As filed with the Securities and Exchange Commission on November 1, 1996
Registration No. 333-11959
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 1 / X /
OPPENHEIMER GROWTH FUND
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York, 10048-0203
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
Executive Vice President & General Counsel
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
(212) 323-0256
(Name and Address of Agent for Service)
As soon as practicable after the Registration Statement becomes effective.
(Approximate Date of Proposed Public Offering)<PAGE>
It is proposed that this
filing will become effective on November 1,
1996, pursuant to Rule 485(b).
No filing fee is due because the Registrant has previously registered an
indefinite number of shares under Rule 24f-2; a Rule 24f-2 notice for the
fiscal year ended June 30, 1996 was filed on August 24, 1996 and for the
two-month period ended August 31, 1996 was filed on October 30, 1996.
Pursuant to Rule 429, this Registration Statement relates to shares
previously registered by the Registrant on Form N-1A (Reg. No. 2-45272;
811-2306).
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A
Proxy Statement for Jefferson-Pilot Capital Appreciation Fund, Inc.
and
Prospectus for Oppenheimer Growth Fund
Part B
Statement of Additional Information
Part C
Other Information
Signatures
Exhibits
<PAGE>
FORM N-14
OPPENHEIMER GROWTH FUND
Cross Reference Sheet
Part A of
Form N-14
Item No. Proxy Statement and Prospectus Heading and/or Title of Document
- --------- ---------------------------------------------------------------
1 (a) Cross Reference Sheet
(b) Front Cover Page
(c) *
2 (a) *
(b) Table of Contents
3 (a) Comparative Fee Tables
(b) Synopsis
(c) Principal Risk Factors
4 (a)Synopsis; Approval or Disapproval of the Reorganization;
Comparison between Growth Fund and JP Fund; Miscellaneous
(b)Approval or Disapproval of the Reorganization -
Capitalization Table
5 (a) Registrant's Prospectus; Comparison Between Growth Fund and JP
Fund
(b) *
(c) *
(d) *
(e) Miscellaneous
(f) Miscellaneous
6 (a) Prospectus of Jefferson-Pilot Capital Appreciation Fund, Inc.;
Annual Report of Jefferson-Pilot Capital Appreciation Fund, Inc.;
Comparison Between Growth Fund and JP Fund
(b)Miscellaneous
(c) *
(d) *
7 (a) Synopsis; Information Concerning the Meeting
(b) *
(c) Synopsis; Information Concerning the Meeting
8 (a) Proxy Statement
(b) *
9 *
Part B of
Form N-14
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Table of Contents
12 (a) Registrant's Statement of Additional Information
(b) *
(c) *
13 (a)Statement of Additional Information about Jefferson-Pilot Capital
Appreciation Fund, Inc.
(b) *
(c) *
14 Registrant's Statement of Additional Information; Statement of
Additional Information about Jefferson-Pilot Capital
Appreciation Fund, Inc.; Annual Report of Jefferson-Pilot
Capital Appreciation Fund, Inc. at 12/31/95; Semi-Annual Report
of Jefferson-Pilot Capital Appreciation Fund, Inc. at 6/30/96;
Registrant's Annual Report at 8/31/96
Part C of
Form N-14
Item No. Other Information Heading
- --------- -------------------------
15 Indemnification
16 Exhibits
17 Undertakings
_______________
* Not Applicable or negative answer
<PAGE>
JEFFERSON-PILOT CAPITAL APPRECIATION FUND, INC.
100 North Greene Street, Greensboro, North Carolina 27420
1-800-458-4498
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held December 3, 1996
To the Shareholders of Jefferson-Pilot Capital Appreciation Fund, Inc.:
Notice is hereby given that a Special Meeting of the Shareholders of
Jefferson-Pilot Capital Appreciation Fund, Inc. ("JP Fund"), an open-end,
management investment company, will be held at the Jefferson-Pilot Building
(4th Floor, Room B-2), 100 North Greene Street, Greensboro, North Carolina
27420 at 10:00 A.M., local time, on December 3, 1996, and any adjournments
thereof (the "Meeting"), for the following purposes:
1. To consider and vote upon the approval or disapproval of the
Agreement and Plan of Reorganization dated as of October 8, 1996 (the
"Reorganization Agreement") by and among JP Fund, Jefferson-Pilot
Corporation, Oppenheimer Growth Fund ("Oppenheimer Fund") and
OppenheimerFunds, Inc., and the transactions contemplated thereby
(the "Reorganization"), including (i) the transfer of substantially
all the assets of JP Fund to Oppenheimer Fund in exchange for Class
A shares of Oppenheimer Fund, (ii) the distribution of such shares
of Oppenheimer Fund to shareholders of JP Fund in liquidation of JP
Fund, and (iii) the cancellation of the outstanding shares of JP Fund
("Proposal 1");
2. To elect to the Board of Directors five (5) directors to hold office
until the earlier of (i) the dissolution of JP Fund or (ii) the next
annual meeting of shareholders of JP Fund called for the purpose of
electing directors, or until their successors are elected and
qualified ("Proposal 2");
3. To ratify or reject the selection of McGladrey & Pullen LLP as JP
Fund's independent auditors for the current fiscal year ("Proposal
3"); and
4. To act upon such other matters as may properly come before the
Meeting.
The Proposals are more fully described in the accompanying Proxy Statement
and Prospectus and a copy of the Reorganization Agreement is attached as
Exhibit A thereto. JP Fund shareholders of record at the close of business
on October 10, 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 JP Fund recommends a vote in favor of each Proposal
and to elect each of the nominees as Director. WE URGE YOU TO SIGN, DATE
AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Directors,
J. Gregory Poole, Secretary
November 1, 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.
<PAGE>
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 Jefferson-Pilot Capital Appreciation Fund, Inc. ("JP Fund")
to Oppenheimer Growth Fund ("Oppenheimer Fund"), the issuance of Class A
shares of Oppenheimer Fund to JP Fund for distribution to its shareholders
and the cancellation of the outstanding shares of JP Fund. The number of
Class A shares of Oppenheimer Fund that will be received by shareholders
of JP Fund will be determined on the basis of the relative net asset values
of Oppenheimer Fund and JP Fund. Although the number of shares of
Oppenheimer Fund issued to a shareholder of JP Fund may be greater or fewer
than the number of JP Fund shares that he or she holds, the value of the
shares of Oppenheimer Fund issued in the Reorganization will be equal to
the value of his or her JP Fund shares.
The Reorganization has been proposed in connection with a proposed
acquisition by OppenheimerFunds, Inc. ("OFI") of the assets of JP
Investment Management Company ("JPM"), the investment adviser to JP Fund.
OFI is discussed in greater detail below.
Shareholders are directed to read the accompanying Proxy Statement and
Prospectus for further information about the Reorganization and related
matters. Additional information about Oppenheimer Fund is set forth in its
accompanying Prospectus.
2. What are the reasons for the Reorganization?
Jefferson-Pilot Corporation ("JPC"), in the course of a review of its
business, concluded that it should invest its capital resources in its core
insurance business and communications operations rather than investing in
the expansion of mutual fund assets being managed by JPM (or another
investment management subsidiary). Because managing mutual fund investment
portfolios in an efficient and profitable manner can only be achieved by
managing aggregate assets significantly in excess of the amount of assets
currently being managed by JPM, JPC has decided to sell the assets of JPM
and thereby leave the business of managing mutual fund investment
portfolios. This decision requires that alternative arrangements be made
for the management of the assets of the four mutual funds (including JP
Fund) managed by JPM. The Reorganization would result in OFI taking over
management of the investment portfolio of JP Fund when JPM is sold.
3. What benefits to shareholders may result from this Reorganization?
The Board of Directors of JP Fund has determined that, among other things,
the Reorganization would afford the shareholders of JP Fund: 1) the
capabilities and resources of OFI and its affiliates in the area of equity
investment management, distribution, shareholder services and marketing,
and 2) the ability to exchange their Oppenheimer Fund shares for shares of
a wider variety of funds and portfolios within the OppenheimerFunds family.
4. Who is paying the expenses of the Reorganization?
All expenses of the Reorganization will be paid by the respective
investment advisers to JP Fund and Oppenheimer Fund and not JP Fund or
Oppenheimer Fund.
5. Who is OppenheimerFunds, Inc.?
OFI and its subsidiaries are engaged principally in the business of
managing, distributing and servicing registered investment companies. OFI
has operated as an investment adviser since 1959. OFI is indirectly
controlled by Massachusetts Mutual Life Insurance Company. As of September
30, 1996, OFI and a subsidiary had assets of more than $55 billion under
management in more than 60 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 (with one exception). However, there will be no commission
or sales load of any kind charged in connection with the Class A shares
issued in this Reorganization. Purchases of Class A shares of Oppenheimer
Fund in addition to those received in exchange for JP Fund shares in the
Reorganization will, nonetheless, be assessed any applicable sales charge.
See the accompanying documents for further details.
7. May I exchange between other Oppenheimer funds without a sales charge
or exchange fee?
Yes. As a shareholder of Oppenheimer Fund after this Reorganization, you
will be able to exchange your Class A shares for Class A shares of other
Oppenheimer funds without payment of any sales charges or exchange fees.
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 Services at 1-(800) 525-7048. They will be pleased
to supply you with prospectuses and other documentation with respect to the
Oppenheimer funds.
9. After the Reorganization, whom do I contact about my new Oppenheimer
Fund account or to initiate a transaction in that account?
Once the Reorganization is approved and effected, you will become a
shareholder of Oppenheimer Fund. For information about your new
Oppenheimer Fund account or to initiate a transaction in that 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 JP Fund,
Oppenheimer Fund or to me as a shareholder?
The Reorganization is structured in a manner that is intended to qualify
for federal income tax purposes as a tax-free reorganization. The
aggregate tax basis of Oppenheimer Fund shares received by you will be the
same as the aggregate tax basis of your JP Fund shares prior to the
Reorganization, and the holding period of the shares of Oppenheimer Fund
received by you will include the period during which you held your JP Fund
shares provided that those JP Fund shares were held as capital assets.
Shareholders of JP Fund should consult their tax advisors regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing only relates to the federal income tax
consequences of the Reorganization, shareholders of JP Fund should also
consult their tax advisors as to state and local tax consequences, if any,
of the Reorganization.
<PAGE>
JEFFERSON-PILOT CAPITAL APPRECIATION FUND, INC.
100 North Greene Street, Greensboro, North Carolina 27420
1-800-458-4498
PROXY STATEMENT
OPPENHEIMER GROWTH FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROSPECTUS
This Proxy Statement and Prospectus is being furnished to shareholders
of Jefferson-Pilot Capital Appreciation Fund, Inc. ("JP Fund"), an open-end,
management investment company, in connection with the solicitation by
the Board of Directors of JP Fund (the "Board") of proxies to be used at
the Special Meeting of Shareholders of JP Fund, to be held at the
Jefferson-Pilot Building (4th Floor, Room B-2), 100 North Greene Street,
Greensboro, North Carolina 27420 at 10:00 A.M., local time, on December 3,
1996, and any adjournments thereof (the "Meeting"). The Board has set
October 10, 1996, as the date for the determination of JP Fund shareholders
entitled to notice of, and to vote at, the Meeting (the "Record Date").
It is expected that this Proxy Statement and Prospectus will be mailed to
shareholders on or about November 1, 1996.
At the Meeting, shareholders of JP Fund will be asked to consider and
vote upon the approval or disapproval of the Agreement and Plan of
Reorganization, dated as of October 8, 1996 (the "Reorganization
Agreement"), by and among JP Fund, Jefferson-Pilot Corporation ("JPC"),
Oppenheimer Growth Fund ("Oppenheimer Fund") and OppenheimerFunds, Inc.,
("OFI") and the transactions contemplated by the Reorganization Agreement
(the "Reorganization"). The Reorganization Agreement provides for the
transfer of substantially all the assets of JP Fund to Oppenheimer Fund in
exchange for Class A shares of Oppenheimer Fund having a value equal to the
aggregate net asset value of the outstanding shares of JP Fund, the
distribution of such Class A shares of Oppenheimer Fund to the shareholders
of JP Fund in liquidation of JP Fund and the cancellation of the
outstanding shares of JP 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 JP Fund will
receive that number of Class A shares of Oppenheimer Fund having an
aggregate net asset value equal to the net asset value of such
shareholder's shares of JP Fund. This transaction has been structured in
a manner intended to qualify as a tax-free reorganization for federal
income tax purposes. See "Approval or Disapproval of the Reorganization."
At the Meeting, shareholders of JP Fund will also be asked to elect five
Directors and ratify the selection of independent auditors.
Oppenheimer Fund currently offers the individual investor Class A, Class
B and Class C shares. A fourth class of shares, Class Y shares, is offered
only to certain institutional investors and is not discussed herein. Class
A shares are usually sold with a sales charge imposed at the time of
purchase (certain purchases aggregating $1.0 million or more ($500,000 as
to purchases by certain retirement plans) are not subject to a sales
charge, but may be subject to a contingent deferred sales charge ("CDSC")
if redeemed within 18 months of the date of purchase). Class B shares are
sold without a front-end sales charge but may be subject to a CDSC if
redeemed within six years of the date of purchase. Class C shares are sold
without a front-end sales charge but may be subject to a CDSC if not held
for one year. As a result of the Reorganization, shareholders of JP Fund
will receive Class A shares of Oppenheimer Fund and no sales charge will
be imposed on the Oppenheimer Fund Class A shares received by JP Fund's
shareholders. Because JP Fund has only one class of shares outstanding,
Oppenheimer Fund will not issue Class B or Class C shares in the
Reorganization. Accordingly, complete information on Class B and Class C
shares of Oppenheimer Fund is not included in this Proxy Statement and
Prospectus, and no offering of Class B or Class C shares is made hereby.
Oppenheimer Fund, formerly named "Oppenheimer Special Fund," is a mutual
fund that seeks capital appreciation. Oppenheimer Fund does not invest to
earn current income to distribute to shareholders. Oppenheimer Fund seeks
its investment objective by primarily investing in common stocks of
established mid- and large- capitalization growth companies as more fully
described herein. JP Fund's primary investment objective is to seek long
term capital appreciation; current income through the receipt of interest
or dividends from investments is only a secondary objective. JP Fund
proposes to achieve these objectives by investing substantially all of its
assets in common stocks of companies recognized as leaders in their
respective industries as more fully described herein. Shareholders of JP
Fund should consider the differences in investment objectives and policies
of Oppenheimer Fund and JP Fund. See "Synopsis - Investment Objectives and
Policies," "Principal Risk Factors" and "Comparison Between Oppenheimer
Fund and JP Fund -Comparison of Investment Objectives, Policies and
Restrictions."
Oppenheimer Fund 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 Class A shares of Oppenheimer Fund to be
offered to the shareholders of JP Fund pursuant to the Reorganization
Agreement. This Proxy Statement and Prospectus relating to the
Reorganization also constitutes a Prospectus of Oppenheimer Fund filed as
part of such Registration Statement. Information contained or incorporated
by reference herein relating to Oppenheimer Fund has been prepared by and
is the responsibility of Oppenheimer Fund. Information contained or
incorporated by reference herein relating to JP Fund has been prepared by
and is the responsibility of JP Fund.
This Proxy Statement and Prospectus sets forth concisely information
about Oppenheimer Fund 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 Jefferson-
Pilot Investor Services, Inc. ("JPIS"), the distributor for JP Fund, at
P.O. Box 22086, Greensboro, North Carolina 27420, or by calling
1-800-458-4498 (a toll-free number): (i) a Prospectus for JP Fund, dated May 1,
1996, as supplemented October 8, 1996, (information about JP Fund is
incorporated herein by reference to JP Fund's May 1, 1996 Prospectus, as
supplemented) and (ii) a Statement of Additional Information about JP Fund,
dated May 1, 1996 (the "JP Fund Additional Statement"). The most recent
Annual Report and Semi-Annual Report for JP Fund, dated as of December 31,
1995 and June 30, 1996, respectively, are also available without charge
upon request to JPIS by calling 1-800-458-4498 (toll-free).
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 Oppenheimer Fund, OppenheimerFunds Services ("OFS"),
at P.O. Box 5270, Denver, Colorado 80217, or by calling 1-800-525-7048 (a
toll free number): (i) a Prospectus for Oppenheimer Fund, dated November
1, 1996, which is incorporated herein by reference and a copy of which also
accompanies this Proxy Statement and Prospectus; (ii) a Statement of
Additional Information about Oppenheimer Fund, dated November 1, 1996 (the
"Oppenheimer Fund Additional Statement"), which contains more detailed
information about Oppenheimer Fund and its management, and (iii) a
Statement of Additional Information relating to the Reorganization
described in this Proxy Statement and Prospectus (the "Reorganization
Additional Statement"), dated November 1, 1996, incorporated herein by
reference and filed as part of the Registration Statement, which includes,
among other things, the Prospectus for JP Fund, the JP Fund Additional
Statement and the Oppenheimer Fund Additional Statement.
Investors are advised to read and retain this Proxy Statement and
Prospectus for future reference.
Shares of Oppenheimer Fund are not deposits or obligations of any bank, are
not guaranteed or endorsed 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 November 1, 1996.
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
COMPARATIVE FEE TABLES
Transaction Charges
Expenses of Oppenheimer Fund and JP Fund; Pro Forma Expenses
Examples
SYNOPSIS
Purpose of the Meeting
Parties to the Reorganization
The Reorganization
Vote Required
Tax Consequences of the Reorganization
Dissenters' Rights
Investment Objectives and Policies
Investment Advisory and Distribution Plan Fees
Purchases, Exchanges and Redemptions
PRINCIPAL RISK FACTORS
Stock Investment Risks
Foreign Securities
Small, Unseasoned Companies
Borrowing for Leverage
Warrants and Rights
Futures
APPROVAL OR DISAPPROVAL OF THE REORGANIZATION (Proposal 1)
Background
Acquisition Agreement
Board Approval of the Reorganization
The Reorganization
Tax Aspects of the Reorganization
Dissenters' Rights
Capitalization Table (Unaudited)
COMPARISON BETWEEN OPPENHEIMER FUND AND JP FUND
Comparison of Investment Objectives, Policies and Restrictions
Special Investment Methods
Investment Restrictions
Oppenheimer Fund Performance
Additional Comparative Information
ELECTION OF DIRECTORS (Proposal 2)
Information Concerning the Board
Officers of JP Fund
Other Information
RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT AUDITORS (Proposal
3)
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
SHAREHOLDER PROPOSALS
OTHER BUSINESS
EXHIBIT A - Agreement and Plan of Reorganization, dated as of October 8,
1996, by and among Oppenheimer Growth Fund, Jefferson-Pilot
Capital Appreciation Fund, Inc., OppenheimerFunds, Inc. and
Jefferson-Pilot Corporation
ENCLOSURE- Prospectus of Oppenheimer Growth Fund, dated November 1, 1996
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 JP Fund
and Oppenheimer Fund is noted below. Pro forma transaction charges for the
combined fund after giving effect to the Reorganization will be the same
as charges noted below for Oppenheimer Fund.
<TABLE>
<CAPTION>
JP Fund Oppenheimer Fund
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Maximum Initial Sales Load
Imposed on Purchases (as a %
of offering price) 4.50% 5.75% None None None
Maximum Sales Load Imposed on
Reinvested Dividends None None None None None
Maximum Deferred Sales
Load (as a % of the lower
of the original purchase
price or redemption
proceeds) None None(1) 5.00%(2) 1.00%(3) None
Redemption Fee None None None None None
Exchange Fee None None None None None
</TABLE>
1. If you invest $1 million or more ($500,000 or more for
purchases by certain retirement plans) in Class A shares, although
you will generally not pay an initial sales charge, you may have to
pay a sales charge of up to 1.0% if you sell your shares within 18
calendar months from the end of the calendar month during which you
purchased those shares.
2. If you redeem Class B shares within six years of the beginning
of the month in which you purchase them, you may have to pay a
contingent deferred sales charge starting at 5.0% in the first year
and declining thereafter.
3. If you redeem Class C shares within 12 months of the beginning
of the calendar month of buying them, you may have to pay a 1.0%
contingent deferred sales charge.
Expenses of Oppenheimer Fund and JP Fund; Pro Forma Expenses
Each fund pays a variety of expenses directly for management of its
assets, administration, distribution of shares and other services,
and those expenses are reflected in the net asset value per share
of each of Oppenheimer Fund and JP Fund. The following
calculations are based on the annualized expenses of JP Fund for
the six months ended June 30, 1996 and the expenses of Class A
shares of Oppenheimer Fund for the 12 months ended June 30, 1996.
These amounts are shown as a percentage of the average net assets
of JP Fund and of Class A shares of Oppenheimer Fund for that
period. The pro forma expenses reflect what the fee schedules
would have been at June 30, 1996 if the Reorganization had occurred
12 months prior to that date.
<TABLE>
<CAPTION> ProForma
JP Fund(1) Oppenheimer Fund Class A(2) Combined Fund(2)
<S> <C> <C> <C>
Management Fees 0.50% 0.68% 0.67%
12b-1 Fees ---- 0.17% 0.17%
Other Expenses 0.36% 0.21% 0.21%
Total Fund Operating
Expenses 0.86% 1.06% 1.05%
<FN>
_________
(1) Annualized
(2) Oppenheimer Fund changed its fiscal year-end from June 30 to August 31. For the two
months ended August 31, 1996, the annualized expenses of Class A shares of Oppenheimer Fund
were 0.67%, 0.17%, 0.19% and 1.03% for Management Fees, 12b-1 Fees, Other Expenses and Total
Fund Operating Expenses, respectively; with respect to such expenses, pro forma expenses
would have been 0.66%, 0.17%, 0.19% and 1.02% for Management Fees, 12b-1 Fees, Other Expenses
and Total Fund Operating Expenses, respectively.
</TABLE>
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 JP Fund or Oppenheimer Fund 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 1, 3,
5 and 10 years:
1 year 3 years 5 years 10 years
Oppenheimer Fund
Class A Shares $68 $89 $113 $179
JP Fund $53 $71 $ 91 $146
Pro Forma Combined
Fund
Class A Shares $68 $89 $112 $178
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 JP Fund to
assist them in determining whether to approve or disapprove 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 Reorganization Agreement which is Exhibit A hereto.
Shareholders should carefully review this Proxy Statement and
Prospectus and the Reorganization Agreement in their entirety and,
in particular, the current Prospectus of Oppenheimer Fund which
accompanies this Proxy Statement and Prospectus and is incorporated
by reference herein.
Purpose of the Meeting
At the Meeting, shareholders of JP Fund will be asked to approve or
disapprove the Reorganization. In addition, shareholders will be
requested to elect five Directors of JP Fund and ratify the
selection of JP Fund's independent auditors.
Parties to the Reorganization
Oppenheimer Fund is a diversified, open-end, management investment
company initially organized in 1972 as a Maryland corporation and
was reorganized in 1985 as a Massachusetts business trust.
Oppenheimer Fund is located at Two World Trade Center, New York,
New York 10048-0203. OFI acts as investment adviser to Oppenheimer
Fund. OppenheimerFunds Distributor, Inc. ("OFDI"), a subsidiary of
OFI, acts as the distributor of Oppenheimer Fund's shares. OFI and
OFDI are also located at Two World Trade Center, New York, New York
10048-0203. Additional information about Oppenheimer Fund is set
forth below.
JP Fund is a diversified, open-end, management investment company
organized in 1970 as a North Carolina corporation. JP Fund is
located at 100 North Greene Street, Greensboro, North Carolina
27420. JP Investment Management Company ("JPM") acts as investment
adviser to JP Fund. Jefferson-Pilot Investor Services, Inc.
("JPIS") acts as the distributor of JP Fund's shares. JPM and JPIS
are located at P.O. Box 21008 and P.O. Box 22086, respectively,
Greensboro, North Carolina 27420. Additional information about JP
Fund is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of
substantially all the assets of JP Fund to Oppenheimer Fund in
exchange for the issuance of Class A shares of Oppenheimer Fund and
the assumption by Oppenheimer Fund of certain liabilities of JP
Fund. JP Fund will retain a small Cash Reserve sufficient to pay
any liabilities and expenses of dissolution. The Reorganization
Agreement also provides for the distribution by JP Fund of these
shares of Oppenheimer Fund to JP Fund shareholders in liquidation
of JP Fund. As a result of the Reorganization, each JP Fund
shareholder will receive that number of full and fractional
Oppenheimer Fund Class A shares equal in value to such
shareholder's pro rata interest in the net assets transferred to
Oppenheimer Fund as of the Valuation Date (as hereinafter defined).
For further information about the Reorganization see "Approval or
Disapproval of the Reorganization" below.
For the reasons set forth below under "Approval or Disapproval of
the Reorganization -Board Approval of the Reorganization," the
Board, including the Directors who are not "interested persons" of
JP Fund (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
JP Fund and its shareholders and that the interests of existing JP
Fund shareholders will not be diluted as a result of the
Reorganization, and recommends approval of the Reorganization by JP
Fund shareholders. The Board of Trustees of Oppenheimer Fund has
also approved the Reorganization and determined that the interests
of existing Oppenheimer Fund shareholders will not be diluted as a
result of the Reorganization. If the Reorganization is not
approved, JP Fund will continue in existence and the Board will
determine whether to pursue alternative actions. The section below
entitled "Approval or Disapproval 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, JPM and certain
affiliates of JPM.
Vote Required
Approval of the Reorganization will require the affirmative vote of
a majority of the shares of JP Fund entitled to vote at the
Meeting. See "Information Concerning the Meeting - Record Date;
Vote Required; Share Information."
Tax Consequences of the Reorganization
As a condition to the closing of the Reorganization, JP Fund and
Oppenheimer Fund will have received an opinion of Sutherland,
Asbill & Brennan, tax counsel to JP 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 JP Fund,
Oppenheimer Fund, or the shareholders of either fund for federal
income tax purposes. For further information about the tax
consequences of the Reorganization, see "Approval or Disapproval of
the Reorganization -Tax Aspects of the Reorganization" below.
Dissenters' Rights
Dissenters' rights of appraisal are generally not available to
shareholders of JP Fund with respect to the Reorganization. See
"Approval or Disapproval of the Reorganization - Dissenters'
Rights."
Investment Objectives and Policies
Oppenheimer Fund's investment objective is a fundamental policy,
and JP Fund's investment objectives and policies are also
fundamental policies. Fundamental policies are those that cannot
be changed without the approval of shareholders of that fund.
Oppenheimer Fund's investment policies described below are not
fundamental unless this Proxy Statement and Prospectus indicates a
particular policy is fundamental.
Oppenheimer Fund invests its assets to seek capital
appreciation; it does not seek current income. Oppenheimer Fund
emphasizes investment in common stocks issued by established mid-
and large- capitalization "growth companies" that, in the opinion
of OFI, have better-than-expected earnings prospects but are
selling at below-normal valuations. During times of market
volatility, temporary defensive investment methods may be stressed.
The securities selected for defensive or liquidity purposes may
include cash, cash equivalents (such as commercial paper) and U.S.
Government securities. However, it is expected that the emphasis
of this portion of the portfolio will usually be on short-term debt
securities (i.e., those maturing in one year or less from date of
purchase).
JP Fund's primary investment objective is long-term capital
appreciation. Current income through the receipt of interest or
dividends from investments is a secondary objective. JP Fund
proposes to achieve these objectives by investing substantially all
its assets in publicly-held common stocks of companies recognized
as leaders in their respective industries with proven and capable
management and that are providing significant products and services
to their customers. Investments may be made in other equity
securities, including preferred stock and those debt securities
convertible into or carrying rights, warrants, or options to
purchase common stock or to participate in earnings. JP Fund may
also hold cash or invest in short-term securities.
Oppenheimer Fund's and JP Fund's investments may also include
securities of foreign governments and companies (limited, in the
case of JP Fund, to securities issued by Canadian companies).
Oppenheimer Fund and JP Fund may also enter into repurchase
agreements, subject to certain limitations. Oppenheimer Fund may
also use futures for hedging purposes to try to manage investment
risks.
Shareholders of JP Fund should consider the differences in
investment objectives and policies between JP Fund and Oppenheimer
Fund, including that, unlike JP Fund, Oppenheimer Fund does not
seek current income as an investment objective, Oppenheimer Fund
may employ a speculative investment method known as borrowing for
leverage and may use futures contracts for hedging purposes. See
"Principal Risk Factors" and "Comparison Between Oppenheimer Fund
and JP Fund - Comparison of Investment Objectives, Policies and
Restrictions."
Investment Advisory and Distribution Plan Fees
Oppenheimer Fund and JP Fund each obtain investment management
services from their respective investment advisers pursuant to the
terms of their respective investment advisory agreements. Each
agreement provides that a management fee is payable to the
investment adviser monthly. Oppenheimer Fund pays a management fee
to OFI computed on its net asset value as of the close of business
each day, which fee declines on additional assets as Oppenheimer
Fund increases its asset base, at the annual rate of 0.75% of the
first $200 million of net assets, 0.72% of the next $200 million,
0.69% of the next $200 million, 0.66% of the next $200 million,
0.60% of the next $700 million and 0.58% of average annual net
assets in excess of $1.5 billion. The management fee payable by JP
Fund to JPM is at an annual rate of 1/2 of 1% of JP Fund's average
daily net asset value. JPM is reimbursed by JP Fund for performing
certain shareholder accounting services. Oppenheimer Fund pays OFI
to prepare tax returns. JPM has contractually agreed that if in
any fiscal year the total of JP Fund's ordinary business expenses
(with specified exceptions) exceeds 1% of JP Fund's average daily
net asset value, JPM will pay the excess by reducing its management
fee by a corresponding amount. OFI has voluntarily undertaken to
reimburse Oppenheimer Fund (and reduce Oppenheimer Fund's
management fees) to the extent its aggregate expenses (with
specified exceptions) in any fiscal year exceed the most stringent
state regulatory limit on fund expenses. OFI's undertaking to
Oppenheimer Fund is revocable and may be changed or eliminated at
any time. Neither fund's management fees were reduced during the
past fiscal year.
Oppenheimer Fund has adopted a shareholder Service Plan under Rule
12b-1 of the 1940 Act for Class A shares to reimburse OFDI for a
portion of its costs incurred in connection with the personal
service and maintenance of accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net assets of Class A shares of
Oppenheimer Fund. OFDI uses all of those fees to compensate
dealers, brokers, banks and other financial institutions quarterly
for providing personal service and maintenance of accounts of their
customers that hold Class A shares and to reimburse itself (if the
Board of Trustees authorizes such reimbursements, which it has not
yet done) for its other expenditures under the Service Plan.
Services to be provided include, among others, answering customer
inquiries about Oppenheimer Fund, assisting in establishing and
maintaining accounts in Oppenheimer Fund, making Oppenheimer Fund's
investment plans available and providing other services at the
request of Oppenheimer Fund or OFDI. A description of Oppenheimer
Fund's distribution and service plans for Class B and Class C
shares is set forth in Oppenheimer Fund's Prospectus. JP Fund has
not adopted a plan pursuant to Rule 12b-1 under the 1940 Act.
Purchases, Exchanges and Redemptions
Purchases. Purchases of shares of Oppenheimer Fund and JP Fund may
be made directly through OFDI and JPIS, respectively, or through
any dealer, broker or financial institution that has a sales
agreement with the respective distributor. Subsequent to an
initial purchase, additional purchases of JP Fund shares may be
made directly from Investors Fiduciary Trust Company, JP Fund's
stock transfer and dividend paying agent. A shareholder of
Oppenheimer Fund may purchase shares automatically from an account
at a domestic bank or other financial institution under the
"OppenheimerFunds AccountLink" service. Class A shares of
Oppenheimer Fund and shares of JP Fund generally are sold subject
to an initial sales charge. The maximum sales charge rate is 1.25%
higher (as a percent of the offering price) for Oppenheimer Fund
Class A shares than for JP Fund shares. Oppenheimer Fund Class B
and Class C shares generally are sold without a front-end sales
charge but may be subject to a contingent deferred sales charge
("CDSC") upon redemption. See "Comparative Fee Tables --
Transaction Charges" above for a complete description of such sales
charges.
Class A shares of Oppenheimer Fund and shares of JP Fund may be
purchased at reduced sales charges, or may be purchased at net
asset value, as described in that fund's Prospectus. Class A
shares of Oppenheimer Fund to be issued under the Reorganization
Agreement will be issued by Oppenheimer Fund at net asset value
without a sales charge. The sales charge on Class A shares of
Oppenheimer Fund will only affect shareholders of JP Fund to the
extent that they desire to make additional purchases of Class A
shares of Oppenheimer Fund in addition to the shares which they
will receive as a result of the Reorganization. Future dividends
and capital gain distributions of either fund, if any, may be
reinvested without sales charge.
Exchanges. Shareholders of Oppenheimer Fund may exchange their
shares at net asset value for shares of the same class issued by
other mutual funds within the Oppenheimer funds family (over 40
other portfolios), subject to certain conditions. Oppenheimer Fund
offers an automatic exchange plan providing for systematic
exchanges from Oppenheimer Fund of a specified amount for shares of
the same class of other funds within the Oppenheimer funds family.
In contrast, holders of JP Fund shares may only exchange such
shares for shares issued by Jefferson-Pilot Investment Grade Bond
Fund, Inc. ("JP Bond Fund").
Redemptions. Class A shares of Oppenheimer Fund and shares of JP
Fund may be redeemed without charge at their respective net asset
values per share calculated after the redemption order is received
and accepted; however, Class A shares of Oppenheimer Fund that were
exempt from the front-end sales charge upon purchase in amounts of
more than $1 million (more than $500,000 for purchases by certain
retirement plans) may be subject to a CDSC of up to 1.0% upon
redemption within 18 months from the end of the calendar month
during which such shares were purchased. Such CDSC will be waived
for shares issued pursuant to the Reorganization. See "Comparative
Fee Tables -- Transaction Charges" above.
Shareholders of Oppenheimer Fund may reinvest redemption proceeds
of Class A shares on which an initial sales charge was paid, or the
redemption proceeds of Class A or Class B shares on which a CDSC
was paid, without imposition of a sales charge, within six months
of a redemption at net asset value in Class A shares of Oppenheimer
Fund or any of numerous mutual funds within the Oppenheimer funds
family. Shareholders of JP Fund may reinvest all or part of the
redemption proceeds of shares of JP Fund in shares of JP Fund or JP
Bond Fund within 30 days after the date of the redemption without
the imposition of a sales charge. Former JP Fund shareholders would
be permitted to exercise this reinvestment privilege once each
calendar year.
Shareholders of both funds may redeem their shares by written
request or by telephone request in certain stated amounts, and
shareholders of Oppenheimer Fund may arrange to have share
redemption proceeds transmitted to a pre-designated account at a
U.S. bank or other financial institution that is an automated
clearing house ("ACH") member. Oppenheimer Fund may redeem
accounts valued at less than $500 if the account has fallen below
such stated amount for reasons other than market value
fluctuations. For JP Fund, the corresponding minimum is $250 once
the account has been open at least 12 months. 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
Oppenheimer Fund, JP Fund shareholders should carefully consider
the following summary of risk factors, relating to both Oppenheimer
Fund and JP Fund, in addition to the other information set forth in
this Proxy Statement and Prospectus. Additional information on
risk factors for each fund is set forth in the respective
Prospectus of each fund and in addition for Oppenheimer Fund, the
Oppenheimer Fund Additional Statement.
As a general matter, Oppenheimer Fund and JP Fund are intended for
investors seeking capital appreciation (and, as a secondary
objective for JP Fund, current income) who are willing to accept
greater risks of loss in the hopes of greater gains. Oppenheimer
Fund is not intended for investors seeking assured income. There
is no assurance that either Oppenheimer Fund or JP Fund will
achieve its investment objectives and investment in the funds is
subject to investment risks, including the possible loss of the
principal invested.
Stock Investment Risks
Since the funds may invest a substantial portion of their assets in
stocks, the value of a fund's portfolio will be affected by changes
in the stock markets. At times, the stock markets can be volatile,
and stock prices can change substantially. This market risk will
affect a fund's net asset value per share, which will fluctuate as
the values of the fund's portfolio securities change.
Foreign Securities
Oppenheimer Fund may invest up to 25% of its total assets (but
generally limits investment to no more than 10% of its total
assets) in equity securities issued or guaranteed by foreign
governments or foreign companies or other agencies; JP Fund may not
invest in foreign securities other than securities issued by
Canadian companies. In summary, foreign securities markets may be
less liquid and more volatile than the markets in the U.S. Risks
of foreign securities investing may include foreign withholding
taxation, currency blockage, currency exchange costs, difficulty in
obtaining and enforcing judgments against foreign issuers,
relatively greater brokerage and custodial costs, risk of
expropriation or nationalization of assets, less publicly available
information, and differences between domestic and foreign legal,
auditing, brokerage and economic standards. In addition, there
are risks of changes in foreign currency values. A change in value
of a foreign currency against the U.S. dollar will result in a
change in the U.S. dollar value of a fund's securities denominated
in a foreign currency. Although both funds' investment income from
foreign securities may be received in foreign currencies, the funds
are required to absorb the cost of currency fluctuations. If a
fund suffers a loss on foreign currencies after it has distributed
its income during the year, the fund may find that it has
distributed more income than was available from actual investment
income, and the shareholders will have received a return of
capital. The foreign securities Oppenheimer Fund may invest in,
such as securities of issuers in underdeveloped countries, have
speculative characteristics and involve more risk than other
foreign securities, including extended settlement periods for
securities transactions, increased illiquidity and increased
volatility.
Small, Unseasoned Companies
The funds may invest in securities of companies that have been in
operation for less than three years (including the operations of
predecessors). Securities of these companies may have limited
liquidity (which means that a fund may have difficulty selling them
at an acceptable price when it wants to) and the prices of these
securities may be volatile. Oppenheimer Fund currently intends to
invest no more than 5% of its net assets in the next year in the
securities of small, unseasoned issuers. JP Fund is prohibited
from investing more than 5% of its assets in the securities of such
issuers.
Borrowing for Leverage
Oppenheimer Fund may borrow from banks to buy securities, but only
if it can do so without putting up assets as security for a loan.
This is a speculative investment method known as "leverage." This
investment technique may subject Oppenheimer Fund to greater risks
and costs than funds that do not borrow. These risks may include
the possibility that Oppenheimer Fund's net asset value per share
will fluctuate more than the net asset value of funds that do not
borrow, since Oppenheimer Fund pays interest on borrowings and
interest expense affects Oppenheimer Fund's share price. JP Fund
is not permitted to borrow for leverage and may only borrow money
for extraordinary or emergency purposes.
Warrants and Rights
JP Fund may purchase warrants and rights. Warrants basically
are options to purchase equity securities at set prices valid for
a specific period of time. The prices of warrants do not
necessarily move parallel to the prices of the underlying
securities. The price the Fund pays for a warrant will be lost
unless the warrant is exercised prior to its expiration. Rights
are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Warrants
and rights have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer.
Futures
Oppenheimer Fund may purchase and sell certain kinds of futures
contracts, that relate to broadly-based securities indices. The
foregoing instruments, referred to as "hedging instruments," are
considered derivative investments. Their special risks are
described below in "Comparison Between Oppenheimer Fund and JP
Fund."
APPROVAL OR DISAPPROVAL OF THE REORGANIZATION
(Proposal 1)
Background
JPC, in the course of a review of its business, concluded that
it should concentrate on its core insurance business and
communications operations and not continue, through its existing
subsidiaries, in the business of managing mutual fund investment
portfolios. JPC is a publicly-held holding company that is the
parent of JPM and JPIS. In addition to JP Fund and JP Bond Fund,
JPM manages two mutual funds (the "Insurance Funds") that sell
their shares exclusively to certain separate accounts of Jefferson-Pilot Life
Insurance Company ("JPLIC") that support variable
annuity contracts. In aggregate, these four mutual funds had net
assets at September 30, 1996 of approximately $175 million.
Managing mutual fund investment portfolios in an efficient and
profitable manner requires significant assets per fund and in the
aggregate. Usually several billion dollars in aggregate net assets
is necessary to cover normal operating costs and provide resources
for capital investment in new products and services. With regard
to retail mutual funds (such as JP Fund and JP Bond Fund),
financing certain classes of shares and providing sales support to
dealers are additional expenses that can only be supported from a
relatively large asset base. Consequently, it has become
increasingly difficult for a relatively small mutual fund operation
such as that managed by JPM and JPIS to compete. JPC evaluated the
capital investment that would be required of it or its subsidiaries
to achieve such an asset base and determined that: (1) the best
investment of its resources would not be in expanding the mutual
fund assets under JPM's management, and (2) if, through JPM (or
another subsidiary), it could not be extremely competitive in the
business of managing mutual fund investment portfolios, it should
sell the assets of JPM and facilitate making other arrangements for
the management of the assets of the four mutual funds (including JP
Fund) managed by JPM. Sometime after these determinations by JPC
were made, representatives of JPC and JPM met with OFI to discuss
OFI's acquiring JPM's mutual fund-related assets. Representatives
of OFI and JPM held meetings beginning in December 1995. Following
the negotiation of the terms of an acquisition agreement and
related agreements, an acquisition agreement (the "Acquisition
Agreement") was executed by OFI, JPC, JPM and JPLIC on September
24, 1996.
The Reorganization described in this Proxy Statement and Prospectus
is one aspect of the overall Acquisition (as hereinafter defined)
contemplated by the Acquisition Agreement described below. The
consummation of the Reorganization is one condition, among others,
to the closing of the Acquisition. Likewise, the consummation of
the Acquisition is one condition, among others, to the closing of
the Reorganization. Accordingly, unless the parties otherwise
agree, the Reorganization may not be effected, despite shareholder
approval, if the Acquisition does not close. In such case, JP Fund
will continue in existence and the Board will take such further
action as it, in its discretion, deems necessary or advisable. The
description of the Acquisition Agreement set forth below is a
summary only.
Acquisition Agreement
The Acquisition Agreement contemplates the sale to OFI of all the
assets of JPM (the "Purchased Assets") and the assumption by OFI of
certain liabilities of JPM and JPC relating to the Purchased Assets
("Assumed Liabilities") (the foregoing sale and assumption
constitute the "Acquisition"). The Acquisition Agreement
contemplates that each of the four mutual funds advised by JPM
(including JP Fund) (each, a "Reorganized Fund") will be
reorganized with a mutual fund currently advised by OFI.
A condition to the obligation of the parties to close under the
Acquisition Agreement (the "Acquisition Closing") is the approval
of the reorganizations of the Reorganized Funds (including the
Reorganization described in this Proxy Statement and Prospectus) by
their respective shareholders and the approval of the
reorganizations of the Insurance Funds by applicable state
insurance regulatory authorities. The Acquisition Agreement sets
forth certain other conditions to each party's obligation to close.
JPM, JPC and JPLIC have agreed pursuant to an Agreement Not to
Compete not to, among other things, sell or offer to sell shares of
or other security interests in investment companies or investment
oriented insurance policies to persons who were shareholders of JP
Fund or JP Bond Fund or owned variable annuity contracts issued by
JPLIC invested in the Insurance Funds, in each case, immediately
prior to the reorganization of such fund for a period to end on the
fourth anniversary of the Acquisition Closing. Further, JPM, JPC
and JPLIC may not act as an investment adviser to funds
established, formed, sold, sponsored or distributed by them and
their affiliates with certain exceptions. OFI, on the one hand,
and JPM, JPC and JPLIC, on the other, have agreed to indemnify the
other for certain liabilities.
Board Approval of the Reorganization
At its meeting on August 26, 1996, the Board, including the
Independent Directors, unanimously approved the Reorganization and
the Reorganization Agreement, determined that the Reorganization is
in the best interests of JP Fund and its shareholders and resolved
to recommend that JP Fund shareholders vote for approval of the
Reorganization. The Board further determined that the
Reorganization would not result in dilution of JP Fund's
shareholders' interests.
In evaluating the Reorganization, the Board requested and reviewed,
with the assistance of independent legal counsel, materials
furnished by OFI and JPM. These materials included financial
statements as well as other written information regarding OFI and
its personnel, operations and financial condition. The Board also
reviewed the same type of information about JPM. Consideration was
given to comparative information concerning other mutual funds with
similar investment objectives to JP Fund and Oppenheimer Fund. The
Board also considered information with respect to the relative
historical performance of JP Fund, Oppenheimer Fund and other
mutual funds having similar investment objectives. The Board also
reviewed and discussed the terms and provisions of the investment
advisory agreement pursuant to which OFI provides investment
management services to Oppenheimer Fund and compared and contrasted
them to the existing management arrangements for JP Fund as well as
the management arrangements of other similar mutual funds,
particularly with respect to the allocation of various types of
expenses, levels of fees and resulting expense ratios.
In reaching its determination, the Board gave careful consideration
to a number of factors. First, the Board evaluated the entire
Reorganization in light of the fact that JPC intends to sell JPM or
otherwise leave the business of managing mutual fund investment
portfolios. Therefore, new arrangements for the management of JP
Fund assets would have to be obtained either by the Reorganization
or some other means. Second, the Board carefully considered the
similarities and differences of the investment objectives, policies
and methods of JP Fund and Oppenheimer Fund. The Board also
carefully considered the fact that the Reorganization would afford
JP Fund shareholders the capabilities and resources of OFI and its
affiliates in the area of investment management and shareholder
servicing. Finally, the Board carefully considered the terms and
conditions of the Reorganization, including that: (1) there would
be no sales charge imposed in effecting the Reorganization, (2) the
Reorganization is intended to qualify as a tax-free exchange, and
(3) OFI and JPM would pay all expenses of the reorganization and
Oppenheimer Fund and JP Fund would not pay any of these expenses.
The Board also considered that the annual operating expenses for
Oppenheimer Fund are higher, as a percentage of net assets, and
would be higher on a pro forma basis after giving effect to the
Reorganization, than the operating expenses of JP Fund due to the
fact that Oppenheimer Fund is subject to a higher management fee
rate than JP Fund and Oppenheimer Fund Class A shares pay a service
fee to OFDI. For operating expenses and other expense information
relating to Oppenheimer Fund and JP Fund, see "Comparative Fee
Tables - Expenses of Oppenheimer Fund and JP Fund; Pro Forma
Expenses."
The Board was also advised regarding the provisions of Section
15(f) of the 1940 Act as they relate to the Acquisition. Section
15(f) of the 1940 Act provides, in effect, that an investment
adviser of a registered investment company, or an affiliated person
of such adviser, may receive any amount or benefit in connection
with the sale of the adviser's business provided that two
conditions are satisfied. First, an "unfair burden" must not be
imposed on the investment company for which the investment adviser
acts in such capacity as a result of the sale, or any express or
implied terms, conditions or understandings applicable thereto.
The term "unfair burden" as defined in the 1940 Act, includes any
arrangement during the two-year period after the transaction
whereby the investment adviser (or predecessor or successor
advisers), or any interested person of such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from
any person in connection with the purchase or sale of securities or
other property to, from or on behalf of the investment company
(other than ordinary fees for bona fide principal underwriting
services), or from the investment company or its securities holders
(other than fees for bona fide investment advisory and other
services).
Management of the Reorganized Funds (including JP Fund) and
management of the mutual funds managed by OFI into which the
Reorganized Funds will be reorganized (including Oppenheimer Fund)
are aware of no circumstances arising from the Acquisition or
preparatory transactions to the Acquisition that might result in
the imposition of an "unfair burden" on the Reorganized Funds
(including JP Fund) or the mutual funds managed by OFI into which
the Reorganized Funds will be reorganized (including Oppenheimer
Fund). Moreover, the Acquisition Agreement provides that OFI, JPM
and JPC will conduct their businesses (and use their reasonable
efforts to cause their respective affiliates to conduct their
businesses) so as to assure, insofar as is in their control, that
no "unfair burden" will be imposed on the Reorganized Fund
(including JP Fund) or any mutual fund managed by OFI into which a
Reorganized Fund would be reorganized (including Oppenheimer Fund)
as a result of the transactions contemplated by the Acquisition
Agreement.
The second condition of Section 15(f) is that during the three-year
period immediately following a transaction to which Section 15(f)
is applicable, at least 75% of the subject investment company's
board of directors must not be "interested persons" (as defined in
the 1940 Act) of the investment company's investment adviser or
predecessor adviser. The current composition of the Board of
Trustees of each mutual fund managed by OFI into which a
Reorganized Fund would be organized (including Oppenheimer Fund) is
already so composed.
After consideration of the above factors, and such other factors
and information as the directors deemed relevant, the Board,
including the Independent Directors, unanimously approved the
Reorganization and the Reorganization Agreement and voted to
recommend its approval to the shareholders of JP Fund.
The Board of Trustees of Oppenheimer Fund, including the trustees
who are not "interested persons" of Oppenheimer Fund, unanimously
approved the Reorganization and the Reorganization Agreement and
determined that the Reorganization is in the best interests of
Oppenheimer Fund and its shareholders. The Board of Trustees
further determined that the Reorganization would not result in
dilution of the Oppenheimer Fund shareholders' interests. The
Board of Trustees considered, among other things, that an increase
in Oppenheimer Fund's asset base as a result of the Reorganization
could benefit Oppenheimer Fund shareholders due to the economies of
scale available to a larger fund. Over time, these economies of
scale may result in slightly lower costs per account for each
Oppenheimer Fund shareholder through lower operating expenses and
transfer agency expenses.
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 (1) substantially all of
the assets of JP Fund would be transferred to Oppenheimer Fund in
exchange for Class A shares of Oppenheimer Fund having a value
equal to the value of the JP Fund assets transferred, (2) these
Class A shares would be distributed among shareholders of JP Fund
in liquidation of JP Fund and (3) the outstanding shares of JP Fund
would be cancelled. Prior to the Closing Date (as hereinafter
defined), which is expected to be within 10 business days after JP
Fund shareholder approval of the Reorganization is obtained, JP
Fund will endeavor to discharge all of its liabilities and
obligations when and as due prior to such date. Oppenheimer Fund
will not assume any liabilities or obligations of JP Fund except
for portfolio securities purchased which have not settled in the
ordinary course of business. In this regard, JP 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) JP
Fund's expenses of liquidation (if any) and (b) JP Fund's
liabilities, other than those assumed by Oppenheimer Fund. The
Cash Reserve will be accounted for as a liability of JP Fund in
determining its net asset value. The number of full and fractional
Class A shares of Oppenheimer Fund to be issued to JP Fund will be
determined on the basis of Oppenheimer Fund's and JP Fund's
relative net asset values per share, computed as of the close of
business of The New York Stock Exchange Inc. on the business day
preceding the Closing Date (the "Valuation Date"). The Closing
Date for the Reorganization will be the date of the closing of the
Acquisition under the Acquisition Agreement or such other date as
may be mutually agreed upon in writing.
The valuation procedures set forth in Oppenheimer Fund's Prospectus
and the Oppenheimer Fund Additional Statement will be utilized to
determine the value of JP Fund's assets to be transferred to
Oppenheimer Fund pursuant to the Reorganization, the value of
Oppenheimer Fund's assets and the net asset value of shares of
Oppenheimer Fund. Such values will be computed by JPM and OFI,
respectively, as of the Valuation Date in a manner consistent with
OFI's regular practice in pricing Oppenheimer Fund.
The Reorganization Agreement provides for coordination between the
funds as to their respective portfolios so that, on and after the
Closing Date, Oppenheimer Fund will be in compliance with all of
its investment policies and restrictions. JP Fund will recognize
capital gain or loss on any sales made pursuant to this condition.
If JP Fund realizes net gain from the sale of securities, such
gain, to the extent not offset by capital loss carry-forwards, will
be distributed to shareholders prior to the Closing Date and will
be taxable to shareholders as long-term capital gain or, if the
assets disposed of had not been held for more than one year, as
ordinary income. Except for sales, if any, made pursuant to the
foregoing condition or in the ordinary course of business, JP Fund
does not expect to sell any of its portfolio securities prior to
the Closing Date. Except for dispositions to be made in the
ordinary course of business or in an amount deemed not to be
significant, Oppenheimer Fund has no present intention of disposing
of the assets of JP Fund to be acquired in the Reorganization.
Contemporaneously with the closing, JP Fund will be liquidated
(except for the Cash Reserve) and JP Fund will distribute or cause
to be distributed pro rata to JP Fund shareholders of record on the
Valuation Date the full and fractional Class A shares of
Oppenheimer Fund received by JP Fund. Upon such liquidation, all
issued and outstanding shares of the JP Fund will be cancelled on
JP Fund's books and JP Fund shareholders will have no further
rights as shareholders of JP Fund. To assist JP Fund in the
distribution of Oppenheimer Fund shares, Oppenheimer Fund will, in
accordance with a shareholder list supplied by JP Fund, cause
Oppenheimer Fund's transfer agent to credit and confirm an
appropriate number of Class A shares of Oppenheimer Fund to each
shareholder of JP Fund. Certificates for shares of Oppenheimer
Fund will be issued upon written request of a former shareholder of
JP Fund but only for whole shares with fractional shares credited
to the name of the shareholder on the books of Oppenheimer Fund.
Former shareholders of JP Fund who wish certificates representing
their shares of Oppenheimer Fund must, after receipt of their
confirmations, make a written request to OppenheimerFunds Services,
P.O. Box 5270, Denver, Colorado 80217. Shareholders of JP 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
Oppenheimer Fund, or obtain a certificate for Oppenheimer Fund
shares to replace a certificate for former JP Fund shares. After
the closing of the Reorganization, JP 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, JP Fund shall either (i) transfer any remaining
amount of the Cash Reserve to Oppenheimer Fund, 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 JP Fund who
were such on the Valuation Date. 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 JP Fund outstanding on the Valuation
Date. After this transfer or distribution, and after all final
reports and tax returns have been filed and the winding up of JP
Fund's affairs has been completed, JP Fund will be dissolved as a
corporation under North Carolina law.
