Registration No. 2-91683
File No. 811-4054
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ___ / /
POST-EFFECTIVE AMENDMENT NO. 17 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 18 / X /
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
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(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
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(Address of Principal Executive Offices)
212-323-0200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On August 29, 1995, pursuant to paragraph (b)
/ / 60 days after filing, pursuant to paragraph (a)(1)
/ / On _________________, pursuant to paragraph (a)(1)
/ / 75 days after filing, pursuant to paragraph (a)(2)
/ / On _______, pursuant to paragraph (a)(2)
of Rule 485.
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The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended September 30, 1994, was filed on November 29, 1994.
<PAGE>
FORM N-1A
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Cover Page
2 Expenses; Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and Policies
5 Expenses; How the Fund is Managed; Back Cover
5A Performance of the Fund
6 Dividends, Capital Gains and Taxes; How the Fund is
Managed -- Organization and History; The Transfer
Agent
7 How to Exchange Shares; Special Investor Services;
Service Plan for Class A shares; Distribution and
Service Plan for Class B Shares; Distribution and
Service Plan for Class C Shares; How to Buy Shares;
How to Sell Shares; Shareholder Account Rules and
Policies
8 How to Sell Shares; How to Exchange Shares; Special
Investor Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information or Prospectus
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment
Techniques and Strategies; Additional Investment
Restrictions
14 How the Fund is Managed -- Trustees and Officers of
the Fund
15 How the Fund is Managed -- Major Shareholders
16 How the Fund is Managed; Additional Information about
the Fund; Distribution and Service Plans; Back Cover
17 How the Fund is Managed
18 Additional Information about the Fund
19 About Your Account -- How to Buy Shares, How to Sell
Shares, How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Additional Information about
the Fund - The Distributor; Distribution and Service
Plans
22 Performance of the Fund
23 Financial Statements
_____________
*Not applicable or negative answer.
<PAGE>
OPPENHEIMER NEW YORK
TAX-EXEMPT FUND
Prospectus dated August 29, 1995
Oppenheimer New York Tax-Exempt Fund (the "Fund") is a mutual fund with
the investment objective of seeking the maximum current income exempt from
Federal, New York State and New York City income taxes for individual
investors that is consistent with preservation of capital. The Fund seeks
to achieve this objective by investing in municipal obligations, the
income from which is tax-exempt as described above. However, in times of
unstable economic or market conditions, the Fund's investment manager may
deem it advisable to temporarily invest a portion of the Fund's assets in
certain taxable instruments. The Fund may also use certain hedging
instruments in an effort to reduce the risks of market fluctuations that
affect the value of the securities the Fund holds. You should carefully
review the risks associated with an investment in the Fund. Please refer
to "Investment Policies and Strategies" for more information about the
types of securities the Fund invests in and the risks of investing in the
Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read it carefully and keep it for future
reference. You can find more detailed information about the Fund in the
August 29, 1995 Statement of Additional Information. For a free copy,
call Oppenheimer Shareholder Services, the Fund's Transfer Agent, at 1-
800-525-7048, or write to the Transfer Agent at the address on the back
cover. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
(logo) OppenheimerFunds
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
A B O U T T H E F U N D
Expenses
A Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
A B O U T Y O U R A C C O U N T
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
How to Sell Shares
By Mail
By Telephone
Checkwriting
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
A B O U T T H E F U N D
Expenses
The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services, and those
expenses are subtracted from the Fund's assets to calculate the Fund's net
asset value per share. All shareholders therefore pay those expenses
indirectly. Shareholders pay other expenses directly, such as sales
charges and account transaction fees. The following tables are provided
to help you understand your direct expenses of investing in the Fund and
your share of the Fund's business operating expenses that you will bear
indirectly. The numbers below are based on the Fund's expenses during its
last fiscal year ended September 30, 1994.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to "About Your Account," from
pages 22 through 41, for an explanation of how and when these charges
apply.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge
on Purchases (as a %
of offering price) 4.75% None None
--------------------------------------------------------------
Sales Charge on
Reinvested Dividends None None None
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Deferred Sales Charge
(as a % of the lower of
the original purchase
price or redemption
proceeds) None(1) 5% in the first 1% if shares
year, declining are redeemed
to 1% in the within 12 months
sixth year and of purchase(2)
eliminated
thereafter(2)
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Exchange Fee None None None
<FN>
-----------------------
(1) If you invest more than $1 million in Class A shares, you may have to pay a sales charge of up to 1% if you sell your shares
within 18 calendar months from the end of the calendar month during which you purchased those shares. See "How to Buy
Shares - Class A Shares," below.
(2) See "How to Buy Shares - Class B Shares" and "How to Buy Shares - Class C Shares," below, for information on contingent
deferred sales charges.
</TABLE>
- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (referred to in this Prospectus as the "Manager").
The rates of the Manager's fees are set forth in "How the Fund is
Managed," below. The Fund has other regular expenses for services, such
as transfer agent fees, custodial fees paid to the bank that holds its
portfolio securities, audit fees and legal expenses. Those expenses are
detailed in the Fund's Financial Statements in the Statement of Additional
Information.
The numbers in the table below are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of each class
of the Fund's shares for that year. The 12b-1 Plan Fees for Class A
shares are service plan fees (maximum of 0.25% of average annual net
assets of the class); for Class B and Class C shares the 12b-1 Fees are
the service plan fee (0.25% of average annual net assets of the class) and
the annual asset-based sales charge of 0.75%. These plans are described
in greater detail in "How to Buy Shares."
The actual expenses for each class of shares in future years may be
more or less than the numbers in the chart, depending on a number of
factors, including the actual value of the Fund's assets represented by
each class of shares. Class C shares were not publicly offered during the
Fund's fiscal year ended September 30, 1994; therefore, the Annual Fund
Operating Expenses for Class C shares are estimates of amounts that would
have been payable if Class C shares had been outstanding during that
period.
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
<S> <C> <C> <C>
Management Fees 0.51% 0.51% 0.51%
12b-1 Plan Fees 0.24% 1.00% 1.00%
Other Expenses 0.11% 0.14% 0.14%
Total Fund Operating
Expenses 0.86% 1.65% 1.65%
</TABLE>
- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples shown
below. Assume that you make a $1,000 investment in each class of shares
of the Fund, and the Fund's annual return is 5%, and that its operating
expenses for each class are the ones shown in the Annual Fund Operating
Expenses table above. If you were to redeem your shares at the end of
each period shown below, your investment would incur the following
expenses by the end of 1, 3, 5 and 10 years:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years*
<S> <C> <C> <C> <C>
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Class A Shares $56 $74 $ 93 $149
-----------------------------------------------------------------
Class B Shares $67 $82 $110 $155
-----------------------------------------------------------------
Class C Shares $27 $52 $90 $195
If you did not redeem your investment, it would incur the following expenses:
Class A Shares $56 $74 $93 $149
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Class B Shares $17 $52 $90 $155
-----------------------------------------------------------------
Class C Shares $17 $52 $90 $195
<FN>
_______________________
* 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 on Class
B and Class C shares, long-term shareholders of Class B and Class C shares
could pay the economic equivalent of more than the maximum front-end sales
charge allowed under applicable regulatory requirements. For Class B
shareholders, the automatic conversion of Class B shares to Class A Shares
is designed to minimize the likelihood that this will occur. Please refer
to "How to Buy Shares - Class B Shares" and "How to Buy Shares - Class C
Shares" on page 22 for more information.
These examples show the effect of expenses on an investment, but are
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which will vary.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below, with
references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing. 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 the maximum current income exempt from Federal, New
York State and New York City income taxes for individual investors that
is consistent with preservation of capital.
- What Does the Fund Invest In? Under normal market conditions, the
Fund (1) will invest at least 65% of its total assets in municipal bonds,
municipal notes and other debt obligations issued by or on behalf of New
York State and its agencies or authorities, the interest on which is not
subject to New York State individual income tax, and (2) will invest at
least 80% of its total assets in municipal bonds, municipal notes and
other debt obligations issued by or on behalf of the State of New York,
other states and the District of Columbia, the interest from which is not
subject to Federal individual income tax. The Fund may also use hedging
instruments and some derivative investments in an effort to protect
against market risks. These investments are more fully explained in
"Investment Objective and Policies," starting on page 10.
- Who Manages the Fund? The Fund's investment advisor is Oppenheimer
Management Corporation, which (including a subsidiary) manages investment
company portfolios having over $35 billion in assets at June 30, 1995.
The Fund's portfolio manager, who is employed by the Manager, is primarily
responsible for the selection of the Fund's securities, is Robert E.
Patterson. The Manager is paid an advisory fee by the Fund, based on its
net assets. The Fund's Board of Trustees, elected by shareholders,
oversees the investment advisor and the portfolio manager. Please refer
to "How the Fund is Managed," starting on page 12 for more information
about the Manager and its fees.
- How Risky is the Fund? All investments carry risks to some degree.
The Fund's bond investments are subject to changes in their value from a
number of factors such as changes in general bond market movements, the
change in value of particular bonds because of an event affecting the
issuer, or changes in interest rates that can affect bond prices. These
changes affect the value of the Fund's investments and its price per
share. The Fund may invest in "inverse floater" variable rate bonds, a
type of derivative investment whose yields move in the opposite direction
as short-term interest rates change.
While the Manager tries to reduce risks by diversifying investments
and by carefully researching securities before they are purchased for the
portfolio, and in some cases by using hedging techniques, there is no
guarantee of success in achieving the Fund's objective and your shares may
be worth more or less than their original cost when you redeem them.
Please refer to "Investment Objective and Policies" starting on page 10
for a more complete discussion.
- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How To Buy Shares"
on page 22 for more details.
- Will I Pay a Sales Charge to Buy Shares? The Fund has three
classes of shares. All three classes have the same investment portfolio
but different expenses. Class A shares are offered with a front-end sales
charge, starting at 4.75%, 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 are also
annual asset-based sales charges on Class B and Class C shares. Please
review "How To Buy Shares" starting on page 22 for more details, including
a discussion about 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 34. The Fund also
offers exchange privileges to other OppenheimerFunds, described in "How
to Exchange Shares" on page 36.
- How Has the Fund Performed? The Fund measures its performance by
quoting its yield, tax-equivalent yield, average annual total return and
cumulative total return, which measure historical performance. Those
yields and 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 page 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 September 30, 1994 is included in the Statement of Additional
Information. The information for the six months ended March 31, 1995 is
unaudited. Class C shares of the Fund were not publicly offered during
the periods shown. Accordingly, no information on Class C shares is
included in the table or in the Fund's financial statements for the fiscal
year ended September 30, 1994.
</TABLE>
<TABLE>
<CAPTION>
Class A
------- -----------------------------------------------------------------------------
Six Months
Ended
March 31,
1995 Year Ended September 30,
(Unaudited) 1994 1993 1992 1991 1990 1989
--------- ------ --------- --------- --------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning
of period $ 11.92 $ 13.50 $ 12.59 $ 12.21 $ 11.61 $ 11.87 $ 11.91
--------- ------ --------- --------- --------- --------- ------
Income (loss) from
investment operations:
Net investment income .36 .74 .73 .79 .81 .83 .84(2)
Net realized and
unrealized gain (loss)
on investments .27 (1.46) 1.01 .47 .64 (.25) .01
--------- ------ --------- --------- --------- --------- ------
Total income (loss) from
investment operations .63 (.72) 1.74 1.26 1.45 .58 .85
Dividends and distributions
to shareholders:
Dividends from net
investment income (.36) (.71) (.75) (.75) (.81) (.83) (.83)
Dividends in excess of net
investment income -- (.01) -- -- -- -- --
Distributions from net
realized gain on
investments -- (.03) (.08) (.13) (.04) (.01) (.06)
Distributions in excess of
net realized gain on
investments -- (.11) -- -- -- -- --
--------- ------ --------- --------- --------- --------- ------
Total dividends and
distributions to
shareholders (.36) (.86) (.83) (.88) (.85) (.84) (.89)
--------- ------ --------- --------- --------- --------- ------
Net asset value, end
of period $ 12.19 $ 11.92 $ 13.50 $ 12.59 $ 12.21 $ 11.61 $ 11.87
========= ====== ========= =========
========= ========= ======
Total Return, at Net
Asset Value(3) 5.44% (5.55)% 14.33% 10.72% 12.93% 4.95% 6.91%
--------- ------ --------- --------- --------- --------- ------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $ 668,467 $687,233 $ 756,934 $ 530,260 $ 349,480 $ 250,012 $197,321
--------- ------ --------- --------- --------- --------- ------
Average net assets
(in thousands) $ 648,096 $738,747 $ 652,327 $ 436,876 $ 292,134 $ 227,504 $156,572
--------- ------ --------- --------- --------- --------- ------
Number of shares
outstanding at end of
period (in thousands) 54,842 57,644 56,087 42,119 28,617 21,533 16,618
--------- ------ --------- --------- --------- --------- ------
Ratios to average
net assets:
Net investment income 6.00%(4) 5.68% 5.66% 6.33% 6.81% 6.97% 7.07%
Expenses .90%(4) .86% .91% .96% .96% .99% .98%(2)
--------- ------ --------- --------- --------- --------- ------
Portfolio turnover rate 6.3%(6) 9.4%(5) 39.1% 30.5% 8.9% 13.3% 11.8%
(Continued) Class B
------------------------------------------------------------------------------------------
Ten Months Six Months Year
Ended Ended Ended
Sept. 30, March 31, 1995 Sept. 30,
1988 1987 1986 1985 (Unaudited) 1994 1993(1)
--------- --------- --------- --------- --------- ------ ------
Per Share Operating Data:
Net asset value, beginning
of period $ 11.60 $ 12.51 $ 10.98 $ 10.32 $ 11.93 $ 13.50 $13.07
--------- --------- --------- --------- --------- ------ ------
Income (loss) from
investment operations:
Net investment income .88(2) .90(2) .86 .76 .31 .64 .36
Net realized and
unrealized gain (loss)
on investments .45 (.79) 1.62 .67 .27 (1.45) .44
--------- --------- --------- --------- --------- ------ ------
Total income (loss) from
investment operations 1.33 .11 2.48 1.43 .58 (.81) .80
Dividends and distributions
to shareholders:
Dividends from net
investment income (.94) (.88) (.86) (.77) (.32) (.60) (.37)
Dividends in excess of net
investment income -- -- -- -- -- (.02) --
Distributions from net
realized gain on
investments (.08) (.14) (.09) -- -- (.03) --
Distributions in excess of
net realized gain on
investments -- -- -- -- -- (.11) --
--------- --------- --------- --------- --------- ------ ------
Total dividends and
distributions to
shareholders (1.02) (1.02) (.95) (.77) (.32) (.76) (.37)
--------- --------- --------- --------- --------- ------ ------
Net asset value, end
of period $ 11.91 $ 11.60 $ 12.51 $ 10.98 $ 12.19 $ 11.93 $13.50
========= ========= ========= =========
========= ====== ======
Total Return, at Net
Asset Value(3) 11.48% .29% 22.73% 13.37% 4.95% (6.22)% 6.56%
--------- --------- --------- --------- --------- ------ ------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $ 116,931 $ 79,479 $ 50,810 $ 28,166 $ 83,030 $73,943 $40,958
--------- --------- --------- --------- --------- ------ ------
Average net assets
(in thousands) $ 95,996 $ 65,102 $ 42,907 $ 15,240 $ 75,172 $61,008 $20,454
--------- --------- --------- --------- --------- ------ ------
Number of shares
outstanding at end of
period (in thousands) 9,817 6,851 4,061 2,565 6,809 6,200 3,033
--------- --------- --------- --------- --------- ------ ------
Ratios to average
net assets:
Net investment income 7.48% 7.33% 7.10% 8.05%(4) 5.21%(4) 4.88% 4.45%(4)
Expenses .90%(2) .67%(2) .86% 1.00%(4) 1.67%(4) 1.65% 1.73%(4)
--------- --------- --------- --------- --------- ------ ------
Portfolio turnover rate 11.7% 22.9% 29.7% 126.3% 6.3%(6) 9.4%(5) 39.1
</TABLE>
1. For the period from March 1, 1993 (inception of offering) to September 30,
1993.
2. Net investment income would have been $.83, $.87 and $.88 absent the
voluntary assumption of expenses, resulting in an expense ratio of 1.00%,
1.02% and .85% for 1989, 1988 and 1987.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns. Total returns are not
annualized for periods of less than one full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1994 were $145,939,745 and $73,796,519,
respectively.
6. 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 six months ended March 31, 1995 were $45,588,316 and $72,870,419,
respectively.
<PAGE>
Investment Objective and Policies
Objective. The Fund's investment objective is to seek maximum current
income exempt from Federal, New York State and New York City income taxes
for individual investors consistent with preservation of capital. Toward
that objective, the Fund may use certain hedging instruments (discussed
below) in an effort to protect against market risks. Since market risks
are inherent in all securities to varying degrees, assurance cannot be
given that the Fund will achieve its investment objective.
Investment Policies and Strategies. Under normal market conditions, the
Fund attempts to invest 100% of its assets, and as a matter of fundamental
policy to invest at least 80% of its assets, in Municipal Securities. In
addition, under normal market conditions, as a matter of fundamental
policy, the Fund will invest at least 65% of its total assets in New York
Municipal Securities.
Dividends paid by the Fund derived from interest attributable to New
York Municipal Securities will be exempt from Federal, New York State and
New York City individual income taxes. Dividends derived from interest
on Municipal Securities of other governmental issuers will be exempt from
Federal income tax for individuals, but will be subject to New York State
and New York City individual income taxes. Any net interest income on
taxable investments will be taxable as ordinary income when distributed
to shareholders (see "Dividends, Capital Gains, and Taxes" below).
- Municipal Securities. Municipal Securities are municipal bonds and
municipal notes and municipal commercial paper issued by or on behalf of
the State of New York, other states and the District of Columbia, their
political subdivisions or any commonwealths, territories or possessions
of the United States, or their respective agencies, instrumentalities or
authorities, the interest on which is, in the opinion of bond counsel to
the respective issuer at the time of issue, not subject to Federal
individual income tax. New York Municipal Securities are obligations of
the State of New York and its political subdivisions, and their respective
agencies, authorities or instrumentalities, the interest from which is,
in the opinion of bond counsel to the respective issuer at the time of
issue, not subject to New York individual income tax. No independent
investigation has been made by the Manager as to the users of proceeds of
bond offerings or the application of such proceeds.
"Municipal bonds" are Municipal Securities that have a maturity when
issued of one year or more and "municipal notes" are Municipal Securities
that have a maturity when issued of less than one year. The two principal
classifications of Municipal Securities are "general obligations" (secured
by the issuer's pledge of its full faith, credit and taxing power for the
payment of principal and interest) and "revenue obligations" (payable only
from the revenues derived from a particular facility or class of
facilities, or specific excise tax or other revenue source). The Fund may
invest in Municipal Securities of both classifications. See "Investment
Objective and Policies" in the Statement of Additional Information for
further information about the Fund's investment policies and about
Municipal Securities.
- Special Considerations - New York Municipal Securities. Because
the Fund concentrates its investments in New York Municipal Securities,
a default or financial crisis relating to any of such issuers could
adversely affect the market value and marketability of such Municipal
Securities and the interest income and repayment of principal to the Fund
from them. Investors should consider these matters and the financial
difficulties experienced in past years by New York State and certain of
its agencies and subdivisions (particularly New York City), as well as
economic trends in New York, summarized in the Statement of Additional
Information under "Special Investment Considerations - New York Municipal
Securities." In addition, the Fund's portfolio securities are affected
by general changes in interest rates, which result in changes in the value
of portfolio securities held by the Fund, which can be expected to vary
inversely to changes in prevailing interest rates.
- 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 investment policies. The Fund's investment policies and techniques
are not "fundamental" unless this Prospectus or the Statement of
Additional Information says that a particular policy is "fundamental."
The Fund's investment objective is a fundamental policy.
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. 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).
- Investments in Taxable Securities and Temporary Defensive
Investment Strategy. Under normal market conditions, the Fund may invest
up to 20% of its assets in taxable investments, including (i) certain
"Temporary Investments" (described immediately below); (ii) hedging
instruments (described in "Hedging," below); (iii) repurchase agreements
(explained below); and (iv) municipal securities issued to benefit a
private user ("Private Activity Municipal Securities"), the interest from
which may be subject to Federal alternative minimum tax (see "Taxes,"
below, and "Private Activity Municipal Securities" in the Statement of
Additional Information).
For temporary defensive purposes, the Fund may invest up to 100% of
its total assets in "Temporary Investments," including: (i) obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities; (ii) corporate debt securities rated within the three
highest grades by Moody's or Standard & Poor's; (iii) commercial paper
rated "A-1" by Standard & Poor's or "Prime-1" by Moody's; and (iv)
certificates of deposit of domestic banks with assets of $1 billion or
more. The Fund may hold Temporary Investments pending the investment of
proceeds from the sale of Fund shares or portfolio securities, or to meet
anticipated redemptions.
- Credit Risk and Interest Rate Risk. The values of Municipal
Securities will vary as a result of changing evaluations by rating
services and investors of the ability of the issuers of such securities
to meet the interest and principal payments. Such values will also change
in response to changes in interest rates. Should interest rates rise, the
values of outstanding Municipal Securities will probably decline and (if
purchased at principal amount) would sell at a discount. If interest
rates fall, the values of outstanding Municipal Securities will probably
increase and (if purchased at principal amount) would sell at a premium.
Changes in the values of the Fund's Municipal Securities from these or
other factors will not affect interest income derived from these
securities but will affect the Fund's net asset value per share.
- Municipal Lease Obligations. The Fund may invest in certificates
of participation that represent a proportionate interest in or right to
the lease-purchase payment made under municipal lease obligations. While
some municipal lease securities may be deemed to be "illiquid" securities
(the purchase of which would be limited as described below in "Illiquid
and Restricted Securities"), from time to time the Fund may invest more
than 5% of its net assets in municipal lease obligations that the Manager
has determined to be liquid under guidelines set by the Board of Trustees.
- Floating Rate/Variable Rate Obligations. Some of the Municipal
Securities the Fund may purchase may have variable or floating interest
rates. Variable rates are adjustable at stated periodic intervals.
Floating rates are automatically adjusted according to a specified market
rate for such investments, such as the percentage of the prime rate of a
bank, or the 90-day U.S. Treasury Bill rate. Such obligations may be
secured by bank letters of credit or other credit support arrangements.
- Inverse Floaters and Other Derivative Investments. The Fund may
invest in certain municipal "derivative investments." The Fund may use
some derivative investments for hedging purposes, and may invest in others
because they offer the potential for increased income and principal value.
In general, a "derivative investment" is a specially-designed investment
whose performance is linked to the performance of another investment or
security, such as an option, future or index. In the broadest sense,
derivative investments include exchange-traded options and futures
contracts (please refer to "Hedging," below).
The Fund may invest in "inverse floater" variable rate bonds, a type
of derivative investment whose yields move in the opposite direction as
short-term interest rates change. As interest rates rise, inverse
floaters produce less current income. Their price may be more volatile
than the price of a comparable fixed-rate security. Some inverse floaters
have a "cap" whereby if interest rates rise above the "cap," the security
pays additional interest income. If rates do not rise above the "cap,"
the Fund will have paid an additional amount for a feature that proves
worthless. The Fund may also invest in municipal securities that pay
interest that depends on an external pricing mechanism, also a type of
derivative investment. Examples of external pricing mechanisms are
interest rate swaps or caps and municipal bond or swap indices. The Fund
anticipates that under normal circumstances it will invest no more than
10% of its net assets in inverse floaters.
The risks of investing in derivative investments include not only the
ability of the issuer of the derivative investment to pay the amount due
on the maturity of the investment, but also the risk that the underlying
security or investment might not perform the way the Manager expected it
to perform. That can mean that the Fund will realize less income than
expected. Another risk of investing in derivative investments is that
their market value could be expected to vary to a much greater extent than
the market value of municipal securities that are not derivative
investments but have similar credit quality, redemption provisions and
maturities.
- Ratings of Municipal Securities. Municipal Securities purchased
by the Fund must be rated within the four highest rating categories of
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P"), Fitch Investors Service, Inc. ("Fitch"), or, if unrated, judged
by the Manager to be of comparable quality to Municipal Securities rated
within such grades. See Appendix B of the Statement of Additional
Information for a description of these rating categories. Municipal
Securities rated either "Baa" or "MIG2" by Moody's, or "BBB" or "SP-2" by
S&P, or "BBB" or "F-3" by Fitch, although investment-grade, may be subject
to greater market fluctuations and risks of loss of income and principal
than higher-rated Municipal Securities and may be considered to have
speculative characteristics. Investments in unrated Municipal Securities
will not exceed 20% of the Fund's total assets.
A reduction in the rating of a security after its purchase by the
Fund will not require the Fund to dispose of such security. Securities
that have fallen below investment grade have a greater risk that the
ability of the issuers of such securities to meet their debt obligations
will be impaired. It is anticipated that the Municipal Securities
purchased for the Fund's portfolio will generally be those having
relatively longer maturities (approximately 7 to 30 years), but the Fund
may invest in Municipal Securities having a broad range of maturities.
The foregoing ratings restrictions do not apply to banks in which the
Fund's cash is kept.
The Fund's Board of Trustees and shareholders have changed the Fund's
current investment policy with respect to the ratings of Municipal
Securities purchased by the Fund. The Fund is permitted to invest up to
25% of the Fund's total assets in Municipal Securities rated below
"investment grade," that is, below the four highest rating categories of
Moody's Investors Service, Inc., Standard & Poor's Corporation or Fitch
Investors Service, Inc. Although the yield in non-investment grade
Municipal Securities tends to be higher than that of higher grade
municipal securities, there is an increased credit risk potential that
issuers of non-investment grade Municipal Securities may not be able to
make interest or principal payments as they become due.
- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund generally will not engage in
the trading of securities for the purpose of realizing short-term gains,
but the Fund may sell securities as the Manager deems advisable to take
advantage of differentials in yield. The "Financial Highlights," above,
show the Fund's portfolio turnover rate during past fiscal years. While
short-term trading increases portfolio turnover, the Fund incurs little
or no brokerage costs because most of the Fund's portfolio transactions
are principal trades without brokerage commissions.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These techniques
involve certain risks. The Statement of Additional Information contains
more information about these practices, including limitations on their use
that are designed to reduce some of the risks.
- When-Issued and Delayed Delivery Transactions. The Fund may
purchase Municipal Securities on a "when-issued" basis, and may purchase
or sell such securities on a "delayed delivery" basis. "When-issued" or
"delayed delivery" refer to securities whose terms and indenture are
available and for which a market exists, but which are not available for
immediate delivery. The Fund does not intend to make such purchases for
speculative purposes. During the period between the purchase and
settlement, no payment is made for the security and no interest accrues
to the buyer from the investment. The commitment to purchase a security
for which payment will be made on a future date may be deemed a separate
security and involves a risk of loss if the value of the security declines
prior to the settlement date.
- 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.
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.
- 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. As a matter of fundamental policy, the Fund
may not invest in securities that have a restriction on their resale. The
Fund will not invest more than 10% of its net assets in illiquid or
restricted securities (that limit may increase to 15% if certain state
laws are changed or the Fund's shares are no longer sold in those states).
The Fund's percentage limitation on these investments does not apply to
certain restricted securities that are eligible for resale to qualified
institutional purchasers.
- Loans of Portfolio Securities. To attempt to increase its income,
the Fund may lend its portfolio securities to brokers, dealers and other
financial institutions. The Fund must receive collateral for a loan.
These loans are limited to not more than 25% of the Fund's net assets and
are subject to other conditions described in the Statement of Additional
Information. The Fund presently does not intend to lend its portfolio
securities, but if it does, the value of securities loaned is not expected
to exceed 5% of the value of its total assets in the coming year.
- Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, put and call options, and options on
futures and broadly-based municipal bond indices, or enter into interest
rate swap agreements. These are all referred to as "hedging instruments."
The Fund does not use hedging instruments for speculative purposes, and
has limits on the use of them, described below. The hedging instruments
the Fund may use are described below and in greater detail in "Other
Investment Techniques and Strategies" in the Statement of Additional
Information.
The Fund may buy and sell options and futures for a number of
purposes. It may do so to try to manage its exposure to the possibility
that the prices of its portfolio securities may decline, or to establish
a position in the securities market as a temporary substitute for
purchasing individual securities. It may do so to try to manage its
exposure to changing interest rates. Some of these strategies, such as
selling futures, buying puts and writing covered calls, hedge the Fund's
portfolio against price fluctuations.
Other hedging strategies, such as buying futures and call options,
tend to increase the Fund's exposure to the securities market. Writing
covered call options may also provide income to the Fund for liquidity
purposes or to raise cash to distribute to shareholders.
- Futures. The Fund may buy and sell futures contracts that relate
to (1) broadly-based municipal bond indices (these are referred to as
Municipal Bond Index Futures) and (2) interest rates (these are referred
to as Interest Rate Futures). These types of Futures are described in
"Hedging With Options and Futures Contracts" in the Statement of
Additional Information.
- Put and Call Options. The Fund may buy and sell certain kinds of
put options (puts) and call options (calls).
The Fund may buy calls only on securities, broadly-based municipal
bond indices, Municipal Bond Index Futures or Interest Rate Futures, or
to terminate its obligation on a call the Fund previously wrote. The Fund
may write (that is, sell) covered call options. When the Fund writes a
call, it receives cash (called a premium). The call gives the buyer the
ability to buy the investment on which the call was written from the Fund
at the call price during the period in which the call may be exercised.
If the value of the investment does not rise above the call price, it is
likely that the call will lapse without being exercised, while the Fund
keeps the cash premium (and the investment).
The Fund may purchase put options. Buying a put on a investment
gives the Fund the right to sell the investment at a set price to a seller
of a put on that investment. The Fund can buy only those puts that relate
to (1) securities that the Fund owns, (2) broadly-based municipal bond
indices, (3) Municipal Bond Index Futures or (4) Interest Rate Futures.
The Fund can buy a put on a Municipal Bond Future or Interest Rate Future
whether or not the Fund owns the particular Future in its portfolio. The
Fund may not sell a put other than a put that it previously purchased.
The Fund may buy and sell puts and calls only if certain conditions
are met: (1) after the Fund writes a call, not more than 25% of the Fund's
total assets may be subject to calls; (2) calls the Fund buys or sells
must be listed on a securities or commodities exchange, or quoted on the
Automated Quotation System of the National Association of Securities
Dealers, Inc. (NASDAQ), or traded in the over-the-counter market; (3) each
call the Fund writes must be "covered" while is outstanding: that means
the Fund must own the investment on which the call was written or it must
own other securities that are acceptable for the escrow arrangements
required for calls; (4) the Fund may write calls on Futures contracts it
owns, but these calls must be covered by securities or other liquid assets
the Fund owns and segregates to enable it to satisfy its obligations if
the call is exercised; (5) a call or put option may not be purchased if
the value of all of the Fund's put and call options would exceed 5% of the
Fund's total assets.
- Interest Rate Swaps. In an interest rate swap, the Fund and
another party exchange their right to receive or their obligation to pay
interest on a security. For example, they may swap a right to receive
floating rate payments for fixed rate payments. The Fund enters into
swaps only on securities it owns. The Fund may not enter into swaps with
respect to more than 25% of its total assets. Also, the Fund will
segregate liquid assets (such as cash or U.S. Government securities) to
cover any amounts it could owe under swaps that exceed the amounts it is
entitled to receive, and it will adjust that amount daily, as needed.
Income from interest rate swaps may be taxable.
- Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than what is
required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce the Fund's return. The Fund could also
experience losses if the prices of its futures and options positions were
not correlated with its other investments or if it could not close out a
position because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If a covered call written by the Fund is exercised on an
investment that has increased in value, the Fund will be required to sell
the investment at the call price and will not be able to realize any
profit if the investment has increased in value above the call price.
Interest rate swaps are subject to credit risks (if the other party fails
to meet its obligations) and also to interest rate risks. The Fund could
be obligated to pay more under its swap agreements than it receives under
them, as a result of interest rate changes. These risks are described in
greater detail in the Statement of Additional Information.
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:
- Invest in securities or any other investment other than the types
described in "Investment Objective and Policies," above;
- With respect to 75% of its assets, purchase securities issued or
guaranteed by any one issuer (other than the U.S. Government or its
agencies or instrumentalities), if more than 5% of the Fund's total assets
would be invested in securities of that issuer or the Fund would then own
more than 10% of that issuer's voting securities;
- Invest more than 25% of its assets in any industry; however, for
the purposes of this restriction, Municipal Securities and U.S. Government
obligations are not considered to be part of any single industry;
- Make loans, except that the Fund may (i) purchase debt securities
described in "Investment Objective and Policies" and repurchase
agreements, and (ii) lend its portfolio securities as described in "Loans
of Portfolio Securities";
- Borrow money in excess of 10% of the value of its total assets or
make any investment when borrowings exceed 5% of the value of its total
assets; it may borrow only as a temporary measure for extraordinary or
emergency purposes;
- Pledge, mortgage or otherwise encumber, transfer or assign any of
its assets to secure a debt; collateral arrangements for premium and
margin payments in connection with hedging instruments are not deemed to
be a pledge of assets;
- Buy or sell futures contracts other than Interest Rate Futures or
Municipal Bond Index Futures; or
- Underwrite securities or invest in securities subject to
restrictions on resale.
All of the percentage restrictions described above and in the
Statement of Additional Information apply only at the time of investment
and require no action by the Fund as a result of subsequent changes in
value of the investments or the size of the Fund. A supplementary list
of investment restrictions is contained in "Investment Restrictions" in
the Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1984 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and officers of the Fund and provides more
information about them. Although the Fund is not required by law to hold
annual meetings, it may hold shareholder meetings from time to time on
important matters, and shareholders have the right to call a meeting to
remove a Trustee or to take other action described in the Fund's
Declaration of Trust.
The Board of Trustees has the power, without shareholder approval,
to divide unissued shares of the Fund into two or more classes. The Board
has done so, and the Fund currently has three classes of shares, Class A,
Class B and Class C. All classes invest in the same investment portfolio.
Each class has its own dividends and distributions and pays certain
expenses which may be different for the different classes. Each class may
have a different net asset value. Each share has one vote at shareholder
meetings, with fractional shares voting proportionally. Only shares of
a particular class vote on matters that affect that class alone. Shares
are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Fund's investments and handles its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Board
of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. The Agreement establishes the fees paid by
the Fund to the Manager and describes the expenses that the Fund pays to
conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $35 billion as
of June 30, 1995, and with more than 2.6 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 E.
Patterson, a Senior Vice President of the Manager. He has been the person
principally responsible for the day-to-day management of the Fund's
portfolio since November, 1985, and is an officer and portfolio manager
of other OppenheimerFunds.
- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 0.60% of the first $200 million of
aggregate net assets, 0.55% of the next $100 million, 0.50% of the next
$200 million, 0.45% of the next $250 million, 0.40% of the next $250
million, and 0.35% of net assets in excess of $1 billion. The Fund's
management fee for its last fiscal year ended September 30, 1994 was 0.51%
of average annual net assets for both its Class A and Class B shares,
which may be higher than the rate paid by some other mutual funds.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, and 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. Because the Fund purchases most of its portfolio
securities directly from the sellers and not through brokers, it incurs
relatively little expense for brokerage. From time to time, however, it
may use brokers when buying portfolio securities. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Distributor for the
Fund. The Distributor also distributes the shares of other mutual funds
managed by the Manager (the "OppenheimerFunds") and is sub-distributor for
funds managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free number shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return", "average annual total return", "standardized yield", "dividend
yield", "yield" and "tax-equivalent yield" to illustrate its performance.
The performance of each class of shares is shown separately, because the
performance of each class will usually be different as a result of the
different kinds of expenses each class bears. This performance
information may be useful to help you see how your investment has done and
to compare it to other funds or to a market index, as we have done below.
It is important to understand that the fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio, 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 they
include the payment of the current maximum initial sales charge. When
total returns are shown for Class B shares, they include the effect of the
contingent deferred sales charge that applies to the period for which
total return is shown. When total returns are shown for Class C shares,
they also include the effect of the contingent deferred sales charge.
Total returns may also be quoted "at net asset value", without considering
the effect of the sales charge, and those returns would be reduced if
sales charges were deducted.
- Yield. Each Class of shares calculates its yield by dividing the
annualized net investment income per share on the portfolio during a
30-day period by the maximum offering price on the last day of the period.
Tax-equivalent yield is the equivalent yield that would be earned in the
absence of taxes. It is calculated by dividing that portion of the yield
that is tax-exempt by a factor equal to one minus the applicable tax rate.
