Registration No. 33-02769
File No. 811-4563
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 1 / X /
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
(Exact Name of Registrant as Specified in Charter)
3410 South Galena Street, Denver, Colorado 80231
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
Executive Vice President & General Counsel
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(212) 323-0256
(Name and Address of Agent for Service)
As soon as practicable after the Registration Statement becomes effective.
(Approximate Date of Proposed Public Offering)
It is proposed that this filing will become effective on July 17, 1995,
pursuant to Rule 488.
No filing fee is due because the Registrant has previously registered an
indefinite number of shares under Rule 24f-2; a Rule 24f-2 notice for the
year ended September 30, 1994 was filed on November 29, 1994.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A
Proxy Statement for Oppenheimer Strategic Short-Term Income Fund
and
Prospectus for Oppenheimer Limited-Term Government Fund
Part B
Statement of Additional Information
Part C
Other Information
Signatures
Exhibits
<PAGE>
FORM N-14
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
Cross Reference Sheet
Part A of
Form N-14
Item No. Proxy Statement and Prospectus Heading and/or Title of Document
- -------- ----------------------------------------------------------------
1 (a) Cross Reference Sheet
(b) Front Cover Page
(c) *
2 (a) *
(b) Table of Contents
3 (a) Comparative Fee Table
(b) Synopsis
(c) Principal Risk Factors
4 (a) Synopsis; Approval of the Reorganization; Comparison between the
Fund and Strategic Income Fund; Method of Carrying Out the
Reorganization; Miscellaneous Information
(b) Approval of the Reorganization - Capitalization Table
(Unaudited)
5 (a) Registrant's Prospectus; Additional Information
(b) *
(c) *
(d) *
(e) Comparison between Strategic Short-Term Income Fund and Limited-
Term Government Fund
(f) Comparison between Strategic Short-Term Income Fund and Limited-
Term Government Fund
6 (a) Prospectus of Oppenheimer Strategic Short-Term Income Fund;
Front Cover Page
(b) Comparison between Strategic Short-Term Income Fund and Limited-
Term Government Fund
(c) *
(d) *
7 (a) Introduction; Synopsis
(b) *
(c) Introduction; Approval of the Reorganization
8 (a) Proxy Statement
(b) *
9 *
Part B of
Form N-14
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Table of Contents
12 (a) Oppenheimer Limited-Term Government Fund's Statement of
Additional Information
(b) *
13 (a) Oppenheimer Strategic Short-Term Income Fund's Statement of
Additional Information
(b) *
14 Registrant's Statement of Additional Information; Statement of
Additional Information about Oppenheimer Strategic Short-Term
Income Fund; Annual Report of Oppenheimer Strategic Short-Term
Income Fund at 9/30/94; Semi-Annual Report of Oppenheimer
Strategic Short-Term Income Fund at 3/31/95 (unaudited);
Oppenheimer Limited-Term Government Fund Annual Report at
9/30/94 and Semi-Annual Report of Oppenheimer Limited-Term
Government Fund (unaudited) at 3/31/95
Part C of
Form N-14
Item No. Other Information Heading
- --------- -------------------------
15 Indemnification
16 Exhibits
17 Undertakings
_______________
* Not Applicable or negative answer
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant / X /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ X / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Oppenheimer Limited-Term Government Fund
- ------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Oppenheimer Strategic Short-Term Income Fund
- ------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-
6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee Computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- ------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
- ------------------------------------------------------------------
(1) Amount previously paid:
- ------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- ------------------------------------------------------------------
(3) Filing Party:
- ------------------------------------------------------------------
(4) Date Filed:
- -----------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
July 1995
Dear Oppenheimer Strategic Short-Term Income Fund Shareholder:
One of the things we pride ourselves on at Oppenheimer Management
Corporation is our commitment to searching for new investment
opportunities for our shareholders. I am writing to you today to let you
know about one of those opportunities -- a positive change that has been
proposed for Oppenheimer Strategic Short-Term Income Fund.
After careful consideration, the Board of Trustees agreed that it
would be in the best interest of shareholders of Strategic Short-Term
Income Fund to reorganize into another Oppenheimer fund, Oppenheimer
Limited-Term Government Fund. A shareholder meeting has been scheduled
in August, and all shareholders of record on June 2nd are being asked to
vote either in person or by proxy. You will find a notice of the meeting,
a ballot card, a proxy statement detailing the proposal, an Oppenheimer
Limited-Term Government Fund prospectus and a postage-paid return envelope
enclosed for your use.
Why does the Board of Trustees recommend this change?
While both Strategic Short-Term Income Fund and Limited-Term
Government Fund seek high current income with stability of principal by
maintaining a relatively short-term portfolio maturity, the Investment
Adviser believes that Limited-Term Government Fund's management approach
can offer shareholders even better investment opportunities over the long
term.
Oppenheimer Limited-Term Government Fund's investment strategy has
achieved high income for shareholders while helping protect the share
value from significant price fluctuations due to changes in interest
rates. For example, in 1994, one of the most challenging periods the bond
markets have faced in more than six decades, Limited-Term Government
Fund's Class A shares delivered an attractive, dependable level of income
and a positive return at net asset value (assuming reinvestment of
dividends and distributions).
Another benefit for shareholders is the greater economies of scale
resulting from consolidation into a much larger fund. By merging into
Limited-Term Government Fund --which now has approximately $366 million
in assets -- former shareholders of Strategic Short-Term Income Fund may
benefit from a lower expense ratio as costs are spread among a larger
number of shareholders.
How do you vote?
No matter how large or small your investment, your vote is important,
so please review the proxy statement carefully. To cast your vote, simply
mark, sign and date the enclosed proxy ballot and return it in the
postage-paid envelope today. Remember, it can be expensive for the Fund -
- - and ultimately for you as a shareholder -- to remail ballots if not
enough responses are received to conduct the meeting.
If you have any questions about the proposal, please feel free to
contact your financial adviser, or call us at 1-800-525-7048.
As always, we appreciate your confidence in OppenheimerFunds and look
forward to serving you for many years to come.
Sincerely,
[JSF signature]
<PAGE>
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 20, 1995
To the Shareholders of Oppenheimer Strategic Short-Term Income Fund:
Notice is hereby given that a Special Meeting of the Shareholders of
Oppenheimer Strategic Short-Term Income Fund ("Strategic Short-Term Income
Fund"), a registered management investment company, will be held at 3410
South Galena Street, Denver, Colorado 80231, at 10:00 A.M., Denver time,
on September 20, 1995, or any adjournments thereof (the "Meeting"), for
the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization
between Strategic Short-Term Income Fund and Oppenheimer Limited-Term
Government Fund ("Limited-Term Government Fund"), and the transactions
contemplated thereby, including the transfer of substantially all the
assets of Strategic Short-Term Income Fund, in exchange for Class A and
Class B shares of Limited-Term Government Fund, the distribution of such
shares to the Class A and Class B shareholders of Strategic Short-Term
Income Fund in complete liquidation of Strategic Short-Term Income Fund,
the de-registration of Strategic Short-Term Income Fund as an investment
company under the Investment Company Act of 1940, as amended, and the
cancellation of the outstanding shares of Strategic Short-Term Income Fund
(the "Proposal").
2. To act upon such other matters as may properly come before the
Meeting.
Shareholders of record at the close of business on June 2, 1995 are
entitled to notice of, and to vote at, the Meeting. The Proposal is more
fully discussed in the Proxy Statement and Prospectus. Please read it
carefully before telling us, through your proxy or in person, how you wish
your shares to be voted. Strategic Short-Term Income Fund's Board of
Trustees recommends a vote in favor of the Proposal. WE URGE YOU TO SIGN,
DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
George C. Bowen, Secretary
July 17, 1995
_______________________________________________________________________
Shareholders who do not expect to attend the Meeting are requested to
indicate voting instructions on the enclosed proxy and to date, sign and
return it in the accompanying postage-paid envelope. To avoid unnecessary
duplicate mailings, we ask your cooperation in promptly mailing your proxy
no matter how large or small your holdings may be.
295
<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
This Proxy Statement of Strategic Short-Term Income Fund relating to the
Reorganization Agreement and the transactions contemplated thereby (the
"Reorganization") also constitutes a Prospectus of Limited-Term Government
Fund included in a Registration Statement on Form N-14 filed by Limited-
Term Government Fund with the Securities and Exchange Commission (the
"SEC"). Such Registration Statement relates to the registration of shares
of Limited-Term Government Fund to be offered to the shareholders of
Strategic Short-Term Income Fund pursuant to the Reorganization Agreement.
Strategic Short-Term Income Fund is located at 3410 South Galena Street,
Denver, Colorado 80231 (telephone 1-800-525-7048).
This Proxy Statement and Prospectus sets forth concisely information
about Limited-Term Government Fund that shareholders of Strategic Short-
Term Income Fund should know before voting on the Reorganization. A copy
of the Prospectus for Limited-Term Government Fund, dated February 1,
1995, supplemented July 14, 1995, is enclosed, and is incorporated herein
by reference. The following documents have been filed with the SEC and
are available without charge upon written request to Oppenheimer
Shareholder Services ("OSS"), the transfer and shareholder servicing agent
for Limited-Term Government Fund and Strategic Short-Term Income Fund, at
P.O. Box 5270, Denver, Colorado 80217, or by calling the toll-free number
shown above: (i) a Prospectus for Strategic Short-Term Income Fund, dated
January 27, 1995, supplemented July 14, 1995; (ii) a Statement of
Additional Information about Strategic Short-Term Income Fund, dated
January 27, 1995, supplemented July 14, 1995; and (iii) a Statement of
Additional Information about Limited-Term Government Fund, dated February
1, 1995, supplemented July 14, 1995 (the "Limited-Term Government Fund
Additional Statement"). The Limited-Term Government Fund Additional
Statement, which is incorporated herein by reference, contains more
detailed information about Limited-Term Government Fund and its
management. A Statement of Additional Information relating to the
Reorganization, dated July 17, 1995, has been filed with the SEC as part
of the Limited-Term Government Fund Registration Statement on Form N-14
and is incorporated by reference herein, and is available by written
request to OSS at the same address immediately above or by calling the
toll-free number shown above.
Investors are advised to read and retain this Proxy Statement and
Prospectus for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated July 17, 1995.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
Page
Introduction
General
Record Date; Vote Required; Share Information
Proxies
Costs of the Solicitation and the Reorganization
Comparative Fee Table
Synopsis
Parties to the Reorganization
Shares to be Issued
The Reorganization
Reasons for the Reorganization
Tax Consequences of the Reorganization
Investment Objectives and Policies
Investment Advisory and Distribution and Service Plan Fees
Purchases, Exchanges and Redemptions
Principal Risk Factors
Approval of the Reorganization (The Proposal)
Reasons for the Reorganization
The Reorganization
Tax Aspects of the Reorganization
Capitalization Table (Unaudited)
Comparison Between Strategic Short-Term Income Fund and Limited-Term
Government Fund
Investment Objectives and Policies
Permitted Investments by Strategic Short-Term Income Fund and
Limited-Term Government Fund
Additional Permitted Investments by Strategic Short-Term
Income Fund
Investment Restrictions
Portfolio Turnover
Description of Brokerage Practices
Expense Ratios and Performance
Shareholder Services
Rights of Shareholders
Management and Distribution Arrangements
Purchase of Additional Shares
Method of Carrying Out the Reorganization
Miscellaneous
Additional Information
Financial Information
Public Information
Other Business
Annex A - Agreement and Plan of Reorganization,
by and between Oppenheimer Strategic
Short-Term Income Fund and Oppenheimer Limited-Term
Government Fund A-1
<PAGE>
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Special Meeting of Shareholders
to be held September 20, 1995
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the
shareholders of Oppenheimer Strategic Short-Term Income Fund ("Strategic
Short-Term Income Fund"), a registered management investment company, in
connection with the solicitation by the Board of Trustees (the "Board")
of proxies to be used at the Special Meeting of Shareholders of Strategic
Short-Term Income Fund to be held at 3410 South Galena Street, Denver,
Colorado 80231, at 10:00 A.M., Denver time, on September 20, 1995, or any
adjournments thereof (the "Meeting"). It is expected that the mailing of
this Proxy Statement and Prospectus will commence on or about August 14,
1995.
At the Meeting, shareholders of Strategic Short-Term Income Fund will be
asked to approve an Agreement and Plan of Reorganization (the
"Reorganization Agreement") between Strategic Short-Term Income Fund and
Oppenheimer Limited-Term Government Fund ("Limited-Term Government Fund"),
and the transactions contemplated thereby (the "Reorganization"),
including the transfer of substantially all the assets of Strategic Short-
Term Income Fund, in exchange for Class A and Class B shares of Limited-
Term Government Fund, the distribution of such shares to the shareholders
of Strategic Short-Term Income Fund in complete liquidation of Strategic
Short-Term Income Fund, the de-registration of Strategic Short-Term Income
Fund as an investment company, under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), and the cancellation of the
outstanding shares of Strategic Short-Term Income Fund. Limited-Term
Government Fund currently offers Class A shares with a sales charge
imposed at the time of purchase and Class B and Class C shares without an
initial sales charge. There is no initial sales charge on purchases of
Class B or Class C shares, however a contingent deferred sales charge may
be imposed, depending on when the shares are sold. The Class A and Class
B shares issued pursuant to the Reorganization will be issued at net asset
value without a sales charge and without the imposition of the contingent
deferred sales charge. Additional information with respect to these
charges by Limited-Term Government Fund is set forth herein, in the
Prospectus of Limited-Term Government Fund accompanying this Proxy
Statement and Prospectus and in the Limited-Term Government Fund
Additional Statement which is incorporated herein by reference.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on June 2, 1995 as the record
date (the "Record Date") for the determination of shareholders entitled
to notice of, and to vote at, the Meeting. An affirmative vote of the
holders of a majority of the outstanding voting securities of all of the
Class A and Class B shares in the aggregate of Strategic Short-Term Income
Fund is required to approve the Reorganization. That level of vote is
defined in the Investment Company Act of 1940 as the vote of the holders
of the lesser of: (i) 67% or more of the voting securities present or
represented by proxy at the shareholders meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented
by proxy, or (ii) more than 50% of the outstanding voting securities.
Each shareholder will be entitled to one vote for each share and a
fractional vote for each fractional share held of record at the close of
business on the Record Date. Only shareholders of Strategic Short-Term
Income Fund will vote on the Reorganization. The vote of shareholders of
Limited-Term Government Fund is not being solicited.
At the close of business on the Record Date, there were approximately
4,369,138.369 Class A shares and 1,845,278.468 Class B shares of Strategic
Short-Term Income Fund issued and outstanding. With respect to Limited-
Term Government Fund there were 33,825,634.953 shares of Limited-Term
Government Fund issued and outstanding, consisting of: 26,401,139.049
Class A shares, 7,151,722.034 Class B shares and 272,773.870 Class C
shares. The presence in person or by proxy of the holders of a majority
of the outstanding shares of Strategic Short-Term Income Fund constitutes
a quorum for the transaction of business at the Meeting. To the knowledge
of Strategic Short-Term Income Fund, as of the Record Date, no person
owned of record or beneficially 5% or more of its outstanding shares
except for Oppenheimer Funds Distributor, Inc. (the "Distributor"), P.O.
Box 5061, Denver, Colorado 80217-5061, which owned of record 505,050.505
Class A shares (11.55% of the outstanding Class A shares of Strategic
Short-Term Income Fund as of such date which represented 8.13% of
Strategic Short-Term Income Fund) and Smith Barney Shearson, 388 Greenwich
Street, New York, New York 10013, which owned of record 109,802.010 Class
B shares of Strategic Short-Term Income Fund (5.95% of the outstanding
Class B shares of Strategic Short-Term Income Fund as of such date which
represented less than 5% of Strategic Short-Term Income Fund). The
Distributor, a subsidiary of the Manager, has informed Strategic Short-
Term Income Fund that it will vote its shares of Strategic Short-Term
Income Fund in the same proportion as shares are voted by other
shareholders. To the knowledge of Limited-Term Government Fund, as of the
Record Date, no person owned of record or beneficially owned 5% or more
of its outstanding shares except for the following: Charles R. Player,
Jr., TR T. Tankersley Wolfe Chas. Rem. Unit Trust For Lives of Donor &
Steven John Wolfe UA Dec. 22 1994, P.O. Box 401, Bainesville, Maryland
20838-0401, who owned of record 19,210.889 shares of Class A (7.04% of the
outstanding Class A shares of Limited-Term Government Fund as of such date
which represented 5.67% of Limited-Term Government Fund), Vonda A. Webb,
208 Pine Ridge Road, Jackson, Mississippi 39206, who owned of record
17,691.588 shares of Class A (6.48% of the outstanding Class A shares of
Limited-Term Government Fund as of such date which represented 5.23% of
the Fund) and David B. Jones, 2727 Fairview Avenue E, Seattle, Washington
98102-3147, who owned of record 14,665.066 Class A shares of Limited-Term
Government Fund (5.38% of the outstanding Class A shares of Limited-Term
Government Fund as of such date which represented less than 5% of Limited-
Term Government Fund). In addition, as of the record date, the Trustees
and officers of Strategic Short-Term Income Fund owned less than 1% of the
outstanding shares of either Strategic Short-Term Income Fund or Limited-
Term Government Fund.
Proxies
The enclosed form of proxy, if properly executed and returned, will be
voted (or counted as an abstention or withheld from voting) in accordance
with the choices specified thereon, and will be included in determining
whether there is a quorum to conduct the Meeting. The proxy will be voted
in favor of the Proposal unless a choice is indicated to vote against or
to abstain from voting on the Proposal.
Shares owned of record by broker-dealers for the benefit of their
customers ("street account shares") will be voted by the broker-dealer
based on instructions received from its customers. If no instructions are
received, the broker-dealer may (if permitted under applicable stock
exchange rules), as record holder, vote such shares on the Proposal in the
same proportion as that broker-dealer votes street account shares for
which voting instructions were received in time to be voted. If a
shareholder executes and returns a proxy but fails to indicate how the
votes should be cast, the proxy will be voted in favor of the Proposal.
The proxy may be revoked at any time prior to the voting thereof by: (i)
writing to the Secretary of Strategic Short-Term Income Fund at 3410 South
Galena Street, Denver, Colorado 80231; (ii) attending the Meeting and
voting in person; or (iii) signing and returning a new proxy (if returned
and received in time to be voted).
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing and
mailing this Proxy Statement and Prospectus, will be borne by Strategic
Short-Term Income Fund. Any documents such as existing prospectuses or
annual reports that are included in that mailing will be a cost of the
fund issuing the document. In addition to the solicitation of proxies by
mail, proxies may be solicited by officers of Strategic Short-Term Income
Fund or officers and employees of OSS, personally or by telephone or
telegraph; any expenses so incurred will be borne by OSS. Proxies may
also be solicited by a proxy solicitation firm hired at Strategic Short-
Term Income Fund's expense for such purpose. Brokerage houses, banks and
other fiduciaries may be requested to forward soliciting material to the
beneficial owners of shares of Strategic Short-Term Income Fund and to
obtain authorization for the execution of proxies. For those services,
if any, they will be reimbursed by Strategic Short-Term Income Fund for
their reasonable out-of-pocket expenses.
With respect to the Reorganization, Strategic Short-Term Income Fund and
Limited-Term Government Fund will bear the cost of their respective tax
opinions. Any other out-of-pocket expenses of Strategic Short-Term Income
Fund and Limited-Term Government Fund associated with the Reorganization,
including legal, accounting and transfer agent expenses, will be borne by
Strategic Short-Term Income Fund and Limited-Term Government Fund,
respectively, in the amounts so incurred by each.
COMPARATIVE FEE TABLE
Strategic Short-Term Income Fund and Limited-Term Government Fund each
pay a variety of expenses for management of their assets, administration,
distribution of their shares and other services, and those expenses are
reflected in the net asset value per share of each class of each fund.
Shareholders pay other expenses directly, such as sales charges. The
following table is provided to help you compare the direct expenses of
investing in each class of Strategic Short-Term Income Fund with the
direct expenses of investing in each class of Limited-Term Government
Fund.