The consummation of the Reorganization is subject to the conditions
set forth in the Reorganization Agreement, including, without
limitation, approval of the Reorganization by JP Fund's
shareholders. Notwithstanding approval of JP Fund's shareholders,
the Reorganization may be terminated at any time prior to the
Closing Date (1) by mutual written consent of JP Fund and
Oppenheimer Fund, (2) by JP Fund or Oppenheimer Fund, if the
Closing shall not have occurred on or before December 31, 1996,
(3) by JP Fund or Oppenheimer Fund, if the other party shall fail
to perform in any material respect its agreements contained in the
Reorganization Agreement required to be performed on or prior to
the Closing Date, the other party materially breaches any
representation, warranty, or covenant contained in the
Reorganization Agreement, the JP Fund shareholders fail to approve
the Reorganization Agreement, or if a condition in the
Reorganization Agreement expressed to be precedent to the
obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met prior to the
Closing Date, or (4) if a suspension in the redemption of shares
shall continue for 60 days beyond the Valuation Date. The
Reorganization Agreement will automatically terminate prior to the
Closing if the Acquisition Agreement is terminated or the
Acquisition is not consummated. Termination of the Reorganization
Agreement pursuant to (1), (2) or (4) above, or an automatic
termination as described in the preceding sentence, will terminate
all obligations of the parties thereto and there will be no
liability for damages. In such case JP Fund and Oppenheimer Fund
will be reimbursed for its expenses incurred with respect to the
Reorganization by JPM and OFI, respectively. In the event of a
termination pursuant to (3) above, all obligations of Oppenheimer
Fund and JP Fund under the Reorganization Agreement will be
terminated without liability for damages except that the party in
breach (other than a breach due to JP Fund shareholders not
approving the Reorganization) of the Reorganization Agreement will,
upon demand, reimburse (such reimbursement to be made by such
party's investment adviser) the non-breaching party for all
expenses and reasonable out-of-pocket fees (if any) incurred in
connection with the transactions contemplated by the Reorganization
Agreement.
Pursuant to the Reorganization Agreement, JPC has agreed to
indemnify and hold harmless JP Fund, Oppenheimer Fund, their
investment advisers and their respective trustees, officers and
shareholders against claims resulting from certain actions or a
failure to act by JP Fund and OFI has agreed to indemnify and hold
harmless JP Fund and its investment adviser and their respective
directors, officers and shareholders against claims resulting from
certain actions or a failure to act by Oppenheimer Fund.
In addition, JPC has separately agreed with JP Fund and the
Independent Directors that, if indemnification from the assets of
JP Fund or liability insurance is not available to the Independent
Directors after the Closing Date, JPC will indemnify and hold the
Independent Directors harmless to the same extent as provided under
the JP Fund's Articles of Incorporation.
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 JP Fund, the Board will consider
other possible courses of action.
Tax Aspects of the Reorganization
At or prior to the Closing Date, JP Fund will declare a dividend
in an amount large enough so that it will have declared a dividend
of all of its investment company taxable income and net capital
gain, if any, for the taxable period ending on or around the
Closing Date (determined without regard to any deduction for
dividends paid). Such dividends will be included in the taxable
income of JP Fund's shareholders as ordinary income and long-term
capital gain, respectively.
The exchange of the assets of JP Fund for Class A shares of
Oppenheimer Fund and the assumption by Oppenheimer Fund of certain
liabilities of JP 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"). JP Fund
has represented to Sutherland, Asbill & Brennan, tax counsel to JP
Fund, that there is no plan or intention by any JP Fund shareholder
who owns 5% or more of JP Fund's outstanding shares and, to JP
Fund's best knowledge, there is no plan or intention on the part of
the remaining JP Fund shareholders, to redeem, sell, exchange or
otherwise dispose of a number of Oppenheimer Fund shares received
in the transaction that would reduce JP Fund shareholders'
ownership of Oppenheimer Fund Class A 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 JP Fund shares as of the same
date. JP Fund has also represented that Oppenheimer Fund will
acquire at least 90% of the fair market value of the net assets and
at least 70% of the fair market value of the gross assets held by
JP Fund immediately prior to the Reorganization. JP Fund and
Oppenheimer Fund have each further represented to Sutherland,
Asbill & Brennan the fact that, as of the Closing Date, JP Fund and
Oppenheimer Fund will qualify as regulated investment companies or
will meet the diversification test of Section 368(a)(2)(F)(ii) of
the Code. As of the Record Date, JPLIC owned 400,000 shares of JP
Fund, representing 17.12% of the outstanding shares of JP Fund as
of such date. JPLIC has informed OFI and Oppenheimer Fund that it
intends to redeem all Class A Oppenheimer Fund shares received
pursuant to the Reorganization soon after the Reorganization.
As a condition to the closing of the Reorganization, Oppenheimer
Fund and JP Fund will receive the opinion of Sutherland, Asbill &
Brennan to the effect that, based on the Reorganization Agreement,
information given by JPC, 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:
(a) The reorganization contemplated by the Reorganization
Agreement will constitute a "reorganization" within the
meaning of Section 368(a)(1)(C) of the Code and JP Fund and
Oppenheimer Fund will each be a "party to the reorganization"
within the meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by Oppenheimer Fund
upon the receipt of the assets transferred to it by JP Fund in
exchange for Class A shares of Oppenheimer Fund and the
assumption by Oppenheimer Fund of certain identified
liabilities of JP Fund. (Section 1032)
(c) No gain or loss will be recognized by JP Fund upon the
transfer of its assets to Oppenheimer Fund in exchange solely
for Class A shares of Oppenheimer Fund and the assumption by
Oppenheimer Fund of certain identified liabilities of JP Fund
(if any) and the subsequent distribution by JP Fund of such
Class A shares to the shareholders of JP Fund. (Section 361)
(d) No gain or loss will be recognized by JP Fund shareholders
upon the exchange of the JP Fund shares solely for the Class
A shares of Oppenheimer Fund. (Section 354)
(e) The basis of the Class A shares of Oppenheimer Fund
received by each JP Fund shareholder pursuant to the
reorganization will be the same as the adjusted basis of that
shareholder's JP Fund shares surrendered in exchange therefor.
(Section 358)
(f) The holding period of Class A shares of Oppenheimer Fund
to be received by each JP Fund shareholder will include the
shareholder's holding period for the JP Fund shares
surrendered in exchange therefor, provided such JP Fund shares
were held as capital assets on the Closing Date. (Section
1223)
(g) Oppenheimer Fund's basis for the assets transferred to it
by JP Fund will be the same as JP Fund's tax basis for the
assets immediately prior to the reorganization. (Section
362(b))
(h) Oppenheimer Fund's holding period for the transferred
assets will include JP Fund's holding period therefor.
(Section 1223)
(i) Oppenheimer Fund will succeed to and take into account the
items of JP Fund described in Section 381(c) of the Code,
including the earnings and profits, or deficit therein, of JP
Fund as of the Closing Date, subject to the conditions and
limitations specified in Sections 381, 382, 383 and 384 of the
Code.
Shareholders of JP Fund should consult their tax advisers 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 JP Fund should also consult their
tax advisers as to state and local tax consequences, if any, of the
Reorganization.
Dissenters' Rights
Under the North Carolina Business Corporation Act (the "NCBCA"),
the state statute governing JP Fund, shareholders of a company
acquired in a reorganization who do not vote to approve the
reorganization could have, under certain circumstances, "appraisal
rights" (where they may elect to have the "fair value" of their
shares as of the day prior to such reorganization, determined in
accordance with the NCBCA, judicially appraised and paid to them).
The Division of Investment Management of the SEC has taken the
position that Rule 22c-1 under the 1940 Act preempts certain
appraisal provisions in state statutes that conflict with the Rule.
Rule 22c-1 provides that no open-end investment company, such as
JP Fund, may redeem its shares other than at net asset value
computed after receipt of a tender of such security for redemption.
Accordingly, dissenters' rights of appraisal are amended for
shareholders of JP Fund with respect to the Reorganization insofar
as shareholders may only receive the "fair value" of their JP Fund
shares or Oppenheimer Fund Class A shares, as the case may be, as
of the date that they tender such shares for redemption.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of Oppenheimer Fund
and JP Fund and indicates the pro forma combined capitalization as
of June 30, 1996 as if the Reorganization had occurred on that
date.
<TABLE>
<CAPTION>
Net Asset
Shares Value
Oppenheimer Fund Net Assets Outstanding Per Share
<S> <C> <C> <C>
Class A Shares $1,120,045,776 33,508,383 $33.43
Class B Shares* 129,484,414 3,955,435 32.74
Class C Shares* 3,592,867 108,160 33.22
Class Y Shares* 16,110,476 482,038 33.42
JP Fund $ 40,517,630 2,346,524 $17.27
Pro Forma Combined
Fund**
Class A Shares $1,160,563,406 34,720,397 $33.43
Class B Shares* 129,484,414 3,955,435 32.74
Class C Shares* 3,592,867 108,160 33.22
Class Y Shares* 16,110,476 482,038 33.42
</TABLE>
- ------------------
* No Oppenheimer Fund Class B, Class C or Class Y shares are being
issued in the Reorganization because JP Fund does not have Class B,
Class C or Class Y shares.
**Reflects issuance of 1,212,014 Class A shares of Oppenheimer Fund
in a tax-free exchange for the net assets of JP Fund, aggregating
$40,517,630 for shares of JP Fund.
The pro forma ratio of expenses to average annual net assets of the
combined funds at June 30, 1996 would have been 1.05% with respect
to Class A shares.
COMPARISON BETWEEN OPPENHEIMER FUND AND JP FUND
Comparative information about Oppenheimer Fund and JP Fund is
presented below. More complete information about Oppenheimer Fund
and JP Fund is set forth in their respective Prospectuses (which,
as to Oppenheimer Fund, 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 investment objective, Oppenheimer Fund seeks capital
appreciation; it does not seek current income. JP Fund's primary
investment objective is long-term capital appreciation; a secondary
objective is current income. In seeking their investment
objectives, which are fundamental policies, Oppenheimer Fund and JP
Fund employ the investment policies as described in detail below.
Oppenheimer Fund. Oppenheimer Fund seeks its investment
objective by emphasizing investment in common stocks issued by
established mid- and large- capitalization "growth companies" that,
in the opinion of OFI, have better-than-expected earnings prospects
but are selling at below-normal valuations. Mid-cap companies
generally have market capitalizations between $1 billion and $5
billion, and large-cap companies generally have market
capitalization greater than $5 billion. Growth companies tend to
be companies that may be developing new products or services, or
expanding into new markets for their products. In the event that
economic or financial conditions adversely affect equity
securities, defensive investment methods may be stressed.
Investment opportunities may be sought among securities of smaller,
less well known companies as well as securities of large, well
known companies, but the emphasis is in mid- and large- cap
issuers. The securities selected for defensive or liquidity
purposes may include cash, cash equivalents (such as commercial
paper) and U.S. Government securities. It is expected that the
emphasis of this portion of the portfolio will usually be on short-term debt
securities (i.e., those maturing in one year or less from
date of purchase), since such securities usually may be quickly
disposed of at prices not involving significant gains or losses
when OFI wishes to increase the portion of the portfolio invested
in securities selected for appreciation possibilities.
JP Fund. JP Fund proposes to achieve its investment objectives by
investing substantially all its assets in common stocks of
companies recognized as leaders in their respective industries with
proven and capable management and that are providing significant
products and services to their customers. JP Fund's investments
will be made predominantly in securities listed on registered
securities exchanges, but it may purchase securities traded in the
over-the-counter market. Investments may be made in other equity
securities, including rights, warrants, preferred stock and those
debt securities convertible into or carrying rights, warrants, or
options to purchase common stock or to participate in earnings. JP
Fund may also hold cash or invest in short-term securities.
Special Investment Methods
Oppenheimer Fund and JP Fund may use certain special investment
methods as summarized below.
Loans of Portfolio Securities. Oppenheimer Fund may lend its
portfolio securities to brokers, dealers and other financial
institutions, subject to certain conditions. Oppenheimer Fund must
receive collateral for the loans. Oppenheimer Fund presently does
not intend that the value of portfolio securities loaned will
exceed 5% of the value of the total assets of Oppenheimer Fund in
the coming year and is otherwise subject to a 25% limit with
respect to such loans. JP Fund is prohibited from making loans
except to the extent of investing in repurchase agreements or
purchasing a portion of an issue of a debt security distributed to
the public.
Repurchase Agreements and Illiquid Securities. Both Oppenheimer
Fund and JP Fund may enter into repurchase agreements. 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 is less than the repurchase price.
There is no limit on the amount of either fund's net assets that
may be invested subject to repurchase agreements of seven days or
less because these investments are liquid and may be disposed of
promptly. Neither fund will purchase illiquid or restricted
securities (which are subject to legal or contractual restrictions
on resale) that will cause more than 10% of its net assets to be
invested in such securities. As to Oppenheimer Fund, this
percentage limit may increase to 15% with respect to all illiquid
or restricted securities if approved by its Board of Trustees.
Repurchase agreements with maturities longer than seven days are
considered illiquid. JP Fund has no present intention of acquiring
restricted securities. For Oppenheimer Fund, certain restricted
securities, eligible for resale to qualified institutional
purchasers, are not subject to the foregoing limitation. However,
investing in such restricted 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.
Hedging. Oppenheimer Fund may purchase and sell futures contracts
that relate to broadly-based securities indices. These are
referred to as "hedging instruments." Oppenheimer Fund does not
use hedging instruments for speculative purposes. JP Fund does not
invest in hedging instruments.
Hedging instruments may be used to manage Oppenheimer Fund's
exposure to the possibility that the prices of its portfolio
securities may decline, or to establish a position in the
securities market as a temporary substitute for purchasing
individual securities; to hedge the Fund's portfolio against price
fluctuations; and to increase the Fund's exposure to the securities
market.
The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than those
required for normal portfolio management. If Oppenheimer Fund uses
a hedging instrument at the wrong time or judges market conditions
incorrectly, hedging strategies may reduce the Fund's return.
Oppenheimer Fund could also experience losses if the prices of its
futures positions were not correlated with its other investments or
if it could not close out a position because of an illiquid market
for the future. Futures are subject to special tax rules that may
affect the amount, timing and character of Oppenheimer Fund's
distributions to its shareholders.
Derivative Investments. In general, a "derivative investment" is
a specially-designed security or contract the performance of which
is linked to the performance of another investment or security. In
the broadest sense, derivative investments include the futures
contracts in which Oppenheimer Fund may invest. JP Fund does not
have a policy with regard to investments in such other types of
derivatives investments such as hedging instruments. Nonetheless,
JP Fund has never invested in such derivative investments and JPM
has no intention of having JP Fund invest in such investments.
When-Issued and Delayed Delivery Transactions. JP Fund and
Oppenheimer Fund may purchase securities on a "when-issued" basis
and may purchase or sell such securities on a "delayed delivery"
basis. These terms refer to securities that have been created and
for which a market exists, but which are not available for
immediate delivery or are to be delivered at a later date. There
may be a risk of loss to either fund if the value of the security
changes prior to the settlement date. Although JP Fund may purchase
securities on a "when-issued" basis and may purchase or sell such
securities on a "delayed delivery" basis, it has not done so to
date and JPM has no intention of having JP Fund do so in the
foreseeable future.
Investment Restrictions
Both Oppenheimer Fund and JP Fund have certain investment
restrictions that, together with their respective investment
objectives are fundamental policies changeable only by shareholder
approval. The investment restrictions of Oppenheimer Fund and JP
Fund are set forth below.
Oppenheimer Fund cannot: (1) as to 75% of its assets, invest in
the securities of any one issuer (other than the U.S. Government or
its agencies or instrumentalities) if immediately thereafter (a)
more than 5% of Oppenheimer Fund's total assets would be invested
in securities of that issuer, or (b) Oppenheimer Fund would then
own more than 10% of that issuer's voting securities; (2)
concentrate investments in any particular industry; therefore
Oppenheimer Fund will not purchase the securities of companies in
any one industry if, thereafter, more than 25% of the value of
Oppenheimer Fund's assets would consist of securities of companies
in that industry; (3) deviate from the percentage restrictions
listed in "Investment Techniques and Strategies" under "Small,
Unseasoned Companies," "Warrants and Rights," "Loans of Portfolio
Securities," and "Short Sales Against-the-Box," and "Investment
Risks - Special Risks - Borrowing For Leverage", in Oppenheimer
Fund's Prospectus; (4) lend money, but Oppenheimer Fund may invest
in all or a portion of an issue of bonds, debentures, commercial
paper, or other similar corporate obligations; Oppenheimer Fund may
also make loans of portfolio securities subject to the restrictions
set forth in Oppenheimer Fund's Prospectus and the Oppenheimer Fund
Additional Statement; (5) underwrite securities of other companies,
except insofar as it might be deemed to be an underwriter for
purposes of the Securities Act of 1933 in the resale of any
securities held in its own portfolio; (6) invest in or hold
securities of any issuer if those officers and trustees or
directors of Oppenheimer Fund or OFI owning individually more than
1/2 of 1% of the securities of such issuer together own more than
5% of the securities of such issuer; (7) invest in commodities or
commodity contracts other than the hedging instruments permitted by
any of its other fundamental policies, whether or not any such
hedging instrument is considered to be a commodity or commodity
contract; (8) invest in real estate or interests in real estate,
but may purchase readily marketable securities of companies holding
real estate or interests therein; (9) purchase securities on
margin; however, Oppenheimer Fund may make margin deposits in
connection with any of the hedging instruments permitted by any of
its other fundamental policies; (10) mortgage, hypothecate or
pledge any of its assets; however, this does not prohibit the
escrow arrangements or other collateral or margin arrangements in
connection with covered call writing or any of the hedging
instruments permitted by any of its other fundamental policies; and
(11) invest in other open-end investment companies, or invest more
than 5% of the value of its net assets in closed-end investment
companies, including small business investment companies, nor make
any such investments at commission rates in excess of normal
brokerage commissions.
In accordance with certain non-fundamental policies and guidelines
changeable without shareholder approval, Oppenheimer Fund may not:
(i) invest in interests in oil, gas, or other mineral exploration
or development programs, or (ii) invest more than 5% of its total
assets in securities of unseasoned issuers (including predecessors)
which have been in operation for less than three years, or (iii)
invest more than 10% of its net assets in illiquid or restricted
securities, including Rule 144A securities.
JP Fund cannot: (1) issue senior securities; (2) purchase
securities on margin or sell short, except it may obtain such
short-term credits as are necessary for the clearance of
transactions; (3) write, purchase or sell puts, calls or
combinations thereof; (4) borrow money except that, as a temporary
measure for extraordinary or emergency purposes and not for
investment purposes, JP Fund may borrow up to 5% of the value of
its total assets; (5) act as an underwriter of securities of other
issuers, except JP Fund may invest up to 10% of the value of its
net assets (at time of investment) in portfolio securities which JP
Fund might not be free to sell to the public without registration
of such securities under the Securities Act of 1933; (6) purchase
or sell real estate or interests in real estate, nor interests in
real estate investment trusts or real estate limited partnerships
(however, JP Fund may purchase interests in real estate investment
trusts whose securities are registered under the Securities Act of
1933 and are readily marketable); (7) engage in the purchase and
sale of commodities or commodity contracts; (8) make loans, except
to the extent that either of the following is deemed to constitute
a loan: (a) purchases of a portion of an issue of a debt security
distributed to the public; or (b) investment in "repurchase
agreements"; (9) purchase the securities (except U.S. Government
securities) of any one issuer if immediately after and as a result
of such purchase (a) the value of the holdings of JP Fund in the
securities of such issuer exceeds 5% of the value of JP Fund's
total assets, or (b) JP Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
(10) purchase the securities of open-end investment companies
(except JP Fund may purchase the securities of other investment
companies provided that (a) immediately after such purchase JP Fund
and companies controlled by JP Fund, or other investment companies
having the same investment adviser as JP Fund, do not own more than
10% of the investment company whose securities are being purchased;
(b) JP Fund cannot invest more than 10% of its total assets in the
securities of other investment companies; and (c) such purchases
are made in the open market where no commission or profit to a
sponsor or dealer results other than the customary broker's
commission; notwithstanding the foregoing, restrictions 10(a),
10(b) and 10(c) do not apply in connection with a merger,
consolidation, or plan of reorganization; (11) mortgage, pledge,
hypothecate, or in any manner transfer, as security for
indebtedness, any securities owned or held by JP Fund; (12)
participate on a joint or joint and several basis in any trading
account in securities or effect a short sale of any security,
except in connection with an underwriting in which it is a
participant in the circumstances specified in "5" above; and (13)
purchase or retain the securities of any issuer if those officers
and directors of JP Fund, its adviser or underwriter owning
individually more than 0.5% of the securities of such issuer
together own more than 5% of the securities of such issuer. As
non-fundamental policies changeable without shareholder approval,
JP Fund cannot: (a) invest in companies for the purpose of
exercising control or management; (b) invest in foreign securities
other than securities issued by Canadian companies; and (c) invest
in interests of oil, gas or other mineral exploration or
development programs (including oil, gas or mineral leases).
Oppenheimer Fund Performance
Oppenheimer Fund does not maintain a fixed dividend rate and there
can be no assurance as to the payment of any dividends or the
realization of any capital gains.
During Oppenheimer Fund's fiscal year ended August 31, 1996, its
performance was affected principally by the overall strong
performance of the U.S. stock market, although the market
experienced significant volatility near the end of the fiscal year.
The portfolio manager focused on securities with long-term growth
potential that OFI believed were undervalued. Oppenheimer Fund
focused new investments in the technology and financial services
sectors, including U.S. companies with broad international
exposure, which appreciated as the stock market rose. OFI disposed
of securities it believed had become over-valued or more fairly
valued, especially in the healthcare sector. As U.S corporate
earnings momentum slowed, OFI purchased stocks in the basic
materials sectors - paper, chemicals and metals producers.
Oppenheimer Fund maintained a significant cash position during the
fiscal year for defensive purposes and to try to reduce the effects
of any short-term market volatility on Oppenheimer Fund's share
price.
Included in Oppenheimer Fund's Prospectus, a copy of which
accompanies this Proxy Statement and Prospectus, in the section
entitled "Performance of the Fund", is a performance graph which
depicts the performance of a hypothetical $10,000 investment in
Class A shares of Oppenheimer Fund over a ten-year period from June
30, 1986 through June 30, 1996 and from July 1, 1996 through to
August 31, 1996. Class B and Class C shares are not being offered
in the Reorganization, and thus no performance information about
Class B and Class C shares is given.
Oppenheimer Fund's performance is compared to the performance of
the S&P 500 Index, a broad-based index of equity securities widely
regarded as a general measurement of the performance of the U.S.
equity securities market. Index performance reflects the
reinvestment of dividends but does not consider the effect of
capital gains or transaction costs, and none of the data below
shows the effect of taxes. Also, Oppenheimer Fund's performance
data reflects the deduction of the current maximum sales charge of
5.75% for Class A shares, reinvestment of all dividends and capital
gains distributions, and the effect of fund business and operating
expenses. While index comparisons may be useful to provide a
benchmark for Oppenheimer Fund's performance, it must be noted that
Oppenheimer Fund's investments are not limited to the securities in
the S&P 500 index, which tend to be securities of larger, well-capitalized
companies, as contrasted to the smaller growth-type
companies in which Oppenheimer Fund principally invests. Moreover,
the index data does not reflect any assessment of the risk of the
investments included in the index.
Information on JP Fund performance is set forth in JP Fund's
current Prospectus and in its Annual Report as of December 31, 1995
which may be obtained without charge as set forth in "Miscellaneous
- - Public Information." Such information is incorporated herein by
reference.
Additional Comparative Information
General. For a discussion of the organization and operation of
Oppenheimer Fund, including brokerage practices, see "Investment
Objective and Policies" and "How the Fund is Managed" in
Oppenheimer Fund's current Prospectus and "Brokerage Policies of
the Fund" in the Oppenheimer Fund Additional Statement. For a
discussion of the organization and operation of JP Fund, including
brokerage practices, see "Investment Objectives and Policies,"
"Portfolio Managers" and "Who Manages The Funds" in JP Fund's
current Prospectus and "Brokerage" in the JP Fund Additional
Statement.
Financial Information. For certain financial information about
Oppenheimer Fund and JP Fund, see as to Oppenheimer Fund "Financial
Highlights" and "Performance of the Fund" in Oppenheimer Fund's
current Prospectus and as to JP Fund "Condensed Financial
Information" and "Performance" in JP Fund's current Prospectus.
Management of Oppenheimer Fund and JP Fund. For information about
the management of Oppenheimer Fund and JP Fund, including their
respective Boards of Trustees or Directors, investment adviser,
portfolio managers and distributor, see as to Oppenheimer Fund,
"Expenses" and "How the Fund is Managed" in the Oppenheimer Fund
current Prospectus and "How the Fund is Managed," "Trustees and
Officers of the Fund" and "The Manager and Its Affiliates" in the
Oppenheimer Fund Additional Statement, and, as to JP Fund,
"Portfolio Managers" and "Who Manages the Funds" in JP Fund's
current Prospectus and "The Investment Adviser," "The Fund's
Distributor" and "The Fund's Directors and Officers" in the JP Fund
Additional Statement.
Description of Shares of Oppenheimer Fund and JP Fund. Oppenheimer
Fund is a Massachusetts business trust. Oppenheimer Fund and its
shareholders are governed principally by its Declaration of Trust,
its By-laws and other governing documents. Each share of
Oppenheimer Fund represents an interest in Oppenheimer Fund
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. Shares of Oppenheimer Fund and of
the Trust's other series vote together in the aggregate on certain
matters at shareholder meetings, such as the election of Trustees
and ratification of appointment of auditors. Shareholders of a
particular series or class vote separately on proposals which
affect that series or class, and shareholders of a series or class
which is not affected by that matter are not entitled to vote on
the proposal. Shareholders of Oppenheimer Fund have the right,
under certain circumstances, to remove a Trustee and will be
assisted in communicating with other shareholders for such purpose.
Oppenheimer Fund is authorized to issue an unlimited number of
shares of beneficial interest. Shares are freely transferable and
shares do not have cumulative voting rights or preemptive or
subscription rights. Oppenheimer Fund is governed by a Board of
Trustees 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. The Board of Trustees has
established four classes of shares for Oppenheimer Fund, Class A,
Class B Class C and Class Y. Each class invests in the same
investment portfolio. Each class has its own dividends and
distributions, and pays certain expenses which may be different for
the different classes. Under certain circumstances, a shareholder
of Oppenheimer Fund may be held personally liable as a partner for
the obligations of Oppenheimer Fund, and under the Trust's
Declaration of Trust, such a shareholder is entitled to
indemnification rights by Oppenheimer Fund; the risk of a
shareholder incurring any such loss is limited to the remote
circumstances in which Oppenheimer Fund is unable to meet its
obligations. For further information about the shares of
Oppenheimer Fund, see "How the Fund is Managed" in the Oppenheimer
Fund current Prospectus and Oppenheimer Fund Additional Statement.
JP Fund is a North Carolina corporation with 100,000,000 shares of
common stock, par value $1.00 per share, authorized, which shares
are divided initially into two classes, consisting of 50,000,000
shares of Class A and 50,000,000 shares of Class B. JP Fund and
its shareholders are governed by its Articles of Incorporation and
By-Laws and by the NCBCA. The shares of common stock issued and
outstanding on the date Class B shares are first issued will be
reclassified as Class A; no Class B shares have been issued as of
the date hereof. Each share entitles the holder to participate
equally in dividends and distributions declared by JP Fund and in
its remaining net assets on liquidation after satisfaction of
outstanding liabilities. JP Fund shares are fully paid and
nonassessable when issued; have no preemptive or conversion rights;
are transferable without restriction; and are redeemable at net
asset value. On matters submitted for a shareholder vote, each
shareholder is entitled to one vote for each share owned.
Fractional shares have proportionately the same rights as do full
shares.
Oppenheimer Fund is not required to hold, and does not plan to
hold, regular annual meetings of shareholders. In contrast, JP Fund
is required to hold an annual meeting of shareholders each year or
in lieu thereof, a special meeting of shareholders.
Dividends, Distributions and Taxes. Oppenheimer Fund declares
dividends from net investment income on an annual basis and
normally pays those dividends to shareholders in December, but the
Board of Trustees can change that date. As Oppenheimer Fund does
not have an objective of seeking current income, the amounts of
dividends it pays, if any, will likely be small. Any net long-term
and short-term capital gains may be distributed by Oppenheimer Fund
annually in December. JP Fund's policy is to pay dividends from
net investment income semi-annually in February and August. Each
December JP Fund makes a distribution of the capital gains, if any,
realized during the 12-month period ended the preceding October 31.
For a discussion of the policies of Oppenheimer Fund and JP Fund
with respect to dividends and distributions, and a discussion of
the tax consequences of an investment in Oppenheimer Fund and JP
Fund, see as to Oppenheimer Fund "Dividends, Capital Gains and
Taxes" in the Oppenheimer Fund current Prospectus and as to JP Fund
"Dividends, Distribution and Taxes" in the JP Fund current
Prospectus.
Purchases, Redemptions and Exchanges of Shares. Information on
purchases, exchanges, and redemptions of shares of Oppenheimer Fund
and JP Fund is provided under "Synopsis -- Purchases, Exchanges and
Redemptions" in this Proxy Statement and Prospectus. For an
additional discussion of how shares of Oppenheimer Fund and JP Fund
may be purchased, redeemed and exchanged, see, as to Oppenheimer
Fund, "How to Buy Shares," "How to Sell Shares," "Exchanges of
Shares," "Special Investor Services," "Service Plan for Class A
Shares," and "Distribution and Service Plans for Class B and Class
C Shares" in Oppenheimer Fund's current Prospectus and the
Oppenheimer Fund Additional Statement, and as to JP Fund, "How to
Purchase Shares," "Shareholder Services" and "How to Redeem Shares"
in JP Fund's current Prospectus.
Shareholder Inquiries. For a description of how shareholder
inquiries should be made, see (as to Oppenheimer Fund, "How the
Fund is Managed" in the Oppenheimer Fund current Prospectus and,
as to JP Fund, "Additional Information" in the JP Fund current
Prospectus.
The Board of Directors recommends that shareholders approve the
Reorganization Agreement.
ELECTION OF DIRECTORS
(Proposal 2)
The Board of Directors of JP Fund recommends that shareholders
elect the following nominees to serve as the 5 directors of the
full Board of directors of JP Fund: John C. Ingram, J. Lee Lloyd,
Richard W. McEnally, William E. Moran and E.J. Yelton. Each of the
nominees is presently a Director of JP Fund and has been previously
elected by shareholders of JP Fund. If elected, the directors will
serve until the earlier of the dissolution of JP Fund or the next
shareholder meeting called for the purpose of electing directors,
or until the election and qualification of their successors. If
the enclosed Proxy is duly executed and received in time for the
Meeting, and if no contrary specification is made as provided
therein, it will be voted in favor of the election as directors of
the foregoing nominees. If any nominee should be unwilling or
unable to serve, which is not now anticipated, the Proxy may be
voted with discretionary authority for a substitute or substitutes
as shall be designated by the Board of Directors. Certain
information concerning the directors and executive officers of JP
Fund is set forth below.
Information Concerning the Board
JP Fund's current Board of Directors consists of 5 directors, all
of whom are elected at annual meetings. The Board of Directors
does not have a standing audit, nominating or compensation
committee. The following list of JP Fund's directors and executive
officers, all of whom are also directors and/or officers of
Jefferson-Pilot Investment Grade Bond Fund, Inc., JP Investment
Grade Bond Fund, Inc., and JP Capital Appreciation Fund, Inc.
(collectively with JP Fund, the "Jefferson-Pilot Funds"), includes
information as to their principal occupations during the past five
years and their principal affiliations.
<TABLE>
<CAPTION>
Name and Other Position/Office Principal Occupation(s) Officer or
Information with JP Fund During the Past 5 Years Director
Since
<S> <C> <C>
John C. Ingram* Director Senior Vice President, 1989
3802 Woodcote Dr. JPLIC since November 1988.
Greensboro, N.C.
Age-52
J. Lee Lloyd Director Managing Director, Lloyd & Company 1994
16 Irving Park Lane since April 1991.
Greensboro, NC 27455
Age-36
Richard W. McEnally Director Professor of Investment Banking, 1984
401 Brookside Drive University of North Carolina at
Chapel Hill, NC at Chapel Hill.
Age-54
William E. Moran Director Senior Vice President, Connors 1983
5206 Barnfield Road Investor Service, Inc.
Greensboro, NC since January 1995; prior thereto, Chancellor,
Age-64 University of North Carolina at
Greensboro.
W. Hardee Mills, Jr. Vice President Vice President, JPLIC 1987
5 St. Francis Court since February 1994; prior
Greensboro, NC 27408 thereto, Second Vice President,
Age-46 JPLIC.
J. Gregory Poole Secretary Assistant Secretary of JPC and 1994
1805 Gate Post Drive Associate Counsel and Assistant
Greensboro, NC 27455 Secretary of JPLIC since February
Age-32 1994; prior thereto, various
positions at JPLIC.
E.J. Yelton* Director, Senior Vice President - Investments 1994
3204 St. Regis Road President, of JPC and Executive Vice President
Greensboro, NC 27408 Treasurer - Investments of JPLIC since October
Age-57 1993; prior thereto, President and
CEO, ING North America
Investment Centre/Member of
ING Group (investment banking firm).
</TABLE>
* Messrs. Ingram and Yelton are directors that are "interested
persons" (as that term is defined in the 1940 Act) of JP Fund due
to the following positions with JPM and JPC: Mr. Ingram -Senior
Vice President, Treasurer and Director of JPM, and Mr. Yelton -
President and Director, JPM and Senior Vice President -
Investments, JPC.
The nominees for directors are beneficial owners of the
following shares in JPC, the parent of JP Fund's investment
adviser: Yelton, 54,900; Ingram, 26,010; Moran, None; Lloyd, None;
and McEnally, None.
Officers of JP Fund
The following officers of JP Fund also serve as officers and/or
directors of JPM and JPIS: E.J. Yelton, President and Treasurer of
JP Fund, is President and a Director of JPM and a Director of JPIS;
W. Hardee Mills, Jr., Vice President of JP Fund, is Vice President
of JPM and J. Gregory Poole, Secretary of JP Fund, is Secretary of
JPIS and JPM. Messrs. Yelton, Poole and Mills hold positions with
the other Jefferson-Pilot Funds similar to the positions held with
JP Fund. The other Jefferson-Pilot Funds have the same investment
adviser as JP Fund.
The following table provides information regarding the compensation
each nominee for director was paid by JP Fund and the other
Jefferson-Pilot Funds for the year ended December 31, 1995.
<TABLE>
<CAPTION>
COMPENSATION TABLE
(1) (2) (3) (4) (5)
Name of Aggregate Pension or Retirement Estimated Annual Total Compensation
Person, Compensation Benefits Accrued as Benefits upon From
Position from JP Fund Part of JP Fund Expenses Retirement______ Jefferson-Pilot Funds
<S> <C> <C> <C> <C>
John C. Ingram $0 $0 $0 $0
Director
J. Lee Lloyd 1,220 0 0 4,880
Director
Richard W. McEnally 1,220 0 0 4,880
Director
William E. Moran 1,220 0 0 4,880
Director
E.J. Yelton 0 0 0 0
Director,
President,
Treasurer
</TABLE>
Other Information
The Board of Directors met five items during the fiscal year ended
December 31, 1995 and all of the Directors were present for at
least 75% of those meetings. During the year ended December 31,
1995, directors who are not employed by JP Fund or its affiliates
received a $100 director's fee for each meeting attended, amounting
to an aggregate of $500. In addition, each of the Independent
Directors receives a fee of $720 per year payable in equal monthly
installments.
JP Fund's Board does not have a standing audit committee,
compensation committee or nominating committee.
As of the Record Date, JP Fund's directors and officers owned JP
Fund shares in the amounts indicated: John C. Ingram, 98.241
shares; J. Lee Lloyd, None; Richard W. McEnally, 558.101 shares;
William E. Moran, 350.871 shares; E.J. Yelton, 883.927 shares; W.
Hardee Mills, Jr., None; J. Gregory Poole, None; and all directors
and officers as a group, 1891.14 shares.
The percentage of shares beneficially owned by each such
individual, and all directors and officers as a group, did not
exceed 1% of JP Fund's outstanding shares.
JP Fund's investment adviser and accounting agent is JPM, P.O. Box
21008, Greensboro, North Carolina 27420, a North Carolina
corporation organized on January 13, 1970. JPM is a wholly-owned
subsidiary of JPC, an insurance holding company. JPM serves the
other Jefferson-Pilot Funds in these capacities as well. JPIS, a
North Carolina corporation, with offices at the same location as
JPM, serves as JP Fund's distributor.
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, MO 64105-1716 (phone: 1-800-292-6701), serves as JP Fund's
transfer agent and dividend paying agent.
RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal 3)
The Board of Directors of JP Fund recommends that the
shareholders ratify the selection of McGladrey & Pullen LLP
("McGLadrey & Pullen"), Certified Public Accountants, to continue
to serve as the independent auditors of JP Fund for the fiscal year
ending December 31, 1996. That firm or its predecessor has served
as JP Fund's independent auditors from the time of JP Fund's
incorporation on January 13, 1970. JP Fund has been advised by
McGladrey & Pullen that neither the said firm nor any of its
members have a direct or indirect financial interest in JP Fund.
McGladrey & Pullen also serves as independent auditors for JPM.
Representatives of McGladrey & Pullen are not expected to be
present at the Meeting but will be available should any matter
arise requiring their presence.
INFORMATION CONCERNING THE MEETING
The Meeting
The Meeting will be held at the Jefferson-Pilot Building (4th
Floor, Room B-2), 100 North Greene Street, Greensboro, North
Carolina 27420 at 10:00 A.M., local time, on December 3, 1996. At
the Meeting, JP Fund shareholders will be asked to consider and
vote upon approval or disapproval of the Reorganization Agreement,
and the transactions contemplated thereby, including the transfer
of substantially all the assets of JP Fund to Oppenheimer Fund in
exchange for Class A shares of Oppenheimer Fund, the distribution
by JP Fund of such shares to its shareholders in liquidation of JP
Fund and the cancellation of the outstanding shares of JP Fund. At
the meeting, shareholders of JP Fund will also be asked to elect
five directors and ratify or reject the selection of independent
accountants.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on October 10, 1996 as
the Record Date for the determination of shareholders entitled to
notice of, and to vote at, the Meeting. The affirmative vote of a
majority of the JP Fund shares entitled to vote at the Meeting is
required for approval of Proposal 1. The affirmative vote of a
majority of JP Funds shares voted (in person or by proxy) at the
Meeting, if a quorum is present at the Meeting, is required to
approve Proposal 3. A plurality of all the votes cast at the
Meeting, if a quorum is present at the Meeting, is sufficient to
elect the nominees for director (Proposal 2). 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 JP Fund shareholders will vote on the
Reorganization and the other Proposals. The vote of shareholders
of Oppenheimer Fund is not being solicited.
At the close of business on the Record Date, there were
approximately 2,337,005 shares of JP Fund issued and outstanding.
The presence in person or by proxy of the holders of one-third of
JP Fund's shares constitutes a quorum for the transaction of
business at the Meeting. To the knowledge of JP Fund, as of the
Record Date, no person owned of record or beneficially 5% or more
of the outstanding JP Fund shares. As indicated above, JPLIC owned
17.12% of the issued and outstanding JP Fund shares as of the
Record Date. JPLIC has informed JP Fund that it intends to vote
all of these shares in favor of each Proposal and for each nominee
as Director. JPLIC, a North Carolina corporation, is a wholly-owned subsidiary
of JPC.
As of the close of business on the Record Date, there were
approximately 33,595,295, Class A, 4,418,267 Class B, 182,446 Class
C and 1,186,657 Class Y shares of Oppenheimer Fund issued and
outstanding. To the knowledge of Oppenheimer Fund, as of the
Record Date, the only person who owned of record or was known by
Oppenheimer Fund to own beneficially 5% or more of Oppenheimer
Fund's outstanding shares was Merrill Lynch Pierce Fenner & Smith,
4800 Deer Lake Drive East, 3rd Floor, Jacksonville, Florida 32246,
who owned of record 9,307 Class C shares (approximately 5.11% of
the Fund's outstanding shares of that class). As of that same date
the only person who owned of record or was known by Oppenheimer
Fund to own beneficially 5% or more of Oppenheimer Fund's
outstanding Class Y shares was Massachusetts Mutual Life Insurance
Company, 1295 State Street, Springfield, Massachusetts 01111, which
owned all issued and outstanding Class Y shares. Massachusetts
Mutual Life Insurance Company controls the parent of OFI. As of
the Record Date, the officers and Trustees of Oppenheimer Fund
beneficially owned as a group less than 1% of the outstanding
shares of Oppenheimer Fund and less than 1% of the outstanding
shares of each class of Oppenheimer Fund.
In the event a quorum does not exist 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 cast
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 any Proposal,
in favor of an adjournment, and will vote all shares which they are
required to vote against any 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.
If a Proxy that is properly executed and returned accompanied by
instructions to withhold authority to vote represents a broker
"non-vote" (that is, a Proxy from a broker or nominee indicating
that such person has not received instructions from the beneficial
owner or other person entitled to vote shares on a particular
matter with respect to which the broker or nominee does not have
discretionary power), the shares represented thereby will be
considered not to be present at the Meeting for purposes of
determining the existence of a quorum for the transaction of
business and be deemed not cast with respect to such proposal. A
properly executed and returned Proxy marked with an abstention will
be considered present at the Meeting for proposes of determining
the existence of a quorum for the transaction of business. However,
abstentions and broker "non-votes" do not constitute a vote "for"
or "against" the matter. Nevertheless, as to Proposal 1,
abstentions and broker non-votes have the same effect as a vote
against the matter and as to Proposal 3, they have the effect of
reducing the number of votes necessary to approve a matter.
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 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 Proposals, and for the election of each nominee as Director.
The proxy is revocable (a) upon receipt by JP Fund of written
notice of revocation at any time before the proxy is exercised, (b)
upon return to the shareholder, at his or her request, of the proxy
or (c) submission of a revised proxy.
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 OFI and JPM. Similarly, any costs associated with
documents included in that mailing, such as existing prospectuses
or annual reports, will be borne by OFI and JPM. In addition to
the solicitation of proxies by mail, proxies may be solicited by
officers and employees of JPM or JPM affiliates, personally or by
telephone or telecopy. JPM may retain a proxy solicitor to assist
in the solicitation of proxies primarily by contacting shareholders
by telephone and telecopy for a fee that may approximate $10,000,
plus reasonable out-of-pocket expenses. The cost of such proxy
solicitor will be borne by JPM.
Brokerage houses, banks and other fiduciaries may be requested to
forward soliciting material to the beneficial owners of shares of
JP Fund and to obtain authorization for the execution of proxies.
For those services, if any, they will be reimbursed by JPIS for
their reasonable out-of-pocket expenses.
In addition to the proxy solicitation expenses (as described
above), OFI and JPM 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 Oppenheimer Fund in
its financial statements similar to a pooling without restatement.
Further financial information as to JP Fund is contained in JP
Fund's current Prospectus, which is available without charge upon
written request to JPIS at P.O. Box 22086, Greensboro, North
Carolina 27420, and in its audited financial statements as of
December 31, 1995, which are included in the JP Fund Additional
Statement. Financial information for Oppenheimer Fund is contained
in its current Prospectus accompanying this Proxy Statement and
Prospectus and incorporated herein, and in its audited financial
statements as of June 30, 1996 and August 31, 1996, which are
included in the Oppenheimer Fund Additional Statement.
Public Information
Additional information about Oppenheimer Fund and JP Fund is
available, as applicable, in the following documents: (1)
Oppenheimer Fund's Prospectus dated November 1, 1996, accompanying
this Proxy Statement and Prospectus and incorporated by reference
herein, (2) JP Fund's Prospectus dated May 1, 1996, as supplemented
October 8, 1996, which may be obtained without charge by writing to
JPIS at the address indicated above; (3) Oppenheimer Fund's Annual
Report as of August 31, 1996, which may be obtained without charge
by writing to OFS at the address on the cover of this Proxy
Statement and Prospectus; and (4) JP Fund's Annual Report as of
December 31, 1995 and Semi-Annual Report as of June 30, 1996, which
may be obtained without charge by writing to JPIS at the address
indicated above. All of the foregoing documents may be obtained by
calling the toll-free number for Oppenheimer Fund and JP Fund, as
applicable, on the cover of this Proxy Statement and Prospectus.
Additional information about the following matters is contained in
the Reorganization Additional Statement, which is incorporated
herein by reference and includes Oppenheimer Fund's Additional
Statement, the JP Fund Prospectus dated May 1, 1996, as
supplemented October 8, 1996, the JP Fund Additional Statement and
the Annual Reports and Semi-Annual Report described in the
preceding paragraph: the organization and operation of Oppenheimer
Fund and JP Fund; more information on investment policies,
practices and risks; information about the Board of Trustees of the
Trust and the Board of Directors of JP Fund, and their
responsibilities; a further description of the services provided by
Oppenheimer Fund's and JP Fund's respective investment adviser,
distributor, and transfer and shareholder servicing agent; dividend
policies; tax matters; an explanation of the method of determining
the offering price of the shares of Oppenheimer Fund and JP Fund;
purchase, redemption and exchange programs; and distribution
arrangements. The Reorganization Additional Statement may be
obtained by calling 1-800-525-7048 (a toll free number).
Oppenheimer Fund and JP 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
Oppenheimer Fund and JP 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.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to present a proposal for action at
the next annual meeting of shareholders and who wishes to have it
set forth in a proxy statement and identified in the form of proxy
prepared by JP Fund must notify JP Fund in such a manner so that
such notice is received by JP Fund by December 31, 1996, and in
such form as is required under the rules and regulations
promulgated by the SEC.
OTHER BUSINESS
Management of JP 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
J. Gregory Poole, Secretary
November 1, 1996
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated
as of October 8, 1996 by and between Jefferson-Pilot Capital
Appreciation Fund, Inc. ("JP Fund"), a North Carolina corporation,
Oppenheimer Growth Fund ("Oppenheimer Fund"), a Massachusetts
business trust, and (solely for purposes of Section 21 of this
Agreement) Jefferson-Pilot Corporation ("JPC"), a North Carolina
corporation, and OppenheimerFunds, Inc. ("OFI"), a Colorado
corporation.
W I T N E S S E T H:
WHEREAS, JP Fund and Oppenheimer Fund are each open-end
investment companies of the management type; and
WHEREAS, JP Fund and Oppenheimer Fund desire to provide for
the reorganization pursuant to Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"), of JP Fund through
the acquisition by Oppenheimer Fund of substantially all of the
assets of JP Fund in exchange solely for voting shares of
beneficial interest ("shares") of Class A of Oppenheimer Fund and
the assumption by Oppenheimer Fund of certain liabilities of JP
Fund, which Class A shares of Oppenheimer Fund are thereafter to be
distributed by JP Fund pro rata to its shareholders in complete
liquidation of JP Fund and complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. JP Fund and Oppenheimer Fund 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 Oppenheimer Fund of substantially
all of the assets of JP Fund in exchange for the issuance of Class
A shares of Oppenheimer Fund to JP Fund and the assumption by
Oppenheimer Fund of certain liabilities of JP Fund, followed by the
distribution by JP Fund of such Class A shares of Oppenheimer Fund
to the shareholders of JP Fund in exchange for their shares of JP
Fund, all upon and subject to the terms hereinafter set forth.
2. On the Closing Date (as hereinafter defined) (i) JP Fund
shall transfer and deliver (or cause to be so transferred and
delivered) to Oppenheimer Fund, free and clear of all liens,
encumbrances, restrictions and claims (other than Assumed
Liabilities (as hereinafter defined)), the assets of JP Fund
including but not limited to portfolio securities, cash (excluding
the Cash Reserve as defined below), cash equivalents and
receivables as the same shall exist on that date (the "Assets") and
(ii) Oppenheimer Fund shall deliver to JP Fund (in accordance with
Section 5 hereof) in exchange therefor, the Class A shares of
Oppenheimer Fund to be issued hereunder. The Assets shall exclude
a cash reserve (the "Cash Reserve") which shall be retained by JP
Fund for the payment by it in respect of the Liabilities (as
hereinafter defined) of JP Fund, if any, and which Cash Reserve
shall not exceed the amount contemplated by Section 10E. The
aggregate number of Class A shares of Oppenheimer Fund to be
delivered by Oppenheimer Fund at the Closing (as hereinafter
defined) shall be such number as shall have, as of the Valuation
Date, an aggregate net asset value equal to the value of the Assets
so transferred and delivered. Such Oppenheimer Fund Class A shares
shall be issued without the imposition of any sales charge or load
and holders of such Class A shares shall be entitled to all
exchange privileges afforded to holders of other Class A shares of
Oppenheimer Fund pursuant to the terms set forth in its current
Prospectus and Statement of Additional Information. Oppenheimer
Fund agrees that, if the reorganization becomes effective,
Oppenheimer Fund will treat each shareholder of JP Fund who
received any of Oppenheimer Fund's shares as a result of the
reorganization as having made the minimum initial purchase of
shares of Oppenheimer Fund received by such shareholder for the
purpose of making additional investments in shares of Oppenheimer
Fund, regardless of the value of the shares of Oppenheimer Fund
received. Promptly following the execution of the Agreement, JP
Fund shall provide Oppenheimer Fund with a list of the Assets
including, as to portfolio securities, a description thereof, units
held and their value, as of the most reasonably practicable date.
3. The net asset value of Class A shares of Oppenheimer Fund
and the value of the Assets shall in each case be determined as of
the close of business of The New York Stock Exchange on the
business day immediately preceding the Closing Date (the "Valuation
Date"). The foregoing valuations shall be prepared using the
procedures set forth in Oppenheimer Fund's then current prospectus
and statement of additional information and shall be computed in
accordance with the regular practice and pricing services utilized
by OppenheimerFunds, Inc. in pricing the Oppenheimer Fund. In
accordance with the foregoing, Oppenheimer Fund and JP Fund shall
each respectively prepare a report setting forth, as of the
Valuation Date, its respective total net assets, the number of its
shares outstanding, the net asset value of Oppenheimer Fund Class
A shares or the net asset value of JP Fund shares, respectively,
and as to each of its portfolio securities, the cusip or ticket
number, description thereof, units held and value determined as
aforesaid (the "Valuation Report"). A Valuation Report shall be
delivered by each of Oppenheimer Fund and JP Fund to the other on
the Closing Date.
JP 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
JP Fund's shareholders all of JP 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., Two
World Trade Center, Suite 3400, New York, New York 10048, at the
date and time of the closing of the acquisition contemplated by
that certain Acquisition Agreement (the "Acquisition Agreement")
dated September 24, 1996 by and among OFI, JP Investment Management
Company ("JPM"), Jefferson-Pilot Life Insurance Company and JPC (or
such other date, time and place as JP Fund and Oppenheimer Fund may
otherwise designate) (the "Closing Date").
In the event that on the Valuation Date either party has,
pursuant to the Investment Company Act of 1940, as amended (the
"1940 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 JP Fund and Oppenheimer Fund 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 as set forth in Section 20.
5. Class A shares of Oppenheimer Fund representing the
number of Class A shares of Oppenheimer Fund being delivered
against the Assets, registered in the name of JP Fund, shall be
transferred to JP Fund on the Closing Date. In connection with
the Closing, JP Fund shall distribute on a pro rata basis to the
shareholders of JP Fund on the Valuation Date the Class A shares of
Oppenheimer Fund received by JP Fund on the Closing Date in
exchange for the Assets in complete liquidation of JP Fund; for the
purpose of the distribution by JP Fund of Class A shares of
Oppenheimer Fund to its shareholders, Oppenheimer Fund will
promptly cause its transfer agent to: (a) credit an appropriate
number of Class A shares of Oppenheimer Fund on the books of
Oppenheimer Fund to each shareholder of JP Fund in accordance with
a list (the "Shareholder List") of JP Fund shareholders received
from JP Fund; and (b) confirm an appropriate number of Class A
shares of Oppenheimer Fund to each shareholder of JP Fund;
certificates for Class A shares of Oppenheimer Fund will be issued
upon written request of a former shareholder of JP Fund and
surrender of the JP Fund certificates but only for whole shares,
with fractional shares credited to the name of the shareholder on
the books of Oppenheimer Fund. JP Fund covenants and agrees to
cause the cancellation of all of its outstanding shares upon the
Closing.
The Shareholder List shall be certified by the Secretary of JP
Fund and by an authorized signatory of Investors Fiduciary Trust
Company, JP Fund's transfer agent, and shall indicate, as of the
Valuation Date, the name, address and taxpayer identification
number of each shareholder of JP Fund, indicating his or her share
balance. JP Fund agrees to supply the Shareholder List to
Oppenheimer Fund not later than the Closing Date in such form
(including computer diskette) as Oppenheimer Fund shall request.
JP Fund further agrees to deliver to Oppenheimer Fund or its
designee (i) on or before the Closing Date all such other
information and documents available to JP Fund relating to such
shareholders as may be necessary for Oppenheimer Fund and its
designee to perform all necessary shareholder accounting,
communication and related services subsequent to the Closing and
(ii) as soon as practicable after the Closing all original
documentation (including Internal Revenue Service forms,
certificates and correspondence) relating to the taxpayer
identification numbers of JP Fund shareholders on the Shareholder
List and their liability for or exemption from backup withholding.
Shareholders of JP 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, exchange
or pledge the shares of Oppenheimer Fund which they received.
The share transfer books of JP Fund will be permanently
closed as of the Valuation Date and only redemption requests
received in proper form on or prior to the Valuation Date shall be
fulfilled by JP Fund; redemption requests received by JP Fund after
that date shall be treated as requests for the redemption of the
shares of Oppenheimer Fund that shall have been distributed to the
shareholder in question as set forth in this Section 5.
