating categories by any
two "nationally recognized statistical rating organizations" (as defined
in the Rule) (these are referred to as "Rating Organizations"), or, if
only one Rating Organization has rated that security, it must have been
rated in one of the two highest rating categories by that rating
organization. An unrated security that is judged by OFI to be of
comparable quality to "Eligible Securities" rated by Rating Organizations
may also be an "Eligible Security". The Rule permits the funds to
purchase any number of "First Tier Securities." These are Eligible
Securities rated in the highest rating category for short-term debt
obligations by at least two Rating Organizations, or, if only one Rating
Organization has rated a particular security, by that Rating Organization.
Comparable unrated securities may also be First Tier Securities. Under
the Rule, the funds may invest only up to 5% of their assets in "Second
Tier Securities," which are Eligible Securities that are not "First Tier
Securities." The types of investments that may satisfy these quality
standards are as follows.
The funds may invest in U.S. Government securities. These include
obligations issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities. These may include direct obligations of
the U.S. Treasury, such as Treasury bills, notes and bonds. Other U.S.
Government Securities are supported by the full faith and credit of the
United States, such as pass-through certificates issued by the Government
National Mortgage Association. Others may be supported by the right of
the issuer to borrow from the U.S. Treasury, such as securities of Federal
Home Loan Banks. Others may be supported only by the credit of the
instrumentality, such as obligations of the Federal National Mortgage
Association.
The funds may invest in bank obligations and instruments secured by them.
These include time deposits, certificates of deposit and bankers'
acceptances. OMMF may also invest in instruments secured by these types
of bank obligations, such as separately-issued bank debt which is
guaranteed by the bank. The term "bank" includes commercial banks,
savings banks, and savings and loan associations, which may or may not be
members of the Federal Deposit Insurance Corporation ("FDIC"). The term
"foreign bank" includes foreign branches of U.S. banks ( which may be
issuers of "Eurodollar" money market instruments), U.S. branches and
agencies of foreign banks (which may be issuers of "Yankee dollar"
instruments), and foreign branches of foreign banks.
The funds may invest in commercial paper. Commercial paper is a short-
term, unsecured promissory note of a domestic or foreign company. The
commercial paper in which the funds invest must be rated within one of the
two highest rating categories of the major rating agencies (e.g. Moody's
or S&P) for short-term debt securities. Each fund may also invest unrated
securities if judged by OFI to be comparable to these other types of rated
securities.
Each fund can invest in short-term corporate debt obligations, that at the
time of purchase are rated by at least one Rating Organization in one of
the two highest rating categories for short-term debt securities.
The funds may enter into repurchase agreements of seven days or less
without limit and may cause up to 10% of their respective net assets to
be subject to repurchase agreements having a maturity beyond seven days.
Repurchase agreements must be fully collateralized. However, if the
vendor fails to pay the resale price on the delivery date, the funds may
experience costs or delays in disposing of the collateral and may
experience losses to the extent that the proceeds from the sale of the
collateral are less than the repurchase price.
APPROVAL OF THE REORGANIZATION
(The Proposal)
Background
On February 29, 1996, the indirect parent company of Phelps, Connecticut
Mutual Life Insurance Company ("Connecticut Mutual") merged with and into
Massachusetts Mutual Life Insurance Company ("MassMutual"). On that date,
Connecticut Mutual ceased to exist and MassMutual became the surviving
company. Immediately subsequent to the merger, MassMutual became the
nation's fifth largest life insurance company.
MassMutual is the ultimate parent company of OppenheimerFunds, Inc.
("OFI"), which is engaged (directly and through subsidiaries) in the
business of managing, distributing and servicing registered investment
companies. As of March 1, 1996, OFI (including a subsidiary) had more
than $50 billion in assets under management, the majority of which is
represented by the Oppenheimer funds.
Board Approval of the Reorganization
At its meeting on November 17, 1995, the Company's Board, including the
Independent Directors, unanimously approved the Reorganization and the
Reorganization Agreement, determined that the Reorganization is in the
best interests of the Liquid Fund and its shareholders and resolved to
recommend that Fund shareholders vote for approval of the Reorganization.
The Board further determined that the Reorganization would not result in
dilution of the Fund's shareholders' interests.
The Company's Board of Directors, on behalf of Liquid Fund, believes that
the proposed Reorganization will be advantageous to the shareholders of
Liquid Fund in several respects. The Board considered the following
matters, among others, in approving the Proposal.
First, the Board believes that it is not advantageous to operate and
market Liquid Fund separately from OMMF because their investment
objectives and policies are substantially similar. By being offered
simultaneously, each fund hinders the other fund's potential for asset
growth. For a complete description of OMMF's investment objectives and
policies, see OMMF's Prospectus included with this Proxy Statement.
Second, the Board considered that shareholders may be better served by a
Fund offering greater diversification. To the extent that the funds'
assets are combined into a single portfolio and a larger asset base is
created as a result of the Reorganization, greater diversification of
OMMF's investment portfolio can be achieved than is currently possible in
either Fund, especially Liquid Fund. Greater diversification is expected
to be beneficial to shareholders of both funds because it may reduce the
negative effect which the adverse performance of any one security may have
on the performance of the entire portfolio.
Third, the Board considered the fact that OMMF's total operating expenses
are lower than those of Liquid Fund. The Board believes that the assets
of OMMF attributable to Liquid Fund will receive the benefit of OFI's
capabilities and resources in investment management.
Fourth, the Board believes that OMMF shares received in the Reorganization
will provide existing Liquid Fund shareholders with substantially the same
investment advantages that they currently enjoy. The Board also
considered the performance history of each fund.
Fifth, a combined fund offers economies of scale that may have a positive
effect on the expenses currently borne by Liquid Fund, and hence,
indirectly, its shareholders. Both funds incur substantial costs for
accounting, legal, transfer agency services, insurance, and custodial and
administrative services. The Board expects that the Reorganization may
result over time in a decrease in the expenses currently borne indirectly
by Liquid Fund's shareholders. See expense information in "Comparative
Fee Tables."
The Board considered the fact that, from the perspective of OMMF, the
Reorganization presents an opportunity to acquire assets without the
obligation to incur costs that may be associated with the purchase of
securities. This opportunity provides an economic benefit to OMMF and its
shareholders.
The Board also considered the fact that OFI and OFDI will receive certain
benefits from the Reorganization. The consolidated portfolio management
effort might result in time savings for OFI and the preparation of fewer
prospectuses, reports and regulatory filings. The Board, however,
believes that this consideration will not amount to a significant economic
benefit.
The OMMF Board of Directors, including the Directors who are not
"interested persons" of OMMF, unanimously approved the Reorganization and
the Reorganization Agreement and determined that the Reorganization is in
the best interests of OMMF and its shareholders. The OMMF Board further
determined that the Reorganization would not result in dilution of the
OMMF shareholders' interests. The OMMF Board considered, among other
things, that an increase in OMMF's asset base as a result of the
Reorganization could benefit OMMF shareholders due to the economies of
scale available to a larger fund. Over time, these economies of scale
should result in slightly lower costs per account for each OMMF
shareholder through lower operating expenses and transfer agency expenses.
Regulatory Approval of the Reorganization
The funds, OFI and MassMutual have applied to the SEC for an order of the
SEC exempting the reorganization from the provisions of Section 17 of the
1940 Act. Because MassMutual owns more than 5% of the shares of Liquid
Fund, the reorganization does not qualify to use the exemptive provisions
of the 1940 Act without an order of the SEC. If the SEC does not grant
the exemptive relief requested, the Reorganization will not proceed and
the Company's Board of Directors will determine what action, if any, will
be taken on behalf of Liquid Fund.
The Reorganization
The following summary of the Reorganization Agreement is qualified in its
entirety by reference to the Reorganization Agreement (a copy of which is
set forth in full as Exhibit A to this Proxy Statement and Prospectus).
The Reorganization Agreement contemplates a reorganization under which (i)
substantially all of the assets of the Fund would be transferred to OMMF
in exchange for the issuance of shares of OMMF, (ii) these shares would
be distributed to shareholders of the Fund in liquidation of the Fund and
(iii) the outstanding shares of the Fund would be cancelled. Prior to the
closing date (April 6, 1996, or such other date as the funds may
designate; the "Closing Date"), the Fund will endeavor to discharge all
of its liabilities and obligations when and as due prior to such date.
OMMF will not assume any liabilities or obligations of Liquid Fund except
for portfolio securities purchased which have not settled and outstanding
shareholder redemptions and dividend checks. In this regard, the Fund
will retain a cash reserve (the "Cash Reserve") in an amount which is
deemed sufficient in the discretion of the Board for the payment of (a)
the Fund's expenses of liquidation (if any) and (b) the Fund's
liabilities, other than those assumed by OMMF. The Cash Reserve will be
accounted for as a liability of Liquid Fund prior to the determination of
its net asset value. The number of full and fractional shares of OMMF to
be issued to the Fund will be determined on the basis of OMMF's and the
Fund's relative net asset values, computed as of the close of business of
The New York Stock Exchange on the business day preceding the Closing Date
(the "Valuation Date").
OFI will utilize the valuation procedures set forth in the Prospectus and
Statement of Additional Information of OMMF to determine the value of the
Fund's assets to be transferred to OMMF pursuant to the Reorganization,
the value of OMMF's assets and the net asset value of the shares of OMMF.