The yield of each Class will differ because of the different expenses of
each Class of shares. The yield data represents a hypothetical investment
return on the portfolio, and does not measure an investment return based
on dividends actually paid to shareholders. To show that return, a
dividend yield may be calculated. Dividend yield is calculated by
dividing the dividends of a Class derived from net investment income
during a stated period by the maximum offering price on the last day of
the period. Yields and dividend yields for Class A shares reflect the
deduction of the maximum initial sales charge, but may also be shown based
on the Fund's net asset value per share. Yields for Class B and Class C
shares do not reflect the deduction of the contingent deferred sales
charge.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended September 30, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the fiscal year
ended September 30, 1994, the Fund was affected by aggressive increases
in short-term interest rates by the Federal Reserve Board. The Fund's
focus on call protection (which prevents the issuer of the bond from
calling or redeeming it before maturity) and on bond quality helped
moderate price fluctuations. The Fund continued to maintain a strong
position in higher quality bonds that the Manager considered to be related
to essential services backed by predictable revenue streams, such as
transportation, utilities, housing and hospitals. In the opinion of the
Manager, the Fund is diversified both by geographic location and by market
sector within New York.
- Comparing the Fund's Performance to the Market. The graphs below
show the performance of a hypothetical $10,000 investment in each Class
of shares of the Fund held from the inception of the Class until September
30, 1994. In the case of Class A shares, performance is measured over a
ten-year period, and in the case of Class B shares, from the inception of
the Class on March 1, 1993. In both cases, all dividends and capital
gains distributions were reinvested in additional shares. The graph
reflects the deduction of the 4.75% current maximum initial sales charge
on Class A shares and the maximum 5% contingent deferred sales charge on
Class B shares. Class C shares were not publicly offered during the
fiscal year ended September 30, 1994. Accordingly, no information on
Class C shares is presented in the graphs below.
Because the Fund invests in a variety of Municipal Securities, the
Fund's performance is compared to the performance of the Lehman Brothers
Municipal Bond Index, an unmanaged index of a broad range of investment
grade municipal bonds widely regarded as a measure of the performance of
the general municipal bond market.
Index performance reflects the reinvestment of income but does not
consider the effect of capital gains or transaction costs, and none of the
data below shows the effect of taxes. Also, the Fund's performance
reflects the effect of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited
to the securities in the Lehman Brothers Municipal Bond Index. Moreover,
the index performance 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 Investments in
Class A and Class B Shares of
Oppenheimer New York Tax-Exempt Fund and
Lehman Brothers Municipal Bond Index
(Graph)
Average Annual Total Return of Class A and Class B shares of the Fund at
9/30/94(1)
A Shares 1-Year 5-Year 10-Year
<10.04%> 6.18% 9.07%
B Shares 1-Year Life:
<10.90%> <2.77%>
----------------------
(1) The inception date of the Fund (Class A shares) was 8/16/84. The
average annual total returns and the ending account value in the graph
reflect reinvestment of all dividends and capital gains distributions and
are shown net of the applicable 4.75% maximum initial sales charge.
(2) Class B shares of the Fund were first publicly offered on 3/1/93. The
average annual total returns reflect reinvestment of all dividends and
capital gains distributions and are shown net of the applicable 5%
contingent deferred sales charges, respectively, for the 1-year period and
the life of the class. The ending account value in the graph is net of
the applicable 5% and 4% contingent deferred sales charge.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Classes of Shares. The Fund offers investors three different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will
likely have different share prices.
- Class A Shares. If you buy Class A shares, you pay an initial
sales charge (on investments up to $1 million). If you purchase Class A
shares as part of an investment of at least $1 million in shares of one
or more OppenheimerFunds, you will not pay an initial sales charge, but
if you sell any of those shares within 18 months after your purchase, you
may pay a contingent deferred sales charge, which will vary depending on
the amount you invested. Sales charges are described below in "Class A
Shares."
- 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, you
will normally pay a contingent deferred sales charge that varies depending
on how long you own your shares. As described below, the Fund
automatically converts Class B shares into Class A shares after 6 years.
Long-term Class B shareholders could pay the economic equivalent of more
than the maximum front-end sales charge allowed under applicable
regulations, because of the effect of the asset-based sales charge and the
contingent deferred sales charge. The automatic conversion of Class B
shares to Class A shares is designed to minimize the likelihood that this
will occur. See "Class B Shares," below.
- Class C Shares. When 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%. Please refer to "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 are how much you plan to
invest, how long you plan to hold your investment, and whether you
anticipate exchanging your shares for shares of other OppenheimerFunds
(not all of which currently offer Class B and/or Class C shares). If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We used the
sales charge rates that apply to each class, 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 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? The Fund is
designed for long-term 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 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 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 less than six years), you
should probably consider purchasing Class C shares rather than Class A or
Class B shares. This is 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 $250,000 for a period less
than six years, Class C shares might not be as advantageous as Class A
shares. This is because the annual asset-based sales charge on Class C
shares (and the contingent deferred sales charges that apply if you redeem
Class C shares within a year of purchase) might have a greater impact on
your account during the period than the initial sales charge that would
apply if Class A shares were purchased instead at the applicable reduced
Class A sales charge rate.
For most investors who invest $500,000 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, or orders
for more than $1 million of Class C shares from a single investor.
- Investing for the Longer Term. If you are investing for the longer
term, for example, for retirement, and do not expect to need access to
your money for seven years or more, Class A shares will likely be more
advantageous than Class B or Class C shares. This is because of the
effect of 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. Class B shares may be appropriate
for smaller investments held for the longer term because there is no
initial sales charge on Class B shares and Class B shares held six years
following their purchase convert into Class A shares.
Of course, all of 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
you should analyze your options carefully.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available to Class B or Class C
shareholders, or other features (such as Automatic Withdrawal Plans) might
not be advisable (because of the effect of the contingent deferred sales
charge for Class B and Class C shareholders), you should carefully review
how you plan to use your investment account before deciding which class
of shares to buy. For example, share certificates are not available for
Class B or Class C shares and if you are considering using your shares as
collateral for a loan, that may be a factor to consider. Also,
checkwriting privileges are not available for Class B and Class C shares.
Also, because not all OppenheimerFunds currently offer Class B or Class
C shares, and because exchanges are permitted only to the same class of
shares in other OppenheimerFunds, you should consider how important the
exchange privilege is likely to be for you.
- 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 rather than another class. It is important that investors
understand that the purpose of the contingent deferred sales charges and
asset-based sales charges for Class B and Class C shares are 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 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.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or you
can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements with
the Distributor.
- How Are Shares Purchased? You can buy shares several ways: through
any dealer, broker or financial institution that has a sales agreement
with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service. When you buy shares, be sure
to specify Class A, Class B or Class C shares. If you do not choose, your
investment will be made in Class A shares.
- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an OppenheimerFunds
New Account Application and return it with a check payable to "Oppenheimer
Funds Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217.
If you don't list a dealer on the application, the Distributor will act
as your agent in buying the shares. However, we recommend that you
discuss your investment first with a financial advisor, to be sure it is
appropriate for you.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member. You can then transmit funds electronically to purchase shares,
to send redemption proceeds, and to transmit dividends and distributions.
Shares are purchased for your account on AccountLink on the regular
business day the Distributor is instructed by you to initiate the ACH
transfer to buy shares. You can provide those instructions automatically,
under an Asset Builder Plan, described below, or by telephone instructions
using OppenheimerFunds PhoneLink, also described below. You should
request AccountLink privileges on the application or dealer settlement
instructions used to establish your account. Please refer to
"AccountLink" below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other OppenheimerFunds) automatically each month from your account
at a bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of
Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver. In most cases, to enable you to receive that
day's offering price, the Distributor must receive your order by 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.
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 may be 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:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Amount of Purchase Front-End Front-End Commission
Sales Charge Sales Charge as
as a as a Percentage
Percentage Percentage of Offering
of Offering of Amount Price
Price Invested
-------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.98% 4.00%
-------------------------------------------------------------------
$50,000 or more
but less than
$100,000 4.50% 4.71% 4.00%
-------------------------------------------------------------------
$100,000 or more
but less than
$250,000 3.50% 3.63% 3.00%
-------------------------------------------------------------------
$250,000 or more
but less than
$500,000 2.50% 2.56% 2.25%
-------------------------------------------------------------------
$500,000 or more
but less than
$1 million 2.00% 2.04% 1.80%
-------------------------------------------------------------------
</TABLE>
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
OppenheimerFunds aggregating $1 million or more. Shares of any
OppenheimerFunds that offer only one class of shares that has no
designation are considered "Class A Shares" for this purpose. However,
the Distributor pays dealers of record commissions on such purchases in
an amount equal to the sum of 1.0% of the first $2.5 million, plus 0.50%
of the next $2.5 million, plus 0.25% of share purchases over $5 million.
That commission will be paid only on the amount of those purchases in
excess of $1 million that were not previously subject to a front-end sales
charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge
(called the "Class A contingent deferred sales charge") will be deducted
from the redemption proceeds. That sales charge will be equal to 1.0% of
the aggregate net asset value of either (1) the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original cost of the shares, whichever is less.
However, the 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 OppenheimerFunds you purchased subject to
the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable,
the Fund will first redeem shares that are not subject to the sales
charge, including shares purchased by reinvestment of dividends and
capital gains, and then will redeem other shares in the order that you
purchased them. The Class A contingent deferred sales charge is waived
in certain cases described in "Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges
of shares under the Fund's Exchange Privilege (described below). However,
if the shares acquired by exchange are redeemed within 18 months of the
end of the calendar month of the purchase of the exchanged shares, the
sales charge will apply.
- Special Arrangements With Dealers. The Distributor may advance up
to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients.
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 on behalf of your children who are minors, under
trust or custodial accounts. A fiduciary can count all shares purchased
for a trust, estate or other fiduciary account (including one or more
employee benefit plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and
Class B shares of the Fund and other OppenheimerFunds to reduce the sales
charge rate that applies to current purchases of Class A shares. You can
also count Class A and Class B shares of OppenheimerFunds 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
OppenheimerFunds. The value of those shares will be based on the greater
of the amount you paid for the shares or their current value (at offering
price). The OppenheimerFunds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Distributor. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, if you purchase Class
A shares or Class A and Class B shares of the Fund and other
OppenheimerFunds during a 13-month period, you reduce the sales charge
rate that applies to your purchases of Class A shares. The total amount
of your intended purchases of both Class A and Class B shares will
determine the reduced sales charge rate for the Class A shares purchased
during that period. This can include purchases made up to 90 days before
the date of the Letter. More information is contained in the Application
and in "Reduced Sales Charges" in the Statement of Additional Information.
- Waivers of Class A Sales Charges. The Class A sales charges are
not imposed in the circumstances described below. There is an explanation
of this policy in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers. Class A shares purchased by the following investors are not
subject to any Class A sales charges:
- the Manager or its affiliates;
- present or former officers, directors, trustees and employees (and
their "immediate families" as defined in "Reduced Sales Charges" in the
Statement of Additional Information) of the Fund, the Manager and its
affiliates, and retirement plans established by them for their employees;
- registered management investment companies, or separate accounts
of insurance companies having an agreement with the Manager or the
Distributor for that purpose;
- dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
- employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and are
identified to the Distributor) or with the Distributor; the purchaser must
certify to the Distributor at the time of purchase that the purchase is
for the purchaser's own account (or for the benefit of such employee's
spouse or minor children);
- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor providing specifically for
the use of shares of the Fund in particular investment products made
available to their clients; or
- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor to sell shares of defined
contribution employee retirement plans for which the dealer, broker or
investment adviser provides administration services.
Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions. Class A shares issued or purchased in the following
transactions are not subject to Class A sales charges:
- shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party,
- shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other OppenheimerFunds (other
than Oppenheimer Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the Distributor, or
- shares purchased and paid for with the proceeds of shares redeemed
in the prior 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. There is a further discussion of this policy in "Reduced
Sales Charges" in the Statement of Additional Information.
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); or
- 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 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).
- 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
accounts that hold Class A shares. Reimbursement is made quarterly at an
annual rate that may not exceed 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor uses all of those fees to
compensate dealers, brokers, banks and other financial institutions
quarterly for providing personal service and maintenance of accounts of
their customers that hold Class A shares and to reimburse itself (if the
Fund's Board of Trustees authorizes such reimbursements) for its other
expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of Class A shares held in
accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of Class A shares. For more details, please
refer to "Distribution and Service Plans" in the Statement of Additional
Information.
Buying Class B Shares. Class B shares are sold at net asset value per
share without an initial sales charge. However, if Class B shares are
redeemed within 6 years of their purchase, a contingent deferred sales
charge will be deducted from the redemption proceeds. That sales charge
will not apply to shares purchased by the reinvestment of dividends or
capital gains distributions. The charge will be assessed on the lesser of
the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class B contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 6 years, and (3) shares held the longest during the
6-year period.
The 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:
<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
Years Since Beginning of Month in On Redemptions in That Year
which Purchase Order Was Accepted (As % of Amount Subject to Charge)
-----------------------------------------------------------------------
<S> <C>
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
</TABLE>
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.
- Waivers of Class B Sales Charge. The Class B contingent deferred
sales charge will not be applied to shares purchased in certain types of
transactions nor will it apply to Class B 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
contingent deferred sales charge will be waived for redemptions of shares
in the following cases:
- Following the death or disability of the last surviving shareholder
(the death or disability must have occurred after the account was
established, and for disability you must provide evidence of a
determination of disability by the Social Security Administration);
- 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; and
- shares redeemed in involuntary redemptions as described below.
Further details about this policy are contained in "Reduced Sales Charges"
in the Statement of Additional Information.
- 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.
Under the Plan, the Fund pays the Distributor an annual "asset-based sales
charge" of 0.75% per year on Class B shares that are outstanding for 6
years or less. The Distributor also receives a service fee of 0.25% per
year. Both fees are computed on the average annual net assets of Class
B shares, determined as of the close of each regular business day. The
asset-based sales charge allows investors to buy Class B shares without
a front-end sales charge while allowing the Distributor to compensate
dealers that sell Class B shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class B shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fees increase
Class B expenses by up to 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for
the first year after Class B shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the fee on a
quarterly basis. The Distributor pays sales commissions of 3.75% of the
purchase price to dealers from its own resources at the time of sale. The
Distributor retains the asset-based sales charge to recoup the sales
commissions it pays, the advances of service fee payments it makes, and
its financing costs.
The Distributor's actual expenses in selling Class B shares may be
more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plan for Class B shares. Therefore, those expenses may be carried
over and paid in future years. At September 30, 1994, the end of the Plan
year, the Distributor had incurred unreimbursed expenses under the Plan
of $3,030,109 (equal to 4.10% of the Fund's net assets represented by
Class B shares on that date), which have been carried over into the
present Plan year. 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 the Distributor for expenses it incurred before the Plan was
terminated.
Buying Class C Shares. Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are
redeemed within 12 months of their purchase, a contingent deferred sales
charge of 1.0% will be deducted from the redemption proceeds. That sales
charge will not apply to shares purchased by the reinvestment of dividends
or capital gains distributions. The charge will be assessed on the lesser
of the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class C contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 12 months, and (3) shares held the longest during the
12-month period.
- Waivers of Class C Sales Charge. The Class C contingent deferred
sales charge will be waived if the shareholder requests it for any of the
redemptions or circumstances described above under "Waivers of Class B
Sales Charge."
- Distribution and Service Plan for Class C Shares. The Fund has
adopted a Distribution and Service Plan for Class C shares to compensate
the Distributor for its services and costs in distributing Class C shares
and servicing accounts. Under the Plan, the Fund pays the Distributor an
annual "asset-based sales charge" of 0.75% per year on Class C shares.
The Distributor also receives a service fee of 0.25% per year. Both fees
are computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. The asset-based
sales charge allows investors to buy Class C shares without a front-end
sales charge while allowing the Distributor to compensate dealers that
sell Class C shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class C shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fees increase
Class C expenses by up to 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for
the first year after Class C shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the fee on a
quarterly basis. The Distributor pays sales commissions of 0.75% of the
purchase price to dealers from its own resources at the time of sale. The
Distributor retains the asset-based sales charge during the first year
shares are outstanding to recoup the sales commissions it pays, the
advances of service fee payments it makes, and its financing costs. 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.
Because the Distributor's actual expenses in selling Class C shares
may be more than the payments it receives from contingent deferred sales
charges collected on redeemed shares and from the Fund under the
Distribution and Service Plan for Class C shares, those expenses may be
carried over and paid in future years. If the Plan is terminated by the
Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to the Distributor for certain expenses it
incurred before the plan was terminated.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions. These include purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges on signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each shareholder
listed in the registration on your account as well as to your dealer
representative of record unless and until the Transfer Agent receives
written instructions terminating or changing those privileges. After you
establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the
Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be
used on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is worth $5,000
or more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly, semi-annual or annual
basis. The checks may be sent to you or sent automatically to your bank
account on AccountLink. You may even set up certain types of withdrawals
of up to $1,500 per month by telephone. You should consult the
Application and Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent
automatically to exchange an amount you establish in advance for shares
of up to five other OppenheimerFunds on a monthly, quarterly, semi-annual
or annual basis under an Automatic Exchange Plan. The minimum purchase
for each OppenheimerFunds account is $25. These exchanges are subject to
the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A or
Class B shares, you have up to 6 months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other
OppenheimerFunds without paying a sales charge. This privilege applies
only to Class A shares you purchased subject to an initial sales charge
and to Class A or Class B shares or on which you paid a contingent
deferred sales charge when you redeemed them. It does not apply to Class
C shares. You must be sure to ask the Distributor for this privilege when
you send your payment. Please consult the Statement of Additional
Information for more details.
How to Sell Shares
You can arrange to take money out of your account on any regular business
day by selling (redeeming) some or all of your shares. Your shares will
be sold at the next net asset value calculated after your order is
received and accepted by the Transfer Agent. The Fund offers you a number
of ways to sell your shares: in writing, by using Checkwriting or by
telephone. You can also set up an Automatic Withdrawal Plan 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, please call
the Transfer Agent first, at 1-800-525-7048, for assistance.
- 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
statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as an
Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other business, or
as a fiduciary, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your account statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling, and
- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell
shares.
Use the following address for requests by mail:
Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record
may also sell your shares by telephone. To receive the redemption price
on a regular business day, your call must be received by the Transfer
Agent by the close of the New York Stock Exchange that day, which is
normally 4:00 P.M., but which may be earlier on some days. You may not
redeem shares held 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. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
Checkwriting. To be able to write checks against your Fund account,
you may request that privilege on your account Application or you can
contact the Transfer Agent for signature cards, which must be signed (with
a signature guarantee) by all owners of the account and returned to the
Transfer Agent so that checks can be sent to you to use. Shareholders with
joint accounts can elect in writing to have checks paid over the signature
of one owner. If you previously signed a signature card to establish
Checkwriting in one of the other OppenheimerFunds, you may call 1-800-525-
7048 to request Checkwriting for an account in this Fund that has the same
registration as that other fund account.
- Checks can be written to the order of whomever you wish, but may
not be cashed at the Fund's bank or custodian.
- Checkwriting privileges are not available for accounts holding
Class B or Class C shares, or Class A shares that are subject to a
contingent deferred sales charge.
- Checks must be written for at least $100.
- Checks cannot be paid if they are written for more than your
account value. Remember: your shares fluctuate in value and you should
not write a check close to the total account value.
- You may not write a check that would require the Fund to redeem
shares that were purchased by check or Asset Builder Plan payments within
the prior 10 days.
- Don't use your checks if you changed your Fund account number.
Selling Shares Through Your Dealer. The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their
customers. Brokers or dealers may charge for that service. Please refer
to "Special Arrangements for Repurchase of Shares from Dealers and
Brokers" in the Statement of Additional Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain OppenheimerFunds
at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
- Shares of the fund selected for exchange must be available for sale
in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other OppenheimerFunds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At
present, not all of the OppenheimerFunds offer the same classes of shares.
If a fund has only one class of shares that does not have a class
designation, they are "Class A" shares for exchange purposes. Certain
OppenheimerFunds offer Class A shares and Class B and/or Class C shares,
and a list can be obtained by calling the Distributor at 1-800-525-7048.
In some cases, sales charges may be imposed on exchange transactions.
Please refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1-800-525-7048. Exchanges of shares
involve a redemption of the shares of the fund you own and a purchase of
shares of the other fund.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request by 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 7 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 disposition 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 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 on each regular business
day 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, obligations for which market values
cannot be readily obtained, and call options and hedging instruments.
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 it 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 value of the securities in the Fund's portfolio fluctuates, and the
redemption price, which is the net asset value per share, will normally
be different for Class A, Class B and Class C shares. Therefore, the
redemption value of your shares may be more or less than their original
cost.
- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. For accounts registered
in the name of a broker-dealer, payment will be forwarded within 3
business days. The Transfer Agent may delay forwarding a check or
processing a payment via AccountLink for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much
as 10 days from the date the shares were purchased. That delay may be
avoided if you purchase shares by certified check or arrange with your
bank to provide telephone or written assurance to the Transfer Agent that
your purchase payment has cleared.
- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $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 and
Class C shares from net investment income each regular business day and
pays such dividends to shareholders monthly. Normally, dividends are paid
on or about the tenth business day of each month, but the Board of
Trustees can change that date. It is expected that distributions paid with
respect to Class A shares will generally be higher than for Class B and
Class C shares because expenses allocable to Class B and Class C shares
will generally be higher.
For the fiscal year ended September 30, 1994, the Fund maintained the
practice, to the extent consistent with the amount of the Fund's net
investment income and other distributable income, of attempting to pay
dividends on Class A shares at a constant level, although the amount of
such dividends was subject to change from time to time depending on market
conditions, the composition of the Fund's portfolio and expenses borne by
the Fund or borne separately by that Class. The practice of attempting
to pay dividends on Class A shares at a constant level requires the
Manager, consistent with the Fund's investment objective and investment
restrictions, to monitor the Fund's portfolio and select higher yielding
securities when deemed appropriate to maintain necessary net investment
income levels. The Fund anticipates paying dividends at the targeted
dividend level from net investment income and other distributable income
without any impact on the Fund's net asset value per share. The Board of
Trustees may change the Fund's targeted dividend level at any time,
without prior notice to shareholders; the Fund does not otherwise have a
fixed dividend rate and there can be no assurance as to the payment of any
dividends or the realization of any capital gains.
Capital Gains. Although the Fund does not seek capital gains, it may
realize capital gains on the sale of portfolio securities. If it does,
it may make distributions out of any net short- or long-term capital gains
in December. The Fund may make supplemental distributions of dividends
and capital gains following the end of its fiscal year (which ends
September 30th). 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 OppenheimerFunds account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. Long-term capital gains are taxable as long-term capital gains
when distributed to shareholders. Dividends paid from short-term capital
gains and net investment income are taxable as ordinary income. Dividends
paid from net investment income earned by the Fund on Municipal Securities
will be excludable from your gross income for Federal income tax purposes.
A portion of the dividends paid by the Fund may be an item of tax
preference if you are subject to the alternative minimum tax.
Distributions are subject to Federal income tax and may be subject to
state and/or local taxes. Your distributions are taxable when paid,
whether you reinvest them in additional shares or take them in cash. Every
year the Fund will send you and the IRS a statement showing the amount of
each taxable distribution you received in the previous year.
- "Buying a Dividend". When a fund goes ex-dividend, its share price
is reduced by the amount of the distribution. If you buy shares on or
just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions. Even though the Fund seeks tax-exempt
income for distribution to shareholders, you may have a capital gain or
loss when you sell or exchange your shares. A capital gain or loss is the
difference between the price you paid for the shares and the price you
receive when you sell them. Any capital gain is subject to capital gains
tax.
- Returns of Capital. In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders. A non-
taxable return of capital may reduce your tax basis in your Fund shares.
This information is only a summary of certain Federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
Graphic material included in Prospectus of Oppenheimer New York Tax-
Exempt Fund: "Comparison of Total Return of Oppenheimer New York Tax-
Exempt Fund and the Lehman Bros. Municipal Bond Index - Change in Value
of a $10,000 Hypothetical Investment"
Linear Graphs will be included in the Prospectus of Oppenheimer New
York Tax-Exempt Fund (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in (i) Class
A shares of the Fund for the ten years ended September 30, 1994, and (ii)
Class B shares of the Fund from March 1, 1993 (the date Class B shares
were first publicly-offered) to September 30, 1994, and comparing such
values with the same investments over the same time periods in the Lehman
Brothers Municipal Bond Index. Since no Class C shares of the Fund were
outstanding until after September 30, 1994, no figures are included for
this class. 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 Lehman Brothers Municipal Bond
Index, is set forth in the Prospectus under "Fund Information -
Management's Discussion of Performance."
<TABLE>
<CAPTION>
Oppenheimer
New York
Tax-Exempt Lehman
Fund Brothers
Fiscal Year Class A Municipal
(Period) Ended Shares Bond Index
<S> <C> <C>
09/30/84 $ 9,525 $10,000
09/30/85 $11,257 $11,624
09/30/86 $13,882 $14,489
09/30/87 $13,973 $14,566
09/30/88 $15,648 $16,457
09/30/89 $16,806 $17,885
09/30/90 $17,638 $19,101
09/30/91 $19,908 $21,621
09/30/92 $22,019 $23,880
03/01/93 $23,563 $25,487
09/30/93 $25,175 $26,925
09/30/94 $23,833 $26,268
Oppenheimer
New York
Tax-Exempt Lehman
Fund Brothers
Fiscal Year Class B Municipal
(Period) Ended Shares(1) Bond Index
03/01/93 $10,000 $10,000
09/30/93 $10,596 $10,564
09/30/94 $ 9,601 $10,306
<FN>
____________________
(1)For the period from March 1, 1993 (commencement of class) to September
30, 1994.
</TABLE>
<PAGE>
Oppenheimer New York Tax-Exempt Fund
Two World Trade Center
New York, New York 10048-0203
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
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, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given
or made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds Distributor, Inc., or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
(OppenheimerFunds Logo)
PR360.001.0895 * Printed on recycled paper
<PAGE>
Oppenheimer New York Tax-Exempt Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated August 29, 1995
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated August 29, 1995. It should be read
together with the Prospectus, which may be obtained by writing to the
Fund's Transfer Agent, Oppenheimer Shareholder Services, at P.O. Box 5270,
Denver, Colorado 80217 or by calling the Transfer Agent at the toll-free
number shown above.
Contents
Page
About The Fund
Investment Objective and Policies 2
Investment Policies and Strategies 2
Special Investment Considerations -
New York Municipal Securities 5
Other Investment Techniques and Strategies 11
Other Investment Restrictions17
How the Fund is Managed 18
Organization and History 18
Trustees and Officers of the Fund 19
The Manager and Its Affiliates 23
Brokerage Policies of the Fund 24
Performance of the Fund 26
Distribution and Service Plans 30
About Your Account
How To Buy Shares 32
How To Sell Shares 38
How To Exchange Shares 42
Dividends, Capital Gains and Taxes 44
Additional Information About the Fund 47
Financial Information About the Fund
Independent Auditors' Report 48
Financial Statements 49
Appendix A: Description of Ratings Categories A-1
Appendix B: Tax-Equivalent Yield Chart B-1
Appendix C: Industry Classifications C-1
<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 meaning as those terms
used in the Prospectus.
Municipal Securities
- Municipal Bonds. The principal classifications of long-term
municipal bonds are "general obligation" and "revenue" or "industrial
development" bonds.
- General Obligation Bonds. Issuers of general obligation bonds
include states, counties, cities, towns, and regional districts. The
proceeds of these obligations are used to fund a wide range of public
projects, including construction or improvement of schools, highways and
roads, and water and sewer systems. The basic security behind general
obligation bonds is the issuer's pledge of its full faith and credit and
taxing power for the payment of principal and interest. The taxes that
can be levied for the payment of debt service may be limited or unlimited
as to the rate or amount of special assessments.
- Revenue Bonds. The principal security for a revenue bond is
generally the net revenues derived from a particular facility, group of
facilities, or, in some cases, the proceeds of a special excise or other
specific revenue source. Revenue bonds are issued to finance a wide
variety of capital projects including: electric, gas, water and sewer
systems; highways, bridges, and tunnels; port and airport facilities;
colleges and universities; and hospitals. Although the principal security
behind these bonds may vary, many provide additional security in the form
of a debt service reserve fund whose money may be used to make principal
and interest payments on the issuer's obligations. Housing finance
authorities have a wide range of security, including partially or fully
insured mortgages, rent subsidized and/or collateralized mortgages, and/or
the net revenues from housing or other public projects. Some authorities
provide further security in the form of a state's ability (without
obligation) to make up deficiencies in the debt service reserve fund.
- Industrial Development Bonds. Industrial development bonds,
which are considered municipal bonds if the interest paid is exempt from
federal income tax, are issued by or on behalf of public authorities to
raise money to finance various privately operated facilities for business
and manufacturing, housing, sports, and pollution control. These bonds
are also used to finance public facilities such as airports, mass transit
systems, ports, and parking. The payment of the principal and interest
on such bonds is dependent solely on the ability of the facility's user
to meet its financial obligations and the pledge, if any, of real and
personal property so financed as security for such payment.
- Municipal Notes. Municipal Securities having a maturity when
issued of less than one year are generally known as municipal notes.
Municipal notes generally are used to provide for short-term working
capital needs and include:
- Tax Anticipation Notes. Tax anticipation notes are issued to
finance working capital needs of municipalities. Generally, they are
issued in anticipation of various seasonal tax revenue, such as income,
sales, use of business taxes, and are payable from these specific future
taxes.
- Revenue Anticipation Notes. Revenue anticipation notes are
issued in expectation of receipt of other types of revenue, such as
federal revenues available under the Federal revenue sharing programs.
- Bond Anticipation Notes. Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged. In
most cases, the long-term bonds then provide the money for the repayment
of the notes.
- Construction Loan Notes. Construction loan notes are sold to
provide construction financing. After successful completion and
acceptance, many projects receive permanent financing through the Federal
Housing Administration.
- Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a
short-term obligation with a stated maturity of 365 days or less. It is
issued by state and local governments or their agencies to finance
seasonal working capital needs or as short-term financing in anticipation
of longer-term financing.
- Municipal Lease Obligations. From time to time the Fund may invest
5% in municipal lease obligations, some of which may be illiquid and
others which the Manager has determined to be liquid under guidelines set
by the Board of Trustees. Those guidelines require the Manager to
evaluate: (1) the frequency of trades and price quotations for such
securities; (2) the number of dealers or other potential buyers willing
to purchase or sell such securities; (3) the availability of market-
makers; and (4) the nature of the trades for such securities. The Manager
will also evaluate the likelihood of a continuing market for such
securities throughout the time they are held by the Fund and the credit
quality of the instrument. Municipal leases may take the form of a lease
or an installment purchase contract issued by a state or local government
authority to obtain funds to acquire a wide variety of equipment and
facilities. Although lease obligations do not constitute general
obligations of the municipality for which the municipality's taxing power
is pledged, a lease obligation is ordinarily backed by the municipality's
covenant to budget for, appropriate and make the payments due under the
lease obligation. However, certain lease obligations contain "non-
appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years
unless money is appropriated for such purpose on a yearly basis. In
addition to the risk of "non-appropriation," municipal lease securities
do not yet have a highly developed market to provide the degree of
liquidity of conventional municipal bonds. Municipal leases, like other
municipal debt obligations, are subject to the risk of non-payment. The
ability of issuers of municipal leases to make timely lease payments may
be adversely affected in general economic downturns and as relative
governmental cost burdens are reallocated among federal, state and local
governmental units. Such non-payment would result in a reduction of
income to the Fund, and could result in a reduction in the value of the
municipal lease experiencing non-payment and a potential decrease in the
net asset value of the Fund.
- Private Activity Municipal Securities. The Tax Reform Act of 1986
(the "Tax Reform Act") reorganized, as well as amended, the rules
governing tax exemption for interest on Municipal Securities. The Tax
Reform Act generally does not change the tax treatment of bonds issued in
order to finance governmental operations. Thus, interest on obligations
issued by or on behalf of state or local government, the proceeds of which
are used to finance the operations of such governments (e.g., general
obligation bonds) continues to be tax-exempt. However, the Tax Reform Act
further limited the use of tax-exempt bonds for non-governmental (private)
purposes. More stringent restrictions were placed on the use of proceeds
of such bonds. Interest on certain private activity bonds (other than
those specified as "qualified" tax-exempt private activity bonds, e.g.,
exempt facility bonds including certain industrial development bonds,
qualified mortgage bonds, qualified Section 501(c)(3) bonds, qualified
student loan bonds, etc.) is taxable under the revised rules.
Interest on certain private activity bonds issued after August 7,
1986, which continues to be tax-exempt, will be treated as a tax
preference item subject to the alternative minimum tax (discussed below)
to which certain taxpayers are subject. Further, a private activity bond
which would otherwise be a qualified tax-exempt private activity bond will
not, under Internal Revenue Code Section 147(a), be a qualified bond for
any period during which it is held by a person who is a "substantial user"
of the facilities or by a "related person" of such a substantial user.
This "substantial user" provision is applicable primarily to exempt
facility bonds, including industrial development bonds. The Fund may not
be an appropriate investment for entities which are "substantial users"
(or persons related thereto) of such exempt facilities, and such persons
should consult their own tax advisers before purchasing shares. A
"substantial user" of such facilities is defined generally as a "non-
exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds. Generally, an individual will not be
a "related person" under the Internal Revenue Code unless such investor
or the investor's immediate family (spouse, brothers, sisters and
immediate descendants) own directly or indirectly in the aggregate more
than 50% in value of the equity of a corporation or partnership which is
a "substantial user" of a facility financed from the proceeds of exempt
facility bonds. In addition, the Tax Reform Act revised downward the
limitations as to the amount of private activity bonds which each state
may issue, which will reduce the supply of such bonds. The value of the
Fund's portfolio could be affected if there is a reduction in the
availability of such bonds. That value may also be affected by a 1988
U.S. Supreme Court decision upholding the constitutionality of the
imposition of a Federal tax on the interest earned on Municipal Securities
issued in bearer form.
A Municipal Security is treated as a taxable private activity bond
under a test for: (a) a trade or business use and security interest, or
(b) a private loan restriction. Under the trade or business use and
security interest test, an obligation is a private activity bond if: (i)
more than 10% of bond proceeds are used for private business purposes and
(ii) 10% or more of the payment of principal or interest on the issue is
directly or indirectly derived from such private use or is secured by the
privately used property or the payments related to the use of the
property. For certain types of uses, a 5% threshold is substituted for
this 10% threshold. (The term "private business use" means any direct or
indirect use in a trade or business carried on by an individual or entity
other than a state or municipal governmental unit.) Under the private
loan restriction, the amount of bond proceeds which may be used to make
private loans is limited to the lesser of 5% or $5.0 million of the
proceeds. Thus, certain issues of Municipal Securities could lose their
tax-exempt status retroactively if the issuer fails to meet certain
requirements as to the expenditure of the proceeds of that issue or use
of the bond-financed facility.
The Federal alternative minimum tax is designed to ensure that all
taxpayers pay some tax, even if their regular tax is zero. This is
accomplished in part by including in taxable income certain tax preference
items in arriving at alternative minimum taxable income. The Tax Reform
Act made tax-exempt interest from certain private activity bonds a tax
preference item for purposes of the alternative minimum tax on individuals
and corporations. Any exempt-interest dividend paid by a regulated
investment company will be treated as interest on a specific private
activity bond to the extent of its proportionate share of the interest on
such bonds received by the regulated investment company. The Treasury is
authorized to issue regulations implementing this provision. In addition,
corporate taxpayers subject to the alternative minimum tax may, under some
circumstances, have to include exempt-interest dividends in calculating
their alternative minimum taxable income in situations where the "adjusted
current earnings" of the corporation exceeds its alternative minimum
taxable income. The Fund may hold Municipal Securities the interest on
which (and thus a proportionate share of the exempt-interest dividends
paid by the Fund) will be subject to the alternative minimum tax on
individuals and corporations. The Fund anticipates that under normal
circumstances it will not purchase any such securities in an amount
greater than 20% of the Fund's total assets.
- Ratings of Municipal Securities. Moody's and S&P's ratings (see
Appendix A) represent their respective opinions of the quality of the
Municipal Securities they undertake to rate. However, such ratings are
general and are not absolute standards of quality. Consequently, Municipal
Securities with the same maturity, coupon and rating may have different
yields, while Municipal Securities of the same maturity and coupon with
different ratings may have the same yield. Investment in lower quality
securities may produce a higher yield than securities rated in the higher
rating categories described in the Prospectus (or judged by the Manager
to be of comparable quality). However, the added risk of lower quality
securities might not be consistent with a policy of preservation of
capital.