<TABLE>
<CAPTION>
Strategic Short-Term Limited-Term
Income Fund Government Fund
Class A Class B Class A Class B Class C
Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales 3.50% None 3.50% None None
Charge on
Purchases (as a %
of offering price)
Sales Charge on None None None None None
Reinvested
Dividends
Deferred Sales None(1) 4% in the None(1) 4% in the 1% if
Charge (as a % first year, first year, shares are
of the lower declining declining redeemed
of the original to 1% in the to 1% in the within 12
purchase price fifth year and fifth year and months of
or redemption eliminated eliminated purchase
proceeds) thereafter thereafter
Exchange Fee None None None None None
Pro Forma Surviving
Limited-Term
Government Fund
Class A Class B Class C
Shares Shares Shares
Shareholder Transaction Expenses
Maximum Sales 3.50% None None
Charge on
Purchases (as a %
of offering price)
Sales Charge on None None None
Reinvested
Dividends
Deferred Sales None(1) 4% in the 1% if
Charge (as a % first year, shares are
of the lower declining redeemed
of the original to 1% in the within 12
purchase price fifth year and months of
or redemption eliminated purchase
proceeds) thereafter
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.
</TABLE>
The following tables are projections of the business expenses of Class
A and Class B shares of Strategic Short-Term Income Fund and Class A and
Class B shares of Limited-Term Government Fund based on the expenses for
the six month period (annualized) ended March 31, 1995 (unaudited). The
pro forma information is an estimate of the business expenses of the
surviving Limited-Term Government Fund after giving effect to the
reorganization. All amounts shown are a percentage of net assets of each
class of the funds.
<TABLE>
<CAPTION>
Pro Forma
Strategic Surviving
Short-Term Limited-Term Limited-Term
Income Fund Government Fund Government Fund
Class A Class B Class A Class B Class A Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .65% .65% .46% .46% .46% .46%
12b-1 Distribution and
Service Plan Fees .22% 1.00% .24% 1.00% .24% 1.00%
Other Expenses .46% .46% .16% .22% .16% .22%
Total Fund Operating
Expenses 1.33% 2.11% .86% 1.68% .86% 1.68%
</TABLE>
The 12b-1 fees for Class A shares of Strategic Short-Term Income Fund
and Limited-Term Government Fund are service plan fees. The service fee
is a maximum of 0.25% of average annual net assets of Class A shares of
each fund. The 12b-1 fees for Class B shares of both funds are
Distribution and Service Plan fees which include a service fee of 0.25%
and an asset-based sales charge of 0.75%.
Class C shares of Limited-Term Government Fund will not be issued to
shareholders of Strategic Short-Term Income Fund. The management fees for
Class C shares are .46%, 12b-1 Distribution and Service Plan Fees are
1.00%, other expenses are .16%, for total operating expenses of 1.62%.
These amounts are estimates based on amounts that would have been payable
assuming that Class C shares were existing during such period.
Examples
To try and show the effect of the expenses in an investment over time,
the hypotheticals shown below have been created. Assume that you make a
$1,000 investment in each class of shares of Strategic Short-Term Income
Fund, or Class A or Class B shares of Limited-Term Government Fund, or
Class A or Class B shares of the pro forma surviving Limited-Term
Government Fund (Class C shares are shown for information purposes only
since such shares are not a part of the merger and will not be issued to
shareholders of Strategic Short-Term Income Fund) and that the annual
return is 5% and that the operating expenses for each fund are the ones
shown in the chart above. If you were to redeem your shares at the end
of each period shown below, your investment would incur the following
expenses by the end of each period shown.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Oppenheimer Strategic
Short-Term Income Fund
Class A Shares $48 $76 $105 $190
Class B Shares $61 $86 $123 $206*
Oppenheimer Limited-Term
Government Fund
Class A Shares $43 $61 $81 $137
Class B Shares $57 $73 $101 $157*
Class C Shares $26 $51 $88 $192**
Pro Forma Surviving Limited-Term
Government Fund
Class A Shares $43 $61 $81 $137
Class B Shares $57 $73 $101 $157*
Class C Shares $26 $51 $88 $192**
If you did not redeem your investment, it would incur the following expenses:
1 year 3 years 5 years 10 years
Oppenheimer Strategic
Short-Term Income Fund
Class A Shares $48 $76 $105 $190
Class B Shares $21 $66 $113 $206*
Oppenheimer Limited-Term
Government Fund
Class A Shares $43 $61 $81 $137
Class B Shares $17 $53 $91 $157*
Class C Shares $16 $51 $88 $192*
Pro Forma Surviving Limited-Term
Government Fund
Class A Shares $43 $61 $81 $137
Class B Shares $17 $53 $91 $157*
Class C Shares $16 $51 $88 $192*
<FN>
____________________
* The Class B expenses in years 7 through 10 are based on the Class A
expenses shown above, because each fund automatically converts your Class
B shares into Class A shares after 6 years. Because of the asset-based
sales charge and the contingent deferred sales charge on Class B and Class
C shares, long-term Class B and Class C shareholders could pay the
economic equivalent of an amount greater than the maximum front-end sales
charge allowed under the applicable regulatory requirement. The automatic
conversion of Class B shares to Class A Shares is designed to minimize the
likelihood that this will occur.
</TABLE>
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus and
presents key considerations for shareholders of Strategic Short-Term
Income Fund to assist them in determining whether to approve the
Reorganization. This synopsis is only a summary and is qualified in its
entirety by the more detailed information contained in or incorporated by
reference in this Proxy Statement and Prospectus and by the Reorganization
Agreement, a copy of which is attached as an Annex hereto. Shareholders
should carefully review this Proxy Statement and Prospectus and the
Reorganization Agreement in their entirety and, in particular, the current
Prospectus of Limited-Term Government Fund which accompanies this Proxy
Statement and Prospectus and is incorporated by reference herein.
Parties to the Reorganization
Strategic Short-Term Income Fund is a diversified, open-end management
investment company organized in 1991 as a Massachusetts business trust.
Limited-Term Government Fund is a diversified, open-end, management
investment company organized in 1986 as a Massachusetts business trust.
Strategic Short-Term Income Fund and Limited-Term Government Fund are each
located at 3410 South Galena Street, Denver, Colorado 80231. The members
of the Board of Trustees of Strategic Short-Term Income Fund and of the
Board of Trustees of Limited-Term Government Fund are the same.
Oppenheimer Management Corporation (the "Manager") whose address is Two
World Trade Center, New York, New York 10048-0203, acts as investment
adviser to Strategic Short-Term Income Fund and Limited-Term Government
Fund (collectively referred to herein as the "funds"). Additional
information about the parties is set forth below.
Shares to be Issued. All shareholders of Strategic Short-Term Income Fund
who own Class A shares will receive Class A shares of Limited-Term
Government Fund in exchange for their Class A shares of Strategic Short-
Term Income Fund. Shareholders of Strategic Short-Term Income Fund who
own Class B shares will receive Class B shares of Limited-Term Government
Fund in exchange for their Class B shares of Strategic Short-Term Income
Fund. All classes of shares vote together in the aggregate as to certain
matters, however shares of a particular class vote together on matters
that affect that class alone. The Class A and Class B shares of Strategic
Short-Term Income Fund, and Class A and Class B shares of Limited-Term
Government Fund to be issued in the reorganization are substantially
similar.
The Reorganization
The Reorganization Agreement provides for the transfer of
substantially all the assets of Strategic Short-Term Income Fund to
Limited-Term Government Fund in exchange for Class A and Class B shares
of Limited-Term Government Fund. Presently Strategic Short-Term Income
Fund has two classes of shares which are Class A and Class B shares. The
net asset value of Limited-Term Government Fund Class A and Class B shares
issued in the exchange will equal the value of the assets of Strategic
Short-Term Income Fund received by Limited-Term Government Fund.
Following the Closing of the Reorganization presently scheduled for
September 22, 1995, Strategic Short-Term Income Fund will distribute the
Class A and Class B shares of Limited-Term Government Fund received by
Strategic Short-Term Income Fund on the Closing Date to holders of Fund
shares issued and outstanding as of the Valuation Date (as hereinafter
defined). As a result of the Reorganization, each Class A or Class B
Strategic Short-Term Income Fund shareholder will receive that number of
full and fractional Limited-Term Government Fund Class A or Class B shares
equal in value to such shareholder's pro rata interest in the assets
transferred to Limited-Term Government Fund as of the Valuation Date. The
Board has determined that the interests of existing Strategic Short-Term
Income Fund shareholders will not be diluted as a result of the
Reorganization. For the reasons set forth below under "The Reorganization
- - Reasons for the Reorganization," the Board, including the trustees who
are not "interested persons" of the Trust (the "Independent Trustees'),
as that term is defined in the Investment Company Act, has concluded that
the Reorganization is in the best interests of Strategic Short-Term Income
Fund and its shareholders and recommends approval of the Reorganization
by Strategic Short-Term Income Fund shareholders. If the Reorganization
is not approved, Strategic Short-Term Income Fund will continue in
existence and the Board will determine whether to pursue alternative
actions.
Reasons for the Reorganization
The Manager proposed to the Board a reorganization of Strategic Short-
Term Income Fund with Limited-Term Government Fund so that Strategic
Short-Term Income Fund shareholders may be shareholders of a larger fund,
which after such reorganization, allows such shareholders to experience
a reduction in expenses as well as a lower effective management fee. The
Manager advised the Board that with a fund this small, diversification of
investments is difficult and Strategic Short-Term Income Fund is expensive
to manage. Strategic Short-Term Income Fund, while having the ability to
invest in a broad range of securities, has not grown as anticipated. For
the fiscal period ended September 30, 1994, Strategic Short-Term Income
Fund's management fee was 0.65% of average annual net assets for both
Class A and Class B shares. For the fiscal period ended September 30,
1994, Limited-Term Government Fund's management fee for each class was
.47% of average annual net assets. On a pro forma basis giving effect to
the Reorganization, the management fee for Limited-Term Government Fund
as a percentage of average annual net assets for the fiscal year ended
September 30, 1994 would have been .47% for Class A shares and .47% for
Class B shares.
In addition, the Board considered that the average annual return on Class
A shares and Class B shares of Limited-Term Government Fund was better
than Class A and Class B shares of Strategic Short-Term Income Fund when
viewed from a longer term prospective. See "Expense Ratios and
Performance" on page __.
Tax Consequences of the Reorganization
In the opinion of Deloitte & Touche LLP, tax adviser to Strategic Short-
Term Income Fund, the Reorganization will qualify as a tax-free
reorganization for Federal income tax purposes. As a result, no gain or
loss will be recognized by either fund, or by the shareholders of either
fund for Federal income tax purposes as a result of the Reorganization.
For further information about the tax consequences of the Reorganization,
see "Approval of the Reorganization - Tax Aspects" below.
Investment Objectives and Policies
Strategic Short-Term Income Fund
Strategic Short-Term Income Fund's investment objective is to seek as high
a level of current income, consistent with stability of principal, as is
available from a portfolio of investment grade debt securities having a
remaining maturity of not more than three years. Under normal
circumstances at least 65% of Strategic Short-Term Income Fund's total
assets will be invested in investment grade securities that include the
following: (i) domestic bonds, notes and debentures of investment grade,
that is, rated "Baa" or better by Moody's Investors Service, Inc.
("Moody's") or "BBB" or better by Standard & Poor's Corporation ("Standard
& Poor's") or, if unrated, determined by Strategic Short-Term Income
Fund's investment adviser, Oppenheimer Management Corporation (the
"Manager"), to be comparable to securities meeting those rating
requirements; (ii) U.S. Government Securities; (iii) money market
instruments and (iv) investment grade foreign corporate and government
debt securities denominated in U.S. dollars or in selected foreign
currencies. Strategic Short-Term Income Fund may also invest in debt
securities which have been rated below investment grade. It may also
invest in other securities and use hedging instruments. Under normal
circumstances, Strategic Short-Term Income Fund will maintain a dollar
weighted average portfolio maturity of not more than three years.
Limited-Term Government Fund
Limited-Term Government Fund's investment objective is to seek high
current return and safety of principal. As a matter of fundamental
policy, Limited-Term Government Fund seeks its objective by investing only
in obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities ("U.S. Government Securities"), and repurchase
agreements on such securities. Limited-Term Government Fund may also use
hedging instruments approved by its Board. Under normal circumstances,
it anticipates that it will maintain an average effective portfolio
duration on a dollar-weighted basis of not more than three years.
Each of these funds may also invest in other securities. See "Investment
Objectives and Policies" on page 18.
Investment Advisory and Distribution and Service Plan Fees
The terms and conditions of each investment advisory agreement are the
same other than the investment advisory fees. The funds obtain investment
management services from the Manager. The management fee is payable
monthly and computed on the net asset value of each fund as of the close
of business each day. Strategic Short-Term Income Fund pays a management
fee at the rate of 0.65% of the first $500 million of average annual net
assets, 0.62% of the next $500 million, 0.59% of the next $500 million,
and 0.50% of net assets in excess of $1.5 billion. Limited-Term
Government Fund pays a management fee at the rate of 0.500% of the first
$100 million of average annual net assets, 0.450% of the next $150
million, 0.425% of the next $250 million and 0.400% of net assets in
excess of $500 million.
Strategic Short-Term Income Fund and Limited-Term Government Fund have
both adopted Service Plans for their respective Class A shares. Both
Service Plans provide for reimbursement to the Distributor for a portion
of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Under each plan,
reimbursement is made at an annual rate that may not exceed 0.25% of the
average annual net assets of Class A shares of either fund.
Strategic Short-Term Income Fund and Limited-Term Government Fund have
adopted Distribution and Service Plans (the "Plans") for Class B shares
under which each fund pays the Distributor for its services in connection
with distributing Class B shares and servicing accounts. Under each Plan,
the funds pay the Distributor an asset-based sales charge of 0.75% per
annum of Class B shares outstanding for six years or less, and also pays
the Distributor a service fee of 0.25% per annum, each of which is
computed on the average annual net assets of Class B shares determined as
of the close of each regular business day of each fund. The Plan for
Strategic Short-Term Income Fund makes payments to reimburse the
Distributor for its distribution expenses. The Plan for Limited-Term
Government Fund is a compensation plan under which Limited-Term Government
Fund pays the Distributor for certain distribution services but Limited-
Term Government Fund payments are not tied to reimbursing the Distributor
for its expenses. Under Limited-Term Government Fund's compensation plan,
the payments the Fund makes may over time be greater than the payments to
be made by Strategic Short-Term Income Fund.
Purchases, Exchanges and Redemptions
Both Strategic Short-Term Income Fund and Limited-Term Government Fund
are part of the OppenheimerFunds complex of mutual funds. The procedures
for purchases, exchanges and redemptions of shares of the funds are
substantially the same. Shares of either fund may be exchanged only for
shares of the same class of certain of other Oppenheimer Funds offering
such shares.
Both Strategic Short-Term Income Fund and Limited-Term Government Fund
have an initial sales charge of 3.50% on Class A shares. Investors who
purchase more than $1 million in Class A shares may have to pay a sales
charge of up to 1% if shares are sold within 18 calendar months from the
end of the calendar month during which shares are purchased. Each of the
funds has the same contingent deferred sales charge imposed on the
proceeds of Class B shares redeemed within five years of buying them. The
contingent deferred sales charge ("CDSC") varies depending on how long you
hold your shares. Class A and Class B shares of Limited-Term Government
Fund received in the Reorganization will be issued at net asset value,
without a sales charge and no CDSC will be imposed as a result of the
Reorganization. Services available to shareholders of both funds include
purchase and redemption of shares through OppenheimerFunds AccountLink and
PhoneLink (an automated telephone system), telephone redemptions, and
exchanges by telephone to other OppenheimerFunds which offer Class A and
Class B shares, and reinvestment privileges. Please see "Shareholder
Services," and you should refer to Strategic Short-Term Income Fund's
prospectus and Limited-Term Government Fund's prospectus included with
this document for further information.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in Limited-
Term Government Fund, shareholders should carefully consider the following
risk factors, the information set forth in this Proxy Statement and
Prospectus and the more complete description of risk factors set forth in
the documents incorporated by reference herein, including the Prospectuses
of the funds and their respective Statements of Additional Information.
Strategic Short-Term Income Fund
Strategic Short-Term Income Fund in seeking its investment objective
as described above, normally invests primarily in (i) investment grade
domestic debt securities, (ii) U.S. government securities, (iii) money
market instruments and (iv) investment grade foreign and government debt
securities denominated in U.S. dollars and selected foreign currencies.
Strategic Short-Term Income Fund may also use certain hedging instruments
to try to reduce the risk of market fluctuations. Foreign securities
have special risks. For example, foreign issuers are not subject to the
same accounting and disclosure requirements that U.S. companies are
subject to. The values of foreign securities investments may be affected
by changes in foreign currency rates, exchange control regulations,
expropriation or nationalization of a company's assets, foreign taxes,
delays in settlement of transactions, changes in governmental economic or
monetary policy in the U.S. or abroad, or other political and economic
factors. Foreign currency losses incurred by Strategic Short-Term Income
Fund after it has distributed income in a particular period may result in
Strategic Short-Term Income Fund having distributed more income than was
available from investment income, which could result in a return of
capital to shareholders. Additional costs may be incurred in connection
with investments in foreign securities because of generally higher foreign
brokerage commissions and the additional custodial costs associated with
holding foreign securities.
Strategic Short-Term Income Fund may also invest up to 35% of its assets
in lower-rated securities, common and preferred stocks, participation
interests, zero coupon securities and asset-backed securities, each of
which present special risks. High yield, lower-grade securities, whether
rated or unrated, are often referred to as "junk bonds" and have
speculative characteristics. Lower-grade securities have special risks
that make them riskier investments than investment grade securities. They
may be subject to greater market fluctuations and risk of loss of income
and principal than lower yielding, investment grade securities. There may
be less of a market for them and therefore they may be harder to sell at
an acceptable price. There is a relatively greater possibility that the
issuer's earnings may be insufficient to make the payments of interest due
on the bonds. The issuer's lower creditworthiness may increase the
potential for its insolvency. Strategic Short-Term Income Fund may also
use some types of "derivative investments" for hedging purposes, and may
invest in other derivatives because they offer the potential for increased
income and principal value.
Limited-Term Government Fund
Limited-Term Government Fund seek high current return and safety of
principal. As a matter of fundamental policy, Limited-Term Government
Fund seeks its objective by investing only in obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities
("U.S. Government Securities"), and repurchase agreements on such
securities. A fundamental policy is one that may not be changed without
shareholder approval. This fund may also use hedging instruments approved
by its Board of Trustees. Its investment practices are generally more
conservative than the investment practices of Strategic Short-Term Income
Fund.
Investments in U.S. Government Securities involve little credit risk,
although their values will fluctuate depending on prevailing interest
rates. Limited-Term Government Fund also uses "hedging" instruments to
seek to reduce the risks of market and interest rate fluctuations that
affect the value of the securities the fund holds. Futures contracts,
exchange traded options and other hedging instruments that Limited-Term
Government Fund may use can be considered "derivative investments."
The types of securities each fund invests in, and the risks of investing
in them, are described below under "Investment Objectives and Policies."
APPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
At meetings of the Board of Trustees (the "Board") held February 28,
1995 and June 27, 1995, the Trustees reviewed and discussed materials
relevant to the Reorganization. The Board, including the Independent
Trustees, unanimously approved and recommended to shareholders of
Strategic Short-Term Income Fund that they approve the Reorganization.
The Board, in reviewing the proposed reorganization, considered that while
the investment objectives of the two funds are not identical, they are
consistent. The Board also considered that the securities in which
Limited-Term Government Fund invests are more conservative, as they are
generally limited to U.S. Government securities. The Board considered
that both funds were short-term type funds, although prior to 1994,
Oppenheimer Limited-Term Government Fund was called Oppenheimer Government
Securities Fund and had no limit on the maturity or duration of its
portfolio.
Strategic Short-Term Income Fund which was originally offered in 1992, has
not grown and is significantly smaller than Limited-Term Government Fund.
As of March 31, 1995, Strategic Short-Term Income Fund had net assets of
$29,082,000 and Limited-Term Government Fund had net assets of
$348,955,000. The Manager advised the Board that with a fund this small
it is difficult to achieve the appropriate diversification of investments
and Strategic Short-Term Income Fund is expensive to manage. The Board,
in reviewing financial information, determined that if the Reorganization
is approved, shareholders of Strategic Short-Term Income Fund will
experience a reduction in expenses and in the effective management fee.
The ratio of expenses to average net assets for Strategic Short-Term
Income Fund for the fiscal year ended September 30, 1994 was 1.17% for
Class A shares and 1.97% for Class B shares, respectively. For the six
months ended March 31, 1995, the ratio of expenses to average net assets
was 1.33% for its Class A shares and 2.11% for its Class B shares. The
ratio of expenses to average net assets for Limited-Term Government Fund
for the fiscal year ended September 30, 1994 was .99% for its Class A
shares and 1.79% for its Class B shares. For the six months ended March
31, 1995, the ratio of expenses for its Class A shares was .86% and 1.68%
for its Class B shares. For the fiscal year ended September 30, 1994 on
a pro forma basis giving effect to the Reorganization, the expense ratio
of Limited-Term Government Fund, as a percentage of average annual net
assets would have been .97% for Class A shares and 1.79% for Class B
shares. For the six month period ended March 31, 1995, on a pro forma
basis giving effect to the Reorganization, the expense ratio of the
surviving Limited-Term Government Fund, as a percentage of average annual
net assets would have been .86% for Class A shares and 1.68% for Class B
shares.