6. Within one year after the Closing Date, JP Fund shall (a)
either pay or make provision for payment of all of its Liabilities
(other than Assumed Liabilities) and (b) either (i) transfer any
remaining amount of the Cash Reserve to Oppenheimer Fund, 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 JP 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 JP Fund outstanding on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination
between JP Fund and Oppenheimer Fund as to their respective
portfolios so that, after the Closing, Oppenheimer Fund will not
hold assets inconsistent with its investment objectives and will be
in compliance with all of its investment policies and restrictions.
8. Portfolio securities or written evidence acceptable to
Oppenheimer Fund of record ownership thereof by The Depository
Trust Company or through the Federal Reserve Book Entry System or
any other depository approved by JP Fund pursuant to Rule 17f-4 and
Rule 17f-5 under the 1940 Act shall be endorsed and delivered, or
transferred by appropriate transfer or assignment documents, by JP
Fund on the Closing Date to Oppenheimer Fund, or at its direction,
to Oppenheimer Fund's 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 of JP Fund
shall be delivered on the Closing Date to Oppenheimer Fund by bank
wire or inter-bank transfer of immediately available funds to
Oppenheimer Fund's custodian bank payable to the order of
Oppenheimer Fund for the account of Oppenheimer Fund.
If, at the Closing Date, JP Fund is unable to make
delivery under this Section 8 to Oppenheimer Fund of any of its
portfolio securities or cash for the reason that any of such
securities purchased by JP Fund, or the cash proceeds of a sale of
portfolio securities, prior to the Closing Date have not yet been
delivered in the ordinary course of business to it or JP Fund's
custodian, then the delivery requirements of this Section 8 with
respect to said undelivered securities or cash will be waived and
JP Fund will deliver to Oppenheimer Fund 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
Oppenheimer Fund, together with such other documents, including a
due bill or due bills and brokers' confirmation slips as may
reasonably be required by Oppenheimer Fund.
9. Oppenheimer Fund shall not assume and shall not otherwise
be responsible for any liabilities (except the obligations, if any,
to pay the purchase price of portfolio securities purchased by JP
Fund which have not settled in the ordinary course of business
("Assumed Liabilities")), taxes, obligations, expenses, contracts,
claims, commitments, agreements and arrangements relating to (i)
the Assets or (ii) JP Fund, its predecessors, affiliates,
directors, officers, employees and agents, in each case whether
fixed, contingent, accrued or otherwise ("Liabilities"). JP Fund
expressly agrees to remain liable for and discharge all its
Liabilities whether incurred prior to or subsequent to the Closing
Date. With respect to any expenses applicable to, or incurred by
JP Fund and Oppenheimer Fund hereto in connection with entering
into and carrying out the provisions of the Agreement ("Expenses"),
including legal, accounting and registration fees and Blue Sky
expenses and expenses of the proxy solicitation, including the cost
of printing and mailing the Proxy Statement and Prospectus (as
hereinafter defined) and related proxy materials, it is hereby
agreed that except as otherwise provided in Section 20 of the
Agreement, the respective investment adviser for Oppenheimer Fund
and JP Fund shall reimburse the Fund for which it acts as
investment adviser for such Fund's Expenses and, as to the rights
and obligations of said investment advisers inter se, the terms of
the Acquisition Agreement shall govern. It is understood and
acknowledged that in no event shall JP Fund or Oppenheimer Fund be
liable for the payment of any Expenses.
10. As soon as practicable JP Fund shall (i) after it
fulfills its obligations set forth in Section 6 hereof, file
Articles of Dissolution with the North Carolina Secretary of State
(the "Department") and (ii) file an application for an order of the
Securities and Exchange Commission ("SEC") pursuant to Section 8(f)
of the 1940 Act, declaring that it has ceased to be an investment
company, and shall take, in accordance with North Carolina law and
the 1940 Act, all such other actions as may be necessary or
appropriate to effect a complete liquidation and dissolution of JP
Fund and to deregister JP Fund under the 1940 Act.
11. Any reporting, filing or other obligation of JP Fund
under the federal securities laws and state laws shall remain the
responsibility of JP Fund until it is deregistered under the 1940
Act or liquidated and dissolved, respectively.
12. The obligations of Oppenheimer Fund hereunder shall be
subject to the following conditions:
A. The shareholders of JP Fund shall have approved the
Agreement and the transactions contemplated herein; such
shareholder approval shall have been by the affirmative vote of a
majority of the outstanding voting shares of JP Fund in conformity
with the provisions of the North Carolina Business Corporation Act
("NCBCA") at a meeting for which proxies have been solicited by the
Proxy Statement and Prospectus (as hereinafter defined); and JP
Fund shall have furnished to Oppenheimer Fund copies of resolutions
with respect to each of the foregoing and copies of resolutions of
the Board of Directors of JP Fund with respect to approvals of the
Agreement and the transactions contemplated herein, in each case
certified by the Secretary or an Assistant Secretary of JP Fund.
B. Oppenheimer Fund shall have received an opinion of
counsel to JP Fund dated the Closing Date, to the effect that: (i)
JP Fund is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of North Carolina with
full powers to carry on its business as described by its charter
and then being conducted and to enter into and perform the
Agreement (North Carolina counsel may be relied upon in delivering
such opinion); (ii) all action necessary to make the Agreement,
according to its terms, valid, binding and enforceable on JP Fund
and to authorize effectively the transactions contemplated by the
Agreement have been taken by JP Fund; (iii) the Agreement has been
duly authorized, executed and delivered by JP Fund and, assuming
due authorization, execution and delivery of the Agreement by
Oppenheimer Fund, constitutes a valid and binding obligation of JP
Fund, enforceable against JP Fund in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar laws affecting
creditors rights and remedies generally and subject, as to
enforceability, to general principles of equity regardless of
whether enforcement is sought in a proceeding at law or in equity
(the "Bankruptcy Exception"); and (iv) the execution and delivery
of the Agreement does not, and the consummation of the transactions
contemplated by the Agreement will not, conflict with, or result in
any violation of, or constitute a default (with or without notice
or lapse of time, or both) under (a) the Certificate of
Incorporation or By-Laws of JP Fund, (b) any loan, credit
agreement, note, bond, mortgage, indenture, lease or contract
applicable to JP Fund, its assets and properties (other than any
such conflicts, violations or defaults that individually or in the
aggregate would not have a material adverse effect on JP Fund or
prevent consummation of the transactions contemplated hereby), or
(c) any judgment, order or decree to which JP Fund is subject or
any state or federal law or regulation applicable to JP Fund or its
assets and properties.
C. The representations and warranties of JP Fund
contained herein shall be true and correct at and as of the Closing
Date (with all representations and warranties that were made as of
the date of the Agreement or as of another date being made again as
of the Closing Date) and JP Fund shall have performed, in all
material respects, each of the covenants required to be performed
by JP Fund at or prior to Closing, and Oppenheimer Fund 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 JP Fund, dated the Closing Date, to that effect.
D. On the Closing Date, JP Fund shall have furnished to
Oppenheimer Fund a certificate of the Treasurer or Assistant
Treasurer of JP Fund as to the amount of the capital loss carry-over, if any,
and net unrealized appreciation or depreciation, if
any, with respect to JP 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 JP Fund at
the close of business on the Valuation Date.
F. A Registration Statement on Form N-14 (the "N-14
Registration Statement") filed by Oppenheimer Fund under the
Securities Act of 1933, as amended (the "1933 Act"), containing a
preliminary form of the proxy statement and prospectus required
under the 1940 Act to request the approval of shareholders of JP
Fund of the reorganization contemplated in the Agreement, shall
have become effective under the 1933 Act not later than December
31, 1996.
G. On the Closing Date, Oppenheimer Fund shall have
received a letter of a senior executive officer of JPM in form
acceptable to Oppenheimer Fund, stating that between the date of
the Agreement and the Closing Date there has been no material
adverse change in the Assets, the operations or the financial
condition of JP Fund (it being understood that a decrease in the
size of JP 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) and that nothing has come to his or her attention
which would indicate that as of the Closing Date there were any
Liabilities of JP Fund not fully covered by the Cash Reserve or
expected not to be so covered or pending or threatened claims,
actions, suits, proceedings or investigations with respect to or
affecting JP Fund, or any director, officer, employee or agent of
JP Fund.
H. Oppenheimer Fund shall have received an opinion,
dated the Closing Date, of Sutherland, Asbill & Brennan, to the
same effect as the opinion contemplated by Section 13E of the
Agreement.
I. Except as otherwise provided in the last paragraph
of Section 8, Oppenheimer Fund shall have received at the Closing
all of the Assets to be conveyed hereunder, free and clear of all
liens, encumbrances, security interests, restrictions and
limitations whatsoever except the Assumed Liabilities.
J. At or prior to the Closing Date, JP Fund shall have
delivered to Oppenheimer Fund two copies of a list setting forth
the securities, cash and receivables then owned by JP Fund and the
respective federal income tax bases thereof.
13. The obligations of JP Fund hereunder shall be subject to
the following conditions:
A. Oppenheimer Fund shall have furnished to JP Fund
copies of resolutions of the Board of Trustees of Oppenheimer Fund
with respect to approvals of the Agreement and the transactions
contemplated herein certified by the Secretary or an Assistant
Secretary of Oppenheimer Fund.
B. JP Fund's shareholders shall have approved the
Agreement and the transactions contemplated hereby, by an
affirmative vote of a majority of the outstanding voting shares of
JP Fund.
C. JP Fund shall have received an opinion of counsel to
Oppenheimer Fund dated the Closing Date, to the effect that (i)
Oppenheimer Fund is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts with full powers to carry on its business as
described by its charter and then being conducted and to enter into
and perform the Agreement (Massachusetts counsel may be relied upon
in delivering such opinion); (ii) all action necessary to make the
Agreement, according to its terms, valid, binding and enforceable
upon Oppenheimer Fund and to authorize effectively the transactions
contemplated by the Agreement have been taken by Oppenheimer Fund;
(iii) the shares of Oppenheimer Fund to be issued hereunder are
duly authorized and when issued as provided for herein will be
validly issued, fully-paid and non-assessable, except as otherwise
set forth on Schedule 13C hereto with respect to potential
liability of shareholders of a Massachusetts business trust
(Massachusetts counsel may be relied upon in delivering such
opinion); (iv) the Agreement has been duly authorized, executed and
delivered by Oppenheimer Fund and, assuming due authorization,
execution and delivery of the Agreement by JP Fund, constitutes a
valid and binding obligation of Oppenheimer Fund, enforceable
against Oppenheimer Fund in accordance with its terms, subject to
the Bankruptcy Exception and (v) the execution and delivery of the
Agreement does not, and consummation of the transactions
contemplated by the Agreement will not, conflict with, or result in
any violation of, or constitute a default (with or without notice
or lapse of time, or both) under: (a) the Declaration of Trust or
By-Laws of Oppenheimer Fund, (b) any loan, credit agreement, note,
bond, mortgage, indenture, lease, or contract applicable to
Oppenheimer Fund, its assets and properties (other than any such
conflicts, violations or defaults that individually or in the
aggregate would not have a material adverse effect on Oppenheimer
Fund or prevent consummation of the transactions contemplated
hereby), or (c) any judgment, order of decree to which Oppenheimer
Fund is subject or any state or federal law or regulation
applicable to Oppenheimer Fund or its assets and properties.
D. The representations and warranties of Oppenheimer Fund
contained herein shall be true and correct at and as of the Closing
Date (with all representations and warranties that were made as of
the date of the Agreement or as of another date being made again as
of the Closing Date), and Oppenheimer Fund shall have performed, in
all material respects, each of the covenants required to be
performed by Oppenheimer Fund at or prior to Closing, and JP 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 Oppenheimer Fund to that effect dated the Closing
Date.
E. JP Fund shall have received an opinion of
Sutherland, Asbill & Brennan to the effect that the Federal tax
consequences of the transaction, if carried out in the manner
outlined in the Agreement and in accordance with (i) JP Fund's
representation that there is no plan or intention by any JP Fund
shareholder who owns 5% or more of JP Fund's outstanding shares,
and, to JP Fund's best knowledge, there is no plan or intention on
the part of the remaining JP Fund shareholders, to redeem, sell,
exchange or otherwise dispose of a number of Oppenheimer Fund
shares received in the transaction that would reduce JP Fund
shareholders' ownership of Oppenheimer Fund 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 JP Fund shares as of
the same date, (ii) the representation that Oppenheimer Fund will
acquire at least 90% of the fair market value of the net assets and
at least 70% of the fair market value of the gross assets held by
JP Fund immediately prior to the reorganization, (iii) the
representation by each of JP Fund and Oppenheimer Fund that, as of
the Closing Date, JP Fund and Oppenheimer Fund will qualify as
regulated investment companies and will meet the diversification
test of Section 368(a)(2)(F)(ii) of the Code, and (iv) such other
representations as shall be made by each of JP Fund and Oppenheimer
Fund to Sutherland, Asbill & Brennan and accompany or be set forth
in the opinion, will generally be as follows:
(a) The reorganization contemplated by the Agreement will
constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code and JP Fund and Oppenheimer Fund will
each be a "party to the reorganization" within the meaning of
Section 368(b) of the Code.
(b) No gain or loss will be recognized by Oppenheimer Fund
upon the receipt of the assets transferred to it by JP Fund in
exchange for Class A shares of Oppenheimer Fund and the
assumption by Oppenheimer Fund of certain identified
liabilities of JP Fund. (Section 1032)
(c) No gain or loss will be recognized by JP Fund upon the
transfer of its assets to Oppenheimer Fund in exchange solely
for Class A shares of Oppenheimer Fund and the assumption by
Oppenheimer Fund of certain identified liabilities of JP Fund
(if any) and the subsequent distribution by JP Fund of such
Class A shares to the shareholders of JP Fund. (Section 361)
(d) No gain or loss will be recognized by JP Fund shareholders
upon the exchange of the JP Fund shares solely for the Class
A shares of Oppenheimer Fund. (Section 354)
(e) The basis of the Class A shares of Oppenheimer Fund
received by each JP Fund shareholder pursuant to the
reorganization will be the same as the adjusted basis of that
shareholder's JP Fund shares surrendered in exchange therefor.
(Section 358)
(f) The holding period of Class A shares of Oppenheimer Fund
to be received by each JP Fund shareholder will include the
shareholder's holding period for the JP Fund shares
surrendered in exchange therefor, provided such JP Fund shares
were held as capital assets on the Closing Date. (Section
1223)
(g) Oppenheimer Fund's basis for the assets transferred to it
by JP Fund will be the same as JP Fund's tax basis for the
assets immediately prior to the reorganization. (Section
362(b))
(h) Oppenheimer Fund's holding period for the transferred
assets will include JP Fund's holding period therefor.
(Section 1223)
(i) Oppenheimer Fund will succeed to and take into account the
items of JP Fund described in Section 381(c) of the Code,
including the earnings and profits, or deficit in earnings and
profits, of JP Fund as of the date of the transaction, subject
to the conditions and limitations specified in Sections 381,
382, 383 and 384 of the Code.
Notwithstanding anything herein to the contrary, neither
Oppenheimer Fund nor JP Fund may waive the material conditions set
forth in this Section 13E although the actual wording of such
opinion may differ to the extent agreed to by Oppenheimer Fund and
JP Fund.
F. The Cash Reserve shall not exceed 1% of the value of
the net assets, nor 10% in value of the gross assets, of JP Fund at
the close of business on the Valuation Date.
G. The N-14 Registration Statement shall have become
effective under the 1933 Act not later than December 31, 1996.
H. JP Fund shall acknowledge receipt of the shares of
Oppenheimer Fund.
I. On the Closing Date, JP Fund shall have received a
letter of a senior officer of OFI in form acceptable to JP Fund,
stating that between the date of the Agreement and the Closing Date
there has been no material adverse change in the operations or
financial condition of Oppenheimer Fund (it being understood that
a decrease in the size of Oppenheimer 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) and that nothing has
come to his or her attention that would indicate that as of the
Closing Date there were any pending or threatened litigation or
claims with respect to Oppenheimer Fund.
14. JP Fund hereby represents and warrants that:
A. The financial statements of JP Fund as at December
31, 1995 (audited) and June 30, 1996 (unaudited) heretofore
furnished to Oppenheimer Fund, present fairly the financial
position, results of operations, and changes in net assets of JP
Fund as of such dates, in conformity with generally accepted
accounting principles applied on a basis consistent with the
preceding year and six-month period; and that from December 31,
1995 through the date hereof there has not been any material
adverse change in the Assets, the operations or financial condition
of JP Fund, it being agreed that a decrease in the size of JP 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. JP Fund has good and valid title to the Assets,
subject to no liens, security interests or other encumbrances, and
contingent upon approval of the Agreement and the transactions
contemplated hereby by JP Fund's shareholders, JP Fund has
authority to transfer the Assets to be conveyed hereunder free and
clear of all liens, encumbrances, security interests, restrictions
and limitations whatsoever (excluding the Assumed Liabilities).
C. The Prospectus of JP Fund dated May 1, 1996, as
amended and supplemented on October 8, 1996, and Statement of
Additional Information of JP Fund dated May 1, 1996, contained in
JP Fund's Registration Statement under the 1933 Act, as amended,
are true, correct and complete, conform to the requirements of the
1933 Act and the 1940 Act and do 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 of JP Fund, 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 the 1940 Act, 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 and was, as of its filing, and
continues to be, in full force and effect.
D. There is no material Liability of JP Fund in
existence except as set forth in the financial statements of JP
Fund as at December 31, 1995 and June 30, 1996 and as of such dates
there were no Liabilities of JP Fund (contingent or otherwise) not
disclosed therein that would be required in conformity with
generally accepted accounting principles to be disclosed therein.
No such material Liability of JP Fund has arisen since December 31,
1995 and June 30, 1996 except as set forth on Exhibit 14D hereto.
There are no claims, actions, suits, proceedings or investigations
pending or, to the knowledge of JP Fund, threatened by, against or
involving JP Fund or any director, officer, employee, or agent of
JP Fund. JP Fund knows of no facts that might form the basis for
the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any
court or governmental body that materially and adversely affects,
or is likely to materially and adversely affect, its business or
its ability to consummate the transactions herein contemplated.
E. There are no contracts, agreements or commitments in
existence, whether written or oral, to which JP Fund (or a
predecessor) is a party or has succeeded to a party by assumption
or assignment or in which it has a beneficial interest other than
the Agreement and those entered into by JP Fund in the ordinary
conduct of its business and JP Fund has delivered or made available
to Oppenheimer Fund, as to each such contract, agreement or other
commitment, a true and complete copy or description thereof and as
to any oral contract, agreement or other commitment, a true and
complete description thereof.
F. JP Fund is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of North
Carolina, with the requisite corporate power and authority to enter
into and perform the Agreement and, subject to approval of its
shareholders, to consummate the transactions contemplated hereby;
all corporate action necessary to make the Agreement, according to
its terms, valid, binding and enforceable on JP Fund and to
authorize the transactions contemplated by the Agreement, including
without limitation necessary approvals of the Board of Directors of
JP Fund, have been taken by JP Fund subject to approval of the
Agreement by the shareholders of JP Fund; the Agreement has been
duly executed and delivered by JP Fund and constitutes a valid and
binding obligation of JP Fund, enforceable against JP Fund in
accordance with its terms, subject to the approval of its
shareholders and the Bankruptcy Exception; and the execution and
delivery of the Agreement does not, and the consummation of the
transactions contemplated by the Agreement will not, conflict with,
or result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under (a) the Certificate
of Incorporation or By-Laws of JP Fund, or (b) any loan, credit
agreement, note, bond, mortgage, indenture, lease or contract
applicable to JP Fund, its assets and properties (other than any
such conflicts, violations or defaults that individually or in the
aggregate would not have a material adverse effect on JP Fund or
prevent consummation of the transactions contemplated hereby), or
(c) any judgment, order or decree to which JP Fund is subject or
any state or federal law or regulation applicable to JP Fund or its
assets and properties.
G. All Federal and other tax returns and reports of JP
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 JP 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 JP 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. There are no
claims, levies, liabilities or amounts due for corporate, excise,
income or other federal, state or local taxes outstanding or
threatened against JP Fund (other than those reflected in its most
recent audited financial statements) and to the best of JP Fund's
knowledge there are no facts that might form the basis for such
claims, levies, liabilities or amounts due.
H. JP Fund has elected to be treated as a regulated
investment company and, for each fiscal year of its operations, JP
Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and
JP Fund intends to meet such requirements with respect to its
current taxable year.
I. All issued and outstanding shares of common stock of
JP Fund, par value $1.00 per share, are, and at the Closing Date
will be, duly authorized and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof. All such shares will, at the time of Closing,
be held by the persons or entities and in the amounts set forth on
the Shareholder List submitted to Oppenheimer Fund pursuant to
Section 5. There are no outstanding rights, options, warrants,
conversion rights, preemptive rights or agreements with respect to
shares of JP Fund. Set forth on Exhibit 14I hereto are the names,
addresses and share ownership amounts of each shareholder of JP
Fund that beneficially (as that term is defined pursuant to Section
13(d) of the Securities Exchange Act of 1934, as amended, and the
rules thereunder) owns 1% or more of JP Fund's outstanding shares.
J. The copies of the Certificate of Incorporation and
By-laws of JP Fund, and all amendments thereto, previously
delivered to Oppenheimer Fund are true, complete and correct.
K. There is no plan or intention by any JP Fund
shareholder who owns 5% or more of JP Fund's outstanding shares,
and, to JP Fund's best knowledge, there is no plan or intention on
the part of the remaining JP Fund shareholders, to redeem, sell,
exchange or otherwise dispose of a number of Oppenheimer Fund
shares received in the transaction that would reduce JP Fund
shareholders' ownership of Oppenheimer Fund 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 JP Fund shares as of
the same date. With respect to the foregoing representation,
attached hereto as Exhibit 14K are true and complete copies of
representation letters signed by each such 5% or greater
shareholder.
L. There are no unresolved or outstanding shareholder
claims or complaints related to JP Fund other than as disclosed by
JP Fund in writing to Oppenheimer Fund and which are determined by
Oppenheimer Fund to not be material with respect to the Agreement
and the transactions contemplated herein.
M. Except as previously disclosed to Oppenheimer Fund
in writing, and except as have been corrected as required by
applicable law, there have been no miscalculations of the net asset
value of JP Fund during the twelve-month period preceding the
Closing Date and all such calculations have been done in accordance
with the applicable provisions of the 1940 Act.
N. All of the issued and outstanding shares of JP Fund
have been offered and sold in compliance in all material respects
with applicable registration requirements of the 1933 Act and state
securities laws, are registered under the 1933 Act, the 1940 Act
and in all jurisdictions in which they are required to be
registered under state securities laws and other laws, and said
registrations, including any periodic reports or supplemental
filings, are complete, current and have been continuously
effective, all fees required to be paid have been paid, and JP Fund
is not subject to any stop order and is fully qualified to sell its
shares in each state in which its shares have been registered.
O. JP Fund has maintained or has caused to be
maintained on its behalf all books and accounts as required of a
registered investment company in compliance with the requirements
of Section 31 of the 1940 Act and the Rules thereunder.
P. No violation of applicable federal, state and local
statute, law or regulation, exists that individually, or in the
aggregate, would have a material adverse effect on the business or
operations of JP Fund.
Q. JP Fund is in compliance with its investment
objectives, policies and restrictions as described in its current
Prospectus and Statement of Additional Information.
R. JP Fund is duly registered under the 1940 Act and
such registration has not been revoked or rescinded and is in full
force and effect.
S. Except for the shareholder approvals specified in
Section 12F, no consent, approval, governmental filing,
authorization or permit from any person or entity is necessary for
the execution and delivery of the Agreement and the consummation of
the transactions contemplated by the Agreement.
15. Oppenheimer Fund hereby represents and warrants that:
A. The financial statements of Oppenheimer Fund as at
June 30, 1996 (audited) heretofore furnished to JP Fund, present
fairly the financial position, results of operations, and changes
in net assets of Oppenheimer Fund, as of that date, in conformity
with generally accepted accounting principles applied on a basis
consistent with the preceding year; and that from June 30, 1996
through the date hereof there have not been, any material adverse
changes in the business or financial condition of Oppenheimer Fund,
it being understood that a decrease in the size of Oppenheimer Fund
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, dated November 1, 1995, as amended
and supplemented, and the Statement of Additional Information,
dated November 1, 1995, contained in Oppenheimer Fund's
Registration Statement under the 1933 Act, are true, correct and
complete, conform to the requirements of the 1933 Act and the 1940
Act and do 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 of Oppenheimer Fund, 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 the 1940 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. Oppenheimer Fund is a Massachusetts business trust
duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts with the requisite power
and authority granted to business trusts to enter into and perform
the Agreement and consummate the transactions contemplated hereby;
all necessary action necessary to make the Agreement, according to
its terms, valid, binding and enforceable on Oppenheimer Fund and
to authorize the transactions contemplated by the Agreement,
including without limitation necessary approvals of the Board of
Trustees of Oppenheimer Fund, have been taken by Oppenheimer Fund;
the Agreement has been duly executed and delivered by Oppenheimer
Fund and constitutes a valid and binding obligation of Oppenheimer
Fund, enforceable against Oppenheimer Fund in accordance with its
terms, subject to the Bankruptcy Exception; and the execution and
delivery of the Agreement does not, and the consummation of the
transactions contemplated by the Agreement will not, conflict with,
or result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under (a) the Declaration
of Trust or By-Laws of Oppenheimer Fund, or (b) any loan, credit
agreement, note, bond, mortgage, indenture, lease or contract
applicable to Oppenheimer Fund, its assets and properties (other
than any such conflicts, violations or defaults that individually
or in the aggregate would not have a material adverse effect on
Oppenheimer Fund or prevent consummation of the transactions
contemplated hereby), or (c) any judgment, order or decree to which
Oppenheimer Fund is subject or any state or federal law or
regulation applicable to Oppenheimer Fund or its assets and
properties.
D. All Federal and other tax returns and reports of
Oppenheimer 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 Oppenheimer 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 Oppenheimer Fund ended
August 31, 1996 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.
E. Oppenheimer Fund has elected to be treated as a
regulated investment company and, for each fiscal year of its
operations, Oppenheimer Fund has met the requirements of Subchapter
M of the Code for qualification and treatment as a regulated
investment company and Oppenheimer Fund intends to meet such
requirements with respect to its current taxable year.
F. Oppenheimer Fund (i) at the time of the
reorganization will have no plan or intention to dispose of any of
the assets transferred by JP Fund, other than in the ordinary
course of business, and (ii) has no plan or intention to redeem or
reacquire any of the shares issued by it in the reorganization
other than pursuant to valid requests of shareholders.
G. After consummation of the transactions contemplated
by the Agreement and for a period of one year thereafter,
Oppenheimer Fund intends to operate its business in a substantially
unchanged manner subject to such changes as may be required in the
ordinary course of its business or as may be approved by the Board
of Trustees of Oppenheimer Fund.
H. The copies of the Declaration of Trust and By-Laws
of Oppenheimer Fund, and any amendments thereto, previously
delivered to JP Fund by Oppenheimer Fund are true, complete and
correct.
I. The Class A shares of Oppenheimer Fund which it
issues to JP Fund pursuant to the Agreement will be duly
authorized, validly issued, fully-paid and non-assessable, except
as otherwise set forth in Schedule 13C hereto with respect to
potential liability of shareholders of a Massachusetts business
trust; will conform to the description thereof contained in
Oppenheimer Fund's Registration Statement and will be duly
registered under the 1933 Act and in the states where registration
is required.
J. All of the issued and outstanding shares of
Oppenheimer Fund have been offered and sold in compliance in all
material respects with applicable registration requirements of the
1933 Act and state securities laws, are registered in all
jurisdictions in which they are required to be registered under
state securities laws and other laws and such registrations,
including any periodic reports or supplemental filings, are
complete, current and have been continuously effective, all fees
required to be paid have been paid, and Oppenheimer Fund is not
subject to any stop order and is fully qualified to sell its shares
in each state in which its shares have been registered.
K. Oppenheimer Fund is duly registered under the 1940
Act and such registration has not been revoked or rescinded and is
in full force and effect.
16. (a) 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.
(b) Oppenheimer Fund represents and warrants that the
information concerning it in the Proxy Statement and Prospectus
will not as of the date of the Proxy Statement and Prospectus
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 concerning it therein in light of the circumstances
in which they are made not misleading. Oppenheimer Fund represents
and warrants that its financial statements in the N-14 Registration
Statement (described below) fairly present the information shown in
accordance with generally accepted accounting principles applied on
a basis consistent with previous periods.
(c) JP Fund represents and warrants that the information
concerning it in the Proxy Statement and Prospectus will not as of
the date of the Proxy Statement and Prospectus 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
concerning it therein in light of the circumstances in which they
are made not misleading. JP Fund represents and warrants that its
financial statements in the N-14 Registration Statement fairly
present the information shown in accordance with generally accepted
accounting principles applied on a basis consistent with previous
periods.
17. Oppenheimer Fund agrees that it will prepare and file the
N-14 Registration Statement which shall contain a preliminary form
of Proxy Statement and Prospectus contemplated by Rule 145 under
the 1933 Act. JP Fund shall be responsible for preparation of the
notice of meeting, Proxy Statement and Prospectus and form of proxy
to be sent to JP Fund shareholders. 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 the N-14 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.
18. (a) JP Fund covenants and agrees to afford to
Oppenheimer Fund, its counsel, accountants and other
representatives reasonable access, during normal business hours
throughout the period prior to the Closing Date, to the books,
records, employees and representatives of JP Fund.
(b) JP Fund covenants and agrees that during the period
from the date hereof until the Closing Date its investment
objectives, investment policies and investment restrictions, as
disclosed in its most current Prospectus dated May 1, 1996, as
amended and supplemented on October 8, 1996, and Statement of
Additional Information, dated May 1, 1996, will not be changed in
any manner whatsoever except pursuant to a statutory amendment or
regulatory requirement during such time and upon prior notice to
Oppenheimer Fund.
(c) JP Fund covenants that during the period from the
date hereof until the Closing Date, except as approved in writing
by Oppenheimer Fund or expressly provided for in the Agreement, JP
Fund (i) will not conduct its business other than in the ordinary
course substantially in the manner heretofore conducted and
consistent with JP Fund's investment objectives, policies and
restrictions as set forth in its most current Prospectus dated May
1, 1996, as amended and supplemented on October 8, 1996, and
Statement of Additional Information, dated May 1, 1996, (ii) will
not permit or allow any of the Assets to be subjected to any
encumbrance, (iii) will not enter into any material transaction or
otherwise incur any material Liability other than in the normal
course of business consistent with past practice, (iv) will not
declare, set aside or pay any dividend or make any other
distribution except for payment of its dividends in ordinary course
consistent with past practice and except for the final dividend and
distribution to be made pursuant to Section 3 of the Agreement, and
(v) will not agree, whether in writing or otherwise, to do any of
the foregoing. Notwithstanding the foregoing, JP Fund covenants
that (x) between the date of the Agreement and the Closing Date,
promptly following any transaction involving an acquisition or
disposition by JP Fund of portfolio securities, JP Fund shall
provide to Oppenheimer Fund a written report detailing such
transaction and (y) upon the written request of Oppenheimer Fund,
to promptly sell one or more portfolio securities acquired by JP
Fund between the date of the Agreement and the Closing Date and (z)
to transfer to Oppenheimer Fund on the Closing Date only those
Assets the acquisition of which will permit Oppenheimer Fund to be
in compliance with all of its investment policies and restrictions.
(d) JP Fund covenants and agrees to comply with all
applicable laws, rules and regulations.
(e) JP Fund covenants and agrees to maintain in the
ordinary course of business consistent with past practice its books
and records through to the date of its dissolution and liquidation
and to prepare and file all documents, reports and instruments and
take such action, including, without limitation, under the federal
securities laws and state laws, that is required or appropriate to
be filed or taken by it prior to, and/or in connection with, its
dissolution and liquidation.
19. (a) Oppenheimer Fund covenants that during the period
from the date hereof until the Closing Date it will conduct its
business in the ordinary course, it being understood that such
ordinary course of business will include customary dividends and
other distributions and such changes, if any, that have been
approved by trustees of Oppenheimer Fund of which JP Fund has been
advised.
(b) Oppenheimer Fund covenants and agrees to comply with
all applicable laws, rules and regulations.
20. The Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the
Closing (i) by the mutual written consent of Oppenheimer Fund and
JP Fund, (ii) by either Oppenheimer Fund or JP Fund, by notice in
writing to the other, if the Closing shall not have occurred on or
before December 31, 1996, (iii) by either Oppenheimer Fund or JP
Fund, by notice in writing to the other, if (A) the other party
shall fail to perform in any material respect its agreements
contained herein required to be performed on or prior to the
Closing Date, (B) the other party materially breaches or shall have
breached any of its representations, warranties or covenants
contained herein, (C) the JP Fund shareholders fail to approve the
Agreement or (D) any other condition herein expressed to be
precedent to the obligations of the terminating party has not been
met (other than through the failure of the terminating party to
comply with its obligations under the Agreement) and it reasonably
appears that it will not or cannot be met prior to the Closing Date
or (iv) pursuant to Section 4 of the Agreement. Termination of the
Agreement pursuant to (i), (ii) or (iv) shall terminate all
obligations of the parties hereunder and there shall be no
liability for damages on the part of Oppenheimer Fund, JP Fund or
their respective trustees, directors or officers to any other party
or its trustees, directors, or officers and it is understood and
agreed that each party shall be reimbursed for its Expenses
pursuant to Section 9 of the Agreement. Termination of the
Agreement pursuant to (iii) shall terminate all obligations of
Oppenheimer Fund and JP Fund hereunder and there shall be no
liability for damages on the part of Oppenheimer Fund or JP Fund or
their respective trustees, directors or officers to any other party
or its trustees, directors or officers, except that the party in
breach of the Agreement shall, upon demand, reimburse the non-breaching party
for all Expenses, including reasonable out-of-pocket expenses and
fees incurred in connection with the
transactions contemplated by the Agreement, and the provisions of
Section 9 as to Expenses shall be of no force or effect. For the
purposes of the foregoing sentence, the non-fulfillment of the
condition requiring approval of JP Fund shareholders set forth in
Sections 10A and 11B shall not be deemed a breach entitling a party
to reimbursement of fees and expenses.
The Agreement shall automatically terminate prior to the
Closing in the event the Acquisition Agreement is terminated or the
acquisition contemplated by the Acquisition Agreement is not
consummated, and in such event all obligations of Oppenheimer Fund
and JP Fund shall terminate and there shall be no liability on the
part of Oppenheimer Fund or JP Fund or their respective trustees,
directors or officers to the other or its respective trustees,
directors or officers, it being understood and agreed that each
party shall be reimbursed for its Expenses pursuant to Section 9 of
the Agreement.
21. (a) JPC shall indemnify and hold harmless JP Fund and
Oppenheimer Fund, their investment advisers and their respective
trustees, directors, officers and shareholders, against any and all
claims to the extent such claims are based upon, arise out of or
relate to (i) any untruthful or inaccurate representation made by
JP Fund in the Agreement or any breach by JP Fund of any warranty
or any failure by JP Fund to perform or comply with any of its
obligations, covenants, conditions or agreements set forth in the
Agreement or (ii) the failure of JP Fund to comply with applicable
legal requirements, including, without limitation, registration
under the 1933 Act and the 1940 Act and state securities laws.
Notwithstanding the foregoing, JPC shall not be obligated to so
indemnify any officer or director of JP Fund if such claims result
from such person's willful misfeasance, bad faith or gross
negligence.
(b) OFI shall indemnify and hold harmless JP Fund and
its investment adviser and their respective directors, officers and
shareholders, against any and all claims to the extent such claims
are based upon, arise out of or relate to any untruthful or
inaccurate representation made by Oppenheimer Fund in the Agreement
or any breach by Oppenheimer Fund of any warranty or any failure by
Oppenheimer Fund to perform or comply with any of its obligations,
covenants, conditions or agreements set forth in the Agreement.
Notwithstanding the foregoing, OFI shall not be obligated to so
indemnify any officer or director of JP Fund or its investment
adviser if such claims result from such person's willful
misfeasance, bad faith or gross negligence.
(c) As used in this section, the word "claim" means any
and all liabilities, obligations, losses, damages, deficiencies,
demands, claims, penalties, assessments, judgments, actions,
proceedings and suits of whatever kind and nature and all costs and
expenses (including, without limitation, reasonable attorneys'
fees).
22. 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.
23. 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.
24. JP Fund understands that the obligations of Oppenheimer
Fund under the Agreement are not binding upon any Trustee or
shareholder of Oppenheimer Fund personally, but bind only
Oppenheimer Fund and Oppenheimer Fund's property. JP Fund
represents that it has notice of the provisions of the Declaration
of Trust of Oppenheimer Fund disclaiming shareholder and Trustee
liability for acts or obligations of Oppenheimer Fund.
25. Neither of the parties shall make any press release of
the transactions contemplated by the Agreement, or any discussion
in connection therewith, without the prior written consent of the
other party, which consent shall not be unreasonably withheld. The
preceding sentence shall not apply to any disclosures required to
be made by applicable laws, as determined by counsel; however, the
applicable party shall consult with the other party concerning the
timing and content of such disclosure before making it.
26. The representations, warranties and covenants set forth
in the Agreement shall survive the closing.
<PAGE>
27. The Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to
the conflicts of laws principles of such State.
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: JEFFERSON-PILOT CAPITAL APPRECIATION
FUND, INC.
/s/ J. Gregory Poole By: /s/ E.J. Yelton
President
Attest: OPPENHEIMER GROWTH FUND
/s/ Robert G. Zack By: /s/ Andrew J. Donohue
Secretary
Attest: For purposes of Section 21 only:
JEFFERSON-PILOT CORPORATION
/s/ J. Gregory Poole By: /s/ E.J. Yelton
Senior Vice President
Attest: For purposes of Section 21 only:
OPPENHEIMERFUNDS, INC.
/s/ Robert G. Zack By: /s/ Andrew J. Donohue
Executive Vice President
<PAGE>
Jefferson-Pilot Capital Appreciation Fund, Inc.
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD DECEMBER 3, 1996
The undersigned shareholder of Jefferson-Pilot Capital Appreciation
Fund, Inc. ("JP Fund"), does hereby appoint Richard W. McEnally and
E.J. Yelton 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 JP Fund to be held on December
3, 1996, at the Jefferson Building (4th Floor, Room B-2), 100 North
Greene Street, Greensboro, North Carolina 27420 at 10:00 A.M.,
local 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 Proposals 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 PROPOSALS ON THE REVERSE SIDE AND THE ELECTION OF
EACH NOMINEE AS DIRECTOR. THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS INDICATED ON THE REVERSE SIDE OR FOR EACH PROPOSAL AND THE
ELECTION OF EACH NOMINEE AS DIRECTOR 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.
Proposal 1:
To consider and vote upon the approval or disapproval of the
Agreement and Plan of Reorganization dated as of October 8, 1996
(the "Reorganization Agreement") by and among JP Fund,
Jefferson-Pilot Corporation, Oppenheimer Growth Fund ("Oppenheimer Fund"),
and OppenheimerFunds, Inc., and the transactions contemplated
thereby, including (i) the transfer of substantially all the assets
of JP Fund to Oppenheimer Fund in exchange for Class A shares of
Oppenheimer Fund, (ii) the distribution of such shares of
Oppenheimer Fund to shareholders of JP Fund in liquidation of JP
Fund, and (iii) the cancellation of the outstanding shares of JP
Fund.
FOR____ AGAINST____ ABSTAIN____
Proposal 2:
To elect to the Board of Directors the following five (5) directors
to hold office until the earlier of (i) the dissolution of JP Fund
or (ii) the next annual meeting of shareholders of JP Fund called
for the purpose of electing directors, or until their successors
are elected and qualified.
A) E.J. Yelton D) William Edward Moran
B) John C. Ingram E) J. Lee Lloyd
C) Richard Wolcott McEnally
_______For all nominees listed ____WITHHOLD AUTHORITY
except as marked to the contrary at to vote for all
nominees
left. Instruction: To withhold listed at left.
authority to vote for any individual
nominee, line out that nominee's name
at left.
Proposal 3:
To ratify or reject the selection of McGladrey & Pullen LLP as JP
Fund's independent auditors for the current fiscal year.
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.
<PAGE>
OPPENHEIMER
Growth Fund
Prospectus dated November 1, 1996
Oppenheimer Growth Fund is a mutual fund that seeks capital
appreciation as its investment objective. The Fund emphasizes
investment in securities of established mid- and large-
capitalization growth companies that the Fund's investment manager
believes have above average earnings prospects but are selling at
below-normal valuations. The Fund does not invest to earn current
income to distribute to shareholders.
The Fund invests primarily in common stocks. The Fund may
also use futures contracts for hedging purposes to seek to reduce
the risks of market fluctuations that affect the value of the
securities the Fund holds. The Fund may borrow money from banks to
buy securities, which is a speculative instrument method known as
"leverage."
Please refer to "Investment Objectives and Policies" for more
information about the types of securities the Fund invests in and
refer to "Investment Risks" for a discussions of the risks of
investing in the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and
keep it for future reference. You can find more detailed
information about the Fund in the November 1, 1996, Statement of
Additional Information. For a free copy, call OppenheimerFunds
Services, the Fund's Transfer Agent, at 1-800-525-7048, or write to
the Transfer Agent at the address on the back cover. The Statement
of Additional Information has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by
reference (which means that it is legally part of this Prospectus).
(OppenheimerFunds logo)
Shares of the Fund are not deposits or obligations of any bank, are
not guaranteed by any bank, are not insured by the F.D.I.C. or any
other agency, and involve investment risks, including the possible
loss of the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
3 Expenses
5 A Brief Overview of the Fund
7 Financial Highlights
11 Investment Objective and Policies
12 Investment Risks
13 Investment Techniques and Strategies
16 How the Fund is Managed
18 Performance of the Fund
ABOUT YOUR ACCOUNT
22 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class Y Shares
36 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
38 How to Sell Shares
By Mail
By Telephone
40 How to Exchange Shares
42 Shareholder Account Rules and Policies
44 Dividends, Capital Gains and Taxes
A-1 Appendix A: Special Sales Charge Arrangements
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other
services, and those expenses are subtracted from the Fund's assets
to calculate the Fund's net asset value per share. All
shareholders therefore pay those expenses indirectly. Shareholders
pay other expenses directly, such as sales charges and account
charges. The following tables are provided to help you understand
your direct expenses of investing in the Fund and your share of the
Fund's business operating expenses that you will expect to bear
indirectly. The numbers below are based on the Fund's expenses
during its fiscal year ended June 30, 1996.
Shareholder Transaction Expenses are charges you pay when
you buy or sell shares of the Fund. Please refer to "About Your
Account" starting on page 22 for an explanation of how and when
these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
Shares Shares Shares Shares
<S> <C> <C> <C> <C>
Maximum Sales Charge on Purchases 5.75% None None None
(as a % of offering price)
Maximum Deferred Sales Charge None(1) 5% in the first 1% if shares None
(as a % of the lower of the original year, declining to are redeemed
offering price or redemption proceeds) 1% in the sixth within 12
year and eliminated months of
thereafter(2) purchase(2)
Maximum Sales Charge on Reinvested None None None None
Dividends
Exchange Fee None None None None
Redemption Fee None(3) None(3) None(3) None(3)
</TABLE>
(1)If you invest $1 million or more ($500,000 or more for purchases
by "Retirement Plans," as defined in "Class A Contingent Deferred
Sales Charge" on page 29) in Class A shares, you may have to pay a
sales charge of up to 1% if you sell your shares within 18 calendar
months from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares - Buying Class A
Shares," below.
(2)See "How to Buy Shares- Buying Class B Shares" and "How to Buy
Shares - Buying Class C Shares," below for more information on the
contingent deferred sales charge.
(3)There is a $10 transaction fee for redemptions paid by Federal
Funds wire, but not for redemptions paid by ACH transfer through
AccountLink. See "How to Sell Shares."
Annual Fund Operating Expenses are paid out of the Fund's
assets and represent the Fund's expenses in operating its business.
For example, the Fund pays management fees to its investment
adviser, OppenheimerFunds, Inc. (which is referred to in this
Prospectus as the "Manager"). The rates of the Manager's fees are
set forth in "How the Fund is Managed," below. The Fund has other
regular expenses for services, such as transfer agent fees,
custodial fees paid to the bank that holds its portfolio
securities, audit fees and legal expenses. Those expenses are
detailed in the Fund's Financial Statements in the Statement of
Additional Information.
Annual Fund Operating Expenses (as a Percentage of Average Net
Assets)
Class A Class B Class C Class Y
Shares Shares Shares Shares
Management Fees 0.68% 0.68% 0.68% 0.68%
12b-1 Plan Fees 0.17% 1.00% 1.00% NA
Other Expenses 0.21% 0.21% 0.13% 0.26%
Total Fund Operating Expenses 1.06% 1.89% 1.81% 0.94%
The numbers for Class A, Class B and Class Y shares in the
chart above are based upon the Fund's business expenses in its last
fiscal year ended June 30, 1996. Class C shares were not publicly
offered prior to November 1, 1995. Therefore, Annual Fund
Operating Expenses shown for Class C shares are based on the period
from November 1, 1995 until June 30, 1996. All amounts are shown
as a percentage of the average net assets of each class of the
Fund's shares for the year ended June 30, 1996, and have been
annualized for Class C shares. The actual expenses for each class
of shares in future years may be more or less than the numbers in
the chart, depending on a number of factors, including the actual
amount of the Fund's assets represented by each class of shares.
The "12b-1 Plan Fees" for Class A shares are service fees (the
maximum fee is 0.25% of average annual net assets of that class).
Currently, the Board of Trustees has set the maximum fee at 0.15%
for assets representing Class A shares sold before April 1, 1991,
and 0.25% for assets representing Class A shares sold on or after
that date. For Class B and Class C shares, the 12b-1 Plan Fees are
the service fees (the maximum service fee is 0.25% of average
annual net assets of that class) and the asset-based sales charge
of 0.75%
Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples
shown below. Assume that you make a $1,000 investment in each
class of shares of the Fund, that the Fund's annual return is 5%,
and that its operating expenses for each class are the ones shown
in the Annual Fund Operating Expenses table above. If you were to
redeem your shares at the end of each period shown below, your
investment would incur the following expenses by the end of 1, 3,
5 and 10 years:
1 year 3 years 5 years 10 years*
Class A Shares $68 $89 $113 $179
Class B Shares $69 $89 $122 $180
Class C Shares $28 $57 $98 $213
Class Y Shares $10 $30 $52 $115
If you did not redeem your investment, it would incur the
following expenses:
1 year 3 years 5 years 10 years*
Class A Shares $68 $89 $113 $179
Class B Shares $19 $59 $102 $180
Class C Shares $18 $57 $98 $213
Class Y Shares $10 $30 $52 $115
*In the first example, expenses include the Class A initial sales
charge and the applicable Class B or Class C contingent deferred
sales charge. In the second example, Class A expenses include the
initial sales charge, but Class B and Class C expenses do not
include contingent deferred sales charges. The Class B expenses in
years 7 through 10 are based on the Class A expenses shown above,
because the Fund automatically converts your Class B shares into
Class A shares after 6 years. Because of the effect of the asset-based sales
charge and the contingent deferred sales charge imposed
on Class B and Class C shares, long-term holders of Class B and
Class C shares could pay the economic equivalent of more than the
maximum front-end sales charge allowed under applicable
regulations. For Class B shareholders, the automatic conversion of
Class B shares to Class A shares is designed to minimize the
likelihood that this will occur. Please refer to "How to Buy
Shares - Buying Class B Shares" for more information.
These examples show the effect of expenses on an investment,
but are not meant to state or predict actual or expected costs or
investment returns of the Fund, all of which may be more or less
than those shown.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below,
with references to the section of this Prospectus where more
complete information can be found. You should carefully read the
entire Prospectus before making a decision about investing in the
Fund. Keep the Prospectus for reference after you invest,
particularly for information about your account, such as how to
sell or exchange shares.
What Is The Fund's Investment Objective? The Fund's
investment objective is to seek capital appreciation.
What Does the Fund Invest In? To seek capital appreciation,
the Fund primarily invests in common stocks (these are called
"equity securities"), and short-term debt securities for defensive
purposes. The Fund may also use futures contracts for hedging
purposes to try to manage investment risks. These investments are
more fully explained in "Investment Objective and Policies"
starting on page 11.
Who Manages the Fund? The Fund's investment adviser (the
"Manager") is OppenheimerFunds, Inc., which (including a
subsidiary) manages investment company portfolios currently having
over $55 billion in assets at September 30, 1996. The Manager is
paid an advisory fee by the Fund, based on its net assets. The
Fund has a portfolio manager, Robert C. Doll, Jr., who is employed
by the Manager and is primarily responsible for the selection of
the Fund's securities. The Fund's Board of Trustees, elected by
shareholders, oversees the investment adviser and the portfolio
manager. Please refer to "How the Fund is Managed," starting on
page __ for more information about the Manager and its fees.
How Risky Is the Fund? All investments carry risks to some
degree. It is important to remember that the Fund is designed for
long-term investors. The Fund's investments in stocks are subject
to changes in their value from a number of factors such as changes
in general stock market movements. A change in value of particular
stocks may result from an event affecting the issuer, or changes
in interest rates that can affect stock prices. The Fund's
investments in foreign securities are subject to additional risks
associated with investing abroad, such as the effect of currency
rate changes on stock values. These changes affect the value of
the Fund's investments and its share prices for each class of its
shares. In the Oppenheimer funds spectrum, the Fund is generally
considered more aggressive than the money market or growth and
income funds because it invests for capital appreciation in common
stocks, emphasizing "growth" stocks that tend to be more volatile
than other investments. While the Manager tries to reduce risks by
diversifying investments, by carefully researching securities
before they are purchased for the portfolio, and in some cases by
using hedging techniques, there is no guarantee of success in
achieving the Fund's objectives and your shares may be worth more
or less than their original cost when you redeem them. Please
refer to "Investment Risks" starting on page 12 for a more complete
discussion of the Fund's investment risks.
How Can I Buy Shares? You can buy shares through your
dealer or financial institution, or you can purchase shares
directly through the Distributor by completing an Application or by
using an Automatic Investment Plan under AccountLink. Please refer
to "How to Buy Shares" on page 22 for more details.
Will I Pay a Sales Charge to Buy Shares? The Fund has four
classes of shares. Each class of shares has the same investment
portfolio but different expenses. Class A shares are offered with
a front-end sales charge, starting at 5.75% and reduced for larger
purchases. Class B shares and Class C shares are offered without
a front-end sales charge, but may be subject to a contingent
deferred sales charge if redeemed within 6 years or 12 months,
respectively, of purchase. There is also an annual asset-based
sales charge on Class B shares and Class C shares. Class Y shares
are offered at net asset value without sales charge only to certain
institutional investors. Please review "How to Buy Shares"
starting on page 24 for more details, including a discussion about
factors you and your financial advisor should consider in
determining which class may be appropriate for you.
How Can I Sell My Shares? Shares can be redeemed by mail
or by telephone call to the Transfer Agent on any business day, or
through your dealer. Please refer to "How to Sell Shares" on page
38. The Fund also offers exchange privileges to other Oppenheimer
funds, described in "How to Exchange Shares" on page 40.
How Has the Fund Performed? The Fund measures its
performance by quoting its average annual total returns and
cumulative total returns, which measure historical performance.
Those returns can be compared to the returns (over similar periods)
of other funds. Of course, other funds may have different
objectives, investments, and levels of risk. The Fund's
performance can also be compared to a broad market index, which we
have done on pages 20 and 21. Please remember that past
performance does not guarantee future results.
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data and expense
ratios and other data based on the Fund's average net assets. This
information has been audited by KPMG Peat Marwick LLP, the Fund's
independent auditors, whose report on the Fund's financial
statements for the fiscal year ended August 31, 1996, is included
in the Statement of Additional Information. The Fund has changed
its fiscal year from June 30 to August 31. Class C shares were
only offered during a portion of the for the fiscal year ended
August 31, 1996, commencing on November 1, 1995.