Subsequent to its purchase by the Fund, a Municipal Security may
cease to be rated or its rating may be reduced below the minimum required
for purchase by the Fund. Neither event requires the Fund to sell the
security, but Oppenheimer Management Corporation (the "Manager") will
consider such events in determining whether the Fund should continue to
hold the security. To the extent that ratings given by Moody's or S&P
change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
investments in accordance with the Fund's investment policies.
Special Investment Considerations - New York Municipal Securities. As
explained in the Prospectus, the Trust is highly sensitive to the fiscal
stability of New York State (the "State") and its subdivisions, agencies,
instrumentalities or authorities, including New York City, which issue the
Municipal Securities in which the Trust concentrates its investments. The
following information on risk factors in concentrating in New York
Municipal Securities is only a summary, based on publicly available
information, and official statements relating to offerings of New York
issuers of Municipal Securities prior to January 18, 1995, and no
representation is made as to the accuracy of such information.
- New York City
- General. More than any other municipality, the fiscal health of
New York City (the "City") has a significant effect on the fiscal health
of the State. The national economic downturn which began in July 1990
adversely affected the local economy which had been declining since late
1989. In order to achieve a balanced budget as required by the laws of
the State for the 1992 fiscal year, the City increased taxes and reduced
services during the 1991 fiscal year to close a then projected gap of $3.3
billion in the 1992 fiscal year which resulted from, among other things,
lower than projected tax revenue of approximately $1.4 billion, reduced
State aid for the City and greater than projected increases in legally
mandated expenditures, including public assistance and Medicaid
expenditures. Beginning in calendar year 1992, the improvement in the
national economy helped stabilize conditions in the City. Employment
losses moderated toward year-end and real Gross City Product ("GCP")
increased, boosted by strong wage gains. The City's current four-year
financial plan assumes that, after noticeable improvements in the City's
economy during calendar year 1994, economic growth will slow in calendar
years 1995 and 1996 with local employment increasing modestly. In
December 1994, the City experienced substantial shortfalls in payments of
non-property tax revenues from those forecasted. Through December 1994,
collections of non-property taxes were approximately $200 million lower
than projected.
For each of the 1981 through 1994 fiscal years, the City achieved
balanced operating results as reported in accordance with then applicable
generally accepted accounting principles ("GAAP"). The City was required
to close substantial budget gaps in recent years in order to maintain
balanced operating results. For fiscal year 1995, the City adopted a
budget which halted the trend in recent years of substantial increases in
City spending from one year to the next. There can be no assurance that
the City will continue to maintain a balanced budget as required by State
law without additional tax or other revenue increases or reductions in
City services, which could adversely affect the City's economic base.
The Mayor is responsible for preparing the City's four-year financial
plan, including the City's current financial plan for the 1995 through
1998 fiscal years (the "1995-1998 Financial Plan", "Financial Plan" or
"City Plan").
The City Comptroller and other agencies and public officials have
issued reports and made public statements which, among other things, state
that projected revenues may be different from those forecast in the City
Plan. In addition, the Control Board staff and others have questioned
whether the City has the capacity to generate sufficient revenues in the
future to provide the level of services included in the City Plan. It is
reasonable to expect that such reports and statements will continue to be
issued and to engender public comment.
- 1995-1998 Financial Plan. On October 25, 1994, the City published
the City Plan for the 1995-1998 fiscal years which is a proposed
modification to a financial plan submitted to the Control Board on July
8, 1994 (the "July City Plan") and which relates to the City, the Board
of Education ("BOE") and the City University of New York ("CUNY").
The City's July City Plan set forth proposed actions for the 1995
fiscal year to close a previously projected gap of approximately $2.3
billion for the 1995 fiscal year, which included City actions aggregating
$1.9 billion, a $288 million increase in State actions over the 1994 and
1995 fiscal years, and a $200 million increase in Federal assistance. The
City actions included proposed agency actions aggregating $1.1 billion,
including productivity savings; tax and fee enforcement initiatives;
service reductions; and savings from the restructuring of City services.
City actions also included savings of $45 million resulting from proposed
tort reform, the projected transfer to the 1995 fiscal year of $171
million of the projected 1994 fiscal year surplus, savings of $200 million
for employee health care costs, $51 million in reduced pension costs,
savings of $225 million from refinancing City bonds and $65 million from
the proposed sale of certain City assets.
The 1995-1998 City Plan published on October 25, 1994 reflects actual
receipts and expenditures and changes in forecast revenues and
expenditures since the July City Plan and projects revenues and
expenditures for the 1995 fiscal year balanced in accordance with GAAP.
For the 1995 fiscal year, the City Plan includes actions to offset an
additional potential $1.1 billion budget gap, resulting principally from
a $104 million decrease in the $171 million projected surplus from the
1994 fiscal year to be transferred to the 1995 fiscal year, due primarily
to lower projected tax revenues for the 1994 fiscal year; reductions in
projected tax revenues for the 1995 fiscal year totalling $170 million;
$60 million of increased City pension contributions resulting from lower
than expected earnings on pension fund assets for the 1994 fiscal year;
a $166 million shortfall in projected increased Federal assistance due
primarily to the failure to enact national health care reform; the failure
of the State Legislature to approve tort reform; the failure to achieve
the projected savings of $200 million for employee health care costs; a
$165 million increase in projected overtime expenditures; and additional
agency spending requirements, primarily for increased costs for foster
care and homeless services, and other decreased projected revenues.
The gap closing measures for the 1995 fiscal year include additional
proposed agency actions aggregating $851 million, which together with the
$1.1 billion of agency actions proposed in the July City Plan, are
substantial and may be difficult to implement. The City Plan is subject
to the ability of the City to implement proposed reductions in City
personnel and other cost reduction initiatives. In addition, legislation
has been adopted by the State Legislature that would impose a maintenance
of effort requirement on the level of funding required of the City for the
BOE. This legislation has not been forwarded to the Governor for
signature. If enacted into law, this legislation would require the City
to increase its fiscal year 1995 funding for the BOE by approximately $500
million over the amount included in the 1995-1998 City Plan, and could
also result in increased funding for the BOE in subsequent years.
The City Plan also sets forth projections for the 1996 through 1998
fiscal years and outlines a proposed gap-closing program to close
projected budget gaps of $1.0 billion, $1.5 billion and $2.0 billion for
the 1996 through 1998 fiscal years, respectively, after successful
implementation of the $1.1 billion gap-closing program for the 1995 fiscal
year. These projections take into account expected increases in Federal
and State assistance. Various actions proposed in the City Plan,
including the proposed continuation of the personal income tax surcharge
and the proposed increase in State aid, are subject to approval by the
Governor and the State Legislature, and the proposed increase in Federal
aid is subject to approval by Congress and the President. The State
Legislature has in previous legislative sessions failed to approve
proposals for the State assumption of certain Medicaid costs and
reallocation in State education aid, thereby increasing the uncertainty
as to the receipt of the State assistance included in the City Plan. If
these actions cannot be implemented, the City will be required to take
other actions to decrease expenditures or increase revenues to maintain
a balanced financial plan.
In January, 1993, the City announced settlement with a coalition of
municipal unions covering approximately 44% of the City's workforce.
Subsequently, the City reached agreement with all but four of its major
bargaining units under terms generally consistent with the coalition
agreement. Taken together, these agreements cover approximately 95% of
the City's workforce. Contract disputes with the four major bargaining
units that did not reach agreement with the City are in arbitration. The
City Plan reflects the costs associated with these settlements, provides
for similar increases for all City-funded employees, and provides no
additional wage increases for City employees after the 1995 fiscal year.
In the event of a collective bargaining impasse, the terms of wage
settlements could be determined through the impasse procedure in the New
York City Collective Bargaining Law, which can impose a binding
settlement.
The City's projections set forth in the City Plan are based on
various assumptions and contingencies which are uncertain and which may
not materialize. Changes in major assumptions could significantly affect
the City's ability to balance its budget as required by State law and to
meet its annual cash flow and financial requirements. Such assumptions
and contingencies include the timing and pace of any regional and local
economic recovery, the impact of real estate tax revenues on the real
estate market, wage increases for City employees consistent with those
assumed in the City Plan, employment growth, the results of a pending
actuarial audit of the City's pension system which is expected to
significantly increase the City's annual pension costs, the ability to
implement proposed reductions in City personnel and other cost reduction
initiatives, which may require in certain cases the cooperation of the
City's municipal unions, and provision of State and Federal aid and
mandate relief.
Implementation of the City Plan is also dependent upon the City's
ability to market its securities successfully in the public credit
markets. The City's financing program for fiscal years 1995 through 1998
contemplates the issuance of $11.3 billion of general obligation bonds
primarily to reconstruct and rehabilitate the City's infrastructure and
physical assets and to make other capital investments. In addition, the
City issues revenue and tax anticipation notes to finance its seasonal
working capital requirements. The success of projected public sales of
City bonds and notes will be subject to prevailing market conditions, and
no assurance can be given that such sales will be completed. If the City
were unable to sell its general obligation bonds and notes, it would be
prevented from meeting its planned capital and operating expenditures.
- Ratings. In 1975, Standard & Poor's suspended its A rating of City
bonds. This suspension remained in effect until March 1981, at which time
the City received an investment grade rating of BBB from Standard &
Poor's. On July 2, 1985, Standard & Poor's revised its rating of City
bonds upward to BBB+ and on November 19, 1987, to A-. Moody's ratings of
City bonds were revised in November 1981 from B (in effect since 1977) to
Ba1, in November 1983 to Baa, in December 1985 to Baa1, in May 1988 to A
and again in February 1991 to Baa1. Since July 15, 1993, Fitch has rated
City bonds A-.
On January 17, 1995, mayor Rudolph Giuliani announced that the City
would borrow money to help close its budget gap instead of turning to the
BOE to find savings this school year, which announcement resulted in
Standard & Poor's placing City bonds on a negative credit watch. Standard
& Poor's further indicated that it would reconsider the City's bond rating
in April 1995.
Such ratings reflect only the views of these rating agencies, from
which an explanation of the significance of such ratings may be obtained.
There is no assurance that such ratings will continue for any given period
of time or that they will not be revised downward or withdrawn entirely.
Any such downward revision or withdrawal could have an adverse effect on
the market prices of bonds.
- Outstanding Net Indebtedness. As of September 30, 1994, the City
and the Municipal Assistance Corporation for the City of New York had,
respectively, $21.218 billion and $4.146 billion of outstanding net long-
term debt.
The City depends on the State for State aid both to enable the City
to balance its budget and to meet its cash requirements. If the State
experiences revenue shortfalls or spending increases beyond its
projections during its 1995 fiscal year or subsequent years, such
developments could result in reductions in anticipated State aid to the
City. In addition, there can be no assurance that State budgets in future
fiscal years will be adopted by the April 1 statutory deadline and that
there will not be adverse effects on the City's cash flow and additional
City expenditures as a result of such delays.
- Litigation. The City is a defendant in a significant number of
lawsuits. Such litigation includes, but is not limited to, routine
litigation incidental to the performance of its government and other
functions, actions commenced and claims asserted against the City arising
out of alleged constitutional violations, alleged torts, alleged breaches
of contracts and other violations of law and condemnation proceedings and
other tax and miscellaneous actions. While the ultimate outcome and
fiscal impact, if any, on the proceedings and claims are not currently
predictable, adverse determination in certain of them might have a
material adverse effect upon the City's ability to carry out the City
Plan. As of June 30, 1994, the City estimated its potential future
liability on account of all outstanding claims to be approximately $2.6
billion.
- New York State
The State has historically been one of the wealthiest states in the
nation. For decades, however, the State economy has grown more slowly
than that of the nation as a whole, resulting in the gradual erosion of
its relative economic affluence. The causes of this relative decline are
varied and complex, in many cases involving national and international
developments beyond the State's control. Part of the reason for the long-
term relative decline in the State economy has been attributed to the
combined State and local tax burden, which is one of the highest in the
nation. The existence of this tax burden limits the State's ability to
impose higher taxes in the event of future financial difficulties.
Recently, the State has been relatively successful in bringing the rate
of growth in the public sector in the State in line with changes in the
private economy.
As a result of the national and regional economic recession, the
State's tax receipts for its 1991 and 1992 fiscal years were substantially
lower than projected, which resulted in reductions in State aid to
localities for the State's 1992 and 1993 fiscal years from amounts
previously projected and increases in certain states taxes and fees. The
State completed its 1993 fiscal year with a positive margin of $671
million in the General Fund, which was deposited into a tax refund reserve
account. The State's economy, as measured by employment, started to
recover near the start of the 1993 calendar year and the State completed
its 1994 fiscal year with a cash-basis balanced budget in the State's
General Fund (the major operating fund of the State), after depositing
$1.5 billion in various reserve funds.
The State's 1994-95 Financial Plan, which is based upon the enacted
State budget, projects a balanced General Fund. The State's 1994-95
Financial Plan provided the City with savings through various actions,
which include increased State education aid and State assumption of
certain costs previously paid by the City and restoration of certain prior
year revenue sharing reductions. However, the State Legislature failed
to enact a substantial portion of the proposed State assumption of local
Medicaid costs, other significant mandate relief items, and the proposed
tort reform legislation, which would have provided the City with
additional savings. The State's second quarterly update was released on
October 28, 1994. It projects a year-end surplus in the General Fund of
$14 million. The update revises the projected General Fund receipt and
disbursements contained in the 1994-95 State Financial Plan as revised by
the first quarterly update issued on July 29, 1994. Receipts are now
projected at $34.054 billion, a decreased of $267 million from the State's
first quarterly update, reflecting primarily recent weakness in the
financial services sector. The State's estimated disbursements are
projected at $33.967 billion, a decrease of $281 million from July,
attributable largely to anticipated decreases in social services spending.
However, the State Division of the Budget cautioned that its projections
were subject to the risk that increases in interest rates could impede
economic growth. It has been reported the State will face a potential
budget gap for its 1995-96 fiscal year which could approximate $4 billion.
As a result, the State would be required to take actions to increase
receipts and/or reduce disbursements from projected levels when it
proposes its budget for the 1995-96 fiscal year, which could result in
reductions in State aid to localities.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant
disparity between tax revenues projected from a lower recurring receipts
base and the spending required to maintain state programs at current
levels. To address any potential budgetary imbalance, the State may need
to take significant actions to align recurring receipts and disbursements
in future fiscal years.
- Ratings. On January 13, 1992, Standard & Poor's reduced its
ratings on the State's general obligation bonds from A to A- and, in
addition, reduced its ratings on the State's moral obligation, lease
purchase, guaranteed and contractual obligation debt. Standard & Poor's
also continued its negative rating outlook assessment on State general
obligation debt. On April 26, 1993, Standard & Poor's revised the rating
outlook assessment to stable. On February 14, 1994, Standard & Poor's
raised its outlook to positive and, on June 27, 1994, confirmed its A-
rating.
On January 6, 1992, Moody's reduced its ratings on outstanding
limited-liability State lease purchase and contractual obligations from
A to Baa1. On June 27, 1994, Moody's reconfirmed its A rating on the
State's general obligation long-term indebtedness.
Ratings reflect only the respective views of such organizations. See
"New York City - Ratings," above on page 8.
- Litigation.
Abandoned Property Law. On May 31, 1988, the Supreme Court of the
United States took jurisdiction of a claim of the State of Delaware that
certain unclaimed dividends, interest and other distributions made by
issuers of securities and held by New York-based brokers incorporated in
Delaware for beneficial owners who cannot be identified or located, had
been, and were being, wrongfully taken by the State of New York pursuant
to New York's Abandoned Property Law (State of Delaware v. State of New
York). Texas intervened, claiming a portion of such distributions and
similar property taken by the State of New York from New York-based banks
and depositories incorporated in Delaware. All other states and the
District of Columbia moved to intervene. In a decision dated March 30,
1993, the United States Supreme Court granted all pending motions of the
states and the District of Columbia to intervene and remanded the case to
a Special Master for further proceedings consistent with the Court's
decision. The Court determined that the abandoned property should be
remitted first to the state of the beneficial owner's last known address,
if ascertainable and, if not, then to the state of incorporation of the
intermediary bank, broker or depository. New York and Delaware have
executed a settlement agreement which provides for payments by New York
to Delaware of $35 million in the State's 1993-94 fiscal year and five
annual payments thereafter of $33 million. New York and Massachusetts
have executed a settlement agreement which provides for aggregate payments
by New York of $23 million, payable over five consecutive years. The
claims of the other states and the District of Columbia remain.
Public Authority Financing Programs. On June 30, 1994, the Court of
Appeals unanimously affirmed the rulings of the trial court and the
Appellate Division on favor of the State in case of Schulz et al. v. State
of New York, et al. (commencement May 24, 1993) and upheld the
constitutionality of certain highway, bridge and mass transportation
bonding programs of the New York State Thruway Authority and the
Metropolitan Transportation Authority authorized by Chapter 56 of the Laws
of 1993.
In upholding the State's position, the Court of Appeals found that,
because the State itself does not become "indebted" in financing
arrangements with public authorities where the State's obligation to make
payments is subject to appropriation, such as lease-purchase and
contractual-obligation financing arrangements described in the State's
Annual Information Statement, those financing arrangements do not
constitute indebtedness of the State for purposes of the State
constitutional limits on debt and are thus not required to be submitted
to the voters for approval at a general election.
Plaintiffs' motion for reargument before the Court of Appeals was
denied on September 1, 1994. The time for appeal to the United States
Supreme Court by petition for a writ of certiorari has not yet expired.
Medicaid Cases. In Matter of New York Association of Homes and
Services for the Aging, Inc. v. Commissioner, by decision dated June 30,
1994, the Court of Appeals held invalid the State Department of Health's
retroactive application to rate years 1989 through 1991 of the nursing
home Medicaid reimbursement rate recalibration adjustment set forth in 10
NYCRR Section 86-2.31(a).
Other Investment Techniques and Strategies
- When-Issued and Delayed Delivery Transactions. As stated in the
Prospectus, the Fund may purchase securities on a "when-issued" basis, and
may purchase or sell such securities on a "delayed delivery" basis.
Although the Fund will enter into such transactions for the purpose of
acquiring securities for its portfolio or for delivery pursuant to options
contracts it has entered into, the Fund may dispose of a commitment prior
to settlement. "When-issued" or "delayed delivery" refers to securities
whose terms and indenture are available and for which a market exists, but
which are not available for immediate delivery. When such transactions
are negotiated the price (which is generally expressed in yield terms) is
fixed at the time the commitment is made, but delivery and payment for the
securities take place at a later date. During the period between
commitment by the Fund and settlement (generally within two months but not
to exceed 120 days), no payment is made for the securities purchased by
the purchaser, and no interest accrues to the purchaser from the
transaction. Such securities are subject to market fluctuation; the value
at delivery may be less than the purchase price. The Fund will maintain
a segregated account with its Custodian, consisting of cash, U.S.
Government securities or other high grade debt obligations at least equal
to the value of purchase commitments until payment is made.
The Fund will engage in when-issued transactions in order to secure
what is considered to be an advantageous price and yield at the time of
entering into the obligation. When the Fund engages in when-issued or
delayed delivery transactions, it relies on the buyer or seller, as the
case may be, to consummate the transaction. Failure to do so may result
in the Fund losing the opportunity to obtain a price and yield considered
to be advantageous. If the Fund chooses to (i) dispose of the right to
acquire a when-issued security prior to its acquisition or (ii) dispose
of its right to deliver or receive against a forward commitment, it may
incur a gain or loss. At the time the Fund makes a commitment to purchase
or sell a security on a when-issued or forward commitment basis, it
records the transaction and reflects the value of the security purchased,
or if a sale, the proceeds to be received in determining its net asset
value.
To the extent the Fund engages in when-issued and delayed delivery
transactions, it will do so for the purpose of acquiring or selling
securities consistent with its investment objective and policies and not
for the purposes of investment leverage. The Fund enters into such
transactions only with the intention of actually receiving or delivering
the securities, although (as noted above), when-issued securities and
forward commitments may be sold prior to settlement date. In addition,
changes in interest rates in a direction other than that expected by the
Manager before settlement will affect the value of such securities and may
cause loss to the Fund.
When-issued transactions and forward commitments can be used by the
Fund as a defensive technique to use against anticipated changes in
interest rates and prices. For instance, in periods of rising interest
rates and falling prices, the Fund might sell securities in its portfolio
on a forward commitment basis to attempt to limit its exposure to
anticipated falling prices. In periods of falling interest rates and
rising prices, the Fund might sell portfolio securities and purchase the
same or similar securities on a when-issued or forward commitment basis,
thereby obtaining the benefit of currently higher cash yields.
- Repurchase Agreements. In a repurchase transaction, the Fund
acquires a security from, and simultaneously resells it to, an approved
vendor (a U.S. commercial bank or U.S. branch of a foreign bank with total
domestic assets of a least $1 billion or broker-dealer with net capital
of at least $50 million which has been designated a primary dealer in
government securities) for delivery on an agreed-on future date. The
resale price exceeds the purchase price by an amount that reflects an
agreed-upon interest rate effective for the period during which the
repurchase agreement is in effect. The majority of these transactions run
from day to day, and delivery pursuant to 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
continuously monitor the collateral's value and will impose
creditworthiness requirements to confirm that the vendor is financially
sound.
- Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, be at least equal the market value
of the loaned securities and must consist of cash, bank letters of credit,
securities of the U.S. Government or its agencies or instrumentalities,
or other cash equivalents in which the Fund is permitted to invest. To
be acceptable as collateral, letters of credit must obligate a bank to pay
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. The
Fund receives an amount equal to the dividends or interest on loaned
securities and also receives one or more of: (a) negotiated loan fees, (b)
interest on securities used as collateral, or (c) interest on short-term
debt securities purchased with such loan collateral; either type of
interest may be shared with the borrower. The Fund may also pay
reasonable finder's custodian and administrative fees. The terms of the
Fund's loans must meet certain tests under the Internal Revenue Code and
permit the Fund to reacquire loaned securities on five days' notice or in
time to vote on any important matter. Income from securities loans is not
included in the exempt-interest dividends paid by the Fund. The Fund will
not enter into any securities loans having a duration of more than one
year.
- Hedging. As described in the Prospectus, the Fund may employ one
or more types of hedging instruments. When hedging to attempt to protect
against declines in the market value of the Fund's portfolio, to permit
the Fund to retain unrealized gains in the value of portfolio securities
which have appreciated, or to facilitate selling securities for investment
reasons, the Fund may: (i) sell Interest Rate Futures or Municipal Bond
Index Futures, (ii) buy puts on such Futures or securities, or (iii) write
covered calls on securities, Interest Rate Futures or Municipal Bond Index
Futures (as described in the Prospectus). Covered calls may also be
written on debt securities to attempt to increase the Fund's income. When
hedging to permit the Fund to establish a position in the debt securities
market as a temporary substitute for purchasing individual debt securities
(which the Fund will normally purchase, and then terminate that hedging
position), the Fund may: (i) buy Interest Rate Futures or Municipal Bond
Index Futures, or (ii) buy calls on such Futures or on securities. The
Fund's strategy of hedging with Futures and options on Futures will be
incidental to the Fund's activities in the underlying cash market.
Additional information about the covered calls and hedging instruments the
Fund may use is provided below.
- Writing Covered Call Options. When the Fund writes a call on
a security, it receives a premium and agrees to sell the underlying
investment to a purchaser of a corresponding call during the call period
(usually not more than nine months) at a fixed exercise price (which may
differ from the market price of the underlying investment) regardless of
market price changes during the call period. To terminate its obligation
on a call it has written, the Fund may purchase a corresponding call in
a "closing purchase transaction." A profit or loss will be realized,
depending upon whether the net of the option transaction costs and the
premium received on the call written was more or less than the price of
the call subsequently purchased. A profit may also be realized if the
call lapses unexercised, because the Fund retains the underlying
investment and the premium received. Any such profits are considered
short-term gains for Federal tax purposes, as are premiums on lapsed
calls, and when distributed by the Fund are taxable as ordinary income.
If the Fund could not effect a closing purchase transaction due to a lack
of a market, it would have to hold the underlying investment until the
call lapsed or were exercised.
- Interest Rate Futures. The Fund may buy and sell futures
contracts relating to debt securities ("Interest Rate Futures") and
municipal bond indices ("Municipal Bond Index Futures," discussed below).
An Interest Rate Future obligates the seller to deliver and the purchaser
to take the related debt securities at a specified price on a specified
date. No amount is paid or received upon the purchase or sale of an
Interest Rate Future.
The Fund may concurrently buy and sell Futures contracts in the
expectation that the Future purchased will outperform the Future sold.
For example, the Fund might simultaneously buy Municipal Bond Futures and
sell U.S. Treasury Bond Futures. This type of transaction would be
profitable to the Fund if municipal bonds, in general, outperform U.S.
Treasury bonds. Risks of this type of Futures strategy include the
possibility that the Manager does not correctly assess the relative
durations of the investments underlying the Futures, with the result that
the strategy changes the overall duration of the Fund's portfolio in a
manner that increases the volatility of the Fund's price per share.
Duration is a volatility measure that refers to the expected percentage
change in the value of a bond resulting from a change in general interest
rates (measured by each 1% change in the rates on U.S. Treasury
securities). For example, if a bond has an effective duration of three
years, a 1% increase in general interest rates would be expected to cause
the bond to decline about 3%.
Upon entering into a Futures transaction, the Fund will be required
to deposit an initial margin payment, equal to a specified percentage of
the contract amount, with the futures commission merchant (the "futures
broker"). The initial margin will be deposited with the Fund's Custodian
in an account registered in the futures broker's name; however, the
futures broker can gain access to that account only under specified
conditions. As the Future is marked to market to reflect changes in its
market value, subsequent margin payments, called variation margin, will
be made to and from the futures broker on a daily basis. At any time
prior to the expiration of the Future, the Fund may elect to close out its
position by taking an opposite position, at which time a final
determination of variation margin is made and additional cash is required
to be paid by or released to the Fund. Any gain or loss is then realized.
Although Interest Rate Futures by their terms call for settlement by the
delivery of debt securities, in most cases the obligation is fulfilled
by entering into an offsetting transaction. All futures transactions are
effected through a clearinghouse associated with the exchange on which the
contracts are traded.
- Municipal Bond Index Futures. A "municipal bond index" assigns
relative values to the municipal bonds in the index, and is used as the
basis for trading long-term municipal bond futures contracts. Municipal
Bond Index Futures are similar to Interest Rate Futures except that
settlement is made in cash. The obligation under such contracts may also
be satisfied by entering into an offsetting contract to close out the
futures position. Net gain or loss on options on Municipal Bond Index
Futures depends on the price movements of the securities included in the
index. The strategies which the Fund employs regarding Municipal Bond
Index Futures are similar to those described above with regard to Interest
Rate Futures.
- Purchasing Calls and Puts. When the Fund purchases a call
(other than in a closing purchase transaction), it pays a premium and,
except as to calls on Municipal Bond Index Futures, has the right to buy
the underlying investment from a seller of a corresponding call on the
same investment during the call period at a fixed exercise price. The
Fund benefits only if the call is sold at a profit or if, during the call
period, the market price of the underlying investment is above the sum of
the exercise price plus the transaction costs and premium paid for the
call, and the call is exercised. If the call is not exercised or sold
(whether or not at a profit), it will become worthless at its expiration
date and the Fund will lose its premium payment and the right to purchase
the underlying investment.
When the Fund purchases a call or put on a municipal bond index,
Municipal Bond Index Future or Interest Rate Future, it pays a premium,
but settlement is in cash rather than by delivery of the underlying
investment to the Fund. Gain or loss depends on changes in the index in
question (and thus on price movements in the debt securities market
generally) rather than on price movements in individual futures contracts.
When the Fund buys a put, it pays a premium and, except as to puts
on municipal bond indices, has the right to sell the underlying investment
to a seller of a corresponding put on the same investment during the put
period at a fixed exercise price. Buying a put on a debt security,
Interest Rate Future or Municipal Bond Index Future the Fund owns enables
the Fund to protect itself during the put period against a decline in the
value of the underlying investment below the exercise price by selling
such underlying investment at the exercise price to a seller of a
corresponding put. If the market price of the underlying investment is
equal to or above the exercise price and as a result the put is not
exercised or resold, the put will become worthless at its expiration date
and the Fund will lose its premium payment and the right to sell the
underlying investment. The put may, however, be sold prior to expiration
(whether or not at a profit).
An option position may be closed out only on a market which provides
secondary trading for options of the same series, and there is no
assurance that a liquid secondary market will exist for any particular
option. The Fund's option activities may affect its turnover rate and
brokerage commissions. The exercise of calls written by the Fund may
cause it to sell underlying investments, thus increasing its turnover rate
in a manner beyond its control. The exercise by the Fund of puts may also
cause the sale of underlying investments, also causing turnover, since the
underlying investment might be sold for reasons which would not exist in
the absence of the put. The Fund will pay a brokerage commission each
time it buys a call or a put or sells a call. Premiums paid for options
are small in relation to the market value of the related investments and,
consequently, put and call options offer large amounts of leverage. The
leverage offered by trading in options could cause the Fund's net asset
value to be more sensitive to changes in the value of the underlying
investments.
- Additional Information about Hedging Instruments and Their Use.
The Fund's Custodian, or a securities depository acting for the Custodian,
will act as the Fund's escrow agent through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has
written calls traded on exchanges, or as to other acceptable escrow
securities, so that no margin will be required for such transactions. OCC
will release the securities on the expiration of the calls or upon the
Fund's entering into a closing purchase transaction. An option position
may be closed out only on a market which provides secondary trading for
options of the same series and there is no assurance that a liquid
secondary market will exist for any particular option. When the Fund
writes an over-the-counter("OTC") option, it intends to into an
arrangement with a primary U.S. Government securities dealer, which would
establish a formula price at which the Fund would have the absolute right
to repurchase that OTC option. This formula price would generally be
based on a multiple of the premium received for the option, plus the
amount by which the option is exercisable below the market price of the
underlying security ("in-the-money"). For any OTC option the Fund writes,
it will treat as illiquid (for purposes of its restriction on illiquid
securities, stated in the Prospectus) the mark-to-market value of any OTC
option held by it. The Securities and Exchange Commission is evaluating
the general issue of whether or not OTC options should be considered as
liquid securities, and the procedure described above could be affected by
the outcome of that evaluation.
The Fund's option activities may affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
portfolio turnover rate. The exercise by the Fund of puts on securities
will cause the sale of related investments, increasing portfolio turnover.
Although such exercise is within the Fund's control, holding a put might
cause the Fund to sell the related investments for reasons which would not
exist in the absence of the put. The Fund will pay a brokerage commission
each time it buys a call or put, sells a call, or buys or sells an
underlying investment in connection with the exercise of a call or put.
Such commissions may be higher on a relative basis than those which would
apply to direct purchases or sales of such underlying investments.
Premiums paid for options as to underlying investments are small in
relation to the market value of such investments and consequently, put and
call options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being more
sensitive to changes in the value of the underlying investment.
- 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 thereon as established by the Commodities
Futures Trading Commission ("CFTC"). In particular, the Fund is excluded
from registration as a "commodity pool operator" if it 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 Futures margin and related
option premiums to no more than 5% of the Fund's net assets for hedging
strategies that are not considered bona fide hedging strategies under the
Rule.
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 through
one or more brokers. Thus, the number of options which the Fund may write
or hold may be affected by options written or held by other entities,
including other investment companies having the same adviser as the Fund
or an affiliated investment adviser. Position limits also apply to
Futures. An exchange may order the liquidation of positions found to be
in violation of those limits and may impose certain other sanctions. Due
to requirements under the Investment Company Act, when the Fund purchases
an Interest Rate Future or Municipal Bond Index Future, the Fund will
maintain, in a segregated account or accounts with its Custodian, cash or
readily marketable short-term (maturing in one year or less) debt
instruments in an amount equal to the market value of the investments
underlying such Future, less the margin deposit applicable to it.
- Tax Aspects of Hedging Instruments and Covered Calls. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code. One of the tests for such qualification is that less than
30% of its gross income (irrespective of losses) must be derived from
gains realized on the sale of securities held for less than three months.
Due to this limitation, the Fund will limit the extent to which it engages
in the following activities, but will not be precluded from them: (i)
selling investments, including Interest Rate Futures and Municipal Bond
Index Futures, held for less than three months, whether or not they were
purchased on the exercise of a call held by the Fund; (ii) writing calls
on investments held less than three months; (iii) purchasing calls or puts
which expire in less than three months; (iv) effecting closing
transactions with respect to calls or puts purchased less than three
months previously; and (v) exercising puts or calls held by the Fund for
less than three months.
- Possible Risk Factors in Hedging. In addition to the risks with
respect to Futures and options discussed in the Prospectus and above,
there is a risk in using short hedging by selling Interest Rate Futures
and Municipal Bond Index Futures that the prices of such Futures or the
applicable index will correlate imperfectly with the behavior of the cash
(i.e., market value) prices of the Fund's securities. The ordinary
spreads between prices in the cash and futures markets are subject to
distortions due to differences in the natures of those markets. First,
all participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal relationship between the cash
and futures markets. Second, the liquidity of the futures market 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 market could be reduced, thus producing
distortion. Third, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation
by speculators in the futures market 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 debt 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 debt securities being hedged if
the historical volatility of the prices of such debt 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 debt 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 of its debt 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 debt 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 debt
securities markets as a temporary substitute for the purchase of
individual debt securities (long hedging) by buying Interest Rate Futures,
Municipal Bond Index Futures and/or calls on such Futures or debt
securities, it is possible that the market may decline; if the Fund then
concludes not to invest in such securities at that time because of
concerns as to possible further market decline or for other reasons, the
Fund will realize a loss on the Hedging Instruments that is not offset by
a reduction in the price of the debt securities purchased.
Other Investment Restrictions
The Fund's significant investment restrictions are described in the
Prospectus. The following investment restrictions are also fundamental
policies of the Fund, and, together with the fundamental policies and
investment objective described in the Prospectus, can be changed only by
the vote of a "majority" of the Fund's outstanding voting securities.
Under the Investment Company Act, such a "majority" vote is defined as the
vote of the holders of the lesser of: (i) 67% or more of the shares
present or represented by proxy at such meeting, if the holders of more
than 50% of the outstanding shares are present, or (ii) more than 50% of
the outstanding shares.
Under these additional restrictions, the Fund cannot: (1) Invest in
real estate, but the Fund may invest in Municipal Securities or other
permitted securities secured by real estate or interests therein; (2)
Purchase securities other than Hedging Instruments on margin; however, the
Fund may obtain such short-term credits as may be necessary for the
clearance of purchases and sales of securities; (3) Make short sales of
securities; (4) Invest in or hold securities of any issuer if those
officers and trustees of the Fund or its adviser beneficially owning
individually more than .5% of the securities of such issuer together own
more than 5% of the securities of such issuer; or (5) Invest in securities
of any other investment company, except in connection with a merger with
another investment company.
- Diversification. For purposes of diversification under the
Investment Company Act and the investment restrictions set forth in the
Prospectus and above, the identification of the "issuer" of a Municipal
Security depends on the terms and conditions of the security. When the
assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating
the subdivision, and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond,
if that bond is backed only by the assets and revenues of the
nongovernmental user, then such nongovernmental user would be deemed the
sole issuer. However, if in either case the creating government or some
other entity guarantees the security, such a guarantee would be considered
a separate security and would be treated as an issue of such government
or other agency. In applying these restrictions to its investments, the
Manager will consider a nongovernmental user of facilities financed by
industrial development bonds as being in a particular industry, despite
the fact that there is no industry concentration limitation as to
Municipal Securities. Although this application of the restriction is not
technically a fundamental policy of the Fund, it will not be changed
without shareholder approval. The Manager has no present intention of
investing more than 25% of the Fund's assets in securities paying interest
from revenues of similar type projects. This is not a fundamental policy,
and therefore may be changed without shareholder approval. Should any
such change be made, the Prospectus and/or this Statement of Additional
Information will be supplemented accordingly.
For purposes of the Fund's policy not to concentrate its assets,
described under restriction number (3) in the Prospectus, the Fund has
adopted the industry classifications set forth in Appendix C to this
Statement of Additional Information. This is not a fundamental policy.