For the fiscal period ended September 30, 1994, Strategic Short-Term
Income Fund's management fee was 0.65% of average annual net assets for
both Class A and Class B shares. For the fiscal period ended September
30, 1994, Limited-Term Government Fund's management fee was .47% of
average annual net assets for both Class A and Class B shares. On a pro
forma basis giving effect to the Reorganization, the management fee for
Limited-Term Government Fund as a percentage of average annual net assets
for the fiscal year ended September 30, 1994 would have been .47% for
Class A shares and .47% for Class B shares. For the six months ended
March 31, 1995 (annualized) Strategic Short-Term Income Fund's management
fee was .65% of average annual net assets for Class A shares and .65% for
Class B shares. For the six months ended March 31, 1995 (annualized)
Limited-Term Government Fund's management fee for Class A shares was .46%
and .46% for Class B shares and, after giving effect to the
Reorganization, the management fee for the six month period (annualized)
ended March 31, 1995 (unaudited) would have been .46% for Class A shares
and .46% for Class B shares.
In addition to the above, the Board also considered information with
respect to the investment performance of Strategic Short-Term Income Fund.
The Board compared the longer term performance of Strategic Short-Term
Income Fund to the performance of Limited-Term Government Fund and
determined that the average annual return over the longer term was better
for Class A and Class B shares of Limited-Term Government Fund. The Board
also recognized that over the past twelve months the investment
performance of Strategic Short-Term Income Fund has been better than that
of Limited-Term Government Fund, and that Strategic Short-Term Income
Fund's standardized 30 day yield has recently been higher than Limited-
Term Government Fund's standardized 30 day yield. Based on discussions
with the Manager, the Board concluded that Limited-Term Government Fund
nevertheless is likely to provide better overall longer term investment
returns than Strategic Short-Term Income Fund. Although past performance
is not predictive of future results, shareholders of Strategic Short-Term
Income Fund would have an opportunity to become shareholders of a fund
with lower expenses.
The Board also considered that the Reorganization would be a tax-free
Reorganization. The Board concluded that the Reorganization would not
result in dilution to the shareholders of Strategic Short-Term Income Fund
and would not result in dilution to shareholders of Limited-Term
Government Fund.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full as
Annex A to this Proxy Statement and Prospectus) contemplates a
reorganization under which (i) all of the assets of Strategic Short-Term
Income Fund (other than the cash reserve described below (the "Cash
Reserve")) will be transferred to Limited-Term Government Fund in
exchange for Class A and Class B shares of Limited-Term Government Fund,
(ii) these shares will be distributed among the shareholders of Strategic
Short-Term Income Fund in complete liquidation of Strategic Short-Term
Income Fund, (iii) the outstanding shares of Strategic Short-Term Income
Fund will be cancelled. Limited-Term Government Fund will not assume any
of Strategic Short-Term Income Fund's liabilities except for portfolio
securities purchased which have not settled and outstanding shareholder
redemption and dividend checks.
The result of effectuating the Reorganization would be that: (i) Limited-
Term Government Fund will add to its gross assets all of the assets (net
of any liability for portfolio securities purchased but not settled and
outstanding shareholder redemption and dividend checks) of Strategic
Short-Term Income Fund other than its Cash Reserve; and (ii) the
shareholders of Strategic Short-Term Income Fund as of the close of
business on the Closing Date will become shareholders of either Class A
or Class B shares of Limited-Term Government Fund.
The effect of the Reorganization will be that shareholders of Strategic
Short-Term Income Fund who vote their shares in favor of the
Reorganization will be electing to redeem their shares of Strategic Short-
Term Income Fund (at net asset value on the Valuation Date referred to
below under "Method of Carrying Out the Reorganization Plan," calculated
after subtracting the Cash Reserve) and reinvest the proceeds in Class A
or Class B shares of Limited-Term Government Fund at net asset value
without sales charge and without recognition of taxable gain or loss for
Federal income tax purposes (see "Tax Aspects of the Reorganization"
below). The Cash Reserve is that amount retained by Strategic Short-Term
Income Fund which is sufficient in the discretion of the Board for the
payment of: (a) Strategic Short-Term Income Fund's expenses of
liquidation, and (b) its liabilities, other than those assumed by Limited-
Term Government Fund. Strategic Short-Term Income Fund and Limited-Term
Government Fund will bear all of their respective expenses associated with
the Reorganization, as set forth under "Costs of the Solicitation and the
Reorganization" above. Management estimates that such expenses associated
with the Reorganization to be borne by Strategic Short-Term Income Fund
will not exceed $30,000. Liabilities as of the date of the transfer of
assets will consist primarily of accrued but unpaid normal operating
expenses of Strategic Short-Term Income Fund, excluding the cost of any
portfolio securities purchased but not yet settled and outstanding
shareholder redemption and dividend checks. See "Method of Carrying Out
the Reorganization Plan" below.
The Reorganization Agreement provides for coordination between the
funds as to their respective portfolios so that, after the closing,
Limited-Term Government Fund will be in compliance with all of its
investment policies and restrictions. Strategic Short-Term Income Fund
will recognize capital gain or loss on any sales made pursuant to this
paragraph. As noted in "Tax Aspects of the Reorganization" below, if
Strategic Short-Term Income Fund realizes net gain from the sale of
securities, such gain, to the extent not offset by capital loss carry
forward, will be distributed to shareholders prior to the Closing Date and
will be taxable to shareholders as capital gain.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the Reorganization
Agreement, Strategic Short-Term Income Fund will pay a dividend or
dividends which, together with all previous such dividends, will have the
effect of distributing to Strategic Short-Term Income Fund's shareholders
all of Strategic Short-Term Income Fund's investment company taxable
income for taxable years ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid) and all of its net
capital gain, if any, realized in taxable years ending on or prior to the
Closing Date (after reduction for any available capital loss carry-
forward). Such dividends will be included in the taxable income of
Strategic Short-Term Income Fund's shareholders as ordinary income and
capital gain, respectively.
The exchange of the assets of Strategic Short-Term Income Fund for
Class A and Class B shares of Limited-Term Government Fund and the
assumption by Limited-Term Government Fund of certain liabilities of
Strategic Short-Term Income Fund is intended to qualify for Federal income
tax purposes as a tax-free reorganization under Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"). Strategic Short-
Term Income Fund has represented to Deloitte & Touche LLP, tax adviser to
Strategic Short-Term Income Fund, that there is no plan or intention by
any Fund shareholder who owns 5% or more of Strategic Short-Term Income
Fund's outstanding shares, and, to Strategic Short-Term Income Fund's best
knowledge, there is no plan or intention on the part of the remaining Fund
shareholders, to redeem, sell, exchange or otherwise dispose of a number
of Limited-Term Government Fund Class A or Class B shares received in the
transaction that would reduce Strategic Short-Term Income Fund
shareholders' ownership of Limited-Term Government Fund shares to a number
of shares having a value, as of the Closing Date, of less than 50% of the
value of all the formerly outstanding Strategic Short-Term Income Fund
shares as of the same date. Oppenheimer Limited-Term Government Fund has
represented to Deloitte & Touche LLP, that, as of the Closing Date, it
will qualify as a regulated investment company or will meet the
diversification test of Section 368(a)(2)(F)(ii) of the Code.
As a condition to the closing of the Reorganization, Limited-Term
Government Fund and Strategic Short-Term Income Fund will receive the
opinion of Deloitte & Touche LLP to the effect that, based on the
Reorganization Agreement, the above representations, existing provisions
of the Code, Treasury Regulations issued thereunder, current Revenue
Rulings, Revenue Procedures and court decisions, for Federal income tax
purposes:
1. The transactions contemplated by the Reorganization Agreement will
qualify as a tax-free "reorganization" within the meaning of Section
368(a)(1) of the Code.
2. Strategic Short-Term Income Fund and Limited-Term Government Fund will
each qualify as "a party to a reorganization" within the meaning of
Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of Strategic
Short-Term Income Fund upon the distribution of Class A or Class B
shares of beneficial interest in Limited-Term Government Fund to the
shareholders of Strategic Short-Term Income Fund pursuant to Section
354 of the Code.
4. Under Section 361(a) of the Code no gain or loss will be recognized
by Strategic Short-Term Income Fund by reason of the transfer of its
assets solely in exchange for Class A or Class B shares of Limited-
Term Government Fund.
5. Under Section 1032 of the Code no gain or loss will be recognized by
Limited-Term Government Fund by reason of the transfer of Strategic
Short-Term Income Fund's assets solely in exchange for Class A or
Class B shares of Limited-Term Government Fund.
6. The shareholders of Strategic Short-Term Income Fund will have the
same tax basis and holding period for the shares of beneficial
interest in Limited-Term Government Fund that they receive as they had
for Strategic Short-Term Income Fund stock that they previously held,
pursuant to Sections 358(a) and 1223(1) of the Code, respectively.
7. The securities transferred by Strategic Short-Term Income Fund to
Limited-Term Government Fund will have the same tax basis and holding
period in the hands of Limited-Term Government Fund as they had for
Strategic Short-Term Income Fund, pursuant to Sections 362(b) and
1223(1) of the Code, respectively.
Shareholders of Strategic Short-Term Income Fund should consult their tax
advisors regarding the effect, if any, of the Reorganization in light of
their individual circumstances. Since the foregoing discussion only
relates to the Federal income tax consequences of the Reorganization,
shareholders of Strategic Short-Term Income Fund should also consult their
tax advisers as to state and local tax consequences, if any, of the
Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of Strategic Short-Term
Income Fund and Limited-Term Government Fund and indicates the pro forma
combined capitalization as of March 31, 1995 as if the Reorganization had
occurred on such dates.
<TABLE>
<CAPTION>
March 31, 1995
Net Asset
Shares Value
Net Assets Outstanding Per Share
<S> <C> <C> <C>
Oppenheimer Strategic
Short-Term Income Fund
Class A $ 20,997,783 4,604,117 $4.56
Class B $ 8,084,465 1,775,203 $4.55
Oppenheimer Limited-Term
Government Fund
Class A $274,872,477 26,366,128 $10.43
Class B $ 72,130,147 6,917,484 $10.43
Class C $ 1,952,739 187,455 $10.42
Oppenheimer Limited-Term
Government Fund (Pro Forma
Surviving Fund)
Class A $295,870,260 28,379,338 $10.43
Class B $ 80,214,612 7,692,600 $10.43
Class C $ 1,952,739 187,455 $10.42
</TABLE>
Reflects issuance of 2,013,210 of Class A shares and 775,116 of Class B
shares of Limited-Term Government Fund in a tax-free exchange for the net
assets of Strategic Short-Term Income Fund, aggregating $29,082,248.
The pro forma ratio of expenses to average annual net assets of the Class
A shares at March 31, 1995 would have been .86%. The pro forma ratio of
expenses to average net assets of Class B shares at March 31, 1995 would
have been 1.68%. The pro forma ratio of expenses to average net assets
of Class C shares at March 31, 1995 would have been 1.62%.
COMPARISON BETWEEN STRATEGIC SHORT-TERM INCOME FUND
AND LIMITED-TERM GOVERNMENT FUND
Information about Strategic Short-Term Income Fund and Limited-Term
Government Fund is presented below. Additional information about Limited-
Term Government Fund is set forth in its Prospectus, accompanying this
Proxy Statement and Prospectus, and additional information about both
funds is set forth in documents that may be obtained upon request of the
transfer agent and upon review at the offices of the SEC. See
"Miscellaneous - Public Information."
Investment Objectives and Policies
Summary
Limited-Term Government Fund invests its assets in obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
repurchase agreements on those securities and certain hedging investments.
The U.S. Government securities in which Limited-Term Government Fund
invests include mortgage-backed pass-through obligations issued by the
Government National Mortgage Association, the Federal Home Loan Mortgage
Corporation and the Federal National Mortgage Corporation. It may not
invest in lower rated, high yielding "junk" bonds nor in any foreign
securities. Limited-Term Government Fund may also lend its portfolio
securities, purchase when-issued and delayed delivery securities, reverse
repurchase agreements, illiquid and restricted securities, enter into swap
arrangements and purchase certain derivative securities.
Strategic Short-Term Income Fund has a broader range of securities in
which it may invest. It normally invests at least 65% of its total assets
in investment grade debt securities. Its remaining assets may be invested
in lower rated, high yielding "junk bonds." Strategic Short-Term Income
Fund may also invest in foreign investment grade and lower rated, high
yielding securities, mortgage-backed and asset-backed securities issued
by both the U.S. Government and by private companies, a broader range of
hedging investments, derivative investments and swaps. Strategic Short-
Term Income Fund may also invest in money market securities, lend its
portfolio securities, enter into repurchase agreements, purchase illiquid
and restricted securities, purchase and sell forward currency contracts,
make short sales against-the-box, buy participation interests and common
and preferred stocks.
All debt securities, including U.S. Government securities, are subject to
changes in their value due to changes in prevailing interest rates.
During periods of falling interest rates, the values of outstanding fixed-
income securities generally rise. Conversely, during periods of rising
interest rates, the values of such securities generally decline. The
magnitude of these fluctuations will generally be greater for securities
with longer maturities.
The securities in which Limited-Term Government Fund and Strategic Short-
Term Income Fund invest are summarized below. Strategic Short-Term Income
Fund may use a number of securities which Limited-Term Government Fund
does not invest in, and these securities are mentioned below. For more
information on all of these securities, please refer to each fund's
prospectus and statement of additional information.
Strategic Short-Term Income Fund
Strategic Short-Term Income Fund seeks its objective principally by
investing in: (i) domestic bonds, notes and debentures of investment
grade, that is, rated "Baa" or better by Moody's Investors Service, Inc.
("Moody's") or "BBB" or better by Standard & Poor's Corporation ("Standard
& Poor's") or, if unrated, determined by Strategic Short-Term Income
Fund's investment adviser, Oppenheimer Management Corporation (the
"Manager"), to be comparable to securities meeting those rating
requirements; (ii) U.S. Government Securities; (iii) money market
instruments and (iv) investment grade foreign corporate and government
debt securities denominated in U.S. dollars or in selected foreign
currencies.
Strategic Short-Term Income Fund's investments in investment grade
domestic fixed-income securities may include those issued by domestic
corporations in any industry (for example, industrial, financial or
utility) which may be denominated in U.S. dollars or in non-U.S.
currencies. These investments may include debt obligations such as bonds,
debentures and notes (including variable and floating rate instruments),
as well as sinking fund and callable bonds. Strategic Short-Term Income
Fund may also invest in municipal obligations issued by or on behalf of
states, territories, possessions or districts of the U.S. or their
political subdivisions, agencies, instrumentalities or authorities.
Under normal circumstances, at least 65% of Strategic Short-Term Income
Fund's total assets will be invested in investment grade debt securities
in the respective sectors described above. The remaining assets may be
invested in other securities.
High yield, lower-grade securities, whether rated or unrated, often have
speculative characteristics. Lower-grade securities have special risks
that make them riskier investments than investment grade securities. They
may be subject to greater market fluctuations and risk of loss of income
and principal than lower yielding, investment grade securities. There may
be less of a market for them and therefore they may be harder to sell at
an acceptable price. There is a relatively greater possibility that the
issuer's earnings may be insufficient to make the payments of interest due
on the bonds. The issuer's low creditworthiness may increase the
potential for its insolvency.
These risks mean that Strategic Short-Term Income Fund may not achieve the
expected income from lower-grade securities, and that Strategic Short-Term
Income Fund's net asset value per share may be affected by declines in
value of these securities. However, Strategic Short-Term Income Fund's
limitations on investments in these types of securities may reduce some
of the risk, as will Strategic Short-Term Income Fund's policy of
diversifying its investments.
Under normal circumstances, Strategic Short-Term Income Fund will maintain
a dollar-weighted average portfolio maturity of not more than three years.
In calculating maturity, Strategic Short-Term Income Fund will consider
various factors, including anticipated payments of principal. Strategic
Short-Term Income Fund may hold securities with maturities of more than
three years if, under normal circumstances, it maintains a dollar-weighted
average maturity of not more than three years. See "Investment Objective
and Policies" in the Statement of Additional Information for more
information on Strategic Short-Term Income Fund's calculation of portfolio
maturity.
Limited-Term Government Fund
Oppenheimer Limited-Term Government Fund is a mutual fund that seeks
high current return and safety of principal. In seeking its objective,
Limited-Term Government Fund invests in obligations issued or guaranteed
by the U.S. Government or its agencies or instrumentalities, including
mortgage-backed securities issued by The Government National Mortgage
Association ("GNMA").
While payments of principal and interest on certain U.S. Government
securities (including the GNMA certificates which Limited-Term Government
Fund may hold) are guaranteed by the U.S. Government or its agencies or
instrumentalities, neither the principal value of those securities nor the
net asset value of shares of Limited-Term Government Fund is guaranteed,
and therefore Limited-Term Government Fund's net asset values per share
are subject to fluctuations due to changes in the value of portfolio
securities. Limited-Term Government Fund also uses "hedging" instruments
to seek to reduce the risks of market and interest rate fluctuations that
affect the value of the securities Limited-Term Government Fund holds.
Under normal circumstances, Limited-Term Government Fund anticipates that
it will maintain an average effective portfolio duration on a dollar-
weighted basis of not more than three years. Effective portfolio duration
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.) Please refer to "Investment Policies
and Strategies" in Limited-Term Government Fund's Statement of Additional
Information for more information about the types of securities Limited-
Term Government Fund invests in and the risks of investing in Limited-Term
Government Fund.
Permitted Investments by Both Strategic Short-Term Income Fund and
Limited-Term Government Fund
U.S. Government Securities
Both of the funds may invest in debt obligations issued or guaranteed by
the U.S. Government or its agencies or instrumentalities ("U.S. Government
Securities"), however, with respect to Limited-Term Government Fund, as
a matter of fundamental policy it may invest only in these obligations.
Both of the funds may invest in obligations supported by the full faith
and credit of the U.S. Government such as mortgage-backed securities
guaranteed by the Government National Mortgage Association ("Ginnie Maes")
or they may invest in other securities, issued or guaranteed by federal
agencies or government-sponsored enterprises that are not supported by the
full faith and credit of the United States, and securities of agencies and
instrumentalities that are supported by the discretionary authority of the
U.S. Government to purchase such securities which include: Federal Land
Banks, Farmers Home Administration, Central Bank for Cooperatives, and
Federal Intermediate Credit Banks and Freddie Mac.
Both of the funds may invest in mortgaged-backed securities, including
collateralized mortgage-backed obligations ("CMOs"), however, Limited-Term
Government Fund may only invest in mortgage-backed securities of the
fully-modified pass-through type, such as GNMA certificates, which are
guaranteed as to timely payment of principal and interest by the full
faith and credit of the United States Government or which are issued or
guaranteed by agencies of the U.S. Government, such as Federal Home Loan
Mortgage Corporation ("Freddie Mac") or the Federal National Mortgage
Association ("Fannie Mae").
Limited-Term Government Fund may only invest in CMOs that are issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
or that are collateralized by a portfolio of mortgages or mortgage-related
securities guaranteed by such an agency or instrumentality. Strategic
Short-Term Income Fund has the ability to invest in mortgage-backed
securities, including CMO's that may be issued by private issuers, such
as commercial banks, savings and loan institutions and private mortgage
insurance companies and other secondary market issuers. There can be no
assurance that private issuers will be able to meet their obligations.
The effective maturity of a mortgage-backed security may be shortened by
unscheduled or early payment of principal and interest on the underlying
mortgages, which may affect the effective yield of such securities. The
principal that is returned may be invested in instruments having a higher
or lower yield than the prepaid instruments, depending on then-current
market conditions. Such securities therefore may be less effective as a
means of "locking in" attractive long-term interest rates and may have
less potential for appreciation during periods of declining interest rates
than conventional bonds with comparable stated maturities. If mortgage-
backed securities are purchased at a premium, prepayments of principal and
foreclosures of mortgages may result in some loss of the principal
investment to the extent of the premium paid.
Payment of the interest and principal generated by the pool of mortgages
is passed through to the holders as the payments are received by the
issuer of the CMO. CMOs may be issued in a variety of classes or series
("tranches") that have different maturities. The principal value of
certain CMO tranches may be more volatile than other types of mortgage-
related securities, because of the possibility that the principal value
of the CMO may be prepaid earlier than the maturity of the CMO as a result
of prepayments of the underlying mortgage loans by the borrowers.