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Financial Highlights
Class A
-------------------------------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $33.43 $30.80 $26.65 $27.34
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .08 .44 .36 .16
Net realized and unrealized gain (loss) .18 5.70 6.83 (.05)
- -------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .26 6.14 7.19 .11
- -------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.41) (.24) (.16)
Distributions from net realized gain -- (3.10) (2.80) (.64)
- -------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders -- (3.51) (3.04) (.80)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.69 $33.43 $30.80 $26.65
===============================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(5) 0.78% 21.00% 29.45% 0.27%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,127,836 $1,120,046 $860,736 $656,934
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,101,233 $1,018,022 $727,102 $720,765
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 1.50%(6) 1.43% 1.31% 0.56%
Expenses 1.03%(6) 1.06% 1.05% 1.07%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8%
Average brokerage commission rate(8) $0.0595 $0.0583 -- --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
-------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988 1987
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $24.94 $21.88 $20.60 $18.90 $17.13 $20.37 $23.82
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .19 .29 .47 .64 .62 .67 .93
Net realized and unrealized gain (loss) 4.03 3.13 1.36 1.76 1.78 (.89) .59
- -------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 4.22 3.42 1.83 2.40 2.40 (.22) 1.52
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders
Dividends from net investment income (.25) (.36) (.55) (.70) (.59) (1.27) (.77)
Distributions from net realized gain (1.57) -- -- -- (.04) (1.75) (4.20)
- -------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (1.82) (.36) (.55) (.70) (.63) (3.02) (4.97)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.34 $24.94 $21.88 $20.60 $18.90 $17.13 $20.37
==================================================================================
- -------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(5) 16.88% 15.69% 9.39% 12.98% 14.54% (1.03)% 9.48%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $743,830 $630,767 $550,480 551,295 $542,250 $552,863 $690,326
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $710,391 $624,527 $520,335 547,090 $529,699 $570,250 $717,115
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.72% 1.14% 2.20% 3.07% 3.31% 3.78% 4.32%
Expenses 0.93% 0.90% 0.94% 0.92% 0.97% 0.95% 0.93%
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 23.2% 36.7% 31.1% 27.6% 27.1% 120.3% 371.2%
Average brokerage commission rate(8) -- -- -- -- -- -- --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Class B
------------------------------------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994(4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $32.74 $30.36 $26.44 $27.02
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .04 .23 .20 (.04)
Net realized and unrealized gain (loss) .16 5.53 6.65 .21
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .20 5.76 6.85 .17
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.28) (.13) (.11)
Distributions from net realized gain -- (3.10) (2.80) (.64)
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders -- (3.38) (2.93) (.75)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $32.94 $32.74 $30.36 $26.44
==============================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(5) 0.61% 19.95% 28.22% (0.20)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $137,437 $129,484 $43,267 $8,747
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $131,142 $ 90,501 $18,722 $5,119
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.61%(6) 0.60% 0.44% (0.22)%(6)
Expenses 1.92%(6) 1.89% 2.02% 1.98%(6)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8%
Average brokerage commission rate(8) $0.0595 $0.0583 -- --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
--------------------------------
Class C
--------------------------------
Two Months
Ended Period Ended
August 31, June 30,
1996(2) 1996(3)
- --------------------------------------------------------------------------------
<S> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $33.22 $33.44
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .02 .40
Net realized and unrealized gain (loss) .18 2.88
- --------------------------------------------------------------------------------
Total income (loss) from investment
operations .20 3.28
- --------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.40)
Distributions from net realized gain -- (3.10)
- --------------------------------------------------------------------------------
Total dividends and distributions
to shareholders -- (3.50)
- --------------------------------------------------------------------------------
Net asset value, end of period $33.42 $33.22
================================
- --------------------------------------------------------------------------------
Total Return, at Net Asset Value(5) 0.60% 10.07%
- --------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $5,034 $3,593
- --------------------------------------------------------------------------------
Average net assets (in thousands) $4,105 $1,804
- --------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.44%(6) 0.65%(6)
Expenses 2.10%(6) 1.81%(6)
- --------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0%
Average brokerage commission rate(8) $0.0595 $0.0583
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------
Class Y
---------------------------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $33.42 $30.80 $26.64 $28.08
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .08 .46 .30 .02
Net realized and unrealized gain (loss) .19 5.70 6.92 (1.46)
- -------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .27 6.16 7.22 (1.44)
- -------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.44) (.26) --
Distributions from net realized gain -- (3.10) (2.80) --
- -------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders -- (3.54) (3.06) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.69 $33.42 $30.80 $26.64
===================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(5) 0.81% 21.10% 29.59% (5.13)%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $18,497 $16,110 $3,189 $9
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,792 $9,384 $536 $10
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 1.67%(6) 1.56% 1.54% 1.09%(6)
Expenses 0.87%(6) 0.94% 1.04% 1.25%(6)
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8%
Average brokerage commission rate(8) $0.0595 $0.0583 -- --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S><C>
1. For the period from June 1, 1994 (inception of offering) to June 30, 1994.
2. The Fund changed its fiscal year end from June 30 to August 31.
3. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
4. For the period from August 17, 1993 (inception of offering) to June 30, 1994. Per share amounts calculated based on the
weighted average number of shares outstanding during the period.
5. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period (or inception of
offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
6. Annualized.
7. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of
portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year
or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the
period ended August 31, 1996 were $62,748,065 and $55,257,768, respectively.
8. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period divided by the total
number of related shares purchased and sold.
</TABLE>
Oppenheimer Growth Fund
Investment Objective and Policies
Objective. The Fund invests its assets to seek capital
appreciation for shareholders. The Fund does not invest to seek
current income to pay shareholders.
Investment Policies and Strategies. The Fund seeks its investment
objective by emphasizing investment in common stocks issued by
established mid- and large- capitalization "growth companies" that,
in the opinion of the Manager, have above average earnings
prospects but are selling at below-normal valuations. Mid-cap
companies generally have market capitalizations between $1 billion
and $5 billion, and large-cap companies generally have market
capitalizations greater than $5 billion.
"Growth companies" may be developing new products or services,
or expanding into new markets for their products. While they may
have what the Manager believes to be favorable prospects for the
long-term, they normally retain a large part of their earnings for
research, development and investment in capital assets. Therefore,
they tend not to emphasize the payment of dividends. In the event
that economic or financial conditions adversely affect equity
securities, defensive investment methods may be stressed.
Investment opportunities may be sought among securities of smaller,
less well known companies, although the Fund's emphasis is on mid-
and large-cap issuers.
The securities selected for defensive or liquidity purposes
may include cash, cash equivalents (such as commercial paper) and
U.S. Government securities. It is expected that the emphasis of
this portion of the portfolio will usually be on short-term debt
securities (i.e., those maturing in one year or less from date of
purchase), since such securities usually may be quickly disposed of
at prices not involving significant gains or losses when the
Manager wishes to increase the portion of the portfolio invested in
securities selected for appreciation possibilities.
Can the Fund's Investment Objective and Policies Change?
The Fund has an investment objective, described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and
strategies in carrying out those policies. The Fund's investment
policies and practices are not "fundamental" unless this Prospectus
or the Statement of Additional Information says that a particular
policy is "fundamental." The Fund's investment objective is a
fundamental policy.
Fundamental policies are those that cannot be changed without
the approval of a "majority" of the Fund's outstanding voting
shares. The term "majority" is defined in the Investment Company
Act to be a particular percentage of outstanding voting shares (and
this term is explained in the Statement of Additional Information).
The Fund's Board of Trustees may change non-fundamental policies
without shareholder approval, although significant changes will be
described in amendments to this Prospectus.
Investment Risks.
All investments carry risks to some degree, whether they are risks
that market prices of the investment will fluctuate (this is known
as "market risk") or that the underlying issuer will experience
financial difficulties and may default on its obligations under a
fixed-income investment to pay interest and repay principal (this
is referred to as "credit risk"). These general investment risks,
and the special risks of certain types of investments that the Fund
may hold are described below. They affect the value of the Fund's
investments, its investment performance, and the prices of its
shares. These risks collectively form the risk profile of the
Fund.
Because of the types of securities the Fund invests in and the
investment techniques the Fund uses, the Fund is designed for
investors who are investing for the long term. It is not intended
for investors seeking assured income or preservation of capital.
While the Manager tries to reduce risks by diversifying
investments, by carefully researching securities before they are
purchased, and in some cases by using hedging techniques, changes
in overall market prices can occur at any time, and because the
income earned on securities is subject to change, there is no
assurance that the Fund will achieve its investment objective.
When you redeem your shares, they may be worth more or less than
what you paid for them.
Stock Investment Risks. Because the Fund invests a
substantial portion of its assets in stocks, the value of the
Fund's portfolio will be affected by changes in the stock markets.
At times, the stock markets can be volatile, and stock prices can
change substantially. This market risk will affect the Fund's net
asset values per share, which will fluctuate as the values of the
Fund's portfolio securities change. Not all stock prices change
uniformly or at the same time, not all stock markets move in the
same direction at the same time and other factors can affect a
particular stock's prices (for example poor earnings reports by an
issuer, loss of major customers, major litigation against an issuer
and changes in government regulations affecting an industry). Not
all of these factors can be predicted. The Fund attempts to limit
market risks by diversifying its investments, that is, by not
holding a substantial amount of the stock of any one company, and
by not investing too great a percentage of the Fund's assets in any
one company.
Interest Rate Risks. Debt securities are subject to changes
in their values due to changes in prevailing interest rates. When
prevailing interest rates fall, the value of already-issued debt
securities generally rise. When interest rates rise, the values of
already-issued debt securities generally decline. The magnitude of
these fluctuations will often be greater for longer-term debt
securities than shorter-term debt securities. Changes in the value
of securities held by the Fund mean that the Fund's share prices
can go up or down when interest rates change because of the effect
of the change on the value of the Fund's portfolio of debt
securities.
Foreign Securities Have Special Risks. The Fund may invest
up to 25% of its total assets in foreign securities, but generally
limits its investments in foreign securities to no more than 10% of
its total assets. While foreign securities offer special investment
opportunities, there are also special risks. The change in value
of a foreign currency against the U.S. dollar will result in a
change in the U.S. dollar value of securities denominated in that
foreign currency. Foreign issuers are not subject to the same
accounting and disclosure requirements that U.S. companies are
subject to. The value of foreign investments may be affected by
exchange control regulations, expropriation or nationalization of
a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental economic or monetary policy
in the U.S. or abroad, or other political and economic factors.
More information about the risks and potential rewards of investing
in foreign securities is contained in the Statement of Additional
Information.
Borrowing for Leverage. The Fund may borrow money from
banks to buy securities. The Fund will borrow only if it can do so
without putting up assets as security for a loan. This is a
speculative investment method known as "leverage." This investing
technique may subject the Fund to greater risks and costs than
funds that do not borrow. These risks may include the possibility
that the Fund's net asset value per share will fluctuate more than
funds that don't borrow. Borrowing for leverage is subject to
limits under the Investment Company Act, described in more detail
in "Borrowing for Leverage" in the Statement of Additional
Information. Under the Investment Company Act, the Fund can borrow
only if it maintains a 300% ratio of net assets to borrowing at all
times.
Hedging instruments can be volatile investments and may
involve special risks. The use of futures for hedging purposes
requires special skills and knowledge of investment techniques that
are different than what is required for normal portfolio
management. If the Manager uses a hedging instrument at the wrong
time or judges market conditions incorrectly, hedging strategies
may reduce the Fund's return. The Fund could also experience losses
if the prices of its futures positions were not correlated with its
other investments or if it could not close out a position because
the market for the future was illiquid. These risks are described
in greater detail in the Statement of Additional Information.
Investment Techniques and Strategies
The Fund may also use the investment techniques and strategies
described below, which involve certain risks. The Statement of
Additional Information contains more information about these
practices, including limitations on their use that are designed to
reduce some of the risks.
Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies
that, together with the operations of predecessors, have been in
operation for less than three years. Securities of these companies
may have limited liquidity (which means that the Fund may have
difficulty selling them at an acceptable price when it wants to)
and the prices of these securities may be volatile. As a matter of
fundamental policy, the Fund will not make an investment that will
result in more than 15% of the Fund's total assets being invested
in securities of such companies. The Fund currently intends to
invest no more than 5% of its total assets in securities of small,
unseasoned issuers.
Foreign Securities. The Fund may purchase equity securities
issued or guaranteed by foreign companies or foreign governments or
their agencies. The Fund may invest up to 25% of its total assets
in foreign securities, but generally limits its investments in
foreign securities to no more than 10% of its total assets. The
Fund may buy securities in any country, developed or
underdeveloped. Investments in securities of issuers in
underdeveloped countries generally involve more risk and may be
considered highly speculative.
Short-Term Debt Securities. When the Manager believes it is
appropriate (for example, for defensive purposes during unstable
market conditions), the Fund can hold cash or invest without limit
in money market instruments. The Fund will invest in high quality,
short-term money market instruments such as U.S. Treasury and
agency obligations; commercial paper (short-term, unsecured,
negotiable promissory notes of a domestic or foreign company);
short-term debt obligations of corporate issuers; and certificates
of deposit and bankers' acceptances (time drafts drawn on
commercial banks usually in connection with international
transactions) of domestic or foreign banks and savings and loan
associations. The issuers of foreign money market instruments
purchased by the Fund must have at least $1 billion (U.S.) of
assets.
Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments.
Investments may be illiquid because of the absence of an active
trading market, making it difficult to value them or dispose of
them promptly at an acceptable price. A restricted security is one
that has a contractual restriction on its resale or which cannot be
sold publicly until it is registered under the Securities Act of
1933. The Fund currently intends not to invest more than 10% of
its net assets in illiquid or restricted securities (the Board may
increase that limit to 15%). The Manager monitors holdings of
illiquid securities on an ongoing basis and at times the Fund may
be required to sell some holdings to maintain adequate liquidity.
Certain restricted securities, eligible for resale to qualified
institutional purchasers, are not subject to that limit.
Loans of Portfolio Securities. To raise cash for liquidity
purposes, the Fund may lend its portfolio securities to brokers,
dealers and other types of financial institutions approved by the
Board of Trustees. The Fund must receive collateral for a loan.
After any loan, the value of the securities loaned must not exceed
25% of the value of the Fund's total assets. There are some risks
in connection with securities lending. The Fund might experience a
delay in receiving additional collateral to secure a loan, or a
delay in recovery of the loaned securities if the borrower
defaults. The Fund presently does not intend to make loans of
portfolio securities that will exceed 5% of the value of the Fund's
total assets in the coming year.
Repurchase Agreements. The Fund may enter into repurchase
agreements. In a repurchase transaction, the Fund buys a security
and simultaneously sells it to the vendor for delivery at a future
date. They are used primarily for cash purposes. There is no
limit on the amount of the Fund's net assets that may be subject to
repurchase agreements of seven days or less. Repurchase agreements
must be fully collateralized. However, if the vendor fails to pay
the resale price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if there is
any delay in its ability to do so. The Fund will not enter into a
repurchase agreement that causes more than 10% of its net assets to
be subject to repurchase agreements having a maturity beyond seven
days (the Board may increase that limit to 15%).
Hedging. The Fund may purchase and sell futures contracts
that relate to broadly-based securities indices (these are referred
to as Financial Futures and are also referred to as "hedging
instruments"). While the Fund currently does not engage
extensively in hedging, the Fund may use these instruments for
hedging purposes.
The Fund may buy and sell futures and forward contracts for
a number of purposes. It may do so to try to manage its exposure
to the possibility that the prices of its portfolio securities may
decline, or to establish a position in the equity securities market
as a temporary substitute for purchasing individual securities.
Selling futures hedges the Fund's portfolio against price
fluctuations. Buying futures tends to increase the Fund's exposure
to the securities market.
Derivative Investments. In general, a "derivative
investment" is a specially designed investment. Its performance is
linked to the performance of another investment or security. In
the broadest sense, futures contracts (discussed in "Hedging,"
above) may be considered "derivative investments."
Other Investment Restrictions. The Fund has other investment
restrictions which are fundamental policies. Under these
fundamental policies, the Fund cannot do any of the following:
The Fund cannot as to 75% of its assets, invest in the
securities of any one issuer (other than the U.S. Government or its
agencies or instrumentalities) if immediately thereafter (a) more
than 5% of the Fund's total assets would be invested in securities
of that issuer, or (b) the Fund would then own more than 10% of
that issuer's voting securities.
The Fund cannot concentrate investments in any particular
industry; therefore the Fund will not purchase the securities of
companies in any one industry if, thereafter, more than 25% of the
value of the Fund's assets would consist of securities of companies
in that industry.
The Fund cannot deviate from the percentage restrictions
listed under "Small, Unseasoned Companies," "Loans of Portfolio
Securities," and "Borrowing For Leverage."
Unless the Prospectus states that a percentage restriction
applies continuously, it applies only at the time the Fund makes an
investment, and the Fund need not sell securities to meet the
percentage limits if the value of the investment increases in
proportion to the size of the Fund. Other investment restrictions
are listed in "Investment Restrictions" in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1972 as a
Maryland corporation but was reorganized in 1985 as a Massachusetts
business trust. The Fund is an open-end management investment
company.
The Fund is governed by a Board of Trustees, which is
responsible for protecting the interests of shareholders under
Massachusetts law. The Trustees meet periodically throughout the
year to oversee the Fund's activities, review its performance, and
review the actions of the Manager. "Trustees and Officers of the
Fund" in the Statement of Additional Information names the Trustees
and provides more information about them and the officers of the
Fund. Although the Fund will not normally hold annual meetings of
its shareholders, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call
a meeting to remove a Trustee or to take other action described in
the Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder
approval, to divide unissued shares of the Fund into two or more
classes. The Board has done so, and the Fund currently has four
classes of shares, Class A, Class B, Class C and Class Y. All
classes invest in the same investment portfolio. Only certain
institutional investors may elect to purchase Class Y shares. Each
class has its own dividends and distributions and pays certain
expenses which may be different for the different classes. Each
class may have a different net asset value. Each share has one
vote at shareholder meetings, with fractional shares voting
proportionally in matters submitted to the vote of shareholders.
Shares of each class may have separate voting rights on matters in
which interests of one class are different from interests of
another class, and shares of a particular class vote as a class on
matters that affect that class alone. Shares are freely
transferrable.
The Manager and Its Affiliates. The Fund is managed by the
Manager, OppenheimerFunds, Inc., which is responsible for selecting
the Fund's investments and handles its day-to-day business. The
Manager carries out its duties, subject to the policies established
by the Board of Trustees, under an Investment Advisory Agreement
which states the Manager's responsibilities. The Agreement sets
forth the fees paid by the Fund to the Manager, and describes the
expenses that the Fund is responsible for paying to conduct its
business.
The Manager has operated as an investment adviser since 1959.
The Manager (including a subsidiary) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $55 billion as of September 30, 1996, and with more than 3
million shareholder accounts. The Manager is owned by Oppenheimer
Acquisition Corp., a holding company that is owned in part by
senior officers of the Manager and controlled by Massachusetts
Mutual Life Insurance Company.
Portfolio Manager. The Portfolio Manager of the Fund is
Robert C. Doll, Jr. He has been the person principally responsible
for the day-to-day management of the Fund's portfolio since
September, 1987. Mr. Doll is an Executive Vice President and
Director of Equity Investments of the Manager.
Fees and Expenses. Under the investment advisory agreement,
as amended per a resolution of the Board of Trustees dated December
14, 1995 to reduce the fee on assets in excess of $1.5 billion (the
"Investment Advisory Agreement"), the Fund pays the Manager a
monthly fee at the following annual rates, which decline on
additional assets as the Fund grows: 0.75% of the first $200
million of average annual net assets; 0.72% of the next $200
million; 0.69% of the next $200 million; 0.66% of the next $200
million; 0.60% of the next $700 million; and 0.58% of average
annual net assets in excess of $1.5 billion. The Fund's management
fee for its fiscal years ended June 30, 1996 and August 31, 1996
were 0.68% and 0.67%, respectively, of average annual net assets
for each class of shares that were offered.
The Fund pays expenses related to its daily operations, such
as custodian fees, Trustees' fees, transfer agency fees, legal and
auditing costs. Those expenses are paid out of the Fund's assets
and are not paid directly by shareholders. However, those expenses
reduce the net asset value of shares, and therefore are indirectly
borne by shareholders through their investment. More information
about the Investment Advisory Agreement and the other expenses paid
by the Fund is contained in the Statement of Additional
Information.
There is also information about the Fund's brokerage policies
and practices in "Brokerage Policies of the Fund" in the Statement
of Additional Information. That section discusses how brokers and
dealers are selected for the Fund's portfolio transactions. When
deciding which brokers to use, the Manager is permitted by the
Investment Advisory Agreement to consider whether brokers have sold
shares of the Fund or any other funds for which the Manager serves
as investment adviser.
The Distributor. The Fund's shares are sold through
dealers, brokers and other financial institutions that have a sales
agreement with OppenheimerFunds Distributor, Inc., a subsidiary of
the Manager that acts as the Fund's Distributor. The Distributor
also distributes the shares of the other "Oppenheimer funds"
managed by the Manager and is sub-distributor for funds managed by
a subsidiary of the Manager.
The Transfer Agent. The Fund's Transfer Agent is
OppenheimerFunds Services, a division of the Manager, which acts as
the shareholder servicing agent for the Fund on an "at-cost" basis.
It also acts as the shareholder servicing agent for other
Oppenheimer funds. Shareholders should direct inquiries about
their account to the Transfer Agent at the address and toll-free
numbers shown below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the term
"total return" to illustrate its performance. The performance of
each class of shares is shown separately, because the performance
of each class of shares will usually be different as a result of
the different kinds of expenses each class bears. These returns
measure the performance of a hypothetical account in the Fund over
various periods, and do not show the performance of each
shareholder's account (which will vary if dividends are received in
cash or shares are sold or purchased). The Fund's performance data
may help you see how well your investment has done over time and to
compare market indexes.
It is important to understand that the Fund's total returns
represent past performance and should not be considered to be
predictions of future returns or performance. More detailed
information about how total returns are calculated is contained in
the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over
time, depending on market conditions, the composition of the
portfolio, expenses and which class of shares you purchase.
Total Returns. There are different types of "total returns"
used to measure the Fund's performance. Total return is the change
in value of a hypothetical investment in the Fund over a given
period, assuming that all dividends and capital gains distributions
are reinvested in additional shares. The cumulative total return
measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate
of return for each year in a period that would produce the
cumulative total return over the entire period. However, average
annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted for Class A shares, normally the
current maximum initial sales charge has been deducted. When total
returns are shown for Class B or Class C shares, normally the
contingent deferred sales charge that applies to the period for
which total return is shown has been deducted. However, total
returns may also be quoted "at net asset value," without
considering the effect of either the front-end or the appropriate
contingent deferred sales charge, as applicable, and those returns
would be less if sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of
the Fund's performance during its most recent fiscal year ended
August 31, 1996, followed by a graphical comparison of the Fund's
performance to an appropriate broad-based market index.
Management's Discussion of Performance. During the Fund's
fiscal year ended August 31, 1996, its performance was affected
principally by the overall strong performance of the U.S. stock
market, although the market experienced significant volatility near
the end of the fiscal year. The portfolio manager focused on
securities with long-term growth potential that the Manager
believed were undervalued. The Fund focused new investments in the
technology and financial services sectors, including U.S. companies
with broad international exposure, which appreciated as the stock
market rose. The Manager disposed of securities it believed had
become over-valued or more fairly valued, especially in the
healthcare sector. As U.S. corporate earnings momentum slowed, the
Manager purchased stocks in the basic materials sector -- paper,
chemicals and metals producers. The Fund maintained a significant
cash position during the fiscal year for defensive purposes and to
try to reduce the effects of any short-term market volatility on
the Fund's share price.
Comparing the Fund's Performance to the Market. The graphs
below show the performance of a hypothetical $10,000 investment in
Class A, Class B, Class C and Class Y shares of the Fund held at
August 31, 1996. In the case of Class A shares, performance is
measured over a ten-year period. In the case of Class B shares,
performance is measured from the inception of the class on August
17, 1993. In the case of Class C shares, performance is measured
from inception of the class on November 1, 1995. In the case of
Class Y shares, performance is measured from the inception of the
class on June 1, 1994. The Fund's performance reflects the
deduction of the 5.75% current maximum initial sales charge on
Class A shares, the applicable contingent deferred sales charge on
Class B and Class C shares, and reinvestment of all dividends and
capital gains distributions.
The Fund's performance is compared to the performance of the
S&P 500 Index, a broad-based index of equity securities widely
regarded as a general measure of the performance of the U.S. equity
securities market. Index performance reflects the reinvestment of
dividends but does not consider the effect of expenses or taxes.
Also, the Fund's performance reflects the effect of Fund business
and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted
that the Fund's investments are not limited to the securities in
the S&P 500 Index, which tend to be securities of larger, well-capitalized
companies. Moreover, the index data does not reflect
any assessment of the risk of the investments included in the
index.
Comparison of Change in Value
of $10,000 Hypothetical Investment in:
Oppenheimer Growth Fund and the
S&P 500 Index
[Graph]
Average Annual Total Returns of Class A Shares of the Fund at:1
1 year 5 years 10 years
8/31/96 9.52% 12.69% 11.97%
6/30/96 14.04% 14.89% 11.87%
Comparison of Change in Value
of $10,000 Hypothetical Investment in:
Oppenheimer Growth Fund and the
S&P 500 Index
[Graph]
Average Annual Total Returns of Class B Shares of the Fund at:2
1 year Life of Class
8/31/96 10.19% 14.88%
6/30/96 14.95% 15.31%
Comparison of Change in Value
of $10,000 Hypothetical Investment in:
Oppenheimer Growth Fund and the
S&P 500 Index
[Graph]
Cumulative Total Returns of Class C Shares of the Fund at:3
Life of Class
8/31/96 9.74%
6/30/96 9.08%
Comparison of Change in Value
of $10,000 Hypothetical Investment in:
Oppenheimer Growth Fund and the
S&P 500 Index
[Graph]
Average Annual Total Returns of Class Y Shares of the Fund at:4
1 year Life of Class
8/31/96 16.31% 19.78%
6/30/96 21.10% 21.08%
Total returns and the ending account values in the graphs show
change in share value and include reinvestment of all dividends and
capital gains distributions. The Fund's fiscal year has changed
from 6/30 to 8/31.
1The inception date of the Fund (Class A shares) was 3/15/73.
Class A returns are shown net of the applicable 5.75% current
maximum initial sales charge.
2Class B shares of the Fund were first publicly offered on 8/17/93.
The average annual total returns are shown net of the applicable 5%
and 3% contingent deferred sales charge, respectively, for the one-year period
and the life-of-the-class. The ending account value in
the graph is net of the applicable 3% contingent deferred sales
charge.
3Class C shares of the Fund were first publicly offered on 11/1/95.
The cumulative total return and the ending account value in the
graph are shown net of the applicable 1% contingent deferred sales
charge for the period.
4Class Y shares of the Fund, first publicly offered on 6/1/94, are
offered at net asset value without sales charges to certain
institutional investors.
Past performance is not predictive of future performance.
Graphs are not drawn to same scales.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors four different
classes of shares. Three classes, Class A, Class B and Class C,
are available to non-institutional investors. The fourth class,
Class Y, is offered only to certain institutional investors. The
different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and
will likely have different share prices.
Class A Shares. If you buy Class A shares, you may pay an
initial sales charge on investments up to $1 million (up to
$500,000 for purchases by "Retirement Plans," as defined in "Class
A Contingent Deferred Sales Charge" on page __). If you purchase
Class A shares as part of an investment of at least $1 million
($500,000 for Retirement Plans) in shares of one or more
Oppenheimer funds, you will not pay an initial sales charge, but if
you sell any of those shares within 18 months of buying them, you
may pay a contingent deferred sales charge. The amount of that
sales charge will vary depending on the amount you invested. Sales
charge rates are described in "Buying Class A Shares," below.
Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within
six years of buying them, you will normally pay a contingent
deferred sales charge. That sales charge varies depending on how
long you own your shares as described in "Buying Class B Shares"
below.
Class C Shares. If you buy Class C shares, you pay no sales
charge at the time of purchase, but if you sell your shares within
12 months of buying them, you will normally pay a contingent
deferred sales charge of 1% as discussed in "Buying Class C Shares"
below.
Which Class of Shares Should You Choose? Once you decide that the
Fund is an appropriate investment for you, the decision as to which
class of shares is better suited to your needs depends on a number
of factors which you should discuss with your financial advisor.
The Fund's operating costs that apply to a class of shares and the
effect of the different types of sales charges on your investment
will vary your investment results over time. The most important
factors to consider are how much you plan to invest and how long
you plan to hold your investment. If your goals and objectives
change over time and you plan to purchase additional shares, you
should re-evaluate those factors to see if you should consider
another class of shares.
In the following discussion, to help provide you and your
financial advisor with a framework in which to choose a class, we
have made some assumptions using a hypothetical investment in the
Fund. We assumed you are an individual investor, and therefore
ineligible to purchase Class Y shares. We used the sales charge
rates that apply to Class A, Class B and Class C shares and
considered the effect of the annual asset-based sales charge on
Class B and Class C expenses (which, like all expenses, will affect
your investment return). For the sake of comparison, we have
assumed that there is a 10% rate of appreciation in the investment
each year. Of course, the actual performance of your investment
cannot be predicted and will vary, based on the Fund's actual
investment returns and the operating expenses borne by each class
of shares, and which class of shares you invest in. The factors
discussed below are not intended to be investment advice or
recommendations, because each investor's financial considerations
are different. The discussion below of the factors to consider in
purchasing a particular class of shares assumes that you will
purchase only one class of shares and not a combination of shares
of different classes.
How Long Do You Expect to Hold Your Investment? While
future financial needs cannot be predicted with certainty, knowing
how long you expect to hold your investment will assist you in
selecting the appropriate class of shares. Because of the effect
of class-based expenses, your choice will also depend on how much
you plan to invest. For example, the reduced sales charges
available for larger purchases of Class A shares may, over time,
offset the effect of paying an initial sales charge on your
investment (which reduces the amount of your investment dollars
used to buy shares for your account), compared to the effect over
time of higher class-based expenses on shares of Class B or Class
C shares for which no initial sales charge is paid.
Investing for the Short Term. If you have a short-term
investment horizon (that is, you plan to hold your shares for not
more than six years), you should probably consider purchasing Class
A or Class C shares rather than Class B shares, because of the
effect of the Class B contingent deferred sales charge if you
redeem in less than 7 years, as well as the effect of the Class B
asset-based sales charge on the investment return for that class in
the short-term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there
is no initial sales charge on Class C shares, and the contingent
deferred sales charge does not apply to amounts you sell after
holding them one year.
However, if you plan to invest more than $100,000 for the
shorter term, then the more you invest and the more your investment
horizon increases toward six years, Class C shares might not be as
advantageous as Class A shares. That is because the annual asset-based sales
charge on Class C shares will have a greater impact on
your account over the longer term than the reduced front-end sales
charge available for larger purchases of Class A shares. For
example, Class A shares might be more advantageous than Class C (as
well as Class B) shares for investments of more than $100,000
expected to be held for 5 or 6 years (or more). For investments
over $250,000 expected to be held 4 to 6 years (or more), Class A
shares may become more advantageous than Class C (and B) shares.
If investing $500,000 or more, Class A shares may be more
advantageous as your investment horizon approaches 3 years or more.
And for most investors who invest $1 million or more, in most
cases Class A shares will be the most advantageous choice, no
matter how long you intend to hold your shares. For that reason,
the Distributor normally will not accept purchase orders of
$500,000 or more of Class B shares or $1 million or more of Class
C shares from a single investor. Of course, these examples are
based on approximations of the effect of current sales charges and
expenses on a hypothetical investment over time, using the assumed
annual performance return stated above, and therefore should not be
relied on as rigid guidelines.
Investing for the Longer Term. If you are investing for the
longer-term, for example, for retirement, and do not expect to need
access to your money for seven years or more, Class B shares may be
an appropriate consideration, if you plan to invest less than
$100,000. If you plan to invest more than $100,000 over the long
term, Class A shares will likely be more advantageous than Class B
shares or Class C shares, as discussed above, because of the effect
of the expected lower expenses for Class A shares and the reduced
initial sales charges available for larger investments in Class A
shares under the Fund's Right of Accumulation.
Of course, these examples are based on approximations of the
effect of current sales charges and expenses on a hypothetical
investment over time, using the assumed annual performance return
stated above, and therefore, you should analyze your options
carefully.
Are There Differences in Account Features That Matter to
You? Because some account features may not be available for Class
B or Class C shareholders, you should carefully review how you plan
to use your investment account before deciding which class of
shares is better for you. For example, share certificates are not
available for Class B or Class C shares and if you are considering
using your shares as collateral for a loan, that may be a factor to
consider. Additionally, the dividends payable to Class B and Class
C shareholders will be reduced by the additional expenses borne
solely by those classes, such as the asset-based sales charges
described below and in the Statement of Additional Information.
How Does It Affect Payments to My Broker? A salesperson,
such as a broker, or any other person who is entitled to receive
compensation for selling Fund shares may receive different
compensation for selling one class of shares than for selling
another class. It is important that investors understand that the
purposes of the Class B and Class C contingent deferred sales
charge and asset-based sales charges is the same as the purpose of
the front-end sales charge on sales of Class A shares: to
compensate the Distributor for commissions it pays to dealers and
financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a
minimum initial investment of $1,000 and make additional
investments at any time with as little as $25. There are reduced
minimum investments under special investment plans.
With Asset Builder Plans, Automatic Exchange Plans,
403(b)(7) custodial plans and military allotment plans, you can
make initial and subsequent investments of as little as $25; and
subsequent purchases of at least $25 can be made by telephone
through AccountLink.
Under pension and profit-sharing and 401(k) plans and
Individual Retirement Accounts (IRAs), you can make an initial
investment of as little as $250 (if your IRA is established under
an Asset Builder Plan, the $25 minimum applies), and subsequent
investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other Oppenheimer
funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer
Agent), or by reinvesting distributions from unit investment trusts
that have made arrangements with the Distributor.
How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a
sales agreement with the Distributor, or directly through the
Distributor, or automatically from your bank account through an
Asset Builder Plan under the OppenheimerFunds AccountLink service.
The Distributor may appoint certain servicing agents as the
Distributor's agent to accept purchase and redemption orders. When
you buy shares, be sure to specify Class A, Class B or Class C
shares. If you do not choose, your investment will be made in
Class A shares.
Buying Shares Through Your Dealer. Your dealer will place
your order with the Distributor on your behalf.
Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box
5270, Denver, Colorado 80217. If you don't list a dealer on the
application, the Distributor will act as your agent in buying the
shares. However, it is recommended that you discuss your
investment first with a financial advisor, to be sure that it is
appropriate for you.
Buying Shares Through OppenheimerFunds AccountLink. You can
use AccountLink to link your Fund account with an account at a U.S.
bank or other financial institution that is an Automated Clearing
House (ACH) member. You can then transmit funds electronically to
purchase shares, to have the Transfer Agent send redemption
proceeds, and to transmit dividends and distributions.
Shares are purchased for your account on AccountLink on the
regular business day the Distributor is instructed by you to
initiate the ACH transfer to buy shares. You can provide those
instructions automatically, under an Asset Builder Plan, described
below, or by telephone instructions using OppenheimerFunds
PhoneLink, also described below. You should request AccountLink
privileges on the application or dealer settlement instructions
used to establish your account. Please refer to "AccountLink"
below for more details.
Asset Builder Plans. You may purchase shares of the Fund
(and up to four other Oppenheimer funds) automatically each month
from your account at a bank or other financial institution under an
Asset Builder Plan with AccountLink. Details are on the
Application and in the Statement of Additional Information.
At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales
charge that applies) that is next determined after the Distributor
receives the purchase order in Denver, Colorado. In most cases, to
enable you to receive that day's offering price, the Distributor or
its designated agent must receive your order by the time of day The
New York Stock Exchange closes, which is normally 4:00 P.M., New
York time, but may be earlier on some days (all references to time
in this Prospectus mean "New York time"). The net asset value of
each class of shares is determined as of that time on each day The
New York Stock Exchange is open (which is a "regular business
day"). If you buy shares through a dealer, the dealer must receive
your order by the close of The New York Stock Exchange on a regular
business day and transmit it to the Distributor so that it is
received before the Distributor's close of business that day, which
is normally 5:00 P.M. The Distributor may reject any purchase order
for the Fund's shares, in its sole discretion.
Special Sales Charge Arrangements For Certain Persons. Appendix A
to this Prospectus sets forth conditions for the waiver of, or
exemption from, sales charges or the special sales charge rates
that apply to purchases of shares of the Fund (including purchases
by exchange) by a person who was a shareholder of one of the Former
Quest for Value Funds (as defined in that Appendix).
Buying Class A Shares. Class A shares are sold at their offering
price, which is normally net asset value plus an initial sales
charge. However, in some cases, described below, purchases are not
subject to an initial sales charge, and the offering price will be
the net asset value. In some cases, reduced sales charges may be
available, as described below. Out of the amount you invest, the
Fund receives the net asset value to invest for your account. The
sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor and
allocated to your dealer as commission. The current sales charge
rates and commissions paid to dealers and brokers are as follows:
Front-End
Front-End Sales Charge as
Sales Charge as a Percentage of Commission as
a Percentage of Amount Percentage of
Amount of Purchase Offering Price Invested Offering Price
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
The Distributor reserves the right to reallow the entire
commission to dealers. If that occurs, the dealer may be
considered an "underwriter" under Federal securities laws.
Class A Contingent Deferred Sales Charge. There is no
initial sales charge on purchases of Class A shares of any one or
more of the Oppenheimer funds in the following cases:
Purchases aggregating $1 million or more.
Purchases by a retirement plan qualified under sections
401(a) or 401(k) of the Internal Revenue Code, by a non-qualified
deferred compensation plan (not including Section 457 plans),
employee benefit plan, group retirement plan (see "How to Buy
Shares - Retirement Plans" in the Statement of Additional
Information for further details), an employee's 403(b)(7) custodial
plan account, SEP IRA, SARSEP, or SIMPLE plan (all of these plans
are collectively referred to as "Retirement Plans"); that: (1) buys
shares costing $500,000 or more or (2) has, at the time of
purchase, 100 or more eligible participants, or (3) certifies that
it projects to have annual plan purchases of $200,000 or more.
Purchases by an OppenheimerFunds Rollover IRA if the
purchases are made (1) through a broker, dealer, bank or registered
investment adviser that has made special arrangements with the
Distributor for these purchases, or (2) by a direct rollover of a
distribution from a qualified retirement plan if the administrator
of that plan has made special arrangements with the Distributor for
those purchases.
The Distributor pays dealers of record commissions on those
purchases in an amount equal to (i) 1.0% for non-Retirement Plan
accounts, and (ii) for Retirement Plan accounts, 1.0% of the first
$2.5 million, plus 0.50% of the next $2.5 million, plus 0.25% of
purchases over $5 million. That commission will be paid only on
those purchases that were not previously subject to a front-end
sales charge and dealer commission. No sales commission will be
paid to the dealer, broker or financial institution on sales of
Class A shares purchased with the redemption proceeds of shares of
a mutual fund offered as an investment option in a Retirement Plan
in which Oppenheimer funds are also offered as investment options
under a special arrangement with the Distributor if the purchase
occurs more than 30 days after the addition of the Oppenheimer
funds as an investment option to the Retirement Plan.
If you redeem any of those shares within 18 months of the end
of the calendar month of their purchase, a contingent deferred
sales charge (called the "Class A contingent deferred sales
charge") may be deducted from the redemption proceeds. That sales
charge may be equal to 1.0% of the lesser of (1) the aggregate net
asset value of the redeemed shares (not including shares purchased
by reinvestment of dividends or capital gains distributions) or (2)
the original offering price (which is the original net asset value)
of the redeemed shares. However, the Class A contingent deferred
sales charge will not exceed the aggregate amount of the
commissions the Distributor paid to your dealer on all Class A
shares of all Oppenheimer funds you purchased subject to the Class
A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is
payable, the Fund will first redeem shares that are not subject to
the sales charge, including shares purchased by reinvestment of
dividends and capital gains, and then will redeem other shares in
the order that you purchased them. The Class A contingent deferred
sales charge is waived in certain cases described in "Waivers of
Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on
exchanges of shares under the Fund's Exchange privilege (described
below). However, if the shares acquired by exchange are redeemed
within 18 months of the end of the calendar month of the purchase
of the exchanged shares, the contingent deferred sales charge will
apply.
Special Arrangements With Dealers. The Distributor may
advance up to 13 months' commissions to dealers that have
established special arrangements with the Distributor for Asset
Builder Plans for their clients. Until January 1, 1997, dealers
whose sales of Class A shares of Oppenheimer funds (other than
money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per
quarter), will receive monthly one-half of the Distributor's
retained commissions on those sales, and if those sales exceed $10
million per year, those dealers will receive the Distributor's
entire retained commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be
eligible to buy Class A shares at reduced sales charge rates in one
or more of the following ways:
Right of Accumulation. To qualify for the lower sales
charge rates that apply to larger purchases of Class A shares, you
and your spouse can add together Class A and Class B shares you
purchase for your individual accounts, or jointly, or for trust or
custodial accounts on behalf of your children who are minors. A
fiduciary can count all shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit
plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class
A and Class B shares of the Fund and other Oppenheimer funds to
reduce the sales charge rate that applies to current purchases of
Class A shares. You can also include Class A and Class B shares of
Oppenheimer funds you previously purchased subject to an initial or
contingent deferred sales charge to reduce the sales charge rate
for current purchases of Class A shares, provided that you still
hold your investment in one of the Oppenheimer funds. The value of
those shares will be based on the greater of the amount you paid
for the shares or their current value (at offering price). The
Oppenheimer funds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from
the Distributor. The reduced sales charge will apply only to
current purchases and must be requested when you buy your shares.
Letter of Intent. Under a Letter of Intent, if you purchase
Class A or Class A and Class B shares of the Fund and other
Oppenheimer funds during a 13-month period, you can reduce the
sales charge rate that applies to your purchases of Class A shares.
The total amount of your intended purchases of both Class A and
Class B shares will determine your reduced sales charge rate for
the Class A shares purchased during that period. This can include
purchases made up to 90 days before the date of the Letter. More
information is contained in the Application and in "Reduced Sales
Charges" in the Statement of Additional Information.
Waivers of Class A Sales Charges. The Class A sales charges
are not imposed in the circumstances described below. There is an
explanation of this policy in "Reduced Sales Charges" in the
Statement of Additional Information.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain Purchasers. Class A shares purchased by the following
investors are not subject to any Class A sales charges:
the Manager or its affiliates;
present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced
Sales Charges" in the Statement of Additional Information) of the
Fund, the Manager and its affiliates, and retirement plans
established by them for their employees;
registered management investment companies, or separate
accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
employees and registered representatives (and their spouses)
of dealers or brokers described above or financial institutions
that have entered into sales arrangements with such dealers or
brokers (and are identified to the Distributor) or with the
Distributor; the purchaser must certify to the Distributor at the
time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor
children);
dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular
investment products made available to their clients (those clients
may be charged a transaction fee by their dealer, broker or adviser
for the purchase or sale of shares of the Fund);
(1) investment advisors and financial planners who charge
an advisory, consulting or other fee for their services and buy
shares for their own accounts or the accounts of their clients, (2)
Retirement Plans and deferred compensation plans and trusts used to
fund those Plans (including, for example, plans qualified or
created under sections 401(a), 403(b) or 457 of the Internal
Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker
or agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases; and (3)
clients of such investment advisors or financial planners who buy
shares for their own accounts may also purchase shares without
sales charge but only if their accounts are linked to a master
account of their investment advisor or financial planner on the
books and records of the broker, agent or financial intermediary
with which the Distributor has made such special arrangements (each
of these investors may be charged a fee by the broker, agent or
financial intermediary for purchasing shares);
directors, trustees, officers or full-time employees of
OpCap Advisors or its affiliates, their relatives or any trust,
pension, profit sharing or other benefit plan which beneficially
owns shares for those persons;
accounts for which Oppenheimer Capital is the investment
adviser (the Distributor must be advised of this arrangement) and
persons who are directors or trustees of the company or trust which
is the beneficial owner of such accounts;
any unit investment trust that has entered into an
appropriate agreement with the Distributor;
a TRAC-2000 401(k) plan (sponsored by the former Quest for
Value Advisors) whose Class B or Class C shares of a Former Quest
for Value Fund were exchanged for Class A shares of that Fund due
to the termination of the Class A shares of that Fund due to the
termination of the Class B and TRAC-2000 program on November 24,
1995; or
qualified retirement plans that had agreed with the former
Quest for Value Advisors to purchase shares of any of the Former
Quest for Value Funds at net asset value, with such shares to be
held through DCXchange, a sub-transfer agency mutual fund
clearinghouse, provided that such arrangements are consummated and
share purchases commence be December 31, 1996.
Waivers of Initial and Contingent Deferred Sales Charges in
Certain Transactions. Class A shares issued or purchased in the
following transactions are not subject to Class A sales charges:
shares issued in plans of reorganization, such as mergers,
asset acquisitions and exchange offers, to which the Fund is a
party;
shares purchased by the reinvestment of loan repayments by
a participant in a retirement plan for which the Manager or its
affiliates acts as sponsor;
shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds
(other than Oppenheimer Cash Reserves) or unit investment trusts
for which reinvestment arrangements have been made with the
Distributor;
shares purchased and paid for with the proceeds of shares
redeemed in the past 12 months from a mutual fund (other than a
fund managed by the Manager or any of its subsidiaries) on which an
initial sales charge or contingent deferred sales charge was paid
(this waiver also applies to shares purchased by exchange of shares
of Oppenheimer Money Market Fund, Inc. that were purchased and paid
for in this manner); this waiver must be requested when the
purchase order is placed for your shares of the Fund, and the
Distributor may require evidence of your qualification for this
waiver; or
shares purchased with the proceeds of maturing principal of
units of any Qualified Unit Investment Liquid Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for
Certain Redemptions. The Class A contingent deferred sales charge
is also waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following
cases:
to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value;
involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder Account
Rules and Policies," below);
if, at the time a purchase order is placed for Class A
shares that would otherwise be subject to the Class A contingent
deferred sales charge, the dealer agrees in writing to accept the
dealer's portion of the commission payable on the sale in
installments of 1/18th of the commission per month (and no further
commission will be payable if the shares are redeemed within 18
months of purchase);
for distributions from a TRAC-2000 401(k) plan sponsored by
the Distributor due to the termination of the TRAC-2000 program; or
for distributions from Retirement Plans, deferred
compensation plans or other employee benefit plans for any of the
following purposes: (1) following the death or disability (as
defined in the Internal Revenue Code) of the participant or
beneficiary (the death or disability must occur after the
participant's account was established); (2) to return excess
contributions; (3) to return contributions made due to a mistake of
fact; (4) hardship withdrawals, as defined in the plan; (5) under
a Qualified Domestic Relations Order, as defined in the Internal
Revenue Code; (6) to meet the minimum distribution requirements of
the Internal Revenue Code; (7) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal
Revenue Code; (8) for retirement distributions or loans to
participants or beneficiaries; (9) separation from service; (10)
participant-directed redemptions to purchase shares of a mutual
fund (other than a fund managed by the Manager or its subsidiary)
offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a
special arrangement with the Distributor; or (11) plan termination
or "in-service distributions", if the redemption proceeds are
rolled over directly to an OppenheimerFunds IRA.
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for a
portion of its costs incurred in connection with the personal
service and maintenance of shareholder accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may
not exceed 0.25% of the average annual net assets of Class A shares
of the Fund. The Fund's Board of Trustees has set the annual rate
for assets representing Class A shares of the fund sold on or after
April 1, 1991 at 0.25%, and has set the annual rate for assets
representing Class A shares sold before April 1, 1991 at 0.15% (the
Board has authority to increase that rate to no more than 0.25%).
The Distributor uses all of those fees to compensate dealers,
brokers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their
customers that hold Class A shares and to reimburse itself (if the
Fund's Board of Trustees authorizes such reimbursements, which it
has not yet done) for its other expenditures under the Plan.
Services to be provided include, among others, answering
customer inquiries about the Fund, assisting in establishing and
maintaining accounts in the Fund, making the Fund's investment
plans available and providing other services at the request of the
Fund or the Distributor. Payments are made by the Distributor
quarterly at an annual rate not to exceed 0.25% of the average
annual net assets of Class A shares held in accounts of the dealer
or its customers. The payments under the Plan increase the annual
expenses of Class A shares. For more details, please refer to
"Distribution and Service Plans" in the Statement of Additional
Information.
Buying Class B Shares. Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B
shares are redeemed within six years of their purchase, a
contingent deferred sales charge will be deducted from the
redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based
on the lesser of the net asset value of the redeemed shares at the
time of redemption or the original offering price (which is the
original net asset value). The contingent deferred sales charge is
not imposed on the amount of your account value represented by an
increase in net asset value over the initial purchase price. The
Class B contingent deferred sales charge is paid to the Distributor
to reimburse its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge
applies to a redemption, the Fund redeems shares in the following
order: (1) shares acquired by reinvestment of dividends and capital
gains distributions, (2) shares held for over six years, and (3)
shares held the longest during the 6-year period. The contingent
deferred sales charge is not imposed in the circumstances described
in "Waivers of Class B and Class C Sales Charges" below.
The amount of the contingent deferred sales charge will depend
on the number of years since you invested and the dollar amount
being redeemed, according to the following schedule:
Years Since Beginning of Contingent Deferred Sales Charge
Month in Which Purchase on Redemptions in that Year
Order Was Accepted (As % of Amount Subject to
Charge)
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases
are considered to have been made on the first regular business day
of the month in which the purchase was made.
Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to
Class A shares. This conversion feature relieves Class B
shareholders of the asset-based sales charge that applies to Class
B shares under the Class B Distribution and Service Plan, described
below. The conversion is based on the relative net asset value of
the two classes, and no sales load or other charge is imposed.
When Class B shares convert, any other Class B shares that were
acquired by the reinvestment of dividends and distributions on the
converted shares will also convert to Class A shares. The
conversion feature is subject to the continued availability of a
tax ruling described in "Alternative Sales Arrangements - Class A,
Class B and Class C Shares" in the Statement of Additional
Information.
Distribution and Service Plan for Class B Shares. The Fund
has adopted a Distribution and Service Plan for Class B shares to
compensate the Distributor for distributing Class B shares and
servicing accounts. This Plan is described below under "Buying
Class C Shares - Distribution and Service Plans for Class B and
Class C Shares".
Waivers of Class B Sales Charges. The Class B contingent
deferred sales charge will not apply to shares purchased in certain
types of transactions, nor will it apply to shares redeemed in
certain circumstances, as described below under "Waivers of Class
B and Class C Sales Charges."
Buying Class C Shares. Class C shares are sold at net asset value
per share without an initial sales charge. However, if the Class
C shares are redeemed within 12 months of their purchase, a
contingent deferred sales charge of 1.0% will be deducted from the
redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based
on the lesser of the net asset value of the redeemed shares at the
time of redemption or the original offering price which is the
original net asset value). The contingent deferred sales charge is
not imposed on the amount of your account value represented by the
increase in net asset value over the initial purchase price. The
Class C contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge
applies to a redemption, the Fund redeems shares in the following
order: (1) shares acquired by reinvestment of dividends and capital
gains distributions, (2) shares held for over 12 months, and (3)
shares held the longest during the 12-month period.
Distribution and Service Plans for Class B and Class C Shares.
The Fund has adopted Distribution and Service Plans for Class B and
Class C shares to compensate the Distributor for distributing Class
B and Class C shares and servicing accounts. Under the Plans, the
Fund pays the Distributor an annual "asset-based sales charge" of
0.75% per year on Class B shares and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under
each plan.
Under each Plan, both fees are computed on the average of the
net asset value of shares in the respective class, determined as of
the close of each regular business day during the period. The
asset-based sales charge and service fees increase Class B and
Class C expenses by up to 1.00% of the net assets per year of the
respective class.
The Distributor uses the service fees to compensate dealers
for providing personal services for accounts that hold Class B or
Class C shares. Those services are similar to those provided under
the Class A Service Plan, described above. The Distributor pays
the 0.25% service fees to dealers in advance for the first year
after Class B or Class C shares have been sold by the dealer and
retains the service fee paid by the Fund in that year. After the
shares have been held for a year, the Distributor pays the service
fees to dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B
or Class C shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The
Fund pays the asset-based sales charges to the Distributor for its
services rendered in distributing Class B and Class C shares.
Those payments are at a fixed rate that is not related to the
Distributor's expenses. The services rendered by the Distributor
include paying and financing the payment of sales commissions,
service fees and other costs of distributing and selling Class B
and Class C shares.
The Distributor currently pays sales commissions of 3.75% of
the purchase price of Class B shares to dealers from its own
resources at the time of sale. Including the advance of the
service fee, the total amount paid by the Distributor to the dealer
at the time of sales of Class B shares is 4.00% of the purchase
price. The Distributor retains the Class B asset-based sales
charge.
The Distributor currently pays sales commissions of 0.75% of
the purchase price to dealers from its own resources at the time of
sale of Class C shares. Including the advance of the service fee,
the total amount paid by the Distributor to the dealer at the time
of sale of Class C shares is 1.00% of the purchase price. The
Distributor plans to pay the asset-based sales charge as an ongoing
commission to the dealer on Class C shares that have been
outstanding for a year or more.
The Distributor's actual expenses in selling Class B and Class
C shares may be more than the payments it receives from contingent
deferred sales charges collected on redeemed shares and from the
Fund under the Distribution and Service Plans for Class B and Class
C shares. If the Fund terminates either Plan, the Board of Trustees
may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the Plan
was terminated. At June 30, 1996 and August 31, 1996, the end of
the Class B Plan years, the Distributor had incurred unreimbursed
expenses under the Class B Plan of $3,621,450 and $3,988,986,
respectively (equal to 2.63% and 2.90%, respectively, of the Fund's
net assets represented by Class B shares), which have been carried
over into the present plan year. At June 30, 1996 and August 31,
1996, the end of the Class C Plan years, the Distributor had
incurred unreimbursed expenses under the Class C Plan of $55,221
and $64,346, respectively (equal to 1.54% and 1.28%, respectively,
of the Fund's net assets represented by Class C shares), which have
been carried over into the present plan year.
Waivers of Class B and Class C Sales Charges. The Class B
and Class C contingent deferred sales charges will not be applied
to shares purchased in certain types of transactions nor will it
apply to Class B and Class C shares redeemed in certain
circumstances as described below. The reasons for this policy are
in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers for Redemptions of Shares in Certain Cases. The Class
B and Class C contingent deferred sales charges will be waived for
redemptions of shares in the following cases:
distributions to participants or beneficiaries from
Retirement Plans, if the distributions are made (a) under an
Automatic Withdrawal Plan after the participant reaches age 59-1/2,
as long as the payments are no more than 10% of the account value
annually (measured from the date the Transfer Agent receives the
request), or (b) following the death or disability (as defined in
the Internal Revenue Code) of the participant or beneficiary (the
death or disability must have occurred after the account was
established);
redemptions from accounts other than Retirement Plans
following the death or disability of the last surviving
shareholder, including a trustee of a "grantor" trust or revocable
living trust for which the trustee is also sole beneficiary (the
death or disability must have occurred after the account was
established, and for disability you must provide evidence of a
determination of disability by the Social Security Administration);
returns of excess contributions to Retirement Plans;
distributions from retirement plans to make "substantially
equal periodic payments" as permitted in Section 72(t) of the
Internal Revenue Code that do not exceed 10% of the account value
annually, measured from the date the Transfer Agent receives the
request; or
distributions from OppenheimerFunds prototype 401(k) plans
(1) for hardship withdrawals; (2) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (3) to
meet minimum distribution requirements as defined in the Internal
Revenue Code; (4) to make "substantially equal periodic payments"
as described in Section 72(t) of the Internal Revenue Code; or (5)
for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions.