How the Fund is Managed
Organization and History. As a Massachusetts business trust, the Fund is
not required to hold, and does not plan to hold, regular annual meetings
of shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law, or when a shareholder
meeting is called by the Trustees or upon proper request of the
shareholders. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund valued
at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with
other shareholders to request a meeting to remove a Trustee, the Trustees
will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the
applicants' expense, or the Trustees may take such other action as set
forth under Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and
their principal occupations and business affiliations during the past five
years are listed below. The address of each Trustee and officer is Two
World Trade Center, New York, New York 10048-0203, unless another address
is listed below. All of the Trustees are also trustees or directors of
Oppenheimer Fund, Oppenheimer Growth Fund, Oppenheimer Global Fund,
Oppenheimer Money Market Fund, Inc., Oppenheimer U.S. Government Trust,
Oppenheimer Gold & Special Minerals Fund, Oppenheimer Discovery Fund,
Oppenheimer Target Fund, Oppenheimer Asset Allocation Fund, Oppenheimer
Global Emerging Growth Fund, Oppenheimer Global Growth & Income Fund,
Oppenheimer Tax-Free Bond Fund, Oppenheimer California Tax-Exempt Fund,
Oppenheimer Multi-State Tax-Exempt Trust, Oppenheimer Multi-Sector Income
Trust and Oppenheimer Multi-Government Trust (collectively, the "New York-
based OppenheimerFunds). Messrs. Spiro, Donohue, Bowen, Zack, Bishop and
Farrar respectively, hold the same offices with the other New York-based
OppenheimerFunds as with the Fund. As of June 26, 1995, the officers and
Trustees of the Fund as a group owned of record or beneficially 3.09% of
the Class A shares of the Fund and less than 1% of the Class B shares of
the Fund. The foregoing statement does not reflect ownership of shares
held of record by an employee benefit plan for employees of the Manager
for which an officer of the Fund (Andrew J. Donohue) is a trustee, other
than the shares beneficially owned under that plan by the officers of the
Fund listed above.
Leon Levy, Chairman of the Board of Trustees; Age 69
31 West 52nd Street, New York, New York 10019
General Partner of Odyssey Partners, L.P. (investment partnership);
Chairman of Avatar Holdings Inc. (real estate development).
Leo Cherne, Trustee, Age 82
122 East 42nd Street, New York, New York 10168
Chairman Emeritus of the International Rescue Committee
(philanthropic organization); formerly Executive Director of The
Research Institute of America.
Robert G. Galli, Trustee, Age 62
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Manager's parent holding company;
formerly he held the following positions: a director of the Manager
and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment advisory subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of
the Manager, an officer of other OppenheimerFunds and Executive Vice
President and General Counsel of the Manager and the Distributor.
Benjamin Lipstein, Trustee, Age 72
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; a director of Sussex Publishers,
Inc. (Publishers of Psychology Today and Mother Earth News) and a
Director of Spy Magazine, L.P.
Elizabeth B. Moynihan, Trustee; Age 65
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the Freer Gallery
of Art (Smithsonian Institute), the Institute of Fine Arts (New York
University) and the National Building Museum; a member of the
Trustees Council, Preservation League of New York State; a member of
the Indo-U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age 68
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 Chairman
of the Board of ICL, Inc. (information systems) and President and
Chief Executive Officer of The Conference Board, Inc. (international
economic and business research).
Edward V. Regan, Trustee; Age 65
40 Park Avenue, New York, New York 10016
President of Jerome Levy Economics Institute; a member of the U.S.
Competitiveness Policy Council; a director of GranCare, Inc. (health
care provider); formerly New York State Comptroller and trustee, New
York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age 63
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Hospital and the Greenwich Historical Society.
Sidney M. Robbins, Trustee; Age 83
50 Overlook Road, Ossining, NY 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting Professor
of Finance, University of Hawaii; a director of The Korea Fund, Inc.
(a closed-end investment company); a member of the Board of Advisors,
Olympus Private Placement Fund, L.P.; Professor Emeritus of Finance,
Adelphi University.
Donald W. Spiro, President and Trustee; Age 69
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and the Distributor.
Pauline Trigere, Trustee; Age 82
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
Clayton K. Yeutter, Trustee; Age 64
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and agricultural products), Farmers
Insurance Company (insurance), FMC Corp. (chemicals and machinery),
Lindsay Manufacturing Co. (irrigation equipment), Texas Instruments,
Inc. (electronics) and The Vigoro Corporation (fertilizer
manufacturer); formerly (in descending chronological order)
Counsellor to the President (Bush) for Domestic Policy, Chairman of
the Republican National Committee, Secretary of the U.S. Department
of Agriculture, and U.S. Trade Representative.
Andrew J. Donohue, Secretary; Age: 45
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-dealer
and investment adviser), and a director and an officer of First
Investors Family of Funds and First Investors Life Insurance Company.
Robert E. Patterson, Vice President and Portfolio Manager; Age 52
Senior Vice President of the Manager; an officer of other
OppenheimerFunds.
George C. Bowen, Treasurer; Age 58
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, Secretary and Treasurer of SSI and SFSI;
an officer of other OppenheimerFunds.
Robert G. Zack, Assistant Secretary; Age 47
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI, SFSI; an officer of other
OppenheimerFunds.
Robert Bishop, Assistant Treasurer; Age 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Yale &
Seffinger, P.C., an accounting firm, and an Accountant and
Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott Farrar, Assistant Treasurer; Age 29
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman & Co., a bank, and previously
a Senior Fund Accountant for State Street Bank & Trust Company.
- 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 (Messrs. Galli and Spiro; Mr. Spiro is also an officer)
receive no salary or fee from the Fund. The Trustees of the Fund
(including Mr. Delaney, a former Trustee, but excluding Messrs. Galli and
Spiro) received the total amounts shown below (i) from the Fund, during
its fiscal year ended September 30, 1994, and (ii) from all 17 of the New
York-based OppenheimerFunds (including the Fund) listed in the first
paragraph of this section (and from Oppenheimer Global Environment Fund,
a former New York-based OppenheimerFund), for services in the positions
shown:
<TABLE>
<CAPTION>
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as Part From All
Name and from of Fund New York-based
Position Fund Expenses OppenheimerFunds1
<S> <C> <C> <C>
Leon Levy $9,548 $3,812 $141,000.00
Chairman and
Trustee
Leo Cherne $4,661 $1,861 $ 68,800.00
Audit Committee
Member and
Trustee
Benjamin Lipstein $5,838 $2,331 $ 86,200.00
Study Committee
Member and Trustee
Elizabeth B. Moynihan $4,104 $1,639 $ 60,625.00
Study Committee
Member2 and Trustee
Kenneth A. Randall $5,310 $2,120 $ 78,400.00
Audit Committee
Member and Trustee
Edward V. Regan $3,809 $1,521 $ 56,275.00
Audit Committee
Member2 and Trustee
Russell S. Reynolds, Jr. $3,531 $1,410 $ 52,100.00
Trustee
Sidney M. Robbins $8,273 $3,303 $122,100.00
Study Committee
Chairman, Audit
Committee Vice-Chairman
and Trustee
Pauline Trigere $3,531 $1,410 $ 52,100.00
Trustee
Clayton K. Yeutter $3,531 $1,410 $ 52,100.00
Trustee
______________________
1 For the 1994 calendar year.
2 Committee position held during a portion of the period shown.
</TABLE>
The Fund has adopted a retirement plan that provides for payment to a
retired Trustee of up to 80% of the average compensation paid during that
Trustee's five years of service in which the highest compensation was
received. A Trustee must serve in that capacity for any of the New York-
based OppenheimerFunds for at least 15 years to be eligible for the
maximum payment. Because each Trustee's retirement benefits will depend
on the amount of the Trustee's future compensation and length of service,
the amount of those benefits cannot be determined at this time, nor can
we estimate the number of years of credited service that will be used to
determine those benefits. No payments have been made by the Fund under
the plan as of September 30, 1994.
- Major Shareholders. As of June 26, 1995, no person owned of record
or is known by the Fund to own beneficially 5% or more of the Fund's
outstanding Class A, Class B or Class C shares.
The Manager and Its Affiliates. The Manager is owned by Oppenheimer
Acquisition Corp., a holding company controlled by Massachusetts Mutual
Life Insurance Company. OAC is also owned in part by certain of the
Manager's directors and officers, some of whom may also serve as officers
of the Fund, and two of whom (Messrs. 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. A management fee is payable
monthly to the Manager under the terms of the investment advisory
agreement between the Manager and the Fund, and is computed on the
aggregate net assets of the Fund as of the close of business each day.
The investment advisory agreement between the Manager and the Fund
requires the Manager, at its expense, to provide the Fund with adequate
office space, facilities and equipment, and to provide and supervise the
activities of all administrative and clerical personnel required to
provide effective administration for the Fund, including the compilation
and maintenance of records with respect to its operations, the preparation
and filing of specified reports, and the composition of proxy materials
and registration statements for continuous public sale of shares of the
Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributor's Agreement
are paid by the Fund. The advisory agreement lists examples of expenses
paid by the Fund, the major categories of which relate to interest, taxes,
fees to certain Trustees, legal and audit expenses, custodian and transfer
agent expenses, share issuance costs, certain printing and registration
costs, brokerage commissions, and non-recurring expenses, such as
litigation.
The advisory agreement contains no expense limitation. However,
independently of the advisory agreement, the Manager has voluntarily
undertaken that the total expenses of the Fund in any fiscal year
(including the management fee, but excluding taxes, interest, brokerage
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. Currently, the
most stringent state expense limitation is imposed by California, and
limits the Fund's expenses (with specific exclusions) to 2.5% of the first
$30 million of average annual net assets, 2% of the next $70 million, and
1.5% of average annual net assets in excess of $100 million. The Manager
reserves the right to change or eliminate the undertaking at any time.
Any assumption of the Fund's expenses under that limitation would lower
the Fund's overall expense ratio and increase its total return during any
period in which expenses are limited.
For the fiscal years ended September 30, 1992, 1993 and 1994 the
management fees paid by the Fund to the Manager were $2,432,697,
$3,486,365, and $4,074,417, respectively.
The advisory agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard for its
obligations thereunder, the Manager is not liable for any loss sustained
by reason of any investment of Fund assets made with due care and in good
faith. 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 one or more additional 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 and Class C
shares, but is not obligated to sell a specific number of shares.
Expenses normally attributable to sales (excluding payments under the
Distribution and Service Plans but including advertising and the cost of
printing and mailing prospectuses other than those furnished to existing
shareholders), are borne by the Distributor. During the fiscal years
ended September 30, 1992, 1993 and 1994, the aggregate sales charges on
sales of the Fund's Class A shares were $6,102,413, $8,118,017 and
$2,933,373, respectively, of which the Distributor and an affiliated
broker-dealer retained in the aggregate $1,165,277, $1,410,798 and
$551,881 in those respective years. During the Fund's fiscal year ended
September 30, 1994, the contingent deferred sales charge collected on the
Fund's Class B shares totaled $149,477, all of which the Distributor
retained. Class C shares were not publicly offered during this fiscal
period, and no contingent deferred sales charges were collected. For
additional information about distribution of the Fund's shares and the
expenses connected with such activities, please refer to "Distribution and
Service Plans," below.
- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions
paid to the extent consistent with the 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 and 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, the procedures and rules
described above, allocations of brokerage are generally made by the
Manager's portfolio traders based upon new 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 each case, brokerage is allocated under the
supervision of the Manager's executive officers. As most purchases made
by the Fund are principal transactions at net prices, the Fund incurs
little or no brokerage costs. The Fund usually deals directly with the
selling or purchasing principal or market maker without incurring charges
for the services of a broker on its behalf unless it is determined that
better price or execution may be obtained by utilizing the services of a
broker. Purchases of portfolio securities from underwriters include a
commission or concession paid by the issuer to the underwriter, and
purchases from dealers include a spread between the bid and asked price.
The Fund seeks to obtain prompt execution of orders at the most favorable
net price. When the Fund engages in an option transaction, ordinarily the
same broker will be used for the purchase or sale of the option and any
transaction in the securities to which the option relates. When possible,
concurrent orders to purchase or sell the same security by more than one
of the accounts managed by the Manager or its affiliates are combined.
The transactions effected pursuant to such combined orders are averaged
as to price and allocated in accordance with the purchase or sale orders
actually placed for each account.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid in
commission dollars. The 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
Manager that (i) the trade is not from the broker's own inventory, (ii)
the trade was not 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 enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolio or being considered for purchase. The Board of
Trustees, including the "independent" Trustees of the Fund (those Trustees
of the Fund who are not "interested persons" as defined in the Investment
Company Act, and who have no direct or indirect financial interest in the
operation of the advisory agreement or the Distribution 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.
Other funds advised by the Manager have investment objectives and
policies similar to those of the Fund. Such other funds may purchase or
sell the same securities at the same time as the Fund, which could affect
the supply or price of such securities. If two or more of such funds
purchase the same security on the same day from the same dealer, the
Manager may average the price of the transactions and allocate the average
among such funds.
Performance of the Fund
As described in the Prospectus, from time to time the "standardized
yield," "dividend yield," "average annual total return", "total return,"
and "total return at net asset value" of an investment in each class of
Fund shares may be advertised. An explanation of how yields and total
returns are calculated for each class and the components of those
calculations is set forth below. No yield and total return calculations
are presented below for Class B shares because no shares of that class
were publicly issued during the Fund's fiscal year ending September 30,
1994.
Yield and total return information may be useful to investors in
reviewing the Fund's performance. The Fund's advertisement of its
performance must, under applicable SEC rules, include the average annual
total returns for each class of shares of the Fund for the 1, 5 and 10-
year period (or the life of the class, if less) as of the most recently
ended calendar quarter. 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 yield and total return 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.
Yield and total return for any given past period are not a prediction or
representation by the Fund of future yields or rates of return on its
shares. The yield and total returns of the Class A, Class B and Class C
shares of the Fund are affected by portfolio quality, portfolio maturity,
the type of investments the Fund holds and its operating expenses
allocated to the particular class.
- Standardized Yields
- Yield. The Fund's "yield" (referred to as "standardized yield") for
a given 30-day period for a class of shares is calculated using the
following formula set forth in rules adopted by the Securities and
Exchange Commission that apply to all funds that quote yields:
a-b 6
Standardized Yield = 2 ((------ + 1) - 1)
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense
reimbursements).
c = the average daily number of shares of that class outstanding
during the 30-day period that were entitled to receive
dividends.
d = the maximum offering price per share of that class on the last
day of the period, adjusted for undistributed net investment
income.
The standardized yield of a class of shares for a 30-day period may
differ from its yield for any other period. The SEC formula assumes that
the standardized yield for a 30-day period occurs at a constant rate for
a six-month period and is annualized at the end of the six-month period.
This standardized yield is not based on actual distributions paid by the
Fund to shareholders in the 30-day period, but is a hypothetical yield
based upon the net investment income from the Fund's portfolio investments
calculated for that period. The standardized yield may differ from the
"dividend yield" of that class, described below. Additionally, because
each class of shares is subject to different expenses, it is likely that
the standardized yields of the Fund's classes of shares will differ. For
the 30-day period ended September 30, 1994, the standardized yields for
the Fund's Class A and Class B shares were 5.24% and 4.72%, respectively.
- Tax-Equivalent Yield. The Fund's "tax-equivalent yield" adjusts
the Fund's current yield, as calculated above, by a stated combined
Federal, state and city tax rate. The tax equivalent yield is based on
a 30-day period, and is computed by dividing the tax-exempt portion of the
Fund's current yield (as calculated above) by one minus a stated income
tax rate and adding the result to the portion (if any) of the Fund's
current yield that is not tax exempt. The tax equivalent yield may be
used to compare the tax effects of income derived from the Fund with
income from taxable investments at the tax rates stated. Appendix B
includes a tax equivalent yield table, based on various effective tax
brackets for individual taxpayers. Such tax brackets are determined by
a taxpayer's Federal, state and city taxable income (the net amounts
subject to Federal and state income taxes after deductions and
exemptions). The tax equivalent yield table assumes that the investor is
taxed at the highest bracket, regardless of whether a switch to non-
taxable investments would cause a lower bracket to apply. For taxpayers
with income above certain levels, otherwise allowable itemized deductions
are limited. The Fund's tax-equivalent yields (after expense assumptions
by the Manager) for its Class A and Class B shares for the 30-day period
ended September 30, 1994, for an individual New York City resident in the
47.05% combined tax bracket were 9.90% and 8.91%, respectively.
- Dividend Yield and Distribution Return. From time to time the Fund
may quote a "dividend yield" or a "distribution return" for each class.
Dividend yield is based on the Class A, Class B or Class C share dividends
derived from net investment income during a stated period. Distribution
return includes dividends derived from net investment income and from
realized capital gains declared during a stated period. Under those
calculations, the dividends and/or distributions for that class declared
during a stated period of one year or less (for example, 30 days) are
added together, and the sum is divided by the maximum offering price per
share of that class on the last day of the period. When the result is
annualized for a period of less than one year, the "dividend yield" is
calculated as follows:
Dividend Yield of the Class =
Dividends of the Class
----------------------------------------------------
Max Offering Price of the Class (last day of period)
Divided by number of days (accrual period) x 365
The maximum offering price for Class A shares includes the maximum
front-end sales charge. For Class B shares and Class C shares, the
maximum offering price is the net asset value per share, without
considering the effect of contingent deferred sales charges.
From time to time similar yield or distribution return calculations
may also be made using the Class A net asset value (instead of its
respective maximum offering price) at the end of the period.
The dividend yields on Class A shares for the 30-day period ended
September 30, 1994, were 5.79% and 6.08% when calculated at maximum
offering price and at net asset value, respectively. The dividend yield
on Class B shares for the 30-day period ended September 30, 1994, was
5.30%. Distribution returns for the 30-day period ended September 30,
1994 are the same as the above-quoted dividend yields. No portion of the
Class A or Class B dividends for the three months ended September 30, 1994
were derived from realized capital gains.
- Total Return Information
- 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"), according to the following formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over
an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return
on an annual basis. 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 4.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown at net asset
value, as discussed below). For Class B shares, payment of the contingent
deferred sales charge of 5.0% for the first year, 4.0% for the second
year, 3.0% for the third and fourth years, 2.0% in the fifth year, 1.0%
in the sixth year and none thereafter is applied, as described in the
Prospectus. For Class C shares, the payment of 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 to buy
additional shares at net asset value per share, and that the investment
is redeemed at the end of the period.
The "average annual total return" on an investment in Class A shares
of the Fund for the one, five and ten year periods ended September 30,
1994 were -10.04%, 6.18% and 9.07%, respectively. The cumulative "total
return" on Class A shares for the ten year period ended September 30, 1994
was 138.24%. The average annual total returns on an investment in Class
B shares for the fiscal year ended September 30, 1994 and for the period
March 1, 1993 (the date Class B shares were first publicly offered)
through September 30, 1994 were -10.63% and -2.56%, respectively. The
cumulative total return on Class B shares for the period March 1, 1993
through September 30, 1994 was -4.02%.
- Total Returns at Net Asset Value. From time to time the Fund may
also quote an average annual total return at net asset value or a
cumulative total return at net asset value for Class A, Class B or Class
C shares. Each is based on the difference in net asset value per share
at the beginning and the end of the period for a hypothetical investment
in that class of shares (without considering front-end or contingent sales
charges) and takes into consideration the reinvestment of dividends and
capital gains distributions.
The average annual total returns at net asset value for Class A
shares for the one, five and ten-year periods ended September 30, 1994
were -5.55%, 7.22% and 9.6%, respectively. The cumulative total return
at net asset value for Class A shares for the ten-year period ended
September 30, 1994 was 150.13%.
The average annual total returns at net asset value for Class B
shares for the fiscal year ended September 30, 1994 and for the period
March 1, 1993 (the date Class B shares were first publicly offered)
through September 30, 1994 were -6.22% and -0.23%, respectively. The
cumulative total return at net asset value for Class B shares for the
period March 1, 1993 through September 30, 1994 was -0.36%.
- Other Performance Comparisons. From time to time the Fund may
publish the ranking of its Class A, Class B or Class C shares by Lipper
Analytical Services, Inc. ("Lipper"), a widely-recognized independent
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 is ranked against (i)
all other funds, excluding money market funds, and (ii) all other New York
municipal bond funds. The Lipper performance rankings are based on total
returns that include the reinvestment of capital gains distributions and
income dividends but do not take sales charges or taxes into
consideration. From time to time the Fund may include in its
advertisement and sales literature performance information about the Fund
cited in other newspapers and periodicals such as The New York Times,
which may include performance quotations from other sources, including
Lipper and Morningstar.
From time to time the Fund may publish the ranking of the performance
of its Class A, Class B or Class C shares by Morningstar, Inc., an
independent mutual fund monitoring service that ranks mutual funds,
including the Fund, monthly in broad investment categories (equity,
taxable bond, municipal bond and hybrid) based upon risk-adjusted
investment returns. 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 return are combined to produce star rankings reflecting
performance relative to the average fund in a given 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 Class A, Class B and Class C shares of the Fund in relation to
other rated municipal bond funds. Rankings are subject to change.
Investors may also wish to compare the Fund's Class A, Class B or
Class C return to the return on fixed income investments available from
banks and thrift institutions, such as certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed
or variable time deposits, and various other instruments such as Treasury
bills. However, the Fund's returns and share price are not guaranteed and
will fluctuate daily, while bank depository obligations may be insured by
the FDIC and may provide fixed rates of return, and Treasury bills are
guaranteed as to principal and interest by the U.S. government. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a prediction or
representation by the Fund of future returns. The returns of Class A,
Class B and Class C shares of the Fund are affected by portfolio quality,
the type of investments the Fund holds and its operating expenses
allocated to a particular class.
From time to time, the Fund's Manager may publish rankings or ratings
of the Manager (or the Transfer Agent), by independent third-parties, on
the investor services provided by them to shareholders of the
OppenheimerFunds, other than the performance rankings of the
OppenheimerFunds themselves. These ratings or rankings of
shareholder/investor services may compare the OppenheimerFunds services
to those of other mutual fund families selected by the rating or ranking
services, and may be based upon the opinions of the rating or ranking
service itself, using its own research or judgment, or based upon surveys
of investors, brokers, shareholders or others. in relation to other equity
funds.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares, a
Distribution and Service Plan for Class B shares and a Distribution and
Service Plan for Class C shares 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 B shares and for Class C shares,
that vote was cast by the Manager as the sole initial holder of Class B
shares and of 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. The
Distributor and the Manager may, in their sole discretion, increase or
decrease the amount of payments they make from their own resources to
Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as such continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. Any 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. In addition, because Class B
shares automatically convert into Class A shares after six years, the Fund
is required by an exemptive order issued by the Securities and Exchange
Commission to obtain the approval of Class B as well as Class A
shareholders for a proposed amendment to the Class A Plan that would
materially increase the amount to be paid by Class A shareholders under
the Class A Plan. Such vote must be by a "majority" of the Class A and
Class B shares (as defined in the Investment Company Act), voting
separately by 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. All
material amendments must be approved by the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at least
quarterly on the amount of all payments made pursuant to each Plan, the
purpose for which the payment was made and the identity of each Recipient
that received any such payment. The report for the Class B Plan or Class
C Plan shall also include the distribution costs for that quarter, and
such costs for previous fiscal periods that are carried forward, as
explained in the Prospectus and below. Those reports, including the
allocations on which they are based, will be subject to the review and
approval of the Independent Trustees in the exercise of their fiduciary
duty. Each Plan further provides that while it is in effect, the
selection and nomination of those Trustees of the Fund who are not
"interested persons" of the Fund is committed to the discretion of the
Independent Trustees. This does not prevent the involvement of others in
such selection and nomination if the final decision on any such selection
or nomination is approved by a majority of such Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the
fee at the maximum rate allowed under the Plans and set no minimum amount.
For the fiscal year ended September 30, 1994, payments under the
Class A Plan totaled $1,780,777, all of which was paid by the Distributor
to Recipients, including $26,802 paid to an affiliate of the Distributor.
Any unreimbursed expenses incurred with respect to Class A shares for any
fiscal year by the Distributor may not be recovered in subsequent years.
Payments received by the Distributor under the Plan for Class A shares
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 Plan and the Class C Plan 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. Service fee payments by the Distributor to
Recipients will be made (i) in advance for the first year Class B and
Class C shares are outstanding, following the purchase of shares, in an
amount equal to 0.25% of the net asset value of the shares purchased by
the Recipient or its customers and (ii) thereafter, on a quarterly basis,
computed as of the close of business each day at an annual rate of .25%
of the average daily net asset value of Class B shares and Class C shares
respectively, held in accounts of the Recipient or its customers. An
exchange of shares does not entitle the Recipient to an advance service
fee payment. In the event Class B shares or Class C shares are redeemed
during the first year such shares are outstanding, the Recipient will be
obligated to repay a pro rata portion of such advance payment to the
Distributor. For the fiscal year ended September 30, 1994, payments made
under the Class B Plan totaled $612,760, of which the Distributor paid
$902 to an affiliate of the Distributor and retained $582,434 as
reimbursement for Class B sales commissions and service fee advances, as
well as financing costs; the balance of such Class B Plan payments was
paid by the Distributor to Recipients not affiliated with the Distributor.
Since Class C shares were not outstanding during the Fund's fiscal year
ended September 30, 1994, no payments were made under the Class C Plan.
Although the Class B Plan and the Class C Plan permit the Distributor
to retain both the asset-based sales charges and the service fees on Class
B and Class C shares, or to pay Recipients the service fee on a quarterly
basis, without payment in advance, the Distributor presently intends to
pay the service fee to Recipients in the manner described above. A
minimum holding period may be established from time to time under the
Class B Plan and the Class C Plan by the Board. Initially, the Board has
set no minimum holding period. All payments under the Class B and 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 Class B and Class C Plans provide for the Distributor to be
compensated at a flat rate, whether the Distributor's distribution
expenses are more or less than the amounts paid by the Fund during that
period. Such payments are made in recognition that the Distributor (i)
pays sales commissions to authorized brokers and dealers at the time of
sale and pays service fees as described in the Prospectus, (ii) may
finance such commissions and/or the advance of the service fee payment to
Recipients under those Plans, or may provide such financing from its own
resources, or from an affiliate, (iii) employs personnel to support
distribution of shares, and (iv) may bear the costs of sales literature,
advertising and prospectuses (other than those furnished to current
shareholders), state "blue sky" registration fees and certain other
distribution expenses.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C Shares. The
availability of three classes of shares permits an investor to choose the
method of purchasing shares that is more beneficial to the investor
depending on the amount of the purchase, the length of time the investor
expects to hold shares and other relevant circumstances. Investors should
understand that the purpose and function of the deferred sales charge and
asset-based sales charge with respect to Class B and Class C shares are
the same as those of the initial sales charge with respect to Class A
shares. Any salesperson or other person entitled to receive compensation
for selling Fund shares may receive different compensation with respect
to one class of shares than the other. The Distributor will not accept
any order for $500,000 or more of Class B shares or $1 million or more of
Class C shares on behalf of a single investor (not including dealer
"street name" or omnibus accounts) because generally it will be more
advantageous for that investor to purchase Class A shares of the Fund
instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class
B and Class C shares and the dividends payable on such shares will be
reduced by incremental expenses borne solely by those classes, including
the asset-based sales charge to which both classes of shares are subject.
The conversion of Class B shares to Class A shares is subject to the
continuing availability of a private letter ruling from the Internal
Revenue Service, or an opinion of counsel or tax adviser, to the effect
that the conversion of Class B shares does not constitute a taxable event
for the holder under Federal income tax law. If such a revenue ruling or
opinion is no longer available, the automatic conversion feature may be
suspended, in which event no further conversions of Class B shares would
occur while such suspension remained in effect. Although Class B shares
could then be exchanged for Class A shares on the basis of relative net
asset value of the two classes, without the imposition of a sales charge
or fee, such exchange could constitute a taxable event for the holder, and
absent such exchange, Class B shares might continue to be subject to the
asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares recognizes
two types of expenses. General expenses that do not pertain specifically
to a 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 unaffiliated 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 Value Per Share. The net asset values per
share of Class A, Class B and Class C shares of the Fund are determined
as of the close of business of the New York Stock Exchange (the "NYSE")
on each day that the NYSE is open by dividing the value of the Fund's net
assets attributable to a class by the total number of shares of that class
that are outstanding. The NYSE normally closes at 4:00 P.M. New York
time, but may close earlier on some days (for example, in case of weather
emergencies or on days falling before a holiday). The NYSE's most recent
annual holiday schedule 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.
Dealers other than NYSE members may conduct trading in Municipal
Securities on certain days on which the NYSE is closed (including weekends
and holidays) or after 4:00 P.M. on a regular business day). Because the
Fund's net asset values will not be calculated on those days, the Fund's
net asset value per Class A, Class B or Class C shares may be
significantly affected at times 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 sales prices
of the preceding trading day, or closing bid and asked prices); (ii)
securities actively traded on a foreign securities exchange are valued at
the last sales price available to the pricing service approved by the
Fund's Board of Trustees or to the Manager as reported by the principal
exchange on which the security is traded; (iii) unlisted foreign
securities or listed foreign securities not actively traded are valued as
in (i) above, if available, or at the mean between "bid" and "asked"
prices obtained from active market makers in the security on the basis of
reasonable inquiry; (iv) long-term debt securities having a remaining
maturity in excess of 60 days are valued at the mean between the "bid" and
"asked" prices determined by a portfolio pricing service approved by the
Fund's Board of Trustees or obtained from active market makers in the
security on the basis of reasonable inquiry; (v) debt instruments having
a maturity of more than one year when issued, and non-money market type
instruments having a maturity of one year or less when issued, which have
a remaining maturity of 60 days or less are valued at the mean between the
"bid" and "asked" prices determined by a pricing service approved by the
Fund's Board of Trustees or obtained from active market makers in the
security on the basis of reasonable inquiry; (vi) money market-type debt
securities having a maturity of less than one year when issued that having
a remaining maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; and (vii) securities
(including restricted securities) not having readily-available market
quotations are valued at fair value under the Board's procedures.
In the case of Municipal Securities, when 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 (such as the
tax-exempt status of the interest paid by Municipal Securities). The
Fund's Board of Trustees has authorized the Manager to employ a pricing
service, bank or broker-dealer experienced in such matters to price any
of the types of securities described above. The Trustees will monitor the
accuracy of such pricing services by comparing prices used for portfolio
evaluation to actual sales prices of selected securities.
Puts, calls, Interest Rate Futures and Municipal Bond Index Futures
are valued at the last sales price on the principal exchange on which they
are traded or on NASDAQ, as applicable, or if there were no sales that
day, in accordance with (i), above. When the Fund writes an option, an
amount equal to the premium received is included in the Fund's Statement
of Assets and Liabilities as an asset, and an equivalent deferred credit
is included in the liability section. The deferred credit is adjusted
("marked-to-market") to reflect the current market value of the call.
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
("ACH") transfer to buy the shares. Dividends will begin to accrue on
such shares on the day the Fund receives Federal Funds for such purchase
through the ACH system before the close of the NYSE. The NYSE normally
closes at 4:00 P.M. but may close earlier on certain days. The proceeds
of ACH transfers are normally received by the Fund three days after the
ACH transfer is initiated. The Distributor and the Fund are not
responsible for any delays. If the Federal Funds are received after the
close of the NYSE, dividends will begin to accrue on the next regular
business day after such Federal Funds are received.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and
reduction of expenses realized by the Distributor and dealers making such
sales. In the instances discussed in the Prospectus in which no sales
charge is imposed, that policy has been adopted because the Distributor
or dealer or broker incurs little or no selling expenses in such
circumstances. The term "immediate family" refers to one's spouse,
children, grandchildren, parents, grandparents, parents-in-law, siblings,
a spouse's siblings and a sibling's spouse.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-Distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion High Yield Fund
Oppenheimer Bond Fund
Oppenheimer International Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Bond Fund
Oppenheimer Strategic Income & Growth Fund
and, the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares
of each of the OppenheimerFunds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent (referred to as a "Letter")
is an investor's statement in writing to the Distributor of the intention
to purchase Class A shares or Class A and Class B shares of the Fund (and
other OppenheimerFunds during a 13-month period (the "Letter of Intent
period"), which may, at the investor's request, include purchases made up
to 90 days prior to the date of the Letter. The Letter states the
investor's intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those funds,
will equal or exceed the amount specified in the Letter. Purchases made
by reinvestment of dividends or distributions of capital gains and
purchases made at net asset value without sales charge do not count toward
satisfying the amount of the Letter. A Letter enables an investor to
count the Class A and Class B shares purchased under the Letter to obtain
the reduced sales charge rate on purchases of Class A shares of the Fund
(and other OppenheimerFunds) that applies under the Right of Accumulation
to current purchases of Class A shares. Each purchase of Class A shares
under the Letter will be made at the public offering price applicable to
a single lump-sum purchase of shares in the intended amount, as described
in the 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 amount, the investor agrees to pay the additional
amount of sales charge applicable to such purchases, as set forth in
"Terms of Escrow," below (as those terms may be amended from time to
time). The investor agrees that shares equal in value to 5% of the
intended amount will be held in escrow by the Transfer Agent subject to
the Terms of Escrow. Also, the investor agrees to be bound by the terms
of the Prospectus, this Statement of Additional Information and the
Application used for such Letter of Intent, and if such terms are amended,
as they may be from time to time by the Fund, that those amendments will
apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended amount, the commissions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual total purchases. If total eligible purchases during
the Letter of Intent period exceed the intended amount and exceed the
amount needed to qualify for the next sales charge rate reduction set
forth in the applicable prospectus, the sales charges paid will be
adjusted to the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid to the
dealer over the amount of commissions that apply to the actual amount of
purchases. The excess commissions returned to the Distributor will be
used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly
after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value to 5% of the
intended amount specified in the Letter shall be held in escrow by the
Transfer Agent. For example, if the intended amount specified under the
Letter is $50,000, the escrow shall be shares valued in the amount of
$2,500 (computed at the public offering price adjusted for a $50,000
purchase). Any dividends and capital gains distributions on the escrowed
shares will be credited to the investor's account.
2. If the total minimum investment specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended amount
specified in the Letter, the investor must remit to the Distributor an
amount equal to the difference between the dollar amount of sales charges
actually paid and the amount of sales charges which would have been paid
if the total amount purchased had been made at a single time. Such sales
charge adjustment will apply to any shares redeemed prior to the
completion of the Letter. If such difference in sales charges is not paid
within twenty days after a request from the Distributor or the dealer, the
Distributor will, within sixty days of the expiration of the Letter,
redeem the number of escrowed shares necessary to realize such difference
in sales charges. Full and fractional shares remaining after such
redemption will be released from escrow. If a request is received to
redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent 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 acquired subject to
a contingent deferred sales charge, and (c) Class A or B shares acquired
by reinvestment of dividends and distributions or acquired in exchange for
either (i) Class A shares of one of the other OppenheimerFunds that were
acquired subject to a Class A initial or contingent deferred sales charge
or (ii) Class B shares of one of the other OppenheimerFunds that were
acquired subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as described
in the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those
accounts for monthly automatic purchases of shares of up to four other
Eligible Funds.
There is a sales charge on the purchase of certain Eligible Funds.
An application should be obtained from the Transfer Agent, completed and
returned, and a prospectus of the selected fund(s) (available from the
Distributor) should be obtained 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.
Checkwriting. When a check is presented to the Bank for clearance, the
Bank will ask the Fund to redeem a sufficient number of full and
fractional shares in the shareholder's account to cover the amount of the
check. This enables the shareholder to continue receiving dividends on
those shares until the check is presented to the Fund. Checks may not be
presented for payment at the offices of the Bank or the Fund's Custodian.
This limitation does not affect the use of checks for the payment of bills
or to obtain cash at other banks. The Fund reserves the right to amend,
suspend or discontinue offering checkwriting privileges at any time
without prior notice.
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 such 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 such shares has fallen below the stated minimum solely as
a result of market fluctuations. Should the Board elect to exercise this
right, it may also fix, in accordance with the Investment Company Act, the
requirements for any notice to be given to the shareholders in question
(not less than 30 days), or may set requirements for permission to
increase the investment, and 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, if the Board
of Trustees of the Fund determines 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, the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind" of
securities from the portfolio of the Fund, in lieu of cash, in conformity
with applicable rules of the Securities and Exchange Commission. The Fund
has elected to be governed by Rule 18f-1 under the Investment Company Act,
pursuant to which the Fund is obligated to redeem shares solely in cash
up to the lesser of $250,000 or 1% of the net assets of the Fund during
any 90-day period for any one shareholder. If shares are redeemed in kind,
the redeeming shareholder might incur brokerage or other costs in selling
the securities for cash. The method of valuing securities used to make
redemptions in kind will be the same as the method the Fund uses to value
it portfolio securities described above under "Determination of Net Asset
Value Per Share" and such valuation will be made as of the time the
redemption price is determined.