Such values will be computed by OFI as of the Valuation Date in a manner
consistent with its regular practice in pricing OMMF.
The Reorganization Agreement provides for coordination between the funds
as to their respective portfolios so that, on and after the Closing Date,
OMMF will be in compliance with all of its investment policies and
restrictions.
Contemporaneously with the closing, the Fund will be liquidated (except
for the Cash Reserve) and the Fund will distribute or cause to be
distributed pro rata to Fund shareholders of record as of the close of
business on the Valuation Date the full and fractional OMMF shares
received by the Fund. Upon such liquidation, all issued and outstanding
shares of the Fund will be cancelled on the Fund's books and Fund
shareholders will have no further rights as shareholders of the Fund. To
assist the Fund in the distribution of OMMF shares, OMMF will, in
accordance with a shareholder list supplied by the Fund, cause OMMF's
transfer agent to credit and confirm an appropriate number of shares of
OMMF to each shareholder of the Fund. Certificates for shares of OMMF
will be issued upon written request of a former shareholder of the Fund
but only for whole shares with fractional shares credited to the name of
the shareholder on the books of OMMF. Former shareholders of the Fund who
wish certificates representing their shares of OMMF must, after receipt
of their confirmations, make a written request to OppenheimerFunds
Services, P.O. Box 5270, Denver, Colorado 80217. Shareholders of the Fund
holding certificates representing their shares will not be required to
surrender their certificates to anyone in connection with the
Reorganization. After the Reorganization, however, it will be necessary
for such shareholders to surrender such certificates in order to redeem,
transfer, pledge or exchange any shares of OMMF. After the closing of the
Reorganization, the Fund will not conduct any business except in
connection with the winding up of its affairs. Under the Reorganization
Agreement, within one year after the Closing Date, the Fund shall: either
(i) transfer any remaining amount of the Cash Reserve to OMMF, if such
remaining amount (as reduced by the estimated cost of distributing it to
shareholders) is not material (as defined below) or (ii) distribute such
remaining amount to the shareholders of the Fund who were such on the
Valuation Date. After this transfer or distribution, the Fund's existence
will be terminated. Such remaining amount shall be deemed to be material
if the amount to be distributed, after deducting the estimated expenses
of the distribution, equals or exceeds one cent per share of the number
of Fund shares outstanding on the Valuation Date.
The consummation of the Reorganization is subject to the conditions set
forth in the Reorganization Agreement, including, without limitation,
approval of the Reorganization by the Fund's shareholders.
Notwithstanding approval of the Fund's shareholders, the Reorganization
may be terminated at any time at or prior to the Closing Date (i) by
mutual written consent of the Company, on behalf of Liquid Fund, and OMMF,
(ii) by the Company, on behalf of the Liquid Fund, or OMMF upon a breach
by the other of any material provision of the Reorganization Agreement,
or (iii) if the requested SEC order described above is not granted by the
SEC. Termination of the Reorganization Agreement will terminate all
obligations of the parties thereto without liability except, in the event
of a termination pursuant to (ii) above, any party in breach of the
Reorganization Agreement will, upon demand, reimburse the non-breaching
party for all reasonable out-of-pocket fees and expenses (if any) incurred
in connection with the transactions contemplated by the Reorganization
Agreement.
Approval of the Reorganization will require the vote specified below in
"Information Concerning the Meeting - Record Date; Vote Required; Share
Information." If the Reorganization is not approved by the shareholders
of the Fund, the Directors of the Company will consider other possible
courses of action.
Tax Aspects of the Reorganization
The exchange of the assets of the Fund for shares of OMMF and the
assumption by OMMF of certain liabilities of the Fund is intended to
qualify for Federal income tax purposes as a reorganization under Section
368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code").
The Fund has represented to Arthur Andersen LLP, tax adviser to the Fund,
that there is no plan or intention by any Fund shareholder who owns 5% or
more of the Fund's outstanding shares, and, to the Fund's best knowledge,
there is no plan or intention on the part of the remaining Fund
shareholders, to redeem, sell, exchange or otherwise dispose of a number
of OMMF shares received in the transaction that would reduce the Fund
shareholders' ownership of OMMF shares to a number of shares having a
value, as of the Closing Date, of less than 50% of the value of all the
formerly outstanding Fund shares as of the same date. The Fund and OMMF
have each further represented to Arthur Andersen LLP the fact that, as of
the Closing Date, the Fund and OMMF will qualify as regulated investment
companies or will meet the diversification test of Section
368(a)(2)(F)(ii) of the Code.
As a condition to the closing of the Reorganization, OMMF and the Fund
will receive the opinion of Arthur Andersen LLP to the effect that, based
on the Reorganization Agreement, the above representations and other
representations as such firm shall reasonably request, existing provisions
of the Code, Treasury Regulations issued thereunder, current Revenue
Rulings, Revenue Procedures and court decisions, for Federal income tax
purposes:
1. The transfer of substantially all of Liquid Fund's assets in
exchange for shares of OMMF and the assumption by OMMF of certain
identified liabilities of the Fund followed by the distribution by
the Fund of shares of OMMF to the Fund shareholders in exchange for
their Fund shares will constitute a "reorganization" within the
meaning of Section 368(a)(1) of the Code and the Fund and OMMF will
each be a "party to a reorganization" within the meaning of Section
368(b) of the Code.
2. Pursuant to Section 1032 of the Code, no gain or loss will be
recognized by OMMF upon the receipt of the assets of the Fund solely
in exchange for shares of OMMF and the assumption by OMMF of the
identified liabilities of the Fund.
3. Pursuant to Sections 361(a) and 361(c) of the Code, no gain or
loss will be recognized by the Fund upon the transfer of the assets
of the Fund to OMMF in exchange for shares of OMMF and the assumption
by OMMF of certain identified liabilities of the Fund or upon the
distribution of shares of OMMF to the Fund shareholders in exchange
for the Fund shares.
4. Pursuant to Section 354(a) of the Code, no gain or loss will be
recognized by the Fund shareholders upon the exchange of the Fund
shares for the shares of OMMF. However, Fund shareholders may
recognize taxable income or gain to the extent they receive any
portion of the Cash Reserve as defined below.
5. Pursuant to Section 358 of the Code, the aggregate tax basis for
shares of OMMF received by each Fund shareholder pursuant to the
Reorganization will be the same as the aggregate tax basis of the
Fund shares held by each such Fund shareholder immediately prior to
the Reorganization.
6. Pursuant to Section 1223 of the Code, the holding period of
shares of OMMF to be received by each Fund shareholder will include
the period during which the Fund shares surrendered in exchange
therefor were held (provided such Fund shares were held as capital
assets on the date of the Reorganization).
7. Pursuant to Section 362(b) of the Code, the tax basis of the
assets of the Fund acquired by OMMF will be the same as the tax basis
of such assets of the Fund immediately prior to the Reorganization.
8. Pursuant to Section 1223 of the Code, the holding period of the
assets of the Fund in the hands of OMMF will include the period
during which those assets were held by the Fund.
9. OMMF will succeed to and take into account the items of the Fund
described in Section 381(c) of the Code, including the earnings and
profits, or deficit in earnings and profits, of the Fund as of the
date of the transactions. OMMF will take these items into account
subject to the conditions and limitations specified in Sections 381,
382, 383 and 384 of the Code and applicable regulations thereunder.
Shareholders of the Fund should consult their tax advisors regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the Federal
income tax consequences of the Reorganization, shareholders of the Fund
should also consult their tax advisors as to state and local tax
consequences, if any, of the Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of OMMF and the Liquid Fund
and indicates the pro forma combined capitalization as of December 31,
1995 as if the Reorganization had occurred on that date.
Net Asset
Shares Value
Net Assets Outstanding Per Share
($000) (000)
OMMF $817,928 817,928 $1.00
Liquid Fund $ 75,808 75,808 $1.00
Pro Forma Combined
Fund* $893,736 893,736 $1.00
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*Reflects issuance of 75,808,000 shares of OMMF in a tax-free exchange for
the net assets of the Fund, aggregating $893,736,000.
The pro forma ratio of expenses to average annual net assets of the
combined funds at December 31, 1995 would have been .90%.
COMPARISON BETWEEN OMMF AND LIQUID FUND
Comparative information about OMMF and the Fund is presented below. More
complete information about OMMF and the Fund is set forth in their
respective Prospectuses (which, as to OMMF, accompanies this Proxy
Statement and Prospectus and is incorporated herein by reference) and
Statements of Additional Information. To obtain copies of either
Prospectus, see "Miscellaneous - Public Information."
Comparison of Investment Objectives, Policies and Restrictions
As its objective, OMMF seeks the maximum current income that is consistent
with stability of principal. OMMF seeks to achieve this objective by
investing in "money market" securities meeting specific credit quality
standards. As its investment objective, the Fund seeks as high a level
of current income as is consistent with the preservation of capital and
maintenance of liquidity by investing in money market instruments. In
seeking their investment objectives, OMMF and the Liquid Fund employ the
investment policies as described in detail below. OMMF's investment
objective is fundamental, whereas Liquid Fund's investment objective is
non-fundamental, meaning that it can be changed by a vote of the Company's
Board without shareholder approval.