Both funds may invest in "stripped" mortgage-backed securities or CMOs or
other securities issued by agencies or instrumentalities of the U.S.
Government. Stripped mortgage-backed securities usually have two classes.
The classes receive different proportions of the interest and principal
distributions on the pool of mortgage assets that act as collateral for
the security. In certain cases, one class will receive all of the
interest payments (and is known as an "I/O"), while the other class will
receive all of the principal value on maturity (and is known as a "P/O").
The yield to maturity on the class that receives only interest is
extremely sensitive to the rate of payment of the principal on the
underlying mortgages. Principal prepayments increase that sensitivity.
Stripped securities that pay "interest only" are therefore subject to
greater price volatility when interest rates change, and they have the
additional risk that if the underlying mortgages are prepaid, a Fund will
lose the anticipated cash flow from the interest on the prepaid mortgages.
That risk is increased when general interest rates fall, and in times of
rapidly falling interest rates, a fund might receive back less than its
investment.
The value of "principal only" securities generally increases as interest
rates decline and prepayment rates rise. The price of these securities
is typically more volatile than that of coupon-bearing bonds of the same
maturity.
Stripped securities are generally purchased and sold by institutional
investors through investment banking firms. At present, established
trading markets have not yet developed for these securities. Therefore,
some stripped securities may be deemed "illiquid."
Zero Coupon Securities
While both funds may invest in zero coupon securities, Limited-Term
Government Fund must invest in zero coupon securities issued by the U.S.
Treasury. In general, zero coupon U.S. Treasury securities include (1)
U.S. Treasury notes or bonds that have been "stripped" of their interest
coupons, (2) U.S. Treasury bills issued without interest coupons, or (3)
certificates representing an interest in stripped securities. A zero
coupon Treasury security pays no current interest and trades at a deep
discount from its face value. It will be subject to greater market
fluctuations from changes in interest rates than interest-paying
securities. Both funds accrue interest on zero coupon securities without
receiving the actual cash. As a result of holding these securities,
either fund could possibly be forced to sell portfolio securities to pay
cash dividends or meet redemptions.
Strategic Short-Term Income Fund may invest in zero coupon securities
issued by corporations or private issuers. These zero coupon securities
are: (i) notes or debentures that do not pay current interest and are
issued at substantial discounts from par value, or (ii) notes or
debentures that pay no current interest until a stated date one or more
years into the future, after which the issuer is obligated to pay interest
until maturity, usually at a higher rate than if interest were payable
from the date of issuance. Such zero coupon securities are subject to
certain risks, in addition to the risks identified above for zero coupon
securities issued by the U.S. Treasury, such as the risk of the issuer's
failure to pay interest and repay principal in accordance with the terms
of the obligation.
When-Issued and Delayed Delivery Transactions
The funds may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "delayed delivery" basis. "When-issued"
refers to securities that have been created and for which a market exists,
but which are not available for immediate delivery. There may be a risk
of loss to either fund if the value of the security changes prior to the
settlement date. With respect to Limited-Term Government Fund, it will
not, as a matter of fundamental policy, enter into when-issued or delayed
delivery transactions unless the acceptance and delivery of the securities
is mandatory, occurs within 120 days of the trade date and is settled in
cash on the settlement date.
Repurchase Agreements
Each of the funds may enter into repurchase agreements. Strategic Short-
Term Income Fund has no limit on the amount of its net assets that may be
subject to repurchase agreements of seven days or less. However, Limited-
Term Government Fund, as a matter of fundamental policy, will not enter
into repurchase transactions that will cause more than 25% of Limited-Term
Government Fund's net assets to be subject to repurchase agreements, or
that will cause more than 5% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. Strategic Short-Term
Income 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. Also, as a matter of fundamental policy,
Limited-Term Government Fund will not enter into repurchase agreements
unless ownership and control of the securities subject to the agreement
are transferred to Limited-Term Government Fund. Repurchase agreements
must be fully collateralized. However, if the vendor fails to pay the
resale price on the delivery date, the funds may experience costs in
disposing of the collateral and losses if there is any delay in doing so.
Illiquid and Restricted Securities
Both of the funds may invest in illiquid and restricted securities.
Investments may be illiquid because of the absence of an active trading
market, making it difficult to value them or dispose of them promptly at
an acceptable price. A restricted security is one that has a contractual
restriction on its resale or which cannot be sold publicly until it is
registered under the Securities Act of 1933. Strategic Short-Term Income
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 Strategic Short-Term Income Fund's shares are no
longer sold in those states). Strategic Short-Term Income Fund's
percentage limitation on these investments does not apply to certain
restricted securities that are eligible for resale to qualified
institutional purchasers. With respect to Limited-Term Government Fund,
as a matter of fundamental policy, Limited-Term Government Fund will not
invest more than 5% of its total assets in illiquid and restricted
securities.
Hedging
Both funds may use hedging investments although the types of hedging
investments which Limited-Term Government Fund makes are more limited than
the hedging investments of Strategic Short-Term Income Fund. The funds
may buy and sell options, futures and forward contracts for a number of
purposes. They may do so to try to manage their exposure to the
possibility that the prices of portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute
for purchasing individual securities. Each 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 for liquidity purposes or defensive reasons, or to raise cash to
distribute to shareholders. The hedging investments which the funds may
use are summarized below and you should refer to each fund's prospectus
and statement of additional information for a more complete discussion of
these investments and their risks. Neither fund uses hedging investments
for speculative purposes.
Limited-Term Government Fund may buy covered call options on securities
and interest rate futures or to terminate its obligation on a previously
written call. Limited-Term Government Fund may purchase put options that
relate to securities it owns or interest rate futures. This fund may sell
these kinds of puts in an amount up to 50% of its total assets if the puts
are covered by segregated liquid assets. This fund may not buy a put
option on an interest rate future.
Limited-Term Government Fund may buy and sell puts and calls only as
follows: (1) if after a call is sold, not more than 25% of its total
assets are subject to calls; (2) calls must be listed on a securities or
commodities exchange or quoted on the Automated Quotation System of the
National Association of Securities Dealers or traded in the over-the-
counter market; (3) if the fund sells calls on futures contracts it owns,
these calls must be covered; and (4) a call or put option may not be
purchased if the value of all put and call options would exceed 5% of the
fund's total assets.
Strategic Short-Term Income Fund may use all of the hedging investments
which Limited-Term Government Fund may use and is subject to most of the
same limitations on their use. In addition, Strategic Short-Term Income
Fund may also: buy and sell futures contracts and options thereon that
relate to financial futures such as bond indexes; buy and sell foreign
currencies and forward contracts and options thereon; purchase put options
on futures whether or not the fund owns the future; and may enter into
cross-hedges.
Interest Rate Swaps. Both of the funds may enter into interest rate
swaps. The funds enter into swaps only on securities they own. The funds
may not enter into swaps with respect to more than 25% of their total
respective assets. Also, the funds will segregate liquid assets (such as
cash or U.S. Government securities or other appropriate high grade debt
obligations) 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. Interest rate swaps are subject to credit risks (if the other
party fails to meet its obligations) and also to interest rate risks. A
fund could be obligated to pay more under its swap agreements than it
receives under them, as a result of interest rate changes.
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 a fund's return. A 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 and they are addressed in each fund's prospectus and statement
of additional information.
Derivative Investments
Strategic Short-Term Income Fund and Limited-Term Government Fund can
invest in a number of different kinds of "derivative investments." Each
fund may use some types of derivatives for hedging purposes, and may
invest in others because they offer the potential for increased income.
In general, a "derivative investment" is a specially-designed investment
whose performance is linked to the performance of another investment or
security, such as an option, future, index or currency. In the broadest
sense, derivative investments include exchange-traded options and futures
contracts (please refer to "Hedging," above).
One risk of investing in derivative investments is that the company
issuing the instrument might not pay the amount due on the maturity of the
instrument. There is also the risk that the underlying investment or
security might not perform the way the Manager expected it to perform.
The performance of derivative investments may also be influenced by
interest rate changes in the U.S. and abroad. All of these risks can mean
that the fund will realize less income than expected from its investments,
or that it can lose part of the value of its investments, which will
affect the fund's share price. Certain derivative investments held by a
fund may trade in the over-the-counter markets and may be illiquid.
Borrowing for Leverage
Both Limited-Term Government Fund and Strategic Short-Term Income Fund may
borrow money from banks to buy securities. Although both funds are
authorized to borrow money, neither fund has borrowed money in the past
or plans to borrow money for any purpose. Each fund's fundamental
investment policy on borrowing is different and is set forth under
"Investment Restrictions" on page __ of this Prospectus.
Additional Permitted Investments by Strategic Short-Term Income Fund
Strategic Short-Term Income Fund may also invest in a number of additional
securities which are mentioned briefly below. For more information on
these securities, please refer to the prospectus and statement of
additional information for Strategic Short-Term Income Fund.
Foreign Securities
Only Strategic Short-Term Income Fund may invest in foreign securities.
Strategic Short-Term Income Fund may invest in equity or debt obligations
issued or guaranteed by foreign corporations, certain supranational
entities and foreign governments or their agencies or instrumentalities,
and debt obligations issued by U.S. corporations denominated in non-U.S.
currencies.
Strategic Short-Term Income Fund's portfolio of foreign securities may
include those of a number of foreign countries or, depending upon market
conditions, those of a single foreign country. No more than 25% of
Strategic Short-Term Income Fund's total assets will be invested in
government securities of any one foreign country or in securities issued
by companies organized under the laws of any one foreign country.
Foreign securities have special risks. For example, the values of foreign
securities investments may be affected by changes in foreign currency
rates, exchange control regulations, expropriation or nationalization of
a company's assets, foreign taxes, delays in settlement of transactions,
changes in governmental economic or monetary policy in the U.S. or abroad,
or other political and economic factors.
Money Market Instruments
Strategic Short-Term Income Fund may invest in the following money
market instruments (which are debt obligations generally having a maturity
of one year or less): U.S. Government securities, bank obligations,
commercial paper, and corporate obligations; and other money market
instruments if they are (a) subject to repurchase agreements or (b)
guaranteed as to principal and interest by a domestic or foreign bank
having total assets in excess of $1 billion, by a corporation whose
commercial paper may be purchased by Strategic Short-Term Income Fund, or
by a foreign government having an existing debt security rated at least
"A" by a nationally recognized rating organization.
Board-Approved Instruments. Strategic Short-Term Income Fund may invest
in other short-term investments of a type that Strategic Short-Term Income
Fund's Board of Trustees, or the Manager under guidelines established by
the Board, determines present minimal credit risks and that are of "high
quality."
Common and Preferred Stocks
Strategic Short-Term Income Fund may invest in common and preferred stock
issued by domestic or foreign corporations.
Participation Interests
Strategic Short-Term Income Fund may acquire participation interests
in loans that are made to U.S. or foreign companies (the "borrower").
They may be interests in, or assignments of, the loan and are acquired
from banks or brokers that have made the loan or are members of the
lending syndicate. No more than 5% of Strategic Short-Term Income Fund's
net assets can be invested in participation interest of the same borrower.
See "Illiquid and Restricted Securities."
Corporate Asset-Backed Securities. Asset-backed securities are fractional
interests in pools of consumer loans and other trade receivables, similar
to mortgage-backed securities. They are issued by trusts and special
purpose corporations. They are backed by a pool of assets, such as credit
card or auto loan receivables, which are the obligations of a number of
different parties.
Investment Restrictions
Strategic Short-Term Income Fund and Limited-Term Government Fund have
certain investment restrictions that, together with their investment
objectives, are fundamental policies, changeable only by shareholder
approval. Set forth below is a summary of these investment restrictions
which are different for each fund. Other investment restrictions for each
fund are substantially the same.
Under these fundamental policies, the funds cannot do any of the
following: (1) with respect to Strategic Short-Term Income Fund, purchase
securities issued or guaranteed by any one issuer (except the U.S.
Government or its agencies or instrumentalities), if, with respect to 75%
of its total assets, more than 5% of Strategic Short-Term Income Fund's
total assets would be invested in securities of that issuer or Strategic
Short-Term Income Fund would then own more than 10% of that issuer's
voting securities; with respect to Limited-Term Government Fund, this
limitation applies to 100% of its total assets; (2) with respect to
Limited-Term Government Fund, it may not (a) invest in any security other
than U.S. Government Securities, including repurchase agreements therein;
Limited-Term Government Fund may write covered calls and use hedging
instruments approved by the Board; (b) borrow money, except from banks for
temporary purposes in amounts not in excess of 5% of the value of its
assets; no assets of Limited-Term Government Fund may be pledged,
mortgaged or hypothecated other than to secure a borrowing, and then in
amounts not exceeding 7.5% of Limited-Term Government Fund's total assets;
borrowings may not be made for leverage, but only for liquidity purposes
to satisfy redemption requests when liquidation of portfolio securities
is considered inconvenient or disadvantageous; however, Limited-Term
Government Fund may enter into reverse repurchase agreements and when-
issued and delayed delivery transactions; such prohibition against
pledging, mortgaging or hypothecating assets does not bar Limited-Term
Government Fund from escrow arrangements for options trading or collateral
or margin arrangements in connection with hedging instruments approved by
the Board; Strategic Short-Term Income Fund may also borrow money from
banks on an unsecured basis and invest the borrowed funds in securities;
borrowing by Strategic Short-Term Income Fund is limited only by the
provisions of the Investment Company Act of 1940; (3) with respect to
Strategic Short-Term Income Fund, buy securities of an issuer which,
together with any predecessor, has been in operation for less than three
years, if as a result, the aggregate of such investments would exceed 5%
of the value of Strategic Short-Term Income Fund's total assets; Limited-
Term Government Fund is prohibited from buying any such securities; (4)
with respect to Strategic Short-Term Income Fund, make short sales of
securities or maintain a short position, unless at all times when a short
position is open it owns an equal amount of such securities or by virtue
of ownership of other securities has the right, without payment of any
further consideration, to obtain an equal amount of securities sold short
("short sales against-the-box"); with respect to Limited-Term Government
Fund, it may not make short sales of securities.
Portfolio Turnover
Holding a portfolio security for any particular length of time is not
generally a consideration in investment decisions. As a result of each
fund's investment policies and market factors, their portfolio securities
are actively traded to try to benefit from short-term yield differences
among debt securities. As a result, portfolio turnover of each of the
funds may be higher than other mutual funds. This strategy may involve
greater transaction costs from brokerage commissions and dealer mark-ups.
Neither fund however, incurs significant brokerage costs for U.S.
Government Securities. Additionally, high portfolio turnover may result
in increased short-term capital gains and affect the ability of each of
the funds to qualify for tax deductions for payments made to shareholders
as a "regulated investment company" under the Internal Revenue Code.
Strategic Short-Term Income Fund and Limited-Term Government Fund each
qualified in their last fiscal year and intend to do so in the coming
year, although they reserve the right not to qualify.
For the fiscal year ended September 30, 1994, the portfolio turnover rate
for Strategic Short-Term Income Fund and Limited-Term Government Fund was
57.8% and 226%, respectively. For the six months ended March 31, 1995
(unaudited), the portfolio turnover rate for Strategic Short-Term Income
Fund and Limited-Term Government Fund was 20.9% and 102%, respectively.
Description of Brokerage Practices
The brokerage practices of the two funds are substantially similar and are
conducted in accordance with the terms and conditions of each fund's
investment advisory agreement and other brokerage policies of the Manager.
Purchases of U.S. Government Securities, money market instruments and debt
obligations by both funds are normally principal transactions at net
prices and each fund incurs little or no brokerage costs for these
transactions. Principal transactions include purchases of securities from
underwriters, which include a commission or concession paid by the issuer
to the underwriter, and purchases from dealers which include a spread
between the bid and asked price.
When brokers are used, the Manager is permitted to select qualified
brokers to obtain best execution. Brokerage is allocated among brokers
under the supervision of the Manager's executive officers and the Manager
is permitted to consider brokers which have sold shares of the funds and
other OppenheimerFunds in selecting brokers for fund transactions.
Commissions paid to such brokers may be higher than commissions charged
by other qualified brokers. The Manager is also permitted to allocate
brokerage commissions from fund transactions to brokers to obtain research
services to assist the Manager in the investment-making decision process.
Please refer to the Statement of Additional Information for each fund for
further information on each fund's brokerage practices.
Expense Ratios and Performance
The ratio of expenses to average net assets for Strategic Short-Term
Income Fund for the fiscal year ended September 30, 1994 was 1.17% for
Class A shares and 1.97% for Class B shares. The ratio of expenses to
average net assets for Limited-Term Government Fund for the fiscal year
ended September 30, 1994, for its Class A and Class B shares was .99% and
1.79%, respectively. For the six months ended March 31, 1995 (unaudited)
(annualized) the ratio of expenses to average net assets for Strategic
Short-Term Income Fund for its Class A and Class B shares was 1.33% and
2.11%, respectively. For the six months ended March 31, 1995, the ratio
of expenses to average net assets for Limited-Term Government Fund was
.86% for its Class A shares and 1.68% for its Class B shares. Further
details are set forth under "Fund Expenses" and "Financial Highlights" in
Strategic Short-Term Income Fund's Prospectus dated January 27, 1995,
supplemented June 14, 1995, and in Strategic Short-Term Income Fund's
Annual Report as of September 30, 1994 and financial statement (unaudited)
as of March 31, 1995, and Limited-Term Government Fund's Annual Report as
of September 30, 1994 and financial statement (unaudited) as of March 31,
1995, which are included in the Statement of Additional Information.
Please also see Limited-Term Government Fund's Prospectus which
accompanies this Proxy Statement and Prospectus.
The standardized yield for Strategic Short-Term Income Fund for the 30 day
period ended March 31, 1995 was 6.76% for Class A shares and 6.21% for
Class B shares. The average annual total return on an investment in Class
A and Class B shares of Strategic Short-Term Income Fund for the one year
period ended March 31, 1995 was .04% and <1.00%>, respectively. The total
return for Strategic Short-Term Income Fund for the 12 month period ended
May 31, 1995 was 4.03% for Class A shares and 2.76% for Class B shares.
The average annual return on an investment in Class A shares for the
period from August 4, 1992 to March 31, 1995 was 1.73%. The average
annual return on an investment in Class B shares for the period from
November 30, 1992 to March 31, 1995 was 3.28%. The average annual return
for Strategic Short-Term Income Fund for the period June 30, 1993 to March
31, 1995 was 1.15% for Class A shares and .73% for Class B shares.
For the 30 day period ended March 31, 1995, the standardized yield for
Limited-Term Government Fund's Class A and Class B shares were 6.56% and
5.98%, respectively. Effective with the dividend scheduled for payment
on August 31, 1995, the Board of Limited-Term Government Fund has also
reduced the annual dividend rate payable on Class A shares. As a result,
the annual yield on the maximum offering price of Class A shares will be
reduced. The current annual dividend on a Class B share will also be
reduced, thereby reducing the annual yield. Since expenses allocable to
Class B shares are generally higher than those allocable to Class A
shares, it is expected that the annual yield will be lower for Class B
shares. The average annual total return on an investment in Class A
shares of Limited-Term Government Fund for the one and five year periods
ended March 31, 1995 were .26% and 7.46%, respectively. The total return
for Limited-Term Government Fund for the 12 month period ended May 31,
1995 was 3.30% for Class A shares and 2.21% for Class B shares. For the
period ended March 31, 1995 and the period from May 3, 1993 (the date
Class B shares of Limited-Term Government Fund were publicly offered)
through March 31, 1995, the average annual return on an investment in
Class B shares of Limited-Term Government Fund was <.92%> and 1.79%,
respectively. The average annual return for Limited-Term Government Fund
for the period June 30, 1993 to March 31, 1995 was 1.59% for Class A
shares and 1.19% for Class B shares. For more information on performance
of each fund as compared to the market, please refer to the section
"Comparing the Fund's Performance To the Market" in the respective
prospectus of each fund.
Shareholder Services
The policies of Strategic Short-Term Income Fund and Limited-Term
Government Fund with respect to minimum initial investments and subsequent
investments by its shareholders are substantially the same. Both
Strategic Short-Term Income Fund and Limited-Term Government Fund offer
the following privileges: (i) Right of Accumulation, (ii) Letter of
Intent, (iii) reinvestment of dividends and distributions at net asset
value, (iv) net asset value purchases by certain individuals and entities,
(v) Asset Builder (automatic investment) Plans, (vi) Automatic Withdrawal
and Exchange Plans for shareholders who own shares of the fund valued at
$5,000 or more, (vii) reinvestment of net redemption proceeds at net asset
value within six months of a redemption, (viii) AccountLink and PhoneLink
arrangements, (ix) exchanges of shares for shares of the same class of
certain other funds at net asset value, and (x) telephone redemption and
exchange privileges.