The contingent deferred sales charge is also waived on Class B and
Class C shares sold or issued in the following cases:
shares sold to the Manager or its affiliates;
shares sold to registered management investment companies
or separate accounts of insurance companies having an agreement
with the Manager or the Distributor for that purpose;
shares issued in plans of reorganization to which the Fund
is a party; or
shares redeemed involuntarily, as described below.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account
to your account at your bank or other financial institution to
enable you to send money electronically between those accounts to
perform a number of types of account transactions. These include
purchases of shares by telephone (either through a service
representative or by PhoneLink, described below), automatic
investments under Asset Builder Plans, and sending dividends and
distributions or Automatic Withdrawal Plan payments directly to
your bank account. Please refer to the Application for details or
call the Transfer Agent for more information.
AccountLink privileges should be requested on the Application
you use to buy shares, or on your dealer's settlement instructions
if you buy your shares through your dealer. After your account is
established, you can request AccountLink privileges by sending
signature-guaranteed instructions to the Transfer Agent.
AccountLink privileges will apply to each shareholder listed in the
registration on your account as well as to your dealer
representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those
privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all
shareholders who own the account.
Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase
shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1-800-852-8457. The
purchase payment will be debited from your bank account.
PhoneLink. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a number of
account transactions automatically using a touch-tone phone.
PhoneLink may be used on already-established Fund accounts after
you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number: 1-800-533-3310.
Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have
established AccountLink privileges to link your bank account with
the Fund, to pay for these purchases.
Exchanging Shares. With the OppenheimerFunds Exchange
Privilege, described below, you can exchange shares automatically
by phone from your Fund account to another Oppenheimer fund account
you have already established by calling the special PhoneLink
number. Please refer to "How to Exchange Shares," below, for
details.
Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will
send the proceeds directly to your AccountLink bank account.
Please refer to "How to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several
plans that enable you to sell shares automatically or exchange them
to another Oppenheimer fund account on a regular basis:
Automatic Withdrawal Plans. If your Fund account is worth
$5,000 or more, you can establish an Automatic Withdrawal Plan to
receive payments of at least $50 on a monthly, quarterly, semi-annual or annual
basis. The checks may be sent to you or sent
automatically to your bank account on AccountLink. You may even
set up certain types of withdrawals of up to $1,500 per month by
telephone. You should consult the Application and Statement of
Additional Information for more details.
Automatic Exchange Plans. You can authorize the Transfer
Agent to exchange automatically an amount you establish in advance
for shares of up to five other Oppenheimer funds on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum purchase for each other Oppenheimer funds
account is $25. These exchanges are subject to the terms of the
exchange privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A
or Class B shares of the Fund, you have up to 6 months to reinvest
all or part of the redemption proceeds in Class A shares of the
Fund or of other Oppenheimer funds without paying a sales charge.
This privilege applies to Class A shares that you purchased subject
to an initial sales charge and to Class A or Class B shares on
which you paid a contingent deferred sales charge when you redeemed
them. This privilege does not apply to Class C shares. You must
be sure to ask the Distributor for this privilege when you send
your payment. Please consult the Statement of Additional
Information for more details.
Retirement Plans. Fund shares are available as an investment for
your retirement plans. If you participate in a plan sponsored by
your employer, the plan trustee or administrator must make the
purchase of shares for your retirement plan account. The
Distributor offers a number of different retirement plans that can
be used by individuals and employers:
Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable
organizations
SEP-IRAs (Simplified Employee Pension Plans) for small
business owners or people with income from self-employment,
including SAR-SEP IRAs
Pension and Profit-Sharing Plans for self-employed persons
and other employers
401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
Class Y Shares. Class Y Shares are sold at net asset value per
share without the imposition of a sales charge at the time of
purchase to separate accounts of insurance companies and other
institutional investors ("Class Y Sponsors") having an agreement
("Class Y Agreements") with the Manager or the Distributor. The
intent of Class Y Agreements is to allow tax-qualified
institutional investors to invest indirectly (through separate
accounts of the Class Y Sponsor) in Class Y Shares of the Fund and
to allow institutional investors to invest directly in Class Y
shares of the Fund. Individual investors are not permitted to
invest directly in Class Y Shares. As of the date of this
Prospectus, it is anticipated that Massachusetts Mutual Life
Insurance Company (an affiliate of the Manager and the Distributor)
will act as Class Y Sponsor for any outstanding Class Y Shares of
the Fund. While Class Y shares are not subject to a contingent
deferred sales charge, asset-based sales charge or service fee, a
Class Y sponsor may impose charges on separate accounts investing
in Class Y shares.
None of the instructions described elsewhere in this
Prospectus or the Statement of Additional Information for the
purchase, redemption, reinvestment, exchange or transfer of shares
of the Fund or the reinvestment of dividends apply to its Class Y
shares. Clients of Class Y Sponsors must request their Sponsor to
effect all transactions in Class Y shares on their behalf.
How to Sell Shares
You can arrange to take money out of your account by selling
(redeeming) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated
after your order is received and accepted by the Transfer Agent.
The Fund offers you a number of ways to sell your shares: in
writing or by telephone. You can also set up Automatic Withdrawal
Plans to redeem shares on a regular basis, as described above. If
you have questions about any of these procedures, and especially if
you are redeeming shares in a special situation, such as due to the
death of the owner, or from a retirement plan, please call the
Transfer Agent first, at 1-800-525-7048, for assistance.
Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax
withholding requirements for distributions from retirement plans
and you must submit a withholding form with your request to avoid
delay. If your retirement plan account is held for you by your
employer, you must arrange for the distribution request to be sent
by the plan administrator or trustee. There are additional details
in the Statement of Additional Information.
Certain Requests Require a Signature Guarantee. To protect
you and the Fund from fraud, certain redemption requests must be in
writing and must include a signature guarantee in the following
situations (there may be other situations also requiring a
signature guarantee):
You wish to redeem more than $50,000 worth of shares and
receive a check
The redemption check is not payable to all shareholders
listed on the account statement
The redemption check is not sent to the address of record
on your account statement
Shares are being transferred to a Fund account with a
different owner or name
Shares are redeemed by someone other than the owners (such
as an Executor)
Where Can I Have My Signature Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a number of
financial institutions, including: a U.S. bank, trust company,
credit union or savings association, or by a foreign bank that has
a U.S. correspondent bank, or by a U.S. registered dealer or broker
in securities, municipal securities or government securities, or by
a U.S. national securities exchange, a registered securities
association or a clearing agency. If you are signing as a
fiduciary or on behalf of a corporation, partnership or other
business, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
Your name
The Fund's name
Your Fund account number (from your account statement)
The dollar amount or number of shares to be redeemed
Any special payment instructions
Any share certificates for the shares you are selling,
The signatures of all registered owners exactly as the
account is registered, and
Any special requirements or documents requested by the
Transfer Agent to assure proper authorization of the person asking
to sell shares.
Use the following address for requests by mail:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
Send courier or Express Mail requests to:
OppenheimerFunds Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of
record may also sell your shares by telephone. To receive the
redemption price on a regular business day, your call must be
received by the Transfer Agent by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M. but may be earlier
on some days. You may not redeem shares held in an
OppenheimerFunds retirement plan or under a share certificate by
telephone.
To redeem shares through a service representative, call 1-800-852-8457
To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the
address on the account statement, or, if you have linked your Fund
account to your bank account on AccountLink, you may have the
proceeds wired to that bank account.
Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, in any 7-day period. The check must be
payable to all owners of record of the shares and must be sent to
the address on the account statement. This service is not
available within 30 days of changing the address on an account.
Telephone Redemptions Through AccountLink or Wire. There
are no dollar limits on telephone redemption proceeds sent to a
bank account designated when you establish AccountLink. Normally
the ACH transfer to your bank is initiated on the business day
after the redemption. You do not receive dividends on the proceeds
of the shares you redeemed while they are waiting to be
transferred.
Shareholders may also have the Transfer Agent send redemption
proceeds of $2,500 or more by Federal Funds wire to a designated
commercial bank account if the bank is a member of the Federal
Reserve wire system. There is a $10 fee for each Federal Funds
wire. To place a wire redemption request, call the Transfer Agent
at 1-800-852-8457. The wire will normally be transmitted on the
next bank business day after the shares are redeemed. There is a
possibility that the wire may be delayed up to seven days to enable
the Fund to sell securities to pay the redemption proceeds. No
dividends are accrued or paid on the proceeds of shares that have
been redeemed and are awaiting transmittal by wire. To establish
wire redemption privileges on an account that is already
established, please contact the Transfer Agent for instructions.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on
behalf of their customers. Brokers or dealers may charge for that
service. Please call your dealer for more information about this
procedure. Please refer to "Special Arrangements For Repurchase of
Shares From Dealers and Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
Oppenheimer funds at net asset value per share at the time of
exchange, without sales charge. To exchange shares, you must meet
several conditions:
Shares of the fund selected for exchange must be available
for sale in your state of residence
The prospectuses of this Fund and the fund whose shares you
want to buy must offer the exchange privilege
You must hold the shares you buy when you establish your
account for at least 7 days before you can exchange them; after the
account is open 7 days, you can exchange shares every regular
business day
You must meet the minimum purchase requirements for the fund
you purchase by exchange
Before exchanging into a fund, you should obtain and read
its prospectus
Shares of a particular class of the Fund may be exchanged only
for shares of the same class in the other Oppenheimer funds. For
example, you can exchange Class A shares of this Fund only for
Class A shares of another fund. At present, Oppenheimer Money
Market Fund, Inc. offers only one class of shares, which are
considered "Class A" shares for this purpose. In some cases, sales
charges may be imposed on exchange transactions. Please refer to
"How to Exchange Shares" in the Statement of Additional Information
for more details.
Exchanges may be requested in writing or by telephone:
Written Exchange Requests. Submit an OppenheimerFunds
Exchange Request form, signed by all owners of the account. Send
it to the Transfer Agent at the addresses listed in "How to Sell
Shares."
Telephone Exchange Requests. Telephone exchange requests may
be made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310. Telephone
exchanges may be made only between accounts
that are registered with the same name(s) and address. Shares held
under certificates may not be exchanged by telephone.
You can find a list of Oppenheimer funds currently available
for exchanges in the Statement of Additional Information or obtain
one by calling a service representative at 1-800-525-7048. That
list can change from time to time.
There are certain exchange policies you should be aware of:
Shares are normally redeemed from one fund and purchased
from the other fund in the exchange transaction on the same regular
business day on which the Transfer Agent receives an exchange
request that is in proper form by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M. but may be earlier
on some days. However, either fund may delay the purchase of
shares of the fund you are exchanging into up to seven days if it
determines it would be disadvantaged by a same day transfer of the
proceeds to buy shares. For example, the receipt of multiple
exchange requests from a dealer in a "market-timing" strategy might
require the sale of portfolio securities at a time or price
disadvantageous to the Fund.
Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange
request that will disadvantage it, or to refuse multiple exchange
requests submitted by a shareholder or dealer.
The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund will attempt to provide
you notice whenever it is reasonably able to do so, it may impose
these changes at any time.
For tax purposes, exchanges of shares involve a redemption
of the shares of the Fund you own and a purchase of the shares of
the other fund, which may result in a capital gain or loss. for
more information about taxes affecting exchanges, please refer to
"How to Exchange Shares" in the Statement of Additional
Information.
If the Transfer Agent cannot exchange all the shares you
request because of a restriction cited above, only the shares
eligible for exchange will be exchanged.
The Distributor has entered into agreements with certain
dealers and investment advisers permitting them to exchange their
clients' shares by telephone. These privileges are limited under
those agreements and the Distributor has the right to reject or
suspend those privileges. As a result, those exchanges may be
subject to notice requirements, delays and other limitations that
do not apply to shareholders who exchange their shares directly by
calling or writing to the Transfer Agent.
Shareholder Account Rules and Policies
Net Asset Value Per Share is determined for each class of
shares as of the close of The New York Stock Exchange, which is
normally 4:00 P.M. but may be earlier on some days, on each day the
Exchange is open by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that
are outstanding. The Fund's Board of Trustees has established
procedures to value the Fund's securities to determine net asset
value. In general, securities values are based on market value.
There are special procedures for valuing illiquid and restricted
securities and obligations for which market values cannot be
readily obtained. These procedures are described more completely
in the Statement of Additional Information.
The offering of shares may be suspended during any period
in which the determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time the
Board believes it is in the Fund's best interest to do so.
Telephone Transaction Privileges for purchases, redemptions
or exchanges may be modified, suspended or terminated by the Fund
at any time. If an account has more than one owner, the Fund and
the Transfer Agent may rely on the instructions of any one owner.
Telephone privileges apply to each owner of the account and the
dealer representative of record for the account unless and until
the Transfer Agent receives cancellation instructions from an owner
of the account.
The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other procedures to
confirm that telephone instructions are genuine, by requiring
callers to provide tax identification numbers and other account
data or by using PINs, and by confirming such transactions in
writing. If the Transfer Agent does not use reasonable procedures
it may be liable for losses due to unauthorized transactions, but
otherwise neither the Transfer Agent nor the Fund will be liable
for losses or expenses arising out of telephone instructions
reasonably believed to be genuine. If you are unable to reach the
Transfer Agent during periods of unusual market activity, you may
not be able to complete a telephone transaction and should consider
placing your order by mail.
Redemption or transfer requests will not be honored until
the Transfer Agent receives all required documents in proper form.
From time to time, the Transfer Agent in its discretion may waive
certain of the requirements for redemptions stated in this
Prospectus.
Dealers that can perform account transactions for their
clients by participating in NETWORKING through the National
Securities Clearing Corporation are responsible for obtaining their
clients' permission to perform those transactions and are
responsible to their clients who are shareholders of the Fund if
the dealer performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day
because the values of the securities in the Fund's portfolio
fluctuate, and the redemption price, which is the net asset value
per share, will normally be different for Class A, Class B, Class
C and Class Y shares. Therefore, the redemption value of your
shares may be more or less than their original cost.
Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the
shareholder under the redemption procedures described above) within
7 days after the Transfer Agent receives redemption instructions in
proper form, except under unusual circumstances determined by the
Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer,
payment will be forwarded within 3 business days. The Transfer
Agent may delay forwarding a check or processing a payment via
AccountLink for recently purchased shares, but only until the
purchase payment has cleared. That delay may be as much as 10 days
from the date the shares were purchased. That delay may be avoided
if you purchase shares by certified check or arrange to have your
bank provide telephone or written assurance to the Transfer Agent
that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the
Fund if the account value has fallen below $500 for reasons other
than the fact that the market value of shares has dropped, and in
some cases involuntary redemptions may be made to repay the
Distributor for losses from the cancellation of share purchase
orders.
Under unusual circumstances, shares of the Fund may be
redeemed "in kind," which means that the redemption proceeds will
be paid with securities from the Fund's portfolio. Please refer to
"How to Sell Shares" in the Statement of Additional Information for
more details.
"Backup Withholding" of Federal income tax may be applied
at the rate of 31% from taxable dividends, distributions and
redemption proceeds (including exchanges) if you fail to furnish
the Fund a certified Social Security or Employer Identification
Number when you sign your application, or if you violate Internal
Revenue Service regulations on tax reporting of income.
The Fund does not charge a redemption fee, but if your
dealer or broker handles your redemption, they may charge a fee.
That fee can be avoided by redeeming your Fund shares directly
through the Transfer Agent. Under the circumstances described in
"How To Buy Shares," you may be subject to a contingent deferred
sales charges when redeeming certain Class A, Class B and Class C
shares.
To avoid sending duplicate copies of materials to
households, the Fund will mail only one copy of each annual and
semi-annual report to shareholders having the same last name and
address on the Fund's records. However, each shareholder may call
the Transfer Agent at 1-800-525-7048 to ask that copies of those
materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A,
Class B, Class C and Class Y shares from net investment income on
an annual basis and normally pays those dividends to shareholders
in December, but the Board of Trustees can change that date. The
Board may also cause the Fund to declare dividends after the close
of the Fund's fiscal year (which ends August 31st). Because the
Fund does not have an objective of seeking current income, the
amounts of dividends it pays, if any, will likely be small. Also,
dividends paid on Class A and Class Y shares generally are expected
to be higher than for Class B and Class C shares because expenses
allocable to Class B and Class C shares will generally be higher.
Capital Gains. The Fund may make distributions annually in December
out of any net short-term or long-term capital gains, and the Fund
may make supplemental distributions of dividends and capital gains
following the end of its fiscal year. Long-term capital gains will
be separately identified in the tax information the Fund sends you
after the end of the year. Short-term capital gains are treated as
dividends for tax purposes. There can be no assurance that the Fund
will pay any capital gains distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are
reinvested. For other accounts, you have four options:
Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
Reinvest Long-Term Capital Gains Only. You can elect to
reinvest long-term capital gains in the Fund while receiving
dividends by check or sent to your bank account on AccountLink.
Receive All Distributions in Cash. You can elect to receive
a check for all dividends and long-term capital gains distributions
or have them sent to your bank on AccountLink.
Reinvest Your Distributions in Another Oppenheimer Fund
Account. You can reinvest all distributions in another Oppenheimer
Fund account you have established.
Taxes. If your account is not a tax-deferred retirement account,
you should be aware of the following tax implications of investing
in the Fund. The Fund's distributions from long-term capital gains
are taxable to shareholders as long-term capital gains, no matter
how long you held your shares. Dividends paid by the Fund from
short-term capital gains and net investment income, including
certain net realized foreign exchange gains, are taxable as
ordinary income. These dividends and distributions are subject to
Federal income tax and may be subject to state or local taxes.
Your distributions are taxable as described above, whether you
reinvest them in additional shares or take them in cash. Corporate
shareholders may be entitled to the corporate dividends received
deduction for some portion of the Fund's distributions treated as
ordinary income, subject to applicable limitations under the
Internal Revenue Code. Every year the Fund will send you and the
IRS a statement showing the aggregate amount and character of the
dividends and other distributions you received for the previous
year.
"Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy
shares on or just before the ex-dividend date, or just before the
Fund declares a capital gains distribution, you will pay the full
price for the shares and then receive a portion of the price back
as a taxable dividend or capital gain.
Taxes on Transactions: Share redemptions, including
redemptions for exchanges, are subject to capital gains tax.
Generally speaking, a capital gain or loss is the difference
between the price you paid for the shares and the price you
received when you sold them.
Returns of Capital: In certain cases distributions made by
the Fund may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices to
shareholders. A non-taxable return of capital may reduce your tax
basis in your Fund shares.
This information is only a summary of certain federal tax
information about your investment. More information is contained
in the Statement of Additional Information, and in addition you
should consult with your tax adviser about the effect of an
investment in the Fund on your particular tax situation.
<PAGE>
<PAGE>
APPENDIX A
Special Sales Charge Arrangements for Shareholders of the Fund Who
Were Shareholders of the Former Quest for Value Funds
The initial and contingent sales charge rates and waivers for Class
A, Class B and Class C shares of the Fund described elsewhere in
this Prospectus are modified as described below for those
shareholders of (i) Quest for Value Fund, Inc., Quest for Value
Growth and Income Fund, Quest for Value Opportunity Fund, Quest for
Value Small Capitalization Fund and Quest for Value Global Equity
Fund, Inc. on November 24, 1995, when OppenheimerFunds, Inc. became
the investment adviser to those funds, and (ii) Quest for Value
U.S. Government Income Fund, Quest for Value Investment Quality
Income Fund, Quest for Global Income Fund, Quest for Value New York
Tax-Exempt Fund, Quest for Value National Tax-Exempt Fund and Quest
for Value California Tax-Exempt Fund when those funds merged into
various Oppenheimer funds on November 24, 1995. The funds listed
above are referred to in this Prospectus as the "Former Quest for
Value Funds." The waivers of initial and contingent deferred sales
charges described in this Appendix apply to shares of the Fund (i)
acquired by such shareholder pursuant to an exchange of shares of
one of the Oppenheimer funds that was one of the Former Quest for
Value Funds or (ii) received by such shareholder pursuant to the
merger of any of the Former Quest for Value Funds into an
Oppenheimer fund on November 24, 1995.
Class A Sales Charges
Reduced Class A Initial Sales Charge Rates for Certain Former
Quest Shareholders
Purchases by Groups, Associations and Certain Qualified
Retirement Plans. The following table sets forth the initial sales
charge rates for Class A shares purchased by a "Qualified
Retirement Plan" through a single broker, dealer or financial
institution, or by members of "Associations" formed for any purpose
other than the purchase of securities if that Qualified Retirement
Plan or that Association purchased shares of any of the Former
Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995. For this
purpose only, a "Qualified Retirement Plan" includes any 401(k)
plan, 403(b) plan, and SEP/IRA or IRA plan for employees of a
single employer.
Front-End Front-End Commission
Sales Charge Sales Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
9 or fewer 2.50% 2.56% 2.00%
At least 10 but not
more than 49 2.00% 2.04% 1.60%
For purchases by Qualified Retirement plans and Associations
having 50 or more eligible employees or members, there is no
initial sales charge on purchases of Class A shares, but those
shares are subject to the Class A contingent deferred sales charge
described on pages __ and __ of this Prospectus.
Purchases made under this arrangement qualify for the lower of
the sales charge rate in the table based on the number of eligible
employees in a Qualified Retirement Plan or members of an
Association or the sales charge rate that applies under the Rights
of Accumulation described above in the Prospectus. In addition,
purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they
qualified to purchase shares of any of the Former Quest For Value
Funds by virtue of projected contributions or investments of $1
million or more each year. Individuals who qualify under this
arrangement for reduced sales charge rates as members of
Associations, or as eligible employees in Qualified Retirement
Plans also may purchase shares for their individual or custodial
accounts at these reduced sales charge rates, upon request to the
Fund's Distributor.
Special Class A Contingent Deferred Sales Charge Rates
Class A shares of the Fund purchased by exchange of shares of
other Oppenheimer funds that were acquired as a result of the
merger of Former Quest for Value Funds into those Oppenheimer
funds, and which shares were subject to a Class A contingent
deferred sales charge prior to November 24, 1995 will be subject to
a contingent deferred sales charge at the following rates: if they
are redeemed within 18 months of the end of the calendar month in
which they were purchased, at a rate equal to 1.0% if the
redemption occurs within 12 months of their initial purchase and at
a rate of 0.50 of 1.0% if the redemption occurs in the subsequent
six months. Class A shares of any of the Former Quest for Value
Funds purchased without an initial sales charge on or before
November 22, 1995 will continue to be subject to the applicable
contingent deferred sales charge in effect as of that date as set
forth in the then-current prospectus for such fund.
Waiver of Class A Sales Charges for Certain Shareholders
Class A shares of the Fund purchased by the following
investors are not subject to any Class A initial or contingent
deferred sales charges:
Shareholders of the Fund who were shareholders of the AMA
Family of Funds on February 28, 1991 and who acquired shares of any
of the Former Quest for Value Funds by merger of a portfolio of the
AMA Family of Funds.
Shareholders of the Fund who acquired shares of any Former
Quest for Value Fund by merger of any of the portfolios of the
Unified Funds.
Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions
The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares of the Fund purchased by the
following investors who were shareholders of any Former Quest for
Value Fund:
Investors who purchased Class A shares from a dealer that
is not or was not permitted to receive a sales load or redemption
fee imposed on a shareholder with whom that dealer has a fiduciary
relationship under the Employee Retirement Income Security Act of
1974 and regulations adopted under that law.
Participants in Qualified Retirement Plans that purchased
shares of any of the Former Quest For Value Funds pursuant to a
special "strategic alliance" with the distributor of those funds.
The Fund's Distributor will pay a commission to the dealer for
purchases of Fund shares as described above in "Class A Contingent
Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge
Waivers
Waivers for Redemptions of Shares Purchased Prior to March 6,
1995
In the following cases, the contingent deferred sales charge
will be waived for redemptions of Class A, B or C shares of the
Fund acquired by merger of a Former Quest for Value Fund into the
Fund or by exchange from an Oppenheimer fund that was a Former
Quest for Value Fund or into which such fund merged, if those
shares were purchased prior to March 6, 1995: in connection with
(i) distributions to participants or beneficiaries of plans
qualified under Section 401(a) of the Internal Revenue Code or from
custodial accounts under Section 403(b)(7) of the Code, Individual
Retirement Accounts, deferred compensation plans under Section 457
of the Code, and other employee benefit plans, and returns of
excess contributions made to each type of plan, (ii) withdrawals
under an automatic withdrawal plan holding only either Class B or
C shares if the annual withdrawal does not exceed 10% of the
initial value of the account, and (iii) liquidation of a
shareholder's account if the aggregate net asset value of shares
held in the account is less than the required minimum value of such
accounts.
Waivers for Redemptions of Shares Purchased on or After March 6,
1995 but Prior to November 24, 1995.
In the following cases, the contingent deferred sales charge
will be waived for redemptions of Class A, B or C shares of the
Fund acquired by merger of a Former Quest for Value Fund into the
Fund or by exchange from an Oppenheimer fund that was a Former
Quest For Value Fund or into which such fund merged, if those
shares were purchased on or after March 6, 1995, but prior to
November 24, 1995: (1) distributions to participants or
beneficiaries from Individual Retirement Accounts under
Section 408(a) of the Internal Revenue Code or retirement plans
under Section 401(a), 401(k), 403(b) and 457 of the Code, if those
distributions are made either (a) to an individual participant as
a result of separation from service or (b) following the death or
disability (as defined in the Code) of the participant or
beneficiary; (2) returns of excess contributions to such retirement
plans; (3) redemptions other than from retirement plans following
the death or disability of the shareholder(s) (as evidenced by a
determination of total disability by the U.S. Social Security
Administration); (4) withdrawals under an automatic withdrawal plan
(but only for Class B or C shares) where the annual withdrawals do
not exceed 10% of the initial value of the account; and
(5) liquidation of a shareholder's account if the aggregate net
asset value of shares held in the account is less than the required
minimum account value. A shareholder's account will be credited
with the amount of any contingent deferred sales charge paid on the
redemption of any Class A, B or C shares of the Fund described in
this section if within 90 days after that redemption, the proceeds
are invested in the same Class of shares in this Fund or another
Oppenheimer fund.
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value
Fund to Quest for Value prototype 401(k) plans that were maintained
on the TRAC-2000 recordkeeping system and that were transferred to
an OppenheimerFunds prototype 401(k) plan shall be eligible for an
additional one-time payment by the Distributor of 1% of the value
of the plan assets transferred, but that payment may not exceed
$5,000 as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value
Fund to Quest for Value prototype 401(k) plans that were maintained
on the TRAC-2000 recordkeeping system and (i) the shares held by
those plans were exchanged for Class A shares, or (ii) the plan
assets were transferred to an OppenheimerFunds prototype 401(k)
plan, shall be eligible for an additional one-time payment by the
Distributor of 1% of the value of the plan assets transferred, but
that payment may not exceed $5,000.
<PAGE>
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER GROWTH FUND
Graphic material included in Prospectus of Oppenheimer Growth
Fund: "Comparison of Total Return of Oppenheimer Growth Fund with
the S&P 500 Index - Change in Value of a $10,000 Hypothetical
Investment"
A linear graph will be included in the Prospectus of
Oppenheimer Growth Fund (the "Fund") depicting the initial account
value and subsequent account value of a hypothetical $10,000
investment in the Fund. In the case of the Fund's Class A shares,
that graph will cover each of the Fund's last ten fiscal years from
6/30/86 through 6/30/96 and from July 1, 1996 through August 31,
1996. In the case of the Fund's Class B shares will cover the
period from the inception of the class (August 17, 1993) through
6/30/96 and from July 1, 1996 through August 31, 1996. In the case
of the Fund's Class C shares will cover the period from the
inception of the Class (November 1, 1995 through 6/30/96 and from
July 1, 1996 through August 31, 1996. In the case of the Fund's
Class Y shares will cover the period from the inception of the
Class (June 1, 1994) through 6/30/96 and July 1, 1996 through
August 31, 1996. The graph will compare such values with
hypothetical $10,000 investments over the same time periods in the
S&P 500 Index.
Set forth below are the relevant data points that will appear
on the linear graph. Additional information with respect to the
foregoing, including a description of the S&P 500 Index, is set
forth in the Prospectus under "Performance of the Fund - Comparing
the Fund's Performance to the Market."
Fiscal Year Oppenheimer S&P
(Period) Ended Growth Fund A 500 Index
06/30/86 $9,425 $10,000
06/30/87 $10,318 $13,150
06/30/88 $10,212 $11,649
06/30/89 $11,696 $14,039
06/30/90 $13,215 $16,348
06/30/91 $14,456 $17,553
06/30/92 $16,724 $19,903
06/30/93 $19,547 $22,611
06/30/94 $19,599 $22,928
06/30/95 $25,371 $28,897
06/30/96 $30,696 $36,404
08/31/96 $30,936 $35,531
Fiscal Oppenheimer S&P
Period Ended Growth Fund B 500 Index
08/17/93(1) $10,000 $10,000
06/30/94 $9,980 $9,810
06/30/95 $12,796 $12,363
06/30/96 $15,349 $15,575
08/31/96 $15,244 $15,202
Fiscal Oppenheimer S&P
Period Ended Growth Fund C 500 Index
11/01/95 $10,000 $10,000
06/30/96 $11,006 $11,713
08/31/96 $10,973 $11,432
Fiscal Oppenheimer S&P
Period Ended Growth Fund Y 500 Index
06/01/94(2) $10,000 $10,000
06/30/94 $9,487 $9,755
06/30/95 $12,295 $12,295
06/30/96 $14,889 $15,489
08/31/96 $15,009 $15,118
1. Class B shares of the Fund were first publicly offered on
August 17, 1993.
2. Class C shares of the Fund were first publicly offered on
November 1, 1995.
3. Class Y shares of the Fund were first publicly offered on June
1, 1994.
<PAGE>
<PAGE>
Oppenheimer Growth Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been
authorized to give any information or to make any representations
other than those contained in this Prospectus or the Statement of
Additional Information and, if given or made, such information and
representations must not be relied upon as having been authorized
by the Fund, OppenheimerFunds, Inc., OppenheimerFunds Distributor,
Inc. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state to any person to whom it is
unlawful to make such an offer in such state.
PRO 270.001.11/96 * Printed on recycled paper
<PAGE>
Oppenheimer Growth Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1996
___________________________________
This Statement of Additional Information of Oppenheimer Growth
Fund consists of this cover page and the following documents:
1. Statement of Additional Information of Oppenheimer Growth Fund
dated November 1, 1996, filed herewith and incorporated herein by
reference.
2.(a) Oppenheimer Growth Fund's Annual Report as of June 30, 1996,
previously filed with Registration Statement of Oppenheimer Growth
Fund on Form N-14, 10/13/96, and incorporated herein by reference.
(b) Oppenheimer Growth Fund's Annual Report as of August 31,
1996, filed herewith and incorporated herein by reference.
3.(a) Prospectus of Jefferson Pilot Family of Funds dated May 1,
1996, previously filed with Registration Statement of Oppenheimer
Growth Fund on Form N-14, 10/13/96, and incorporated by reference.
(b) Supplement to Prospectus of Jefferson-Pilot Family of Funds
dated October 8, 1996, filed herewith and incorporated herein by
reference.
4. Statement of Additional Information of Jefferson-Pilot Capital
Appreciation Fund, Inc., dated May 1, 1996, previously filed with
Registration Statement of Oppenheimer Growth Fund on Form N-14,
10/13/96, and incorporated herein by reference.
5. Jefferson Pilot Family of Funds Annual Report as of December 31,
1995, previously filed with Registration Statement of Oppenheimer
Growth Fund on Form N-14, 10/13/96, and incorporated herein by
reference.
6. Jefferson Pilot Family of Funds Semi-Annual Report as of June
30, 1996, previously filed with Registration Statement of
Oppenheimer Growth Fund on Form N-14, 10/13/96, and incorporated
herein by reference.
This Statement of Additional Information (the "Statement of
Additional Information") is not a Prospectus. This Statement of
Additional Information should be read in conjunction with the Proxy
Statement and Prospectus, which may be obtained by written request
to OppenheimerFunds Services ("OFS"), P.O. Box 5270, Denver,
Colorado 80217, or by calling OFS at the toll-free number shown
above.
<PAGE>
Oppenheimer Growth Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated November 1, 1996
This Statement of Additional Information of Oppenheimer Growth
Fund is not a Prospectus. This document contains additional
information about the Fund and supplements information in the
Prospectus dated November 1, 1996. It should be read together with
the Prospectus, which may be obtained by writing to the Fund's
Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270,
Denver, Colorado 80217 or by calling the Transfer Agent at the
toll-free number shown above.
Contents
Page
About the Fund
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . 2
Investment Policies and Strategies . . . . . . . . . . . . . . . . . . 2
Other Investment Techniques and Strategies . . . . . . . . . . . . . . 4
Other Investment Restrictions. . . . . . . . . . . . . . . . . . . . . 8
How the Fund is Managed . . . . . . . . . . . . . . . . . . . . . . . 9
Organization and History . . . . . . . . . . . . . . . . . . . . . . . 9
Trustees and Officers of the Fund. . . . . . . . . . . . . . . . . . . 9
The Manager and Its Affiliates . . . . . . . . . . . . . . . . . . . . 15
Brokerage Policies of the Fund . . . . . . . . . . . . . . . . . . . . 16
Performance of the Fund. . . . . . . . . . . . . . . . . . . . . . . . 18
Distribution and Service Plans . . . . . . . . . . . . . . . . . . . . 21
About Your Account
How To Buy Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
How To Sell Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 30
How To Exchange Shares . . . . . . . . . . . . . . . . . . . . . . . . 35
Dividends, Capital Gains and Taxes . . . . . . . . . . . . . . . . . . 37
Additional Information About the Fund. . . . . . . . . . . . . . . . . 39
Financial Information About the Fund
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . 40
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 41
Appendix: Industry Classifications . . . . . . . . . . . . . . . . . . A-1
<PAGE>
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and
policies of the Fund are described in the Prospectus. Set forth
below is supplemental information about those policies and the
types of securities in which the Fund may invest, as well as the
strategies the Fund may use to try to achieve its objective.
Certain capitalized terms used in this Statement of Additional
Information have the same meanings as those terms have in the
Prospectus.
In selecting securities for the Fund's portfolio, the Fund's
investment advisor, OppenheimerFunds, Inc. referred to as (the
"Manager"), evaluates the merits of securities primarily through
the exercise of its own investment analysis. This may include,
among other things, evaluation of the history of the issuer's
operations, prospects for the industry of which the issuer is part,
the issuer's financial condition, the issuer's pending product
developments and developments by competitors, the effect of general
market and economic conditions on the issuer's business, and
legislative proposals or new laws that might affect the issuer.
Current income is not a consideration in the selection of portfolio
securities for the Fund, whether for appreciation, defensive or
liquidity purposes. The fact that a security has a low yield or
does not pay current income will not be an adverse factor in
selecting securities to try to achieve the Fund's investment
objective of capital appreciation unless the Manager believes that
the lack of yield might adversely affect appreciation
possibilities.
The portion of the Fund's assets allocated to securities and
methods selected for capital appreciation will depend upon the
judgment of the Manager as to the future movement of the equity
securities markets. If the Manager believes that economic
conditions favor a rising market, the Fund will emphasize
securities and investment methods selected for high capital growth.
If the Manager believes that a market decline is likely, defensive
securities and investment methods will be emphasized.
Foreign Securities. As noted in the Prospectus, the Fund
may invest in securities (which may be denominated in U.S. dollars
or non-U.S. currencies) issued or guaranteed by foreign
corporations, certain supranational entities (described below) and
foreign governments or their agencies or instrumentalities and in
securities issued by U.S. corporations denominated in non-U.S.
currencies. The types of foreign debt obligations and other
securities in which the Fund may invest are the same types of debt
and equity securities identified above. Foreign securities are
subject however, to additional risks not associated with domestic
securities, as discussed below. These additional risks may be more
pronounced as to investments in securities issued by emerging
market countries or by companies located in emerging market
countries.
"Foreign securities" include equity and debt securities of
companies organized under the laws of countries other than the
United States and debt securities of foreign governments that are
traded on foreign securities exchanges or in the foreign over-the-counter
markets. Securities of foreign issuers that are
represented by American Depository Receipts or that are listed on
a U.S. securities exchange or traded in the U.S. over-the-counter
markets are not considered "foreign securities" for the purpose of
the Fund's investment allocations, because they are not subject to
many of the special considerations and risks, discussed below, that
apply to foreign securities traded and held abroad.
Investing in foreign securities offer potential benefits not
available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear
to offer growth potential, or in foreign countries with economic
policies or business cycles different from those of the U.S., or to
reduce fluctuations in portfolio value by taking advantage of
foreign stock markets that do not move in a manner parallel to U.S.
markets. In buying foreign securities, the Fund may convert U.S.
dollars into foreign currency, but only to effect securities
transactions on foreign securities exchanges and not to hold such
currency as an investment. If the Fund's portfolio securities are
held abroad, the sub-custodians or depositories holding them must
be approved by the Fund's Board of Trustees to the extent that
approval is required under applicable rules of the Securities and
Exchange Commission.
Risks of Foreign Investing. Investing in foreign securities
involves special additional risks and considerations not typically
associated with investing in securities of issuers traded in the
U.S. These include: reduction of income by foreign taxes;
fluctuation in value of foreign portfolio investments due to
changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of
public information about foreign issuers; lack of uniform
accounting, auditing and financial reporting standards comparable
to those applicable to domestic issuers; less volume on foreign
exchanges than on U.S. exchanges; greater volatility and less
liquidity on foreign markets than in the U.S.; less regulation of
foreign issuers, stock exchanges and brokers than in the U.S.;
greater difficulties in commencing lawsuits against foreign
issuers; higher brokerage commission rates than in the U.S.;
increased risks of delays in settlement of portfolio transactions
or loss of certificates for portfolio securities because of the
lesser speed and reliability of mail service between the U.S. and
foreign countries than within the U.S.; possibilities in some
countries of expropriation or nationalization of assets,
confiscatory taxation, political, financial or social instability
or adverse diplomatic developments; and differences (which may be
favorable or unfavorable) between the U.S. economy and foreign
economies. From time to time, U.S. Government policies have
discouraged certain investments abroad by U.S. investors, through
taxation or other restrictions, and it is possible that such
restrictions could be re-imposed. If the Fund's securities are
held abroad, the countries in which such securities may be held and
the sub-custodians holding them must be approved by the Fund's
Board of Trustees under applicable SEC rules.
Borrowing For Leverage. From time to time, the Fund may
increase its ownership of securities by borrowing from banks on an
unsecured basis and investing the borrowed funds, subject to the
restrictions stated in the Prospectus. Any such borrowing will be
made only from banks, and, pursuant to the requirements of the
Investment Company Act of 1940, will only be made to the extent
that the value of the Fund's assets, less its liabilities other
than borrowings, is equal to at least 300% of all borrowings
including the proposed borrowing. If the value of the Fund's
assets, when computed in that manner, should fail to meet the 300%
asset coverage requirement, the Fund is required within three days
to reduce its bank debt to the extent necessary to meet that
requirement. To do so, the Fund may have to sell a portion of its
investments at a time when independent investment judgment would
not dictate such sale. Interest on money borrowed is an expense
the Fund would not otherwise incur, so that during periods of
substantial borrowings, its expenses may increase more than funds
that do not borrow.
Other Investment Techniques and Strategies
Investing in Small, Unseasoned Companies. The securities
of small, unseasoned companies may have a limited trading market,
which may adversely affect the Fund's ability to dispose of them
and can reduce the price the Fund might be able to obtain for them.
If other investment companies and investors that invest in these
types of securities trade the same securities when the Fund
attempts to dispose of its holdings, the Fund may receive lower
prices than might be obtained, because of the thinner market for
such securities.
Illiquid and Restricted Securities. To enable the Fund to
sell restricted securities not registered under the Securities Act
of 1933, the Fund may have to cause those securities to be
registered. The expenses of registration of restricted securities
may be negotiated by the Fund with the issuer at the time such
securities are purchased by the Fund, if such registration is
required before such securities may be sold publicly. When
registration must be arranged because the Fund wishes to sell the
security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would
be permitted to sell them. The Fund would bear the risks of any
downward price fluctuation during that period. The Fund may also
acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability
to dispose of such securities and might lower the amount realizable
upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those
percentage restrictions do not limit purchases of restricted
securities that are eligible for sale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933,
provided that those securities have been determined to be liquid by
the Board of Trustees of the Fund or by the Manager under Board-approved
guidelines. Those guidelines take into account the
trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, the
Fund's holding of that security may be deemed to be illiquid.
Loans of Portfolio Securities. The Fund may lend its
portfolio securities subject to the restrictions stated in the
Prospectus. Repurchase transactions are not considered "loans" for
the purpose of the Fund's limit on the percentage of its assets
that can be loaned. Under applicable regulatory requirements
(which are subject to change), the loan collateral on each business
day must at least equal the value of the loaned securities and must
consist of cash, bank letters of credit or securities of the U.S.
Government (or its agencies or instrumentalities). To be
acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of
the letter. Such terms and the issuing bank must be satisfactory
to the Fund. In a portfolio securities lending transaction, the
Fund receives from the borrower an amount equal to the interest
paid or the dividends declared on the loaned securities during the
term of the loan as well as the interest on the collateral
securities, less any finders', administrative or other fees the
Fund pays in connection with the loan. The terms of the Fund's
loans must meet applicable tests under the Internal Revenue Code
and must permit the Fund to reacquire loaned securities on five
days' notice or in time to vote on any important matter.
Repurchase Agreements. The Fund may acquire securities
subject to repurchase agreements for liquidity purposes to meet
anticipated redemptions, or pending the investment of the proceeds
from sales of Fund shares, or pending the settlement of purchases
of portfolio securities. In a repurchase transaction, the Fund
acquires a security from, and simultaneously resells it to, an
approved vendor. An "approved vendor" is a U.S. commercial bank or
the U.S. branch of a foreign bank or a broker-dealer which has been
designated a primary dealer in government securities which must
meet credit requirements set by the Fund's Board of Trustees from
time to time. The repurchase price exceeds the purchase price by
an amount that reflects an agreed-upon interest rate effective for
the period during which the repurchase agreement is in effect. The
majority of these transactions run from day to day, and delivery
pursuant to the resale typically will occur within one to five days
of the purchase. Repurchase agreements are considered "loans"
under the Investment Company Act, collateralized by the underlying
security. The Fund's repurchase agreements require that at all
times while the repurchase agreement is in effect, the value of the
collateral must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Manager
will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the
collateral's value.
Hedging with Futures Contracts. The Fund may use hedging
instruments for the purposes described in the Prospectus. When
hedging to attempt to protect against declines in the market value
of the Fund's portfolio, or to permit the Fund to retain unrealized
gains in the value of portfolio securities which have appreciated,
or to facilitate selling securities for investment reasons, the
Fund may sell Financial Futures. When hedging to establish a
position in the equities market as a temporary substitute for the
purchase of individual equity securities, the Fund may buy
Futures. Normally, the Fund would then purchase the equity
securities and terminate the hedging portion.
The Fund's strategy of hedging with Futures will be incidental
to the Fund's investment activities in the underlying cash market.
In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be
developed, to the extent such investment methods are consistent
with the Fund's investment objective, and are legally permissible
and disclosed in the Prospectus. Additional information about the
hedging instruments the Fund may use is provided below.
Futures. The Fund may buy and sell futures contracts
related to financial indices, including stock indices (a "Financial
Future"). A financial index assigns relative values to the
securities included in the index and fluctuates with the changes in
the market value of those securities. Financial indices cannot be
purchased or sold directly. The contracts obligate the seller to
deliver, and the purchaser to take, cash to settle the futures
transaction or to enter into an offsetting contract. No physical
delivery of the securities underlying the index is made on settling
the futures obligation. No monetary amount is paid or received by
a Fund on the purchase or sale of a Financial Future.
Upon entering into a Futures transaction, the Fund will be
required to deposit an initial margin payment in cash or U.S.
Treasury bills with the futures commission merchant (the "futures
broker"). The initial margin payment will be deposited with the
Fund's Custodian in an account registered in the futures broker's
name; however, the futures broker can gain access to that account
only under specified conditions. As the Future is marked to market
to reflect changes in its market value, subsequent margin payments,
called variation margin, will be paid to or by the futures broker
on a daily basis. Prior to expiration of the Future, if the Fund
elects to close out its position by taking an opposite position, a
final determination of variation margin is made, additional cash is
required to be paid by or released to the Fund, and any loss or
gain is then realized for tax purposes. Although Financial Futures
and Interest Rate Futures by their terms call for settlement by
delivery of cash or securities, respectively, in most cases the
obligation is fulfilled by entering into an offsetting position.
All futures transactions are effected through a clearinghouse
associated with the exchange on which the contracts are traded.
Regulatory Aspects of Hedging Instruments. The Fund is
required to operate within certain guidelines and restrictions with
respect to its use of Futures and options on Futures established by
the Commodity Futures Trading Commission ("CFTC"). In particular
the Fund is exempted from registration with the CFTC as a
"commodity pool operator" if the Fund complies with the
requirements of Rule 4.5 adopted by the CFTC. The Rule does not
limit the percentage of the Fund's assets that may be used for
Futures margin and related options premiums for a bona fide hedging
position. However, under the Rule the Fund must limit its
aggregate initial futures margin and related option premiums to no
more than 5% of the Fund's total assets for hedging strategies that
are not considered bona fide hedging strategies under the Rule.
Under the Rule, the Fund also must use short Futures and Futures
options positions solely for "bona fide hedging purposes" within
the meaning and intent of the applicable provisions of the
Commodity Exchange Act.
Transactions in options by the Fund are subject to limitations
established by each of the exchanges governing the maximum number
of options which may be written or held by a single investor or
group of investors acting in concert, regardless of whether the
options were written or purchased on the same or different
exchanges or are held in one or more accounts or through one or
more different exchanges or futures brokers. Thus, the number of
options which the Fund may write or hold may be affected by
options written or held by other entities, including other
investment companies having the same or an affiliated investment
adviser. Position limits also apply to Futures. An exchange may
order the liquidation of positions found to be in violation of
those limits and may impose certain other sanctions. Due to
requirements under the Investment Company Act of 1940 (the
"Investment Company Act"), when the Fund purchases a Stock Index
Future, the Fund will maintain in a segregated account or accounts
with its Custodian, liquid assets marketable short-term (maturing
in one year or less) debt instruments in an amount equal to the
market value of the securities underlying such Future, less the
margin deposit applicable to it.
Tax Aspects of Covered Calls and Hedging Instruments. The
Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code (although it reserves the right not to
qualify). That qualification enables the Fund to "pass through"
its income and realized capital gains to shareholders without
having to pay tax on them. This avoids a "double tax" on that
income and capital gains, since shareholders normally will be taxed
on the dividends and capital gains they receive from the Fund
(unless the Fund's shares are held in a retirement account or the
shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that
less than 30% of its gross income must be derived from gains
realized on the sale of securities held for less than three months.
To comply with this 30% cap, the Fund will limit the extent to
which it engages in the following activities, but will not be
precluded from them: selling investments, including Futures, held
for less than three months, whether or not they were purchased on
the exercise of a call held by the Fund.
Risks of Hedging with Futures. In addition to the risks
associated with respect to hedging that are discussed in the
Prospectus and above, there is a risk in using short hedging by
selling Futures to attempt to protect declines in the values of the
fund's securities. the risk is that the prices of the Futures will
correlate imperfectly with the behavior of the cash (i.e., market
value) prices of the Fund's securities. The ordinary spreads
between prices in the cash and futures markets are subject to
distortions due to differences in the natures of those markets.
First, all participants in the futures markets are subject to
margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close out
futures contracts through off-setting transactions which could
distort the normal relationship between the cash and futures
markets. Second, the liquidity of the futures markets depends on
participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to
make or take delivery, liquidity in the futures markets could be
reduced, thus producing distortion. Third, from the point of view
of speculators, the deposit requirements in the futures markets are
less onerous than margin requirements in the securities markets.
Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition
of the Fund's portfolio diverges from the securities included in
the applicable index. To compensate for the imperfect correlation
of movements in the price of the securities being hedged and
movements in the price of the Hedging Instruments, the Fund may use
Hedging Instruments in a greater dollar amount than the dollar
amount of securities being hedged if the historical volatility of
the prices of such securities being hedged is more than the
historical volatility of the applicable index. It is also possible
that where the Fund has used Hedging Instruments in a short hedge,
the market may advance and the value of securities held in the
Fund's portfolio may decline. If this occurred, the Fund would
lose money on the Hedging Instruments and also experience a decline
in value in its securities. However, while this could occur for
a very brief period or to a very small degree, over time the value
of a diversified portfolio of securities will tend to move in the
same direction as the indices upon which the Hedging Instruments
are based.
If the Fund uses hedging instruments to establish a position
in the equities markets as a temporary substitute for the purchase
of individual equity securities (long hedging) by buying Futures,
it is possible that the market may decline. If the Fund then
concludes not to invest in equity securities at that time because
of concerns as to a possible further market decline or for other
reasons, the Fund will realize a loss on the hedging instruments
that is not offset by a reduction in the price of the equity
securities purchased.
Short Sales Against-the-Box. In this type of short sale,
while the short position is open, the Fund must own an equal amount
of the securities sold short, or by virtue of ownership of other
securities have the right, without payment of further
consideration, to obtain an equal amount of the securities sold
short. Short sales against-the-box may be made to defer, for
Federal income tax purposes, recognition of gain or loss on the
sale of securities "in the box" until the short position is closed
out. They may also be used to protect a gain on the security "in-the-box"
when the Fund does not want to sell it and realize a
capital gain.
Other Investment Restrictions
The Fund's most significant investment restrictions are set
forth in the Prospectus. The following are fundamental policies,
and together with the Fund's fundamental policies described in the
Prospectus, cannot be changed without the vote of a "majority" of
the Fund's outstanding voting securities. Such a "majority" vote
is defined in the Investment Company Act as the vote of the holders
of the lesser of (i) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of
more than 50% of the outstanding shares are present, or (ii) more
than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot:
lend money, but the Fund may invest in all or a portion of
an issue of bonds, debentures, commercial paper, or other similar
corporate obligations; the Fund may also make loans of portfolio
securities subject to the restrictions set forth in the Prospectus
and above under the caption "Loans of Portfolio Securities";
underwrite securities of other companies, except insofar as
it might be deemed to be an underwriter for purposes of the
Securities Act of 1933 in the resale of any securities held in its
own portfolio;
invest in or hold securities of any issuer if those officers
and trustees or directors of the Fund or its adviser owning
individually more than 1/2 of 1% of the securities of such issuer
together own more than 5% of the securities of such issuer;
invest in commodities or commodity contracts other than the
hedging instruments permitted by any of its other fundamental
policies, whether or not any such hedging instrument is considered
to be a commodity or commodity contract;
invest in real estate or interests in real estate, but may
purchase readily marketable securities of companies holding real
estate or interests therein;
purchase securities on margin; however, the Fund may make
margin deposits in connection with any of the hedging instruments
permitted by any of its other fundamental policies;
mortgage, hypothecate or pledge any of its assets; however,
this does not prohibit the escrow arrangements or other collateral
or margin arrangements in connection with covered call writing or
any of the hedging instruments permitted by any of its other
fundamental policies; or
invest in other open-end investment companies, or invest
more than 5% of the value of its net assets in closed-end
investment companies, including small business investment
companies, nor make any such investments at commission rates in
excess of normal brokerage commissions.
Non-Fundamental Investment Restrictions. For purposes of
the Fund's policy not to concentrate its assets as described under
the second investment restriction in "Other Investment
Restrictions" in the Prospectus, the Fund has adopted the industry
classifications set forth in Appendix A to this Statement of
Additional Information. This is not a fundamental policy.
In connection with the qualification of its shares in certain
states, the Fund has undertaken that in addition to the above, as
a non-fundamental policy, the Fund will not: (i) invest in
interests in oil, gas, or other mineral exploration or development
programs, or (ii) invest more than 5% of its total assets in
securities of unseasoned issuers (including predecessors) which
have been in operation for less than three years.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the
Fund is not required to hold, and does not plan to hold, regular
annual meetings of shareholders. The Fund will hold meetings when
required to do so by the Investment Company Act or other applicable
law, or when a shareholder meeting is called by the Trustees or
upon proper request of the shareholders. Shareholders have the
right, upon the declaration in writing or vote of two-thirds of the
outstanding shares of the Fund, to remove a Trustee. The Trustees
will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of 10% of
its outstanding shares. In addition, if the Trustees receive a
request from at least 10 shareholders (who have been shareholders
for at least six months) holding shares of the Fund valued at
$25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate
with other shareholders to request a meeting to remove a Trustee,
the Trustees will then either make the Fund's shareholder list
available to the applicants or mail their communication to all
other shareholders at the applicants' expense, or the Trustees may
take such other action as set forth under Section 16(c) of the
Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer
of shareholder or Trustee liability for the Fund's obligations, and
provides for indemnification and reimbursement of expenses out of
its property for any shareholder held personally liable for its
obligations. The Declaration of Trust also provides that the Fund
shall, upon request, assume the defense of any claim made against
any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a
shareholder of a business trust (such as the Fund) to be held
personally liable as a "partner" under certain circumstances, the
risk of a Fund shareholder incurring financial loss on account of
shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its
obligations described above. Any person doing business with the
Trust, and any shareholder of the Trust, agrees under the Trust's
Declaration of Trust to look solely to the assets of the Trust for
satisfaction of any claim or demand which may arise out of any
dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers
and their principal occupations and business affiliations during
the past five years are listed below. The address of each Trustee
and officer is Two World Trade Center, New York, New York 10048-0203, unless
another address is listed below. Ms. Macaskill is not
a director of Oppenheimer Money Market Fund, Inc. All of the
Trustees are also trustees or directors of Oppenheimer Fund,
Oppenheimer Global Fund, Oppenheimer Target Fund, Oppenheimer
Discovery Fund, Oppenheimer Global Growth & Income Fund,
Oppenheimer Global Emerging Growth Fund, Oppenheimer Gold & Special
Minerals Fund, Oppenheimer International Growth Fund, Oppenheimer
Tax-Free Bond Fund, Oppenheimer New York Municipal Fund,
Oppenheimer California Municipal Fund, Oppenheimer Money Market
Fund, Inc., Oppenheimer Multi-State Municipal Trust, Oppenheimer
Asset Allocation Fund, Oppenheimer U.S. Government Trust,
Oppenheimer Multi-Sector Income Trust and Oppenheimer World Bond
Fund (collectively the "New York-based Oppenheimer funds"). Messrs.