Reinvestment Privilege. Within six months of a redemption, a shareholder
may reinvest all or part of the redemption proceeds of (i) Class A shares,
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
OppenheimerFunds into which shares of the Fund are exchangeable, as
described below, at the net asset value next computed the Transfer Agent
receives the reinvestment order. The shareholder must ask the Distributor
for such privilege at the time of reinvestment. Any capital gain that was
realized when the shares were redeemed is taxable, and reinvestment will
not alter any capital gains tax payable on that gain. If there has been
a capital loss on the redemption, some or all of the loss may not be tax
deductible, depending on the timing and amount of the reinvestment. Under
the Internal Revenue Code, if the redemption proceeds of Fund shares on
which a sales charge was paid are reinvested in shares of the Fund or
another of the OppenheimerFunds within 90 days of payment of the sales
charge, the shareholder's basis in the shares of the Fund that were
redeemed may not include the amount of the sales charge paid. That would
reduce the loss or increase the gain recognized from the redemption.
However, in that case the sales charge would be added to the basis of the
shares acquired by the reinvestment of the redemption proceeds. The Fund
may amend, suspend or cease offering this reinvestment privilege at any
time as to shares redeemed after the date of such amendment, suspension
or cessation.
Transfer of Shares. Shares are not subject to the payment of a contingent
deferred sales charge of any 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 the Class C
contingent deferred sales charge will be followed in determining the order
in which shares are transferred.
Special Arrangements for Repurchase of Shares from Dealers and
Brokers. The Distributor is the Fund's agent to repurchase its shares
from authorized dealers or brokers. The repurchase price 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 broker or
dealer 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 (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
document as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the
Fund valued at $5,000 or more can authorize the Transfer Agent to redeem
shares (minimum $50) automatically on a monthly, quarterly, semi-annual
or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are by check
payable to all shareholders of record and sent to the address of record
for the account (and if the address has not been changed within the prior
30 days). Required minimum distributions from OppenheimerFunds-sponsored
retirement plans may not be arranged on this basis. Payments are normally
made by check, but shareholders having AccountLink privileges (see "How
To Buy Shares") may arrange to have Automatic Withdrawal Plan payments
transferred to the bank account designated on the OppenheimerFunds New
Account Application or signature-guaranteed instructions. The Fund cannot
guarantee receipt of the payment on the date requested and reserves the
right to amend, suspend or discontinue offering such plans at any time
without prior notice. Because of the sales charge assessed on Class A
share purchases, shareholders should not make regular additional Class A
purchases while participating in an Automatic Withdrawal Plan. Class B
and Class C shareholders should not establish withdrawal plans, because
of the imposition of the contingent deferred sales charge on such
withdrawals (except where the Class B or Class C contingent deferred sales
charge is waived as described in "Waivers of Class B Sales Charge" or
"Waivers of Class C Sales Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such plans,
as stated below and in the provisions of the OppenheimerFunds Application
relating to such Plans, as well as the Prospectus. These provisions may
be amended from time to time by the Fund and/or the Distributor. When
adopted, such amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other OppenheimerFunds automatically on
a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus, and below in this Statement of Additional
Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and thereafter 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
such plans should not be considered as a yield or income on your
investment.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the "Planholder")
who executed the Plan authorization and application submitted to the
Transfer Agent. The Transfer Agent shall incur no liability to the
Planholder for any action taken or omitted by the Transfer Agent in good
faith to administer the Plan. Certificates will not be issued for shares
of the Fund purchased for and held under the Plan, but the Transfer Agent
will credit all such shares to the account of the Planholder on the
records of the Fund. Any share certificates held by a Planholder may be
surrendered unendorsed to the Transfer Agent with the Plan application so
that the shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How to Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
OppenheimerFunds that have a single class of shares without a class
designation are deemed "Class A" shares for this purpose. All of the
OppenheimerFunds offer Class A shares, but only the following
OppenheimerFunds offer Class B shares:
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Bond Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer High Yield Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Cash Reserves (Class B shares are only available by
exchange)
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Global Fund
Oppenheimer Discovery Fund
Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund
Only the following other OppenheimerFunds offer Class C shares:
Oppenheimer Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Champion High Yield Fund
Oppenheimer U.S. Government Trust
Oppenheimer Intermediate Tax-Exempt Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Cash Reserves (Class C shares available only by
exchange)
Oppenheimer Strategic Income Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer Target Fund
Oppenheimer Bond Fund
Oppenheimer Value Stock Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer International Bond Fund
Class A shares of OppenheimerFunds may be exchanged for shares of any
Money Market Fund. Shares of any Money Market Fund purchased without a
sales charge may be exchanged for shares of OppenheimerFunds offered with
a sales charge upon payment of the sales charge (or, if applicable, may
be used to purchase shares of OppenheimerFunds subject to a contingent
deferred sales charge). However, if the Distributor receives, at the time
of purchase, notice that shares of Oppenheimer Money Market Fund, Inc. are
being purchased with the redemption proceeds of other mutual funds (other
than other money market funds) that are not part of the OppenheimerFunds
family, those shares of Oppenheimer Money Market Fund, Inc. may be
exchanged for shares of other OppenheimerFunds at net asset value without
paying a sales charge.
Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the OppenheimerFunds or from any unit
investment trust for which reinvestment arrangements have been made with
the Distributor may be exchanged at net asset value for shares of any of
the OppenheimerFunds. 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 OppenheimerFunds 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 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or 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, the shareholder must either have
an existing account in, or acknowledge receipt of a prospectus of, the
fund to which the exchange is to be made. For full or partial exchanges
of an account made by telephone, any special account features such as
Asset Builder Plans, Automatic Withdrawal Plans and retirement plan
contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal 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
transaction.
Dividends, Capital Gains and Taxes
Dividends and Distributions. Dividends will be payable on shares held of
record 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. Shares purchased through dealers or brokers
normally are paid for by the third business day following the placement
of the purchase order. Shares redeemed through the regular redemption
procedure will be paid dividends through and including the day on which
the redemption request is received by the Transfer Agent in proper form.
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 the 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 as a result of the
asset-based sales charge on Class B and Class C shares, and Class B and
Class C dividends will also differ in amount as a consequence of any
difference in net asset value between Class A, Class B and Class C shares.
Distributions may be made annually in December out of any net short-
term or long-term capital gains realized from the sale of securities,
premiums from expired calls written by the Fund and net profits from
hedging instruments and closing purchase transactions realized in the
twelve months ending on October 31 of the current year. Any difference
between the net asset values of Class A, Class B and Class C shares will
be reflected in such distributions. Distributions from net short-term
capital gains are taxable to shareholders as ordinary income and when paid
by the Fund are considered "dividends." The Fund may make a supplemental
distribution of capital gains and ordinary income following the end of its
fiscal year. Long-term capital gains distributions, if any are taxable
as long-term capital gains whether received in cash or reinvested and
regardless of how long Fund shares have been held. There is no fixed
dividend rate (although the Fund may have a targeted dividend rate for
Class A shares) and there can be no assurance as to the payment of any
dividends or the realization of any capital gains.
Tax Status of the Fund's Dividends and Distributions. The Fund intends
to qualify under the Internal Revenue Code during each fiscal year to pay
"exempt-interest dividends" to its shareholders. Exempt-interest
dividends which are derived from net investment income earned by the Fund
on Municipal Securities will be excludable from gross income of
shareholders for Federal income tax purposes. Net investment income
includes the allocation of amounts of income from the Municipal Securities
in the Fund's portfolio which are free from Federal income taxes. This
allocation will be made by the use of one designated percentage applied
uniformly to all income dividends made during the Fund's tax year. Such
designation will normally be made following the end of each fiscal year
as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may substantially differ from the percentage of
the Fund's income that was tax-exempt for a given period. All of the
Fund's dividends (excluding capital gains distributions) paid during 1994
were exempt from Federal and New York income taxes. A portion of the
exempt-interest dividends paid by the Fund may be an item of tax
preference for shareholders subject to the alternative minimum tax. The
amount of any dividends attributable to tax preference items for purposes
of the alternative minimum tax will be identified when tax information is
distributed by the Fund. 10.2% of the Fund's dividends (excluding
distributions) paid during 1994 were a tax preference item for
shareholders subject to the alternative minimum tax.
A shareholder receiving a dividend from income earned by the Fund
from one or more of: (1) certain taxable temporary investments (such as
certificates of deposit, repurchase agreements, commercial paper and
obligations of the U.S. government, its agencies and instrumentalities);
(2) income from securities loans; (3) income or gains from options or
Futures; or (4) an excess of net short-term capital gain over net long-
term capital loss from the Fund, treats the dividend as a receipt of
either ordinary income or long-term capital gain in the computation of
gross income, regardless of whether the dividend is reinvested. The
Fund's dividends will not be eligible for the dividends-received deduction
for corporations. Shareholders receiving Social Security benefits should
be aware that exempt-interest dividends are a factor in determining
whether such benefits are subject to Federal income tax. Losses realized
by shareholders on the redemption of Fund shares within six months of
purchase (which period may be shortened by regulation) will be disallowed
for Federal income tax purposes to the extent of exempt-interest dividends
received on such shares.
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 the Fund will qualify, and the Fund might not meet those tests in
a particular year. For example, if the Fund derives 30% or more of its
gross income from the sale of securities held less than three months, it
may fail to qualify (see "Tax Aspects of Covered Calls and Hedging
Instruments," above). If it does not qualify, the 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. The Manager might determine in a particular year that it
might be in the best interest of shareholders for the Fund not to make
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.
The Internal Revenue Code requires that a holder (such as the Fund)
of a zero coupon security accrue as income each year a portion of the
discount at which the security was purchased even though the Fund receives
no interest payment in cash on the security during the year. As an
investment company, the Fund must pay out substantially all of its net
investment income each year or be subject to excise taxes, as described
above. Accordingly, when the Fund holds zero coupon securities, it may
be required to pay out as an income distribution each year an amount which
is greater than the total amount of cash interest the Fund actually
received during that year. Such distributions will be made from the cash
assets of the Fund or by liquidation of portfolio securities, if
necessary. The Fund may realize a gain or loss from such sales. In the
event the Fund realizes net capital gains from such transactions, its
shareholders may receive a larger capital gain distribution than they
would have had in the absence of such transactions.
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 OppenheimerFunds listed in "Reduced
Sales Charges," above, at net asset value without sales charge. Class B
and Class C shareholders should be aware that as of the date of this
Statement of Additional Information, only certain OppenheimerFunds offer
Class B or Class C shares. 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 OppenheimerFunds may
be invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. Citibank, N.A. is the Custodian of the Fund's assets. The
Custodian's responsibilities include safeguarding and controlling the
Fund's portfolio securities, collecting income on the portfolio securities
and handling the delivery of such securities to and from the Fund. The
Manager has represented to the Fund that the banking relationships between
the Manager and the Custodian have been and will continue to be unrelated
to and unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer New York Tax-Exempt Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer New York Tax-Exempt Fund as of September 30, 1994,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then
ended and the financial highlights for each of the years in the nine-year
period then ended and the ten-month period ended September 30, 1985. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 1994, by correspondence
with the custodian. 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 New York Tax-Exempt Fund as of September 30, 1994, the
results of its operations for the year then ended, the changes in its net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the nine-year period then ended
and the ten-month period ended September 30, 1985, in conformity with generally
accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
October 21, 1994
<PAGE>
STATEMENT OF INVESTMENTS September 30, 1994
<TABLE>
<CAPTION>
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
==========================================================
==========================================================
=============
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--98.6%
---------------------------------------------------------------------------------------------------------------------------------
NEW YORK--76.9% City of New York General Obligation Bonds:
Series A, 7.75%, 8/15/16 Baa1/A- $ 2,500,000 $ 2,737,152
Series B, 8.25%, 6/1/07 Baa1/A- 1,750,000 2,014,670
Series B, FSA Insured, 8.638%, 10/1/07(1) Aaa/AAA 7,500,000 7,231,462
Prerefunded, Series F, 8.25%, 11/15/17 Aaa/A- 7,820,000 9,300,505
Series F, 8.25%, 11/15/17 Baa1/A- 680,000 767,514
7.482%, 8/1/08(1) NR/NR 9,250,000 7,575,305
8.245%, 8/1/13(1) Baa1/A- 5,000,000 4,155,170
8.245%, 8/1/14(1) Baa1/A- 8,150,000 6,742,234
---------------------------------------------------------------------------------------------------
Dormitory Authority of the State of New York:
Revenue Bonds:
City University System:
Series A, 5.75%, 7/1/18 Baa1/BBB 2,500,000 2,219,317
Prerefunded, Series A, 7.625%, 7/1/20 AAA/BBB 1,475,000 1,679,425
Series C, 6%, 7/1/16 Baa1/BBB 9,000,000 8,311,788
Series U, 6.375%, 7/1/08 Baa1/BBB 3,000,000 2,961,834
Series V, 5.60%, 7/1/10 Baa1/BBB 10,880,000 9,872,478
Cornell University System, FGIC Insured,
6.875%, 7/1/14 Aa/AA 7,000,000 7,291,837
Department of Health, Prerefunded, 7.70%, 7/1/20 Aaa/BBB 2,750,000 3,141,974
Judicial Facilities Lease, Escrowed
to Maturity, MBIA Insured, 7.375%, 7/1/16 Aaa/AAA 2,300,000 2,586,035
Pooled Capital Program, Prerefunded,
FGIC Insured, 7.80%, 12/1/05 Aaa/AAA 8,145,000 8,827,045
Rockefeller University System,
MBIA Insured, 7.375%, 7/1/14 Aaa/AAA 4,000,000 4,295,555
Revenue Refunding Bonds:
City University System:
Second Series A, 5.75%, 7/1/18 Baa1/BBB 6,750,000 6,014,114
Series B, 6%, 7/1/14 Baa1/BBB 10,875,000 10,102,657
Fordham University System,
FGIC Insured, 5.75%, 7/1/15 Aaa/AAA/AAA 5,700,000 5,289,389
State University Educational Facilities System:
Series A, 5.25%, 5/15/15 Baa1/BBB+ 23,090,000 19,718,305
Series A, 5.25%, 5/15/21 Baa1/BBB+ 5,010,000 4,060,108
Prerefunded, Series B, 7.25%, 5/15/15 NR/AAA 1,735,000 1,940,519
Prerefunded, Series B, 7.25%, 5/15/15 Aaa/BBB+ 15,230,000 17,034,068
Series B, 7%, 5/15/16 Baa1/BBB+ 9,020,000 9,314,196
---------------------------------------------------------------------------------------------------
Grand Central District Management Assn., Inc.,
New York Business District Capital Improvement:
Revenue Bonds, Prerefunded, 6.50%, 1/1/22 Aaa/AAA 2,000,000 2,168,866
Revenue Refunding Bonds:
5.125%, 1/1/14 A1/A 1,000,000 849,551
5.25%, 1/1/22 A1/A 2,500,000 2,053,837
---------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority
of New York Revenue Bonds:
Commuter Facilities, Series A,
MBIA Insured, 6.125%, 7/1/12 Aaa/AAA 4,090,000 4,007,234
Transportation Facilities Service
Contracts, 6%, 7/1/21 Baa1/BBB 12,950,000 11,723,581
---------------------------------------------------------------------------------------------------
New York City Health and Hospital Corp.
Revenue Refunding Bonds, Series A,
AMBAC Insured, 7.595%, 2/15/23(1) Aaa/AAA/AAA 8,300,000 6,549,206
</TABLE>
4 Oppenheimer New York Tax-Exempt Fund
<PAGE> 5
<TABLE>
<CAPTION>
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
==========================================================
==========================================================
=============
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED) New York City Housing Development Corp.
Multi-Family Housing Revenue Bonds:
1985 First Series, FHA Insured, 9.875%, 10/1/17 Aa/AA $ 500,000 $ 518,653
Glenn Garden Project, 6.50%, 1/15/18 NR/NR 3,045,199 2,928,446
Keith Plaza Project, 6.50%, 2/15/18 NR/NR 2,011,262 2,018,292
---------------------------------------------------------------------------------------------------
New York City Industrial Development Agency
Revenue Bonds, Terminal One Group Assn.:
6%, 1/1/15 A/A/A- 5,000,000 4,640,580
6.125%, 1/1/24 A/A/A- 3,000,000 2,784,918
---------------------------------------------------------------------------------------------------
New York City Municipal Water Finance Authority
Revenue Bonds, Water and Sewer System:
Prerefunded, Series A,
MBIA Insured, 7.25%, 6/15/15 Aaa/AAA 7,000,000 7,811,586
Series B, AMBAC Insured, 5.375%, 6/15/19 Aaa/AAA/AAA 5,000,000 4,320,170
Prerefunded, Series B, 6.375%, 6/15/22 A/A-/A 2,650,000 2,846,709
Series B, 6.375%, 6/15/22 A/A-/A 6,100,000 5,936,935
Prerefunded, Series C, 7.75%, 6/15/20 Aaa/A- 11,500,000 13,256,751
---------------------------------------------------------------------------------------------------
New York State Energy Research and
Development Authority:
Electric Facilities Revenue Bonds:
Consolidated Edison Co. of New York Project:
Series B, 6.375%, 12/1/27 Aa3/A+ 10,000,000 9,651,749
Series C, 7.25%, 11/1/24 Aa3/A+ 3,450,000 3,620,864
Long Island Lighting Co.:
Series A, 7.15%, 12/1/20 Ba1B+ 7,500,000 7,481,332
Series C, 6.90%, 8/1/22 Ba1/BB+/NR 9,200,000 8,901,081
Gas Facilities Revenue Bonds,
Brooklyn Union Gas Co. Project:
Series B, 10.546%, 7/1/26(1) A1/A/A 6,000,000 6,217,487
Series D, MBIA Insured, 7.569%, 7/8/26(1) Aaa/AAA/A 2,000,000 1,439,272
Pollution Control Revenue Bonds,
Orange and Rockland Utilities, Inc. Project,
10.25%, 10/1/14 Baa1/A-/A+ 1,700,000 1,734,000
---------------------------------------------------------------------------------------------------
New York State Housing Finance Agency:
Revenue Bonds, Service Contracts, Series D,
5.375%, 3/15/23 Baa1/BBB 9,000,000 7,566,570
Revenue Refunding Bonds:
New York City Health Facility:
Series A, 7.90%, 11/1/99 Baa/A- 3,500,000 3,843,826
Series A, 8%, 11/1/08 Baa/A- 3,240,000 3,646,785
State University Construction, Escrowed
to Maturity, Prerefunded, Series A, 7.90%, 11/1/06 Aaa/AAA 1,750,000 2,052,674
---------------------------------------------------------------------------------------------------
New York State Local Government
Assistance Corp. Revenue Bonds:
Series A, 5.375%, 4/1/14 A/A/A+ 5,500,000 4,812,962
Prerefunded, Series C, 7%, 4/1/21 Aaa/AAA/AAA 9,455,000 10,513,771
Series C, 5.50%, 4/1/22 A/A/A+ 16,175,000 14,022,560
Prerefunded, Series D, 6.75%, 4/1/21 Aaa/AAA/AAA 4,700,000 5,177,801
Revenue Refunding Bonds:
Series B, 5.50%, 4/1/21 A/A/A+ 12,800,000 11,091,160
Series C, 5%, 4/1/21 A/A/A+ 15,000,000 11,951,159
</TABLE>
5 Oppenheimer New York Tax-Exempt Fund
<PAGE> 6
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
==========================================================
==========================================================
=============
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED) New York State Medical Care
Facilities Finance Agency:
Revenue Bonds:
Hospital and Nursing Home Mortgage:
Series B, FHA Insured, 6.20%, 8/15/22 NR/AAA $11,470,000 $10,873,581
Series C, FHA Insured, 6.375%, 8/15/29 NR/AAA 10,000,000 9,620,979
Long-Term Health Care,
Series C, CGIC Insured, 6.40%, 11/1/14 Aaa/AAA 3,000,000 3,006,168
Mental Health Services Facilities
Improvement Project:
Prerefunded, Series A, 8.875%, 8/15/07 Aaa/AAA 6,200,000 6,993,860
Series A, 8.875%, 8/15/07 Baa1/BBB+ 6,800,000 7,526,967
Series A, FGIC Insured, 6.375%, 8/15/17 Aaa/AAA/AAA 5,000,000 5,000,000
Series A, 7.70%, 2/15/18 Baa1/BBB+ 765,000 824,447
Prerefunded, Series B, 7.875%, 8/15/20 Aaa/AAA 2,800,000 3,229,346
Series B, 7.875%, 8/15/20 Baa1/BBB+ 2,020,000 2,210,954
St. Francis Hospital Project,
Series 1988A, FGIC Insured, 7.625%, 11/1/21 Aaa/AAA/AAA 2,690,000 2,924,640
Saint Luke's-Roosevelt Hospital Center Mtg.,
Prerefunded, Series B, FHA Insured, 7.45%, 2/15/29 Aaa/AAA 7,500,000 8,429,542
Revenue Refunding Bonds:
Hospital Mtg., Series A,
FHA Insured, 5.25%, 8/15/14 Aa/AAA 16,940,000 14,594,621
Mental Health Services Facilities
Improvement Project:
Series F, 5.375%, 2/15/14 Baa1/BBB+ 6,600,000 5,635,627
Series F, FSA Insured, 5.25%, 2/15/21 Aaa/AAA 4,400,000 3,705,236
---------------------------------------------------------------------------------------------------
New York State Mortgage Agency Revenue Bonds:
Eighth Series C, Verex Pool Insured, 8.40%, 10/1/17 Aa/NR 1,715,000 1,807,568
Ninth Series B, Verex Pool Insured, 8.30%, 10/1/17 Aa/NR 1,760,000 1,822,880
8.334%, 10/1/24(1) NR/NR 9,000,000 5,678,135
Homeowner Mortgage:
Series 1, 7.95%, 10/1/21 Aa/NR 2,270,000 2,343,532
Series GG, 7.60%, 10/1/18 Aa/NR 280,000 287,583
Series UU, FHA Insured, 7.75%, 10/1/23 Aa/NR 2,000,000 2,125,164
---------------------------------------------------------------------------------------------------
New York State Power Authority:
Revenue Bonds, Series Y, 6.50%, 1/1/11 Aa/AA- 2,500,000 2,557,287
Revenue Refunding Bonds, Series V, 8%, 1/1/17 Aa/AA- 5,580,000 6,076,168
---------------------------------------------------------------------------------------------------
New York State Thruway Authority Revenue Bonds,
Service Contract, Series A, 5.75%, 1/1/19 A1/A 10,000,000 8,999,829
---------------------------------------------------------------------------------------------------
New York State Urban Development Corp.,
Correctional Facilities Capital Project:
Revenue Bonds:
Prerefunded, Series G, 7.25%, 1/1/14 Aaa/NR 3,650,000 4,061,483
Prerefunded, Series G, 7%, 1/1/17 Aaa/NR 2,000,000 2,202,696
Revenue Refunding Bonds:
5.50%, 1/1/15 Baa1/BBB/A 10,000,000 8,699,229
5.50%, 1/1/18 Baa1/BBB/A 17,490,000 15,013,853
---------------------------------------------------------------------------------------------------
Onondaga County, New York Resources Recovery
Agency Revenue Bonds, Resources Recovery
Facilities Project, 7%, 5/1/15 Baa/NR/A- 14,500,000 14,451,758
</TABLE>
6 Oppenheimer New York Tax-Exempt Fund
<PAGE> 7
<TABLE>
<CAPTION>
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
==========================================================
==========================================================
=============
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED) Port Authority of New York and New Jersey,
Consolidated Revenue Bonds:
Sixty Series, 8.25%, 4/1/23 A1/AA-/AA- $ 8,775,000 $ 9,096,761
Sixty-Second Series, 8%, 12/1/23 A1/AA-/AA- 1,370,000 1,441,595
Sixty-Third Series, 7.875%, 3/1/24 A1/AA-/AA- 9,000,000 9,502,596
Eighty-Fifth Series, 5.375%, 3/1/28 A1/AA-/AA- 9,000,000 7,555,680
---------------------------------------------------------------------------------------------------
Suffolk County, New York General Obligation
Refunding Bonds, Southwest Sewer District,
Escrowed to Maturity, Prerefunded, Series B,
22.875%, 2/1/95 NR/AAA 2,500,000 2,655,395
---------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority
of New York General Purpose Revenue Bonds:
Series A, 5%, 1/1/12 Aa/A+ 13,130,000 11,237,468
Series A, 5%, 1/1/15 Aa2/A+ 7,500,000 6,286,778
Series B, 0%, 1/1/09 Aa2/A+ 3,925,000 1,605,800
Series B, 0%, 1/1/16 Aa2/A+ 2,540,000 644,266
Series B, 0%, 1/1/17 Aa2/A+ 13,045,000 3,095,343
Series X, 6%, 1/1/14 Aa2/A+ 14,510,000 13,871,065
Series Y, 5.50%, 1/1/17 Aa2/A+ 5,000,000 4,453,135
------------
585,474,039
---------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--21.7% Puerto Rico Commonwealth Aqueduct and Sewer
Authority Revenue Bonds, Escrowed to Maturity,
Prerefunded, 10.25%, 7/1/09 Aaa/AAA 500,000 674,951
---------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth General Obligation
Refunding Bonds:
Series A, 6%, 7/1/14 Baa1/A 12,000,000 11,387,472
5.25%, 7/1/18 Baa1/A 20,000,000 16,823,898
Prerefunded, 7.70%, 7/1/20 NR/AAA 5,000,000 5,712,679
YCNS, FSA Insured, 8.021%, 7/1/20(1) Aaa/AAA 11,500,000 9,974,111
---------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and
Transportation Authority Revenue Bonds:
Prerefunded, Series S, 6.50%, 7/1/22 NR/AAA 13,500,000 14,643,611
Prerefunded, Series T, 6.50%, 7/1/22 NR/AAA 2,790,000 3,026,346
Series W, 7.385%, 7/1/10(1) Baa1/A 9,000,000 7,361,333
---------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Infrastructure
Financing Authority Special Tax Revenue Bonds,
Series A, 7.75%, 7/1/08 Baa1/BBB+ 6,000,000 6,525,828
---------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority:
Revenue Bonds:
Prerefunded, Series O, 7.125%, 7/1/14 Baa1/AAA 6,145,000 6,759,554
Series O, 7.125%, 7/1/14 Baa1/A- 3,235,000 3,434,288
Series P, 7%, 7/1/21 Baa1/A- 6,000,000 6,213,215
Series T, 6%, 7/1/16 Baa1/A- 7,500,000 7,099,005
Revenue Refunding Bonds:
Series N, 5%, 7/1/12 Baa1/A- 6,545,000 5,519,149
Series U, 6%, 7/1/14 Baa1/A- 8,025,000 7,572,718
---------------------------------------------------------------------------------------------------
Puerto Rico Housing Bank and Finance
Agency Single Family Mtg. Revenue Bonds,
Homeownership--Fourth Portfolio,
Prerefunded, FHA Insured, 8.50%, 12/1/18 Aaa/NR 1,580,000 1,904,532
</TABLE>
7 Oppenheimer New York Tax-Exempt Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
==========================================================
==========================================================
=============
<S> <C> <C> <C>
U.S. POSSESSIONS (CONTINUED) Puerto Rico Housing Finance Corp. Single
Family Mtg. Revenue Bonds, Prerefunded,
GNMA Collateral, 6.85%, 10/15/24 Aaa/AAA $ 3,250,000 $ 3,328,958
---------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Medical and Environmental
Pollution Control Revenue Bonds:
American Airlines, Inc. Project,
Series A, 8.75%, 12/1/25 Baa1/A+ 850,000 894,734
Warner Lambert Co. Project, 7.60%, 5/1/14 AA/NR/AAA 3,000,000 3,335,067
---------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority
Guaranteed Public Education and Health Facilities:
Revenue Bonds:
Prerefunded, Series J, 7.25%, 7/1/17 Aaa/AAA 6,000,000 6,561,065
Prerefunded, Series L, 6.875%, 7/1/21 Aaa/A 6,000,000 6,647,825
Revenue Refunding Bonds:
Series L, 5.75%, 7/1/16 Baa1/A 12,100,000 11,089,118
Series M, 5.75%, 7/1/15 Baa1/A 11,500,000 10,523,581
---------------------------------------------------------------------------------------------------
Puerto Rico Telephone Authority Revenue Bonds,
MBIA Insured, 7.039%, 1/16/15(1) Aaa/AAA 11,000,000 8,577,271
------------
165,590,309
------------
Total Municipal Bonds and Notes (Cost $779,391,028) 751,064,348
==========================================================
==========================================================
=============
SHORT-TERM TAX-EXEMPT OBLIGATIONS--0.2%
---------------------------------------------------------------------------------------------------------------------------------
City of New York Cultural Resources Revenue
Refunding Bonds, American Museum of Natural
History, Series A, MBIA Insured, 3.35%(2)
(Cost $1,200,000) Aaa/AAA 1,200,000 1,200,000
---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $780,591,028) 98.8%
752,264,348
---------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.2 8,911,968
----------- ------------
NET ASSETS 100.0% $761,176,316
===========
============
</TABLE>
(1) Represents the current interest rate for a
variable rate bond. Variable rate bonds known as
"inverse floaters" pay interest at a rate that
varies inversely with short-term interest rates.
As interest rates rise, inverse floaters produce
less current income. Their price may be more
volatile than the price of a comparable fixed-rate
security.
(2) Floating or variable rate obligation
maturing in more than one year. The interest rate,
which is based on specific, or an index of, market
interest rates, is subject to change periodically
and is the effective rate on September 30, 1994.
A demand feature allows the recovery of principal
at any time, or at specified intervals not
exceeding one year, on up to 30 days notice.
See accompanying Notes to Financial Statements.
8 Oppenheimer New York Tax-Exempt Fund
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
<TABLE>
<S> <C> <C>
==========================================================
==========================================================
============
ASSETS Investments, at value (cost $780,591,028)--see accompanying statement $752,264,348
--------------------------------------------------------------------------------------------------
Cash 782,054
--------------------------------------------------------------------------------------------------
Receivables:
Interest 13,783,056
Shares of beneficial interest sold 1,123,453
--------------------------------------------------------------------------------------------------
Other 22,259
------------
Total assets 767,975,170
==========================================================
==========================================================
============
LIABILITIES Payables and other liabilities:
Shares of beneficial interest redeemed 3,431,982
Dividends 2,646,422
Distribution and service plan fees--Note 4 487,162
Other 233,288
------------
Total liabilities 6,798,854
==========================================================
==========================================================
============
NET ASSETS $761,176,316
============
==========================================================
==========================================================
============
COMPOSITION OF Paid-in capital $786,272,600
NET ASSETS --------------------------------------------------------------------------------------------------
Undistributed net investment income 1,685,934
--------------------------------------------------------------------------------------------------
Accumulated net realized gain from investment transactions 1,544,462
--------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Note 3 (28,326,680)
------------
Net assets $761,176,316
============
==========================================================
==========================================================
============
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $687,233,355 and 57,643,750 shares of beneficial interest outstanding) $11.92
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $12.51
--------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $73,942,961 and 6,199,583 shares of beneficial interest outstanding) $11.93
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer New York Tax-Exempt Fund
<PAGE> 10
STATEMENT OF OPERATIONS For the Year Ended September 30, 1994
<TABLE>
<S> <C> <C>
==========================================================
==========================================================
============
INVESTMENT INCOME Interest $ 52,336,632
==========================================================
==========================================================
============
EXPENSES Management fees--Note 4 4,074,417
--------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 1,780,777
Class B--Note 4 612,760
--------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 487,979
--------------------------------------------------------------------------------------------------
Shareholder reports 133,381
--------------------------------------------------------------------------------------------------
Trustees' fees and expenses 81,122
--------------------------------------------------------------------------------------------------
Custodian fees and expenses 56,356
--------------------------------------------------------------------------------------------------
Legal and auditing fees 48,479
--------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 13,281
Class B 14,549
--------------------------------------------------------------------------------------------------
Other 86,167
------------
Total expenses 7,389,268
==========================================================
==========================================================
============
NET INVESTMENT INCOME 44,947,364
==========================================================
==========================================================
============
REALIZED AND UNREALIZED Net realized gain on investments 1,578,448
GAIN (LOSS) ON INVESTMENTS --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (92,939,878)
-----------
Net realized and unrealized loss on investments (91,361,430)
==========================================================
==========================================================
============
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(46,414,066)
============
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer New York Tax-Exempt Fund
<PAGE> 11
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1994 1993
==========================================================
==========================================================
============
<S> <C> <C> <C>
OPERATIONS Net investment income $ 44,947,364 $ 37,419,311
--------------------------------------------------------------------------------------------------
Net realized gain on investments 1,578,448 10,840,246
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (92,939,878) 42,115,874
------------ ------------
Net increase (decrease) in net assets resulting from operations (46,414,066) 90,375,431
==========================================================
==========================================================
============
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.7155 and $.75 per share, respectively) (41,273,404) (37,617,756)
SHAREHOLDERS Class B ($.6033 and $.37 per share, respectively) (2,926,006) (558,098)
--------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A ($.0081 per share) (464,748) --
Class B ($.0201 per share) (32,947) --
--------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments:
Class A ($.0260 and $.078 per share, respectively) (1,480,818) (3,645,107)
Class B ($.0260 per share) (97,630) --
--------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments:
Class A ($.1144 per share) (6,524,436) --
Class B ($.1144 per share) (430,153) --
==========================================================
==========================================================
============
BENEFICIAL INTEREST Net increase in net assets resulting from Class A
TRANSACTIONS beneficial interest transactions--Note 2 22,278,985 179,235,850
--------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B
beneficial interest transactions--Note 2 40,649,454 39,841,699
==========================================================
==========================================================
============
NET ASSETS Total increase (decrease) (36,715,769) 267,632,019
--------------------------------------------------------------------------------------------------
Beginning of year 797,892,085 530,260,066
----------- -----------
End of year (including undistributed net investment
income of $1,685,934 and $1,237,047, respectively) $761,176,316 $797,892,085
============
============
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer New York Tax-Exempt Fund
<PAGE> 12
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
YEAR ENDED
SEPTEMBER 30,
1994 1993 1992 1991 1990 1989 1988
==========================================================
==========================================================
============
<S> <C> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $13.50 $12.59 $12.21 $11.61 $11.87 $11.91 $11.60
--------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .74 .73 .79 .81 .83 .84(2) .88(2)
Net realized and unrealized
gain (loss) on investments (1.46) 1.01 .47 .64 (.25) .01 .45
-------- --------- -------- ------- -------- ------- ------
Total income (loss) from
investment operations (.72) 1.74 1.26 1.45 .58 .85 1.33
--------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.71) (.75) (.75) (.81) (.83) (.83) (.94)
Dividends in excess
of net investment income (.01) -- -- -- -- -- --
Distributions from net
realized gain on investments (.03) (.08) (.13) (.04) (.01) (.06) (.08)
Distributions in excess of net
realized gain on investments (.11) -- -- -- -- -- --
-------- --------- -------- ------- -------- ------- ------
Total dividends and
distributions to shareholders (.86) (.83) (.88) (.85) (.84) (.89) (1.02)
--------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.92 $13.50 $12.59 $12.21 $11.61 $11.87 $11.91
======== ========= ======== =======
======== ======= ======
==========================================================
==========================================================
============
Total Return, at Net Asset Value(3) (5.55)% 14.33% 10.72% 12.93% 4.95% 6.91%
11.48%
==========================================================
==========================================================
============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $687,233 $756,934 $530,260 $349,480 $250,012 $197,321 $116,931
--------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $738,747 $652,327 $436,876 $292,134 $227,504 $156,572 $95,996
--------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 57,644 56,087 42,119 28,617 21,533 16,618 9,817
--------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.68% 5.66% 6.33% 6.81% 6.97% 7.07% 7.48%
Expenses .86% .91% .96% .96% .99% .98%(2) .90%(2)
--------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 9.4% 39.1% 30.5% 8.9% 13.3% 11.8% 11.7%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------------- -----------------
TEN MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1987 1986 1985 1994 1993(1)
==========================================================
========================================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.51 $10.98 $10.32 $13.50 $13.07
------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .90(2) .86 .76 .64 .36
Net realized and unrealized
gain (loss) on investments (.79) 1.62 .67 (1.45) .44
-------- -------- ------- -------- -------
Total income (loss) from
investment operations .11 2.48 1.43 (.81) .80
------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.88) (.86) (.77) (.60) (.37)
Dividends in excess
of net investment income -- -- -- (.02) --
Distributions from net
realized gain on investments (.14) (.09) -- (.03) --
Distributions in excess of net
realized gain on investments -- -- -- (.11) --
------- -------- -------- ------- --------
Total dividends and
distributions to shareholders (1.02) (.95) (.77) (.76) (.37)
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.60 $12.51 $10.98 $11.93 $13.50
======= ======== ======== =======
========
==========================================================
========================================================
Total Return, at Net Asset Value(3) .29% 22.73% 13.37% (6.22)% 6.56%
------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $79,479 $50,810 $28,166 $73,943 $40,958
------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $65,102 $42,907 $15,240 $61,008 $20,454
------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 6,851 4,061 2,565 6,200 3,033
------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 7.33% 7.10% 8.05%(4) 4.88% 4.45%(4)
Expenses .67%(2) .86% 1.00%(4) 1.65% 1.73%(4)
------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 22.9% 29.7% 126.3% 9.4% 39.1%
</TABLE>
(1) For the period from March 1, 1993 (inception of offering) to September 30,
1993.