In seeking their respective objectives, the funds invest in short-term
money market securities meeting quality standards consistent with Rule 2a-
7, described above. While those standards are intended to help the funds
maintain a stable share value, there can be no assurance that the funds'
net asset value will not vary from $1.00 per share or that they will
achieve its investment objective. Additionally, under Rule 2a-7, the
funds must maintain a dollar-weighted average portfolio maturity of no
more than 90 days, and the maturity of any single portfolio investment may
not exceed 397 days.
Special Investment Methods
OMMF and the Fund may also use the investment techniques and strategies
listed below.
Illiquid and Restricted Securities. 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 funds will not invest more than 10% of their net assets in
illiquid or restricted securities. Certain restricted securities, eligible
for resale to qualified institutional purchasers, are not subject to that
limit. However, investing in such exempt securities could have the effect
of increasing the level of fund illiquidity to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing these
securities.
Loans of Portfolio Securities. The funds may lend their portfolio
securities to brokers, dealers and other financial institutions. The
value of the securities loaned will not exceed 33-1/3% of the total assets
of the Liquid Fund. OMMF presently does not intend to lend its securities,
but if it does so, the value of securities loaned is not expected to
exceed 5% of the value of OMMF's total assets. There are some risks in
lending securities. The funds could experience a delay in receiving
additional collateral to secure a loan, or a delay in recovering the
loaned securities.
Floating Rate/Variable Rate Notes. Each fund may purchase notes with
floating or variable interest rates. Variable rates are adjustable at
stated periodic intervals. Floating rates are adjusted automatically
according to a specified market index for such investments, such as the
prime rate of a bank.
Foreign Obligations. Because each fund may invest in securities of non-
U.S. banks and corporations and obligations of foreign branches of U.S.
banks, each fund may be subject to additional investment risks different
from those incurred by an investment company that invests only in debt
obligations of domestic issuers. These risks may include future political
and economic developments of the country in which the issuer is located,
possible imposition of withholding taxes on interest income payable on the
securities, possible seizure or nationalization of foreign deposits, the
possible establishment of exchange control regulations or the adoption of
other governmental restrictions that might affect the payment of principal
and interest on those securities. Additionally, not all U.S. and state
banking laws and regulations applicable to domestic banks (relating to
maintenance of reserves, loan limits and financial soundness) apply to
foreign branches of domestic banks, and none of those regulations apply
to foreign banks. All investments by Liquid Fund must be U.S. dollar-
denominated.
Bank Loan Participation Agreements. OMMF may invest in bank loan
participation agreements that provide OMMF an undivided interest in a loan
made by the issuing bank in the proportion OMMF's interest bears to the
total principal amount of the loan. OMMF looks to the creditworthiness
of the borrower obligated to make principal and interest payments on the
loan. These investments are subject to the provisions of Rule 2a-7 and
OMMF's limitation on investing in "illiquid securities," below.
Asset-Backed Securities. OMMF may invest in asset-backed securities,
which are fractional interests in pools of consumer loans and other trade
receivables. They are issued by trusts and special purpose corporations.
They are backed by a pool of assets, such as credit card or auto loan
receivables, which are the obligations of a number of different parties.
The income from the underlying pool is passed through to holders, such as
OMMF. These securities are frequently supported by a credit enhancement,
such as a letter of credit, a guarantee or a preference right. However,
the credit enhancement generally applies to only a fraction of the
security's value. OMMF's investment in those securities is subject
to Rule 2a-7, as described above. A risk of these securities is that the
issuer of the security may have no security interest in the related
collateral.
Investment Restrictions
Both OMMF and Fund have certain investment restrictions that, together
with their respective investment objectives, are fundamental policies
changeable only by shareholder approval. The investment restrictions of
OMMF and the Fund are substantially the same and are set forth below.
OMMF cannot (1) invest more than 5% of its total assets in securities of
any issuer (except the U.S. Government or its agencies or
instrumentalities); (2) concentrate investments in any particular
industry; therefore OMMF will not purchase the securities of companies in
any one industry if more than 25% of the value of OMMF's total assets
would consist of securities of companies in that industry; except for
obligations of foreign branches of domestic banks, or obligations issued
or guaranteed by foreign banks, the investments set forth in OMMF's
Prospectus under "U.S. Government Securities" and "Bank Obligations and
Instruments Secured By Them" under "Investment Objective and Policies" are
not included in this limitation; (3) make loans, except through the
purchase of the types of debt securities listed in OMMF's Prospectus under
"Investment Objective and Policies" or through repurchase agreements; OMMF
may also lend securities as described above under "Loans of Portfolio
Securities"; (4) borrow money in excess of 5% of the value of its total
assets; OMMF may borrow only as a temporary measure for extraordinary or
emergency purposes and no assets of OMMF may be pledged, mortgaged or
assigned to secure a debt; (5) invest more than 5% of the value of its
total assets in securities of companies that have operated less than three
years, including the operations of predecessors; (6) invest in commodities
or commodity contracts or invest in interests in oil, gas, or other
mineral exploration or mineral development programs; (7) invest in real
estate (however, OMMF may purchase commercial paper issued by companies
which invest in real estate or interests therein); (8) purchase securities
on margin or make short sales of securities; (9) invest in or hold
securities of any issuer if those officers and directors of OMMF or its
adviser who beneficially own individually more than 1/2 of 1% of the
securities of such issuer together own more than 5% of the securities of
such issuer; (10) underwrite securities of other companies; or (11) invest
in securities of other investment companies.
Liquid Fund cannot: (1) issue senior securities, except as permitted by
paragraphs 3, 4, 5 and 15 below. For purposes of this restriction, the
issuance of shares of common stock in multiple classes or series, the
purchase or sale of options, futures contracts and options on futures
contracts, forward commitments, and repurchase agreements entered into in
accordance with the Fund's investment policies, and the pledge, mortgage
or hypothecation of the Fund's assets are not deemed to be senior
securities; (2) purchase equity securities (e.g., common stocks, preferred
stocks), voting securities or local or state government securities (e.g.,
municipal bonds, state bonds); (3) borrow money, except from banks for
temporary or emergency purposes, including the meeting of redemption
requests which might otherwise require the untimely disposition of
securities, borrow in the aggregate more than 10% of the value of its
total assets, or invest in portfolio securities while outstanding
borrowings exceed 5% of the value of its total assets and except in
conformity with investment restriction (15) below; (4) pledge,
hypothecate, mortgage or otherwise encumber its assets, except in an
amount of not more than 10% of the value of its net assets to secure
borrowings for temporary or emergency purposes and except as may be
necessary in connection with securities lending as provided in investment
restriction (10) below. The deposit of cash, cash equivalents and liquid
debt securities in a segregated account with the custodian and/or with a
broker in connection with futures contracts or related options
transactions and the purchase of securities on a "when-issued" basis is
not deemed to be a pledge; (5) sell securities short or purchase
securities on margin. The deposit or payment by the Fund of initial or
maintenance margin in connection with futures contracts or related options
transactions is not considered the purchase of a security on margin; (6)
write or purchase put or call options; (7) underwrite the securities of
other issuers or purchase restricted securities; (8) purchase or sell real
estate, real estate investment trust securities, commodities or
commodities contracts, or oil and gas interests; (9) make loans, except
that the Fund (1) may lend portfolio securities in accordance with the
Fund's investment policies up to 33 1/3% of the Fund's total assets taken
at market value, (2) enter into repurchase agreements, and (3) purchase
all or a portion of an issue of publicly distributed debt securities, bank
loan participation interests, bank certificates of deposit, bankers'
acceptance, debentures or other securities, whether or not the purchase
is made upon the original issuance of the securities; (10) invest more
than 15% of the value of its total assets in the obligations of any one
bank or invest more than 5% of the value of its total assets in the
commercial paper of any one issuer; (11) invest more than 25% of the value
of its total assets in the securities of issuers in any single industry,
provided that this limitation shall not apply to the purchase of
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities, certificates of deposit issued by domestic
banks and domestic bankers' acceptances (excluding foreign branches of
domestic banks); (12) invest more than 10 percent in the aggregate of the
value of its total assets in repurchase agreements maturing in more than
7 days, time deposits maturing in more than 2 days and portfolio
securities which are not readily marketable; (13) invest in companies for
the purpose of exercising control; (14) invest in securities of other
investment companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets; (15) enter into a reverse
repurchase agreement if as a result its current obligations under such
agreement would exceed one-third of the value of its total assets (less
all its liabilities other than the obligations under such agreements); or
(16) invest in any security with a maturity in excess of one year.
OMMF uses the terms "yield" and "compounded effective yield" to illustrate
its performance. The "yield" of OMMF is the income generated by an
investment in OMMF over a seven-day period, which is then "annualized."
In annualizing, the amount of income generated by the investment during
that seven days is assumed to be generated each week over a 52-week
period, and is shown as a percentage of the investment. The "compounded
effective yield" is calculated similarly, but the annualized income earned
by an investment in OMMF is assumed to be reinvested in additional shares.
The "compounded effective yield" will be slightly higher than the yield
because of the effect of the assumed reinvestment. OMMF's "current yield"
for the seven days ended December 31, 1995, was 5.09% and its "compound
effective yield" was 5.22%.
OMMF's yields can also be compared to those of Liquid Fund. Liquid Fund's
"current yield" for the seven days ended December 31, 1995, was 4.73%, and
its "compound effective yield" was 4.84%.