Spiro, Bishop, Bowen, Donohue, Farrar and Zack, respectively, hold
the same offices with the other New York-based Oppenheimer funds as
with the Fund. As of October 11, 1996, the Trustees and officers
of the Fund as a group owned of record or beneficially less than 1%
of the outstanding shares of each class of the Fund. That
statement does not reflect shares held of record by an employee
benefit plan for employees of the Manager (for which plan a Trustee
and an officer listed below, Ms. Macaskill, and Mr. Donohue,
respectively, are Trustees), other than the shares beneficially
owned under that plan by the officers of the Fund listed below.
Leon Levy, Chairman of the Board of Trustees; Age 71
31 West 52nd Street, New York, New York 10019
General Partner of Odyssey Partners, L.P. (investment
partnership) and Chairman of Avatar Holdings, Inc. (real
estate development).
Robert G. Galli, Trustee*; Age 63
Vice Chairman of OppenheimerFunds, Inc. (the "Manager");
formerly he held the following positions: Vice President and
Counsel of Oppenheimer Acquisition Corp. ("OAC"), the
Manager's parent holding company; Executive Vice President
and General Counsel and a director of the Manager and
OppenheimerFunds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management
Corporation ("HarbourView") and Centennial Asset Management
Corporation ("Centennial"), investment advisory subsidiaries
of the Manager, a director of Shareholder Financial Services,
Inc. ("SFSI") and Shareholder Services, Inc. ("SSI"), transfer
agent subsidiaries of the Manager, an officer of other
Oppenheimer funds.
Benjamin Lipstein, Trustee; Age 73
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of
Business Administration, New York University; a director of
Sussex Publications, Inc. (publishers of Psychology Today and
Mother Earth News) and of Spy Magazine, L.P.
Bridget A. Macaskill, President and Trustee*; Age: 48
President, Chief Executive Officer and a Director of the
Manager; Chairman and a director of SSI and SFSI, President
and a director of OAC; HarbourView and Oppenheimer Partnership
Holdings, Inc., a holding company subsidiary of the Manager;
a director of Oppenheimer Real Asset Management, Inc.
Elizabeth B. Moynihan, Trustee; Age: 67
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the Freer
Gallery of Art (Smithsonian Institution), the Institute of
Fine Arts (New York University), National Building Museum; a
member of the Trustees Council, Preservation League of New
York State and of the Indo-U.S. Sub-Commission on Education
and Culture.
Kenneth A. Randall, Trustee; Age: 69
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility
holding company), Dominion Energy, Inc. (electric power and
oil & gas producer), Enron-Dominion Cogen Corp. (cogeneration
company), Kemper Corporation (insurance and financial services
company) and Fidelity Life Association (mutual life insurance
company); formerly President and Chief Executive Officer of
The Conference Board, Inc. (international economic and
business research) and a director of Lumbermens Mutual
Casualty Company, American Motorists Company and American
Mutual Insurance Company.
Edward V. Regan, Trustee; Age 66
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of
New York; Senior Fellow of Jerome Levy Economics Institute;
Bard College; a member of the U.S. Competitiveness Policy
Council; a director or GranCare, Inc. (healthcare provider);
formerly New York State Comptroller and a trustee, New York
State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age: 64
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc.
(executive recruiting); Chairman of Directorship, Inc.
(consulting and publishing); a director of XYAN, Inc.
(printing), Professional Staff Limited and American Scientific
Resources; a trustee of Mystic Seaport Museum, International
House, Greenwich Hospital and the Greenwich Historical
Society.
Sidney M. Robbins, Trustee; Age: 84
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting
Professor of Finance, University of Hawaii; Emeritus Founding
Director of The Korea Fund, Inc. (closed-end investment
company); a member of the Board of Advisors, Olympus Private
Placement Fund, L.P.; Professor Emeritus of Finance, Adelphi
University.
Donald W. Spiro, Vice Chairman and Trustee*; Age: 70
Chairman Emeritus and a director of the Manager; formerly
Chairman of the Manager and the Distributor.
Pauline Trigere, Trustee; Age: 83
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design
and sale of women's fashions).
Clayton K. Yeutter, Trustee; Age: 65
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel to Hogan & Hartson (a law firm); a director of
B.A.T. Industries, Ltd. (tobacco and financial services),
Caterpillar, Inc. (machinery), ConAgra, Inc. (food and
agricultural products), Farmers Insurance Company (insurance),
FMC Corp. (chemicals and machinery), IMC Global, Inc.
(chemical and animal feed), Texas Instruments, Inc.
(electronics) and The Vigoro Corporation (fertilizer
manufacturer); formerly (in descending chronological order)
Counsellor to the President (Bush) for Domestic Policy,
Chairman of the Republican National Committee, Secretary of
the U.S. Department of Agriculture, and U.S. Trade
Representative.
[FN]
- --------------
*A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
Andrew J. Donohue, Secretary; Age: 46
Executive Vice President and General Counsel of the Manager
and the Distributor, President and a director of Centennial,
Executive Vice President, General Counsel and a director of
HarbourView, SSI, SFSI, and Oppenheimer Partnership Holdings,
Inc.; President and director of Oppenheimer Real Asset
Management, Inc.; General Counsel of OAC; Executive Vice
President, Chief Legal Officer and a director of MultiSource
Services, Inc. (a broker-dealer); an officer of other
Oppenheimer funds; formerly Senior Vice President and
Associate General Counsel of the Manager and the Distributor;
Partner in Kraft & McManimon (a law firm); an officer of First
Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment
adviser); director and an officer of First Investors Family of
Funds and First Investors Life Insurance Company.
Robert Doll, Jr., Vice President and Portfolio Manager; Age: 42
Executive Vice President and Director of the Manager;
Executive Vice President of HarbourView; an officer of other
Oppenheimer funds.
George C. Bowen, Treasurer; Age: 60
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice
President and Treasurer of the Distributor and HarbourView;
Senior Vice President, Treasurer, Assistant Secretary and a
director of Centennial; Vice President, Treasurer and
Secretary of SSI and SFSI; an officer of other Oppenheimer
funds.
Robert G. Zack, Assistant Secretary; Age: 48
Senior Vice President and Associate General Counsel of the
Manager; Assistant Secretary of SSI and SFSI; an officer of
other Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age: 37
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; formerly a Fund Controller
for the Manager, prior to which he was an Accountant for Yale
& Seffinger, P.C., an accounting firm, and previously an
Accountant and Commissions Supervisor for Stuart James Company
Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age: 31
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; formerly a Fund Controller
for the Manager, prior to which he was an International Mutual
Fund Supervisor for Brown Brothers Harriman & Co., a bank, and
previously a Senior Fund Accountant for State Street Bank &
Trust Company.
Remuneration of Trustees. The officers of the Fund are
affiliated with the Manager; they and the Trustees of the Fund who
are affiliated with the Manager (Ms. Macaskill and Messrs. Galli
and Spiro; Ms. Macaskill and Mr. Spiro are also officers of the
Fund) receive no salary or fee from the Fund. The remaining
Trustees of the Fund received the compensation shown below from the
Fund during its fiscal year ended June 30, 1996 and August 31,
1996, and from all of the New York-based Oppenheimer funds
(including the Fund) for which they served as Trustees or Director.
Compensation is paid for services in the positions below their
names:
<TABLE>
<CAPTION>
At 6/30/96 At 8/31/96
Retirement Retirement
Benefits Benefits Total
Accrued Accrued Compensation
Aggregate as Part of Aggregate as Part of From All
Compensation Fund Compensation Fund New York-based
From Fund Expenses From Fund Expenses Oppenheimer funds1
<S> <C> <C> <C> <C> <C>
Leon Levy, Chairman $5,156 $16,770 $1,579 ($480) $141,000
and Trustee
Benjamin Lipstein, $3,152 $10,252 $966 ($293) $86,200
Study Committee
Member and Trustee
Elizabeth B. Moynihan, $3,152 $10,252 $966 ($293) $86,200
Study Committee
Member and Trustee
Kenneth A. Randall, $2,867 $9,324 $878 ($267) $78,400
Audit Committee
Chairman and Trustee
Edward V. Regan, $2,516 $8,183 $771 ($234) $68,800
Proxy Committee
Chairman,2 Audit
Committee Member
and Trustee
Russell S. Reynolds, Jr., $1,905 $6,196 $584 ($177) $52,100
Proxy Committee
Member2 and Trustee
Sidney M. Robbins, $4,465 $14,522 $1,368 ($415) $122,100
Study Committee
Chairman, Audit
Committee Vice-
Chairman and Trustee
Pauline Trigere, Trustee $1,905 $6,196 $584 ($177) $52,100
Clayton K. Yeutter, $1,905 $6,196 $584 ($177) $52,100
Proxy Committee
Member2 and Trustee
</TABLE>
_________________________
1For the 1995 calendar year (prior to the inception of the Proxy
Committee) during which the New York-based Oppenheimer funds,
listed in the first paragraph of this section, including
Oppenheimer Mortgage Income Fund and Oppenheimer Time Fund (which
ceased operation following the acquisition of their assets by
certain other Oppenheimer funds) but excluding Oppenheimer
International Growth Fund, which had not yet commenced operations.
2Committee position held during a portion of the period shown. The
Study and Audit Committees meet for all of the New York-based
Oppenheimer funds and the fees are allocated among the funds by the
Board.
The Fund has adopted a retirement plan that provides for
payment to a retired Trustee of up to 80% of the average
compensation paid during that Trustee's five years of service in
which the highest compensation was received. A Trustee must serve
in that capacity for any of the New York-based Oppenheimer funds
for at least 15 years to be eligible for the maximum payment.
Because each Trustee's retirement benefits will depend on the
amount of the Trustee's future compensation and length of service,
the amount of those benefits cannot be determined at this time, nor
can the Fund estimate the number of years of credited service that
will be used to determine those benefits. During the fiscal years
ended June 30, 1996 and August 31, 1996, a provision of $102,655
and ($2,937), respectively, was made for the Fund's projected
benefit obligations and payments of $6,672 and $0, respectively,
were made to retired trustees resulting in an accumulated liability
of $251,146 and $248,209 at June 30, 1996 and August 31, 1996,
respectively.
Major Shareholders. As of October 11, 1996, no person
owned of record or was known by the Fund to own beneficially 5% or
more of the Fund's outstanding shares except Merrill Lynch Pierce
Fenner & Smith, 4800 Deer Lake Drive EF13, Jacksonville, Florida,
who owned of record 9,307 Class C shares (approximately 5.11% of
the Fund's outstanding shares of that class). As of that same date
the only person who owned of record or was known by the Fund to own
beneficially 5% or more of the Fund's outstanding Class Y shares
was Massachusetts Mutual Life Insurance Company, 1295 State Street,
Springfield, Massachusetts 01111, which owned 1,186,657.11 Class Y
shares (representing 99.99% of the Class Y shares then
outstanding). Massachusetts Mutual Life Insurance Company's
affiliation with the Manager is described below.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled
by Massachusetts Mutual Life Insurance Company. OAC is also owned
in part by certain of the Manager's directors and officers, some of
whom also serve as officers of the Fund, and three of whom (Ms.
Macaskill and Messrs. Galli and Spiro) serve as Trustees of the
Fund.
The Manager and the Fund have a Code of Ethics. It is
designed to detect and prevent improper personal trading by certain
employees, including portfolio managers, that would compete with or
take advantage of the Fund's portfolio transactions. Compliance
with the Code of Ethics is carefully monitored and strictly
enforced by the Manager.
The Investment Advisory Agreement. The Investment Advisory
Agreement between the Manager and the Fund requires the Manager, at
its expense, to provide the Fund with adequate office space,
facilities and equipment, and to provide and supervise the
activities of all administrative and clerical personnel required to
provide effective corporate administration for the Fund, including
the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and
composition of proxy materials and registration statements for
continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the
Investment Advisory Agreement or by the Distributor under the
General Distributors Agreement are paid by the Fund. The
Investment Advisory Agreement lists examples of expenses paid by
the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit
expenses, custodian and transfer agent expenses, share issuance
costs, certain printing and registration costs and non-recurring
expenses, including litigation costs. For the Fund's fiscal years
ended June 30, 1994, 1995 and 1996 and August 31, 1996, the
management fees paid by the Fund to the Manager were $5,149,361,
$5,274,276, $7,558,069 and $1,415,789, respectively.
The Investment Advisory Agreement contains no expense
limitation. However, independently of the Investment Advisory
Agreement, the Manager has voluntarily undertaken that the total
expenses of the Fund in any fiscal year (including the management
fee but excluding taxes, interest, brokerage commissions,
distribution plan payments and extraordinary expenses such as
litigation costs) shall not exceed the most stringent expense
limitation imposed under state law applicable to the Fund.
Pursuant to the undertaking, the Manager's fee will be reduced at
the end of a month so that there will not be any accrued but unpaid
liability under this undertaking. Currently, the most stringent
state expense limitation is imposed by California, and limits the
Fund's expenses (with specified exclusions) to 2.5% of the first
$30 million of average annual net assets, 2% of the next $70
million of average annual net assets, and 1.5% of average annual
net assets in excess of $100 million. The Manager reserves the
right to terminate or amend the undertaking at any time. Any
assumption of the Fund's expenses under this limitation would lower
the Fund's overall expense ratio and increase its total return
during any period in which expenses are limited.
The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence in the performance of
its duties, or reckless disregard for its obligations and duties
under the advisory agreement, the Manager is not liable for any
loss resulting from a good faith error or omission on its part with
respect to any of its duties thereunder. The advisory agreement
permits the Manager to act as investment adviser for any other
person, firm or corporation and to use the name "Oppenheimer" in
connection with other investment companies for which it may act as
investment adviser or general distributor. If the Manager shall no
longer act as investment adviser to the Fund, the right of the Fund
to use the name "Oppenheimer" as part of its name may be withdrawn.
The Distributor. Under its General Distributor's Agreement
with the Fund, the Distributor acts as the Fund's principal
underwriter in the continuous public offering of the Fund's Class
A, Class B, Class C and Class Y shares but is not obligated to sell
a specific number of shares. Expenses normally attributable to
sales, including advertising and the cost of printing and mailing
prospectuses (other than those furnished to existing shareholders),
are borne by the Distributor. During the Fund's fiscal years ended
June 30, 1994, 1995 and 1996 and August 31, 1996, the aggregate
sales charges on sales of the Fund's Class A shares were
$1,831,787, $1,238,892, $3,462,100 and $424,452,, respectively, of
which the Distributor and an affiliated broker-dealer retained in
the aggregate $495,180, $370,067, $956,285 and $134,309 in those
respective years. During the Fund's fiscal years ended June 30,
1996 and August 31, 1996, the contingent deferred sales charges
collected on the Fund's Class B shares totalled $157,312 and
$60,623, respectively, [all of which was retained by the
Distributor]. During the Fund's fiscal years ended June 30, 1996
and August 31, 1996, contingent deferred sales charges collected on
the Fund's class C shares totaled $351 and $0, respectively, [all
of which was retained by the Distributor]. For additional
information about distribution of the Fund's shares and the
expenses connected with such activities, please refer to
"Distribution and Service Plans," below.
The Transfer Agent. OppenheimerFunds Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for
shareholder servicing and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of
the duties of the Manager under the Investment Advisory Agreement
is to arrange the portfolio transactions for the Fund. The
Advisory Agreement contains provisions relating to the employment
of broker-dealers ("brokers") to effect the Fund's portfolio
transactions. In doing so, the Manager is authorized by the
advisory agreement to employ broker-dealers, including "affiliated"
brokers, as that term is defined in the Investment Company Act, as
may, in its best judgment based on all relevant factors, implement
the policy of the Fund to obtain, at reasonable expense, the "best
execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the
commissions paid to the extent consistent with the interest and
policies of the Fund as established by its Board of Trustees.
Under the Advisory Agreement, the Manager is authorized to
select brokers that provide brokerage and/or research services for
the Fund and/or the other accounts over which the Manager or its
affiliates have investment discretion. The commissions paid to
such brokers may be higher than another qualified broker would have
charged if a good faith determination is made by the Manager that
the commission is fair and reasonable in relation to the services
provided. Subject to the foregoing considerations, the Manager may
also consider sales of shares of the Fund and other investment
companies managed by the Manager or its affiliates as a factor in
the selection of brokers for the Fund's portfolio transactions.
Description of Brokerage Practices Followed by the Manager.
Subject to the provisions of the Advisory Agreement and the
procedures and rules described above, allocations of brokerage are
generally made by the Manager's portfolio traders based upon
recommendations from the Manager's portfolio managers. In certain
instances, portfolio managers may directly place trades and
allocate brokerage, also subject to the provisions of the advisory
agreement and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those
for which an exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid
primarily for effecting transactions in listed securities and/or
for certain fixed-income agency transactions in the secondary
market, and are otherwise paid only if it appears likely that a
better price or execution can be obtained. When the Fund engages
in an option transaction, ordinarily the same broker will be used
for the purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent
orders to purchase or sell the same security by more than one of
the accounts managed by the Manager or its affiliates are combined.
The transactions effected pursuant to such combined orders are
averaged as to price and allocated in accordance with the purchase
or sale orders actually placed for each account.
Most purchases of money market instruments and debt
obligations are principal transactions at net prices. Instead of
using a broker for those transactions, the Fund normally deals
directly with the selling or purchasing principal or market maker
unless it determines that a better price or execution can be
obtained by using a broker. Purchases of these securities from
underwriters include a commission or concession paid by the issuer
to the underwriter. Purchases from dealers include a spread
between the bid and asked price. The Fund seeks to obtain prompt
execution of these orders at the most favorable net price.
The research services provided by a particular broker may be
useful only to one or more of the advisory accounts of the Manager
and its affiliates, and investment research received for the
commissions of those other accounts may be useful both to the Fund
and one or more of such other accounts. Such research, which may
be supplied by a third party at the instance of a broker, includes
information and analyses on particular companies and industries as
well as market or economic trends and portfolio strategy, receipt
of market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If
a research service also assists the Manager in a non-research
capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to
the Manager in the investment decision-making process may be paid
for in commission dollars. The Board of Trustees has permitted the
Manager to use concessions on fixed-price offerings to obtain
research, in the same manner as is permitted for agency
transactions. The Board has also permitted the Manager to use
stated commissions on secondary fixed-income agency trades to
obtain research where the broker has represented to the Manager
that: (i) the trade is not from or for the broker's own inventory,
(ii) the trade was executed by the broker on an agency basis at the
stated commission, and (iii) the trade is not a riskless principal
transaction.
The research services provided by brokers broaden the scope
and supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and
by enabling the Manager to obtain market information for the
valuation of securities held in the Fund's portfolio or being
considered for purchase. The Board of Trustees, including the
"independent" Trustees of the Fund (those Trustees of the Fund who
are not "interested persons" as defined in the Investment Company
Act, and who have no direct or indirect financial interest in the
operation of the Investment Advisory Agreement or the Distribution
and Service Plans described below) annually reviews information
furnished by the Manager as to the commissions paid to brokers
furnishing such services so that the Board may ascertain whether
the amount of such commissions was reasonably related to the value
or benefit of such services.
During the Fund's fiscal years ended June 30, 1994, 1995 and
1996, and August 31, 996, total brokerage commissions paid by the
Fund (not including spreads or concessions on principal
transactions on a net trade basis) were $706,547, $1,073,321,
$708,331 and $142,075, respectively. During the fiscal years ended
June 30, 1996 and August 31, 1996, $405,118 and $64,496 were paid
to brokers as commissions in return for research services; the
aggregate dollar amount of those transactions was $230,621,176 and
$37,461,550, respectively. The transactions giving rise to those
commissions were allocated in accordance with the Manager's
internal allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from
time to time the "average annual total return," "cumulative total
return," "average annual total return at net asset value" and
"total return at net asset value" of an investment in a class of
shares of the Fund may be advertised. An explanation of how these
total returns are calculated for each class and the components of
those calculations is set forth below.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include
the average annual total returns for each advertised class of
shares of the Fund for the 1, 5, and 10-year periods (or the life
of the class, if less) ending as of the most recently-ended
calendar quarter prior to the publication of the advertisement.
This enables an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a number
of factors should be considered before using such information as a
basis for comparison with other investments. An investment in the
Fund is not insured; its returns and share prices are not
guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a
prediction or representation by the Fund of future returns. The
returns of each class of shares of the Fund are affected by
portfolio quality, the type of investments the Fund holds and its
operating expenses allocated to the particular class.
Average Annual Total Returns. The "average annual total
return" of each class is an average annual compounded rate of
return for each year in a specified number of years. It is the
rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a
number of years ("n") to achieve an Ending Redeemable Value ("ERV")
of that investment, according to the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
Cumulative Total Returns. The "cumulative total return"
calculation measures the change in value of a hypothetical
investment of $1,000 over an entire period of years. Its
calculation uses some of the same factors as average annual total
return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
In calculating total returns for Class A shares, the current
maximum sales charge of 5.75% (as a percentage of the offering
price) is deducted from the initial investment ("P") (unless the
return is shown at net asset value, as described below). In
calculating total returns for Class B shares, the payment of the
contingent deferred sales charge, (5% for the first year, 4% for
the second year, 3% for the third and fourth years, 2% for the
fifth year, 1% for the sixth year and none thereafter) is applied
to the investment result for the period shown. For Class C shares,
the 1.0% contingent deferred sales charge is applied to the
investment result for the one-year period (or less). Total returns
also assume that all dividends and capital gains distributions
during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.
Total Returns at Net Asset Value. From time to time the Fund
may also quote an average annual total return at net asset value or
a cumulative total return at net asset value for Class A, Class B,
Class C or Class Y shares. Each is based on the difference in net
asset value per share at the beginning and the end of the period
for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and
takes into consideration the reinvestment of dividends and capital
gains distributions.
Total return information may be useful to investors in
reviewing the performance of the Fund's Class A, Class B, Class C
or Class Y shares. However, when comparing total return of an
investment in Class A, Class B, Class C or Class Y shares of the
Fund with that of other alternatives, investors should understand
that as the Fund is an equity fund seeking capital appreciation,
its shares are subject to greater market risks and volatility than
shares of funds having other investment objectives and that the
Fund is designed for investors who are willing to accept greater
risk of loss in the hopes of realizing greater gains.
<TABLE>
<CAPTION>
Class A Shares
Average Annual Total Returns at:
8/31/96 6/30/96
<S> <S> <C> <C> <C> <C>
1 year 5 years 10 years 1 year 5 years 10 years
9.52% 12.69% 11.97% 14.04% 14.89% 11.87%
Average Annual Total Returns (Net Asset Value) at:
8/31/96 6/30/96
1 year 5 years 10 years 1 year 5 years 10 years
16.21% 14.04% 12.63% 21.00% 16.26% 12.53%
</TABLE>
<TABLE>
<CAPTION>
Class B Shares
Average Annual Total Return at:
8/31/96 6/30/96
<S> <C> <C> <C>
1 year Life(1) 1 year Life(1)
10.19% 14.88% 14.95% 15.31%
Average Annual Total Return (Net Asset Value) at:
8/31/96 6/30/96
1 year Life(1) 1 year Life(1)
15.19% 15.37% 19.95% 16.10%
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
Cumulative Total Return at: Cumulative Total Return
(at Net Asset Value) at:
<S> <C> <C> <C>
8/31/96 6/30/96 8/31/96 6/30/96
Life(2) Life(2) Life(2) Life(2)
9.74% 9.08% 10.73% 10.07%
</TABLE>
<TABLE>
<CAPTION>
Class Y Shares
Average Annual Total Return at:
8/31/96 6/30/96
<S> <C> <C> <C>
1 year Life(3) 1 year Life(3)
16.31% 19.78% 21.10% 21.08%
</TABLE>
________________
(1)Class B shares of the Fund were first publicly offered on
8/17/96.
(2)Class C shares of the Fund were first publicly offered on
11/1/95.
(3)Class Y Shares, first publicly offered on 6/1/94, are offered at
net asset value without sales charge to certain institutional
investors.
Other Performance Comparisons. From time to time the Fund may also
include in its advertisements and sales literature performance
information about the Fund or rankings of the Fund's performance
cited in newspapers or periodicals, such as The New York Times.
These articles may include quotations of performance from other
sources, such as Lipper Analytical Services, Inc. ("Lipper") or
Morningstar, Inc. Lipper is a widely-recognized independent mutual
fund monitoring service. Lipper monitors the performance of
regulated investment companies, including the Fund, and ranks their
performance for various periods based on categories relating to
investment objectives. The performance of the Fund's classes of
shares is ranked against (i) all other funds and (ii) all other
gold-oriented funds. The Lipper performance rankings are based on
total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or
taxes into consideration.
Morningstar is an independent mutual fund monitoring service
that ranks mutual funds, including the Fund, monthly in broad
investment categories (equity, taxable bond, municipal bond and
hybrid) based on risk-adjusted investment return. Investment
return measures a fund's three, five and ten-year average annual
total returns (when available) in excess of 90-day U.S. Treasury
bill returns after considering sales charges and expenses. Risk
measures fund performance below 90-day U.S. Treasury bill monthly
returns. Risk and investment return are combined to produce star
rankings reflecting performance relative to the average fund in a
fund's category. Five stars is the "highest" ranking (top 10%),
four stars is "above average" (next 22.5%), three stars is
"average" (next 35%), two stars is "below average" (next 22.5%) and
one star is "lowest" (bottom 10%). Morningstar ranks the Fund's
Class A, Class B and Class C shares in relation to other equity
funds. Rankings are subject to change.
From time to time, the Fund's Manager may publish rankings or
ratings of the Manager (or Transfer Agent) or the investor services
provided by them to shareholders of the Oppenheimer funds, other
than performance rankings of the Oppenheimer funds themselves.
Those ratings or rankings of shareholder/investor services by third
parties may compare the Oppenheimer funds services to those of
other mutual fund families selected by the rating or ranking
services, and may be based upon the opinions of the rating or
ranking service itself, using its own research or judgment, or
based upon surveys of investors, brokers, shareholders or others.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and
Distribution and Service Plans for Class B and Class C shares of
the Fund under Rule 12b-1 of the Investment Company Act, pursuant
to which the Fund makes payments to the Distributor in connection
with the distribution and/or servicing of the shares of that class,
as described in the Prospectus. Each Plan has been approved by a
vote of (i) the Board of Trustees of the Fund, including a majority
of the Independent Trustees, cast in person at a meeting called for
the purpose of voting on that Plan, and (ii) the holders of a
"majority" (as defined in the Investment Company Act) of the shares
of each class. For the Distribution and Service Plans for Class
Class B and Class C shares, that vote was cast by the Manager as
the sole initial holder of Class B and Class C shares of the Fund.
In addition, under the Plans the Manager and the Distributor,
in their sole discretion, from time to time may use their own
resources (which, in the case of the Manager, may include profits
from the advisory fee it receives from the Fund) to make payments
to brokers, dealers or other financial institutions (each is
referred to as a "Recipient" under the Plans) for distribution and
administrative services they perform, at no cost to the Fund. The
Distributor and the Manager may, in their sole discretion, increase
or decrease the amount of payments they make from their own
resources to Recipients.
Unless terminated as described below, each Plan continues in
effect from year to year but only as long as its continuance is
specifically approved at least annually by the Fund's Board of
Trustees and its Independent Trustees by a vote cast in person at
a meeting called for the purpose of voting on such continuance.
Each Plan may be terminated at any time by the vote of a majority
of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the
outstanding shares of that class. None of the Plans may be amended
to increase materially the amount of payments to be made unless
such amendment is approved by shareholders of the Class affected by
the amendment. In addition, because Class B shares automatically
convert into Class A shares after six years, the Fund is required
to obtain the approval of Class B as well as Class A shareholders
for a proposed amendment to the Class A plan that would materially
increase payments under the plan. Such approval must be by a
"majority" of the Class A and Class B shares (as defined in the
Investment Company Act) voting separately by class. All material
amendments must be approved by the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at
least quarterly for its review, detailing the amount of all
payments made pursuant to each Plan, the purpose for which payments
were made and the identity of each Recipient that received any
payment. The reports for the Class B and Class C Plans shall also
include the distribution costs for that quarter, and such costs for
previous fiscal periods that have been carried forward, as
explained in the Prospectus and below. Those reports, including the
allocations on which they are based, will be subject to the review
and approval of the Independent Trustees in the exercise of their
fiduciary duty. Each Plan further provides that while it is in
effect, the selection and nomination of those Trustees of the Fund
who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision on selection or nomination is approved by a majority of
the Independent Trustees.
Under the Plans, no payment will be made to any Recipient in
any quarter if the aggregate net asset value of all Fund shares
held by the Recipient for itself and its customers does not exceed
a minimum amount, if any, that may be determined from time to time
by a majority of the Fund's Independent Trustees. Initially, the
Board of Trustees has set the fee at the maximum rate and set no
minimum amount. However, while the maximum fee rate under the
Class A Plan is 0.25% of average annual net assets of the fund, the
Board of Trustees has set the maximum rate for assets representing
Class A shares of the Fund acquired before April 1, 1991 at 0.15%,
and for assets representing Class A shares acquired on or after
April 1, 1991, at 0.25%.
For the fiscal year ended June 30, 1996 and August 31, 1996,
payments under the Class A Plan totalled $1,726,845, and $326,094,
respectively, all of which was paid by the Distributor to
Recipients, including $48,287 and $19,657, respectively, paid to
MML Investor Services, Inc., an affiliate of the Distributor. Any
unreimbursed expenses incurred by the Distributor with respect to
Class A shares for any fiscal year may not be recovered in
subsequent years. Payments received by the Distributor under the
Class A Plan will not be used to pay any interest expense, carrying
charge, or other financial costs, or allocation of overhead by the
Distributor.
The Class B and Class C plans allow the service fee payment to
be paid by the Distributor to Recipients in advance for the first
year such shares are outstanding, and thereafter on a quarterly
basis, as described in the Prospectus. The advance payment is
based on the net asset value of shares sold. An exchange of shares
does not entitle the Recipient to an advance service fee payment.
In the event shares are redeemed during the first year that the
shares are outstanding, the Recipient will be obligated to repay a
pro rata portion of the advance payment for those shares to the
Distributor. Payments made under the Class B Plan during the
fiscal years ended June 30, 1996 and August 31, 1996 totaled
$904,437 and $223,302, respectively, of which $808,757 and
$195,442, respectively, was retained by the Distributor and $5,467
and $1,207, respectively was paid to a dealer affiliated with the
Distributor. Payments made under the Class C Plan during the
period from November 1, 1995 through June 30, 1996, and for the
fiscal year ended August 31, 1996, totaled $11,561 and $6,917,
respectively, of which $10,534 and $5,934, respectively was
retained by the Distributor and $48 and $0, respectively was paid
to a dealer affiliated with the Distributor. At fiscal year-end
August 31, 1996, the Distributor had incurred unreimbursed expenses
under the Class B and Class C Plans of $3,988,981 and $64,346,
respectively (equal to 2.90% and 1.28% of the Fund's net assets
represented by Class B and Class C shares on that date) which have
been carried over into the present Plan year.
Although the Class B and Class C Plans permit the Distributor
to retain both the asset-based sales charges and the service fee on
such shares, or to pay Recipients the service fee on a quarterly
basis without payment in advance, the Distributor intends to pay
the service fee to Recipients in the manner described above. A
minimum holding period may be established from time to time under
the Class B and the Class C Plans by the Board. Initially, the
Board has set no minimum holding period. All payments under the
Class B Plan and the Class C Plans are subject to the limitations
imposed by the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. on payments of asset-based sales
charges and service fees. The Distributor anticipates that it will
take a number of years for its to recoup (from the Fund's payments
to the Distributor under the Class B or Class C Plan and from the
contingent deferred sales charges collected on redeemed Class B or
Class C shares) the sales commissions paid to authorized dealers or
brokers.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C
Shares. The availability of three classes of shares permits an
investor to choose the method of purchasing shares that is more
beneficial to the investor depending on the amount of the purchase,
the length of time the investor expects to hold shares and other
relevant circumstances. Investors should understand that the
purpose and function of the deferred sales charge and asset-based
sales charge with respect to Class B and Class C shares are the
same as those of the initial sales charge with respect to Class A
shares. Any salesperson or other person entitled to receive
compensation for selling Fund shares may receive different
compensation with respect to one class of shares than the other.
The Distributor normally will not accept any order for $500,000 or
more of Class B shares or any order for $1 million or more of Class
C shares on behalf of a single investor (not including dealer
"street name" or omnibus accounts) because generally it will be
more advantageous for that investor to purchase Class A shares of
the Fund instead. A fourth class of shares may be purchased only
by certain institutional investors at net asset value per share
(the "Class Y shares").
The three classes of shares each represent an interest in the
same portfolio investments of the Fund. However, each class has
different shareholder privileges and features. The net income
attributable to Class B and Class C shares and the dividends
payable on Class B and Class C shares will be reduced by
incremental expenses borne solely by that class, including the
asset-based sales charge to which Class B and Class C shares are
subject.
The conversion of Class B shares to Class A shares after six
years is subject to the continuing availability of a private letter
ruling from the Internal Revenue Service, or an opinion of counsel
or tax adviser, to the effect that the conversion of Class B shares
does not constitute a taxable event for the holder under Federal
income tax law. If such a revenue ruling or opinion is no longer
available, the automatic conversion feature may be suspended, in
which event no further conversions of Class B shares would occur
while such suspension remained in effect. Although Class B shares
could then be exchanged for Class A shares on the basis of relative
net asset value of the two classes, without the imposition of a
sales charge or fee, such exchange could constitute a taxable event
for the holder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for longer
than six years.
The methodology for calculating the net asset value, dividends
and distributions of the Fund's Class A, Class B, Class C and Class
Y shares recognizes two types of expenses. General expenses that
do not pertain specifically to any one class are allocated pro rata
to the shares of each class, based on the percentage of the net
assets of such class to the Fund's total assets, and then equally
to each outstanding share within a given class. Such general
expenses include (i) management fees, (ii) legal, bookkeeping and
audit fees, (iii) printing and mailing costs of shareholder
reports, Prospectuses, Statements of Additional Information and
other materials for current shareholders, (iv) fees to Independent
Trustees, (v) custodian expenses, (vi) share issuance costs, (vii)
organization and start-up costs, (viii) interest, taxes and
brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to
a class are allocated equally to each outstanding share within that
class. Such expenses include (i) Distribution Plan fees, (ii)
incremental transfer and shareholder servicing agent fees and
expenses, (iii) registration fees and (iv) shareholder meeting
expenses, to the extent that such expenses pertain to a specific
class rather than to the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values
per share of Class A, Class B, Class C and Class Y shares of the
Fund are determined as of the close of business of The New York
Stock Exchange (the "NYSE") on each day that the NYSE is open, by
dividing the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding. The NYSE
normally closes at 4:00 P.M., but may close earlier on some other
days (for example, in case of weather emergencies or days falling
before a holiday). The NYSE's most recent annual announcement
(which is subject to change) states that it will close on New
Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
It may also close on other days. The Fund may invest a portion of
its assets in foreign securities primarily listed on foreign
exchanges which may trade on Saturdays or customary U.S. business
holidays on which the NYSE is closed. Because the Fund's price and
net asset value will not be calculated on those days, the Fund's
net asset values per share may be significantly affected on such
days when shareholders may not purchase or redeem shares.
The Fund's Board of Trustees has established procedures for
the valuation of the Fund's securities, generally as follows: (i)
equity securities traded on a U.S. securities exchange or on NASDAQ
for which last sale information is regularly reported are valued at
the last reported sale price on their primary exchange or NASDAQ
that day (or, in the absence of sales that day, at values based on
the last sale prices of the preceding trading day or closing "bid"
prices that day); (ii) securities traded on a foreign securities
exchange are valued generally at the last sales price available to
the pricing service approved by the Fund's Board of Trustees or to
the Manager as reported by the principal exchange on which the
security is traded at its last trading session on or immediately
preceding the valuation date, or at the mean between "bid" and
"ask" prices obtained from the principal exchange or two active
market makers in the security on the basis of reasonable inquiry;
(iii) long-term debt securities having a remaining maturity in
excess of 60 days are valued based on the mean between the "bid"
and "ask" prices determined by a portfolio pricing service approved
by the Fund's Board of Trustees or obtained by the Manager from two
active market makers in the security on the basis of reasonable
inquiry; (iv) debt instruments having a maturity of more than 397
days when issued, and non-money market type instruments having a
maturity of 397 days or less when issued, which have a remaining
maturity of 60 days or less are valued at the mean between the
"bid" and "ask" prices determined by a pricing service approved by
the Fund's Board of Trustees or obtained by the Manager from two
active market makers in the security on the basis of reasonable
inquiry; (v) money market debt securities that had a maturity of
less than 397 days when issued that have a remaining maturity of 60
days or less are valued at cost, adjusted for amortization of
premiums and accretion of discounts; and (vi) securities (including
restricted securities) not having readily-available market
quotations are valued at fair value determined under the Board's
procedures. If the Manager is unable to locate two market makers
willing to give quotes (see (ii), (iii) and (iv) above), the
security may be priced at the mean between the "bid" and "ask"
prices provided by a single active market maker (which in certain
cases may be the "bid" price if no "ask" price is available).
In the case of U.S. Government Securities and mortgage-backed
securities, where last sale information is not generally available,
such pricing procedures may include "matrix" comparisons to the
prices for comparable instruments on the basis of quality, yield,
maturity and other special factors involved. The Manager may use
pricing services approved by the Board of Trustees to price U.S.
Government Securities for which last sale information is not
generally available. The Manager will monitor the accuracy of such
pricing services, which may include comparing prices used for
portfolio evaluation to actual sales prices of selected securities.
Trading in securities on European and Asian exchanges and
over-the-counter markets is normally completed before the close of
the New York Stock Exchange. Events affecting the values of
foreign securities traded in securities markets that occur between
the time their prices are determined and the close of the New York
Stock Exchange will not be reflected in the Fund's calculation of
net asset value unless the Board of Trustees or the Manager, under
procedures established by the Board of Trustees, determines that
the particular event is likely to effect a material change in the
value of such security. Foreign currency, including forward
contracts, will be valued at the closing price in the London
foreign exchange market that day as provided by a reliable bank,
dealer or pricing service. The values of securities denominated in
foreign currency will be converted to U.S. dollars at the closing
price in the London foreign exchange market that day as provided by
a reliable bank, dealer or pricing service.
Puts, calls and Futures are valued at the last sales price on
the principal exchange on which they are traded or on NASDAQ, as
applicable, as determined by a pricing service approved by the
Board of Trustees or by the Manager. If there were no sales that
day, value shall be the last sale price on the preceding trading
day if it is within the spread of the closing "bid" and "ask"
prices on the principal exchange or on NASDAQ on the valuation
date, or, if not, value shall be the closing "bid" price on the
principal exchange or on NASDAQ on the valuation date. If the put,
call or future is not traded on an exchange or on NASDAQ, it shall
be valued at the mean between "bid" and "ask" prices obtained by
the Manager from two active market makers (which in certain cases
may be the "bid" price if no "ask" price is available).
AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $25.00. Shares will be purchased on the
regular business day the Distributor is instructed to initiate the
Automated Clearing House transfer to buy shares. Dividends will
begin to accrue on such shares on the day the Fund receives Federal
Funds for the purchase through the ACH system before the close of
The New York Stock Exchange that day, which is normally three days
after the ACH transfer is initiated. The Exchange normally closes
at 4:00 P.M., but may close earlier on certain days. If Federal
Funds are received on a business day after the close of the
Exchange, the shares will be purchased and dividends will begin to
accrue on the next regular business day. The proceeds of ACH
transfers are normally received by the Fund 3 days after the
transfers are initiated. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from
delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced
sales charge rate may be obtained for Class A shares under Right of
Accumulation and Letter of Intent because of the economies of sales
efforts and reduction in expenses realized by the Distributor,
dealers and brokers making such sales. No sales charge is imposed
in certain other circumstances described in the Prospectus because
the Distributor incurs little or no selling expenses. The term
"immediate family" refers to one's spouse, children, grandchildren,
grandparents, parents, parents-in-law, brothers and sisters, sons-
and daughters-in-law, siblings, a sibling's spouse, a spouse's
siblings, aunts, uncles, nieces and nephews.
The Oppenheimer Funds. The Oppenheimer funds are those
mutual funds for which the Distributor acts as the distributor or
the sub-distributor and include the following:
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Main Street California
Municipal Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income &
Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Enterprise Fund
Oppenheimer Bond Fund for Growth
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term
Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer International Bond Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income &
Growth Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Growth & Income Fund
Rochester Fund Municipals*
Rochester Portfolio Series-Limited Term
New York Municipal Fund*
Oppenheimer Disciplined Value Fund
Oppenheimer Disciplined Allocation Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
*Shares of the Fund are not presently exchangeable for shares of
these funds.
There is an initial sales charge on the purchase of Class A
shares of each of the Oppenheimer funds except Money Market Funds
(under certain circumstances described herein, redemption proceeds
of Money Market Fund shares may be subject to a contingent
deferred sales charge).
Letters of Intent. A Letter of Intent (referred to as a
"Letter") is an investor's statement in writing to the Distributor
of the intention to purchase Class A shares of the Fund or Class A
and Class B shares of the Fund and other Oppenheimer funds during
a 13-month period (the "Letter of Intent period"), which may, at
the investor's request, include purchases made up to 90 days prior
to the date of the Letter. The Letter states the investor's
intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those
funds, will equal or exceed the amount specified in the Letter.
Purchases made by reinvestment of dividends or distributions of
capital gains and purchases made at net asset value without sales
charge do not count toward satisfying the amount of the Letter. A
Letter enables an investor to count the Class A and Class B shares
purchased under the Letter to obtain the reduced sales charge rate
on purchases of Class A shares of the Fund (and other Oppenheimer
funds) that applies under the Right of Accumulation to current
purchases of Class A shares. Each purchase under the Letter will
be made at the public offering price applicable to a single lump-sum purchase
of shares in the intended purchase amount, as
described in the Prospectus.
In submitting a Letter, the investor makes no commitment to
purchase shares, but if the investor's purchases of shares within
the Letter of Intent period, when added to the value (at offering
price) of the investor's holdings of shares on the last day of that
period, do not equal or exceed the intended purchase amount, the
investor agrees to pay the additional amount of sales charge
applicable to such purchases, as set forth in "Terms of Escrow,"
below (as those terms may be amended from time to time). The
investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be
bound by the terms of the Prospectus, this Statement of Additional
Information and the Application used for such Letter of Intent, and
if such terms are amended, as they may be from time to time by the
Fund, that those amendments will apply automatically to existing
Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer
funds by OppenheimerFunds prototype 401(k) plans under a Letter of
Intent, the Transfer Agent will not hold shares in escrow. If the
intended purchase amount under the Letter entered into by an
OppenheimerFunds prototype 401(k) plan is not purchased by the plan
by the end of the Letter of Intent period, there will be no
adjustment of commissions paid to the broker-dealer or financial
institution of record for accounts held in the name of that plan.
If the total eligible purchases made during the Letter of
Intent period do not equal or exceed the intended purchase amount,
the commissions previously paid to the dealer of record for the
account and the amount of sales charge retained by the Distributor
will be adjusted to the rates applicable to actual purchases. If
total eligible purchases during the Letter of Intent period exceed
the intended purchase amount and exceed the amount needed to
qualify for the next sales charge rate reduction set forth in the
applicable prospectus, the sales charges paid will be adjusted to
the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid
to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the
investor's account at the net asset value per share in effect on
the date of such purchase, promptly after the Distributor's receipt
thereof.
In determining the total amount of purchases made under a
Letter, shares redeemed by the investor prior to the termination of
the Letter of Intent period will be deducted. It is the
responsibility of the dealer of record and/or the investor to
advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of
such purchases must be made through the Distributor.
Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in
value up to 5% of the intended purchase amount specified in the
Letter shall be held in escrow by the Transfer Agent. For example,
if the intended purchase amount is $50,000, the escrow shall be
shares valued in the amount of $2,500 (computed at the public
offering price adjusted for a $50,000 purchase). Any dividends and
capital gains distributions on the escrowed shares will be credited
to the investor's account.
2. If the intended purchase amount specified under the
Letter is completed within the thirteen-month Letter of Intent
period, the escrowed shares will be promptly released to the
investor.
3. If, at the end of the thirteen-month Letter of Intent
period the total purchases pursuant to the Letter are less than the
intended purchase amount specified in the Letter, the investor must
remit to the Distributor an amount equal to the difference between
the dollar amount of sales charges actually paid and the amount of
sales charges which would have been paid if the total amount
purchased had been made at a single time. Such sales charge
adjustment will apply to any shares redeemed prior to the
completion of the Letter. If such difference in sales charges is
not paid within twenty days after a request from the Distributor or
the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares
necessary to realize such difference in sales charges. Full and
fractional shares remaining after such redemption will be released
from escrow. If a request is received to redeem escrowed shares
prior to the payment of such additional sales charge, the sales
charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably
constitutes and appoints the Transfer Agent as attorney-in-fact to
surrender for redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the
holding of which may be counted toward completion of a Letter)
include (a) Class A shares sold with a front-end sales charge or
subject to a Class A contingent deferred sales charge, (b) Class B
shares of other Oppenheimer funds acquired subject to a contingent
deferred sales charge, and (c) Class A or B shares acquired in
exchange for either (i) Class A shares of one of the other
Oppenheimer funds that were acquired subject to a Class A initial
or contingent deferred sales charge or (ii) Class B shares of one
of the other Oppenheimer funds that were acquired subject to a
contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be
exchanged for shares of another fund to which an exchange is
requested, as described in the section of the Prospectus entitled
"How to Exchange Shares," and the escrow will be transferred to
that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a
bank account, a check (minimum $25) for the initial purchase must
accompany the application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption
restrictions for recent purchases described in "How To Sell
Shares," in the Prospectus. Asset Builder Plans also enable
shareholders of Oppenheimer Cash Reserves to use those accounts for
monthly automatic purchases of shares of up to four other
Oppenheimer funds.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply
to shares purchased by Asset Builder payments. An application
should be obtained from the Distributor, completed and returned,
and a prospectus of the selected fund(s) should be obtained from
the Distributor or your financial advisor before initiating Asset
Builder payments. The amount of the Asset Builder investment may
be changed or the automatic investments may be terminated at any
time by writing to the Transfer Agent. A reasonable period
(approximately 15 days) is required after the Transfer Agent's
receipt of such instructions to implement them. The Fund reserves
the right to amend, suspend, or discontinue offering such plans at
any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders
for the Fund's shares (for example, when a purchase check is
returned to the Fund unpaid) causes a loss to be incurred when the
net asset value of the Fund's shares on the cancellation date is
less than on the purchase date. That loss is equal to the amount
of the decline in the net asset value per share multiplied by the
number of shares in the purchase order. The investor is
responsible for that loss. If the investor fails to compensate the
Fund for the loss, the Distributor will do so. The Fund may
reimburse the Distributor for that amount by redeeming shares from
any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
Retirement Plans. In describing certain types of employee benefit
plans that may purchase Class A shares without being subject to the
Class A contingent differed sales charge, the term "employee
benefit plan" means any plan or arrangement, whether or not
"qualified" under the Internal Revenue Code, including, medical
savings accounts, payroll deduction plans or similar plans in which
Class A shares are purchased by a fiduciary or other person for the
account of participants who are employees of a single employer or
of affiliated employers, if the Fund account is registered in the
name of the fiduciary or other person for the benefit of
participants in the plan.
The term "group retirement plan" means any qualified or non-qualified
retirement plan (including 457 plans, SEPs, SARSEPs,
403(b) plans, and SIMPLE plans) for employees of a corporation or
a sole proprietorship, members and employees of a partnership or
association or other organized group of persons (the members of
which may include other groups), if the group has made special
arrangements with the Distributor and all members of the group
participating in the plan purchase Class A shares of the Fund
through a single investment dealer, broker or other financial
institution designated by the group.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and
conditions for redemptions set forth in the Prospectus.
Involuntary Redemptions. The Fund's Board of Trustees has
the right to cause the involuntary redemption of the shares held in
any account if the aggregate net asset value of those shares is
less than $500 or such lesser amount as the Board may fix. The
Board of Trustees will not cause the involuntary redemption of
shares in an account if the aggregate net asset value of the shares
has fallen below the stated minimum solely as a result of market
fluctuations. Should the Board elect to exercise this right, it
may also fix, in accordance with the Investment Company Act, the
requirements for any notice to be given to the shareholders in
question (not less than 30 days), or the Board may set requirements
for granting permission to the shareholder to increase the
investment, and set other terms and conditions so that the shares
would not be involuntarily redeemed.
Payments "In Kind". The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash.
However, the Board of Trustees of the Fund may determine that it
would be detrimental to the best interests of the remaining
shareholders of the Fund to make payment of a redemption order
wholly or partly in cash. In that case the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind"
of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act, pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day
period for any one shareholder. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage or other costs in
selling the securities for cash. The method of valuing securities
used to make redemptions in kind will be the same as the method the
Fund uses to value its portfolio securities described above under
"Determination of Net Asset Values Per Share" and that valuation
will be made as of the time the redemption price is determined.
Selling Shares by Wire. The wire of redemption proceeds may
be delayed if a Fund's Custodian bank is not open for business on
a day when the Fund would normally authorize the wire to be made,
which is usually the Fund's next regular business day following the
redemption. In those circumstances, the wire will not be
transmitted until the next bank business day on which the Fund is
open for business. No dividends will be paid on the proceeds of
redeemed shares awaiting transfer by wire.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of
(i) Class A shares that you purchased subject to an initial sales
charge, or (ii) Class B shares that were subject to the Class B
contingent deferred sales charge when redeemed. The reinvestment
may be made without sales charge only in Class A shares of the Fund
or any of the other Oppenheimer funds into which shares of the Fund
are exchangeable as described below, at the net asset value next
computed after the Transfer Agent receives the reinvestment order.
The shareholder must ask the Distributor for that privilege at the
time of reinvestment. Any capital gain that was realized when the
shares were redeemed is taxable, and reinvestment will not alter
any capital gains tax payable on that gain. If there has been a
capital loss on the redemption, some or all of the loss may not be
tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption
proceeds of Fund shares on which a sales charge was paid are
reinvested in shares of the Fund or another of the Oppenheimer
funds within 90 days of payment of the sales charge, the
shareholder's basis in the shares of the Fund that were redeemed
may not include the amount of the sales charge paid. That would
reduce the loss or increase the gain recognized from the
redemption. However, in that case the sales charge would be added
to the basis of the shares acquired by the reinvestment of the
redemption proceeds. The Fund may amend, suspend or cease offering
this reinvestment privilege at any time as to shares redeemed after
the date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of either class at the time of
transfer to the name of another person or entity (whether the
transfer occurs by absolute assignment, gift or bequest, not
involving, directly or indirectly, a public sale). The transferred
shares will remain subject to the contingent deferred sales charge,
calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the
transferring shareholder. If less than all shares held in an
account are transferred, and some but not all shares in the account
would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, the priorities described in the Prospectus
under "How to Buy Shares" for the imposition of the Class B or
Class C contingent deferred sales charge will be followed in
determining the order in which shares are transferred.
Distributions From Retirement Plans. Requests for distributions
from OppenheimerFunds-sponsored IRAs, SEP-IRAs, SAR-SEPs, 403(b)(7)
custodial plans, 401(k) plans, or pension or profit-sharing plans
should be addressed to "Trustee, OppenheimerFunds Retirement
Plans," c/o the Transfer Agent at its address listed in "How To
Sell Shares" in the Prospectus or on the back cover of this
Statement of Additional Information. The request must: (i) state
the reason for the distribution; (ii) state the owner's awareness
of tax penalties if the distribution is premature; and (iii)
conform to the requirements of the plan and the Fund's other
redemption requirements. Participants (other than self-employed
persons maintaining a plan account in their own name) in
OppenheimerFunds-sponsored prototype pension, profit-sharing, or
401(k) plans may not directly redeem or exchange shares held for
their account under those plans. The employer or plan
administrator must sign the request. Distributions from pension
and profit sharing plans are subject to special requirements under
the Internal Revenue Code and certain documents (available from the
Transfer Agent) must be completed before the distribution may be
made. Distributions from retirement plans are subject to
withholding requirements under the Internal Revenue Code, and IRS
Form W-4P (available from the Transfer Agent) must be submitted to
the Transfer Agent with the distribution request, or the
distribution may be delayed. Unless the shareholder has provided
the Transfer Agent with a certified tax identification number, the
Internal Revenue Code requires that tax be withheld from any
distribution even if the shareholder elects not to have tax
withheld. The Fund, the Manager, the Distributor, the Trustee and
the Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and
will not be responsible for any tax penalties assessed in
connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and
Brokers. The Distributor is the Fund's agent to repurchase its
shares from authorized dealers or brokers on behalf of their
customers. The shareholder should contact the broker or dealer to
arrange this type of redemption. The repurchase price per share
will be the net asset value next computed after the Distributor
receives the order placed by the dealer or broker, except that if
the Distributor receives a repurchase order from a dealer or broker
after the close of The New York Stock Exchange on a regular
business day, it will be processed at that day's net asset value if
the order was received by the dealer or broker from its customer
prior to the time the Exchange closed (normally, that is 4:00 P.M.,
but may be earlier some days) and the order was transmitted to and
received by the Distributor prior to its close of business that day
(normally 5:00 P.M.). Ordinarily, for accounts redeemed by a
broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the
Distributor's receipt of the required redemption documents in
proper form, with the signature(s) of the registered owners
guaranteed on the redemption documents as described in the
Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares
of the Fund valued at $5,000 or more can authorize the Transfer
Agent to redeem shares (minimum $50) automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic
Withdrawal Plan. Shares will be redeemed three business days prior
to the date requested by the shareholder for receipt of the
payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable
to all shareholders of record and sent to the address of record for
the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on
this basis. Payments are normally made by check, but shareholders
having AccountLink privileges (see "How To Buy Shares") may arrange
to have Automatic Withdrawal Plan payments transferred to the bank
account designated on the OppenheimerFunds New Account Application
or signature-guaranteed instructions. The Fund cannot guarantee
receipt of a payment on the date requested and reserves the right
to amend, suspend or discontinue offering such plans at any time
without prior notice. Because of the sales charge assessed on
Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an
Automatic Withdrawal Plan. Class B and Class C shareholders should
not establish withdrawal plans that would require the redemption of
shares held less than 6 years or 12 months, respectively, because
of the imposition of the Class B or Class C contingent deferred
sales charge on such withdrawals (except where the Class B or Class
C contingent deferred sales charge is waived as described in the
Prospectus under "Waivers of Class B and Class C Sales Charges."