(2) Net investment income would have been $.83, $.87 and $.88 absent the
voluntary assumption of expenses, resulting in an expense ratio of 1.00%,
1.02% and .85% for 1989, 1988 and 1987, respectively.
(3) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
(4) Annualized.
(5) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1994 were $145,939,745 and $73,796,519,
respectively.
See accompanying Notes to Financial Statements.
12 Oppenheimer New York Tax-Exempt Fund
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
1. SIGNIFICANT Oppenheimer New York Tax-Exempt Fund (the Fund) is registered under the Investment Company
Act of
ACCOUNTING POLICIES 1940, as amended, as a diversified, open-end management investment company. The Fund's
investment
advisor is Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class
B shares. Class A shares are sold with a front-end sales charge. Class B shares may be subject to a
contingent deferred sales charge. Both classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own distribution and/or service plan, expenses
directly attributable to a particular class and exclusive voting rights with respect to matters
affecting a single class. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
------------------------------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at 4:00 p.m. (New York time) on each
trading
day. Long-term debt securities are valued by a portfolio pricing service approved by the Board of
Trustees. Long-term debt securities which cannot be valued by the approved portfolio pricing service
are valued by averaging the mean between the bid and asked prices obtained from two active market
makers in such securities. Short-term debt securities having a remaining maturity of 60 days or less
are valued at cost (or last determined market value) adjusted for amortization to maturity of any
premium or discount. Securities for which market quotes are not readily available are valued under
procedures established by the Board of Trustees to determine fair value in good faith.
------------------------------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES. Income, expenses (other than
those attributable
to a specific class) and gains and losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating expenses directly attributable
to a specific class are charged against the operations of that class.
------------------------------------------------------------------------------------------------------
FEDERAL INCOME TAXES. The Fund intends to continue to comply with provisions of the Internal
Revenue
Code applicable to regulated investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income tax provision is required.
------------------------------------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan for the Fund's
independent trustees. Benefits are based on years of service and fees paid to each trustee during the
years of service. During the year ended September 30, 1994, a provision of $23,148 was made for the
Fund's projected benefit obligations, resulting in an accumulated liability of $127,766. No payments
have been made under the plan.
------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately for Class
A and
Class B shares from net investment income each day the New York Stock Exchange is open for business
and pay such dividends monthly. Distributions from net realized gains on investments, if any, will be
declared at least once each year.
------------------------------------------------------------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective October 1,
1993, the Fund adopted
Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the Fund
changed the classification of distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with income tax regulations.
Accordingly, subsequent to September 30, 1993, amounts have been reclassified to reflect a decrease
in
paid-in capital of $2,595,004, an increase in undistributed net investment income of $287,909, and a
decrease in undistributed capital loss on investments of $2,307,095. During the year ended September
30, 1994, in accordance with Statement of Position 93-2, undistributed net investment income was
decreased by $89,281 and undistributed capital gain was increased by $89,281.
------------------------------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are purchased or sold
(trade date). Original issue discount on securities purchased is amortized over the life of the
respective securities, in accordance with federal income tax requirements. Realized gains and
losses on investments and unrealized appreciation and depreciation are determined on an identified
cost basis, which is the same basis used for federal income tax purposes. For bonds acquired after
April 30, 1993, accrued market discount is recognized at maturity or disposition as taxable ordinary
income. Taxable ordinary income is realized to the extent of the lesser of gain or accrued market
discount.
</TABLE>
13 Oppenheimer New York Tax-Exempt Fund
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<S> <C>
==========================================================
==========================================================
================
2. SHARES OF The Fund has authorized an unlimited number of no par value shares of beneficial interest of each
BENEFICIAL INTEREST class. Transactions in shares of beneficial interest were as follows:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1994 YEAR ENDED SEPTEMBER
30, 1993(1)
----------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 8,954,607 $115,070,127 18,532,060 $238,699,747
Dividends and distributions reinvested 2,804,397 35,919,371 2,235,515 28,846,483
Redeemed (10,201,903) (128,710,513) (6,800,016) (88,310,380)
----------- ------------ ---------- ------------
Net increase 1,557,101 $ 22,278,985 13,967,559 $179,235,850
-----------------------------------------------------------------------------------------------------
Class B:
Sold 3,489,946 $ 44,671,139 3,044,196 $ 39,986,285
Dividends and distributions reinvested 183,542 2,334,544 22,045 292,115
Redeemed (507,286) (6,356,229) (32,860) (436,701)
----------- ------------ ---------- ------------
Net increase 3,166,202 $ 40,649,454 3,033,381 $ 39,841,699
=========== ============
========== ============
</TABLE>
(1) For the year ended September 30, 1993 for
Class A shares and for the period from March 1,
1993 (inception of offering) to September 30,
1993 for Class B shares.
<TABLE>
<S> <C>
==========================================================
==========================================================
================
3. UNREALIZED GAINS AND At September 30, 1994, net unrealized depreciation on investments of $28,326,680 was
composed of gross
LOSSES ON INVESTMENTS appreciation of $18,530,958, and gross depreciation of $46,857,638.
==========================================================
==========================================================
================
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance with the investment advisory
agreement with the
AND OTHER TRANSACTIONS Fund which provides for an annual fee of .60% on the first $200 million of net assets,
.55% on the
WITH AFFILIATES next $100 million, .50% on the next $200 million, .45% on the next $250 million, .40% on
the next
$250 million and .35% on net assets in excess of $1 billion.
For the year ended September 30, 1994, commissions (sales charges paid by investors) on
sales of Class A shares totaled $2,933,373, of which $551,881 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated
broker/dealer. During the year ended September 30, 1994, OFDI received contingent deferred sales
charges of $149,477 upon redemption of Class B shares, as reimbursement for sales commissions
advanced by OFDI at the time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund, and for other registered investment companies. OSS's total
costs of providing such services are allocated ratably to these companies.
Under separate approved plans, each class may expend up to .25% of its net assets
annually to reimburse OFDI for costs incurred in connection with the personal service and
maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers,
banks and other financial institutions. In addition, Class B shares are subject to an asset-based
sales charge of .75% of net assets annually, to reimburse OFDI for sales commissions paid from its
own resources at the time of sale and associated financing costs. In the event of termination or
discontinuance of the Class B plan, the Board of Trustees may allow the Fund to continue payment of
the asset-based sales charge to OFDI for distribution expenses incurred on Class B shares sold prior
to termination or discontinuance of the plan. During the year ended September 30, 1994, OFDI paid
$26,802 and $902, respectively to an affiliated broker/dealer as reimbursement for Class A and
Class B personal service and maintenance expenses and retained $582,434 as reimbursement for Class
B
sales commissions and service fee advances, as well as financing costs.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Statement of Investments March 31, 1995 (Unaudited)
----------------------------------------------------------------------------------------------------------------
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
==========================================================
==========================================================
================
Municipal Bonds and Notes--98.8%
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York--78.0% City of New York General Obligation Bonds:
Inverse Floater, 6.395%, 8/1/08(1) Baa1/A- $ 9,250,000 $ 7,839,032
Inverse Floater, 7.194%, 8/1/13(1) Baa1/A- 5,000,000 4,368,629
Inverse Floater, 7.195%, 8/1/14(1) Baa1/A- 8,150,000 7,102,871
Prerefunded, Series F, 8.25%, 11/15/17 Aaa/A- 7,820,000 9,341,294
Series A, 7.75%, 8/15/16 Baa1/A- 2,500,000 2,693,730
Series B, 8.25%, 6/1/07 Baa1/A- 1,750,000 1,990,266
Series B, FSA Insured, Inverse Floater,
5.892%, 10/1/07(1) Aaa/AAA 7,500,000 7,441,522
Series F, 8.25%, 11/15/17 Baa1/A- 680,000 752,134
----------------------------------------------------------------------------------------------------------------
City of New York Health & Hospital Corp. Revenue
Refunding Bonds, Series A, AMBAC Insured,
Inverse Floater, 6.94%, 2/15/23(1) Aaa/AAA/AAA 8,300,000 7,140,074
----------------------------------------------------------------------------------------------------------------
City of New York Housing Development Corp
Multifamily Housing Revenue Bonds:
1985 Fst. Series, FHA Insured, 9.875%, 10/1/17 Aa/AA 500,000 518,943
Glenn Garden Project, 6.50%, 1/15/18 NR/NR 3,022,809 2,848,224
Keith Plaza Project, 6.50%, 2/15/18 NR/NR 1,996,592 1,876,849
----------------------------------------------------------------------------------------------------------------
City of New York Industrial Development Agency
Civil Facility Revenue Bonds, USTA National Tennis
Center Project, FSA Insured, 6.375%, 11/15/14 Aaa/AAA 1,500,000 1,558,572
----------------------------------------------------------------------------------------------------------------
City of New York Industrial Development Agency
Revenue Bonds, Terminal One Group Assn.:
6%, 1/1/15 A/A/A- 5,000,000 4,842,225
6.125%, 1/1/24 A/A/A- 3,000,000 2,897,478
----------------------------------------------------------------------------------------------------------------
City of New York Municipal Water Finance
Authority Water & Sewer System Revenue Bonds:
Prerefunded, Series A, MBIA Insured, 7.25%, 6/15/15 Aaa/AAA 7,000,000 7,825,258
Prerefunded, Series B, 6.375%, 6/15/22 A/A-/A 2,650,000 2,887,400
Prerefunded, Series C, 7.75%, 6/15/20 Aaa/A- 17,250,000 19,982,794
Series B, 6.375%, 6/15/22 A/A-/A 6,100,000 6,226,916
Series B, AMBAC Insured, 5.375%, 6/15/19 Aaa/AAA/AAA 5,000,000
4,582,169
----------------------------------------------------------------------------------------------------------------
Dormitory Authority of the State of New York:
Revenue Bonds:
City University System, Series A, 5.75%, 7/1/18 Baa1/BBB 2,500,000 2,335,952
City University System, Series C, 6%, 7/1/16 Baa1/BBB 9,000,000 8,674,893
City University System, Series V, 5.60%, 7/1/10 Baa1/BBB 10,880,000 10,230,670
Department of Health, Prerefunded, 7.70%, 7/1/20 Aaa/BBB 2,750,000 3,143,626
Judicial Facilities Lease, Escrowed to Maturity,
MBIA-IBC Insured, 7.375%, 7/1/16 Aaa/AAA 2,300,000 2,615,123
Pooled Capital Program, Prerefunded, FGIC
Insured, 7.80%, 12/1/05 Aaa/AAA/AAA 8,145,000 8,963,425
Rockefeller University System, MBIA Insured,
7.375%, 7/1/14 Aaa/AAA 4,000,000 4,305,035
Revenue Refunding Bonds:
City University System, Second Series A, 5.75%, 7/1/18 Baa1/BBB 6,750,000 6,330,521
City University System, Series B, 6%, 7/1/14 Baa1/BBB 10,875,000 10,559,951
Fordham University System, FGIC Insured, 5.75%, 7/1/15 Aaa/AAA/AAA 9,100,000
8,886,467
New York University, Series A, MBIA Insured, 5%, 7/1/09 Aaa/AAA 9,000,000
8,266,491
</TABLE>
6 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York State University Educational Facilities System:
(continued) Prerefunded, Series B, 7.25%, 5/15/15 Aaa/BBB+ $ 15,230,000 $ 17,063,189
Prerefunded, Series B, 7.25%, 5/15/15 NR/AAA 1,735,000 1,943,837
Series A, 5.25%, 5/15/15 Baa1/BBB+ 23,090,000 20,344,550
Series A, 5.25%, 5/15/21 Baa1/BBB+ 5,010,000 4,311,285
Series B, 7%, 5/15/16 Baa1/BBB+ 9,020,000 9,397,974
----------------------------------------------------------------------------------------------------------------
Grand Central District Management Assn., Inc.,
New York Business District Capital Improvement:
Revenue Bonds, Prerefunded, 6.50%, 1/1/22 Aaa/AAA 2,000,000 2,197,338
Revenue Refunding Bonds, 5.125%, 1/1/14 A1/A 1,000,000 894,401
Refunding Bonds, 5.25%, 1/1/22 A1/A 2,500,000 2,200,342
----------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority of New York
Revenue Bonds, Commuter Facilities, Series A,
MBIA Insured, 6.125%, 7/1/12 Aaa/AAA 4,090,000 4,159,472
----------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority of New York
Revenue Bonds, Transportation Facilities Service
Contracts, 6%, 7/1/21 Baa1/BBB 12,950,000 12,341,311
----------------------------------------------------------------------------------------------------------------
New York State Energy Research and Development
Authority Electric Facilities Revenue Bonds:
Long Island Lighting Co., Series A, 7.15%, 12/1/20 Ba1/BB+ 7,500,000 7,112,197
Long Island Lighting Co., Series C, 6.90%, 8/1/22 Ba1/BB+ 9,200,000 8,451,781
Brooklyn Union Gas Co. Project, Series B, Inverse
Floater, 9.271%, 7/1/26(1) A1/A/A 6,000,000 6,330,294
Brooklyn Union Gas Co. Project, Series D, MBIA
Insured, Inverse Floater, 7.126%, 7/8/26(1) Aaa/AAA/A 2,000,000 1,616,870
----------------------------------------------------------------------------------------------------------------
New York State Environmental Facilities Corp
Pollution Control Revenue Bonds, State Water
Revolving Fund--New York City Municipal Water,
5.875%, 6/15/14 Aa/A-/AA 14,050,000 13,826,196
----------------------------------------------------------------------------------------------------------------
New York State Housing Finance Agency:
Revenue Bonds, Service Contracts, Series D,
5.375%, 3/15/23 Baa1/BBB 9,000,000 7,379,694
Revenue Refunding Bonds, New York City Health
Facility, Series A, 7.90%, 11/1/99 Baa/BBB+ 3,500,000 3,825,643
Revenue Refunding Bonds, New York City Health
Facility, Series A, 8%, 11/1/08 Baa/BBB+ 3,240,000 3,596,458
Revenue Refunding Bonds, State University
Construction, Escrowed to Maturity, Prerefunded,
Series A, 7.90%, 11/1/06 Aaa/AAA 1,750,000 2,058,364
----------------------------------------------------------------------------------------------------------------
New York State Local Government Assistance Corp
Revenue Bonds:
Prerefunded, Series C, 7%, 4/1/21(2) Aaa/AAA/AAA 9,455,000 10,586,403
Prerefunded, Series D, 6.75%, 4/1/21 Aaa/AAA/AAA 4,700,000 5,244,358
Series A, 5.375%, 4/1/14 A/A/A+ 5,500,000 5,069,366
Series C, 5.50%, 4/1/22 A/A/A+ 16,175,000 14,818,401
----------------------------------------------------------------------------------------------------------------
New York State Local Government Assistance Corp
Revenue Refunding Bonds, Series B, 5.50%, 4/1/21 A/A/A+ 13,000,000 11,894,778
</TABLE>
7 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
----------------------------------------------------------------------------------------------------------------
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York New York State Local Government Assistance Corp
(continued) Revenue Refunding Bonds, Series C, 5%, 4/1/21 A/A/A+ $ 15,000,000 $
12,707,325
----------------------------------------------------------------------------------------------------------------
New York State Medical Care Facilities Finance Agency:
Revenue Bonds:
Long-Term Health Care, Series C, CGIC Insured,
6.40%, 11/1/14 Aaa/AAA 3,000,000 3,049,317
Mental Health Services Facilities Improvement Project:
Prerefunded, Series A, 8.875%, 8/15/07 Aaa/AAA 3,000,000 3,337,656
Prerefunded, Series B, 7.875%, 8/15/20 Aaa/AAA 4,235,000 4,885,572
Series A, 7.70%, 2/15/18 Baa1/BBB+ 765,000 813,136
Series A, 8.875%, 8/15/07 Baa1/BBB+ 6,800,000 7,463,517
Series A, FGIC Insured, 6.375%, 8/15/17 Aaa/AAA/AAA 5,000,000 5,080,734
Series B, 7.875%, 8/15/20 Baa1/BBB+ 2,020,000 2,239,172
Saint Luke's Hospital Center Mtg., Prerefunded,
Series B, FHA Insured, 7.45%, 2/15/29 Aaa/AAA 7,500,000 8,434,432
St. Francis Hospital Project, Series 1988A, FGIC
Insured, 7.625%, 11/1/21 Aaa/AAA/AAA 2,690,000 2,930,155
Revenue Refunding Bonds:
Hospital Insured Mtg., Series A, FHA Insured,
5.25%, 8/15/14 Aa/AAA 16,940,000 15,297,428
Mental Health Services Facilities Improvement
Project, Series F, 5.375%, 2/15/14 Baa1/BBB+ 6,600,000 5,821,306
Mental Health Services Facilities Improvement
Project, Series F, FSA Insured, 5.25%, 2/15/21 Aaa/AAA 4,400,000 3,884,940
----------------------------------------------------------------------------------------------------------------
New York State Mtg. Agency Revenue Bonds:
Eighth Series C, Verex Pool Insured, 8.40%, 10/1/17 Aa/NR 1,700,000 1,788,743
Homeowner Mtg.:
Series 1, 7.95%, 10/1/21 Aa/NR 2,270,000 2,356,578
Series GG, 7.60%, 10/1/18 Aa/NR 175,000 179,868
Series UU, FHA Insured, 7.75%, 10/1/23 Aa/NR 2,000,000 2,134,800
Inverse Floater, 5.342%, 10/1/24(1) NR/NR 9,000,000 6,131,816
Ninth Series B, Verex Pool Insured, 8.30%, 10/1/17 Aa/NR 1,720,000 1,785,372
----------------------------------------------------------------------------------------------------------------
New York State Power Authority Revenue Bonds,
Series Y, 6.50%, 1/1/11 Aa/AA- 2,500,000 2,602,970
----------------------------------------------------------------------------------------------------------------
New York State Power Authority Revenue Refunding
Bonds, Series V, 8%, 1/1/17 Aa/AA- 5,580,000 6,067,279
----------------------------------------------------------------------------------------------------------------
New York State Thruway Authority Revenue Bonds,
Service Contract, Series A, 5.75%, 1/1/19 A1/A 10,000,000 9,611,290
----------------------------------------------------------------------------------------------------------------
New York State Urban Development Corp.:
Revenue Bonds:
Correctional Facilities Capital Project, Prerefunded,
Series G, 7%, 1/1/17 Aaa/NR 2,000,000 2,206,750
Correctional Facilities Capital Project, Prerefunded,
Series G, 7.25%, 1/1/14 Aaa/NR 3,650,000 4,065,552
Revenue Refunding Bonds:
Correctional Facilities Project, 5.50%, 1/1/15 Baa1/BBB/A 10,000,000 9,018,610
Correctional Facilities Project, 5.50%, 1/1/18 Baa1/BBB/A 17,490,000 15,634,484
</TABLE>
8 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Ratings: Moody's/ Face Market Value
----------------------------------------------------------------------------------------------------------------
S&P's/Fitch's Amount See Note 1
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York Onondaga County, New York Resources Recovery
(continued) Agency Revenue Bonds, Resources Recovery
Facilities Project, 7%, 5/1/15 Baa2/NR/A- $ 15,600,000 $ 15,221,573
----------------------------------------------------------------------------------------------------------------
Port Authority of New York & New Jersey
Consolidated Revenue Bonds:
Sixty Series, 8.25%, 4/1/23 A1/AA-/AA- 8,775,000 8,961,301
Sixty-Second Series, 8%, 12/1/23 A1/AA-/AA- 1,370,000 1,432,515
----------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority of New York
General Purpose Revenue Bonds:
Series A, 5%, 1/1/12 A1/AA-/AA- 9,000,000 9,456,758
Series A, 5%, 1/1/12 Aa/A+ 15,755,000 14,288,885
Series A, 5%, 1/1/15 Aa/A+ 7,500,000 6,693,989
Series B, Zero Coupon, 1/1/09 Aa/A+ 3,925,000 1,766,830
Series B, Zero Coupon, 1/1/16 Aa/A+ 2,540,000 731,502
Series B, Zero Coupon, 1/1/17 Aa/A+ 13,045,000 3,530,667
Series X, 6%, 1/1/14 Aa/A+ 14,510,000 14,556,243
Series Y, 5.50%, 1/1/17 Aa/A+ 15,000,000 14,111,339
------------
585,973,440
------------------------------------------------------------------------------------------------------------------------------------
U.S. Puerto Rico Commonwealth Aqueduct & Sewer
Possessions--20.8% Authority Revenue Bonds, Escrowed to Maturity,
10.25%, 7/1/09 Aaa/AAA 500,000 674,690
----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth General Obligation
Refunding Bonds:
5.25%, 7/1/18 Baa1/A 20,000,000 17,741,840
Prerefunded, 7.70%, 7/1/20 NR/AAA 5,000,000 5,715,685
Series A, 6%, 7/1/14 Baa1/A 12,000,000 11,810,434
YCNS, FSA Insured, Inverse Floater, 7.432%, 7/1/20(1) Aaa/AAA 11,500,000
10,661,603
----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Bonds:
Prerefunded, Series S, 6.50%, 7/1/22 NR/AAA 13,500,000 14,850,418
Prerefunded, Series T, 6.50%, 7/1/22 NR/AAA 2,790,000 3,069,086
Series W, Inverse Floater, 6.406%, 7/1/10(1) Baa1/A 9,000,000 7,920,665
----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Infrastructure
Financing Authority Special Tax Revenue Bonds,
Series A, 7.75%, 7/1/08 Baa1/BBB+ 6,000,000 6,558,612
----------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority:
Revenue Bonds:
Prerefunded, Series 0, 7.125%, 7/1/14 Baa1/AAA 6,145,000 6,759,457
Series T, 6%, 7/1/16 Baa1/A- 7,500,000 7,306,042
Revenue Refunding Bonds:
Series N, 5%, 7/1/12 Baa1/A- 6,545,000 5,738,348
Series U, 6%, 7/1/14 Baa1/A- 7,025,000 6,898,487
----------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Bank & Finance Agency Single
Family Mtg. Revenue Bonds, Homeownership--
Fourth Portfolio, Prerefunded, FHA Insured,
8.50%, 12/1/18 Aaa/NR 1,580,000 1,919,510
----------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Medical & Environmental
Pollution Control Revenue Bonds, American
Airlines, Inc. Project, Series A, 8.75%, 12/1/25 Baa1/BB+ 850,000 886,018
----------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Medical & Environmental
Pollution Control Revenue Bonds, Warner Lambert
Co. Project, 7.60%, 5/1/14 Aaa/NR 3,000,000 3,261,621
</TABLE>
9 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
----------------------------------------------------------------------------------------------------------------
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Possessions Puerto Rico Public Buildings Authority Guaranteed
(continued) Public Education & Health Facilities:
Revenue Bonds, Prerefunded, Series J, 7.25%, 7/1/17 Aaa/AAA $ 6,000,000 $ 6,531,053
Revenue Bonds, Prerefunded, Series L, 6.875%, 7/1/21 Aaa/AAA 5,400,000 6,060,355
Revenue Refunding Bonds, Series M, 5.75%, 7/1/15 Baa1/A 11,500,000 10,893,788
----------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Revenue
Guaranteed Refunding Bonds, Series L, 5.75%, 7/1/16 Baa1/A 12,100,000 11,474,053
----------------------------------------------------------------------------------------------------------------
Puerto Rico Telephone Authority Revenue Bonds,
MBIA Insured, Inverse Floater, 6.51%, 1/16/15(1) Aaa/AAA 11,000,000 9,611,238
------------
156,343,003
------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $746,701,277) 98.8% 742,316,443
------------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.2 9,180,247
------ ------------
Net Assets 100.0% $751,496,690
====== ============
1. Represents the current interest rate for a variable rate bond. Variable rate bonds known as ``inverse
floaters'' pay interest at a rate that varies inversely with short-term interest rates. As interest rates rise,
inverse floaters produce less current income. Their price may be more volatile than the price of a comparable
fixed-rate security. The multiplier for these inverse floaters is 1. Inverse floaters amount to $76,164,614 or
10.1% of the Fund's net assets, at March 31, 1995.
</TABLE>
<TABLE>
<CAPTION>
2. Securities with an aggregate market value of $1,959,408 are held in collateralized accounts to cover initial
margin requirements on open futures sales contracts, as follows:
Type of Contract Number of Contracts Face Amount
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Nts., 6/95 600 $60,000,000
The market value of the open contracts was $62,343,750 at March 31, 1995, with a net unrealized gain of
$1,227,343.
</TABLE>
<TABLE>
<CAPTION>
Distribution of investments by industry, as a percentage of total investments at value, is as follows:
Industry Market Value Percent
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Transportation $135,221,975 18.2%
Education 123,672,603 16.7
General Obligation Bonds 122,418,290 16.4
Utilities 116,210,817 15.6
Lease/Rental 86,570,544 11.7
Special Tax Bonds 72,171,324 9.7
Hospitals 36,851,406 5.0
Pollution Control 23,511,142 3.2
Housing 21,540,703 2.9
Industrial Development 4,147,639 0.6
------------ -----
$742,316,443 100.0%
============ =====
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities March 31, 1995 (Unaudited)
----------------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
================
<S> <C> <C>
Assets Investments, at value (cost $746,701,277)--see accompanying statement $742,316,443
----------------------------------------------------------------------------------------------------------------
Cash 101,953
----------------------------------------------------------------------------------------------------------------
Receivables:
Interest 13,075,610
Shares of beneficial interest sold 1,066,221
----------------------------------------------------------------------------------------------------------------
Other 37,032
------------
Total assets 756,597,259
----------------------------------------------------------------------------------------------------------------
Liabilities Payables and other liabilities:
Dividends 2,581,635
Shares of beneficial interest redeemed 1,850,754
Distribution and service plan fees--Note 5 434,000
Transfer and shareholder servicing agent fees--Note 5 28,711
Trustees' fees 5,384
Other 200,085
------------
Total liabilities 5,100,569
==========================================================
==========================================================
================
Net Assets $751,496,690
============
==========================================================
==========================================================
================
Composition of Paid-in capital $761,699,818
Net Assets ----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 1,195,467
----------------------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment transactions (5,786,418)
----------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Note 3 (5,612,177)
----------------------------------------------------------------------------------------------------------------
Net assets $751,496,690
============
==========================================================
==========================================================
================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on
net assets of $668,466,673 and 54,841,749 shares of beneficial interest outstanding) $ 12.19
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $ 12.80
----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $83,030,017 and 6,808,905 shares of beneficial interest outstanding) $ 12.19
</TABLE>
See accompanying Notes to Financial Statements
11 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended March 31, 1995 (Unaudited)
----------------------------------------------------------------------------------------------------------------
==========================================================
==========================================================
================
<S> <C> <C>
Investment Income Interest $24,891,143
==========================================================
==========================================================
================
Expenses Management fees--Note 5 1,872,377
----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 5 744,433
Class B--Note 5 375,961
----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 298,722
----------------------------------------------------------------------------------------------------------------
Shareholder reports 81,829
----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 40,853
----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 35,359
----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 22,638
----------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 5,777
Class B 2,719
----------------------------------------------------------------------------------------------------------------
Other 39,203
-----------
Total expenses 3,519,871
==========================================================
==========================================================
================
Net Investment Income 21,371,272
==========================================================
==========================================================
================
Realized and Net realized loss on investments (7,330,880)
Unrealized ----------------------------------------------------------------------------------------------------------------
Gain (Loss) Net change in unrealized appreciation or depreciation on investments 22,714,503
on Investments -----------
Net realized and unrealized gain on investments 15,383,623
==========================================================
==========================================================
================
Net Increase in Net Assets Resulting From Operations $ 36,754,895
============
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------
Six Months Ended
March 31, 1995 Year Ended
(Unaudited) Sept. 30, 1994
==========================================================
==========================================================
================
<S> <C> <C>
Operations Net investment income $ 21,371,272 $ 44,947,364
----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (7,330,880) 1,578,448
----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 22,714,503 (92,939,878)
------------- -------------
Net increase (decrease) in net assets resulting from operations 36,754,895 (46,414,066)
==========================================================
==========================================================
================
Dividends and Dividends from net investment income:
Distributions to Class A ($.3576 and $.7155 per share, respectively) (19,849,704) (41,273,404)
Shareholders Class B ($.3135 and $.6033 per share, respectively) (2,012,035) (2,926,006)
----------------------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A ($.0081 per share) -- (464,748)
Class B ($.0201 per share) -- (32,947)
----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments:
Class A ($.026 per share) -- (1,480,818)
Class B ($.026 per share) -- (97,630)
----------------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments:
Class A ($.1144 per share) -- (6,524,436)
Class B ($.1144 per share) -- (430,153)
==========================================================
==========================================================
================
Beneficial Net increase (decrease) in net assets resulting from
Interest Class A beneficial interest transactions--Note 2 (31,840,644) 22,278,985
Transactions ----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
Class B beneficial interest transactions--Note 2 7,267,862 40,649,454
==========================================================
==========================================================
================
Net Assets Total decrease (9,679,626) (36,715,769)
----------------------------------------------------------------------------------------------------------------
Beginning of period 761,176,316 797,892,085
------------ ------------
End of period (including undistributed net investment income
of $1,195,467 and $1,685,934, respectively) $ 751,496,690 $ 761,176,316
=============
=============
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer New York Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Financial Highlights
----------------------------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------------------- --------------------------------
Six Months Six Months
Ended Ended Year Ended
March 31, 1995 Year Ended September 30, March 31, 1995 Sept. 30,
(Unaudited) 1994 1993 1992 1991 1990 (Unaudited) 1994 1993(1)
==========================================================
==========================================================
================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
Per Share Operating Data:
Net asset value, beginning of period $ 11.92 $ 13.50 $ 12.59 $ 12.21 $ 11.61 $ 11.87 $ 11.93 $ 13.50 $ 13.07
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .36 .74 .73 .79 .81 .83 .31 .64 .36
Net realized and unrealized gain
(loss) on investments .27 (1.46) 1.01 .47 .64 (.25) .27 (1.45) .44
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations .63 (.72) 1.74 1.26 1.45 .58 .58 (.81) .80
------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.36) (.71) (.75) (.75) (.81) (.83) (.32) (.60) (.37)
Dividends in excess of net
investment income -- (.01) -- -- -- -- -- (.02) --
Distributions from net realized
gain on investments -- (.03) (.08) (.13) (.04) (.01) -- (.03) --
Distributions in excess of net
realized gain on investments -- (.11) -- -- -- -- -- (.11) --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.36) (.86) (.83) (.88) (.85) (.84) (.32) (.76) (.37)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.19 $ 11.92 $ 13.50 $ 12.59 $ 12.21 $ 11.61 $ 12.19 $ 11.93 $ 13.50
====== ====== ====== ====== ====== ======
====== ====== ======
==========================================================
==========================================================
================
Total Return, at Net Asset Value(2) 5.44% (5.55)% 14.33% 10.72% 12.93% 4.95% 4.95% (6.22)%
6.56%
==========================================================
==========================================================
================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $668,467 $687,233 $756,934 $530,260 $349,480 $250,012 $83,030 $73,943
$40,958
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $648,096 $738,747 $652,327 $436,876 $292,134 $227,504 $75,172 $61,008
$20,454
------------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 54,842 57,644 56,087 42,119 28,617 21,533 6,809 6,200 3,033
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 6.00%(3) 5.68% 5.66% 6.33% 6.81% 6.97% 5.21%(3) 4.88%
4.45%(3)
Expenses .90%(3) .86% .91% .96% .96% .99% 1.67%(3) 1.65% 1.73%(3)
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 6.3% 9.4% 39.1% 30.5% 8.9% 13.3% 6.3% 9.4% 39.1%
1. For the period from March 1, 1993 (inception of offering) to September 30, 1993.
2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with
all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the
market value of portfolio securities owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment
securities (excluding short-term securities) for the six months ended March 31, 1995 were $45,588,316 and
$72,870,419, respectively. See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
APPENDIX A
Descriptions of Ratings Categories
Municipal Bonds
- Moody's Investor Services, Inc. The ratings of Moody's Investors
Service, Inc. ("Moody's") for Municipal Bonds are Aaa, Aa, A, Baa, Ba,
B, Caa, Ca and C. Municipal Bonds rated "Aaa" are judged to be of the
"best quality." The rating of Aa is assigned to bonds which are of "high
quality by all standards," but as to which margins of protection or other
elements make long-term risks appear somewhat larger than "Aaa" rated
Municipal Bonds. The "Aaa" and "Aa" rated bonds comprise what are
generally known as "high grade bonds." Municipal Bonds which are rated
"A" by Moody's possess many favorable investment attributes and are
considered "upper medium grade obligations." Factors giving security to
principal and interest of A rated bonds are considered adequate, but
elements may be present which suggest a susceptibility to impairment at
some time in the future. Municipal Bonds rated "Baa" are considered
"medium grade" obligations. They are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well. Bonds which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be very
moderate and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this
class. Bonds which are rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small. Bonds which are rated "Caa" are of poor standing. Such
issues may be in default or there may be present elements of danger with
respect to principal or interest. Bonds which are rated "Ca" represent
obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings. Bonds which are rated
"C" are the lowest rated class of bonds, and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing. Those bonds in the Aa, A, Baa, Ba and B groups
which Moody's believes possess the strongest investment attributes are
designated Aa1, A1, Baa1, Ba1 and B1 respectively.
In addition to the alphabetic rating system described above,
Municipal Bonds rated by Moody's which have a demand feature that provides
the holder with the ability to periodically tender ("put") the portion of
the debt covered by the demand feature, may also have a short-term rating
assigned to such demand feature. The short-term rating uses the symbol
VMIG to distinguish characteristics which include payment upon periodic
demand rather than fund or scheduled maturity dates and potential reliance
upon external liquidity, as well as other factors. The highest investment
quality is designated by the VMIG 1 rating and the lowest by VMIG 4.
- Standard & Poor's Corporation. The ratings of Standard & Poor's
Corporation ("S&P") for Municipal Bonds are AAA (Prime), AA (High Grade),
A (Good Grade), BBB (Medium Grade), BB, B, CCC, CC, and C (speculative
grade). Bonds rated in the top four categories (AAA, AA, A, BBB) are
commonly referred to as "investment grade." Municipal Bonds rated AAA are
"obligations of the highest quality." The rating of AA is accorded
issues with investment characteristics "only slightly less marked than
those of the prime quality issues." The rating of A describes "the third
strongest capacity for payment of debt service." Principal and interest
payments on bonds in this category are regarded as safe. It differs from
the two higher ratings because, with respect to general obligations bonds,
there is some weakness, either in the local economic base, in debt burden,
in the balance between revenues and expenditures, or in quality of
management. Under certain adverse circumstances, any one such weakness
might impair the ability of the issuer to meet debt obligations at some
future date. With respect to revenue bonds, debt service coverage is
good, but not exceptional. Stability of the pledged revenues could show
some variations because of increased competition or economic influences
on revenues. Basic security provisions, while satisfactory, are less
stringent. Management performance appears adequate. The BBB rating is
the lowest "investment grade" security rating. The difference between A
and BBB ratings is that the latter shows more than one fundamental
weakness, or one very substantial fundamental weakness, whereas the former
shows only one deficiency among the factors considered. With respect to
revenue bonds, debt coverage is only fair. Stability of the pledged
revenues could show variations, with the revenue flow possibly being
subject to erosion over time. Basic security provisions are no more than
adequate. Management performance could be stronger. Bonds rated "BB"
have less near-term vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which would lead to
inadequate capacity to meet timely interest and principal payments. Bonds
rated "B" have a greater vulnerability to default, but currently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity
or willingness to pay interest and repay principal. Bonds rated "CCC"
have a current identifiable vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. Bonds noted "CC" typically
are debt subordinated to senior debt which is assigned on actual or
implied "CCC" debt rating.