It is important to understand that yields represent past performance and
should not be considered to be predictions of future performance.
Investment performance will vary over time, depending on market
conditions, the composition of the portfolio, and expenses. OMMF may make
comparisons between its yield and that of other investments, by citing
various indices such as The Bank Rate Monitor National Index (provided by
Bank Rate Monitor) which measures the average rate paid on bank money
market accounts, NOW accounts and certificates of deposits by the 100
largest banks and thrifts in the top ten metro areas. From time to time,
OMMF may include in its advertisements and sales literature performance
information about OMMF cited in other newspapers and periodicals, such as
The New York Times, which may include performance quotations from other
sources.
Additional Comparative Information
General
For a discussion of the organization and operation of OMMF, including
brokerage practices, see "Investment Objective and Policies" and "How the
Fund is Managed" in OMMF's current Prospectus and "Brokerage Policies of
the Fund" in the OMMF Statement of Additional Information. For a
discussion of the organization and operation of the Fund, including
brokerage practices, see "Investment Objectives and Policies,"
"Management" and "The Company" in the Company's current Prospectus, and
"Portfolio Transactions and Brokerage" in the Company's current Statement
of Additional Information.
Financial Information
For certain financial information about OMMF and the Fund, see "Financial
Highlights" in their respective current Prospectuses.
Management of OMMF and the Fund
For information about the management of OMMF and the Fund, including their
respective Boards of Directors, investment adviser, portfolio managers and
distributor, see (as to OMMF) "Expenses" and "How the Fund is Managed" in
OMMF's current Prospectus and (as to Liquid Fund) "Management" and "The
Company" in the Company's current Prospectus.
Description of Shares of OMMF and the Liquid Fund
OMMF is a Maryland corporation. Each share of OMMF represents an interest
in OMMF proportionately equal to the interest of each other share of the
same class and entitles the holder to one vote per share (and a fractional
vote for a fractional share) on matters submitted to a vote at shareholder
meetings.
OMMF is authorized to issue an unlimited number of shares of capital
stock. Shares are freely transferrable and shares do not have cumulative
voting rights or preemptive or subscription rights. OMMF is governed by
a Board of Directors that has the power, without shareholder approval, to
establish and designate one or more series and to divide unissued shares
into two or more classes. There is currently only one class of shares.
The Company is a Maryland corporation with 3 billion shares of common
stock, par value $0.001 per share, authorized. The Board is authorized
to classify and reclassify the common stock into additional series and the
series into one or more classes. The shares of each class represent an
interest in the same portfolio of investments as the series and have equal
rights as to voting, redemption, dividends and liquidation. On matters
affecting only one series, only the shareholders of that series are
entitled to vote. On matters relating to all the series but affecting the
series differently, separate votes by each series are required. On
matters relating to a single class of shares of a series, only the
shareholders of that class are entitled to vote. Shareholders holding
more than 50% of the shares of the Company can elect all of the Company's
directors. Each share is entitled to one vote within each series.
Neither OMMF nor Liquid Fund are required to hold, and neither plans to
hold, regular annual meetings of shareholders.
For further information about the shares of OMMF, including voting rights
and restrictions on disposition, see (as to OMMF) "How the Fund is
Managed" in the OMMF current Prospectus and OMMF Statement of Additional
Information and (as to Liquid Fund) "The Company" in the Company's current
Prospectus.
Dividends, Distributions and Taxes
Both funds declare dividends from net investment income on each regular
business day, distribute such dividends monthly and declare and distribute
net long-term capital gains, if any, annually. OMMF and the Fund also
declare and distribute net short-term capital gains, if any, annually.
For a discussion of the policies of OMMF and the Fund with respect to
dividends and distributions, and a discussion of the tax consequences of
an investment in OMMF and Liquid Fund, see (as to OMMF) "Dividends and
Taxes" in OMMF's current Prospectus and (as to Liquid Fund), "Dividends,
Capital Gains and Taxes" in the Company's current Prospectus.
Purchases, Redemptions and Exchanges of Shares
For a discussion of how shares of OMMF and the Fund may be purchased,
redeemed and exchanged, see (as to OMMF) "How to Buy Shares," "How to Sell
Shares," "Exchanges of Shares," "Special Investor Services," and
"Shareholder Account Rules and Policies" in OMMF's current Prospectus; and
"Prospectus Summary" and "Your Account" in the Company's current
Prospectus.
Shareholder Inquiries
For a description of how shareholder inquiries should be made, see (as to
OMMF) "How the Fund is Managed" in OMMF's current Prospectus and (as to
the Fund) the March 18, 1996 supplement to the Company's current
Prospectus.
INFORMATION CONCERNING THE MEETING
The Meeting
The Meeting will be held at OppenheimerFunds, Inc., 3410 South Galena
Street, Denver, Colorado 80231, at 10:00 A.M., Denver time, on April 24,
1996 and any adjournments thereof. At the Meeting, shareholders of the
Fund will be asked to consider and vote upon approval of the
Reorganization Agreement, and the transactions contemplated thereby,
including the transfer of substantially all the assets of the Fund to OMMF
in exchange for shares of OMMF, the distribution by the Fund of such
shares to its shareholders in liquidation of the Fund and the cancellation
of the outstanding shares of the Fund.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on March 18, 1996 as the record
date (the "Record Date") for the determination of shareholders entitled
to notice of, and to vote at, the Meeting. The affirmative vote of the
holders of a majority of Liquid Fund's outstanding shares entitled to vote
is required for approval of the Proposal. Each shareholder will be
entitled to one vote for each share and a fractional vote for each
fractional share held of record at the close of business on the Record
Date. Only shareholders of Liquid Fund will vote on the Reorganization.
The vote of shareholders of OMMF is not being solicited to approve the
Reorganization Agreement.
At the close of business on the Record Date, there were approximately
78,743,892 shares of the Fund issued and outstanding. The presence in
person or by proxy of the holders of a majority of shares constitutes a
quorum for the transaction of business at the Meeting. As of the close
of business on the Record Date, there were approximately 911,750,930
shares of OMMF issued and outstanding. To the knowledge of the Fund, as
of March 8, 1996, no person owned of record or beneficially 5% or more of
the outstanding shares or 5% or more of the outstanding shares of Liquid
Fund, except for MassMutual, 1295 State Street, Springfield, MA 01111,
which (together with its subsidiaries) owned of record 38,861,532.961
shares as of March 8, 1996, which represents approximately 50.1% of Liquid
Fund's then outstanding shares. MassMutual acquired its shares as a
consequence of its merger with Connecticut Mutual, described above under
"Approval of the Reorganization - Background." The Company has been
advised that MassMutual intends to vote its shares in favor of the
Proposal. To the knowledge of OMMF, as of March 8, 1996, no person owned
of record or beneficially 5% or more of the outstanding shares of OMMF.
As of March 8, 1996, the officers and Directors of OMMF, and the officers
and Directors of the Company, beneficially owned as a group less than 1%
of the outstanding shares of OMMF and Liquid Fund, respectively.
In the event a quorum does not exist as to the shares of the Fund on the
date originally scheduled for the Meeting, or, subject to approval of the
Board, for other reasons, one or more adjournments of the Meeting may be
sought by the Board. Any adjournment would require a vote in favor of the
adjournment by the holders of a majority of the shares present at the
Meeting (or any adjournment thereof) in person or by proxy. The persons
named as proxies will vote all shares represented by proxies which they
are required to vote in favor of the Proposal, in favor of an adjournment,
and will vote all shares which they are required to vote against the
Proposal, against an adjournment. In the event that a quorum is present
at the Meeting but the shareholders do not approve the Reorganization, the
Reorganization will be deemed to have not been approved and the Board will
consider what further action, if any, to take.
Shares of common stock of the Company represented in person or by proxy
(including shares which abstain or do not vote with respect to the
Proposal presented for shareholder approval) will be counted for purposes
of determining whether a quorum is present at the Meeting. Shares owned
of record by broker-dealers for the benefit of their customers ("street
account shares") will be voted by the broker-dealer based on instructions
received from its customers. If no instructions are received, the broker-
dealer may (if permitted under applicable stock exchange rules), as record
holder, vote such shares on the Proposal in the same proportion as that
broker-dealer votes street account shares for which voting instructions
were received in time to be voted ("broker non-votes"). Abstentions and
broker non-votes will be counted as present for purposes of determining
a quorum and will have the same effect as a vote against the Proposal,
except as follows: if a broker or nominee holding street account shares
indicates on the proxy that it does not have discretionary authority to
vote on the Proposal, those shares will not be considered as present and
entitled to vote on the Proposal and are not considered to be votes cast.
Proxies
The enclosed form of proxy, if properly executed and returned, will be
voted (or counted as an abstention or withheld from voting) in accordance
with the choices specified thereon, and will be included in determining
whether there is a quorum to conduct the Meeting. If a shareholder
executes and returns a proxy but fails to indicate how the votes should
be cast, the proxy will be voted in favor of the Proposal.
The proxy may be revoked at any time prior to the voting thereof by: (i)
writing to the Secretary of the Company at OppenheimerFunds, Inc., Two
World Trade Center, New York, NY 10048; (ii) attending the Meeting and
voting in person; (iii) signing and returning a new proxy (if returned and
received in time to be voted); or (iv) voting by telephone, as explained
below.