Shareholders may purchase shares through OppenheimerFunds AccountLink,
which links a shareholder account to an account at a bank or financial
institution and enables shareholders to send money electronically between
those accounts to perform a number of types of account transactions. This
includes the purchase of shares through the automated telephone system
(PhoneLink). Exchanges can also be made by telephone, or automatically
through PhoneLink. After AccountLink privileges have been established
with a bank account, shares may be purchased by telephone in an amount up
to $100,000. Shares of either Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share, however, shares of a
particular class may be exchanged only for shares of the same class in
other OppenheimerFunds. At present, not all of the OppenheimerFunds offer
the same classes of shares. Shareholders of the funds may redeem their
shares by written request or by telephone request in an amount up to
$50,000 in any seven-day period. Shareholders may arrange to have share
redemption proceeds wired to a pre-designated account at a U.S. bank or
other financial institution that is an ACH member, through AccountLink.
There is no dollar limit on telephone redemption proceeds sent to a bank
account when an AccountLink has been established. Shareholders may also
redeem shares automatically by telephone by using PhoneLink. Shareholders
may also have the Transfer Agent send redemption proceeds of $2,500 or
more by Federal Funds wire to a designated commercial bank, which is a
member of the Federal Reserve wire system. Shareholders of the funds have
up to six months to reinvest redemption proceeds of their Class A or Class
B shares in Class A shares of the funds or other OppenheimerFunds without
paying a sales charge if certain conditions are met. Strategic Short-Term
Income Fund and Limited-Term Government Fund may redeem accounts valued
at less than $200 if the account has fallen below such stated amount for
reasons other than market value fluctuations. Both funds offer Automatic
Withdrawal and Automatic Exchange Plans under certain conditions.
Rights of Shareholders
Class A shares of Strategic Short-Term Income Fund and Class A shares
of Limited-Term Government Fund are each sold at an initial sales charge
of 3.50% on purchases of less than $100,000. The reduced front-end sales
loads on larger purchases are the same for each fund. If Class A shares
of either fund are purchased as part of an investment of at least $1
million in shares of one or more OppenheimerFunds, there is no initial
sales charge, but if shares are sold within 18 months after the purchase,
there may be imposed a contingent deferred sales charge ("CDSC") which
will vary, depending on the amount invested. Class B shares of Strategic
Short-Term Income Fund, and Class B shares of Limited-Term Government Fund
are sold at net asset value per share, without an initial sales charge.
However, if Class B shares are sold within five years of purchase, there
is a CDSC, depending on how long the shares are owned. Both of the funds
have the same CDSC with respect to their Class B shares. The shares of
each such fund, including shares of each class, entitle the holder to one
vote per share on the election of trustees and all other matters submitted
to shareholders of the fund. Class A and Class B shares of Strategic
Short-Term Income Fund and the Class A and Class B shares of Limited-Term
Government Fund which Strategic Short-Term Income Fund shareholders will
receive in the Reorganization participate equally in the fund's dividends
and distributions and in the fund's net assets upon liquidation, after
taking into account the different expenses paid by each class.
Distributions and dividends for each class will be different and Class B
dividends and distributions will be lower than Class A dividends and
distributions. It is not contemplated that Strategic Short-Term Income
Fund or Limited-Term Government Fund will hold regular annual meetings of
shareholders. Under the Investment Company Act, shareholders of Strategic
Short-Term Income Fund do not have rights of appraisal as a result of the
transactions contemplated by the Reorganization Agreement. However, they
have the right at any time prior to the consummation of such transaction
to redeem their shares at net asset value. Shareholders of both of the
funds have the right, under certain circumstances, to remove a Trustee and
will be assisted in communicating with other shareholders for such
purpose.
Strategic Short-Term Income Fund was organized in 1991 as a Massachusetts
business trust and Limited-Term Government Fund was organized in 1986,
also as a Massachusetts business trust. Both of the funds are open-end,
diversified management investment companies, with an unlimited number of
authorized shares of beneficial interest. Each of the funds is governed
by a Board of Trustees (of which the members are the same) which has the
power, without shareholder approval, to establish and designate one or
more series and to divide unissued shares of Strategic Short-Term Income
Fund or Limited-Term Government Fund into two or more classes. With
respect to Strategic Short-Term Income Fund, the Board has done so, and
it presently has two classes of shares, Class A and Class B. The Board
has established three classes of shares with respect to Limited-Term
Government Fund, Class A, Class B and Class C. With respect to Strategic
Short-Term Income Fund and Limited-Term Government Fund, each class has
its own dividends and distributions and pays certain expenses which will
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 proportionately. Shares of a particular class
vote together on matters that affect that class. Most Amendments to the
Declaration of Trust require the approval of a "majority" (as defined in
the Investment Company Act) of a fund's shareholders. Each fund's
Declaration of Trust states that Class A and Class B shares, when issued
and paid for, are fully paid and non-assessable. Under certain
circumstances, shareholders of the funds may be held personally liable as
partners for the funds' obligations, and under each Declaration of Trust
such a shareholder is entitled to indemnification rights by the funds; the
risk of a shareholder incurring any such loss is limited to the remote
circumstances in which the fund is unable to meet its obligations.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York
10048-0203, acts as the investment adviser for Strategic Short-Term Income
Fund and also acts as the investment adviser for Limited-Term Government
Fund. The terms and conditions of the investment advisory agreement for
each fund are substantially the same except for fees paid by each fund.
The monthly management fee payable to the Manager by each fund is set
forth under "Synopsis - Investment Advisory and Service Plan Fees." The
12b-1 Distribution and Service Plan fees paid by Strategic Short-Term
Income Fund with respect to Class A and Class B shares and paid by
Limited-Term Government Fund with respect to Class A and Class B shares
of Limited-Term Government Fund are set forth above under "Synopsis -
Investment Advisory and Service Plan Fees."
Pursuant to each investment advisory agreement, the Manager supervises the
investment operations of the funds and the composition of their portfolios
and furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. Both
investment advisory agreements require the Manager to provide Strategic
Short-Term Income Fund and Limited-Term Government 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 funds, including the compilation
and maintenance of records with respect to their operations, the
preparation and filing of specified reports, and composition of proxy
materials and registration statements for continuous public sale of shares
of each fund.
For the fiscal year ended September 30, 1994, Strategic Short-Term Income
Fund's management fee paid to the Manager was $222,890. The management
fee paid by Strategic Short-Term Income Fund to the Manager for the six
months ended March 31, 1995 was $101,024. For the fiscal year ended
September 30, 1994, the management fee paid by Limited-Term Government
Fund to the Manager was $976,513. For the six months ended March 31,
1995, the management fees paid by Limited-Term Government Fund were
$694,013. However, independently of the advisory agreement with Strategic
Short-Term Income Fund, the Manager has undertaken that the total expenses
of Strategic Short-Term Income Fund in any fiscal year (including the
management fee but exclusive of taxes, interest, brokerage commissions,
distribution plan payments and any extraordinary non-recurring expenses,
including litigation) shall not exceed the most stringent state
regulatory limitation on fund expenses applicable to the funds. The
Manager has made the same undertaking with respect to Limited-Term
Government Fund. At present, that limitation is imposed by California and
limits expenses (with specified exclusions) to 2.5% of the first $30
million of average annual net assets, 2% of the next $70 million and 1.5%
of average annual net assets in excess of $100 million. Until December
1, 1993, the Manager had also undertaken to assume Strategic Short-Term
Income Fund's expenses (other than extraordinary non-recurring expenses)
to enable the Fund to pay a dividend of $.3056 per share per annum, with
the limitation that the dividend could not exceed Strategic Short-Term
Income Fund's annual gross earnings per share. The undertaking terminated
December 1, 1993. Any assumption of either fund's expense, would lower
Strategic Short-Term Income Fund's or Limited-Term Government Fund's
overall expense ratio and increase its total return during each period in
which expenses are limited. The Manager reserves the right to change or
eliminate the expense limitations at any time and there can be no
assurance as to the duration of the expense limitation by either fund.
Since July 1, 1994, Limited-Term Government Fund has attempted to pay
dividends on Class A shares at a constant level. The current Class A
dividend will be reduced beginning with the dividend scheduled for payment
on August 31, 1995. It is not expected that Limited-Term Government Fund
will maintain a fixed dividend rate for Class B shares and there can be
no assurance as to the payment of any dividends or the realization of any
capital gains by either fund.
The Manager is controlled by OAC, a holding company owned in part by
senior management of the Manager and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company that also advises pension plans and investment companies. The
Manager has operated as an investment company adviser since 1959. The
Manager and its affiliates currently advise investment companies with
combined net assets aggregating over $32 billion as of March 31, 1995,
with more than ___ million shareholder accounts. Oppenheimer Shareholder
Services, a division of the Manager, acts as transfer and shareholder
servicing agent on an at-cost basis for Strategic Short-Term Income Fund
and Limited-Term Government Fund and for certain other open-end funds
managed by the Manager and its affiliates.
The Distributor, under a General Distributor's Agreement for each of the
funds, acts as the principal underwriter in the continuous public offering
of Strategic Short-Term Income Fund's Class A and Class B shares, and
Limited-Term Government Fund's Class A, Class B and Class C shares.
During Strategic Short-Term Income Fund's fiscal years ended September 30,
1994, the aggregate sales charges on sales of Strategic Short-Term Income
Fund's Class A shares was $448,316, respectively, of which the Distributor
and an affiliated broker-dealer retained in the aggregate $154,348.
During Strategic Short-Term Income Fund's fiscal year ended September 30,
1994, the contingent deferred sales charges collected on Strategic Short-
Term Income Fund's Class B shares totalled $21,256. For the fiscal year
ended September 30, 1994, the aggregate amount of sales charges on sales
of Limited-Term Government Fund's Class A shares was $1,006,962, of which
$310,375 was retained by the Distributor and an affiliated broker-dealer.
Contingent deferred sales charges collected by the Distributor on the
redemption of Class B shares and for the fiscal year ended September 30,
1994 totaled $36,866.
Purchase of Additional Shares
Class A shares of Strategic Short-Term Income Fund and Class A shares of
Limited-Term Government Fund may be sold with an initial sales charge of
3.50% for purchases of less than $100,000. The sales charge of 3.50% is
reduced for purchases of either fund's Class A shares of $100,000 or more.
Class B shares of Strategic Short-Term Income Fund and Limited-Term
Government Fund are sold at net asset value without an initial sales
charge, however, if Class B shares of either fund are redeemed within five
years of the end of the calendar month of their purchase, a contingent
deferred sales charge may be deducted.
The contingent deferred sales charge on Class B shares of Limited-Term
Government Fund will only affect shareholders of Strategic Short-Term
Income Fund to the extent that they desire to make additional purchases
of Class B shares of Limited-Term Government Fund in addition to the
shares which they will receive as a result of the Reorganization. The
Class A and Class B shares to be issued under the Reorganization Agreement
will be issued by Limited-Term Government Fund at net asset value without
a sales charge. Future dividends and capital gain distributions of
Limited-Term Government Fund, if any, may be reinvested without sales
charge. Any Strategic Short-Term Income Fund shareholder who is entitled
to a reduced sales charge on additional purchases by reason of a Letter
of Intent or Rights of Accumulation based upon holdings of shares of
Strategic Short-Term Income Fund will continue to be entitled to a reduced
sales charge on any future purchase of shares of Limited-Term Government
Fund.
METHOD OF CARRYING OUT THE REORGANIZATION
The consummation of the transactions contemplated by the Reorganization
Agreement is contingent upon the approval of the Reorganization by the
shareholders of Strategic Short-Term Income Fund and the receipt of the
opinions and certificates set forth in Sections 10 and 11 of the
Reorganization Agreement and the occurrence of the events described in
those Sections. Under the Reorganization Agreement, all the assets of
Strategic Short-Term Income Fund, excluding the Cash Reserve, will be
delivered to Limited-Term Government Fund in exchange for Class A and
Class B shares of Limited-Term Government Fund. The Cash Reserve to be
retained by Strategic Short-Term Income Fund will be sufficient in the
discretion of the Board for the payment of Strategic Short-Term Income
Fund's liabilities, and Strategic Short-Term Income Fund's expenses of
liquidation.
Assuming the shareholders of Strategic Short-Term Income Fund approve
the Reorganization, the actual exchange of assets is expected to take
place on September 20, 1995 or as soon thereafter as is practicable (the
"Closing Date") on the basis of net asset values as of the close of
business on the business day preceding the Closing Date (the "Valuation
Date"). Under the Reorganization Agreement, all redemptions of shares of
Strategic Short-Term Income Fund shall be permanently suspended on the
Valuation Date; only redemption requests received in proper form on or
prior to the close of business on that date shall be fulfilled by it;
redemption requests received by Strategic Short-Term Income Fund after
that date will be treated as requests for redemptions of Class A or Class
B shares of Limited-Term Government Fund to be distributed to the
shareholders requesting redemption. The exchange of assets for shares
will be done on the basis of the per share net asset value of the Class
A and Class B shares of Limited-Term Government Fund, and the value of the
assets of Strategic Short-Term Income Fund to be transferred as of the
close of business on the Valuation Date, in the manner used by Limited-
Term Government Fund in the valuation of assets. Limited-Term Government
Fund is not assuming any of the liabilities of Strategic Short-Term Income
Fund, except for portfolio securities purchased which have not settled and
outstanding shareholder redemption and dividend checks.
The net asset value of the shares transferred by Limited-Term Government
Fund to Strategic Short-Term Income Fund will be the same as the value of
the assets of the portfolio received by Limited-Term Government Fund. For
example, if, on the Valuation Date, Strategic Short-Term Income Fund were
to have securities with a market value of $95,000 and cash in the amount
of $10,000 (of which $5,000 was to be retained by it as the Cash Reserve),
the value of the assets which would be transferred to Limited-Term
Government Fund would be $100,000. If the net asset value per share of
Limited-Term Government Fund were $10 per share at the close of business
on the Valuation Date, the number of shares to be issued would be 10,000
($100,000 divided by $10). These 10,000 shares of Limited-Term Government
Fund would be distributed to the former shareholders of Strategic Short-Term
Income Fund. This example is given for illustration purposes only and
does not bear any relationship to the dollar amounts or shares expected
to be involved in the Reorganization.
After the Closing Date, Strategic Short-Term Income Fund will distribute
on a pro rata basis to its shareholders of record on the Valuation Date
the Class A and Class B shares of Limited-Term Government Fund received
by Strategic Short-Term Income Fund at the closing, in liquidation of the
outstanding shares of Strategic Short-Term Income Fund, and the
outstanding shares of Strategic Short-Term Income Fund will be cancelled.
To assist Strategic Short-Term Income Fund in this distribution, Limited-
Term Government Fund will, in accordance with a shareholder list supplied
by Strategic Short-Term Income Fund, cause its transfer agent to credit
and confirm an appropriate number of shares of Limited-Term Government
Fund to each shareholder of Strategic Short-Term Income Fund.
Certificates for Class A and Class B shares of Limited-Term Government
Fund will be issued upon written request of a former shareholder of
Strategic Short-Term Income Fund but only for whole shares with fractional
shares credited to the name of the shareholder on the books of Limited-
Term Government Fund. Former shareholders of Strategic Short-Term Income
Fund who wish certificates representing their shares of Limited-Term
Government Fund must, after receipt of their confirmations, make a written
request to OSS, P.O. Box 5270, Denver, Colorado 80217. Shareholders of
Strategic Short-Term Income Fund holding certificates representing their
shares will not be required to surrender their certificates to anyone in
connection with the Reorganization. After the Reorganization, however,
it will be necessary for such shareholders to surrender such certificates
in order to redeem, transfer, pledge or exchange any shares of Limited-
Term Government Fund.
Under the Reorganization Agreement, within one year after the Closing
Date, Strategic Short-Term Income Fund shall: (a) either pay or make
provision for all of its debts and taxes; and (b) either (i) transfer any
remaining amount of the Cash Reserve to Limited-Term Government Fund, if
such remaining amount is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of Strategic Short-
Term Income Fund who were such on the Valuation Date. Such remaining
amount shall be deemed to be material if the amount to be distributed,
after deducting the estimated expenses of the distribution, equals or
exceeds one cent per share of the number of Strategic Short-Term Income
Fund shares outstanding on the Valuation Date. Within one year after the
Closing Date, Strategic Short-Term Income Fund will complete its
liquidation.
Under the Reorganization Agreement, either Strategic Short-Term Income
Fund or Limited-Term Government Fund may abandon and terminate the
Reorganization Agreement without liability if the other party breaches any
material provision of the Reorganization Agreement or, if prior to the
closing, any legal, administrative or other proceeding shall be instituted
or threatened (i) seeking to restrain or otherwise prohibit the
transactions contemplated by the Reorganization Agreement and/or (ii)
asserting a material liability of either party, which proceeding or
liability has not been terminated or the threat thereto removed prior to
the Closing Date.
In the event that the Reorganization Agreement is not consummated for any
reason, the Board will consider and may submit to the shareholders other
alternatives.
MISCELLANEOUS
Additional Information
Financial Information
The Reorganization will be accounted for by the surviving fund in its
financial statements similar to a pooling. Further financial information
as to Strategic Short-Term Income Fund is contained in its current
Prospectus, which is available without charge from Oppenheimer Shareholder
Services, the Transfer Agent, P.O. Box 5270, Denver, Colorado 80217, and
is incorporated herein, and in its audited financial statements as of
September 30, 1994, and unaudited Semi-Annual Report as of March 31, 1995,
which are included in the Additional Statement. Financial information for
Limited-Term Government Fund is contained in its current Prospectus
accompanying this Proxy Statement and Prospectus and incorporated herein,
and in its audited financial statements as of September 30, 1994 and
unaudited Semi-Annual Report as of March 31, 1995, which are included in
the Statement of Additional Information to this Proxy Statement and
Prospectus.
Public Information
Additional information about Strategic Short-Term Income Fund and Limited-
Term Government Fund is available, as applicable, in the following
documents which are incorporated herein by reference: (i) Limited-Term
Government Fund's Prospectus dated February 1, 1995, supplemented April
20, 1995, May 15, 1995, and further supplemented July 14, 1995,
accompanying this Proxy Statement and Prospectus and incorporated herein;
(ii) Strategic Short-Term Income Fund's Prospectus dated January 27, 1995,
supplemented June 14, 1995, and further supplemented July 14, 1995, which
may be obtained without charge by writing to OSS, P.O. Box 5270, Denver,
Colorado 80217; (iii) Limited-Term Government Fund's Annual Report as of
September 30, 1994 and unaudited Semi-Annual Report as of March 31, 1995,
which may be obtained without charge by writing to OSS at the address
indicated above; and (iv) Strategic Short-Term Income Fund's Annual Report
as of September 30, 1994 and unaudited Semi-Annual Report as of March 31,
1995, which may be obtained without charge by writing to OSS at the
address indicated above. All of the foregoing documents may be obtained
by calling the toll-free number on the cover of this Proxy Statement and
Prospectus.
Additional information about the following matters is contained in the
Statement of Additional Information to this Proxy Statement and
Prospectus, which incorporates by reference the Limited-Term Government
Fund Additional Statement dated February 1, 1995, supplemented April 20,
1995 and further supplemented May 15, 1995, and Strategic Short-Term
Income Fund's Prospectus dated January 27, 1995, supplemented June 14,
1995, and Statement of Additional Information dated January 27, 1995: the
organization and operation of Limited-Term Government Fund and Strategic
Short-Term Income Fund; more information on investment policies, practices
and risks; information about Strategic Short-Term Income Fund's and
Limited-Term Government Fund's Boards of Trustees and their
responsibilities; a further description of the services provided by
Limited-Term Government Fund's and Strategic Short-Term Income Fund's
investment adviser, distributor, and transfer and shareholder servicing
agent; dividend policies; tax matters; an explanation of the method of
determining the offering price of the shares and/or contingent deferred
sales charges, as applicable of Class A, B and C shares of Limited-Term
Government Fund and Class A and Class B shares of Strategic Short-Term
Income Fund; purchase, redemption and exchange programs; the different
expenses paid by each class of shares; and distribution arrangements.
Strategic Short-Term Income Fund and Limited-Term Government Fund are
subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and in accordance therewith, file reports and other
information with the SEC. Proxy material, reports and other information
about Strategic Short-Term Income Fund and Limited-Term Government Fund
which are of public record can be inspected and copied at public reference
facilities maintained by the SEC in Washington, D.C. and certain of its
regional offices, and copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer
Affairs and Information Services, SEC, Washington, D.C. 20549.