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such
plans, as stated below and in the provisions of the
OppenheimerFunds Application relating to such Plans, as well as the
Prospectus. These provisions may be amended from time to time by
the Fund and/or the Distributor. When adopted, such amendments
will automatically apply to existing Plans.
Automatic Exchange Plans. Shareholders can authorize the
Transfer Agent (on the OppenheimerFunds Application or signature-guaranteed
Instructions) to exchange a pre-determined amount of
shares of the Fund for shares (of the same class) of other
Oppenheimer funds automatically on a monthly, quarterly, semi-annual or
annual basis under an Automatic Exchange Plan. The
minimum amount that may be exchanged to each other fund account is
$25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
Automatic Withdrawal Plans. Fund shares will be redeemed
as necessary to meet withdrawal payments. Shares acquired without
a sales charge will be redeemed first and shares acquired with
reinvested dividends and capital gains distributions will be
redeemed next, followed by shares acquired with a sales charge, to
the extent necessary to make withdrawal payments. Depending upon
the amount withdrawn, the investor's principal may be depleted.
Payments made under withdrawal plans should not be considered as a
yield or income on your investment.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the
"Planholder") who executed the Plan authorization and application
submitted to the Transfer Agent. The Transfer Agent shall incur no
liability to the Planholder for any action taken or omitted by the
Transfer Agent in good faith to administer the Plan. Certificates
will not be issued for shares of the Fund purchased for and held
under the Plan, but the Transfer Agent will credit all such shares
to the account of the Planholder on the records of the Fund. Any
share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that
the shares represented by the certificate may be held under the
Plan.
For accounts subject to Automatic Withdrawal Plans,
distributions of capital gains must be reinvested in shares of the
Fund, which will be done at net asset value without a sales charge.
Dividends on shares held in the account may be paid in cash or
reinvested.
Redemptions of shares needed to make withdrawal payments will
be made at the net asset value per share determined on the
redemption date. Checks or AccountLink payments of the proceeds of
Plan withdrawals will normally be transmitted three business days
prior to the date selected for receipt of the payment (receipt of
payment on the date selected cannot be guaranteed), according to
the choice specified in writing by the Planholder.
The amount and the interval of disbursement payments and the
address to which checks are to be mailed or AccountLink payments
are to be sent may be changed at any time by the Planholder by
writing to the Transfer Agent. The Planholder should allow at
least two weeks' time in mailing such notification for the
requested change to be put in effect. The Planholder may, at any
time, instruct the Transfer Agent by written notice (in proper form
in accordance with the requirements of the then-current Prospectus
of the Fund) to redeem all, or any part of, the shares held under
the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will
mail a check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by
writing to the Transfer Agent. A Plan may also be terminated at
any time by the Transfer Agent upon receiving directions to that
effect from the Fund. The Transfer Agent will also terminate a
Plan upon receipt of evidence satisfactory to it of the death or
legal incapacity of the Planholder. Upon termination of a Plan by
the Transfer Agent or the Fund, shares that have not been redeemed
from the account will be held in uncertificated form in the name of
the Planholder, and the account will continue as a dividend-reinvestment,
uncertificated account unless and until proper
instructions are received from the Planholder or his or her
executor or guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt,
the Planholder may request issuance of a portion of the shares in
certificated form. Upon written request from the Planholder, the
Transfer Agent will determine the number of shares for which a
certificate may be issued without causing the withdrawal checks to
stop because of exhaustion of uncertificated shares needed to
continue payments. However, should such uncertificated shares
become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the
Fund, the Planholder will be deemed to have appointed any successor
transfer agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be
exchanged only for shares of the same class of other Oppenheimer
funds. Shares of Oppenheimer funds that have a single class
without a class designation are deemed "Class A" shares for this
purpose. All of the Oppenheimer funds offer Class A, B and C
shares except Oppenheimer Money Market Fund, Inc., Centennial Money
Market Trust, Centennial Tax Exempt Trust, Centennial Government
Trust, Centennial New York Tax Exempt Trust, Centennial California
Tax Exempt Trust, Centennial America Fund, L.P. and Daily Cash
Accumulation Fund, Inc., which only offer Class A shares, and
Oppenheimer Main Street California Tax-Exempt Fund, which only
offers Class A and Class B shares (Class B and Class C shares of
Oppenheimer Cash Reserves are generally available only by exchange
from the same class of shares of other Oppenheimer funds or through
OppenheimerFunds sponsored 401(k) plans). A current list showing
which funds offer which class can be obtained by calling the
Distributor at 1-800-525-7048.
For accounts established on or before March 8, 1996 holding
Class M shares of Oppenheimer Bond Fund for Growth, Class M shares
can be exchanged only for Class A shares of other Oppenheimer
funds, including Rochester Fund Municipals and Limited Term New
York Municipal Fund. Class A shares of Rochester Fund Municipals
or Limited Term New York Municipal Fund acquired on the exchange of
Class M shares of Oppenheimer Bond Fund for Growth may be exchanged
for Class M shares of that fund. For accounts of Oppenheimer Bond
Fund for Growth established after March 8, 1996, Class M shares may
be exchanged for Class A shares of other Oppenheimer funds except
Rochester Funds Municipals and Limited Term New York Municipals.
Exchanges to Class M shares of Oppenheimer Bond Fund for Growth are
permitted from Class A shares of Oppenheimer Money Market Fund,
Inc. or Oppenheimer Cash Reserves that were acquired by exchange
from Class M shares. Otherwise no exchanges of any class of any
Oppenheimer fund into Class M shares are permitted.
Class A shares of Oppenheimer funds may be exchanged at net
asset value for shares of any Money Market Fund. Shares of any
Money Market Fund purchased without a sales charge may be exchanged
for shares of Oppenheimer funds offered with a sales charge upon
payment of the sales charge (or, if applicable, may be used to
purchase shares of Oppenheimer funds subject to a contingent
deferred sales charge).
Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the Oppenheimer funds (except
Oppenheimer Cash Reserves) or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor
may be exchanged at net asset value for shares of any of the
Oppenheimer funds.
No contingent deferred sales charge is imposed on exchanges of
shares of either class purchased subject to a contingent deferred
sales charge. However, shares of Oppenheimer Money Market Fund,
Inc. purchased with the redemption proceeds of shares of other
mutual funds (other than funds managed by the Manager or its
subsidiaries) redeemed within the 12 months prior to that purchase
may subsequently be exchanged for shares of other Oppenheimer funds
without being subject to an initial or contingent deferred sales
charge, whichever is applicable. To qualify for that privilege,
the investor or the investor's dealer must notify the Distributor
of eligibility for this privilege at the time the shares of
Oppenheimer Money Market Fund, Inc. are purchased, and, if
requested, must supply proof of entitlement to this privilege. The
Class C contingent deferred sales charge is imposed on Class C
shares acquired by exchange if they are redeemed within 12 months
of the initial purchase of the exchanged Class C shares.
When Class B or Class C shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the
Prospectus for the imposition of the Class B or Class C contingent
deferred sales charge will be followed in determining the order in
which the shares are exchanged. Shareholders should take into
account the effect of any exchange on the applicability and rate of
any contingent deferred sales charge that might be imposed in the
subsequent redemption of remaining shares. Shareholders owning
shares of more than one class must specify whether they intend to
exchange Class A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written
exchange requests submitted in bulk by anyone on behalf of more
than one account. The Fund may accept requests for exchanges of up
to 50 accounts per day from representatives of authorized dealers
that qualify for this privilege. In connection with any exchange
request, the number of shares exchanged may be less than the number
requested if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In
those cases, only the shares available for exchange without
restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either
have an existing account in, or obtain and acknowledge receipt of
a prospectus of, the fund to which the exchange is to be made. For
full or partial exchanges of an account made by telephone, any
special account features such as Asset Builder Plans, Automatic
Withdrawal Plans and retirement plan contributions will be switched
to the new account unless the Transfer Agent is instructed
otherwise. If all telephone lines are busy (which might occur, for
example, during periods of substantial market fluctuations),
shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business
day the Transfer Agent receives an exchange request in proper form
(the "Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such purchases
may be delayed by either fund up to five business days if it
determines that it would be disadvantaged by an immediate transfer
of the redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may disadvantage it
(for example, if the receipt of multiple exchange requests from a
dealer might require the disposition of portfolio securities at a
time or at a price that might be disadvantageous to the Fund).
The different Oppenheimer funds available for exchange have
different investment objectives, policies and risks, and a
shareholder should assure that the Fund selected is appropriate for
his or her investment and should be aware of the tax consequences
of an exchange. For federal income tax purposes, an exchange
transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and
the Transfer Agent are unable to provide investment, tax or legal
advice to a shareholder in connection with an exchange request or
any other investment transaction.
Dividends, Capital Gains and Taxes
Dividends and Distributions. Dividends will be payable on shares
of record held at the time of the previous determination of net
asset value, or as otherwise described in "How to Buy Shares."
Daily dividends on newly purchased shares will not be declared or
paid until such time as Federal Funds (funds credited to a member
bank's account at the Federal Reserve Bank) are available from the
purchase payment for such shares. Normally, purchase checks
received from investors are converted to Federal Funds on the next
business day. Dividends will be declared on shares repurchased by
a dealer or broker for three business days following the trade date
(i.e., to and including the day prior to settlement of the
repurchase). If all shares in an account are redeemed, all
dividends accrued on shares of the same class in the account will
be paid together with the redemption proceeds.
Dividends, distributions and the proceeds of the redemption of
Fund shares represented by checks returned to the Transfer Agent by
the Postal Service as undeliverable will be invested in shares of
Oppenheimer Money Market Fund, Inc., as promptly as possible after
the return of such checks to the Transfer Agent, to enable the
investor to earn a return on otherwise idle funds.
The amount of a class's distributions may vary from time to
time depending on market conditions, the composition of a Fund's
portfolio, and expenses borne by the Fund or borne separately by a
class, as described in "Alternative Sales Arrangements -- Class A,
Class B and Class C shares" above. Dividends are calculated in the
same manner, at the same time and on the same day for shares of
each class. However, dividends on Class B and Class C shares are
expected to be lower than dividends on Class A shares as a result
of the asset-based sales charges on Class B and Class C shares, and
will also differ in amount as a consequence of any difference in
net asset value between the classes.
Tax Status of the Fund's Dividends and Distributions. The Federal
tax treatment of the Fund's dividends and capital gains
distributions is explained in the Prospectus under the caption
"Dividends, Capital Gains and Taxes." Special provisions of the
Internal Revenue Code govern the eligibility of the Fund's
dividends for the dividends-received deduction for corporate
shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends
paid by the Fund which may qualify for the deduction is limited to
the aggregate amount of qualifying dividends that the Fund derives
from its portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be
eligible for the deduction on dividends paid on Fund shares held
for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or
short-term gains from the sale of securities or dividends from
foreign corporations, those dividends will not qualify for the
deduction.
If prior distributions must be re-characterized at the end of
the fiscal year as a result of the effect of a Fund's investment
policies, shareholders may have a non-taxable return of capital,
which will be identified in notices to shareholders. There is no
fixed dividend rate and there can be no assurance as to the payment
of any dividends or the realization of any capital gains.
If the Fund qualifies as a "regulated investment company"
under the Internal Revenue Code, it will not be liable for Federal
income taxes on amounts paid by it as dividends and distributions.
The Fund qualified as a regulated investment company in its last
fiscal year and intends to qualify in future years, but reserves
the right not to qualify. The Internal Revenue Code contains a
number of complex tests to determine whether a Fund will qualify,
and a Fund might not meet those tests in a particular year. For
example, if a Fund derives 30% or more of its gross income from the
sale of securities held less than three months, it may fail to
qualify (see "Tax Aspects of Covered Calls and Hedging
Instruments," above). If it does not qualify, a Fund will be
treated for tax purposes as an ordinary corporation and will
receive no tax deduction for payments of dividends and
distributions made to shareholders.
Under the Internal Revenue Code, by December 31 each year, the
Fund must distribute 98% of its taxable investment income earned
from January 1 through December 31 of that year and 98% of its
capital gains realized in the period from November 1 of the prior
year through October 31 of the current year, or else the Fund must
pay an excise tax on the amounts not distributed. While it is
presently anticipated that the Fund will meet those requirements,
the Fund's Board of Trustees and the Manager might determine in a
particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the
required levels and to pay the excise tax on the undistributed
amounts. That would reduce the amount of income or capital gains
available for distribution to shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund
may elect to reinvest all dividends and/or capital gains
distributions in shares of the same class of any of the other
Oppenheimer funds listed in "Reduced Sales Charges," above, at net
asset value without sales charge. To elect this option, a
shareholder must notify the Transfer Agent in writing and either
have an existing account in the fund selected for reinvestment or
must obtain a prospectus for that fund and an application from the
Distributor to establish an account. The investment will be made
at the net asset value per share in effect at the close of business
on the payable date of the dividend or distribution. Dividends
and/or distributions from certain of the Oppenheimer funds may be
invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on
the portfolio securities and handling the delivery of such
securities to and from the Fund. The Manager has represented to
the Fund that the banking relationships between the Manager and the
Custodian have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in
a manner uninfluenced by any banking relationship the Custodian may
have with the Manager and its affiliates.
Independent Auditors. The independent auditors of the Fund audit
the Fund's financial statements and perform other related audit
services. They also act as auditors for certain other funds
advised by the Manager and its affiliates.
Independent Auditors' Report
================================================================================
The Board of Trustees and Shareholders of Oppenheimer Growth Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Growth Fund as of August 31, 1996, and the related
statements of operations for the two month period then ended and the year ended
June 30, 1996, the statements of changes in net assets for the two month period
ended August 31, 1996 and the years ended June 30, 1996 and 1995, and the
financial highlights for the two month period ended August 31, 1996 and for each
of the years in the five year period ended June 30, 1996. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1996 by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Growth Fund as of August 31, 1996, the results of its operations for
the two month period then ended and the year ended June 30, 1996, the changes in
its net assets for the two month period ended August 31, 1996 and the years
ended June 30, 1996 and 1995, and the financial highlights for the two month
period ended August 31, 1996 and each of the years in the five year period ended
June 30, 1996, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
September 23, 1996
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments August 31, 1996
Market Value
Shares See Note 1
====================================================================================================================================
<S> <C> <C> <C>
Common Stocks--68.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Materials--4.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.9%
FMC Corp.(1) 25,000 $ 1,600,000
----------------------------------------------------------------------------------------------------------------
Georgia Gulf Corp. 210,000 6,615,000
----------------------------------------------------------------------------------------------------------------
Morton International, Inc. 180,000 6,682,500
----------------------------------------------------------------------------------------------------------------
Praxair, Inc. 30,000 1,233,750
----------------------------------------------------------------------------------------------------------------
Terra Industries, Inc. 112,500 1,490,625
----------------------------------------------------------------------------------------------------------------
Union Carbide Corp. 161,100 6,967,575
--------------
24,589,450
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--1.2%
Asarco, Inc. 300,000 7,762,500
----------------------------------------------------------------------------------------------------------------
British Steel PLC, ADR 95,000 2,766,875
----------------------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co. 140,000 2,975,000
----------------------------------------------------------------------------------------------------------------
LTV Corp. 195,000 2,291,250
--------------
15,795,625
- ------------------------------------------------------------------------------------------------------------------------------------
Paper--1.8%
Boise Cascade Corp. 185,000 6,243,750
----------------------------------------------------------------------------------------------------------------
Bowater, Inc. 315,000 11,340,000
----------------------------------------------------------------------------------------------------------------
Chesapeake Corp. 65,000 1,592,500
----------------------------------------------------------------------------------------------------------------
Georgia-Pacific Corp. 15,000 1,115,625
----------------------------------------------------------------------------------------------------------------
Stone Container Corp. 210,000 2,913,750
--------------
23,205,625
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--6.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--0.6%
Kaufman & Broad Home Corp. 20,000 245,000
----------------------------------------------------------------------------------------------------------------
Navistar International Corp.(1) 555,000 5,411,250
----------------------------------------------------------------------------------------------------------------
Toll Brothers, Inc.(1) 110,000 1,911,250
--------------
7,567,500
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--2.7%
Alaska Air Group, Inc.(1) 65,000 1,373,125
----------------------------------------------------------------------------------------------------------------
AMR Corp.(1) 45,000 3,690,000
----------------------------------------------------------------------------------------------------------------
British Airways PLC, Sponsored ADR 5,000 411,250
----------------------------------------------------------------------------------------------------------------
Brunswick Corp. 250,000 5,281,250
----------------------------------------------------------------------------------------------------------------
Disney (Walt) Co. 60,000 3,420,000
----------------------------------------------------------------------------------------------------------------
KLM Royal Dutch Airlines NV 112,682 3,141,011
----------------------------------------------------------------------------------------------------------------
Mattel, Inc. 40,000 1,055,000
----------------------------------------------------------------------------------------------------------------
McDonald's Corp. 75,000 3,478,125
----------------------------------------------------------------------------------------------------------------
Northwest Airlines Corp., Cl. A(1) 30,000 1,132,500
----------------------------------------------------------------------------------------------------------------
Outback Steakhouse, Inc.(1) 190,000 5,367,500
----------------------------------------------------------------------------------------------------------------
Outboard Marine Corp. 275,000 4,606,250
----------------------------------------------------------------------------------------------------------------
Pancho's Mexican Buffet, Inc. 100,000 212,500
----------------------------------------------------------------------------------------------------------------
Shoney's, Inc.(1) 150,000 1,368,750
--------------
34,537,261
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Retail: General--1.6%
Dillard Department Stores, Inc., Cl. A 5,000 $ 170,000
----------------------------------------------------------------------------------------------------------------
Dollar General Corp. 293,750 9,473,437
----------------------------------------------------------------------------------------------------------------
Eckerd Corp.(1) 56,700 1,389,150
----------------------------------------------------------------------------------------------------------------
Jones Apparel Group, Inc.(1) 35,000 1,938,125
----------------------------------------------------------------------------------------------------------------
Nautica Enterprises, Inc.(1) 25,000 662,500
----------------------------------------------------------------------------------------------------------------
Tommy Hilfiger Corp.(1) 60,000 3,007,500
----------------------------------------------------------------------------------------------------------------
Waban, Inc.(1) 165,000 3,506,250
--------------
20,146,962
- ------------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--1.4%
Bed Bath & Beyond, Inc.(1) 310,000 7,013,750
----------------------------------------------------------------------------------------------------------------
Claire's Stores, Inc. 97,500 3,217,500
----------------------------------------------------------------------------------------------------------------
Micro Warehouse, Inc.(1) 200,000 5,375,000
----------------------------------------------------------------------------------------------------------------
Rocky Mountain Chocolate Factory, Inc.(1) 100,000 837,500
----------------------------------------------------------------------------------------------------------------
Ross Stores, Inc. 15,000 577,500
----------------------------------------------------------------------------------------------------------------
Sotheby's Holdings, Inc., Cl. A 95,000 1,472,500
--------------
18,493,750
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--13.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages--1.7%
Coca-Cola Co. (The) 210,000 10,500,000
----------------------------------------------------------------------------------------------------------------
PepsiCo, Inc. 390,000 11,212,500
--------------
21,712,500
- ------------------------------------------------------------------------------------------------------------------------------------
Food--1.5%
IBP, Inc. 360,000 8,415,000
----------------------------------------------------------------------------------------------------------------
Safeway, Inc.(1) 150,000 5,437,500
----------------------------------------------------------------------------------------------------------------
Sara Lee Corp. 125,000 3,937,500
----------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc.(1) 60,000 1,665,000
--------------
19,455,000
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--4.4%
Bristol-Myers Squibb Co. 75,000 6,581,250
----------------------------------------------------------------------------------------------------------------
Johnson & Johnson 200,300 9,864,775
----------------------------------------------------------------------------------------------------------------
Merck & Co., Inc. 140,000 9,187,500
----------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 225,000 15,975,000
----------------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 280,000 15,645,000
--------------
57,253,525
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies &
Services--3.8%
Beverly Enterprises, Inc.(1) 5,000 51,250
----------------------------------------------------------------------------------------------------------------
Boston Scientific Corp.(1) 35,000 1,605,625
----------------------------------------------------------------------------------------------------------------
Collagen Corp. 75,000 1,481,250
----------------------------------------------------------------------------------------------------------------
HealthCare COMPARE Corp.(1) 375,000 16,031,250
----------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp.(1) 140,000 4,532,500
----------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 310,000 16,120,000
----------------------------------------------------------------------------------------------------------------
Nellcor Puritan Bennett, Inc.(1) 90,000 2,317,500
----------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc.(1) 55,000 2,516,250
----------------------------------------------------------------------------------------------------------------
Sofamor Danek Group, Inc.(1) 115,000 3,306,250
----------------------------------------------------------------------------------------------------------------
Summit Technology, Inc.(1) 240,000 1,590,000
--------------
49,551,875
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tobacco--2.2%
Philip Morris Cos., Inc. 195,000 $ 17,501,250
----------------------------------------------------------------------------------------------------------------
UST, Inc. 350,000 10,500,000
--------------
28,001,250
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--1.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Services &
Producers--0.5%
Global Marine, Inc.(1) 50,000 718,750
----------------------------------------------------------------------------------------------------------------
Tidewater, Inc. 150,000 5,756,250
--------------
6,475,000
- ------------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--0.7%
Phillips Petroleum Co. 30,000 1,215,000
----------------------------------------------------------------------------------------------------------------
Repsol SA, Sponsored ADR 90,000 2,936,250
----------------------------------------------------------------------------------------------------------------
USX-Marathon Group 250,000 5,218,750
--------------
9,370,000
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--17.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Banks--5.4%
Bank of Boston Corp. 355,000 18,726,250
----------------------------------------------------------------------------------------------------------------
Bank of New York Co., Inc. (The) 38,600 1,075,975
----------------------------------------------------------------------------------------------------------------
BankAmerica Corp. 15,000 1,162,500
----------------------------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 10,000 777,500
----------------------------------------------------------------------------------------------------------------
Cal Fed Bancorp, Inc.(1) 55,000 1,251,250
----------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 110,000 8,181,250
----------------------------------------------------------------------------------------------------------------
First Tennessee National Corp. 30,000 1,023,750
----------------------------------------------------------------------------------------------------------------
First Union Corp. 90,000 5,748,750
----------------------------------------------------------------------------------------------------------------
Fleet Financial Group, Inc. 124,996 5,218,583
----------------------------------------------------------------------------------------------------------------
Great Western Financial Corp. 131,400 3,252,150
----------------------------------------------------------------------------------------------------------------
NationsBank Corp. 90,000 7,661,250
----------------------------------------------------------------------------------------------------------------
Northern Trust Corp. 25,000 1,640,625
----------------------------------------------------------------------------------------------------------------
PNC Bank Corp. 307,500 9,609,375
----------------------------------------------------------------------------------------------------------------
SouthTrust Corp. 155,000 4,572,500
----------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 5,000 191,875
--------------
70,093,583
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--8.5%
Advanta Corp., Cl. A 360,000 17,595,000
----------------------------------------------------------------------------------------------------------------
Bear Stearns Cos., Inc. 231,700 5,415,987
----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 70,000 6,186,250
----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn 300,000 9,300,000
----------------------------------------------------------------------------------------------------------------
First USA, Inc. 210,000 11,130,000
----------------------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 640,000 22,240,000
----------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 260,000 5,492,500
----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 20,000 1,225,000
----------------------------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc. 25,000 1,193,750
----------------------------------------------------------------------------------------------------------------
Price (T. Rowe) Associates 65,000 1,885,000
----------------------------------------------------------------------------------------------------------------
Quick & Reilly Group, Inc. 10,000 292,500
----------------------------------------------------------------------------------------------------------------
Salomon, Inc. 137,500 6,187,500
----------------------------------------------------------------------------------------------------------------
Student Loan Marketing Assn. 100,000 7,362,500
----------------------------------------------------------------------------------------------------------------
Travelers Group, Inc. 315,000 13,663,125
--------------
109,169,112
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Shares See Note 1
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--3.7%
AFLAC, Inc. 210,000 $ 7,218,750
----------------------------------------------------------------------------------------------------------------
Allstate Corp. 65,000 2,900,625
----------------------------------------------------------------------------------------------------------------
American International Group, Inc. 15,000 1,425,000
----------------------------------------------------------------------------------------------------------------
Conseco, Inc. 80,000 3,360,000
----------------------------------------------------------------------------------------------------------------
Loews Corp. 80,000 5,980,000
----------------------------------------------------------------------------------------------------------------
MGIC Investment Corp. 15,000 950,625
----------------------------------------------------------------------------------------------------------------
Reliastar Financial Corp. 135,000 5,956,875
----------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. 242,500 16,520,313
----------------------------------------------------------------------------------------------------------------
USF&G Corp. 190,000 3,063,750
--------------
47,375,938
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial--4.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--1.3%
General Electric Co. 30,000 2,493,750
----------------------------------------------------------------------------------------------------------------
Kemet Corp.(1) 510,000 8,670,000
----------------------------------------------------------------------------------------------------------------
Vishay Intertechnology, Inc.(1) 273,000 5,494,125
--------------
16,657,875
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Materials--0.1%
Owens Corning(1) 35,000 1,273,125
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.8%
Comdisco, Inc. 307,500 7,995,000
----------------------------------------------------------------------------------------------------------------
Growth Environmental, Inc.(1) 2,100 32
----------------------------------------------------------------------------------------------------------------
Mercury Air Group, Inc. 121,000 892,375
----------------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 15,000 751,875
--------------
9,639,282
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing--1.0%
Giddings & Lewis, Inc. 60,000 780,000
----------------------------------------------------------------------------------------------------------------
Kulicke & Soffa Industries, Inc.(1) 225,000 2,221,875
----------------------------------------------------------------------------------------------------------------
Mark IV Industries, Inc. 95,000 2,042,500
----------------------------------------------------------------------------------------------------------------
Sealed Air Corp.(1) 70,000 2,651,250
----------------------------------------------------------------------------------------------------------------
Textron, Inc. 15,000 1,280,625
----------------------------------------------------------------------------------------------------------------
Trinity Industries, Inc. 25,000 809,375
----------------------------------------------------------------------------------------------------------------
U.S. Filter Corp.(1) 30,000 783,750
----------------------------------------------------------------------------------------------------------------
Varity Corp.(1) 50,000 2,512,500
--------------
13,081,875
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--0.9%
Canadian Pacific Ltd. (New) 245,000 5,512,500
----------------------------------------------------------------------------------------------------------------
CSX Corp. 50,000 2,531,250
----------------------------------------------------------------------------------------------------------------
Illinois Central Corp. 105,000 3,176,250
--------------
11,220,000
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--20.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--7.2%
Adaptec, Inc.(1) 55,000 2,743,125
----------------------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(1) 265,000 16,165,000
----------------------------------------------------------------------------------------------------------------
Compaq Computer Corp.(1) 250,000 14,156,250
----------------------------------------------------------------------------------------------------------------
Dell Computer Corp.(1) 25,000 1,678,125
----------------------------------------------------------------------------------------------------------------
EMC Corp.(1) 290,000 5,582,500
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer Hardware
(continued)
Gateway 2000, Inc.(1) 500,000 $ 22,281,250
----------------------------------------------------------------------------------------------------------------
Intergraph Corp.(1) 300,000 2,737,500
----------------------------------------------------------------------------------------------------------------
International Business Machines Corp. 40,000 4,575,000
----------------------------------------------------------------------------------------------------------------
Quantum Corp.(1) 220,000 3,382,500
----------------------------------------------------------------------------------------------------------------
Seagate Technology, Inc.(1) 215,000 10,320,000
----------------------------------------------------------------------------------------------------------------
Western Digital Corp.(1) 270,000 9,483,750
--------------
93,105,000
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software--6.6%
Acclaim Entertainment, Inc.(1) 130,000 1,056,250
----------------------------------------------------------------------------------------------------------------
Automatic Data Processing, Inc. 175,000 7,284,375
----------------------------------------------------------------------------------------------------------------
BMC Software, Inc.(1) 300,000 22,350,000
----------------------------------------------------------------------------------------------------------------
Broderbund Software, Inc.(1) 30,000 903,750
----------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 232,500 12,206,250
----------------------------------------------------------------------------------------------------------------
GTech Holdings Corp.(1) 183,200 5,083,800
----------------------------------------------------------------------------------------------------------------
HBO & Co. 40,000 2,185,000
----------------------------------------------------------------------------------------------------------------
Informix Corp.(1) 25,000 562,500
----------------------------------------------------------------------------------------------------------------
Microsoft Corp.(1) 155,000 18,987,500
----------------------------------------------------------------------------------------------------------------
Oracle Corp.(1) 70,000 2,467,500
----------------------------------------------------------------------------------------------------------------
Peoplesoft, Inc.(1) 20,000 1,535,000
----------------------------------------------------------------------------------------------------------------
Sterling Software, Inc.(1) 90,000 6,108,750
----------------------------------------------------------------------------------------------------------------
System Software Associates, Inc. 380,000 3,990,000
--------------
84,720,675
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics--4.8%
Applied Materials, Inc.(1) 45,000 1,091,250
----------------------------------------------------------------------------------------------------------------
Arrow Electronics, Inc.(1) 215,000 9,809,375
----------------------------------------------------------------------------------------------------------------
Cypress Semiconductor Corp.(1) 710,000 8,253,750
----------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 30,000 1,312,500
----------------------------------------------------------------------------------------------------------------
Intel Corp. 100,000 7,981,250
----------------------------------------------------------------------------------------------------------------
International Rectifier Corp.(1) 190,000 3,633,750
----------------------------------------------------------------------------------------------------------------
Linear Technology Corp. 70,000 2,380,000
----------------------------------------------------------------------------------------------------------------
Novellus Systems, Inc.(1) 305,000 11,513,750
----------------------------------------------------------------------------------------------------------------
Philips Electronics NV, ADR 80,000 2,710,000
----------------------------------------------------------------------------------------------------------------
Tektronix, Inc. 65,000 2,518,750
----------------------------------------------------------------------------------------------------------------
Texas Instruments, Inc. 20,000 935,000
----------------------------------------------------------------------------------------------------------------
Varian Associates, Inc. 60,000 2,737,500
----------------------------------------------------------------------------------------------------------------
VLSI Technology, Inc.(1) 325,000 4,550,000
----------------------------------------------------------------------------------------------------------------
Wyle Electronics 85,000 2,741,250
--------------
62,168,125
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications-
Technology--1.9%
3Com Corp.(1) 220,000 10,285,000
----------------------------------------------------------------------------------------------------------------
AT&T Corp. 100,000 5,250,000
----------------------------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Cl. B, ADR 90,000 2,075,625
----------------------------------------------------------------------------------------------------------------
Telecom Corp. of New Zealand Ltd., Sponsored ADR 75,000 5,737,500
----------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(1) 45,000 945,000
--------------
24,293,125
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Utilities--0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--0.3%
Empresa Nacional de Electricidad SA, Sponsored ADR 75,000 $ 4,406,250
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities--0.3%
Telefonos de Mexico SA, Sponsored ADR 100,000 3,287,500
--------------
Total Common Stocks (Cost $569,082,827) 886,646,788
Units
====================================================================================================================================
Rights, Warrants and Certificates--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Windmere-Durable Holdings, Inc. Wts., Exp. 1/98 (Cost $0) 9,062 --
Face
Amount
====================================================================================================================================
Short-Term Notes--23.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Broker/Dealers--3.1%
Goldman Sachs & Co., 5.30%, 9/9/96 $40,000,000 39,952,889
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial Finance--3.0%
CIT Group Holdings, Inc., 5.29%, 9/26/96 38,000,000 37,860,403
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Finance--3.1%
American Express Credit Corp., 5.28%, 9/25/96 40,000,000 39,859,200
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--6.2%
General Electric Capital Corp., 5.27%, 9/17/96 40,000,000 39,906,311
----------------------------------------------------------------------------------------------------------------
Household Finance Corp., 5.30%, 10/4/96 40,000,000 39,805,667
--------------
79,711,978
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--2.3%
PHH Corp., 5.29%, 10/1/96 30,000,000 29,867,750
- ------------------------------------------------------------------------------------------------------------------------------------
Special Purpose Financial--5.3%
New Center Asset Trust, 5.28%, 9/23/96 40,000,000 39,870,933
----------------------------------------------------------------------------------------------------------------
Sheffield Receivables Corp., 5.29%, 9/17/96 28,985,000 28,916,853
--------------
68,787,786
--------------
Total Short-Term Notes (Cost $296,040,006) 296,040,006
====================================================================================================================================
Repurchase Agreement--8.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.22%, dated 8/30/96, to be repurchased at $103,960,262 on
9/3/96, collateralized by U.S. Treasury Nts., 4.75%--9.25%,
7/31/97--11/15/04, with a value of $106,024,709
(Cost $103,900,000) 103,900,000 103,900,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $969,022,833) 99.8% 1,286,586,794
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.2 2,217,474
----------- --------------
Net Assets 100.0% $1,288,804,268
=========== ==============
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities August 31, 1996
====================================================================================================================================
<S> <C> <C>
Assets Investments, at value (cost $969,022,833)--see accompanying statement $1,286,586,794
----------------------------------------------------------------------------------------------------------------
Cash 106,004
----------------------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 2,981,317
Investments sold 1,799,258
Interest and dividends 955,954
----------------------------------------------------------------------------------------------------------------
Other 195,403
--------------
Total assets 1,292,624,730
====================================================================================================================================
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed 1,917,067
Investments purchased 916,250
Distribution and service plan fees 378,016
Trustees' fees 266,401
Shareholder reports 182,547
Transfer and shareholder servicing agent fees 82,984
Dividends 25,189
Other 52,008
--------------
Total liabilities 3,820,462
====================================================================================================================================
Net Assets $1,288,804,268
==============
====================================================================================================================================
Composition of Paid-in capital $ 848,772,734
Net Assets ----------------------------------------------------------------------------------------------------------------
Accumulated net investment income 11,195,907
----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 111,271,666
----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 317,563,961
--------------
Net assets $1,288,804,268
===============
====================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of
$1,127,836,241 and 33,479,487 shares of beneficial interest outstanding) $33.69
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $35.75
----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $137,436,848 and 4,172,024 shares of beneficial interest outstanding) $32.94
----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $5,034,227 and 150,647 shares of beneficial interest outstanding) $33.42
----------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $18,496,952 and 549,005 shares of beneficial interest outstanding) $33.69
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
Two Months Year Ended
Ended Aug. 31, June 30,
1996(1) 1996
====================================================================================================================================
<S> <C> <C> <C>
Investment Income Interest $3,381,607 $17,120,681
----------------------------------------------------------------------------------------------------------------
Dividends 2,012,470 10,809,740
Foreign withholding taxes (25,951) (103,976)
---------- ------------
Total income 5,368,126 27,826,445
====================================================================================================================================
Expenses Management fees--Note 4 1,415,789 7,558,069
----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 326,094 1,726,845
Class B 223,302 904,437
Class C 6,917 11,561
----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 313,235 1,619,012
----------------------------------------------------------------------------------------------------------------
Shareholder reports 34,863 356,339
----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 17,560 64,836
----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 15,029 70,515
----------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 48 626
Class B 5,288 25,101
Class C 478 1,191
Class Y 1,244 3,930
----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 6,731 134,218
----------------------------------------------------------------------------------------------------------------
Insurance expenses 4,571 48,839
----------------------------------------------------------------------------------------------------------------
Other 11,421 98,330
---------- ------------
Total expenses 2,382,570 12,623,849
====================================================================================================================================
Net Investment Income 2,985,556 15,202,596
====================================================================================================================================
Realized and Net realized gain on investments 21,616,200 123,112,424
Unrealized ----------------------------------------------------------------------------------------------------------------
Gain (Loss) Net change in unrealized appreciation or depreciation on investments (16,129,626) 65,683,680
---------- ------------
Net realized and unrealized gain 5,486,574 188,796,104
====================================================================================================================================
Net Increase in Net Assets Resulting From Operations $8,472,130 $203,998,700
========== ============
</TABLE>
1. The Fund changed its fiscal year end from June 30 to
August 31.
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Two Months
Ended Aug. 31, Year Ended June 30,
1996(1) 1996 1995
===================================================================================================================================
<S> <C> <C> <C> <C>
Operations Net investment income $2,985,556 $15,202,596 $ 9,619,976
----------------------------------------------------------------------------------------------------------------
Net realized gain 21,616,200 123,112,424 85,671,017
----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (16,129,626) 65,683,680 104,043,105
-------------- -------------- ------------
Net increase in net assets resulting from operations 8,472,130 203,998,700 199,334,098
===================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A -- (12,145,385) (5,772,443)
Shareholders Class B -- (763,600) (71,931)
Class C -- (8,006) --
Class Y -- (111,943) (1,224)
----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (92,881,153) (67,428,961)
Class B -- (8,596,317) (1,571,030)
Class C -- (61,792) --
Class Y -- (783,715) (13,169)
===================================================================================================================================
Beneficial Net increase in net assets resulting from beneficial
Interest interest transactions--Note 2:
Transactions Class A 307,757 176,397,622 83,386,522
Class B 7,152,701 81,183,295 30,660,868
Class C 1,404,159 3,526,653 --
Class Y 2,233,988 12,281,833 2,984,504
===================================================================================================================================
Net Assets Total increase 19,570,735 362,036,192 241,507,234
----------------------------------------------------------------------------------------------------------------
Beginning of period 1,269,233,533 907,197,341 665,690,107
-------------- -------------- ------------
End of period (including undistributed
net investment income of $11,195,907,
$8,210,351 and $6,036,689, respectively) $1,288,804,268 $1,269,233,533 $907,197,341
============== ============== ============
</TABLE>
1. The Fund changed its fiscal year end from June 30 to
August 31.
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A
-------------------------------------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994 1993 1992
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $33.43 $30.80 $26.65 $27.34 $24.94 $21.88
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) .08 .44 .36 .16 .19 .29
Net realized and
unrealized gain (loss) .18 5.70 6.83 (.05) 4.03 3.13
------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations .26 6.14 7.19 .11 4.22 3.42
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.41) (.24) (.16) (.25) (.36)
Distributions from net realized gain -- (3.10) (2.80) (.64) (1.57) --
------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders -- (3.51) (3.04) (.80) (1.82) (.36)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.69 $33.43 $30.80 $26.65 $27.34 $24.94
====== ====== ====== ====== ====== ======
========================================================================================================================
Total Return, at Net Asset Value(5) 0.78% 21.00% 29.45% 0.27% 16.88% 15.69%
========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,127,836 $1,120,046 $860,736 $656,934 $743,830 $630,767
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,101,233 $1,018,022 $727,102 $720,765 $710,391 $624,527
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 1.50%(6) 1.43% 1.31% 0.56% 0.72% 1.14%
Expenses 1.03%(6) 1.06% 1.05% 1.07% 0.93% 0.90%
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8% 23.2% 36.7%
Average brokerage commission rate(8) $0.0595 $0.0583 -- -- -- --
<CAPTION>
Financial Highlights (Continued)
Class B Class C
---------------------------------------------- --------------------
Two Months Two Months Period
Ended Ended Ended
August 31, Year Ended June 30, August 31, June 30,
1996(2) 1996 1995 1994(4) 1996(2) 1996(3)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $32.74 $30.36 $26.44 $27.02 $33.22 $33.44
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) .04 .23 .20 (.04) .02 .40
Net realized and
unrealized gain (loss) .16 5.53 6.65 .21 .18 2.88
------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations .20 5.76 6.85 .17 .20 3.28
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.28) (.13) (.11) -- (.40)
Distributions from net realized gain -- (3.10) (2.80) (.64) -- (3.10)
------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders -- (3.38) (2.93) (.75) -- (3.50)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $32.94 $32.74 $30.36 $26.44 $33.42 $33.22
====== ====== ====== ====== ====== ======
========================================================================================================================
Total Return, at Net Asset Value(5) 0.61% 19.95% 28.22% (0.20)% 0.60% 10.07%
========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $137,437 $129,484 $43,267 $8,747 $5,034 $3,593
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $131,142 $ 90,501 $18,722 $5,119 $4,105 $1,804
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.61%(6) 0.60% 0.44% (0.22)%(6) 0.44%(6) 0.65%(6)
Expenses 1.92%(6) 1.89% 2.02% 1.98%(6) 2.10%(6) 1.81%(6)
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8% 6.3% 38.0%
Average brokerage commission rate(8) $0.0595 $0.0583 -- -- $0.0595 $0.0583
<CAPTION>
Financial Highlights (Continued)
Class Y
-------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994(1)
==========================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $33.42 $30.80 $26.64 $28.08
- ------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) .08 .46 .30 .02
Net realized and
unrealized gain (loss) .19 5.70 6.92 (1.46)
------ ------ ------ ------
Total income (loss) from
investment operations .27 6.16 7.22 (1.44)
- ------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.44) (.26) --
Distributions from net realized gain -- (3.10) (2.80) --
------ ------ ------ ------
Total dividends and distributions
to shareholders -- (3.54) (3.06) --
- ------------------------------------------------------------------------------------------
Net asset value, end of period $33.69 $33.42 $30.80 $26.64
====== ====== ====== ======
==========================================================================================
Total Return, at Net Asset Value(5) 0.81% 21.10% 29.59% (5.13)%
==========================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $18,497 $16,110 $3,189 $ 9
- ------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,792 $ 9,384 $ 536 $10
- ------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 1.67%(6) 1.56% 1.54% 1.09%(6)
Expenses 0.87%(6) 0.94% 1.04% 1.25%(6)
- ------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8%
Average brokerage commission rate(8) $0.0595 $0.0583 -- --
</TABLE>
1. For the period from June 1, 1994 (inception of offering) to June 30, 1994.
2. The Fund changed its fiscal year end from June 30 to August 31.
3. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
4. For the period from August 17, 1993 (inception of offering) to June 30, 1994.
Per share amounts calculated based on the weighted average number of shares
outstanding during the period.
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
6. Annualized.
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1996 were $62,748,065 and $55,257,768, respectively.
8. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant
Accounting Policies
Oppenheimer Growth Fund (the Fund), is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. On August 15, 1996, the Board of Trustees elected to change the fiscal
year end of the Fund from June 30 to August 31. Accordingly, these financial
statements include information for the two month period from July 1, 1996 to
August 31, 1996. The Fund's investment objective is to seek capital
appreciation, primarily by investing in stocks of established growth companies.
The Fund's investment adviser is OppenheimerFunds, Inc. (the Manager). The Fund
offers Class A, Class B, Class C and Class Y shares. Class A shares are sold
with a front-end sales charge. Class B and Class C shares may be subject to a
contingent deferred sales charge. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to a particular class and exclusive voting rights
with respect to matters affecting a single class. Classes A, B and C have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
``non-money market'' debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by the
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term ``money market type'' debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the two months
ended August 31, 1996, a reduction of $2,937 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $248,209 at August
31, 1996.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from the ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gain (loss) was recorded by the
Fund.
<PAGE>
================================================================================
1. Significant
Accounting Policies
(continued)
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Shares of
Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Two Months Ended Aug. 31, 1996(2) Year Ended June 30, 1996(1) Year Ended June 30, 1995
-------------------------------- -------------------------- ------------------------
Shares Amount Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Sold 1,266,269 $ 42,270,466 8,407,775 $ 275,835,781 5,288,654 $ 147,552,419
Dividends and distributions
reinvested -- -- 3,323,811 101,576,179 2,803,654 70,904,457
Redeemed (1,295,165) (41,962,709) (6,169,610) (201,014,338) (4,799,772) (135,070,354)
--------- ------------- --------- ------------- --------- -------------
Net increase (decrease) (28,896) $ 307,757 5,561,976 $ 176,397,622 3,292,536 $ 83,386,522
========= ============= ========= ============= ========= =============
- -----------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 439,943 $ 14,333,878 3,119,546 $ 100,609,679 1,407,470 $ 39,568,793
Dividends and distributions
reinvested -- -- 288,253 8,664,821 64,577 1,618,927
Redeemed (223,354) (7,181,177) (877,701) (28,091,205) (377,530) (10,526,852)
--------- ------------- --------- ------------- --------- -------------
Net increase 216,589 $ 7,152,701 2,530,098 $ 81,183,295 1,094,517 $ 30,660,868
========= ============= ========= ============= ========= =============
- -----------------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 45,312 $ 1,497,092 111,265 $ 3,624,375 -- $ --
Dividends and distributions
reinvested -- -- 2,287 69,761 -- --
Redeemed (2,825) (92,933) (5,392) (167,483) -- --
--------- ------------- --------- ------------- --------- -------------
Net increase 42,487 $ 1,404,159 108,160 $ 3,526,653 -- $ --
========= ============= ========= ============= ========= =============
- -----------------------------------------------------------------------------------------------------------------------------------
Class Y:
Sold 101,673 $ 3,383,454 439,359 $ 14,330,346 113,317 $ 3,284,040
Dividends and distributions
reinvested -- -- 29,328 895,658 569 14,393
Redeemed (34,706) (1,149,466) (90,199) (2,944,171) (10,692) (313,929)
--------- ------------- --------- ------------- --------- -------------
Net increase 66,967 $ 2,233,988 378,488 $ 12,281,833 103,194 $ 2,984,504
========= ============= ========= ============= ========= =============
</TABLE>
1. For the year ended June 30, 1996 for Class A, B and Y shares, and for the
period from November 1, 1995 (inception of offering) to June 30, 1996 for Class
C shares.
2. The Fund changed its fiscal year end from June 30 to August 31.
================================================================================
3. Unrealized Gains and
Losses on Investments
At August 31, 1996, net unrealized appreciation on investments of $317,563,961
was composed of gross appreciation of $343,437,531, and gross depreciation of
$25,873,570.
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% on the first
$200 million of average annual net assets; 0.72% of the next $200 million; 0.69%
of the next $200 million; 0.66% of the next $200 million; and 0.60% on net
assets in excess of $800 million. The Manager has voluntarily undertaken to
waive a portion of its management fee, whereby the Fund shall pay an annual
management fee of 0.58% of its net assets in excess of $1.5 billion. The Manager
has agreed to reimburse the Fund if aggregate expenses (with specified
exceptions) exceed the most stringent applicable regulatory limit on Fund
expenses.
For the two months ended August 31, 1996, commissions (sales charges paid
by investors) on sales of Class A shares totaled $424,452, of which $134,309 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $429,624 and $10,124, of which $25,126 was paid to an
affiliated broker/dealer for Class B. During the two months ended August 31,
1996, OFDI received contingent deferred sales charges of $60,623 upon redemption
of Class B shares as reimbursement for sales commissions advanced by OFDI at the
time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average annual net
assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the two months ended August 31, 1996, OFDI paid $9,657 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class B shares to reimburse OFDI for its services and costs in distributing
Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B shares that are
outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per
year to reimburse dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual net assets of Class
B shares, determined as of the close of each regular business day. If the Plan
is terminated by the Fund, the Board of Trustees may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain expenses it
incurred before the Plan was terminated. During the two months ended August 31,
1996, OFDI paid $1,207 to an affiliated broker/dealer as reimbursement for Class
B personal service and maintenance expenses and retained $195,442 as
reimbursement for Class B sales commissions and service fee advances, as well as
financing costs. As of August 31, 1996, OFDI had incurred unreimbursed expenses
of $3,988,986 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan for
Class C shares to compensate OFDI for its services and costs in distributing
Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class C shares. Both fees are computed
on the average annual net assets of Class C shares, determined as of the close
of each regular business day. If the Plan is terminated by the Fund, the Board
of Trustees may allow the Fund to continue payments of the asset-based sales
charge to OFDI for certain expenses it incurred before the Plan was terminated.
During the two months ended August 31, 1996, OFDI retained $5,934 as
compensation for Class C sales commissions and service fee advances, as well as
financing costs. As of August 31, 1996, OFDI had incurred unreimbursed expenses
of $64,346 for Class C.
<PAGE>
Appendix
Corporate Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking<PAGE>
<PAGE>
<PAGE>
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, NY 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
PX0270
<PAGE>
[FRONT COVER]
Oppenheimer Growth Fund
Annual Report August 31, 1996
[PICTURE OF GOURMET SHOP]
"We have
a lot of
important goals,
so we need
our money
to grow solidly
over time."
[LOGO] OppenheimerFunds(R)
<PAGE>
News
Beat the Average
Cumulative Annual Total Return
for the 3-Year Period Ended
8/31/96:
Oppenheimer Growth Fund
Class A (at net asset value)(1)
57.92%
S&P 500(3)
40.65%
Lipper Growth Funds Average(4)
42.68%
This Fund is for people who want their money to
grow for long-term needs and feel most comfortable
investing in well-known, established companies.
How Your Fund Is Managed
Oppenheimer Growth Fund invests in stocks to seek capital appreciation. The Fund
currently focuses on a diversified portfolio of medium- and large-sized
companies that the managers believe have prospects for better-than-expected
earnings and whose stock is selling at attractive valuations.
Growth Fund investments are primarily in well-known growth companies, whose
earnings have tended to increase consistently in all types of market conditions.
Performance
Total return at net asset value for the 12 months ended 8/31/96 for Class A, B
and Y shares were 16.21%, 15.19% and 16.31%, respectively. Cumulative total
return at net asset value for Class C shares since inception on 11/1/95 was
10.73%.(1)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1-, 5- and 10-year periods ended 8/31/96 were 9.52%,
12.69% and 11.97%, respectively. For Class B shares, average annual total
returns for the 1-year period ended 8/31/96 and since inception on 8/17/93 were
10.19% and 14.88%, respectively. For Class C shares, cumulative total return
since inception on 11/1/95 was 9.74%. For Class Y shares, average annual total
returns for the 1-year period and since inception on 6/1/94 were 16.31% and
19.78%, respectively.(2)
Outlook
"Our outlook for the Fund remains very positive. Our plan is to continue to
search for companies that exhibit strong long-term growth potential and then
purchase them when their prices have come down to what we believe are reasonable
levels. We feel that by maintaining this proven strategy and investing
accordingly, we have positioned the Fund to exhibit strong performance over the
long term."
Robert Doll, Portfolio Manager
August 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower for
Class A, B, and C shares if sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 8/31/95, 8/31/91
and 8/31/86, after deducting the current maximum initial sales charge of 5.75%.
Class A shares were first publicly offered on 3/15/73. Prior to 4/1/94, the
Fund's maximum sales charge for Class A shares was higher, so that actual
account performance would have been less. Class B returns show results of
hypothetical investments on 8/31/95 and 8/17/93 (inception of class), after the
deduction of the applicable contingent deferred sales charge of 5% (1-year) and
3% (since inception). Class C returns show results of a hypothetical investment
on 11/1/95 (inception of class), after the deduction of the 1% contingent
deferred sales charge. When such returns are calculated in the same manner for
the period ended 9/30/96, they are as follows: for Class A shares, 11.46%,
14.09% and 12.68% for the 1-, 5- and 10-year periods; for Class B shares, 12.23%
and 16.31% for the 1-year period and since inception; for Class C shares,
cumulative total return since inception was 15.29%; and for Class Y shares,
18.39% and 21.62% for the 1-year period and since inception. An example of the
different performance calculations is in the Fund's prospectus.
3. The S&P 500 Index is an unmanaged index of common stocks that is widely
recognized as an indicator of overall market performance. The S&P 500 Index
includes dividend reinvestments but does not take capital gains distributions
into consideration.
4. Source: Lipper Analytical Services, 8/31/96. The Lipper total return average
for the 3-year period was for 395 growth funds. The average is shown for
comparative purposes only. Oppenheimer Growth Fund is characterized by Lipper as
a growth fund. Lipper performance does not take sales charges into
consideration.
2 Oppenheimer Growth Fund
<PAGE>
[PHOTO-BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer
Growth Fund
Dear Shareholder,
Over the past few months, the stock market has shown investors just how
unpredictable it can be. During this time, the market has experienced some
remarkable shifts, both up and down. Despite the recent volatility, we remain
optimistic and see this activity as "normal" movement in a bull market rather
than the onset of a bear market. Here's why.
We entered this period agreeing with many experts that the stock market was
probably due for some kind of a downturn. After all, we had not experienced any
real market correction in six years, making this the longest bull market of the
post-World War II era. Although the market did decline significantly in June and
July, we believe that long-term it will remain strong for the following three
reasons: strong corporate profits; low inflation; and stabilized interest rates.
First, because corporate profits of U.S. companies had advanced at a
double-digit rate between 1992 and 1995, investors had fully expected this
year's profit tallies to be flat. But instead, corporate America continued to
perform. Corporate profits were strong during the first part of the year due to
the fact that many companies reduced their operating expenses and frequently
applied their profits to their businesses.