Bonds rated "C" typically are debt subordinated to senior debt which
is assigned an actual or implied "CCC-" debt rating. The "C" rating may
be used to cover a situation where a bankruptcy petition has been filed,
but debt service payments are continued. Bonds rated "D" are in payment
default. The "D" rating category is used when interest payments or
principal payments are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will
be made during the grace period. The "D" rating also will be used upon
the filing of a bankruptcy petition if debt service payments are
jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.
- Fitch. The ratings of Fitch Investors Service, Inc. for Municipal Bonds
are AAA, AA, A, BBB, BB, B, CCC, CC, C, DDD, DD, and D. Municipal Bonds
rated AAA are judged to be of the "highest credit quality." The rating
of AA is assigned to bonds of "very high credit quality." Municipal Bonds
which are rated A by Fitch are considered to be of "high credit quality."
The rating of BBB is assigned to bonds of "satisfactory credit quality."
The A and BBB rated bonds are more vulnerable to adverse changes in
economic conditions than bonds with higher ratings. Bonds rated AAA, AA,
A and BBB are considered to be of investment grade quality. Bonds rated
below BBB are considered to be of speculative quality. The ratings of
"BB" is assigned to bonds considered by Fitch to be "speculative." The
rating of "B" is assigned to bonds considered by Fitch to be "highly
speculative." Bonds rated "CCC" have certain identifiable characteristics
which, if not remedied, may lead to default. Bonds rated "CC" are
minimally protected. Default in payment of interest and/or principal
seems probable over time. Bonds rated "C" are in imminent default in
payment of interest or principal. Bonds rated "DDD", "DD" and "D" are in
default on interest and/or principal payments. DDD represents the highest
potential for recovery on these bonds, and D represents the lowest
potential for recovery.
Municipal Notes
- Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade ("MIG"). Notes bearing the
designation MIG-1 are of the best quality, enjoying strong protection from
established cash flows of funds for their servicing or from established
and broad-based access to the market for financing. Notes bearing the
designation "MIG-2" are of high quality with ample margins of protection,
although not as large as notes rated "MIG." Such short-term notes which
have demand features may also carry a rating using the symbol VMIG as
described above, with the designation MIG-1/VMIG 1 denoting best quality,
with superior liquidity support in addition to those characteristics
attributable to the designation MIG-1.
- S&P's rating for Municipal Notes due in three years or less are SP-
1, SP-2, and SP-3. SP-1 describes issues with a very strong capacity to
pay principal and interest and compares with bonds rated A by S&P; if
modified by a plus sign, it compares with bonds rated AA or AAA by S&P.
SP-2 describes issues with a satisfactory capacity to pay principal and
interest, and compares with bonds rated BBB by S&P. SP-3 describes issues
that have a speculative capacity to pay principal and interest.
- Fitch's rating for Municipal Notes due in three years or less are
F-1+, F-1, F-2, F-3, F-S and D. F-1+ describes notes with an
exceptionally strong credit quality and the strongest degree of assurance
for timely payment. F-1 describes notes with a very strong credit quality
and assurance of timely payment is only slightly less in degree than
issues rated F-1+. F-2 describes notes with a good credit quality and a
satisfactory assurance of timely payment, but the margin of safety is not
as great for issues assigned F-1+ or F-1 ratings. F-3 describes notes
with a fair credit quality and an adequate assurance of timely payment,
but near-term adverse changes could cause such securities to be rated
below investment grade. F-S describes notes with weak credit quality.
Issues rated D are in actual or imminent payment default.
Corporate Debt
The "other debt securities" included in the definition of temporary
investments are corporate (as opposed to municipal) debt obligations. The
Moody's, S&P and Fitch corporate debt ratings shown do not differ
materially from those set forth above for Municipal Bonds.
Commercial Paper
- Moody's The ratings of commercial paper by Moody's are Prime-1,
Prime-2, Prime-3 and Not Prime. Issuers rated Prime-1 have a superior
capacity for repayment of short-term promissory obligations. Issuers
rated Prime-2 have a strong capacity for repayment of short-term
promissory obligations. Issuers rated Prime-3 have an acceptable capacity
for repayment of short-term promissory obligations. Issuers rated Not
Prime do not fall within any of the Prime rating categories.
- S&P The ratings of commercial paper by S&P are A-1, A-2, A-3, B,
C, and D. A-1 indicates that the degree of safety regarding timely
payment is strong. A-2 indicates capacity for timely payment is
satisfactory. However, the relative degree of safety is not as high as
for issues designated A-1. A-3 indicates an adequate capacity for timely
payments. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher
designations. B indicates only speculative capacity for timely payment.
C indicates a doubtful capacity for payment. D is assigned to issues in
default.
- Fitch The ratings of commercial paper by Fitch are similar to its
ratings of Municipal Notes, above.
<PAGE>
APPENDIX B
TAX EQUIVALENT YIELD TABLES
The equivalent yield tables below compare tax-free income with taxable
income under Federal, New York State and New York City income tax rates
effective January 1, 1995. Combined taxable income refers to the net
amount subject to Federal, New York State and New York City income tax
after deductions and exemptions. The tables assume that an investor's
highest tax bracket applies to the change in taxable income resulting from
a switch between taxable and non-taxable investments, that the investor
is not subject to the Alternative Minimum Tax and that New York State and
local income tax payments are fully deductible for Federal income tax
purposes. They do not reflect the phaseout of itemized deductions and
personal exemptions at higher income levels, resulting in higher effective
tax rates and tax equivalent yields.
New York State Residents
Combined Taxable Income
<TABLE>
<CAPTION>
An Oppenheimer New York
Tax-Exempt Fund Yield
Single Return Joint Return of:
Combined 3.5% 4.0% 4.5%
Effective Is Approximately
Not Not Tax Equivalent to a Taxable
Over Over Over Over Bracket Yield of:
<S> <C> <C> <C> <C> <C> <C> <C>
$ 13,000 $ 19,000 19.72% 4.36% 4.98% 5.61%
$ 19,000 $ 25,000 20.57% 4.41% 5.04% 5.67%
$ 13,000 $ 23,350 $ 25,000 $ 39,000 21.45% 4.46% 5.09% 5.73%
$ 23,350 $ 56,550 $ 39,000 $ 94,250 33.47% 5.26% 6.01% 6.76%
$ 56,550 $117,950 $ 94,250 $143,600 36.24% 5.49% 6.27% 7.06%
$117,950 $256,500 $143,600 $256,500 40.86% 5.92% 6.76% 7.61%
$256,500 $256,500 44.19% 6.27% 7.17% 8.06%
New York State Residents
Combined Taxable Income
An Oppenheimer New York
Tax-Exempt Fund Yield
Single Return Joint Return of:
Combined 5.0% 5.5% 6.0%
Effective Is Approximately
Not Not Tax Equivalent to a Taxable
Over Over Over Over Bracket Yield of:
$ 13,000 $ 19,000 19.72% 6.23% 6.85% 7.47%
$ 19,000 $ 25,000 20.57% 6.29% 6.92% 7.55%
$ 13,000 $ 23,350 $ 25,000 $ 39,000 21.45% 6.37% 7.00% 7.64%
$ 23,350 $ 56,550 $ 39,000 $ 94,250 33.47% 7.52% 8.27% 9.02%
$ 56,550 $117,950 $ 94,250 $143,600 36.24% 7.84% 8.63% 9.41%
$117,950 $256,500 $143,600 $256,500 40.86% 8.45% 9.30% 10.15%
$256,500 $256,500 44.19% 8.96% 9.85% 10.75%
</TABLE>
<PAGE>
New York City Residents
Combined Taxable Income
<TABLE>
<CAPTION>
An Oppenheimer New York
Tax-Exempt Fund Yield
Single Return Joint Return of:
Combined 3.5% 4.0% 4.5%
Effective Is Approximately
Not Not Tax Equivalent to a Taxable
Over Over Over Over Bracket Yield of:
<S> <C> <C> <C> <C> <C> <C> <C>
$ 15,000 $ 19,000 22.14% 4.50% 5.14% 5.78%
$ 19,000 $ 25,000 22.99% 4.54% 5.19% 5.84%
$ 25,000 $ 27,000 23.88% 4.60% 5.25% 5.91%
$ 15,000 $ 23,350 $ 27,000 $ 39,000 24.26% 4.62% 5.28% 5.94%
$ 23,350 $ 25,000 $ 39,000 $ 45,000 35.84% 5.46% 6.23% 7.01%
$ 25,000 $ 56,550 $ 45,000 $ 94,250 35.88% 5.46% 6.24% 7.02%
$ 56,550 $ 60,000 $ 94,250 $108,000 38.55% 5.70% 6.51% 7.32%
$ 60,000 $117,950 $108,000 $143,600 38.59% 5.70% 6.51% 7.33%
$117,950 $256,500 $143,600 $256,500 43.04% 6.14% 7.02% 7.90%
$256,500 $256,500 46.24% 6.51% 7.44% 8.37%
New York City Residents
Combined Taxable Income
An Oppenheimer New York
Tax-Exempt Fund Yield
Single Return Joint Return of:
Combined 5.0% 5.5% 6.0%
Effective Is Approximately
Not Not Tax Equivalent to a Taxable
Over Over Over Over Bracket Yield of:
$ 15,000 $ 19,000 22.14% 6.42% 7.06% 7.71%
$ 19,000 $ 25,000 22.99% 6.49% 7.14% 7.79%
$ 25,000 $ 27,000 23.88% 6.57% 7.23% 7.88%
$ 15,000 $ 23,350 $ 27,000 $ 39,000 24.26% 6.60% 7.26% 7.92%
$ 23,350 $ 25,000 $ 39,000 $ 45,000 35.84% 7.79% 8.57% 9.35%
$ 25,000 $ 56,550 $ 45,000 $ 94,250 35.88% 7.80% 8.58% 9.36%
$ 56,550 $ 60,000 $ 94,250 $108,000 38.55% 8.14% 8.95% 9.76%
$ 60,000 $117,950 $108,000 $143,600 38.59% 8.14% 8.96% 9.77%
$117,950 $256,500 $143,600 $256,500 43.04% 8.78% 9.66% 10.53%
$256,500 $256,500 46.24% 9.30% 10.23% 11.16%
</TABLE>
<PAGE>
Appendix C
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>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
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
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
(1) Financial Highlights*
(2) Independent Auditors' Report*
(3) Statement of Investments at 9/30/94 (audited) and at
3/31/95 (unaudited)*
(4) Statement of Assets and Liabilities at 9/30/94 (audited)
and at 3/31/95 (unaudited)*
(5) Statement of Operations at 9/30/94 (audited) and at
3/31/95 (unaudited)*
(6) Statements of Changes in Net Assets*
(7) Notes to Financial Statements*
------------------
* Filed herewith.
(b) Exhibits
--------
(1) Amended and Restated Declaration of Trust dated 8/21/95: Filed
herewith.
(2) By-Laws amended as of 8/6/87: Previously filed with Post-
Effective Amendment No. 5 to Registrant's Registration
Statement, 1/27/88, refiled with Registrant's Post Effective
Amendment No. 14, 1/27/95 pursuant to Item 102 of Regulation S-
T, and incorporated herein by reference.
(3) Not applicable.
(4) (i) Class A Specimen Share Certificate: Previously filed with
Post-Effective Amendment No. 12 to Registrant's Registration
Statement, 11/26/93, and incorporated herein by reference.
(ii) Class B Specimen Share Certificate: Previously filed
with Post-Effective Amendment No. 12 to Registrant's
Registration Statement, 11/26/93, and incorporated
herein by reference.
(iii) Class C Specimen Share Certificate: Filed herewith.
(5) Investment Advisory Agreement dated October 22, 1990: Filed
with Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 12/3/90, refiled with Registrant's Post Effective
Amendment No. 14, 1/27/95 pursuant to Item 102 of Regulation S-
T, and incorporated herein by reference.
(6) (i) General Distributor's Agreement dated 12/10/92: Filed
with Post-Effective Amendment No. 12 to Registrant's
Registration Statement, 11/26/93, 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 11/1/86: Filed with Post-Effective
Amendment No. 25 of Oppenheimer Growth Fund (Reg. No. 2-45272), 10/30/86,
refiled with Post-Effective Amendment No. 45 of Oppenheimer Growth Fund
(Reg. No. 2-45272), 8/22/94, pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(7) Retirement Plan for Non-Interested Trustees or Directors dated
6/7/90: Filed with Post-Effective Amendment No. 97 of
Oppenheimer Fund (Reg. No. 2-14586), 8/30/90, refiled with Post-
Effective Amendment No. 45 of Oppenheimer Growth Fund (Reg. No.
2-45272), 8/22/94, pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(8) Custodian Agreement with Citibank, N.A.: Filed with
Registrant's Post Effective Amendment No. 14, 1/27/95 pursuant
to Item 102 of Regulation S-T, and incorporated herein by
reference.
(9) Not applicable.
(10) Opinion and Consent of Counsel dated 7/3/84: Previously filed
with Pre-Effective Amendment No. 1 to Registrant's Registration
Statement, 7/12/84, refiled with Registrant's Post Effective
Amendment No. 14, 1/27/95 pursuant to Item 102 of Regulation S-
T, and incorporated herein by reference.
(11) Independent Auditors' Consent: Filed herewith.
(12) Not applicable.
(13) Investment Letter dated 6/29/84 from Oppenheimer Management
Corporation to Registrant: Filed with Pre-Effective Amendment
No. 1 to Registrant's Registration Statement, 7/12/84, refiled
with Registrant's Post Effective Amendment No. 14, 1/27/95
pursuant to Item 102 of Regulation S-T, and incorporated herein
by reference.
(14) Not applicable.
(15) (i) Class A Service Plan and Agreement dated 6/10/93:
Previously filed with Post-Effective Amendment No. 13 to
Registrant's Registration Statement, 1/24/94, and incorporated
herein by reference.
(ii) Class B Distribution and Service Plan and Agreement
dated 2/10/94: Filed with Registrant's Post Effective Amendment
No. 14, 1/27/95, and incorporated herein by reference.
(iii) Class C Distribution and Service Plan and Agreement dated
August 29, 1995: Previously filed with Post-Effective Amendment
No. 16 to Registrant's Registration Statement, 6/28/95, and
incorporated herein by reference.
(16) Performance Data Computation Schedule: Filed herewith.
(17) (i) Financial Data Schedule for Class A Shares for the
fiscal year ended 9/30/94 (audited) and for the six
months ended 3/31/95 (unaudited): Filed herewith.
(ii) Financial Data Schedule for Class B Shares for the
fiscal year ended 9/30/94 (audited) and for the six
months ended 3/31/95 (unaudited): Filed herewith.
(iii) Financial Date Schedule for Class C Shares: Not
Applicable.
(18) Not Applicable.
-- Powers of Attorney and Certified Board Resolutions: Previously
filed with Post-Effective Amendment No. 13 to Registrant's
Registration Statement, 11/26/93, and incorporated herein by
reference.
Item 25. Persons Controlled by or under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Total of Class July 7, 1995
Class A Shares of Beneficial Interest 21,272
Class B Shares of Beneficial Interest 3,187
Class C Shares of Beneficial Interest -0-
Item 27. Indemnification
Reference is made to the provisions of Article SEVENTH of
Registrant's Declaration of Trust, as amended, filed as Exhibit 24(b)(1)
to this 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 28. Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts
A and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals Fund and
Oppenheimer Global Emerging Growth Fund.
Victor Babin, None.
Senior Vice President
Robert J. Bishop Assistant Treasurer of the OppenheimerFunds
Assistant Vice President (listed below); previously a Fund Controller
for Oppenheimer Management Corporation (the
"Manager").
Bruce Bartlett Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc. and
Oppenheimer Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager at First of America
Investment Corp.
George Bowen Treasurer of the New York-based
Senior Vice President OppenheimerFunds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
OppenheimerFunds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
adviser subsidiary of the Manager; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers; formerly Senior Vice President/
Comptroller and Secretary of Oppenheimer
Asset Management Corporation ("OAMC"), an
investment adviser which was a subsidiary of
the OMC.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Vice President Formerly Vice President\Director of Internal
Audit of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
SeniorVice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer
Variable Account Funds and Oppenheimer
Target Fund; Senior Vice President and
Portfolio Manager of Strategic Income &
Growth Fund.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President OppenheimerFunds; Vice President of the
& General Counsel Denver-based OppenheimerFunds; Executive
Vice President, Director and General Counsel
of the Distributor; formerly Senior Vice
President and Associate General Counsel of
the Manager and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the OppenheimerFunds;
Assistant Vice President previously a Fund Controller for the
Manager.
Katherine P.Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board, Acquisition Corp. ("OAC"), the Manager's
Chief Executive Officer parent holding company; President, CEO and
and Director a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
OppenheimerFunds; formerly President of the
Manager. President and Chairman of the Board
of Main Street Advisers, Inc.
Robert G. Galli, Trustee of the New York-based
Vice Chairman OppenheimerFunds; Vice President and Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of HarbourView
and Centennial, a director of SFSI and SSI,
an officer of other OppenheimerFunds and
Executive Vice President & General Counsel
of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Bond Fund and
Oppenheimer Intermediate Tax Exempt Bond
Fund; an officer of other OppenheimerFunds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Bennett Inkeles, Formerly employed by Doremus & Company, an
Assistant Vice President advertising agency.
Stephen Jobe, None.
Vice President
Heidi Kagan, None.
Assistant Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund; Associate Portfolio
Manager of Oppenheimer Discovery Fund and
Oppenheimer Time Fund. Formerly a
Securities Analyst for Columbus Circle
Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director of HarbourView; Director of Main
President and Director Street Advisers, Inc.; and Chairman of
Shareholder Services, Inc.
Sally Marzouk, None.
Vice President
Marilyn Miller, Formerly a Director of marketing for
Vice President TransAmerica Fund Management Company.
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund, Oppenheimer
Multiple Strategies Fund, Oppenheimer
Strategic Investment Grade Bond Fund,
Oppenheimer Asset Allocation Fund,
Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Short-Term Income
Fund, Oppenheimer High Income Fund and
Oppenheimer Bond Fund; an officer of other
OppenheimerFunds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Bond Fund, Oppenheimer Intermediate Tax-
Exempt Bond Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer New Jersey Tax-
Exempt Fund, Oppenheimer Pennsylvania Tax-
Exempt Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York Tax-Exempt
Fund and Oppenheimer Tax-Free Bond Fund;
Vice President of the New York Tax-Exempt
Income Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund and
Portfolio Manager for Oppenheimer Variable
Account Funds-Growth Fund; Senior Investment
Officer and Portfolio Manager with Chemical
Bank.
Russell Read, Formerly an International Finance Consultant
Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust; an officer of other
OppenheimerFunds; formerly a Securities
Analyst for the Manager.
David Robertson, None.
Vice President
Adam Rochlin, Formerly a Product Manager for Metropolitan
Assistant Vice President Life Insurance Company.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund and
Oppenheimer U.S. Government Trust. Formerly
Vice President and Senior Portfolio Manager
for Delaware Investment Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
Strategies Fund; an officer of other
OppenheimerFunds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
James Ruff, None.
Executive Vice President
Ellen Schoenfeld, None.
Assistant Vice President
Diane Sobin, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc. and
Oppenheimre Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager for Dean Witter
InterCapital, Inc.
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus OppenheimerFunds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Investment Grade Bond
Fund, Oppenheimer Strategic Short-Term
Income Fund; an officer of other
OppenheimerFunds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion High Yield Fund and
Oppenheimer High Yield Fund; an officer of
other OppenheimerFunds.
John Stoma, Vice President Formerly Vice President of Pension Marketing
with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors OppenheimerFunds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund. Formerly
Managing Director
of Buckingham Capital Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Ashwin Vasan, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust: an officer of other
OppenheimerFunds.
Valerie Victorson, None.
Vice President
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Centennial
America Fund, L.P., Centennial Government
Trust and Centennial Money Market Trust;
Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
OppenheimerFunds.
Susan Wilson-Perez, None.
Vice President
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc.,
Centennial America Fund, L.P., Centennial
Government Trust, Centennial Money Market
Trust and Daily Cash Accumulation Fund,
Inc.; Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President of
Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the OppenheimerFunds;
and Assistant Secretary Assistant Secretary of SSI, SFSI; an officer
of other OppenheimerFunds.
Eva A. Zeff, Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Mortgage Income Fund; an officer
of other OppenheimerFunds; formerly a
Securities Analyst for the Manager.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
OppenheimerFunds.
</TABLE>
The OppenheimerFunds include the New York-based OppenheimerFunds
and the Denver-based OppenheimerFunds set forth below:
New York-based OppenheimerFunds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based OppenheimerFunds
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based OppenheimerFunds, Oppenheimer Funds Distributor, Inc., Harbourview
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based OppenheimerFunds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Shareholder Services, Centennial Asset Management Corporation, Centennial
Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
Item 29. Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in Part A and B of
this Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Treasurer
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Mary Crooks+ Vice President None
Paul Della Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary
President & Director
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Gregory Farley Vice President - None
1116 Westbury Circle Financial Institution Div.
Eagan, MN 55123
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Wendy Fishler* Vice President - None
Financial Institution Div.
Wayne Flanagan Vice President - None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Senior Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Terry Lee Kelley Vice President - None
1431 Woodview Lane Financial Institution Div.
Commerce Township, MI 48382
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Hans Klehmet II Vice President None
26542 Love Lane
Ramona, CA 92065
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
1900 Eight Avenue
San Francisco, CA 94116
Bill Presutti Vice President None
664 Circuit Road
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
Paul Stickney Vice President None
1314 Log Cabin Lane
St. Louis, MO 63124
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
Bernard J. Wolocko Vice President None
33915 Grand River
Farmington, MI 48335
William Harvey Young+ Vice President None
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
--------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act
and rules promulgated thereunder are in possession of Oppenheimer
Management Corporation at its offices at 3410 South Galena Street,
Denver, Colorado 80231.
Item 31. Management Services
-------------------
Not applicable.
Item 32. Undertakings
------------
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant 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 24th day of August, 1995.
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
By: /s/ Donald W. Spiro*
----------------------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Leon Levy* Chairman of the
-------------- Board of Trustees August 24, 1995
Leon Levy
/s/ Donald W. Spiro* Chief Executive
-------------------- Officer and
Donald W. Spiro Trustee August 24, 1995,
/s/ George Bowen* Chief Financial
----------------- and Accounting
George Bowen Officer August 24, 1995
/s/ Leo Cherne* Trustee August 24, 1995
---------------
Leo Cherne
/s/ Robert G. Galli* Trustee August 24, 1995
-------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee August 24, 1995
----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee August 24, 1995
--------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee August 24, 1995
-----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee August 24, 1995
--------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee August 24, 1995
-----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee August 24, 1995
----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee August 24, 1995
--------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee August 24, 1995
-----------------------
Clayton K. Yeutter
</TABLE>
*By: /s/ Robert G. Zack
--------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
EXHIBIT INDEX
Exhibit No.
24(b)(1) Amended and Restated Declaration of Trust dated 8/21/95
24(b)(4)(iii) Class C Specimen Share Certificate
24(b)(11) Independent Auditors' Consent
24(b)(16) Performance Data Computation Schedule
24(b)(17)(i) Financial Data Schedule for Class A Shares for the fiscal
year ended 9/30/94 (audited) and for the six months ended
3/31/95 (unaudited)
24(b)(17)(ii) Financial Data Schedule for Class B Shares for the fiscal
year ended 9/30/94 (audited) and for the six months ended
3/31/95 (unaudited)
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
This AMENDED AND RESTATED DECLARATION OF TRUST, made as of August 21,
1995 by and among the individuals executing this Amended and Restated
Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer New York Tax-Exempt
Fund (the "Fund"), a trust fund under the laws of the Commonwealth of
Massachusetts, for the investment and reinvestment of funds contributed
thereto, under a Declaration of Trust dated May 14, 1984.
WHEREAS, the Trustees desire to make permitted changes to said
Declaration of Trust;
WHEREAS, the Trustees desire to further amend such Declaration of
Trust, as amended, without shareholder approval, as permitted under
ARTICLE FOURTH, to delete the specific reference to any class of shares
and to permit the addition of a class of shares without requiring further
amendment of this Declaration of Trust;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall henceforth be held and
managed under this Amended and Restated Declaration of Trust IN TRUST as
herein set forth below.
FIRST: This Trust shall be known as OPPENHEIMER NEW YORK TAX-
EXEMPT FUND.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust which are defined
in the 1940 Act (defined below) shall have the meanings given to them in
the 1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the Board
of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from time
to time.
4. "Class" means a class of a series of shares established and
designated under or in accordance with the provisions of Article FOURTH.
<PAGE>
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" shall mean this Amended and Restated
Declaration of Trust as it may be amended or restated from time to time.
7. The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations of the Commission thereunder, all as amended
from time to time.
8. "Series" refers to series of shares established and designated
under or in accordance with the provisions of Article FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust or any Series or Class of the Trust
(as the context may require) shall be divided from time to time and
includes fractions of Shares as well as whole Shares.
11. The "Trust" refers to the Massachusetts business trust created
by this Declaration of Trust, as amended or restated from time to time.
12. "Trustees" refers to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors for
the time being in office as such trustees.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
financial futures contracts, indexes, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein,
or in any property or assets) created or issued by any issuer (which term
"issuer" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof be deemed to include any persons,
firms, associations, corporations, syndicates, business trusts,
partnerships, investment companies, combinations, organizations,
governments, or subdivisions thereof) and in financial instruments
(whether they are considered as securities or commodities); and to
exercise, as owner or holder of any securities or financial instruments,
all rights, powers and privileges in respect thereof; and to do any and
all acts and things for the preservation, protection, improvement and
enhancement in value of any or all such securities or financial
instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings, to the extent permitted by the 1940 Act and
by the Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such Series and Classes and
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including without limitation thereto,
securities) now or hereafter permitted by the laws of the Commonwealth of
Massachusetts and by this Declaration of Trust, as the Trustees may
determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any
Series or Class into one or more Series or Classes that may have been
established and designated from time to time, all without the vote or
consent of the Shareholders of the Trust, in any manner and to the extent
now or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in New York, Colorado and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes
as principal or agent, and alone or with associates or to the extent now
or hereafter permitted by the laws of Massachusetts, as a member of, or
as the owner or holder of any stock of, or share of interest in, any
issuer, and in connection therewith or make or enter into such deeds or
contracts with any issuers and to do such acts and things and to exercise
such powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of a similar or dissimilar
nature, not expressed; provided, however, that the Trust shall not carry
on any business, or exercise any powers, in any state, territory, district
or country except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into
Shares, all without par value, but the Trustees shall have the authority
from time to time to create one or more Series of Shares in addition to
the Series specifically established and designated in part 3 of this
Article FOURTH, and to divide the shares of any Series into two or more
Classes pursuant to Part 2 of this Article FOURTH, all as they deem
necessary or desirable, to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as
between the different Series of Shares or Classes as to right of
redemption and the price, terms and manner of redemption, liabilities and
expenses to be borne by any Series or Class, special and relative rights
as to dividends and other distributions and on liquidation, sinking or
purchase fund provisions, conversion on liquidation, conversion rights,
and conditions under which the several Series or Classes shall have
individual voting rights or no voting rights. Except as aforesaid, all
Shares of the different Series shall be identical.
(a) The number of authorized Shares and the number of Shares
of each Series and each Class of a Series that may be issued is unlimited,
and the Trustees may issue Shares of any Series or Class of any Series for
such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without
action or approval of the Shareholders. All Shares when so issued on the
terms determined by the Trustees shall be fully paid and non-assessable.
The Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series into one or more Series or
Classes of Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares
of any Series reacquired by the Trust.
(b) The establishment and designation of any Series or any
Class of any Series in addition to that established and designated in part
3 of this Article FOURTH shall be effective with the effectiveness of an
instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or such Class of such
Series or as otherwise provided in such instrument. At any time that
there are no Shares outstanding of any particular Series previously
established and designated, the Trustees may by an instrument executed by
a majority of their number abolish that Series and the establishment and
designation thereof. If and to the extent the instrument referred to in
this paragraph shall be an amendment to this Declaration of Trust, and the
Trustees may make any such amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold
and dispose of Shares of any Series or Class of any Series of the Trust
to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued
and sold and may purchase Shares of any Series or Class of any Series from
any such person or any such organization subject only to the general
limitations, restrictions or other provisions applicable to the sale or
purchase of Shares of such Series or Class generally.
2. The Trustees shall have the authority from time to time, without
obtaining shareholder approval, to divide the Shares of any Series into
two or more Classes as they deem necessary or desirable, and to establish
and designate such Classes. In such event, each Class of a Series shall
represent interests in the designated Series of the Trust and have such
voting, dividend, liquidation and other rights as may be established and
designated by the Trustees. Expenses and liabilities related directly or
indirectly to the Shares of a Class of a Series may be borne solely by
such Class (as shall be determined by the Trustees) and, as provided in
Article FIFTH, a Class of a Series may have exclusive voting rights with
respect to matters relating solely to such Class. The bearing of expenses
and liabilities solely by a Class of Shares of a Series shall be
appropriately reflected (in the manner determined by the Trustees) in the
net asset value, dividend and liquidation rights of the Shares of such
Class of a Series. The division of the Shares of a Series into Classes
and the terms and conditions pursuant to which the Shares of the Classes
of a Series will be issued must be made in compliance with the 1940 Act.
No division of Shares of a Series into Classes shall result in the
creation of a Class of Shares having a preference as to dividends or
distributions or a preference in the event of any liquidation, termination
or winding up of the Trust, to the extent such a preference is prohibited
by Section 18 of the 1940 Act as to the Trust.
The relative rights and preferences of shares of different classes
shall be the same in all respects except that, and unless and until the
Board of Trustees shall determine otherwise: (i) when a vote of
Shareholders is required under this Declaration of Trust or when a meeting
of Shareholders is called by the Board of Trustees, the Shares of a Class
shall vote exclusively on matters that affect that Class only; (ii) the
liabilities and expenses related to a Class shall be borne solely by such
Class (as determined and allocated to such Class by the Trustees from time
to time in a manner consistent with parts 2 and 3 of Article FOURTH); and
(iii) pursuant to paragraph 10 of Article NINTH, the Shares of each Class
shall have such other rights and preferences as are set forth from time
to time in the then effective prospectus and/or statement of additional
information relating to the Shares. Dividends and distributions on one
class may differ from the dividends and distributions on another class,
and the net asset value of the shares of one class may differ from the net
asset value of shares of another class.
3. Without limiting the authority of the Trustees set forth in part
1 of this Article FOURTH to establish and designate any further Series,
the Trustees hereby establish one Series of Shares all of one Class having
the same name as the Trust. Said Shares shall be divided into such number
of Classes as shall be set forth from time to time in the then effective
prospectus and/or statement of additional information relating to the
Fund. The Shares of that Series and any Shares of any further Series or
Classes that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect to
some further Series or Classes at the time of establishing and designating
the same) have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
for all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are
herein referred to as "assets belonging to" that Series. In the event
that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively "General Items"), the
Trustees shall allocate such General Items to and among any one or more
of the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series for all
purposes.
(b) (1) Liabilities Belonging to Series. The liabilities,
expenses, costs, charges and reserves attributable to each Series shall
be charged and allocated to the assets belonging to each particular
Series. Any general liabilities, expenses, costs, charges and reserves
of the Trust which are not identifiable as belong to any particular Series
shall be allocated and charged by the Trustees to and among any one or
more of the Series established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The liabilities, expenses, costs, charges and
reserves allocated and so charged to each Series are herein referred to
as "liabilities belonging to" that Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall
be conclusive and binding upon the shareholders of all Series for all
purposes.
(2) Liabilities Belonging to a Class. If a Series is
divided into more than one Class, the liabilities, expenses, costs,
charges and reserves attributable to a Class shall be charged and
allocated to the Class to which such liabilities, expenses, costs, charges
or reserves are attributable. Any general liabilities, expenses, costs,
charges or reserves belonging to the Series which are not identifiable as
belonging to any particular Class shall be allocated and charged by the
Trustees to and among any one or more of the Classes established and
designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
allocations in the two preceding sentences shall be subject to the 1940
Act or any release, rule, regulation, interpretation or order thereunder
relating to such allocations. The liabilities, expenses, costs, charges
and reserves allocated and so charged to each Class are herein referred
to as "liabilities belonging to" that Class. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall
be conclusive and binding upon the holders of all Classes for all
purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series or Class may be paid to the holders of Shares of that
Series or Class, with such frequency as the Trustees may determine, which
may be daily or otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may determine,
from such of the income, capital gains accrued or realized, and capital
and surplus, from the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities belonging
to such Series or Class. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the holders
of such Series or Class in proportion to the number of Shares of such
Series or Class held by such holders at the date and time of record
established for the payment of such dividends or distributions, except
that in connection with any dividend or distribution program or procedure
the Trustees may determine that no dividend or distribution shall be
payable on Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established by the
Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination thereof as
determined by the Trustees or pursuant to any program that the Trustees
may have in effect at the time for the election by each Shareholder of the
mode of the making of such dividend or distribution to that Shareholder.
Any such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with paragraph 13 of
Article SEVENTH.
(d) Liquidation. In the event of the liquidation or
dissolution of the Trust, the Shareholders of each Series and all Classes
of each Series that has been established and designated shall be entitled
to receive, as a Series or Class, when and as declared by the Trustees,
the excess of the assets belonging to that Series over the liabilities
belonging to that Series or Class. The assets so distributable to the
Shareholders of any particular Class and Series shall be distributed among
such Shareholders in proportion to the number of Shares of such Class of
that Series held by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series or Class
shall be transferable, but transfers of Shares of a particular Class and
Series will be recorded on the Share transfer records of the Trust
applicable to such Series or Class of that Series only at such times as
Shareholders shall have the right to require the Trust to redeem Shares
of such Series or Class of that Series and at such other times as may be
permitted by the Trustees.
(f) Equality. All Shares of each particular Series shall
represent an equal proportionate interest in the assets belonging to that
Series (subject to the liabilities belonging to such Series or any Class
of that Series), and each Share of any particular Series shall be equal
to each other Share of that Series and Shares of each Class of a Series
shall be equal to each other Share of such Class; but the provisions of
this sentence shall not restrict any distinctions permissible under
subsection (c) part (2) of this Article FOURTH that may exist with respect
to Shares of the different Classes of a Series. The Trustees may from
time to time divide or combine the Shares of any particular Class or
Series into a greater or lesser number of Shares of that Class or Series
without thereby changing the proportionate beneficial interest in the
assets belonging to that Class or Series or in any way affecting the
rights of Shares of any other Class or Series and Shares of each Class of
a Series shall be equal to each other Share of such Class.
(g) Fractions. Any fractional Share of any Class and Series,
if any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Class and Series,
including those rights and obligations with respect to voting, receipt of
dividends and distributions, redemption of Shares, and liquidation of the
Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that (i) holders of Shares of any Series shall have the right to
exchange said Shares into Shares of one or more other Series of Shares,
(ii) holders of shares of any Class shall have the right to exchange said
Shares into Shares of one or more other Classes of the same or a different
Series, and/or (iii) the Trust shall have the right to carry out the
aforesaid exchanges, in each case in accordance with such requirements and
procedures as may be established by the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Class and Series that has been established and designated. No
certification certifying the ownership of Shares need be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as
to who are the Shareholders and as to the number of Shares of each Class
and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other
person to accept orders for the purchase or sale of Shares that conform
to such authorized terms and to reject any purchase or sale orders for
Shares whether or not conforming to such authorized terms.
FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the
election of Trustees when that issue is submitted to them, (b) with
respect to the amendment of this Declaration of Trust except where the
Trustees are given authority to amend the Declaration of Trust without
shareholder approval, (c) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
Class action on behalf of the Trust or the Shareholders, and (d) with
respect to those matters relating to the Trust as may be required by the
1940 Act or required by law, by this Declaration of Trust, or the By-Laws
of the Trust or any registration statement of the Trust filed with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust will not hold shareholder meetings unless required by
the 1940 Act, the provisions of this Declaration of Trust, or any other
applicable law. The Trustees may call a meeting of shareholders.
3. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote on each matter submitted to a vote of the
Shareholders of the affected Series for each Share standing in his name
on the books of the Trust on the date, fixed in accordance with the By-
Laws, for determination of Shareholders of the affected Series entitled
to vote at such meeting (except, if the Board so determines, for Shares
redeemed prior to the meeting), and each such Series shall vote separately
("Individual Series Voting"); a Series shall be deemed to be affected when
a vote of the holders of that Series on a matter is required by the 1940
Act; provided, however, that as to any matter with respect to which a vote
of Shareholders is required by the 1940 Act or by any applicable law that
must be complied with, such requirements as to a vote by Shareholders
shall apply in lieu of Individual Series Voting as described above. If
the shares of a Series shall be divided into Classes as provided in
Article FOURTH, the shares of each Class shall have identical voting
rights except that the Trustees, in their discretion, may provide a Class
of a Series with exclusive voting rights with respect to matters which
relate solely to such Classes. If the Shares of any Series shall be
divided into Classes with a Class having exclusive voting rights with
respect to certain matters, the quorum and voting requirements described
below with respect to action to be taken by the Shareholders of the Class
of such Series on such matters shall be applicable only to the Shares of
such Class. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the right to
receive dividends. The presence in person or by proxy of the holders of
one-third of the Shares, or of the Shares of any Series or Class of any
Series, outstanding and entitled to vote thereat shall constitute a
quorum at any meeting of the Shareholders or of that Series or Class,
respectively; provided however, that if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires an affirmative
vote of a majority, or more than a majority, of the shares outstanding and
entitled to vote, then in such event the presence in person or by proxy
of the holders of a majority of the shares outstanding and entitled to
vote at such a meeting shall constitute a quorum for all purposes. At a
meeting at which is a quorum is present, a vote of a majority of the
quorum shall be sufficient to transact all business at the meeting. If
at any meeting of the Shareholders there shall be less than a quorum
present, the Shareholders or the Trustees present at such meeting may,
without further notice, adjourn the same from time to time until a quorum
shall attend, but no business shall be transacted at any such adjourned
meeting except such as might have been lawfully transacted had the meeting
not been adjourned.
4. Each Shareholder, upon request to the Trust in proper form
determined by the Trust, shall be entitled to require the Trust to redeem
from the net assets of that Series and Class all or part of the Shares of
such Series and Class standing in the name of such Shareholder. The
method of computing such net asset value, the time at which such net asset
value shall be computed and the time within which the Trust shall make
payment therefor, shall be determined as hereinafter provided in Article
SEVENTH of this Declaration of Trust. Notwithstanding the foregoing, the
Trustees, when permitted or required to do so by the 1940 Act, may suspend
the right of the Shareholders to require the Trust to redeem Shares.
5. No Shareholder shall, as such holder, have any right to purchase
or subscribe for any Shares of the Trust which it may issue or sell, other
than such right, if any, as the Trustees, in their discretion, may
determine.
6. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
SIXTH:
1. The persons who shall act as initial Trustees until the first
meeting or until their successors are duly chosen and qualify are the
initial trustees executing this Declaration of Trust or any counterpart
thereof. However, the By-Laws of the Trust may fix the number of Trustees
at a number greater or lesser than the number of initial Trustees and may
authorize the Trustees to increase or decrease the number of Trustees, to
fill any vacancies on the Board which may occur for any reason including
any vacancies created by any such increase in the number of Trustees, to
set and alter the terms of office of the Trustees and to lengthen or
lessen their own terms of office or make their terms of office of
indefinite duration, all subject to the 1940 Act. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be
Shareholders.
2. A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative vote of the holders
of two-thirds of the outstanding Shares, present in person or by proxy at
any meeting of Shareholders called for such purpose; such a meeting shall
be called by the Trustees when requested in writing to do so by the record
holders of not less than ten per centum of the outstanding Shares. A
Trustee may also be removed by the Board of Trustees as provided in the
By-Laws of the Trust.
3. The Trustees shall make available a list of names and addresses
of all Shareholders as recorded on the books of the Trust, upon receipt
of the request in writing signed by not less than ten Shareholders (who
have been such for at least six months) holding shares of the Trust valued
not less than at $25,000 at current offering price (as defined in the then
effective prospectus and\or statement of additional information relating
to the Shares under the Securities Act of 1933) or holding not less than
1% in amount of the entire amount of Shares issued and outstanding; such
request must state that such Shareholders wish to communicate with other
shareholders with a view to obtaining signatures to a request for a
meeting to take action pursuant to part 2 of this Article SIXTH and
accompanied by a form of communication to the Shareholders. The Trustees
may, in their discretion, satisfy their obligation under this part 3 by
either making available the Shareholder list to such Shareholders at the
principal offices of the Trust, or at the offices of the Trust's transfer
agent, during regular business hours, or by mailing a copy of such
communication and form of request, at the expense of such requesting
Shareholders, to all other Shareholders.
4. If and when the Trust has outstanding two or more series of
Shares pursuant to Article FOURTH of this Declaration of Trust, each
series shall be considered as if it were a separate common-law Trust
covered by Section 16(c) of the 1940 Act and parts 2 and 3 of this Article
SIXTH. The Trust may at any time or from time to time apply to the
Commission for one or more exemptions from all or part of said Section
16(c) and, if an exemptive order or orders are issued by the Commission,
such order or orders shall be deemed part of Section 16(c) for the
purposes of parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust, the Trustees
and the Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or
the Trustees and shall have accepted this trust, the Trust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be deemed
a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them shall not operate to annul
or terminate the Trust but the Trust shall continue in full force and
effect pursuant to the terms of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets
of the Trust shall at all times be considered as vested in the Trustees.
No Shareholder shall have, as such holder of beneficial interest in the
Trust, any authority, power or right whatsoever to transact business for
or on behalf of the Trust, or on behalf of the Trustees, in connection
with the property or assets of the Trust, or in any part thereof.
4. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute, and to authorize the officers and agents of the Trust to make and
execute, any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration of
Trust providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to the
Shareholders;
(b) to elect and remove such officers and appoint and terminate
such officers as they consider appropriate with or without cause, and to
appoint and designate from among the Trustees such committees as the
Trustees may determine, and to terminate any such committee and remove any
member of such committee;
(c) to employ as custodian of any assets of the Trust a bank
or trust company or any other entity qualified and eligible to act as a
custodian, subject to any conditions set forth in this Declaration of
Trust or in the By-Laws;
(d) To retain a transfer agent and shareholder servicing agent,
or both;
(e) To provide for the distribution of Shares either through
a principal underwriter or the Trust itself or both;
(f) To set record dates in the manner provided for in the By-
Laws of the Trust;
(g) to delegate such authority as they consider desirable to
any officers of the Trust and to any agent, custodian or underwriter;
(h) to vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property held in
Trust hereunder; and to execute and deliver powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to securities
or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities held in trust
hereunder;
(j) to hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form,
either in its own name or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the
usual practice of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern,
and to pay calls or subscriptions with respect to any security held in the
Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but
not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws,
distributions of income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted
by the 1940 Act and the Trust's fundamental policy thereunder as to
borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations, partnerships,
trusts, associations or other persons; and
(p) to change the name of the Trust or any Class or Series of
the Trust as they consider appropriate without prior shareholder approval.
5. No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
6. (a) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription to any Shares or
otherwise. This paragraph shall not limit the right of the Trustees to
assert claims against any shareholder based upon the acts or omissions of
such shareholder or for any other reason. There is hereby expressly
disclaimed shareholder and Trustee liability for the acts and obligations
of the Trust. Every note, bond, contract or other undertaking issued by
or on behalf of the Trust or the Trustees relating to the Trust shall
include a notice and provision limiting the obligation represented thereby
to the Trust and its assets (but the omission of such notice and provision
shall not operate to impose any liability or obligation on any
Shareholder).
(b) Whenever this Declaration of Trust calls for or permits any
action to be taken by the Trustees hereunder, such action shall mean that
taken by the Board of Trustees by vote of the majority of a quorum of
Trustees as set forth from time to time in the By-Laws of the Trust or as
required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the powers herein
contained such as may be necessary or convenient in the conduct of any
business or enterprise of the Trust, to do and perform anything necessary,
suitable, or proper for the accomplishment of any of the purposes, or the
attainment of any one or more of the objects, herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively whether any
moneys, securities, or other properties of the Trust are, for the purposes
of this Trust, to be considered as capital or income and in what manner
any expenses or disbursements are to be borne as between capital and
income whether or not in the absence of this provision such moneys,
securities, or other properties would be regarded as capital or income and
whether or not in the absence of this provision such expenses or
disbursements would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into Classes
and prescribe the tenure of office of the several Classes, but no Class
shall be elected for a period shorter than that from the time of the
election following the division into Classes until the next meeting and
thereafter for a period shorter than the interval between meetings or for
a period longer than five years, and the term of office of at least one
Class shall expire each year.
8. The Shareholders shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by the
Shareholders or otherwise, may be removed at any time, with or without
cause, in such lawful manner as may be provided in the By-Laws of the
Trust.
10. The Trustees shall have power to hold their meetings, to have
an office or offices and, subject to the provisions of the laws of
Massachusetts, to keep the books of the Trust outside of said Commonwealth
at such places as may from time to time be designated by them. Action may
be taken by the Trustees without a meeting by unanimous written consent
or by telephone or similar method of communication.
11. Securities held by the Trust shall be voted in person or by
proxy by the President or a Vice-President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12. (a) Subject to the provisions of the 1940 Act, any Trustee,
officer or employee, individually, or any partnership of which any
Trustee, officer or employee may be a member, or any corporation or
association of which any Trustee, officer or employee may be an officer,
partner, director, trustee, employee or stockholder, or otherwise may have
an interest, may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of the Trust, and in the
absence of fraud no contract or other transaction shall be thereby
affected or invalidated; provided that in such case a Trustee, officer or
employee or a partnership, corporation or association of which a Trustee,
officer or employee is a member, officer, director, trustee, employee or
stockholder is so interested, such fact shall be disclosed or shall have
been known to the Trustees including those Trustees who are not so
interested and who are neither "interested" nor "affiliated" persons as
those terms are defined in the 1940 Act, or a majority thereof; and any
Trustee who is so interested, or who is also a director, officer, partner,
trustee, employee or stockholder of such other corporation or a member of
such partnership or association which is so interested, may be counted in
determining the existence of a quorum at any meeting of the Trustees which
shall authorize any such contract or transaction, and may vote thereat to
authorize any such contract or transaction, with like force and effect as
if he were not so interested.
(b) Specifically, but without limitation of the foregoing, the
Trust may enter into a management or investment advisory contract or
underwriting contract and other contracts with, and may otherwise do
business with any manager or investment adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or
affiliate of any such manager or investment adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation
relating to the Trust notwithstanding that the Trustees of the Trust may
be composed in part of partners, directors, officers or employees of any
such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm
or corporation, and in the absence of fraud the Trust and any such firm
or corporation may deal freely with each other, and no such contract or
transaction between the Trust and any such firm or corporation shall be
invalidated or in any way affected thereby, nor shall any Trustee or
officer of the Trust be liable to the Trust or to any Shareholder or
creditor thereof or to any other person for any loss incurred by it or him
solely because of the existence of any such contract or transaction;
provided that nothing herein shall protect any director or officer of the
Trust against any liability to the trust or to its security holders to
which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.
(c) As used in this paragraph the following terms shall have
the meanings set forth below:
(i) the term "indemnitee" shall mean any present or
former Trustee, officer or employee of the Trust, any present or former
Trustee or officer of another trust or corporation whose securities are
or were owned by the Trust or of which the Trust is or was a creditor and
who served or serves in such capacity at the request of the Trust, and the
heirs, executors, administrators, successors and assigns of any of the
foregoing; however, whenever conduct by an indemnitee is referred to, the
conduct shall be that of the original indemnitee rather than that of the
heir, executor, administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which an indemnitee
is or was a party or is threatened to be made a party by reason of the
fact or facts under which he or it is an indemnitee as defined above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an indemnitee in connection
with a covered proceeding; and
(v) the term "adjudication of liability" shall mean,
as to any covered proceeding and as to any indemnitee, an adverse
determination as to the indemnitee whether by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any
covered expenses in any covered proceeding if there has been an
adjudication of liability against such indemnitee expressly based on a
finding of disabling conduct.
(e) Except as set forth in (d) above, the Trust shall
indemnify any indemnitee for covered expenses in any covered proceeding,
whether or not there is an adjudication of liability as to such
indemnitee, if a determination has been made that the indemnitee was not
liable by reason of disabling conduct by (i) a final decision of the
merits of the court or other body before which the covered proceeding was
brought; or (ii) in the absence of such decision, a reasonable
determination, based on a review of the facts, by either (a) the vote of
a majority of a quorum of Trustees who are neither "interested persons,"
as defined in the 1940 Act nor parties to the covered proceedings, or (b)
an independent legal counsel in a written opinion; provided that such
Trustees or counsel, in reaching such determination, may but need not
presume the absence of disabling conduct on the part of the indemnitee by
reason of the manner in which the covered proceeding was terminated.
(f) Covered expenses incurred by an indemnitee in connection
with a covered proceeding shall be advanced by the Trust to an indemnitee
prior to the final disposition of a covered proceeding upon the request
of the indemnitee for such advance and the undertaking by or on behalf of
the indemnitee to repay the advance unless it is ultimately determined
that the indemnitee is entitled to indemnification hereunder, but only if
one or more of the following is the case: (i) the indemnitee shall provide
a security for such undertaking; (ii) the Trust shall be insured against
losses arising out of any lawful advances; or (iii) there shall have been
a determination, based on a review of the readily available facts (as
opposed to a full trial-type inquiry) that there is a reason to believe
that the indemnitee ultimately will be found entitled to indemnification
by either independent legal counsel in a written opinion or by the vote
of a majority of a quorum of trustees who are neither "interested persons"
as defined in the 1940 Act nor parties to the covered proceeding.
(g) Nothing herein shall be deemed to affect the right of
the Trust and/or any indemnitee to acquire and pay for any insurance
covering any or all indemnities to the extent permitted by applicable law
or to affect any other indemnification rights to which any indemnitee may
be entitled to the extent permitted by applicable law. Such rights to
indemnification shall not, except as otherwise provided by law, be deemed
exclusive of any other rights to which such indemnitee may be entitled
under any statute now or hereafter enacted, By-Law, contract or otherwise.
13. The Trustees are empowered, in their absolute discretion, to
establish bases or times, or both, for determining the net asset value per
Share of any Class and Series in accordance with the 1940 Act and to
authorize the voluntary purchase by any Class and Series, either directly
or through an agent, of Shares of any Class and Series upon such terms and
conditions and for such consideration as the Trustees shall deem advisable
in accordance with the 1940 Act.
14. Payment of the net asset value per Share of any Class and
Series properly surrendered to it for redemption shall be made by the
Trust within seven days, or as specified in any applicable law or
regulation, after tender of such stock or request for redemption to the
Trust for such purpose plus any period of time during which the right of
the holders of the shares of such Class of that Series to require the
Trust to redeem such shares has been suspended. Any such payment may be
made in portfolio securities of such Class of that Series and/or in cash,
as the Trustees shall deem advisable, and no Shareholder shall have a
right, other than as determined by the Trustees, to have Shares redeemed
in kind.
15. The Trust shall have the right, at any time and without prior
notice to the Shareholder, to redeem Shares of the Class and Series held
by such Shareholder held in any account registered in the name of such
Shareholder for its current net asset value, if and to the extent that
such redemption is necessary to reimburse either that Series of the Trust
or the distributor (i.e., principal underwriter) of the Shares for any
loss either has sustained by reason of the failure of such Shareholder to
make timely and good payment for Shares purchased or subscribed for by
such Shareholder, regardless of whether such Shareholder was a Shareholder
at the time of such purchase or subscription; subject to and upon such
terms and conditions as the Trustees may from time to time prescribe.
EIGHTH: The name "Oppenheimer" included in the name of the Trust
and of any Series shall be used pursuant to a royalty-free, non-exclusive
license from Oppenheimer Management Corporation ("OMC"), incidental to and
as part of any one or more advisory, management or supervisory contracts
which may be entered into by the Trust with OMC. Such license shall allow
OMC to inspect and subject to the control of the Board of Trustees to
control the nature and quality of services offered by the Trust under such
name. The license may be terminated by OMC upon termination of such
advisory, management or supervisory contracts or without cause upon 60
days' written notice, in which case neither the Trust nor any Series or
Class shall have any further right to use the name "Oppenheimer" in its
name or otherwise and the Trust, the Shareholders and its officers and
Trustees shall promptly take whatever action may be necessary to change
its name accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or the Shareholders, heirs,
executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust estate to be held harmless
from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind the Trust, the Trust's officers or any Shareholder. All
persons extending credit to, doing business with, contracting with or
having or asserting any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under any such credit,
transaction, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall
be personally liable therefor; notice of such disclaimer shall be given
in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee against any liability to which such Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
3. The exercise by the Trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to
the provisions of paragraph 2 of this Article NINTH, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operations of this Declaration of Trust, applicable laws,
contracts, obligations, transactions or any other business the Trust may
enter into, and subject to the provisions of paragraph 2 of this Article
NINTH, shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees shall
not be required to give any bond as such, nor any surety if a bond is
required.
4. This Trust shall continue without limitation of time but
subject to the provisions of sub-sections (a), (b), (c) and (d) of this
paragraph 4.
(a) The Trustees, with the favorable vote of the holders of
a majority of the outstanding voting securities, as defined in the 1940
Act, of any one or more Series entitled to vote, may sell and convey the
assets of that Series (which sale may be subject to the retention of
assets for the payment of liabilities and expenses) to another issuer for
a consideration which may be or include securities of such issuer. Upon
making provision for the payment of liabilities, by assumption by such
issuer or otherwise, the Trustees shall distribute the remaining proceeds
ratably among the holders of the outstanding Shares of the Series the
assets of which have been so transferred.
(b) The Trustees, with the favorable vote of the holders
of a majority of the outstanding voting securities, as defined in the 1940
Act, of any one or more Series entitled to vote, may at any time sell and
convert into money all the assets of that Series. Upon making provisions
for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of that Series, the Trustees shall
distribute the remaining assets of that Series ratably among the holders
of the outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of
a majority of the outstanding voting securities, as defined in the 1940
Act, of any one or more Series entitled to vote, may otherwise alter,
convert or transfer the assets of that Series or those Series.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and (b),
and in subsection (c) where applicable, the Series the assets of which
have been so transferred shall terminate, and if all the assets of the
Trust have been so transferred, the Trust shall terminate and the Trustees
shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be
cancelled and discharged.
5. The original or a copy of this instrument and of each
restated declaration of trust or instrument supplemental hereto shall be
kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each supplemental or
restated declaration of trust shall be filed with the Secretary of the
Commonwealth of Massachusetts, as well as any other governmental office
where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to
whether or not any such supplemental or restated declarations of trust
have been made and as to any matters in connection with the Trust
hereunder, and, with the same effect as if it were the original, may rely
on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such supplemental or restated declaration of trust.
In this instrument or in any such supplemental or restated declaration of
trust, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as
amended or affected by any such supplemental or restated declaration of
trust. This instrument may be executed in any number of counterparts,
each of which shall be deemed as original.
6. The Trust set forth in this instrument is created under and
is to be governed by and construed and administered according to the laws
of the Commonwealth of Massachusetts. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
7. The Board of Trustees is empowered to cause the redemption
of the Shares held in any account if the aggregate net asset value of such
Shares has been reduced to $500 or less upon such notice to the
shareholder in question, with such permission to increase the investment
in question and upon such other terms and conditions as may be fixed by
the Board of Trustees in accordance with the 1940 Act.
8. In the event that any person advances the organizational
expenses of the Trust, such advances shall become an obligation of the
Trust subject to such terms and conditions as may be fixed by, and on a
date fixed by, or determined with criteria fixed by the Board of Trustees,
to be amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of Trust
including action which is required or permitted by the 1940 Act or any
other applicable law, such action shall be deemed to have been properly
taken if such action is in accordance with the construction of the 1940
Act or such other applicable law then in effect as expressed in "no
action" letters of the staff of the Commission or any release, rule,
regulation or order under the 1940 Act or any decision of a court of
competent jurisdiction, notwithstanding that any of the foregoing shall
later be found to be invalid or otherwise reversed or modified by any of
the foregoing.
10. Any action which may be taken by the Board of Trustees under
this Declaration of Trust or its By-Laws may be taken by the description
thereof in the then effective prospectus and/or statement of additional
information relating to the Shares under the Securities Act of 1933 or in
any proxy statement of the Trust rather than by formal resolution of the
Board.
11. Whenever under this Declaration of Trust, the Board of
Trustees is permitted or required to place a value on assets of the Trust,
such action may be delegated by the Board, and/or determined in accordance
with a formula determined by the Board, to the extent permitted by the
1940 Act.
12. If authorized by vote of the Trustees and the favorable vote
of the holders of a majority of the outstanding voting securities, as
defined in the 1940 Act, entitled to vote, or by any larger vote which may
be required by applicable law in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a Restated
Declaration of Trust or a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof; any such Supplemental or Restated
Declaration of Trust may be executed by and on behalf of the Trust and the
Trustees by an officer or officers of the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument
as of this 21st day of August, 1995.
/s/ Leo Cherne /s/ Benjamin Lipstein
-------------- ---------------------
Leo Cherne Benjamin Lipstein
50 East 79th Street 333 East 57th Street
New York, NY 10021 New York, NY 10022
/s/ Edmund T. Delaney /s/ Donald W. Spiro
--------------------- -------------------
Edmund T. Delaney Donald W. Spiro
5 Gorham Road 399 Ski Trail
Chester, CT 06412 Kinnelon, NJ 07405
/s/ Leon Levy /s/ Pauline Trigere
------------- -------------------
Leon Levy Pauline Trigere
One Sutton Place South 525 Park Avenue
New York, NY 10022 New York, NY 10021
/s/ Sidney M. Robbins /s/ Kenneth A. Randall
--------------------- ----------------------
Sidney M. Robbins Kenneth A. Randall
50 Overlook Road 6 Whittaker's Mill
Ossining, NY 10562 Williamsburg, VA 23185
/s/ Russell S. Reynolds /s/ Elizabeth B. Moynihan
----------------------- -------------------------
Russell S. Reynolds Elizabeth B. Moynihan
39 Clapboard Ridge Road 801 Pennsylvania Avenue
Greenwich, CT 06830 Washington, DC 20004
/s/ Clayton K. Yeutter
----------------------
Clayton K. Yeutter
1325 Merrie Ridge Road
McLean, VA 22101
Exhibit 24(b)(4)(iii)
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
Class C Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.] XX-000000
(upper right box, CLASS C SHARES
below cert. no.)
(centered
below boxes) OPPENHEIMER NEW YORK TAX-EXEMPT FUND
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 683913107
(at left) is the owner of
(centered) FULLY PAID CLASS C SHARES OF BENEFICIAL INTEREST
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
(hereinafter called the "Fund"), transferable only on the
books of the Fund By the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Fund and the signatures
of its duly authorized officers.
(at left Dated: (at right
of seal) of seal)
(signature) (signature)
/s/ Andrew J. Donohue /s/ Donald W. Spiro
_______________________ ___________________
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
SEAL
1987
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
[A DIVISION OF OPPENHEIMER MANAGEMENT
CORPORATION]
Denver (CO.) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not on above list.
For Value Received ................ hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
_______________________________________________________________________
(Please print or type name and address of assignee)
______________________________________________________
________________________________________________Class C Shares of
beneficial interest represented by the within certificate, and do hereby
irrevocably constitute and appoint ___________________________ Attorney
to transfer the said shares on the books of the within named Fund with
full power of substitution in the premises.
Dated: ______________________
Signed: __________________________
___________________________________
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) face of the certificate in every particular
without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this "four hands"
watermark: logotype
______________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(11)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Oppenheimer New York Tax-Exempt Fund:
We consent to the use of our report dated October 21, 1994 included herein
and to the reference to our firm under the heading "Financial Highlights"
in the Prospectus.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Denver, Colorado
August 18, 1995
Oppenheimer New York Tax-Exempt Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated
as described below, on the basis of the Fund's distributions, for the
past 10 years which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
10/14/85 0.0700 0.0000 10.990
11/11/85 0.0650 0.0000 11.210
12/13/85 0.0850 0.0000 11.590
01/13/86 0.0700 0.0000 11.790
02/18/86 0.0900 0.0000 12.310
03/17/86 0.0700 0.0000 12.600
04/14/86 0.0650 0.0900 12.310
05/12/86 0.0650 0.0000 12.340
06/16/86 0.0800 0.0000 11.850
07/14/86 0.0650 0.0000 12.130
08/11/86 0.0630 0.0000 12.210
09/11/86 0.0750 0.0000 12.510
10/09/86 0.0650 0.0000 12.490
11/06/86 0.0600 0.1350 12.570
12/04/86 0.0670 0.0000 12.680
01/02/87 0.0650 0.0000 12.610
01/29/87 0.0650 0.0000 12.770
02/26/87 0.0650 0.0000 12.840
03/26/87 0.0740 0.0000 12.880
04/23/87 0.0710 0.0000 11.900
05/20/87 0.0700 0.0000 11.700
06/17/87 0.0700 0.0000 12.080
07/15/87 0.0700 0.0000 12.100
08/12/87 0.0700 0.0000 12.080
09/09/87 0.0700 0.0000 11.680
10/07/87 0.0700 0.0000 11.430
11/04/87 0.0700 0.0800 11.530
12/02/87 0.0700 0.0000 11.610
12/23/87 0.0530 0.0000 11.680
01/20/88 0.0700 0.0000 11.860
02/17/88 0.0700 0.0000 11.990
03/16/88 0.0675 0.0000 11.890
04/13/88 0.0675 0.0000 11.860
05/11/88 0.0675 0.0000 11.790
06/08/88 0.0675 0.0000 11.780
07/06/88 0.0675 0.0000 11.780
08/03/88 0.0675 0.0000 11.830
08/31/88 0.0675 0.0000 11.770
09/28/88 0.0675 0.0000 11.860
10/26/88 0.0675 0.0000 11.990
11/23/88 0.0659 0.0000 11.860
12/21/88 0.0344 0.0610 11.840
01/18/89 0.0670 0.0000 11.940
02/15/89 0.0670 0.0000 11.770
f:\rr\dnvshare\sai\093094\360.sch
Oppenheimer New York Tax-Exempt Fund
Page 2
August 23, 1995
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares (Continued)
03/15/89 0.0670 0.0000 11.760
04/12/89 0.0670 0.0000 11.710
05/10/89 0.0670 0.0000 11.830
06/07/89 0.0670 0.0000 12.050
07/05/89 0.0670 0.0000 12.050
08/02/89 0.0670 0.0000 12.140
08/30/89 0.0640 0.0000 11.960
09/27/89 0.0640 0.0000 11.850
10/25/89 0.0640 0.0000 11.930
11/22/89 0.0640 0.0000 11.970
12/20/89 0.0547 0.0140 12.040
01/17/90 0.0640 0.0000 11.970
02/14/90 0.0640 0.0000 11.890
03/14/90 0.0640 0.0000 11.820
04/11/90 0.0640 0.0000 11.800
05/09/90 0.0640 0.0000 11.690
06/06/90 0.0640 0.0000 11.840
07/05/90 0.0663 0.0000 11.840
08/01/90 0.0617 0.0000 11.960
08/29/90 0.0640 0.0000 11.680
09/26/90 0.0640 0.0000 11.600
10/24/90 0.0640 0.0000 11.630
11/21/90 0.0662857 0.0000 11.820
12/19/90 0.0617143 0.0000 11.830
12/31/90 0.0058 0.0350 11.810
01/16/91 0.0365712 0.0000 11.770
02/13/91 0.0640 0.0000 12.010
03/13/91 0.0640 0.0000 11.900
04/10/91 0.0640 0.0000 11.930
05/08/91 0.0640 0.0000 12.010
06/05/91 0.0640 0.0000 11.950
07/03/91 0.0662861 0.0000 11.940
07/31/91 0.0617143 0.0000 12.040
08/28/91 0.0640 0.0000 12.130
09/25/91 0.0640 0.0000 12.190
10/23/91 0.0640 0.0000 12.230
11/20/91 0.0640 0.0000 12.220
12/18/91 0.0492522 0.0232001 12.250
01/15/92 0.0640004 0.0000 12.330
02/12/92 0.0640000 0.0000 12.180
03/11/92 0.0640000 0.0000 12.150
04/08/92 0.0640000 0.0000 12.240
05/06/92 0.0640000 0.0000 12.260
06/03/92 0.0640000 0.0000 12.350
07/01/92 0.0640000 0.0000 12.540
07/29/92 0.0640000 0.0000 12.960
08/26/92 0.0640000 0.0000 12.650
09/23/92 0.0114289 0.0827 12.560
10/21/92 0.0068508 0.0899 12.390
11/18/92 0.0640000 0.0000 12.530
Oppenheimer New York Tax Exempt Fund
Page 3
August 23, 1995
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares (Continued)
12/16/92 0.0640080 0.0000 12.610
01/13/93 0.0640080 0.013768 12.620
02/10/93 0.0640080 0.0000 12.800
03/10/93 0.0640080 0.0000 13.120
04/07/93 0.0640080 0.0000 12.890
05/05/93 0.0640080 0.0000 12.960
06/10/93 0.0641000 0.0000 13.030
07/09/93 0.0641000 0.0000 13.180
08/10/93 0.0641000 0.0000 13.230
09/10/93 0.0641000 0.0000 13.550
10/08/93 0.0641000 0.0000 13.530
11/10/93 0.0615867 0.0000 13.350
12/10/93 0.0596000 0.1404333 13.300
01/10/94 0.0596000 0.0000 13.330
02/10/94 0.0596000 0.0000 13.290
03/10/94 0.0596000 0.0000 12.760
04/08/94 0.0596000 0.0000 12.170
05/10/94 0.0596000 0.0000 12.120
06/10/94 0.0596000 0.0000 12.540
07/08/94 0.0596000 0.0000 12.090
08/10/94 0.0596000 0.0000 12.140
09/09/94 0.0596000 0.0000 12.160
Class B Shares
03/10/93 0.0165793 0.0000 13.130
04/07/93 0.0521313 0.0000 12.900
05/05/93 0.0521611 0.0000 12.970
06/10/93 0.0516092 0.0000 13.040
07/09/93 0.0547955 0.0000 13.190
08/10/93 0.0546788 0.0000 13.240
09/10/93 0.0542477 0.0000 13.560
10/08/93 0.0556093 0.0000 13.540
11/10/93 0.0523776 0.0000 13.350
12/10/93 0.0501260 0.1404333 13.300
01/10/94 0.0512726 0.0000 13.330
02/10/94 0.0507043 0.0000 13.290
03/10/94 0.0517597 0.0000 12.760
04/08/94 0.0512089 0.0000 12.170
05/10/94 0.0517210 0.0000 12.130
06/10/94 0.0510002 0.0000 12.540
07/08/94 0.0523328 0.0000 12.090
08/10/94 0.0516219 0.0000 12.150
09/09/94 0.0514094 0.0000 12.170
Oppenheimer New York Tax-Exempt Fund
Page 4
August 23, 1995
1. Average Annual Total Returns for the Periods Ended 09/30/94:
The formula for calculating average annual total return is as follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum sales charge of 4.75%:
One Year Five Year
$ 899.59 1 $1,349.74 .2
(---------) - 1 = -10.04% (---------) - 1 = 6.18%
$1,000 $1,000
Ten Year
$2,382.44 .1
(---------) - 1 = 9.07%
$1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of 5.00%
for the first year, and 4.00% for the second year:
One Year Inception
$ 893.66 1 $ 959.85 .6340
(---------) - 1 = -10.63% (---------) - 1 = -2.56%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$ 944.45 1 $1,417.05 .2
(---------) - 1 = -5.55% (---------) - 1 = 7.22%
$1,000 $1,000
Ten Year
$2,501.25 .1
(---------) - 1 = 9.60%
$1,000
Oppenheimer New York Tax-Exempt Fund
Page 5
August 23, 1995
1. Average Annual Total Returns for the Periods Ended 09/30/94 (Continued):
Class B Shares
One Year Inception
$ 937.85 1 $ 996.36 .6340
(---------) - 1 = -6.22% (---------) - 1 = -0.23%
$1,000 $1,000
2. Cumulative Total Returns for the Periods Ended 9/30/94:
The formula for calculating cumulative total return is as follows:
(ERV - P) / P = Cumulative Total Return
Class A Shares
Examples, assuming a maximum sales charge of 4.75%:
One Year Five Year
$ 899.59 - $1,000 $1,349.74 - $1,000
------------------ = -10.04% ------------------ = 34.97%
$1,000 $1,000
Ten Year
$2,382.44 - $1,000
------------------ = 138.24%
$1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of 5.00% for
the first year, and 4.00% for the second year:
One Year Inception
$ 893.66 - $1,000 $ 959.85 - $1,000
------------------ = -10.63% ------------------ = -4.02%
$1,000 $1,000
Oppenheimer New York Tax-Exempt Fund
Page 6
August 23, 1995
2. Cumulative Total Returns for the Periods Ended 9/30/94 (Continued):
Examples at NAV:
Class A Shares
One Year Five Year
$ 944.45 - $1,000 $1,417.05 - $1,000
------------------ = -5.55% ------------------ = 41.71%
$1,000 $1,000
Ten Year
$2,501.25 - $1,000
------------------ = 150.13%
$1,000
Class B Shares
One Year Inception
$ 937.85 - $1,000 $ 996.36 - $1,000
------------------ = -6.22% ------------------ = -0.36%
$1,000 $1,000
3. Standardized Yield for the 30-Day Period Ended 09/30/94:
The Fund's standardized yields are calculated using the following formula
set forth in the SEC rules:
a - b 6
Yield = 2 { (-------- + 1 ) - 1 }
cd or ce
The symbols above represent the following factors:
a = Dividends and interest earned during the 30-day period.
b = Expenses accrued for the period (net of any expense
reimbursements).
c = The average daily number of Fund shares outstanding during
the 30-day period that were entitled to receive dividends.
d = The Fund's maximum offering price (including sales charge)
per share on the last day of the period.
e = The Fund's net asset value (excluding contingent deferred
sales charge) per share on the last day of the period.
Oppenheimer New York Tax-Exempt Fund
Page 7
August 23, 1995
3. Standardized Yield for the 30-Day Period Ended 09/30/94 (Continued):
Class A Shares
Example, assuming a maximum sales charge of 4.75%:
$3,672,724.16 - $537,730.38 6
2{(--------------------------- + 1) - 1} = 5.24%
57,983,276 x $12.51
Class B Shares
Example at NAV:
$ 389,616.01 - $103,960.77 6
2{(--------------------------- + 1) - 1} = 4.72%
6,148,927 x $11.93
4. DIVIDEND YIELDS FOR THE 30-DAY PERIOD ENDED 9/30/94:
The Fund's dividend yields are calculated using the following formula:
Dividend Yield = { (a / 30) x 365 } / b or c
The symbols above represent the following factors:
a = The accrual dividend earned during the period.
b = The Fund's maximum offering price (including sales charge)
per share on the last day of the period.
c = The Fund's net asset value (excluding sales charge) per share
on the last day of the period.
Examples:
Class A Shares
Dividend Yield
at Maximum Offering $.0595363/30 x 365
------------------ = 5.79%
$12.51
Dividend Yield
at Net Asset Value $.0595363/30 x 365
------------------ = 6.08%
$11.92
Class B Shares
Dividend Yield
at Net Asset Value $.0520126/30 x 365
------------------ = 5.30%
$11.93
Oppenheimer New York Tax-Exempt Fund
Page 8
August 23, 1995
4. TAX-EQUIVALENT YIELDS FOR THE 30-DAY PERIOD ENDED 9/30/94:
The Fund's tax-equivalent yields are calculated using the
following formula:
a
----- + b = Tax-Equivalent Yield
1 - c
The symbols above represent the following factors:
a = 30-day SEC yield of tax-exempt security positions in the portfolio.
b = 30-day SEC yield of taxable security positions in the portfolio.
c = Combined stated tax rate (e.g., federal, state and New York City
income tax rates for an individual in the 39.6% federal tax bracket
filing singly).
Examples:
Class A Shares
.0524
----------- + 0 = 9.90%
1 - .4705
Class B Shares
.0472
----------- + 0 = 8.91%
1 - .4705
Combined Stated Tax Rate Formula
1 - {(1-d)(1-(e+f))} = Combined Stated Tax Rate
The symbols above represent the following factors:
d = Stated federal tax rate (e.g., federal income tax rate for an
individual in the 39.6% federal tax bracket filing singly).
e = Stated New York State tax rate (e.g., for an individual in the
39.6% federal and 7.875% state tax bracket filing singly).
f = Stated New York City tax rate (e.g., for an individual in the
39.6% federal and 4.46% City tax bracket filing singly).
Example: 1 - {(1 - .3960)(1 - (.07875+.04460))} = 47.05%
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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