OTHER BUSINESS
Management of Strategic Short-Term Income Fund knows of no business other
than the matters specified above which will be presented at the Meeting.
Since matters not known at the time of the solicitation may come before
the Meeting, the proxy as solicited confers discretionary authority with
respect to such matters as properly come before the Meeting, including any
adjournment or adjournments thereof, and it is the intention of the
persons named as attorneys-in-fact in the proxy to vote this proxy in
accordance with their judgment on such matters.
By Order of the Board of Trustees
George C. Bowen, Secretary
July 17, 1995 295
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
__________________ by and between Oppenheimer Strategic Short-Term Income
Fund ("Strategic Short-Term Income Fund"), a Massachusetts business trust,
and Oppenheimer Limited-Term Government Fund ("Limited-Term Government
Fund"), a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type; and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), of Strategic Short-Term Income Fund through the
acquisition by Limited-Term Government Fund of substantially all of the
assets of Strategic Short-Term Income Fund in exchange for the voting
shares of beneficial interest ("shares") of Class A and Class B shares of
Limited-Term Government Fund and the assumption by Limited-Term Government
Fund of certain liabilities of Strategic Short-Term Income Fund, which
Class A and Class B shares of Limited-Term Government Fund are thereafter
to be distributed by Strategic Short-Term Income Fund pro rata to its
shareholders in complete liquidation of Strategic Short-Term Income Fund
and complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. The parties hereto hereby adopt this Agreement and Plan of
Reorganization (the "Agreement") pursuant to Section 368(a)(1) of the Code
as follows: The reorganization will be comprised of the acquisition by
Limited-Term Government Fund of substantially all of the properties and
assets of Strategic Short-Term Income Fund in exchange for Class A and
Class B shares of Limited-Term Government Fund and the assumption by
Limited-Term Government Fund of certain liabilities of Strategic Short-
Term Income Fund, followed by the distribution of such Class A and Class
B shares of Limited-Term Government Fund shares to the Class A and Class
B shareholders of Strategic Short-Term Income Fund in exchange for their
Class A and Class B shares of Strategic Short-Term Income Fund, all upon
and subject to the terms of the Agreement hereinafter set forth.
The share transfer books of Strategic Short-Term Income Fund
will be permanently closed at the close of business on the Valuation Date
(as hereinafter defined) and only redemption requests received in proper
form on or prior to the close of business on the Valuation Date shall be
fulfilled by Strategic Short-Term Income Fund; redemption requests
received by Strategic Short-Term Income Fund after that date shall be
treated as requests for the redemption of the shares of Limited-Term
Government Fund to be distributed to the shareholder in question as
provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the assets
of Strategic Short-Term Income Fund on that date, excluding a cash reserve
(the "Cash Reserve") to be retained by Strategic Short-Term Income Fund
sufficient in its discretion for the payment of the expenses of Strategic
Short-Term Income Fund's dissolution and its liabilities, but not in
excess of the amount contemplated by Section 10E, shall be delivered as
provided in Section 8 to Limited-Term Government Fund, in exchange for and
against delivery to Strategic Short-Term Income Fund on the Closing Date
of a number of Class A and Class B shares of Limited-Term Government Fund
having an aggregate net asset value equal to the value of the assets of
Strategic Short-Term Income Fund so transferred and delivered.
3. The net asset value of Class A and Class B shares of Limited-Term
Government Fund and the value of the assets of Strategic Short-Term Income
Fund to be transferred shall in each case be determined as of the close
of business of the New York Stock Exchange on the Valuation Date. The
computation of the net asset value of the Class A and Class B shares of
Limited-Term Government Fund and the Class A and Class B shares of
Strategic Short-Term Income Fund shall be done in the manner used by
Limited-Term Government Fund and Strategic Short-Term Income Fund,
respectively, in the computation of such net asset value per share as set
forth in their respective prospectuses. The methods used by Limited-Term
Government Fund in such computation shall be applied to the valuation of
the assets of Strategic Short-Term Income Fund to be transferred to
Limited-Term Government Fund.
Strategic Short-Term Income Fund shall declare and pay,
immediately prior to the Valuation Date, a dividend or dividends which,
together with all previous such dividends, shall have the effect of
distributing to Strategic Short-Term Income Fund's shareholders all of
Strategic Short-Term Income Fund's investment company taxable income for
taxable years ending on or prior to the Closing Date (computed without
regard to any dividends paid) and all of its net capital gain, if any,
realized in taxable years ending on or prior to the Closing Date (after
reduction for any capital loss carry-forward).
4. The closing (the "Closing") shall be at the office of Oppenheimer
Management Corporation (the "Agent"), Two World Trade Center, Suite 3400,
New York, New York 10048, at 4:00 P.M. New York time on September 20,
1995, or at such other time or place as the parties may designate or as
provided below (the "Closing Date"). The business day preceding the
Closing Date is herein referred to as the "Valuation Date."
In the event that on the Valuation Date either party has,
pursuant to the Investment Company Act of 1940, as amended (the "Act"),
or any rule, regulation or order thereunder, suspended the redemption of
its shares or postponed payment therefor, the Closing Date shall be
postponed until the first business day after the date when both parties
have ceased such suspension or postponement; provided, however, that if
such suspension shall continue for a period of 60 days beyond the
Valuation Date, then the other party to the Agreement shall be permitted
to terminate the Agreement without liability for such termination.
5. As soon as practicable after the closing, Strategic Short-Term
Income Fund shall distribute on a pro rata basis to the shareholders of
Strategic Short-Term Income Fund on the Valuation Date the Class A and
Class B shares of Limited-Term Government Fund received by Strategic
Short-Term Income Fund on the Closing Date in exchange for the assets of
Strategic Short-Term Income Fund in complete liquidation of Strategic
Short-Term Income Fund; for the purpose of the distribution by Strategic
Short-Term Income Fund of Class A and Class B shares of Limited-Term
Government Fund to its shareholders, Limited-Term Government Fund will
promptly cause its transfer agent to: (a) credit an appropriate number of
Class A and Class B shares of Limited-Term Government Fund on the books
of Limited-Term Government Fund to each Class A and Class B shareholder,
respectively of Strategic Short-Term Income Fund in accordance with a list
(the "Shareholder List") of its shareholders received from Strategic
Short-Term Income Fund; and (b) confirm an appropriate number of Class A
and Class B shares of Limited-Term Government Fund to each shareholder of
Strategic Short-Term Income Fund; certificates for Class A and Class B
shares of Limited-Term Government Fund will be issued upon written request
of a former shareholder of Strategic Short-Term Income Fund but only for
whole shares with fractional shares credited to the name of the
shareholder on the books of Limited-Term Government Fund.
The Shareholder List shall indicate, as of the close of business
on the Valuation Date, the name and address of each shareholder of
Strategic Short-Term Income Fund, indicating his or her share balance.
Strategic Short-Term Income Fund agrees to supply the Shareholder List to
Limited-Term Government Fund not later than the Closing Date.
Shareholders of Strategic Short-Term Income Fund holding certificates
representing their shares shall not be required to surrender their
certificates to anyone in connection with the reorganization. After the
Closing Date, however, it will be necessary for such shareholders to
surrender their certificates in order to redeem, transfer or pledge the
shares of Limited-Term Government Fund which they received.
6. Within one year after the Closing Date, Strategic Short-Term
Income Fund shall (a) either pay or make provision for payment of all of
its liabilities and taxes, and (b) either (i) transfer any remaining
amount of the Cash Reserve to Limited-Term Government Fund, if such
remaining amount (as reduced by the estimated cost of distributing it to
shareholders) is not material (as defined below) or (ii) distribute such
remaining amount to the shareholders of Strategic Short-Term Income Fund
on the Valuation Date. Such remaining amount shall be deemed to be
material if the amount to be distributed, after deduction of the estimated
expenses of the distribution, equals or exceeds one cent per share of
Strategic Short-Term Income Fund outstanding on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination between
the parties as to their respective portfolios so that, after the closing,
Limited-Term Government Fund will be in compliance with all of its
investment policies and restrictions. At the Closing, Strategic Short-
Term Income Fund shall deliver to Limited-Term Government Fund two copies
of a list setting forth the securities then owned by Strategic Short-Term
Income Fund. Promptly after the Closing, Strategic Short-Term Income Fund
shall provide Limited-Term Government Fund a list setting forth the
respective federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to Limited-
Term Government Fund of record ownership thereof by The Depository Trust
Company or through the Federal Reserve Book Entry System or any other
depository approved by Strategic Short-Term Income Fund pursuant to Rule
17f-4 or Rule 17f-5 under the Act shall be endorsed and delivered, or
transferred by appropriate transfer or assignment documents, by Strategic
Short-Term Income Fund on the Closing Date to Limited-Term Government
Fund, or at its direction, to its custodian bank, in proper form for
transfer in such condition as to constitute good delivery thereof in
accordance with the custom of brokers and shall be accompanied by all
necessary state transfer stamps, if any. The cash delivered shall be in
the form of certified or bank cashiers' checks or by bank wire or intra-
bank transfer payable to the order of Limited-Term Government Fund for the
account of Limited-Term Government Fund. Shares of Limited-Term
Government Fund representing the number of shares of Limited-Term
Government Fund being delivered against the assets of Strategic Short-Term
Income Fund, registered in the name of Strategic Short-Term Income Fund,
shall be transferred to Strategic Short-Term Income Fund on the Closing
Date. Such shares shall thereupon be assigned by Strategic Short-Term
Income Fund to its shareholders so that the shares of Limited-Term
Government Fund may be distributed as provided in Section 5.
If, at the Closing Date, Strategic Short-Term Income Fund is
unable to make delivery under this Section 8 to Limited-Term Government
Fund of any of its portfolio securities or cash for the reason that any
of such securities purchased by Strategic Short-Term Income Fund, or the
cash proceeds of a sale of portfolio securities, prior to the Closing Date
have not yet been delivered to it or Strategic Short-Term Income Fund's
custodian, then the delivery requirements of this Section 8 with respect
to said undelivered securities or cash will be waived and Strategic Short-
Term Income Fund will deliver to Limited-Term Government Fund by or on the
Closing Date and with respect to said undelivered securities or cash
executed copies of an agreement or agreements of assignment in a form
reasonably satisfactory to Limited-Term Government Fund, together with
such other documents, including a due bill or due bills and brokers'
confirmation slips as may reasonably be required by Limited-Term
Government Fund.
9. Limited-Term Government Fund shall not assume the liabilities
(except for portfolio securities purchased which have not settled and for
shareholder redemption and dividend checks outstanding) of Strategic
Short-Term Income Fund, but Strategic Short-Term Income Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so
far as may be possible, prior to the Closing Date. The cost of printing
and mailing the proxies and proxy statements will be borne by Strategic
Short-Term Income Fund. Strategic Short-Term Income Fund and Limited-Term
Government Fund will bear the cost of their respective tax opinion. Any
documents such as existing prospectuses or annual reports that are
included in that mailing will be a cost of the fund issuing the document.
Any other out-of-pocket expenses of Limited-Term Government Fund and
Strategic Short-Term Income Fund associated with this reorganization,
including legal, accounting and transfer agent expenses, will be borne by
Strategic Short-Term Income Fund and Limited-Term Government Fund,
respectively, in the amounts so incurred by each.
10. The obligations of Limited-Term Government Fund hereunder shall
be subject to the following conditions:
A. The Board of Trustees of Strategic Short-Term Income Fund
shall have authorized the execution of the Agreement, and the shareholders
of Strategic Short-Term Income Fund shall have approved the Agreement and
the transactions contemplated thereby, and Strategic Short-Term Income
Fund shall have furnished to Limited-Term Government Fund copies of
resolutions to that effect certified by the Secretary or an Assistant
Secretary of Strategic Short-Term Income Fund; such shareholder approval
shall have been by the affirmative vote of "a majority of the outstanding
voting securities" (as defined in the Act) of Strategic Short-Term Income
Fund at a meeting for which proxies have been solicited by the Proxy
Statement and Prospectus (as hereinafter defined).
B. Limited-Term Government Fund shall have received an opinion
dated the Closing Date of counsel to Strategic Short-Term Income Fund, to
the effect that (i) Strategic Short-Term Income Fund is a business trust
duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts with full powers to carry on its
business as then being conducted and to enter into and perform the
Agreement; and (ii) that all action necessary to make the Agreement,
according to its terms, valid, binding and enforceable on Strategic Short-
Term Income Fund and to authorize effectively the transactions
contemplated by the Agreement have been taken by Strategic Short-Term
Income Fund.
C. The representations and warranties of Strategic Short-Term
Income Fund contained herein shall be true and correct at and as of the
Closing Date, and Limited-Term Government Fund shall have been furnished
with a certificate of the President, or a Vice President, or the Secretary
or the Assistant Secretary or the Treasurer of Strategic Short-Term Income
Fund, dated the Closing Date, to that effect.
D. On the Closing Date, Strategic Short-Term Income Fund shall
have furnished to Limited-Term Government Fund a certificate of the
Treasurer or Assistant Treasurer of Strategic Short-Term Income Fund as
to the amount of the capital loss carry-over and net unrealized
appreciation or depreciation, if any, with respect to Strategic Short-Term
Income Fund as of the Closing Date.
E. The Cash Reserve shall not exceed 10% of the value of the
net assets, nor 30% in value of the gross assets, of Strategic Short-Term
Income Fund at the close of business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Limited-Term
Government Fund under the Securities Act of 1933, as amended (the "1933
Act"), containing a preliminary form of the Proxy Statement and
Prospectus, shall have become effective under the 1933 Act not later than
August 31, 1995.
G. On the Closing Date, Limited-Term Government Fund shall have
received a letter of Andrew J. Donohue or other senior executive officer
of Oppenheimer Management Corporation acceptable to Limited-Term
Government Fund, stating that nothing has come to his or her attention
which in his or her judgment would indicate that as of the Closing Date
there were any material actual or contingent liabilities of Strategic
Short-Term Income Fund arising out of litigation brought against Strategic
Short-Term Income Fund or claims asserted against it, or pending or to the
best of his or her knowledge threatened claims or litigation not reflected
in or apparent from the most recent audited financial statements and
footnotes thereto of Strategic Short-Term Income Fund delivered to
Limited-Term Government Fund. Such letter may also include such
additional statements relating to the scope of the review conducted by
such person and his or her responsibilities and liabilities as are not
unreasonable under the circumstances.
H. Limited-Term Government Fund shall have received an opinion,
dated the Closing Date, of Deloitte & Touche LLP, to the same effect as
the opinion contemplated by Section 11.E. of the Agreement.
I. Limited-Term Government Fund shall have received at the
closing all of the assets of Strategic Short-Term Income Fund to be
conveyed hereunder, which assets shall be free and clear of all liens,
encumbrances, security interests, restrictions and limitations whatsoever.
11. The obligations of Strategic Short-Term Income Fund hereunder
shall be subject to the following conditions:
A. The Board of Trustees of Limited-Term Government Fund shall
have authorized the execution of the Agreement, and the transactions
contemplated thereby, and Limited-Term Government Fund shall have
furnished to Strategic Short-Term Income Fund copies of resolutions to
that effect certified by the Secretary or an Assistant Secretary of
Limited-Term Government Fund.
B. Strategic Short-Term Income Fund's shareholders shall have
approved the Agreement and the transactions contemplated hereby, by an
affirmative vote of "a majority of the outstanding voting securities" (as
defined in the Act) of Strategic Short-Term Income Fund, and Strategic
Short-Term Income Fund shall have furnished Limited-Term Government Fund
copies of resolutions to that effect certified by the Secretary or an
Assistant Secretary of Strategic Short-Term Income Fund.
C. Strategic Short-Term Income Fund shall have received an
opinion dated the Closing Date of counsel to Limited-Term Government Fund,
to the effect that (i) Limited-Term Government Fund is a business trust
duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts with full powers to carry on its
business as then being conducted and to enter into and perform the
Agreement; (ii) all action necessary to make the Agreement, according to
its terms, valid, binding and enforceable upon Limited-Term Government
Fund and to authorize effectively the transactions contemplated by the
Agreement have been taken by Limited-Term Government Fund, and (iii) the
shares of Limited-Term Government Fund to be issued hereunder are duly
authorized and when issued will be validly issued, fully-paid and non-
assessable, except as set forth in Limited-Term Government Fund's then
current Prospectus and Statement of Additional Information.
D. The representations and warranties of Limited-Term
Government Fund contained herein shall be true and correct at and as of
the Closing Date, and Strategic Short-Term Income Fund shall have been
furnished with a certificate of the President, a Vice President or the
Secretary or an Assistant Secretary or the Treasurer of Limited-Term
Government Fund to that effect dated the Closing Date.
E. Strategic Short-Term Income Fund shall have received an
opinion of Deloitte & Touche LLP to the effect that the Federal tax
consequences of the transaction, if carried out in the manner outlined in
this Plan of Reorganization and in accordance with (i) Strategic Short-
Term Income Fund's representation that there is no plan or intention by
any Fund shareholder who owns 5% or more of Strategic Short-Term Income
Fund's outstanding shares, and, to Strategic Short-Term Income Fund's best
knowledge, there is no plan or intention on the part of the remaining Fund
shareholders, to redeem, sell, exchange or otherwise dispose of a number
of Limited-Term Government Fund shares received in the transaction that
would reduce Strategic Short-Term Income Fund shareholders' ownership of
Limited-Term Government Fund shares to a number of shares having a value,
as of the Closing Date, of less than 50% of the value of all of the
formerly outstanding Strategic Short-Term Income Fund shares as of the
same date, and (ii) the representation by each of Strategic Short-Term
Income Fund and Limited-Term Government Fund that, as of the Closing Date,
Strategic Short-Term Income Fund and Limited-Term Government Fund will
qualify as regulated investment companies or will meet the diversification
test of Section 368(a)(2)(F)(ii) of the Code, will be as follows:
1. The transactions contemplated by the Agreement will
qualify as a tax-free "reorganization" within the meaning of Section
368(a)(1) of the Code, and under the regulations promulgated thereunder.
2. Strategic Short-Term Income Fund and Limited-Term
Government Fund will each qualify as a "party to a reorganization" within
the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders
of Strategic Short-Term Income Fund upon the distribution of shares of
beneficial interest in Limited-Term Government Fund to the shareholders
of Strategic Short-Term Income Fund pursuant to Section 354 of the Code.
4. Under Section 361(a) of the Code no gain or loss will
be recognized by Strategic Short-Term Income Fund by reason of the
transfer of substantially all its assets in exchange for shares of
Limited-Term Government Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Limited-Term Government Fund by reason of the transfer of
substantially all Strategic Short-Term Income Fund's assets in exchange
for Class A and Class B shares of Limited-Term Government Fund and
Limited-Term Government Fund's assumption of certain liabilities of
Strategic Short-Term Income Fund.
6. The shareholders of Strategic Short-Term Income Fund
will have the same tax basis and holding period for the Class A or Class
B shares of beneficial interest in Limited-Term Government Fund that they
receive as they had for Strategic Short-Term Income Fund shares that they
previously held, pursuant to Section 358(a) and 1223(1), respectively, of
the Code.
7. The securities transferred by Strategic Short-Term
Income Fund to Limited-Term Government Fund will have the same tax basis
and holding period in the hands of Limited-Term Government Fund as they
had for Strategic Short-Term Income Fund, pursuant to Section 362(b) and
1223(1), respectively, of the Code.
F. The Cash Reserve shall not exceed 10% of the value of the
net assets, nor 30% in value of the gross assets, of Strategic Short-Term
Income Fund at the close of business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Oppenheimer
Limited-Term Government Fund under the 1933 Act, containing a preliminary
form of the Proxy Statement and Prospectus, shall have become effective
under the 1933 Act not later than August 31, 1995.
H. On the Closing Date, Strategic Short-Term Income Fund shall
have received a letter of Andrew J. Donohue or other senior executive
officer of Oppenheimer Management Corporation acceptable to Strategic
Short-Term Income Fund, stating that nothing has come to his or her
attention which in his or her judgment would indicate that as of the
Closing Date there were any material actual or contingent liabilities of
Limited-Term Government Fund arising out of litigation brought against
Limited-Term Government Fund or claims asserted against it, or pending or,
to the best of his or her knowledge, threatened claims or litigation not
reflected in or apparent by the most recent audited financial statements
and footnotes thereto of Limited-Term Government Fund delivered to
Strategic Short-Term Income Fund. Such letter may also include such
additional statements relating to the scope of the review conducted by
such person and his or her responsibilities and liabilities as are not
unreasonable under the circumstances.
I. Strategic Short-Term Income Fund shall acknowledge receipt
of the shares of Limited-Term Government Fund.