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing and
mailing this Proxy Statement and Prospectus, will be borne by MassMutual.
Any documents such as existing prospectuses or annual reports that are
included in that mailing will be a cost of the fund issuing the document.
In addition to the solicitation of proxies by mail, proxies may be
solicited by officers and employees of OFI or OFI's affiliates, personally
or by telephone or telegraph. In addition, the Company has retained D.F.
King & Co., Inc., 77 Water Street, New York, New York 10005 to assist in
the solicitation of proxies primarily by contacting shareholders by
telephone and telegram. The cost of such proxy solicitor will be borne
by MassMutual. D.F. King & Co., Inc. may call shareholders to ask if they
would be willing to have their votes recorded by telephone. The telephone
voting procedure is designed to authenticate a shareholder's identity, to
allow a shareholder to authorize the voting of shares in accordance with
the shareholder's instructions and to confirm that the voting instructions
have been properly recorded. If these procedures were subject to a
successful legal challenge, such votes would not be counted at the
Meeting. The Company has not sought to obtain an opinion of counsel on
this matter and is unaware of any such challenge at this time. A
shareholder would be called on a recorded line at the telephone number the
Company has in its records for the account and could be asked the
shareholder's Social Security number or other identifying information.
The shareholder would then be given an opportunity to authorize proxies
to vote his or her shares at the Meeting in accordance with the
shareholder's instructions. To ensure that the shareholder's instructions
have been recorded correctly, the shareholder will also receive a
confirmation of the voting instructions in the mail. A special telephone
number will be available in case the voting information contained in the
Company's confirmation is incorrect and to revise a vote submitted by
telephone. If the shareholder decides after voting by telephone to
provide a written proxy or attend the Meeting, the shareholder can revoke
the telephone proxy at that time and vote the shares at the Meeting.
Brokerage houses, banks and other fiduciaries may be requested to forward
soliciting material to the beneficial owners of shares of the Fund and to
obtain authorization for the execution of proxies. For those services,
if any, they will be reimbursed by MassMutual for their reasonable out-of-
pocket expenses.
In addition to the proxy solicitation expenses (as described above)
MassMutual will bear the cost of the tax opinion, as well as any other
expenses associated with the Reorganization, including legal and
accounting expenses.
MISCELLANEOUS
Financial Information
The Reorganization will be accounted for by OMMF in its financial
statements similar to a pooling without restatement. Further financial
information as to Liquid Fund is contained in the Company's current
Prospectus, which is available without charge upon written request to OFS
at P.O. Box 5270, Denver, Colorado 80217, and is incorporated herein, and
in its audited financial statements as of December 31, 1995, which are
included in the Statement of Additional Information. Financial
information for OMMF is contained in its current Prospectus accompanying
this Proxy Statement and Prospectus and incorporated herein, and in its
audited financial statements as of December 31, 1995, which are included
in the Statement of Additional Information.
Public Information
Additional information about OMMF and Liquid Fund is available, as
applicable, in the following documents, which may be obtained without
charge by writing OFS at P.O. Box 5270, Denver, Colorado 80217, or by
calling 1-800-525-7048: (i) OMMF's Prospectus dated May 1, 1995,
supplemented January 5, 1996, accompanying this Proxy Statement and
Prospectus and incorporated by reference herein; (ii) the Company's
Prospectus dated October 1, 1995, supplemented March 18, 1996; and (iv)
the Company's Annual Report as of December 31, 1995.
Additional information about the following matters is contained in the
Statement of Additional Information, which is incorporated herein by
reference and includes OMMF's Statement of Additional Information, Liquid
Fund's Statement of Additional Information and the Annual Reports
described in the preceding paragraph: the organization and operation of
OMMF and Liquid Fund; more information on investment policies, practices
and risks; information about OMMF's and the Company's respective Boards
of Directors and their responsibilities; a further description of the
services provided by the funds' investment adviser, distributor, and
transfer and shareholder servicing agent; dividend policies; tax matters;
an explanation of the method of determining the net asset value of the
shares of OMMF and Liquid Fund; purchase, redemption and exchange
programs; and distribution arrangements.
OMMF and Liquid Fund are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith,
file reports and other information with the SEC. Proxy material, reports
and other information about OMMF and the Fund which are of public record
can be inspected and copied at public reference facilities maintained by
the SEC in Washington, D.C. and certain of its regional offices, and
copies of such materials can be obtained at prescribed rates from the
Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, Washington, D.C. 20549.
OTHER BUSINESS
Management of the Fund knows of no business other than the matters
specified above which will be presented at the Meeting. Since matters not
known at the time of the solicitation may come before the Meeting, the
proxy as solicited confers discretionary authority with respect to such
matters as properly come before the Meeting, and it is the intention of
the persons named as attorneys-in-fact in the proxy to vote this proxy in
accordance with their judgment on such matters if no voting instructions
are provided.
By Order of the Board of Directors
Andrew J. Donohue, Secretary
March 18, 1996
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
March 18, 1996 by and between Oppenheimer Series Fund, Inc., a Maryland
corporation (the "Company"), on behalf of Connecticut Mutual Liquid
Account, a series of the Company ("Liquid Fund") and Oppenheimer Money
Market Fund, Inc. ("OMMF"), a Maryland corporation.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type; and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), of Liquid Fund and OMMF through the acquisition by
OMMF of substantially all of the assets of Liquid Fund in exchange solely
for the issuance of voting shares of stock ("shares") of OMMF to Liquid
Fund and the assumption by OMMF of certain liabilities of Liquid Fund,
which shares of OMMF are thereafter to be distributed by Liquid Fund pro
rata to its shareholders in complete liquidation of Liquid Fund and
complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. The parties hereto hereby adopt this Agreement and Plan of
Reorganization (the "Agreement") pursuant to Section 368(a)(1) of the Code
as follows: The reorganization will be comprised of the acquisition by
OMMF of substantially all of the properties and assets of Liquid Fund in
exchange for the issuance of shares of OMMF to Liquid Fund and the
assumption by OMMF of certain liabilities of Liquid Fund, followed by the
distribution by Liquid Fund of such shares of OMMF to the shareholders of
Liquid Fund in exchange for their shares of Liquid Fund, all upon and
subject to the terms of the Agreement hereinafter set forth.
The share transfer books of Liquid Fund will be permanently
closed at the close of business on the Valuation Date (as hereinafter
defined) and only redemption requests received in proper form on or prior
to the close of business on the Valuation Date shall be fulfilled by
Liquid Fund; redemption requests received by Liquid Fund after that date
shall be treated as requests for the redemption of the shares of OMMF that
shall have been distributed to the shareholder in question as provided in
Section 5.
2. On the Closing Date (as hereinafter defined), all of the assets
of Liquid Fund on that date, excluding a cash reserve (the "Cash Reserve")
to be retained by Liquid Fund sufficient in its discretion for the payment
of the expenses of Liquid Fund's dissolution and its liabilities, but not
in excess of the amount contemplated by Section 10E of the Agreement,
shall be delivered as provided in Section 8 of the Agreement to OMMF, in
exchange for and against delivery to Liquid Fund on the Closing Date of
a number of shares of OMMF, having an aggregate net asset value equal to
the value of the assets of Liquid Fund so transferred and delivered.
3. The net asset value of shares of OMMF and the value of the
assets of Liquid Fund to be transferred shall in each case be determined
as of the close of business of The New York Stock Exchange on the
Valuation Date. The computation of the net asset value of the shares of
OMMF and the shares of Liquid Fund shall be done in the manner used by
OMMF and Liquid Fund, respectively, in the computation of such net asset
value per share as set forth in their respective prospectuses. The
methods used by OMMF in such computation shall be applied to the valuation
of the assets of Liquid Fund to be transferred to OMMF.
Liquid Fund shall declare and pay, immediately prior to the
Valuation Date, a dividend or dividends which, together with all previous
such dividends, shall have the effect of distributing to Liquid Fund's
shareholders all of Liquid Fund's investment company taxable income for
taxable years ending on or prior to the Closing Date (computed without
regard to any dividends paid) and all of its net capital gain, if any,
realized in taxable years ending on or prior to the Closing Date (after
reduction for any capital loss carry-forward).
4. The closing of the transactions contemplated herein (the
"Closing") shall be at the office of OppenheimerFunds, Inc. (the "Agent"),
Two World Trade Center, Suite 3400, New York, New York 10048, at 4:00 P.M.
New York time on April 26, 1996, or at such other time or place as the
parties may designate or as provided below (the "Closing Date"). The
business day preceding the Closing Date is herein referred to as the
"Valuation Date."
In the event that on the Valuation Date either party has,
pursuant to the Investment Company Act of 1940, as amended (the "Act"),
or any rule, regulation or order thereunder, suspended the redemption of
its shares or postponed payment therefor, the Closing Date shall be
postponed until the first business day after the date when both parties
have ceased such suspension or postponement; provided, however, that if
such suspension shall continue for a period of 60 days beyond the
Valuation Date, then the other party to the Agreement shall be permitted
to terminate the Agreement without liability to either party for such
termination.