Second, it is our belief that in today's world, faster economic growth may
not necessarily mean higher inflation. For example, despite reports of an
increase in hourly wages, inflation has remained low. In fact, our outlook is
that inflation will remain under control, primarily because of the Federal
Reserve's conservative monetary policy over the last few years as well as the
declining federal government deficit which should help the stock market to
remain strong.
Third, the strength of the stock market earlier this year is all the more
noteworthy because it came during a time when interest rates moved up
sharply--the yield on the benchmark 30-year U.S. Treasury bond rose from under
6% in January to about 7% today. Interest rates have been rising partly because
investors are concerned about whether the economy is growing fast enough to
generate higher inflation. And, while it's impossible to predict how interest
rates will fluctuate, we believe they will stabilize over the next few months.
Rest assured, however, that we will continue to monitor this situation very
closely and would become very cautious in anticipating the stock market's
performance if inflation were to flare up.
Taking these factors into account this year, our managers have worked hard
to strive to meet their Fund's objective--being careful not to abandon their
investment styles in response to short-term changes in the market. Additionally,
they understand that, historically, a diversified portfolio of stocks has
provided superior growth over the long term. With that in mind, it is critical
for investors to remain focused on long-term goals and put near-term
fluctuations in their proper perspective.
Your portfolio managers discuss the outlook for your Fund in light of these
broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/ Bridget A. Macaskill
Bridget A. Macaskill
September 20, 1996
The Board of Trustees recently decided to change the fiscal year end of this
Fund from June 30 to August 31 in order to facilitate the auditing process. Due
to this change, the next shareholder report you receive will cover the six-month
period ended February 28, 1997.
3 Oppenheimer Growth Fund
<PAGE>
Q + A
Q How has the Fund performed?
An interview with your Fund's managers.
How did the Fund perform over the past two months?
In terms of performance, the Fund has made quite a gain due to the fact we went
into this brief period with higher than usual cash level during the month of
June, which helped to protect the portfolio when the market was declining in
July. So, while we were slightly behind the competition at the end of the second
quarter, thanks to our relatively high cash level, we are now nicely positioned
year-to-date in the first quartile of our peer group.(1)
What investments made positive contributions to performance?
Part of the Fund's strategy is to look for companies that have the potential for
above average earnings growth and are priced below what we feel they are worth.
With this in mind, we recently sold a large number of stocks in the portfolio
because they hit our price targets. Additionally, with the prices of many stocks
having reached all-time highs, we found it difficult to find companies that
were affordable and also had attractive earnings potential. However, when the
market declined in July and stock prices dropped, we were able to find quite a
nice selection of stocks that were reasonably priced.
The biggest area of increase during this short period was our addition to
our holdings in technology stocks, primarily systems software firms and
semiconductor companies. We also increased our financial services holdings,
adding to our existing positions in brokerage firms and life insurance
companies.(2)
Were there any investments that didn't perform as you'd expected?
Some of the chemical and basic materials stocks haven't done as well as we had
hoped, specifically, the larger paper
1. Source:Lipper Analytical Services, 8/31/96. Oppenheimer Growth Fund Class A
shares for the year-to-date period ended 8/31/96 was ranked 135th out of 673
funds; and for the 1-year period ended 8/31/96, the Fund was 200th out of 621
funds in its category. Oppenheimer Growth Fund is characterized by Lipper as a
growth fund. This comparison does not take sales charges into consideration.
Past performance is no guarantee for future results.
2. The Fund's portfolio is subject to change.
4 Oppenheimer Growth Fund
<PAGE>
Facing page
Top left: Robert Doll, Portfolio
Manager and Executive VP,
Director of Equity Investments
Top right:Michael Levine, Member
of Equity Investments Team
Bottom: Bruce Bartlett, Member
of Equity Investments Team
This page
Top: Jay Tracey, Member of Equity
Investments Team
Bottom: Jane Putnam, Member
of Equity Investments Team
A Because
of its defensive
position, the
Fund has
made some
real gains.
companies. Although they did well in the early part of the year, once the
economy showed signs of slowing and the stock market experienced significant
declines, many of these stocks declined also. We had hoped these stocks would
come around after the correction, but that doesn't seem to be the case.
What areas of the market are you currently targeting?
We like the technology sector and intend to add to our positions as
opportunities present themselves. We are coming into the fourth quarter of the
year which is traditionally a very strong period for technology stocks because
it's back to school time when demand for computer equipment generally increases.
On the corporate end, this is also a strong period because businesses are
pressed to spend their budgets before the end of the calendar year. For these
two reasons, computer companies historically launch new software products during
this period, which cause a whole new wave of computer upgrades, both in the home
and office.
In addition, we favor the financial services stocks and don't see that
changing unless interest rates increase significantly from where they are now,
particularly short-term interest rates. Going forward to the end of the year, we
are working to reduce the cash level in the portfolio. We'd like to get it under
20 percent and we'll do that as more stocks hit our price target.
What is your outlook for the Fund?
Our outlook for the Fund remains very positive. We've recently seen some big
swings in the market--but through it all, our investment strategy has remained
the same. History has shown us that investors with long-term goals are often
well-served by growth-oriented securities and that over time, stocks are among
the best-known investments for growth potential. Our plan is to continue to
search for companies that exhibit strong long-term growth potential and then
purchase them when their prices have come down to what we believe are reasonable
levels. We feel that by maintaining this proven strategy and investing
accordingly, we have positioned the Fund to exhibit strong performance over the
long term. []
5 Oppenheimer Growth Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
Contents
Statement of Investments 7
Statement of Assets and Liabilities 13
Statements of Operations 14
Statements of Changes in Net Assets 15
Financial Highlights 16
Notes to Financial Statements 18
Independent Auditors' Report 21
Federal Income Tax Information 22
6 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments August 31, 1996
Market Value
Shares
See Note 1
====================================================================================================================================
<S> <C> <C>
<C>
Common Stocks--68.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Materials--4.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.9%
FMC Corp.(1) 25,000
$ 1,600,000
- ----------------------------------------------------------------------------------------------------------------
Georgia Gulf Corp. 210,000
6,615,000
- ----------------------------------------------------------------------------------------------------------------
Morton International, Inc. 180,000
6,682,500
- ----------------------------------------------------------------------------------------------------------------
Praxair, Inc. 30,000
1,233,750
- ----------------------------------------------------------------------------------------------------------------
Terra Industries, Inc. 112,500
1,490,625
- ----------------------------------------------------------------------------------------------------------------
Union Carbide Corp. 161,100
6,967,575
--------------
24,589,450
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--1.2%
Asarco, Inc. 300,000
7,762,500
- ----------------------------------------------------------------------------------------------------------------
British Steel PLC, ADR 95,000
2,766,875
- ----------------------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co. 140,000
2,975,000
- ----------------------------------------------------------------------------------------------------------------
LTV Corp. 195,000
2,291,250
--------------
15,795,625
- ------------------------------------------------------------------------------------------------------------------------------------
Paper--1.8%
Boise Cascade Corp. 185,000
6,243,750
- ----------------------------------------------------------------------------------------------------------------
Bowater, Inc. 315,000
11,340,000
- ----------------------------------------------------------------------------------------------------------------
Chesapeake Corp. 65,000
1,592,500
- ----------------------------------------------------------------------------------------------------------------
Georgia-Pacific Corp. 15,000
1,115,625
- ----------------------------------------------------------------------------------------------------------------
Stone Container Corp. 210,000
2,913,750
--------------
23,205,625
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--6.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--0.6%
Kaufman & Broad Home Corp. 20,000
245,000
- ----------------------------------------------------------------------------------------------------------------
Navistar International Corp.(1) 555,000
5,411,250
- ----------------------------------------------------------------------------------------------------------------
Toll Brothers, Inc.(1) 110,000
1,911,250
--------------
7,567,500
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--2.7%
Alaska Air Group, Inc.(1) 65,000
1,373,125
- ----------------------------------------------------------------------------------------------------------------
AMR Corp.(1) 45,000
3,690,000
- ----------------------------------------------------------------------------------------------------------------
British Airways PLC, Sponsored ADR 5,000
411,250
- ----------------------------------------------------------------------------------------------------------------
Brunswick Corp. 250,000
5,281,250
- ----------------------------------------------------------------------------------------------------------------
Disney (Walt) Co. 60,000
3,420,000
- ----------------------------------------------------------------------------------------------------------------
KLM Royal Dutch Airlines NV 112,682
3,141,011
- ----------------------------------------------------------------------------------------------------------------
Mattel, Inc. 40,000
1,055,000
- ----------------------------------------------------------------------------------------------------------------
McDonald's Corp. 75,000
3,478,125
- ----------------------------------------------------------------------------------------------------------------
Northwest Airlines Corp., Cl. A(1) 30,000
1,132,500
- ----------------------------------------------------------------------------------------------------------------
Outback Steakhouse, Inc.(1) 190,000
5,367,500
- ----------------------------------------------------------------------------------------------------------------
Outboard Marine Corp. 275,000
4,606,250
- ----------------------------------------------------------------------------------------------------------------
Pancho's Mexican Buffet, Inc. 100,000
212,500
- ----------------------------------------------------------------------------------------------------------------
Shoney's, Inc.(1) 150,000
1,368,750
--------------
34,537,261
</TABLE>
7 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Shares
See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C>
Retail: General--1.6%
Dillard Department Stores, Inc., Cl. A 5,000
$ 170,000
- ----------------------------------------------------------------------------------------------------------------
Dollar General Corp. 293,750
9,473,437
- ----------------------------------------------------------------------------------------------------------------
Eckerd Corp.(1) 56,700
1,389,150
- ----------------------------------------------------------------------------------------------------------------
Jones Apparel Group, Inc.(1) 35,000
1,938,125
- ----------------------------------------------------------------------------------------------------------------
Nautica Enterprises, Inc.(1) 25,000
662,500
- ----------------------------------------------------------------------------------------------------------------
Tommy Hilfiger Corp.(1) 60,000
3,007,500
- ----------------------------------------------------------------------------------------------------------------
Waban, Inc.(1) 165,000
3,506,250
--------------
20,146,962
- ------------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--1.4%
Bed Bath & Beyond, Inc.(1) 310,000
7,013,750
- ----------------------------------------------------------------------------------------------------------------
Claire's Stores, Inc. 97,500
3,217,500
- ----------------------------------------------------------------------------------------------------------------
Micro Warehouse, Inc.(1) 200,000
5,375,000
- ----------------------------------------------------------------------------------------------------------------
Rocky Mountain Chocolate Factory, Inc.(1) 100,000
837,500
- ----------------------------------------------------------------------------------------------------------------
Ross Stores, Inc. 15,000
577,500
- ----------------------------------------------------------------------------------------------------------------
Sotheby's Holdings, Inc., Cl. A 95,000
1,472,500
--------------
18,493,750
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--13.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages--1.7%
Coca-Cola Co. (The) 210,000
10,500,000
- ----------------------------------------------------------------------------------------------------------------
PepsiCo, Inc. 390,000
11,212,500
--------------
21,712,500
- ------------------------------------------------------------------------------------------------------------------------------------
Food--1.5%
IBP, Inc. 360,000
8,415,000
- ----------------------------------------------------------------------------------------------------------------
Safeway, Inc.(1) 150,000
5,437,500
- ----------------------------------------------------------------------------------------------------------------
Sara Lee Corp. 125,000
3,937,500
- ----------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc.(1) 60,000
1,665,000
--------------
19,455,000
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--4.4%
Bristol-Myers Squibb Co. 75,000
6,581,250
- ----------------------------------------------------------------------------------------------------------------
Johnson & Johnson 200,300
9,864,775
- ----------------------------------------------------------------------------------------------------------------
Merck & Co., Inc. 140,000
9,187,500
- ----------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 225,000
15,975,000
- ----------------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 280,000
15,645,000
--------------
57,253,525
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies &
Services--3.8%
Beverly Enterprises, Inc.(1) 5,000
51,250
- ----------------------------------------------------------------------------------------------------------------
Boston Scientific Corp.(1) 35,000
1,605,625
- ----------------------------------------------------------------------------------------------------------------
Collagen Corp. 75,000
1,481,250
- ----------------------------------------------------------------------------------------------------------------
HealthCare COMPARE Corp.(1) 375,000
16,031,250
- ----------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp.(1) 140,000
4,532,500
- ----------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 310,000
16,120,000
- ----------------------------------------------------------------------------------------------------------------
Nellcor Puritan Bennett, Inc.(1) 90,000
2,317,500
- ----------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc.(1) 55,000
2,516,250
- ----------------------------------------------------------------------------------------------------------------
Sofamor Danek Group, Inc.(1) 115,000
3,306,250
- ----------------------------------------------------------------------------------------------------------------
Summit Technology, Inc.(1) 240,000
1,590,000
--------------
49,551,875
</TABLE>
8 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares
See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C>
Tobacco--2.2%
Philip Morris Cos., Inc. 195,000
$ 17,501,250
- ----------------------------------------------------------------------------------------------------------------
UST, Inc. 350,000
10,500,000
--------------
28,001,250
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--1.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Services &
Producers--0.5%
Global Marine, Inc.(1) 50,000
718,750
- ----------------------------------------------------------------------------------------------------------------
Tidewater, Inc. 150,000
5,756,250
--------------
6,475,000
- ------------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--0.7%
Phillips Petroleum Co. 30,000
1,215,000
- ----------------------------------------------------------------------------------------------------------------
Repsol SA, Sponsored ADR 90,000
2,936,250
- ----------------------------------------------------------------------------------------------------------------
USX-Marathon Group 250,000
5,218,750
--------------
9,370,000
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--17.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Banks--5.4%
Bank of Boston Corp. 355,000
18,726,250
- ----------------------------------------------------------------------------------------------------------------
Bank of New York Co., Inc. (The) 38,600
1,075,975
- ----------------------------------------------------------------------------------------------------------------
BankAmerica Corp. 15,000
1,162,500
- ----------------------------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 10,000
777,500
- ----------------------------------------------------------------------------------------------------------------
Cal Fed Bancorp, Inc.(1) 55,000
1,251,250
- ----------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 110,000
8,181,250
- ----------------------------------------------------------------------------------------------------------------
First Tennessee National Corp. 30,000
1,023,750
- ----------------------------------------------------------------------------------------------------------------
First Union Corp. 90,000
5,748,750
- ----------------------------------------------------------------------------------------------------------------
Fleet Financial Group, Inc. 124,996
5,218,583
- ----------------------------------------------------------------------------------------------------------------
Great Western Financial Corp. 131,400
3,252,150
- ----------------------------------------------------------------------------------------------------------------
NationsBank Corp. 90,000
7,661,250
- ----------------------------------------------------------------------------------------------------------------
Northern Trust Corp. 25,000
1,640,625
- ----------------------------------------------------------------------------------------------------------------
PNC Bank Corp. 307,500
9,609,375
- ----------------------------------------------------------------------------------------------------------------
SouthTrust Corp. 155,000
4,572,500
- ----------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 5,000
191,875
--------------
70,093,583
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--8.5%
Advanta Corp., Cl. A 360,000
17,595,000
- ----------------------------------------------------------------------------------------------------------------
Bear Stearns Cos., Inc. 231,700
5,415,987
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 70,000
6,186,250
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn 300,000
9,300,000
- ----------------------------------------------------------------------------------------------------------------
First USA, Inc. 210,000
11,130,000
- ----------------------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 640,000
22,240,000
- ----------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 260,000
5,492,500
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 20,000
1,225,000
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc. 25,000
1,193,750
- ----------------------------------------------------------------------------------------------------------------
Price (T. Rowe) Associates 65,000
1,885,000
- ----------------------------------------------------------------------------------------------------------------
Quick & Reilly Group, Inc. 10,000
292,500
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc. 137,500
6,187,500
- ----------------------------------------------------------------------------------------------------------------
Student Loan Marketing Assn. 100,000
7,362,500
- ----------------------------------------------------------------------------------------------------------------
Travelers Group, Inc. 315,000
13,663,125
--------------
109,169,112
</TABLE>
9 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Shares
See Note 1
<S> <C> <C>
<C>
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--3.7%
AFLAC, Inc. 210,000
$ 7,218,750
- ----------------------------------------------------------------------------------------------------------------
Allstate Corp. 65,000
2,900,625
- ----------------------------------------------------------------------------------------------------------------
American International Group, Inc. 15,000
1,425,000
- ----------------------------------------------------------------------------------------------------------------
Conseco, Inc. 80,000
3,360,000
- ----------------------------------------------------------------------------------------------------------------
Loews Corp. 80,000
5,980,000
- ----------------------------------------------------------------------------------------------------------------
MGIC Investment Corp. 15,000
950,625
- ----------------------------------------------------------------------------------------------------------------
Reliastar Financial Corp. 135,000
5,956,875
- ----------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. 242,500
16,520,313
- ----------------------------------------------------------------------------------------------------------------
USF&G Corp. 190,000
3,063,750
--------------
47,375,938
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial--4.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--1.3%
General Electric Co. 30,000
2,493,750
- ----------------------------------------------------------------------------------------------------------------
Kemet Corp.(1) 510,000
8,670,000
- ----------------------------------------------------------------------------------------------------------------
Vishay Intertechnology, Inc.(1) 273,000
5,494,125
--------------
16,657,875
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Materials--0.1%
Owens Corning(1) 35,000
1,273,125
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.8%
Comdisco, Inc. 307,500
7,995,000
- ----------------------------------------------------------------------------------------------------------------
Growth Environmental, Inc.(1) 2,100
32
- ----------------------------------------------------------------------------------------------------------------
Mercury Air Group, Inc. 121,000
892,375
- ----------------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 15,000
751,875
--------------
9,639,282
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing--1.0%
Giddings & Lewis, Inc. 60,000
780,000
- ----------------------------------------------------------------------------------------------------------------
Kulicke & Soffa Industries, Inc.(1) 225,000
2,221,875
- ----------------------------------------------------------------------------------------------------------------
Mark IV Industries, Inc. 95,000
2,042,500
- ----------------------------------------------------------------------------------------------------------------
Sealed Air Corp.(1) 70,000
2,651,250
- ----------------------------------------------------------------------------------------------------------------
Textron, Inc. 15,000
1,280,625
- ----------------------------------------------------------------------------------------------------------------
Trinity Industries, Inc. 25,000
809,375
- ----------------------------------------------------------------------------------------------------------------
U.S. Filter Corp.(1) 30,000
783,750
- ----------------------------------------------------------------------------------------------------------------
Varity Corp.(1) 50,000
2,512,500
--------------
13,081,875
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--0.9%
Canadian Pacific Ltd. (New) 245,000
5,512,500
- ----------------------------------------------------------------------------------------------------------------
CSX Corp. 50,000
2,531,250
- ----------------------------------------------------------------------------------------------------------------
Illinois Central Corp. 105,000
3,176,250
--------------
11,220,000
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--20.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--7.2%
Adaptec, Inc.(1) 55,000
2,743,125
- ----------------------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(1) 265,000
16,165,000
- ----------------------------------------------------------------------------------------------------------------
Compaq Computer Corp.(1) 250,000
14,156,250
- ----------------------------------------------------------------------------------------------------------------
Dell Computer Corp.(1) 25,000
1,678,125
- ----------------------------------------------------------------------------------------------------------------
EMC Corp.(1) 290,000
5,582,500
</TABLE>
10 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares
See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C>
Computer Hardware
(continued)
Gateway 2000, Inc.(1) 500,000
$ 22,281,250
- ----------------------------------------------------------------------------------------------------------------
Intergraph Corp.(1) 300,000
2,737,500
- ----------------------------------------------------------------------------------------------------------------
International Business Machines Corp. 40,000
4,575,000
- ----------------------------------------------------------------------------------------------------------------
Quantum Corp.(1) 220,000
3,382,500
- ----------------------------------------------------------------------------------------------------------------
Seagate Technology, Inc.(1) 215,000
10,320,000
- ----------------------------------------------------------------------------------------------------------------
Western Digital Corp.(1) 270,000
9,483,750
--------------
93,105,000
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software--6.6%
Acclaim Entertainment, Inc.(1) 130,000
1,056,250
- ----------------------------------------------------------------------------------------------------------------
Automatic Data Processing, Inc. 175,000
7,284,375
- ----------------------------------------------------------------------------------------------------------------
BMC Software, Inc.(1) 300,000
22,350,000
- ----------------------------------------------------------------------------------------------------------------
Broderbund Software, Inc.(1) 30,000
903,750
- ----------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 232,500
12,206,250
- ----------------------------------------------------------------------------------------------------------------
GTech Holdings Corp.(1) 183,200
5,083,800
- ----------------------------------------------------------------------------------------------------------------
HBO & Co. 40,000
2,185,000
- ----------------------------------------------------------------------------------------------------------------
Informix Corp.(1) 25,000
562,500
- ----------------------------------------------------------------------------------------------------------------
Microsoft Corp.(1) 155,000
18,987,500
- ----------------------------------------------------------------------------------------------------------------
Oracle Corp.(1) 70,000
2,467,500
- ----------------------------------------------------------------------------------------------------------------
Peoplesoft, Inc.(1) 20,000
1,535,000
- ----------------------------------------------------------------------------------------------------------------
Sterling Software, Inc.(1) 90,000
6,108,750
- ----------------------------------------------------------------------------------------------------------------
System Software Associates, Inc. 380,000
3,990,000
--------------
84,720,675
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics--4.8%
Applied Materials, Inc.(1) 45,000
1,091,250
- ----------------------------------------------------------------------------------------------------------------
Arrow Electronics, Inc.(1) 215,000
9,809,375
- ----------------------------------------------------------------------------------------------------------------
Cypress Semiconductor Corp.(1) 710,000
8,253,750
- ----------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 30,000
1,312,500
- ----------------------------------------------------------------------------------------------------------------
Intel Corp. 100,000
7,981,250
- ----------------------------------------------------------------------------------------------------------------
International Rectifier Corp.(1) 190,000
3,633,750
- ----------------------------------------------------------------------------------------------------------------
Linear Technology Corp. 70,000
2,380,000
- ----------------------------------------------------------------------------------------------------------------
Novellus Systems, Inc.(1) 305,000
11,513,750
- ----------------------------------------------------------------------------------------------------------------
Philips Electronics NV, ADR 80,000
2,710,000
- ----------------------------------------------------------------------------------------------------------------
Tektronix, Inc. 65,000
2,518,750
- ----------------------------------------------------------------------------------------------------------------
Texas Instruments, Inc. 20,000
935,000
- ----------------------------------------------------------------------------------------------------------------
Varian Associates, Inc. 60,000
2,737,500
- ----------------------------------------------------------------------------------------------------------------
VLSI Technology, Inc.(1) 325,000
4,550,000
- ----------------------------------------------------------------------------------------------------------------
Wyle Electronics 85,000
2,741,250
--------------
62,168,125
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications-
Technology--1.9%
3Com Corp.(1) 220,000
10,285,000
- ----------------------------------------------------------------------------------------------------------------
AT&T Corp. 100,000
5,250,000
- ----------------------------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Cl. B, ADR 90,000
2,075,625
- ----------------------------------------------------------------------------------------------------------------
Telecom Corp. of New Zealand Ltd., Sponsored ADR 75,000
5,737,500
- ----------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(1) 45,000
945,000
--------------
24,293,125
</TABLE>
11 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Shares
See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C>
Utilities--0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--0.3%
Empresa Nacional de Electricidad SA, Sponsored ADR 75,000
$ 4,406,250
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities--0.3%
Telefonos de Mexico SA, Sponsored ADR 100,000
3,287,500
--------------
Total Common Stocks (Cost $569,082,827)
886,646,788
Units
====================================================================================================================================
Rights, Warrants and Certificates--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Windmere-Durable Holdings, Inc. Wts., Exp. 1/98 (Cost $0) 9,062
--
Face
Amount
====================================================================================================================================
Short-Term Notes--23.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Broker/Dealers--3.1%
Goldman Sachs & Co., 5.30%, 9/9/96 $40,000,000
39,952,889
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial Finance--3.0%
CIT Group Holdings, Inc., 5.29%, 9/26/96 38,000,000
37,860,403
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Finance--3.1%
American Express Credit Corp., 5.28%, 9/25/96 40,000,000
39,859,200
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--6.2%
General Electric Capital Corp., 5.27%, 9/17/96 40,000,000
39,906,311
- ----------------------------------------------------------------------------------------------------------------
Household Finance Corp., 5.30%, 10/4/96 40,000,000
39,805,667
--------------
79,711,978
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--2.3%
PHH Corp., 5.29%, 10/1/96 30,000,000
29,867,750
- ------------------------------------------------------------------------------------------------------------------------------------
Special Purpose Financial--5.3%
New Center Asset Trust, 5.28%, 9/23/96 40,000,000
39,870,933
- ----------------------------------------------------------------------------------------------------------------
Sheffield Receivables Corp., 5.29%, 9/17/96 28,985,000
28,916,853
--------------
68,787,786
--------------
Total Short-Term Notes (Cost $296,040,006)
296,040,006
====================================================================================================================================
Repurchase Agreement--8.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.22%, dated 8/30/96, to be repurchased at $103,960,262 on
9/3/96, collateralized by U.S. Treasury Nts., 4.75%--9.25%,
7/31/97--11/15/04, with a value of $106,024,709
(Cost $103,900,000) 103,900,000
103,900,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $969,022,833) 99.8%
1,286,586,794
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.2
2,217,474
-----------
--------------
Net Assets 100.0%
$1,288,804,268
===========
==============
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
12 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities August 31, 1996
====================================================================================================================================
<S> <C>
<C>
Assets Investments, at value (cost $969,022,833)--see accompanying statement
$1,286,586,794
- ----------------------------------------------------------------------------------------------------------------
Cash
106,004
- ----------------------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold
2,981,317
Investments sold
1,799,258
Interest and dividends
955,954
- ----------------------------------------------------------------------------------------------------------------
Other
195,403
--------------
Total assets
1,292,624,730
====================================================================================================================================
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed
1,917,067
Investments purchased
916,250
Distribution and service plan fees
378,016
Trustees' fees
266,401
Shareholder reports
182,547
Transfer and shareholder servicing agent fees
82,984
Dividends
25,189
Other
52,008
--------------
Total liabilities
3,820,462
====================================================================================================================================
Net Assets
$1,288,804,268
==============
====================================================================================================================================
Composition of Paid-in capital
$ 848,772,734
Net Assets
- ----------------------------------------------------------------------------------------------------------------
Accumulated net investment income
11,195,907
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions
111,271,666
- ----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3
317,563,961
--------------
Net assets
$1,288,804,268
===============
====================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of
$1,127,836,241 and 33,479,487 shares of beneficial interest outstanding)
$33.69
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price)
$35.75
- ----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $137,436,848 and 4,172,024 shares of beneficial interest outstanding)
$32.94
- ----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $5,034,227 and 150,647 shares of beneficial interest outstanding)
$33.42
- ----------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $18,496,952 and 549,005 shares of beneficial interest outstanding)
$33.69
</TABLE>
See accompanying Notes to Financial Statements
13 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
Two Months
Year Ended
Ended Aug.
31, June 30,
1996(1)
1996
====================================================================================================================================
<S> <C> <C>
<C>
Investment Income Interest $3,381,607
$17,120,681
- ----------------------------------------------------------------------------------------------------------------
Dividends 2,012,470
10,809,740
Foreign withholding taxes
(25,951) (103,976)
----------
------------
Total income 5,368,126
27,826,445
====================================================================================================================================
Expenses Management fees--Note 4 1,415,789
7,558,069
- ----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 326,094
1,726,845
Class B 223,302
904,437
Class C 6,917
11,561
- ----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 313,235
1,619,012
- ----------------------------------------------------------------------------------------------------------------
Shareholder reports 34,863
356,339
- ----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 17,560
64,836
- ----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 15,029
70,515
- ----------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A
48 626
Class B 5,288
25,101
Class C
478 1,191
Class Y 1,244
3,930
- ----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 6,731
134,218
- ----------------------------------------------------------------------------------------------------------------
Insurance expenses 4,571
48,839
- ----------------------------------------------------------------------------------------------------------------
Other 11,421
98,330
----------
------------
Total expenses 2,382,570
12,623,849
====================================================================================================================================
Net Investment Income 2,985,556
15,202,596
====================================================================================================================================
Realized and Net realized gain on investments 21,616,200
123,112,424
Unrealized
- ----------------------------------------------------------------------------------------------------------------
Gain (Loss) Net change in unrealized appreciation or depreciation on investments
(16,129,626) 65,683,680
----------
------------
Net realized and unrealized gain 5,486,574
188,796,104
====================================================================================================================================
Net Increase in Net Assets Resulting From Operations $8,472,130
$203,998,700
==========
============
</TABLE>
1. The Fund changed its fiscal year end from June 30 to
August 31.
See accompanying Notes to Financial Statements.
14 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Two Months
Ended Aug. 31, Year Ended
June 30,
1996(1) 1996
1995
===================================================================================================================================
<S> <C> <C> <C>
<C>
Operations Net investment income $2,985,556 $15,202,596
$ 9,619,976
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 21,616,200 123,112,424
85,671,017
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (16,129,626) 65,683,680
104,043,105
-------------- --------------
------------
Net increase in net assets resulting from operations 8,472,130 203,998,700
199,334,098
===================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A -- (12,145,385)
(5,772,443)
Shareholders Class B -- (763,600)
(71,931)
Class C -- (8,006)
--
Class Y -- (111,943)
(1,224)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (92,881,153)
(67,428,961)
Class B -- (8,596,317)
(1,571,030)
Class C -- (61,792)
--
Class Y -- (783,715)
(13,169)
===================================================================================================================================
Beneficial Net increase in net assets resulting from beneficial
Interest interest transactions--Note 2:
Transactions Class A 307,757 176,397,622
83,386,522
Class B 7,152,701 81,183,295
30,660,868
Class C 1,404,159 3,526,653
--
Class Y 2,233,988 12,281,833
2,984,504
===================================================================================================================================
Net Assets Total increase 19,570,735 362,036,192
241,507,234
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 1,269,233,533 907,197,341
665,690,107
-------------- --------------
------------
End of period (including undistributed
net investment income of $11,195,907,
$8,210,351 and $6,036,689, respectively) $1,288,804,268 $1,269,233,533
$907,197,341
============== ==============
============
</TABLE>
1. The Fund changed its fiscal year end from June 30 to
August 31.
See accompanying Notes to Financial Statements.
15 Oppenheimer Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A
- -------------------------------------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994 1993
1992
========================================================================================================================
<S> <C> <C> <C> <C> <C>
<C>
Per Share Operating Data:
Net asset value,
beginning of period $33.43 $30.80 $26.65 $27.34 $24.94
$21.88
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) .08 .44 .36 .16 .19
.29
Net realized and
unrealized gain (loss) .18 5.70 6.83 (.05) 4.03
3.13
------ ------ ------ ------ ------
- ------
Total income (loss) from
investment operations .26 6.14 7.19 .11 4.22
3.42
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.41) (.24) (.16) (.25)
(.36)
Distributions from net realized gain -- (3.10) (2.80) (.64) (1.57)
--
------ ------ ------ ------ ------
- ------
Total dividends and distributions
to shareholders -- (3.51) (3.04) (.80) (1.82)
(.36)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.69 $33.43 $30.80 $26.65 $27.34
$24.94
====== ====== ====== ====== ======
======
========================================================================================================================
Total Return, at Net Asset Value(5) 0.78% 21.00% 29.45% 0.27% 16.88%
15.69%
========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,127,836 $1,120,046 $860,736 $656,934 $743,830
$630,767
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,101,233 $1,018,022 $727,102 $720,765 $710,391
$624,527
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 1.50%(6) 1.43% 1.31% 0.56% 0.72%
1.14%
Expenses 1.03%(6) 1.06% 1.05% 1.07% 0.93%
0.90%
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8% 23.2%
36.7%
Average brokerage commission rate(8) $0.0595 $0.0583 -- -- --
--
<CAPTION>
Financial Highlights (Continued)
Class B Class C
----------------------------------------------
- --------------------
Two Months Two Months
Period
Ended Ended
Ended
August 31, Year Ended June 30, August 31,
June 30,
1996(2) 1996 1995 1994(4) 1996(2)
1996(3)
========================================================================================================================
<S> <C> <C> <C> <C> <C>
<C>
Per Share Operating Data:
Net asset value,
beginning of period $32.74 $30.36 $26.44 $27.02 $33.22
$33.44
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) .04 .23 .20 (.04) .02
.40
Net realized and
unrealized gain (loss) .16 5.53 6.65 .21 .18
2.88
------ ------ ------ ------ ------
- ------
Total income (loss) from
investment operations .20 5.76 6.85 .17 .20
3.28
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.28) (.13) (.11) --
(.40)
Distributions from net realized gain -- (3.10) (2.80) (.64) --
(3.10)
------ ------ ------ ------ ------
- ------
Total dividends and distributions
to shareholders -- (3.38) (2.93) (.75) --
(3.50)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $32.94 $32.74 $30.36 $26.44 $33.42
$33.22
====== ====== ====== ====== ======
======
========================================================================================================================
Total Return, at Net Asset Value(5) 0.61% 19.95% 28.22% (0.20)% 0.60%
10.07%
========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $137,437 $129,484 $43,267 $8,747 $5,034
$3,593
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $131,142 $ 90,501 $18,722 $5,119 $4,105
$1,804
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.61%(6) 0.60% 0.44% (0.22)%(6) 0.44%(6)
0.65%(6)
Expenses 1.92%(6) 1.89% 2.02% 1.98%(6) 2.10%(6)
1.81%(6)
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8% 6.3%
38.0%
Average brokerage commission rate(8) $0.0595 $0.0583 -- -- $0.0595
$0.0583
<CAPTION>
Financial Highlights (Continued)
Class Y
-------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994(1)
==========================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $33.42 $30.80 $26.64 $28.08
- ------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) .08 .46 .30 .02
Net realized and
unrealized gain (loss) .19 5.70 6.92 (1.46)
------ ------ ------ ------
Total income (loss) from
investment operations .27 6.16 7.22 (1.44)
- ------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.44) (.26) --
Distributions from net realized gain -- (3.10) (2.80) --
------ ------ ------ ------
Total dividends and distributions
to shareholders -- (3.54) (3.06) --
- ------------------------------------------------------------------------------------------
Net asset value, end of period $33.69 $33.42 $30.80 $26.64
====== ====== ====== ======
==========================================================================================
Total Return, at Net Asset Value(5) 0.81% 21.10% 29.59% (5.13)%
==========================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $18,497 $16,110 $3,189 $ 9
- ------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,792 $ 9,384 $ 536 $10
- ------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 1.67%(6) 1.56% 1.54% 1.09%(6)
Expenses 0.87%(6) 0.94% 1.04% 1.25%(6)
- ------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 6.3% 38.0% 35.4% 19.8%
Average brokerage commission rate(8) $0.0595 $0.0583 -- --
</TABLE>
1. For the period from June 1, 1994 (inception of offering) to June 30, 1994.
2. The Fund changed its fiscal year end from June 30 to August 31.
3. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
4. For the period from August 17, 1993 (inception of offering) to June 30, 1994.
Per share amounts calculated based on the weighted average number of shares
outstanding during the period.
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
6. Annualized.
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1996 were $62,748,065 and $55,257,768, respectively.
8. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
16 & 17 Oppenheimer Growth Fund
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant
Accounting Policies
Oppenheimer Growth Fund (the Fund), is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. On August 15, 1996, the Board of Trustees elected to change the fiscal
year end of the Fund from June 30 to August 31. Accordingly, these financial
statements include information for the two month period from July 1, 1996 to
August 31, 1996. The Fund's investment objective is to seek capital
appreciation, primarily by investing in stocks of established growth companies.
The Fund's investment adviser is OppenheimerFunds, Inc. (the Manager). The Fund
offers Class A, Class B, Class C and Class Y shares. Class A shares are sold
with a front-end sales charge. Class B and Class C shares may be subject to a
contingent deferred sales charge. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to a particular class and exclusive voting rights
with respect to matters affecting a single class. Classes A, B and C have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
``non-money market'' debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by the
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term ``money market type'' debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the two months
ended August 31, 1996, a reduction of $2,937 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $248,209 at August
31, 1996.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from the ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gain (loss) was recorded by the
Fund.
18 Oppenheimer Growth Fund
<PAGE>
================================================================================
1. Significant
Accounting Policies
(continued)
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Shares of
Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Two Months Ended Aug. 31, 1996(2) Year Ended June 30, 1996(1) Year Ended
June 30, 1995
-------------------------------- --------------------------
- ------------------------
Shares Amount Shares Amount Shares
Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<C>
Class A:
Sold 1,266,269 $ 42,270,466 8,407,775 $ 275,835,781 5,288,654
$ 147,552,419
Dividends and distributions
reinvested -- -- 3,323,811 101,576,179 2,803,654
70,904,457
Redeemed (1,295,165) (41,962,709) (6,169,610) (201,014,338) (4,799,772)
(135,070,354)
--------- ------------- --------- ------------- ---------
-------------
Net increase (decrease) (28,896) $ 307,757 5,561,976 $ 176,397,622 3,292,536
$ 83,386,522
========= ============= ========= ============= =========
=============
- -----------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 439,943 $ 14,333,878 3,119,546 $ 100,609,679 1,407,470
$ 39,568,793
Dividends and distributions
reinvested -- -- 288,253 8,664,821 64,577
1,618,927
Redeemed (223,354) (7,181,177) (877,701) (28,091,205) (377,530)
(10,526,852)
--------- ------------- --------- ------------- ---------
-------------
Net increase 216,589 $ 7,152,701 2,530,098 $ 81,183,295 1,094,517
$ 30,660,868
========= ============= ========= ============= =========
=============
- -----------------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 45,312 $ 1,497,092 111,265 $ 3,624,375 --
$ --
Dividends and distributions
reinvested -- -- 2,287 69,761 --
--
Redeemed (2,825) (92,933) (5,392) (167,483) --
--
--------- ------------- --------- ------------- ---------
-------------
Net increase 42,487 $ 1,404,159 108,160 $ 3,526,653 --
$ --
========= ============= ========= ============= =========
=============
- -----------------------------------------------------------------------------------------------------------------------------------
Class Y:
Sold 101,673 $ 3,383,454 439,359 $ 14,330,346 113,317
$ 3,284,040
Dividends and distributions
reinvested -- -- 29,328 895,658 569
14,393
Redeemed (34,706) (1,149,466) (90,199) (2,944,171) (10,692)
(313,929)
--------- ------------- --------- ------------- ---------
-------------
Net increase 66,967 $ 2,233,988 378,488 $ 12,281,833 103,194
$ 2,984,504
========= ============= ========= ============= =========
=============
</TABLE>
1. For the year ended June 30, 1996 for Class A, B and Y shares, and for the
period from November 1, 1995 (inception of offering) to June 30, 1996 for Class
C shares.
2. The Fund changed its fiscal year end from June 30 to August 31.
================================================================================
3. Unrealized Gains and
Losses on Investments
At August 31, 1996, net unrealized appreciation on investments of $317,563,961
was composed of gross appreciation of $343,437,531, and gross depreciation of
$25,873,570.
19 Oppenheimer Growth Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% on the first
$200 million of average annual net assets; 0.72% of the next $200 million; 0.69%
of the next $200 million; 0.66% of the next $200 million; and 0.60% on net
assets in excess of $800 million. The Manager has voluntarily undertaken to
waive a portion of its management fee, whereby the Fund shall pay an annual
management fee of 0.58% of its net assets in excess of $1.5 billion. The Manager
has agreed to reimburse the Fund if aggregate expenses (with specified
exceptions) exceed the most stringent applicable regulatory limit on Fund
expenses.
For the two months ended August 31, 1996, commissions (sales charges paid
by investors) on sales of Class A shares totaled $424,452, of which $134,309 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $429,624 and $10,124, of which $25,126 was paid to an
affiliated broker/dealer for Class B. During the two months ended August 31,
1996, OFDI received contingent deferred sales charges of $60,623 upon redemption
of Class B shares as reimbursement for sales commissions advanced by OFDI at the
time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average annual net
assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the two months ended August 31, 1996, OFDI paid $9,657 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class B shares to reimburse OFDI for its services and costs in distributing
Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B shares that are
outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per
year to reimburse dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual net assets of Class
B shares, determined as of the close of each regular business day. If the Plan
is terminated by the Fund, the Board of Trustees may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain expenses it
incurred before the Plan was terminated. During the two months ended August 31,
1996, OFDI paid $1,207 to an affiliated broker/dealer as reimbursement for Class
B personal service and maintenance expenses and retained $195,442 as
reimbursement for Class B sales commissions and service fee advances, as well as
financing costs. As of August 31, 1996, OFDI had incurred unreimbursed expenses
of $3,988,986 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan for
Class C shares to compensate OFDI for its services and costs in distributing
Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class C shares. Both fees are computed
on the average annual net assets of Class C shares, determined as of the close
of each regular business day. If the Plan is terminated by the Fund, the Board
of Trustees may allow the Fund to continue payments of the asset-based sales
charge to OFDI for certain expenses it incurred before the Plan was terminated.
During the two months ended August 31, 1996, OFDI retained $5,934 as
compensation for Class C sales commissions and service fee advances, as well as
financing costs. As of August 31, 1996, OFDI had incurred unreimbursed expenses
of $64,346 for Class C.
20 Oppenheimer Growth Fund
<PAGE>
Independent Auditors' Report
================================================================================
The Board of Trustees and Shareholders of Oppenheimer Growth Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Growth Fund as of August 31, 1996, and the related
statements of operations for the two month period then ended and the year ended
June 30, 1996, the statements of changes in net assets for the two month period
ended August 31, 1996 and the years ended June 30, 1996 and 1995, and the
financial highlights for the two month period ended August 31, 1996 and for each
of the years in the five year period ended June 30, 1996. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1996 by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Growth Fund as of August 31, 1996, the results of its operations for
the two month period then ended and the year ended June 30, 1996, the changes in
its net assets for the two month period ended August 31, 1996 and the years
ended June 30, 1996 and 1995, and the financial highlights for the two month
period ended August 31, 1996 and each of the years in the five year period ended
June 30, 1996, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
September 23, 1996
21 Oppenheimer Growth Fund
<PAGE>
Federal Income Tax Information (Unaudited)
================================================================================
In early 1997, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends paid by the Fund during the period ended August 31, 1996 which
are not designated as capital gain distributions should be multiplied by 30.61%
to arrive at the net amount eligible for the corporate dividend-received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax adviser for specific guidance.
22 Oppenheimer Growth Fund
<PAGE>
Oppenheimer Growth Fund
================================================================================
Officers and Leon Levy, Chairman of the Board of Trustees
Trustees Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Robert C. Doll, Jr., Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Adviser OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG Peat Marwick LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer Growth Fund. This
report must be preceded or accompanied by a Prospectus of Oppenheimer Growth
Fund. For material information concerning the Fund, see the Prospectus. Shares
of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
23 Oppenheimer Growth Fund
<PAGE>
[BACK COVER]
Information
General Information
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
Monday-Friday 8:30 a.m.-8 p.m. ET
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affect your investments
1-800-835-3104
RA0270.001.0896 October 31, 1996
[PHOTO OF CUSTOMER SERVICE REPRESENTATIVE]
Customer Service Representative
OppenheimerFunds Services
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
- --------------------------------------------------------------------------------
[LOGO] OppenheimerFunds(R)
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- -----------------
Bulk Rate
U.S. Postage
PAID
Permit No. 130
Torrington, CT
- -----------------
<PAGE>
JEFFERSON-PILOT CAPITAL APPRECIATION FUND, INC.
SUPPLEMENT DATED OCTOBER 8, 1996
TO PROSPECTUS DATED MAY 1, 1996
Please read this Supplement carefully and retain it for future
reference.
On September 24, 1996, Jefferson-Pilot Corporation ("JPC") and
OppenheimerFunds, Inc. signed an acquisition agreement pursuant to
which OppenheimerFunds, Inc. will, subject to certain conditions,
purchase substantially all of the assets of JP Investment
Management Company, investment adviser to Jefferson-Pilot Capital
Appreciation Fund, Inc. (the "Fund") and a wholly-owned subsidiary
of JPC. In connection with this acquisition, the Board of
Directors of the Fund recently met to consider a proposed
Reorganization Agreement pursuant to which the Fund would be
acquired by and reorganized into the Oppenheimer Growth Fund
("Growth Fund"), a Massachusetts Business Trust which is managed by
OppenheimerFunds, Inc. The Board determined that it is in the best
interests of the Fund and the Fund's shareholders that the Fund
reorganize with Growth Fund and unanimously approved the terms of
the Reorganization Agreement and the reorganization transactions to
which it relates. The Fund's Board of Directors also determined to
recommend to the Fund's shareholders that they approve the
Reorganization Agreement.
The Reorganization Agreement will provide for the transfer of
substantially all the assets of the Fund to Growth Fund in exchange
for the issuance of Class A shares of Growth Fund; the distribution
of such shares of Growth Fund to the shareholders of the Fund in
liquidation of the Fund; and the cancellation of the outstanding
shares of the Fund. As a result of the proposed reorganization,
each shareholder of the Fund would likely receive that number of
Class A shares of Growth Fund having an aggregate net asset value
equal to the net asset value of such shareholder's shares of the
Fund. No sales charge would be imposed on the Growth Fund Class
A shares received by the Fund's shareholders in the reorganization.
The reorganization is contemplated to be tax-free, and the Fund
will request an opinion of tax counsel to that effect.
Unless otherwise determined by the Fund's Board of Directors, a
meeting of the Fund's shareholders is expected to be held on
December 3, 1996 to consider the Reorganization Agreement and the
reorganization transactions to which it relates. The affirmative
vote of a majority of the Fund's outstanding shares is required to
approve the Reorganization Agreement and the related transactions.
There can be no assurance that the Fund's shareholders will approve
the Reorganization Agreement. Details about the Reorganization
Agreement and the reorganization transactions to which it relates
will be contained in a proxy statement and other soliciting
materials to be sent to Fund shareholders of record on October 10,
1996. Persons who first acquire shares of the Fund after this date
will not be entitled to vote on the Reorganization Agreement.
<PAGE>
OPPENHEIMER GROWTH FUND
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article IV of Registrant's Declaration of
Trust filed as Exhibit 24(b)(1) to Registrant's Registration
Statement and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid
by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such trustee, officer or controlling person, Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust dated as of
October 1,1995: Previously filed with Registrant's Post-Effective
Amendment No. 49, 10/27/95, and incorporated herein by reference.
(2) By-Laws (amended as of 8/6/87): Previously filed with
Registrant's Post-Effective Amendment No. 30, 10/28/88, refiled
with Post-Effective Amendment No. 45 to Registrant's Registration
Statement, 8/22/94 pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(3) Not applicable.
(4) Agreement and Plan of Reorganization: See Exhibit A to Part A
of this Registration Statement
(5) (i)Specimen Share Certificate for Registrant's Class A Shares:
Previously filed with Registrant's Post-Effective Amendment
No. 49, 10/27/95, and incorporated herein by reference.
(ii) Specimen Share Certificate for Registrant's Class B
Shares: Previously filed with Registrant's Post-Effective Amendment
No. 49, 10/27/95, and incorporated herein by reference.
(iii) Specimen Share Certificate for Registrant's Class C
Shares: Previously filed with Registrant's Post-Effective Amendment
No. 49, 10/27/95, and incorporated herein by reference.
(iv) Specimen Share Certificate for Registrant's Class Y
Shares: Previously filed with Registrant's Post-Effective
Amendment No. 49, 10/27/95, and incorporated herein by reference.
(6) Investment Advisory Agreement dated October 22, 1990:
Previously filed with Registrant's Post-Effective Amendment No. 35,
11/1/90, refiled with Post-Effective Amendment No. 45 to
Registrant's Registration Statement, 8/22/94, pursuant to Item 102
of Regulation S-T, and incorporated herein by reference.
(7) (i) General Distributor's Agreement dated December 10,
1992: Previously filed with Post-Effective Amendment No. 41 to
Registrant's Registration Statement, 7/30/93, and incorporated
herein by reference.
(ii) Form of Oppenheimer Funds Distributor, Inc. Dealer
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg.
No. 33-17850), 9/30/94, and incorporated herein by reference.
(iii) Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated herein by
reference.
(iv) Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated herein by
reference.
(v) Broker Agreement between Oppenheimer Fund Management,
Inc. and Newbridge Securities dated 10/1/86: Filed with Post-Effective Amendment
No. 25 to Registrant's Registration Statement,
11/1/86, refiled with Post-Effective Amendment No. 45 to
Registrant's Registration Statement, 8/22/94, pursuant to Item
102 of Regulation S-T, and incorporated herein by reference.
(8) Not Applicable.
(9) Custodian Agreement with The Bank of New York dated August 5,
1992: Previously filed with Post-Effective Amendment No. 44 to
Registrant's Registration Statement, 3/31/94, and incorporated
herein by reference.
(10) (i) Class A Service Plan and Agreement dated July 1, 1993:
Previously filed with Post-Effective Amendment No. 41 to
Registrant's Registration Statement, 7/30/93, and incorporated
herein by reference.
(ii) Class B Distribution and Service Plan and Agreement
dated February 10, 1994: Previously filed with Post-Effective
Amendment No. 45 to Registrant's Registration Statement,
8/22/94, and incorporated herein by reference.
(iii) Class C Distribution and Service Plan: Previously filed
with Registrant's Post-Effective Amendment No. 49, 10/27/95, and
incorporated herein by reference.
(11) Opinion and Consent of Counsel dated 10/4/85: Previously
filed with Post-Effective Amendment No. 30 to Registrant's
Registration Statement, 10/28/88, refiled with Post-Effective
Amendment No. 45 of Registrant's Registration Statement, 8/22/94,
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(12)Tax Opinion Relating to the Reorganization: Draft Opinion
previously filed with Registration Statement of Registrant on Form
N-14, 10/13/96, and incorporated herein by reference.
(13) Not applicable.
(14) (i)Consent of KPMG Peat Marwick LLP: Filed herewith.
(ii) Consent of McGladrey & Pullen LLP: Filed herewith.
(15) Not applicable.
(16) Powers of Attorney signed by Registrant's Trustees and
Certified Board Resolutions: Previously filed with Post-Effective
Amendment No. 41 to Registrant's Registration Statement, 7/30/93,
and incorporated herein by reference.
(17)(i) Declaration of Registrant under Rule 24f-2: Previously
filed with Registration Statement of Registrant on Form N-14,
10/13/96, and incorporated herein by reference.
(ii)(a) Financial Data Schedules of Registrant: Filed
herewith.
(b) Financial Data Schedules of Jefferson-Pilot Capital
Appreciation Fund, Inc.: Previously filed with Registration
Statement of Registrant on Form N-14, 10/13/96, and incorporated
herein by reference. <PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or
the Investment Company Act of 1940, the Registrant certifies that
it meets all the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of New York and State of New York on the 28th day of
October, 1996.
OPPENHEIMER GROWTH FUND
BY: /s/ Bridget A. Macaskill*
-------------------------
Bridget A. Macaskill, President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signatures Title Date
- --------- ----- ----
/s/ Leon Levy* Chairman of the October 28, 1996
- -------------- Board of Trustees
Leon Levy
/s/ George Bowen* Chief Financial October 28, 1996
- ----------------- and Accounting
George Bowen Officer and Treasurer
/s/ Bridget A. Macaskill* Principal Executive October 28, 1996
- ------------------------ Officer, President
Bridget A. Macaskill and Trustee
/s/ Robert G. Galli* Trustee October 28, 1996
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee October 28, 1996
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee October 28, 1996
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee October 28, 1996
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee October 28, 1996
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee October 28, 1996
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Donald W. Spiro* Trustee October 28, 1996
- --------------------
Donald W. Spiro
/s/ Pauline Trigere* Trustee October 28, 1996
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee October 28, 1996
- -----------------------
Clayton K. Yeutter
*By:/s/ Robert G. Zack
________________________________
Robert G. Zack, Attorney-in-Fact
OPPENHEIMER GROWTH FUND
Index to Exhibits
-----------------
Exhibit No. Description
- ----------- -----------
16(14)(i) Independent Auditors' Consent
16(14)(ii) Independent Auditors' Consent
16(17)(ii)(a) Financial Data Schedules
Independent Auditors' Consent
The Board of Trustees
Oppenheimer Growth Fund:
We consent to the incorporation by reference in this Registration
Statement on Form N-14 of Oppenheimer Growth Fund of our report
dated September 23, 1996, appearing in the Annual Report of
Oppenheimer Growth Fund for the year ended August 31, 1996, which
is part of this Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Denver, Colorado
October 30, 1996
MERGE/270J2.CON
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our report dated January 11,
1996 on financial statements of Jefferson-Pilot Capital
Appreciation Fund, Inc. referred to therein in this Registration
Statement on Form N-14
We also consent to the reference to our firm in the Proxy
Statement under the caption "Ratification or Rejection of
Selection of Independent Auditors", in the Jefferson-Pilot
Capital Appreciation Fund, Inc. Prospectus and Statement of
Additional Information under the captions "Condensed Financial
Information", and "General Information", respectively.
/s/ McGladrey & Pullen LLP
New York, New York
September 6, 1996
MERGE/270CON.MP
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<NAME> Oppenheimer Growth Fund- A
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</TABLE>
<TABLE> <S> <C>
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<CIK> 74676
<NAME> Oppenheimer Growth Fund- A
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<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 969,022,833
<INVESTMENTS-AT-VALUE> 1,286,586,794
<RECEIVABLES> 5,736,529
<ASSETS-OTHER> 195,403
<OTHER-ITEMS-ASSETS> 106,004
<TOTAL-ASSETS> 1,292,624,730
<PAYABLE-FOR-SECURITIES> 916,250
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,904,212
<TOTAL-LIABILITIES> 3,820,462
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 848,772,734
<SHARES-COMMON-STOCK> 33,479,487
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<DIVIDEND-INCOME> 1,986,519
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<APPREC-INCREASE-CURRENT> (16,129,626)
<NET-CHANGE-FROM-OPS> 8,472,130
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
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<NUMBER-OF-SHARES-SOLD> 1,266,269
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</TABLE>