12. Strategic Short-Term Income Fund hereby represents and warrants
that:
A. The financial statements of Strategic Short-Term Income Fund
as at September 30, 1994 (audited) and March 31, 1995 (unaudited)
heretofore furnished to Limited-Term Government Fund, present fairly the
financial position, results of operations, and changes in net assets of
Strategic Short-Term Income Fund as of that date, in conformity with
generally accepted accounting principles applied on a basis consistent
with the preceding year; and that from September 30, 1994 through the date
hereof there have not been, and through the Closing Date there will not
be, any material adverse change in the business or financial condition of
Strategic Short-Term Income Fund, it being agreed that a decrease in the
size of Strategic Short-Term Income Fund due to a diminution in the value
of its portfolio and/or redemption of its shares shall not be considered
a material adverse change;
B. Contingent upon approval of the Agreement and the
transactions contemplated thereby by Strategic Short-Term Income Fund's
shareholders, Strategic Short-Term Income Fund has authority to transfer
all of the assets of Strategic Short-Term Income Fund to be conveyed
hereunder free and clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in
Strategic Short-Term Income Fund's Registration Statement under the 1933
Act, as amended, is true, correct and complete, conforms to the
requirements of the 1933 Act and does not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Registration Statement, as amended, was, as of the date of the filing of
the last Post-Effective Amendment, true, correct and complete, conformed
to the requirements of the 1933 Act and did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
D. There is no material contingent liability of Strategic
Short-Term Income Fund and no material claim and no material legal,
administrative or other proceedings pending or, to the knowledge of
Strategic Short-Term Income Fund, threatened against Strategic Short-Term
Income Fund, not reflected in such Prospectus;
E. There are no material contracts outstanding to which
Strategic Short-Term Income Fund is a party other than those ordinary in
the conduct of its business;
F. Strategic Short-Term Income Fund is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts; and has all necessary and material Federal
and state authorizations to own all of its assets and to carry on its
business as now being conducted; and Strategic Short-Term Income Fund is
duly registered under the Act and such registration has not been rescinded
or revoked and is in full force and effect;
G. All Federal and other tax returns and reports of Strategic
Short-Term Income Fund required by law to be filed have been filed, and
all Federal and other taxes shown due on said returns and reports have
been paid or provision shall have been made for the payment thereof and
to the best of the knowledge of Strategic Short-Term Income Fund no such
return is currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with respect
to the taxable year of Strategic Short-Term Income Fund ended September
30, 1994 have not been filed, such returns will be filed when required and
the amount of tax shown as due thereon shall be paid when due; and
H. Strategic Short-Term Income Fund has elected to be treated
as a regulated investment company and, for each fiscal year of its
operations, Strategic Short-Term Income Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company and Strategic Short-Term Income Fund intends to meet
such requirements with respect to its current taxable year.
13. Limited-Term Government Fund hereby represents and warrants
that:
A. The financial statements of Limited-Term Government Fund as
at September 30, 1994 (audited) and March 31, 1995 (unaudited) heretofore
furnished to Strategic Short-Term Income Fund, present fairly the
financial position, results of operations, and changes in net assets of
Limited-Term Government Fund, as of that date, in conformity with
generally accepted accounting principles applied on a basis consistent
with the preceding year; and that from September 30, 1994 through the date
hereof there have not been, and through the Closing Date there will not
be, any material adverse changes in the business or financial condition
of Limited-Term Government Fund, it being understood that a decrease in
the size of Limited-Term Government Fund due to a diminution in the value
of its portfolio and/or redemption of its shares shall not be considered
a material or adverse change;
B. The Prospectus, as amended and supplemented, contained in
Limited-Term Government Fund's Registration Statement under the 1933 Act,
is true, correct and complete, conforms to the requirements of the 1933
Act and does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Registration Statement,
as amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
C. There is no material contingent liability of Limited-Term
Government Fund and no material claim and no material legal,
administrative or other proceedings pending or, to the knowledge of
Limited-Term Government Fund, threatened against Limited-Term Government
Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which
Limited-Term Government Fund is a party other than those ordinary in the
conduct of its business;
E. Limited-Term Government Fund is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts; has all necessary and material Federal and
state authorizations to own all its properties and assets and to carry on
its business as now being conducted; the shares of Limited-Term Government
Fund which it issues to Strategic Short-Term Income Fund pursuant to the
Agreement will be duly authorized, validly issued, fully-paid and non-
assessable, except as otherwise set forth in Limited-Term Government
Fund's Registration Statement; and will conform to the description thereof
contained in Limited-Term Government Fund's Registration Statement, will
be duly registered under the 1933 Act and in the states where registration
is required; and Limited-Term Government Fund is duly registered under the
Act and such registration has not been revoked or rescinded and is in full
force and effect;
F. All Federal and other tax returns and reports of Limited-
Term Government Fund required by law to be filed have been filed, and all
Federal and other taxes shown due on said returns and reports have been
paid or provision shall have been made for the payment thereof and to the
best of the knowledge of Limited-Term Government Fund no such return is
currently under audit and no assessment has been asserted with respect to
such returns and to the extent such tax returns with respect to the
taxable year of Limited-Term Government Fund ended September 30, 1994 have
not been filed, such returns will be filed when required and the amount
of tax shown as due thereon shall be paid when due;
G. Limited-Term Government Fund has elected to be treated as
a regulated investment company and, for each fiscal year of its
operations, Limited-Term Government Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company and Limited-Term Government Fund intends to meet such
requirements with respect to its current taxable year;
H. Limited-Term Government Fund has no plan or intention (i)
to dispose of any of the assets transferred by Strategic Short-Term Income
Fund, other than in the ordinary course of business, or (ii) to redeem or
reacquire any of the shares issued by it in the reorganization other than
pursuant to valid requests of shareholders; and
I. After consummation of the transactions contemplated by the
Agreement, Limited-Term Government Fund intends to operate its business
in a substantially unchanged manner.
14. Each party hereby represents to the other that no broker or
finder has been employed by it with respect to the Agreement or the
transactions contemplated hereby. Each party also represents and warrants
to the other that the information concerning it in the Proxy Statement and
Prospectus will not as of its date contain any untrue statement of a
material fact or omit to state a fact necessary to make the statements
concerning it therein not misleading and that the financial statements
concerning it will present the information shown fairly in accordance with
generally accepted accounting principles applied on a basis consistent
with the preceding year. Each party also represents and warrants to the
other that the Agreement is valid, binding and enforceable in accordance
with its terms and that the execution, delivery and performance of the
Agreement will not result in any violation of, or be in conflict with, any
provision of any charter, by-laws, contract, agreement, judgment, decree
or order to which it is subject or to which it is a party.
15. Limited-Term Government Fund agrees that it will prepare and
file a Registration Statement on Form N-14 under the 1933 Act which shall
contain a preliminary form of proxy statement and prospectus contemplated
by Rule 145 under the 1933 Act. The final form of such proxy statement
and prospectus is referred to in the Agreement as the "Proxy Statement and
Prospectus." Each party agrees that it will use its best efforts to have
such Registration Statement declared effective and to supply such
information concerning itself for inclusion in the Proxy Statement and
Prospectus as may be necessary or desirable in this connection. Strategic
Short-Term Income Fund covenants and agrees to deregister as an investment
company under the Investment Company Act of 1940, as amended, as soon as
practicable and to cause the cancellation of its outstanding shares
pursuant to the terms of this Agreement.
16. The obligations of the parties under the Agreement shall be
subject to the right of either party to abandon and terminate the
Agreement without liability if the other party breaches any material
provision of the Agreement or if any material legal, administrative or
other proceeding shall be instituted or threatened between the date of the
Agreement and the Closing Date (i) seeking to restrain or otherwise
prohibit the transactions contemplated hereby and/or (ii) asserting a
material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. The Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all taken together shall constitute
one Agreement. The rights and obligations of each party pursuant to the
Agreement shall not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into the Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written acknowledgement of such waiver.
19. Strategic Short-Term Income Fund understands that the
obligations of Limited-Term Government Fund under the Agreement are not
binding upon any Trustee or shareholder of Limited-Term Government Fund
personally, but bind only Limited-Term Government Fund and Limited-Term
Government Fund's property. Strategic Short-Term Income Fund represents
that it has notice of the provisions of the Declaration of Trust of
Limited-Term Government Fund disclaiming shareholder and Trustee liability
for acts or obligations of Limited-Term Government Fund.
20. Limited-Term Government Fund understands that the obligations
of Strategic Short-Term Income Fund under the Agreement are not binding
upon any Trustee or shareholder of Strategic Short-Term Income Fund
personally, but bind only Strategic Short-Term Income Fund and Strategic
Short-Term Income Fund's property. Limited-Term Government Fund
represents that it has notice of the provisions of the Declaration of
Trust of Strategic Short-Term Income Fund disclaiming shareholder and
Trustee liability for acts or obligations of Strategic Short-Term Income
Fund.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to
be executed and attested by its officers thereunto duly authorized on the
date first set forth above.
Attest: OPPENHEIMER STRATEGIC SHORT-TERM INCOME
FUND
__________________________ By:__________________________________
Attest: OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
__________________________ By:_________________________________
<PAGE>
Oppenheimer Strategic Short-Term Proxy for Shareholders Meeting
Income Fund - Class A Shares To Be Held September 20, 1995
Your shareholder Your prompt response can save vote
is important! your Fund the expense of another
mailing.
Please mark your proxy on the reverse
side, date and sign it, and return
it promptly in the accompanying
envelope, which requires no postage
if mailed in the United States.
Please detach at perforation before
mailing.
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD SEPTEMBER 20, 1995
The undersigned shareholder of Oppenheimer Strategic Short-Term Income
Fund (the "Fund"), does hereby appoint George C. Bowen, Rendle Myer,
Robert Bishop and Scott Farrar, and each of them, as attorneys-in-fact and
proxies of the undersigned, with full power of substitution, to attend the
Special Meeting of Shareholders of Oppenheimer Strategic Short-Term Income
Fund to be held on September 20, 1995, at 3410 South Galena Street,
Denver, Colorado at 10:00 A.M., Denver time, and at all adjournments
thereof, and to vote the shares held in the name of the undersigned on the
record date for said meeting on the Proposal specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their best
judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO RECOMMENDS A VOTE
FOR THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL
BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO CHOICE IS
INDICATED.
Please mark your proxy, date and sign it on the reverse side and return
it promptly in the accompanying envelope, which requires no postage if
mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between
Oppenheimer Strategic Short-Term Income Fund and Oppenheimer Limited-
Term Government Fund, and the transactions contemplated thereby,
including the transfer of substantially all the assets of Oppenheimer
Strategic Short-Term Income Fund, in exchange for Class A and Class
B shares of Limited-Term Government Fund. The distribution of such
shares to the Class A and Class B shareholders of Oppenheimer
Strategic Short-Term Income Fund in complete liquidation of
Oppenheimer Strategic Short-Term Income Fund, the de-registration of
Oppenheimer Strategic Short-Term Income Fund as an investment company
under the Investment Company Act of 1940, as amended, and the
cancellation of the outstanding shares of Oppenheimer Strategic
Short-Term Income Fund (the "Proposal").
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1995
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give his or her title.
295
<PAGE>
Oppenheimer Strategic Short-Term Proxy for Shareholders
Meeting Income Fund - Class B Shares To Be Held September 20,
1995
Your shareholder Your prompt response can save
vote is important! your Fund the expense of another
mailing.
Please mark your proxy on the reverse
side, date and sign it, and return
it promptly in the accompanying
envelope, which requires no postage
if mailed in the United States.
Please detach at perforation before
mailing.
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD SEPTEMBER 20, 1995
The undersigned shareholder of Oppenheimer Strategic Short-Term Income
Fund (the "Fund"), does hereby appoint George C. Bowen, Rendle Myer,
Robert Bishop and Scott Farrar, and each of them, as attorneys-in-fact and
proxies of the undersigned, with full power of substitution, to attend the
Special Meeting of Shareholders of Oppenheimer Strategic Short-Term Income
Fund to be held on September 20, 1995, at 3410 South Galena Street,
Denver, Colorado at 10:00 A.M., Denver time, and at all adjournments
thereof, and to vote the shares held in the name of the undersigned on the
record date for said meeting on the Proposal specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their best
judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO RECOMMENDS A VOTE
FOR THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL
BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO CHOICE IS
INDICATED.
Please mark your proxy, date and sign it on the reverse side and return
it promptly in the accompanying envelope, which requires no postage if
mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between
Oppenheimer Strategic Short-Term Income Fund and Oppenheimer Limited-
Term Government Fund, and the transactions contemplated thereby,
including the transfer of substantially all the assets of Oppenheimer
Strategic Short-Term Income Fund, in exchange for Class A and Class
B shares of Limited-Term Government Fund. The distribution of such
shares to the Class A and Class B shareholders of Oppenheimer
Strategic Short-Term Income Fund in complete liquidation of
Oppenheimer Strategic Short-Term Income Fund, the de-registration of
Oppenheimer Strategic Short-Term Income Fund as an investment company
under the Investment Company Act of 1940, as amended, and the
cancellation of the outstanding shares of Oppenheimer Strategic
Short-Term Income Fund (the "Proposal").
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1995
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give his or her title.
295
<PAGE>
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
July 17, 1995
___________________________________
This Statement of Additional Information of Oppenheimer Limited-Term
Government Fund consists of this cover page and the following documents:
1. Prospectus of Oppenheimer Limited-Term Government Fund dated
February 1, 1995, supplemented April 20, 1995, and further supplemented
May 15, 1995, previously filed June 15, 1995 with Registrant's N-14 and
is incorporated herein by reference. A Supplement to the Prospectus dated
July 14, 1995 is filed herewith and incorporated by reference.
2. Statement of Additional Information of Oppenheimer Limited-Term
Government Fund dated February 1, 1995, previously filed June 15, 1995
with Registrant's N-14 and is incorporated herein by reference. A
Supplement to the Statement of Additional Information dated July 14, 1995
is filed herewith and incorporated by reference.
3. Prospectus of Oppenheimer Strategic Short-Term Income Fund dated
January 27, 1995, supplemented June 14, 1995, previously filed June 15,
1995 with Registrant's N-14 and is incorporated herein by reference. A
Supplement to the Prospectus dated July 14, 1995 is filed herewith and
incorporated by reference.
4. Statement of Additional Information of Oppenheimer Strategic Short-Term
Income Fund dated January 27, 1995, previously filed June 15, 1995 with
Registrant's N-14 and is incorporated herein by reference. A Supplement
to the Statement of Additional Information dated July 14, 1995 is filed
herewith and incorporated by reference.
5. Limited-Term Government Fund's Annual Report as of September 30, 1994,
filed herewith and is incorporated herein by reference.
6. Limited-Term Government Fund's Semi-Annual Report as of March 31, 1995,
filed herewith and is incorporated herein by reference.
7. Strategic Short-Term Income Fund's Annual Report as of September 30,
1994, filed herewith and is incorporated herein by reference.
8. Strategic Short-Term Income Fund's Semi-Annual Report (unaudited) as
of March 31, 1995, filed herewith and is incorporated herein by reference.
This Statement of Additional Information is not a Prospectus. This
Statement of Additional Information should be read in conjunction with the
Proxy Statement and Prospectus, which may be obtained by written request
to Oppenheimer Shareholder Services ("OSS"), P.O. Box 5270, Denver,
Colorado 80217, or by calling OSS at the toll-free number shown above.
<PAGE>
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
Supplement dated July 14, 1995
to the Prospectus dated January 27, 1995
The following changes are made to the Prospectus:
1. The supplement dated June 14, 1995 is replaced by this supplement.
2. The last line of the "Shareholder Transaction Expenses" chart in
"Expenses" on page 3 is amended by deleting the references to the $5.00
Exchange Fee and inserting "None" under the headings Class A Shares and
Class B Shares.
3. Footnote 1 under the "Shareholder Transaction Expenses" chart in
"Expenses" on page 3 is changed to read as follows:
1. If you invest more than $1 million (more than $500,000 for
purchases by OppenheimerFunds prototype 401(k) plans) in Class
A shares, you may have to pay a sales charge of up to 1% if you
sell your shares within 18 calendar months from the end of the
calendar month in which you purchased those shares. See "How to
Buy Shares -- Class A Shares," below.
4. Footnote 2 under the "Shareholder Transaction Expenses" chart in
"Expenses" on page 3 is deleted.
5. The following paragraphs are added at the end of "How the Fund is
Managed" on page 17:
The Board of Trustees of Oppenheimer Strategic Short-Term
Income Fund (referred to as "Strategic Short-Term Income Fund"
or the "Fund") has determined that it is in the best interest
of the Fund's shareholders that the Fund reorganize with and
into Oppenheimer Limited-Term Government Fund ("Limited-Term
Government Fund"). The Board unanimously approved the terms of
an agreement and plan of reorganization to be entered into
between these funds (the "reorganization plan") and the
transactions contemplated (the transactions are referred to as
the "reorganization"). The Board further determined that the
reorganization should be submitted to the Fund's shareholders
for approval, and recommended that shareholders approve the
reorganization.
Pursuant to the reorganization plan, (i) substantially all of
the assets of the Fund would be exchanged for Class A and Class
B shares of Limited-Term Government Fund, (ii) these shares of
Limited-Term Government Fund would be distributed to the
shareholders of the Fund, (iii) Strategic Short-Term Income
Fund would be liquidated, and (iv) the outstanding shares of
Strategic Short-Term Income Fund would be cancelled. It is
expected that the reorganization will be tax-free, pursuant to
Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended, and the Fund will request an opinion of tax counsel to
that effect.
A meeting of the shareholders of Strategic Short-Term Income
Fund is expected to be held on or about August 30, 1995 to vote
on the reorganization. Approval of the reorganization requires
the affirmative vote of a majority of the outstanding shares of
the Fund (the term "majority" is defined in the Investment
Company Act as a special majority. It is also explained in the
Statement of Additional Information). There is no assurance
that Strategic Short-Term Income Fund's shareholders will
approve the reorganization. Details about the proposed
reorganization will be contained in a proxy statement and other
soliciting materials sent to Strategic Short-Term Income Fund's
shareholders of record on June 2, 1995. Persons who become
shareholders of the Fund after the record date for the
shareholder meeting will not be entitled to vote on the
reorganization.
6. In "How to Buy Shares," the section entitled "Class A Shares" under
"Classes of Shares" on page 19 is changed to read as follows:
If you buy Class A shares, you may pay an initial sales charge
on investments up to $1 million (up to $500,000 for purchases
by OppenheimerFunds prototype 401(k) plans). If you purchase
Class A shares as part of an investment of at least $1 million
($500,000 for OppenheimerFunds prototype 401(k) plans) in
shares of one or more OppenheimerFunds, you will not pay an
initial sales charge, but if you sell any of those shares
within 18 months of buying them, you may pay a contingent
deferred sales charge. The amount of that sales charge will
vary depending on the amount you invested. Sales charge rates
are described in "Class A Shares" below.
7. In "How to Buy Shares," the section entitled "Which Class of Shares
Should You Choose?" on page 20 is changed by adding a new final sentence
to the second paragraph of that section as follows:
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.
8. In "How to Buy Shares," the first paragraph of the section "Class A
Contingent Deferred Sales Charge" on page 22 is amended in its entirety
to read as follows:
There is no initial sales charge on purchases of Class A shares
of any one or more of the OppenheimerFunds in the following
cases:
- purchases aggregating $1 million or more, or
- purchases by an OppenheimerFunds prototype 401(k) plan
that: (1) buys shares costing $500,000 or more or (2)
has, at the time of purchase, 100 or more eligible
participants, or (3) certifies that it projects to have
annual plan purchases of $200,000 or more.
Shares of any of the OppenheimerFunds that offers only one
class of shares that has no designation are considered "Class
A shares" for this purpose. The Distributor pays dealers of
record commissions on those purchases in an amount equal to the
sum of 1.0% of the first $2.5 million, plus 0.50% of the next
$2.5 million, plus 0.25% of purchases over $5 million. That
commission will be paid only on the amount of those purchases
in excess of $1 million ($500,000 for purchases by
OppenheimerFunds 401(k) prototype plans) that were not
previously subject to a front-end sales charge and dealer
commission.
9. In "Reduced Sales Charges for Class A Purchases" on page 23, the
first sentence of the section "Right of Accumulation" is changed to read
as follows:
To qualify for the lower sales charge rates that apply to
larger purchases of Class A shares, you and your spouse can add
together Class A and Class B shares you purchase for your
individual accounts, or jointly, or for trust or custodial
accounts on behalf of your children who are minors.
The first two sentences of the second paragraph of that section are
revised to read as follows:
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 that investment in one of the
OppenheimerFunds.