5. As soon as practicable after the Closing, Liquid Fund shall
distribute on a pro rata basis to the shareholders of Liquid Fund on the
Valuation Date the shares of OMMF received by Liquid Fund on the Closing
Date in exchange for the assets of Liquid Fund in complete liquidation of
Liquid Fund; for the purpose of the distribution by Liquid Fund of shares
of OMMF to its shareholders, OMMF will promptly cause its transfer agent
to: (a) credit an appropriate number of shares of OMMF on the books of
OMMF to each shareholder of Liquid Fund in accordance with a list (the
"Shareholder List") of its shareholders received from Liquid Fund; and (b)
confirm an appropriate number of shares of OMMF to each shareholder of
Liquid Fund; certificates for shares of OMMF will be issued upon written
request of a former shareholder of Liquid Fund but only for whole shares,
with fractional shares credited to the name of the shareholder on the
books of OMMF.
The Shareholder List shall indicate, as of the close of business
on the Valuation Date, the name and address of each shareholder of Liquid
Fund, indicating his or her share balance. Liquid Fund agrees to supply
the Shareholder List to OMMF not later than the Closing Date.
Shareholders of Liquid Fund holding certificates representing their shares
shall not be required to surrender their certificates to anyone in
connection with the reorganization. After the Closing Date, however, it
will be necessary for such shareholders to surrender their certificates
in order to redeem, transfer or pledge the shares of OMMF which they
received.
6. Within one year after the Closing Date, Liquid Fund shall (a)
either pay or make provision for payment of all of its liabilities and
taxes, and (b) either (i) transfer any remaining amount of the Cash
Reserve to OMMF, if such remaining amount (as reduced by the estimated
cost of distributing it to shareholders) is not material (as defined
below) or (ii) distribute such remaining amount to the shareholders of
Liquid Fund on the Valuation Date. Such remaining amount shall be deemed
to be material if the amount to be distributed, after deduction of the
estimated expenses of the distribution, equals or exceeds one cent per
share of Liquid Fund outstanding on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination between
the parties as to their respective portfolios so that, after the closing,
OMMF will be in compliance with all of its investment policies and
restrictions. At the Closing, Liquid Fund shall deliver to OMMF two
copies of a list setting forth the securities, cash and receivables then
owned by Liquid Fund. Promptly after the Closing, Liquid Fund shall
provide OMMF a list setting forth the respective federal income tax bases
thereof.
8. Portfolio securities or written evidence acceptable to OMMF of
record ownership thereof by The Depository Trust Company or through the
Federal Reserve Book Entry System or any other depository approved by
Liquid Fund pursuant to Rule 17f-4 and Rule 17f-5 under the Act shall be
endorsed and delivered, or transferred by appropriate transfer or
assignment documents, by Liquid Fund on the Closing Date to OMMF, or at
its direction, to its custodian bank, in proper form for transfer in such
condition as to constitute good delivery thereof in accordance with the
custom of brokers and shall be accompanied by all necessary state transfer
stamps, if any. The cash holding of Liquid Fund shall be delivered to
OMMF in the form of certified or bank cashiers' checks or by bank wire or
intra-bank transfer to OMMF's custodian bank payable to the order of OMMF
for the account of OMMF.
Shares of OMMF representing the number of shares of OMMF being
delivered against the assets of Liquid Fund, registered in the name of
Liquid Fund, shall be transferred to Liquid Fund on the Closing Date.
Such shares shall thereupon be assigned by Liquid Fund to its shareholders
so that the shares of OMMF may be distributed as provided in Section 5.
If, at the Closing Date, Liquid Fund is unable to make delivery
under this Section 8 to OMMF of any of its portfolio securities or cash
for the reason that any of such securities purchased by Liquid Fund, or
the cash proceeds of a sale of portfolio securities, prior to the Closing
Date have not yet been delivered to it or Liquid Fund's custodian, then
the delivery requirements of this Section 8 with respect to said
undelivered securities or cash will be waived and Liquid Fund will deliver
to OMMF by or on the Closing Date and with respect to said undelivered
securities or cash executed copies of an agreement or agreements of
assignment as to such securities or cash proceeds in a form reasonably
satisfactory to OMMF, together with such other documents, including a due
bill or due bills and brokers' confirmation slips as may reasonably be
required by OMMF.
9. OMMF shall not assume the liabilities (except for (a) portfolio
securities purchased which have not settled and (b) shareholder redemption
and dividend checks outstanding) of Liquid Fund, but Liquid Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so
far as may be possible, prior to the Closing Date. Each party represents
to the other that Massachusetts Mutual Life Insurance Company has agreed
to assume liability for and pay all expenses associated with the
reorganization, including legal and accounting expenses, the cost of
required tax opinions, and the cost of printing and mailing the proxies
and proxy statements in connection with the solicitation of the approval
by the shareholders of the Liquid Fund of this reorganization. However
any documents such as existing prospectuses or annual reports that are
included in that proxy mailing will be a cost of the Fund issuing the
document. Other than the cost of such documents, neither party will bear
any expenses associated with the reorganization.
10. The obligations of OMMF hereunder shall be subject to the
following conditions:
A. The Board of Directors of Liquid Fund shall have authorized
the execution of the Agreement, and the shareholders of Liquid Fund shall
have approved the Agreement and the transactions contemplated thereby, and
Liquid Fund shall have furnished to OMMF copies of resolutions to that
effect certified by the Secretary or an Assistant Secretary of the
Company; such shareholder approval shall have been by the affirmative vote
of a majority of the outstanding voting securities of Liquid Fund at a
meeting for which proxies have been solicited by the Proxy Statement and
Prospectus (as hereinafter defined).
B. OMMF shall have received an opinion dated the Closing Date
of Piper & Marbury LLP, counsel to the Company, to the effect that (i) the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland with
full powers to conduct its business as described by its charter and as
currently being conducted; (ii) the execution and delivery of the
Agreement and the consummation of the transactions contemplated therein
will not result in any violation of the provisions of the charter or by-
laws of the Company; and (iii) the Agreement has been duly authorized and
executed by the Company and the Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratoriums and other
similar laws relating to or affecting creditor rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
C. The representations and warranties of the Company on behalf
of Liquid Fund contained herein shall be true and correct at and as of the
Closing Date, and OMMF shall have been furnished with a certificate of the
President, or a Vice President, or the Secretary or the Assistant
Secretary or the Treasurer of the Company, dated the Closing Date, to that
effect.
D. On the Closing Date, Liquid Fund shall have furnished to
OMMF a certificate of the Treasurer or Assistant Treasurer of the Company
as to the amount of the capital loss carry-over, if any, and net
unrealized appreciation or depreciation, if any, with respect to Liquid
Fund as of the Closing Date.
E. The Cash Reserve shall not exceed 1% of the value of the
net assets, nor 10% in value of the gross assets, of Liquid Fund at the
close of business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by OMMF under
the Securities Act of 1933, as amended (the "1933 Act"), containing a
preliminary form of the Proxy Statement and Prospectus required under the
Act to request the approval of shareholders of Liquid Fund of the
reorganization contemplated in the Agreement (the "Proxy Statement and
Prospectus"), shall have become effective under the 1933 Act not later
than December 31, 1996.
G. On the Closing Date, OMMF shall have received a letter of
David E. Sams, Jr. or other senior executive officer of G.R. Phelps & Co.
Inc. (Liquid Fund's administrator and former investment manager)
acceptable to OMMF, stating that nothing has come to his or her attention
which in his or her judgment would indicate that as of the Closing Date
there were any material actual or contingent liabilities of Liquid Fund
arising out of litigation brought against Liquid Fund or claims asserted
against it, or pending or to the best of his or her knowledge threatened
claims or litigation not reflected in or apparent from the most recent
audited financial statements and footnotes thereto of Liquid Fund
delivered to OMMF. Such letter may also include such additional
statements relating to the scope of the review conducted by such person
and his or her responsibilities and liabilities as are not unreasonable
under the circumstances.
H. OMMF shall have received an opinion, dated the Closing
Date, of Arthur Andersen LLP, to the same effect as the opinion
contemplated by Section 11.E. of the Agreement.
I. OMMF shall have received at the Closing all of the assets
of Liquid Fund to be conveyed hereunder, which assets shall be free and
clear of all liens, encumbrances, security interests, restrictions and
limitations whatsoever.
J. Each fund shall have received from the Securities and
Exchange Commission such order or orders as counsel to such Fund deem
reasonably necessary or desirable under the 1933 Act and the Act in
connection with transactions contemplated hereby, and that all such orders
shall be in full force and effect.
11. The obligations of Liquid Fund hereunder shall be subject to the
following conditions:
A. The Board of Directors of OMMF shall have authorized the
execution of the Agreement, and the transactions contemplated thereby, and
OMMF shall have furnished to Liquid Fund copies of resolutions to that
effect certified by the Secretary or an Assistant Secretary of OMMF.
B. Liquid Fund's shareholders shall have approved the
Agreement and the transactions contemplated hereby, by an affirmative vote
of a majority of the outstanding voting securities of Liquid Fund, and
Liquid Fund shall have furnished OMMF copies of resolutions to that effect
certified by the Secretary or an Assistant Secretary of Liquid Fund.