10. The first sentence of the section entitled "Letter of Intent" on page
23 is revised to read as follows:
Under a Letter of Intent, if you purchase Class A shares or
Class A shares and Class B shares of the Fund and other
OppenheimerFunds during a 13-month period, you can reduce the
sales charge rate that applies to your purchases of Class A
shares. The total amount of your intended purchases of both
Class A and Class B shares will determine the reduced sales
charge rate for the Class A shares purchased during that
period.
11. In the section entitled "Waivers of Class A Sales Charges" on pages
23 and 24, the following changes are made:
The first sentence of the first paragraph is replaced by a new
introductory paragraph set forth below and the list of circumstances
describing the sales charge waivers follows a new initial sentence:
- 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 introductory phrase preceding the list of sales charge waivers in the
second paragraph is replaced by the following and a new subsection (d) is
added to that same paragraph following subsection (c):
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:
. . .
(d) 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.
The third paragraph of that section is revised to read as follows:
Waivers of the Class A Contingent Deferred Sales Charge. The
Class A contingent deferred sales charge does not apply to
purchases of Class A shares at net asset value without sales
charge as described in the two sections above. It is also
waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following
cases:
- for retirement distributions or loans to participants or
beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans, including
OppenheimerFunds prototype 401(k) plans (these are all referred
to as "Retirement Plans"); or
- to return excess contributions made to Retirement Plans; or
- to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value; or
- 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); or
- for distributions from OppenheimerFunds prototype 401(k)
plans for any of the following cases or purposes: (1) following
the death or disability (as defined in the Internal Revenue
Code) of the participant or beneficiary (the death or
disability must occur after the participant's account was
established); (2) hardship withdrawals, as defined in the plan;
(3) under a Qualified Domestic Relations Order, as defined in
the Internal Revenue Code; (4) to meet the minimum distribution
requirements of the Internal Revenue Code; (5) to establish
"substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code, or (6) separation from
service.
12. The first paragraph of the section entitled "Waivers of Class B Sales
Charge" on page 25 is amended by replacing the introductory phrase of
that paragraph with the sentences below and adding a new section at the
end of that paragraph as follows:
- 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:
. . . .
(5) for distributions from OppenheimerFunds prototype 401(k)
plans (a) for hardship withdrawals; (b) under a Qualified
Domestic Relations Order, as defined in the Internal Revenue
Code; (c) to meet minimum distribution requirements as defined
in the Internal Revenue Code; (d) to make "substantially equal
periodic payments" as described in Section 72(t) of the
Internal Revenue Code; or (e) for separation from service.
13. In the section entitled "Reinvestment Privilege" on page 27, the
first three sentences are revised to read as follows:
If you redeem some or all of your Class A or B shares of the
Fund, you have up to 6 months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other
OppenheimerFunds without paying a sales charge.
This privilege applies to Class A shares that your purchased subject
to an initial sales charge and to Class A or B shares on which you
paid a contingent deferred sales charge when you redeemed them.
14. In the section entitled "Retirement Plans" on page 27, the following
is added to the list of plans offered by the Distributor:
- 401(k) prototype retirement plans for businesses
15. The first paragraph of the section entitled "How to Exchange Shares"
on page 29 is amended by deleting the second and third sentences.
July 14, 1995 PS0295.003
<PAGE>
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
Supplement dated July 14, 1995 to the
Statement of Additional Information dated January 27, 1995
The Statement of Additional Information is amended as follows:
1. In the section entitled "Letters of Intent" on pages 39 and 40, the
first paragraph in that section is replaced by the following:
- 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 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 (including the sales charge) that applies to a single
lump-sum purchase of shares in the amount intended to be
purchased under the Letter.
2. In the section entitled "Letters of Intent" on page 40, a new third
paragraph is added as follows:
For purchases of shares of the Fund and other OppenheimerFunds
by OppenheimerFunds prototype 401(k) plans under a Letter of
Intent, the Transfer Agent will not hold shares in escrow. If
the intended purchase amount under the Letter entered into by
an OppenheimerFunds prototype 401(k) plan is not purchased by
the plan by the end of the Letter of Intent period, there will
be no adjustment of commissions paid to the broker-dealer or
financial institution of record for accounts held in the name
of that plan.
3. In the section entitled "Terms of Escrow for Letters of Intent" on
page 41, item 5 of that section is replaced by the following:
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.
4. In the section entitled "Distributions from Retirement Plans" on page
43, the phrase "401(k) plans" is added after "403(b)(7) custodial plans"
in the first sentence, and the third sentence of that section is revised
to read as follows:
Participants, other than self-employed persons maintaining a
plan account in their own name) in OppenheimerFunds-sponsored
prototype pension, profit-sharing or 401(k) plans may not
directly redeem or exchange shares held for their account under
those plans.
5. In the section entitled "Special Arrangements for Repurchase of
Shares from Dealers and Brokers" on page 43, the last sentence of that
section is revised to read as follows:
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.
6. In the section entitled "How to Exchange Shares" on page 46, the
second full paragraph is changed by adding new third and fourth sentences
as follows:
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.
July 14, 1995 PX0295.002
<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
Supplement dated July 14, 1995 to the
Prospectus dated February 1, 1995
The following changes are made to the Prospectus:
1. The supplement dated April 20, 1995 to the Prospectus is replaced by
this supplement.
2. Under "Expenses" on page 3, the chart "Shareholder Transaction
Expenses" is amended by deleting the references to the $5.00 fee for
"Exchanges" and inserting "None" on that line under the headings for Class
A Shares, Class B Shares and Class C Shares. Footnote 1 under the chart
is changed to read as follows:
1. If you invest $1 million or more ($500,000 or more for
purchases by OppenheimerFunds prototype 401(k) plans) in Class
A shares, you may have to pay a sales charge of up to 1% if you
sell your shares within 18 calendar months from the end of the
calendar month in which you purchased those shares. See "How to
Buy Shares -- Class A Shares," below.
Existing footnote 3 is deleted from that chart. A new line, entitled
"Redemption Fee" is added to the chart with the word "None" under the
headings for Class A, B and C shares, with a reference to a new footnote
(3) after each, and the footnote is added under the chart as follows: "(3)
There is a $10 transaction fee for redemptions paid by Federal Funds wire,
but not for redemptions paid by check or by ACH wire through AccountLink,
or for which checkwriting privileges are used (see 'How To Sell Shares')."
3. In "How to Buy Shares," the section entitled "Class A Shares" on page
15 under "Classes of Shares" is changed to read as follows:
If you buy Class A shares, you may pay an initial sales charge
on investments up to $1 million (up to $500,000 for purchases
by OppenheimerFunds prototype 401(k) plans). If you purchase
Class A shares as part of an investment of at least $1 million
($500,000 for OppenheimerFunds prototype 401(k) plans) in
shares of one or more OppenheimerFunds, you will not pay an
initial sales charge, but if you sell any of those shares
within 18 months of buying them, you may pay a contingent
deferred sales charge. The amount of that sales charge will
vary depending on the amount you invested. Sales charge rates
are described in "Class A Shares" below.
4. In "How to Buy Shares," the section entitled "Which Class of Shares
Should You Choose?" on page 15 is changed by adding a new final sentence
to the second paragraph of that section as follows:
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.
5. Under "How Long Do You Expect to Hold Your Investment?" in "How to Buy
Shares" on page 16, the third paragraph replaced by the following:
For investors who invest $500,000 or more, in most cases Class
A shares will be the more 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 for Class B shares from a single investor. For
similar reasons, the Distributor normally will not accept
purchase orders of $1 million or more for Class C shares from
a single investor.
6. In "How to Buy Shares," the first paragraph of the section "Class A
Contingent Deferred Sales Charge" on page 18 is amended in its entirety
to read as follows:
There is no initial sales charge on purchases of Class A shares
of any one or more of the OppenheimerFunds in the following
cases:
- purchases aggregating $1 million or more, or
- purchases by an OppenheimerFunds prototype 401(k) plan
that: (1) buys shares costing $500,000 or more or (2)
has, at the time of purchase, 100 or more eligible
participants, or (3) certifies that it projects to have
annual plan purchases of $200,000 or more.
Shares of any of the OppenheimerFunds that offers only one
class of shares that has no designation are considered "Class
A shares" for this purpose. The Distributor pays dealers of
record commissions on those purchases in an amount equal to the
sum of 1.0% of the first $2.5 million, plus 0.50% of the next
$2.5 million, plus 0.25% of purchases over $5 million. That
commission will be paid only on the amount of those purchases
in excess of $1 million ($500,000 for purchases by
OppenheimerFunds 401(k) prototype plans) that were not
previously subject to a front-end sales charge and dealer
commission.
7. In "Reduced Sales Charges for Class A Share Purchases" on page 19 the
first sentence of the section "Right of Accumulation" is changed to read
as follows:
To qualify for the lower sales charge rates that apply to
larger purchases of Class A shares, you and your spouse can add
together Class A and Class B shares you purchase for your
individual accounts, or jointly, or for trust or custodial
accounts on behalf of your children who are minors.
The first two sentences of the second paragraph of that section are
revised to read as follows:
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 that investment in one of the
OppenheimerFunds.
8. The first sentence of the section entitled "Letter of Intent" on page
19 is revised to read as follows:
Under a Letter of Intent, if you purchase Class A shares or
Class A shares and Class B shares of the Fund and other
OppenheimerFunds during a 13-month period, you can reduce the
sales charge rate that applies to your purchases of Class A
shares. The total amount of your intended purchases of both
Class A and Class B shares will determine the reduced sales
charge rate for the Class A shares purchased during that
period.
9. In the section entitled "Waivers of Class A Sales Charges" on page 19,
the following changes are made:
The first sentence of the first paragraph is replaced by a new
introductory paragraph set forth below and the list of circumstances
describing the sales charge waivers follows a new initial sentence:
- 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 introductory phrase preceding the list of sales charge waivers in the
second paragraph is replaced by the following:
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:
A new subsection (d) is added to the first sentence of the second
paragraph of that section as follows:
, or (d) 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.
The third paragraph of that section is revised to read as follows:
Waivers of the Class A Contingent Deferred Sales Charge. The
Class A contingent deferred sales charge does not apply to
purchases of Class A shares at net asset value without sales
charge as described in the two sections above. It is also
waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following
cases:
- for retirement distributions or loans to participants or
beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans, including
OppenheimerFunds prototype 401(k) plans (these are all referred
to as "Retirement Plans"); or
- to return excess contributions made to Retirement Plans; or
- to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value; or
- 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); or
- for distributions from OppenheimerFunds prototype 401(k)
plans for any of the following cases or purposes: (1) following
the death or disability (as defined in the Internal Revenue
Code) of the participant or beneficiary (the death or
disability must occur after the participant's account was
established); (2) hardship withdrawals, as defined in the plan;
(3) under a Qualified Domestic Relations Order, as defined in
the Internal Revenue Code; (4) to meet the minimum distribution
requirements of the Internal Revenue Code; (5) to establish
"substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code, or (6) separation from
service.
10. The first paragraph of the section entitled "Waivers of Class B Sales
Charge" on page 21 is amended by replacing the introductory phrase of
that paragraph with the sentences below and adding a new section at the
end of that paragraph as follows:
- 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:
. . . .
and (5) for distributions from OppenheimerFunds prototype
401(k) plans (1) for hardship withdrawals; (2) under a
Qualified Domestic Relations Order, as defined in the Internal
Revenue Code; (3) to meet minimum distribution requirements as
defined in the Internal Revenue Code; (4) to make
"substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code; or (5) for separation from
service.
11. A new final paragraph is added to "Distribution and Service Plan for
Class B Shares" on page 22 as follows:
The Fund's shareholders have adopted a new Distribution and
Service Plan for Class B shares to compensate the Distributor
for its services and costs in distributing Class B shares and
servicing accounts. Under the new plan, the Distributor would
be compensated with a fixed fee (0.25% of average annual net
assets, which is the maximum rate under the current Plan).
Distribution costs in excess of the fee will be borne by the
Distributor.
12. A new final paragraph is added to "Distribution and Service Plan for
Class C Shares" on page 23 as follows:
The Fund's shareholders have adopted a new 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 new plan, the Distributor would
be compensated with a fixed fee (0.25% of average annual net
assets, which is the maximum rate under the current Plan).
Distribution costs in excess of the fee will be borne by the
Distributor.
13. In the section entitled "Reinvestment Privilege" on page 24, the
first three sentences are revised to read as follows:
If you redeem some or all of your Class A or B shares of the
Fund, you have up to 6 months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other
OppenheimerFunds without paying a sales charge. This privilege
applies to Class A shares that you purchased subject to an
initial sales charge and to Class A or B shares on which you
paid a contingent deferred sales charge when you redeemed them.
It does not apply to Class C shares.
14. In the section entitled "Retirement Plans" on page 24, the following
is added to the list of plans offered by the Distributor:
- 401(k) prototype retirement plans for businesses
15. Under the subheading "Telephone Redemptions Through AccountLink or
By Wire," the last sentence of the second paragraph of that subsection,
which appears on page 26, is revised to read: "There is a $10 fee for each
Federal Funds wire."
16. Under "Checkwriting" on page 26, the last paragraph in that
subsection is deleted.
17. The second and third sentences in the first paragraph of "How To
Exchange Shares" on page 26 are deleted.
July 14, 1995 PS0855.005
<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
Supplement dated July 14, 1995 to the
Statement of Additional Information dated February 1, 1995
The Statement of Additional Information is amended as follows:
1. In the section entitled "Letters of Intent" on page 29, the first two
sentences of the first paragraph in that section are replaced by the
following:
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 Intend
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.
2. In the section entitled "Letters of Intent" on page 29, a new third
paragraph is added as follows:
For purchases of shares of the Fund and other OppenheimerFunds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent,
the Transfer Agent will not hold shares in escrow. If the intended
purchase amount under the Letter entered into by an OppenheimerFunds
prototype 401(k) plan is not purchased by the plan by the end of the
Letter of Intent period, there will be no adjustment of commissions
paid to the broker-dealer or financial institution of record for
accounts held in the name of that plan.
3. In the section entitled "Terms of Escrow That Apply to Letters of
Intent" on page 30, item 5 of that section is replaced by the following:
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 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.
4. In the section entitled "Distributions from Retirement Plans" on page
33, the phrase "401(k) plans" is added after "403(b)(7) custodial plans"
in the first sentence, and the third sentence of that section is revised
to read as follows:
Participants (other than self-employed persons maintaining a plan
account in their own name) in OppenheimerFunds-sponsored prototype
pension, profit-sharing or 401(k) plans may not directly redeem or
exchange shares held for their account under those plans.
5. In the section entitled "Special Arrangements for Repurchase of Shares
from Dealers and Brokers" on page 34, the last sentence of that section
is revised to read as follows:
Ordinarily, for accounts redeemed by a broker-dealer under this
procedure, payment will be made within three business days after the
shares have been redeemed upon the Distributor's receipt the
required redemption documents in proper form, with the signature(s)
of the registered owners guaranteed on the redemption document as
described in the Prospectus.
6. In the section entitled "How To Exchange Shares" on page 36, the
second full paragraph is changed by adding new second and third sentences
as follows:
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.
July 14, 1995 PX0855.002
<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VIII of Registrant's Agreement and
Declaration of Trust filed as Exhibit 24(b)(1) to Registrant's
Registration Statement and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing provisions or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust dated January 16,
1995: Filed with Registrant's Post-Effective Amendment No. 20, 2/1/95.
(2) Amended By-Laws as of August, 1990: Previously filed with
Post-Effective Amendment No. 8 to Registrant's Registration Statement,
2/1/91, and refiled with Post-Effective Amendment No. 20, filed 2/1/95.
(3) Not applicable.
(4) Agreement and Plan of Reorganization: See Annex A to Part A of
this Registration Statement.
(5) (i) Class A Specimen Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 20, 2/1/95, and incorporated herein by
reference.
(ii) Class B Specimen Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 20, 2/1/95, and incorporated herein by
reference.
(iii) Class C Specimen Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 20, 2/1/95, and incorporated herein by
reference.
(6) Investment Advisory Agreement dated October 22, 1990: Filed with
Post-Effective Amendment No. 7 to Registrant's Registration Statement,
12/3/90, refiled with Registrant's Post-Effective Amendment No. 19,
12/2/94, pursuant to Item 102 of Regulation S-T, and incorporated herein
by reference.
(7) (i) General Distributor's Agreement dated October 13, 1992,
with Oppenheimer Fund Management, Inc.: Filed with Post-Effective
Amendment No. 12 of the Registrant's Registration Statement, 12/2/92, and
refiled with Registrant's Post-Effective Amendment No. 19, 12/2/94,
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(ii) Form of Dealer Agreement of Oppenheimer Funds Distributor,
Inc.: Filed with Post-Effective Amendment No. 14 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 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 Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(v) Broker Agreement between Oppenheimer Fund Management, Inc.
and Newbridge Securities, dated 10/1/86: Previously filed with Post-
Effective Amendment No. 25 of Oppenheimer Growth Fund (Reg. No. 2-45272),
11/1/86, refiled with Post-Effective Amendment No. 47 of Oppenheimer
Growth Fund (Reg. No. 2-45272), 10/21/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(8) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant - 6/7/90): Previously 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.
(9) Custodian Agreement dated 6/1/90 with Citibank, N.A.: Filed with
Registrant's Post-Effective Amendment No. 8, 2/1/91, refiled with
Registrant's Post-Effective Amendment No. 19, 12/2/94 pursuant to Item 102
of Regulation S-T, and incorporated herein by reference.
(10) (i) Service Plan and Agreement for Class A shares dated
6/22/93 pursuant to Rule 12b-1: Previously filed with Registrant's Post-
Effective Amendment No. 16, 1/27/94, and incorporated herein by reference.
(ii) Distribution and Service Plan and Agreement for Class B
shares: Previously filed with Proxy Statement of Registrant on 5/__/__,
pursuant to Rule 12b-1.
(iii) Distribution and Service Plan and Agreement for Class C
shares dated 2/1/95: Previously filed with Registrant's Post-Effective
Amendment No. 19, 12/2/94, and incorporated herein by reference.
(11) Opinion and Consent of Counsel dated February 26, 1986:
Previously filed with Registrant's Registration Statement, and refiled
herewith pursuant to Item 102 of Regulation S-T.
(12) Tax Opinion Relating to the Reorganization: Previously filed
with Registrant's N-14 on 6/15/95.
(13) Not applicable.
(14) Consent of Deloitte & Touche LLP: Filed herewith.
(15) Not applicable.
(16) Not applicable
(17) Declaration of Registrant under Rule 24f-2: Previously filed
with Registrant's N-14 on 6/15/95.
(18) Powers of Attorney (including certified Board Resolutions):
Filed with Registrant's Post-Effective Amendment No. 15, 12/3/93, and
incorporated herein by reference.
Item 17. Undertakings
(1) Not applicable.
(2) 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 Denver and State of Colorado on
the 2nd day of August, 1995.
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
By: /s/ James C. Swain
----------------------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
/s/ James C. Swain Chairman of the
- ------------------ Board of Trustees August 2, 1995
James C. Swain
/s/ Jon S. Fossel Chief Executive
- -------------------- Officer and August 2, 1995
Jon S. Fossel Trustee
/s/ George C. Bowen Chief Financial
- ------------------- and Accounting August 2, 1995
George C. Bowen Officer
/s/ Robert G. Avis Trustee August 2, 1995
- ------------------
Robert G. Avis
/s/ William A. Baker Trustee August 2, 1995
- --------------------
William A. Baker
/s/ Charles Conrad, Jr. Trustee August 2, 1995
- -----------------------
Charles Conrad, Jr.
/s/ Raymond J. Kalinowski Trustee August 2, 1995
- -------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast Trustee August 2, 1995
- ------------------
C. Howard Kast
/s/ Robert M. Kirchner Trustee August 2, 1995
- ----------------------
Robert M. Kirchner
/s/ Ned M. Steel Trustee August 2, 1995
- ----------------
Ned M. Steel
<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
EXHIBIT INDEX
Exhibit Description
- ------- -----------
16(14) Independent Auditors' Consent
Independent Auditors' Consent
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration Statement No. 33-02769 of Oppenheimer
Limited-Term Government Fund on Form N-14 of our report dated October 21,
1994, appearing in the Annual Report of Oppenheimer Strategic Short-Term
Income Fund for the year ended September 30, 1994 and our report dated
October 21, 1994, appearing in the Annual Report of Oppenheimer Limited-
Term Government Fund for the year ended September 30, 1994 and to the
references to us under the headings "Tax Consequences of the
Reorganization" and "Tax Aspects of the Reorganization" appearing in the
Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
- --------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
August 2, 1995