C. Liquid Fund shall have received an opinion dated the
Closing Date of Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to
OMMF, to the effect that (i) OMMF is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland with
full powers to carry on its business as described by its Articles of
Incorporation and to the best knowledge of such counsel, then being
conducted and to enter into and perform the Agreement; (ii) all action
necessary to make the Agreement, according to its terms, valid, binding
and enforceable upon OMMF in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratoriums and other similar laws relating to or affecting creditor
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing, and to authorize effectively the transactions contemplated
by the Agreement have been taken by OMMF, and (iii) the shares of OMMF to
be issued hereunder are duly authorized and when issued will be validly
issued, fully-paid and non-assessable, except as set forth in OMMF's then
current Prospectus and Statement of Additional Information.
D. The representations and warranties of OMMF contained herein
shall be true and correct at and as of the Closing Date, and Liquid Fund
shall have been furnished with a certificate of the President, a Vice
President or the Secretary or an Assistant Secretary or the Treasurer of
OMMF to that effect dated the Closing Date.
E. Liquid Fund shall have received an opinion of Arthur
Andersen LLP to the effect that the Federal tax consequences of the
transaction, if carried out in the manner outlined in this Agreement and
Plan of Reorganization and in accordance with (i) Liquid Fund's
representation that there is no plan or intention by any Liquid Fund
shareholder who owns 5% or more of Liquid Fund's outstanding shares, and,
to Liquid Fund's best knowledge, there is no plan or intention on the part
of the remaining Fund shareholders, to redeem, sell, exchange or otherwise
dispose of a number of OMMF shares received in the transaction that would
reduce Liquid Fund shareholders' ownership of OMMF shares to a number of
shares having a value, as of the Closing Date, of less than 50% of the
value of all of the formerly outstanding Fund shares as of the same date,
and (ii) the representation by each of Liquid Fund and OMMF that, as of
the Closing Date, Liquid Fund and OMMF will qualify as regulated
investment companies or will meet the diversification test of Section
368(a)(2)(F)(ii) of the Code, and (iii) the other representations by each
of Liquid Fund and OMMF made to Arthur Andersen LLP and set forth in the
opinion will generally be as follows:
1. The transfer of substantially all of Liquid Fund's
assets in exchange for shares of OMMF and the assumption by OMMF of
certain identified liabilities of Liquid Fund followed by the distribution
by Liquid Fund of shares of OMMF to Liquid Fund shareholders in exchange
for their Liquid Fund shares will constitute a "reorganization" within the
meaning of Section 368(a)(1) of the Code and Liquid Fund and OMMF will
each be a "party to a reorganization" within the meaning of Section 368(b)
of the Code.
2. Pursuant to Section 1032 of the Code, no gain or loss
will be recognized by OMMF upon the receipt of the assets of Liquid Fund
solely in exchange for shares of OMMF and the assumption by OMMF of
certain identified liabilities of Liquid Fund.
3. Pursuant to Sections 361(a) and 361(c) of the Code,
no gain or loss will be recognized by Liquid Fund upon the transfer of the
assets of Liquid Fund to OMMF in exchange for shares of OMMF and the
assumption by OMMF of certain identified liabilities of Liquid Fund or
upon the distribution of shares of OMMF to Liquid Fund shareholders in
exchange for Liquid Fund shares.
4. Pursuant to Section 354(a) of the Code, no gain or
loss will be recognized by Liquid Fund shareholders upon the exchange of
Liquid Fund shares for the shares of OMMF. However, Liquid Fund
shareholders may recognize taxable income or gain to the extent they
receive any portion of the Cash Reserve, as defined in the Agreement.
5. Pursuant to Section 358 of the Code, the aggregate tax
basis for shares of OMMF received by each Liquid Fund shareholder pursuant
to the Reorganization will be the same as the aggregate tax basis of
Liquid Fund shares held by each such Liquid Fund shareholder immediately
prior to the Reorganization.
6. Pursuant to Section 1223 of the Code, the holding
period of shares of OMMF to be received by each Liquid Fund shareholder
will include the period during which Liquid Fund shares surrendered in
exchange therefor were held (provided such Liquid Fund shares were held
as capital assets on the date of the Reorganization.
7. Pursuant to Section 362(b) of the Code, the tax basis
of the assets of Liquid Fund acquired by OMMF will be the same as the tax
basis of such assets of Liquid Fund immediately prior to the
Reorganization.
8. Pursuant to Section 1223 of the Code, the holding
period of the assets of Liquid Fund in the hands of OMMF will include the
period during which those assets were held by Liquid Fund.
9. OMMF will succeed to and take into account the items
of Liquid Fund described in Section 381(c) of the Code, including the
earnings and profits, or deficit in earnings and profits, of Liquid Fund
as of the date of the transactions. OMMF will take these items into
account subject to the conditions and limitations specified in Sections
381, 382, 383 and 384 of the Code and applicable regulations thereunder.
F. The Cash Reserve shall not exceed 1% of the value of the
net assets, nor 10% in value of the gross assets, of Liquid Fund at the
close of business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by OMMF under
the 1933 Act, containing a preliminary form of the Proxy Statement and
Prospectus, required under the Act to request the approval of the
shareholders of Liquid Fund of the reorganization contemplated in the
Agreement shall have become effective under the 1933 Act not later than
December 31, 1996.
H. On the Closing Date, Liquid Fund shall have received a
letter of Andrew J. Donohue or other senior executive officer of
OppenheimerFunds, Inc. acceptable to Liquid Fund, stating that nothing has
come to his or her attention which in his or her judgment would indicate
that as of the Closing Date there were any material actual or contingent
liabilities of OMMF arising out of litigation brought against OMMF or
claims asserted against it, or pending or, to the best of his or her
knowledge, threatened claims or litigation not reflected in or apparent
by the most recent audited financial statements and footnotes thereto of
OMMF delivered to Liquid Fund. Such letter may also include such
additional statements relating to the scope of the review conducted by
such person and his or her responsibilities and liabilities as are not
unreasonable under the circumstances.
I. Liquid Fund shall acknowledge receipt of the shares of
OMMF.
J. Each fund shall have received from the Securities and
Exchange Commission such order or orders as counsel to such Fund deem
reasonably necessary or desirable under the 1933 Act and the Act in
connection with the transactions contemplated hereby, and that all such
orders shall be in full force and effect.
12. Liquid Fund hereby represents and warrants that:
A. The financial statements of Liquid Fund as at December 31,
1995 (audited) heretofore furnished to OMMF, present fairly the financial
position, results of operations, and changes in net assets of Liquid Fund
as of that date, in conformity with generally accepted accounting
principles applied on a basis consistent with the preceding year; and that
from December 31, 1995 through the date hereof there have not been, and
through the Closing Date there will not be, any material adverse change
in the business or financial condition of Liquid Fund, it being agreed
that a decrease in the size of Liquid Fund due to a diminution in the
value of its portfolio and/or redemption of its shares shall not be
considered a material adverse change;
B. Contingent upon approval of the Agreement and the
transactions contemplated thereby by Liquid Fund's shareholders, Liquid
Fund has authority to transfer all of the assets of Liquid Fund to be
conveyed hereunder free and clear of all liens, encumbrances, security
interests, restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in
the Company's Registration Statement under the 1933 Act, as amended, is
true, correct and complete, conforms to the requirements of the 1933 Act
and does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
D. There is no material contingent liability of Liquid Fund
and no material claim and no material legal, administrative or other
proceedings pending or, to the knowledge of Liquid Fund, threatened
against Liquid Fund, not reflected in such Prospectus;
E. There are no material contracts outstanding to which Liquid
Fund is a party other than those ordinary in the conduct of its business;
F. Liquid Fund is a series of Oppenheimer Series Fund, Inc.,
a corporation duly organized, validly existing and in good standing under
the laws of the State of Maryland; and has all necessary and material
Federal and state authorizations to own all of its assets and to carry on
its business as now being conducted; and Liquid Fund is duly registered
under the Act and such registration has not been rescinded or revoked and
is in full force and effect;
G. All Federal and other tax returns and reports of Liquid
Fund required by law to be filed have been filed, and all Federal and
other taxes shown due on said returns and reports have been paid or
provision shall have been made for the payment thereof and to the best of
the knowledge of Liquid Fund no such return is currently under audit and
no assessment has been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of Liquid Fund
ended December 31, 1995 have not been filed, such returns will be filed
when required and the amount of tax shown as due thereon shall be paid
when due; and
H. Liquid Fund has elected to be treated as a regulated
investment company and, for each taxable year of its operations, Liquid
Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and Liquid
Fund intends to meet such requirements with respect to its current taxable
year.
13. OMMF hereby represents and warrants that:
A. The financial statements of OMMF as at December 31, 1995
(audited) heretofore furnished to Liquid Fund, present fairly the
financial position, results of operations, and changes in net assets of
OMMF, as of that date, in conformity with generally accepted accounting
principles applied on a basis consistent with the preceding year; and that
from December 31, 1995 through the date hereof there have not been, and
through the Closing Date there will not be, any material adverse changes
in the business or financial condition of OMMF, it being understood that
a decrease in the size of OMMF due to a diminution in the value of its
portfolio and/or redemption of its shares shall not be considered a
material or adverse change;
B. The Prospectus, as amended and supplemented, contained in
OMMF's Registration Statement under the 1933 Act, is true, correct and
complete, conforms to the requirements of the 1933 Act and does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
C. There is no material contingent liability of OMMF and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of OMMF, threatened against OMMF, not
reflected in such Prospectus;
D. There are no material contracts outstanding to which OMMF
is a party other than those ordinary in the conduct of its business;
E. OMMF is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maryland; has all
necessary and material Federal and state authorizations to own all its
properties and assets and to carry on its business as now being conducted;
the shares of OMMF which it issues to Liquid Fund pursuant to the
Agreement will be duly authorized, validly issued, fully-paid and non-
assessable, except as otherwise set forth in OMMF's Registration
Statement; and will conform to the description thereof contained in
OMMF's Registration Statement, will be duly registered under the 1933 Act
and in the states where registration is required; and OMMF is duly
registered under the Act and such registration has not been revoked or
rescinded and is in full force and effect;
F. All Federal and other tax returns and reports of OMMF
required by law to be filed have been filed, and all Federal and other
taxes shown due on said returns and reports have been paid or provision
shall have been made for the payment thereof and to the best of the
knowledge of OMMF no such return is currently under audit and no
assessment has been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of OMMF ended
December 31, 1995 have not been filed, such returns will be filed when
required and the amount of tax shown as due thereon shall be paid when
due;
G. OMMF has elected to be treated as a regulated investment
company and, for each taxable year of its operations, OMMF has met the
requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and OMMF intends to meet such
requirements with respect to its current taxable year;
H. OMMF has no plan or intention (i) to dispose of any of the
assets transferred by Liquid Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the shares issued by it
in the reorganization other than pursuant to valid requests of
shareholders; and
I. After consummation of the transactions contemplated by the
Agreement, OMMF intends to operate its business in a substantially
unchanged manner.
14. Each party hereby represents to the other that no broker or
finder has been employed by it with respect to the Agreement or the
transactions contemplated hereby. Each party also represents and warrants
to the other that the information concerning it in the Proxy Statement and
Prospectus will not as of its date contain any untrue statement of a
material fact or omit to state a fact necessary to make the statements
concerning it therein not misleading and that the financial statements
concerning it will present the information shown fairly in accordance with
generally accepted accounting principles applied on a basis consistent
with the preceding year. Each party also represents and warrants to the
other that the Agreement is valid, binding and enforceable in accordance
with its terms and that the execution, delivery and performance of the
Agreement will not result in any violation of, or be in conflict with, any
provision of any charter, by-laws, contract, agreement, judgment, decree
or order to which it is subject or to which it is a party. OMMF hereby
represents to and covenants with Liquid Fund that, if the reorganization
becomes effective, OMMF will treat each shareholder of Liquid Fund who
received any of OMMF's shares as a result of the reorganization as having
made the minimum initial purchase of shares of OMMF received by such
shareholder for the purpose of making additional investments in shares of
OMMF, regardless of the value of the shares of OMMF received.
15. OMMF agrees that it will prepare and file a Registration
Statement on Form N-14 under the 1933 Act (unless it has already done so)
which shall contain a preliminary form of proxy statement and prospectus
contemplated by Rule 145 under the 1933 Act. The final form of such proxy
statement and prospectus is referred to in the Agreement as the "Proxy
Statement and Prospectus." Each party agrees that it will use its best
efforts to have such Registration Statement declared effective and to
supply such information concerning itself for inclusion in the Proxy
Statement and Prospectus as may be necessary or desirable in this
connection.
16. The obligations of the parties under the Agreement shall be
subject to the right of (a) both parties to mutually consent to abandon
and terminate the Agreement without liability, and (b) either party to
abandon and terminate the Agreement without liability if the other party
breaches any material provision of the Agreement or if any material legal,
administrative or other proceeding shall be instituted or threatened
between the date of the Agreement and the Closing Date (i) seeking to
restrain or otherwise prohibit the transactions contemplated hereby and/or
(ii) asserting a material liability of either party, which proceeding has
not been terminated or the threat thereof removed prior to the Closing
Date. In the event of termination, damages will be limited to
reimbursement by the party breaching any material provision of the
Agreement of the reasonable out-of-pocket fees and expenses (if any)
incurred by the other party in connection with the transactions
contemplated by the Agreement.
17. The Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all taken together shall constitute
one Agreement. The rights and obligations of each party pursuant to the
Agreement shall not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into the Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written acknowledgement of such waiver.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to
be executed and attested by its officers thereunto duly authorized on the
date first set forth above.
Attest: OPPENHEIMER SERIES FUND, INC.
On Behalf of
Connecticut Mutual Liquid Account
/s/ Robert G. Zack /s/ Andrew J. Donohue
- -------------------------- By: ----------------------
Robert G. Zack, Assistant Secretary
Name and Title: Andrew J. Donohue,
Secretary
Attest: OPPENHEIMER MONEY MARKET FUND,
INC.
/s/ Robert G. Zack /s/ Andrew J. Donohue
- -------------------------- By: ----------------------
Robert G. Zack, Assistant Secretary
Name and Title: Andrew J. Donohue,
Secretary
Preliminary Copy
OPPENHEIMER SERIES FUND, INC.
CONNECTICUT MUTUAL LIQUID ACCOUNT
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD APRIL 24, 1996
The undersigned shareholder of Connecticut Mutual Liquid Account (the
"Fund"), a series of Oppenheimer Series Fund, Inc. (the "Company"), does
hereby appoint Andrew J. Donohue, George Bowen and Robert J. Bishop, and
each of them, as attorneys-in-fact and proxies of the undersigned, with
full power of substitution, to attend the Special Meeting of Shareholders
of the Fund to be held on April 24, 1996, at OppenheimerFunds, Inc., 3410
South Galena Street, Denver, Colorado 80231 at 10:00 A.M., Denver time,
and at all adjournments thereof, and to vote the shares held in the name
of the undersigned on the record date for said meeting on the Proposal
specified on the reverse side. Said attorneys-in-fact shall vote in
accordance with their best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHO RECOMMENDS A VOTE
FOR THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL
BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO CHOICE IS
INDICATED.
Please mark your proxy, date and sign it on the reverse side and return
it promptly in the accompanying envelope, which requires no postage if
mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization dated as of March
18, 1996 by and among Oppenheimer Money Market Fund, Inc. and the
Company, on behalf of the Fund, and the transactions contemplated
thereby, including the transfer of substantially all the assets of
the Fund to Oppenheimer Money Market Fund, Inc. in exchange for the
issuance of shares of Oppenheimer Money Market Fund, Inc., the
distribution by the Fund of such shares to its shareholders in
liquidation of the Fund and the cancellation of the outstanding
shares of the Fund.
FOR____ AGAINST____ ABSTAIN____
Dated:________________________, 1996
(Month) (Day)
______________________________
Signature(s)
______________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give his or her title.
Oppenheimer Series Fund, Inc.
Connecticut Mutual Liquid Account
Proxy For Shareholders Meeting
to be Held April 24, 1996
Your shareholder Your prompt response can avoid the expense
vote is important! of another mailing.
Please vote, sign and mail your proxy
ballot (this card) in the enclosed postage-
paid envelope today, no matter how many
shares you own. A majority of the Fund's
shares must be represented in person or by
proxy. Please vote your proxy so the
expense of another mailing can be avoided.
merge\200.solicit
OFI Letterhead
March 1996
Dear Connecticut Mutual Liquid Account Shareholder:
I am writing to you today to let you know about a positive change
that has been proposed for Connecticut Mutual Liquid Account (the
"Fund").
After careful consideration, the Board of Directors of your Fund
determined that it would be in the best interests of shareholders of
the Fund to reorganize into another Oppenheimer fund, Oppenheimer Money
Market Fund, Inc.
A shareholder meeting has been scheduled in April, and all shareholders
of record on March 18 are being asked to vote either in person or by
proxy. You will find a notice of the meeting, a proxy statement
detailing the proposal, a ballot card, a prospectus of Oppenheimer
Money Market Fund, as well as a postage-paid return envelope enclosed
for your use.
What is being proposed?
Your Fund's Board of Directors, which represents your interests in
the management of the Fund, recommended approval of the merger of the
Fund into another Oppenheimer fund, Oppenheimer Money Market Fund.
Why do the Board and the Fund's new Investment Advisor,
OppenheimerFunds, Inc., recommend this change?
The consolidation of the Fund into Oppenheimer Money Market Fund makes
sense because both funds share substantially similar investment
objectives and policies. In addition, the Board believes the merger is
advantageous for shareholders because the larger asset size of
Oppenheimer Money Market Fund offers shareholders the potential for
greater portfolio diversification, than is currently possible in either
fund alone, especially Liquid Account.
Another benefit for shareholders is the potential for greater
economies of scale that may result from consolidation into a much
larger fund. By merging the Fund into Oppenheimer Money Market Fund --
which now has approximately $780 million in assets -- shareholders of
the Fund may benefit from economies of scale in overall operating
expenses as costs are spread among a larger number of shareholders.
Your vote is very important because these decisions will affect
your investment. So, we urge you to consider these issues carefully,
and to make your vote count.
How do you vote?
No matter how large or small your investment, your vote is
important, so please review the proxy statement carefully. To cast
your vote, simply mark, sign and date the enclosed proxy ballot and
return it in the postage-paid envelope today. It can be expensive to
remail ballots if not enough responses are received to conduct the
meeting.
Please contact your financial advisor or call us at 1-800-525-7048
if you have any questions.
As always, we thank you for allowing us to manage a portion of
your investment assets.
Sincerely,
[BAM signature]
Enclosure
