PROSPECTUS
THE
[LOGO] BOND FUND
FOR GROWTH
ROCHESTER FUND SERIES
350 Linden Oaks
Rochester, New York 14625-2807
(716) 383-1300
- -------------------------------------------------------------------------------
Rochester Fund Series, a Massachusetts business trust (the "Trust"), is an
open-end, non-diversified, management investment company consisting of one
portfolio, The Bond Fund For Growth (the "Fund"), which has three classes of
shares, Class A Shares, Class B Shares, and Class Y Shares. The Fund's
investment objective is to achieve a high level of total return on its assets
through a combination of current income and capital appreciation. The Fund
intends to achieve its objective by investing primarily in convertible fixed
income securities. There can be no assurance that the Fund will achieve its
objective.
This Prospectus sets forth concisely information about Class A Shares,
Class B Shares, and Class Y Shares of the Fund that prospective investors should
know before investing. Investors should read this Prospectus carefully before
they invest and retain it for future reference.
A Statement of Additional Information (the "SAI") of the Fund dated May 1,
1995, which is incorporated by reference in its entirety in this Prospectus, has
been filed with the Securities and Exchange Commission and is available without
charge upon request to Rochester Fund Distributors, Inc., 350 Linden Oaks,
Rochester, NY 14625-2807, (716) 383-1300. The SAI contains additional
information about Class A Shares, Class B Shares, and Class Y Shares of the Fund
and its management not included in this Prospectus.
The Fund invests a substantial portion of its assets in high-yield, lower
rated bonds which are commonly referred to as "junk bonds." Investments of this
type are subject to greater risk of loss of principal and interest. Purchasers
should carefully assess the risks associated with an investment in the Fund. See
Risk Factors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY FINANCIAL INSTITUTION, NOR ARE SHARES OF THE FUND FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
The date of this Prospectus is May 1, 1995, as supplemented on July 5, 1995
Table of Contents
Page
----
Shareholder Expense Information ................................... 2
Financial Highlights .............................................. 3
About the Fund .................................................... 4
Investment Strategies ............................................. 5
Risk Factors ...................................................... 8
Dividends and Other Distributions ................................. 10
Alternative Sales Arrangements .................................... 10
How to Purchase Shares ............................................ 11
Distribution Plans ................................................ 15
Shareholder Services .............................................. 15
Retirement Plans Offering Tax Benefits ............................ 17
How to Redeem Shares .............................................. 17
Performance ....................................................... 18
Tax Matters ....................................................... 18
Management, Services and Distribution ............................. 19
Appendix A ........................................................ 21
Account Application ............................................... 23
<PAGE>
SHAREHOLDER EXPENSE INFORMATION
The information contained in the following tables is intended to assist an
investor in understanding the various costs and expenses that a shareholder in
the Fund will bear directly or indirectly. Existing shares of the Fund were
redesignated as Class A Shares on May 1, 1995. The information for Class B
Shares and Class Y Shares has been estimated based on expenses expected to be
incurred through December 31, 1995. For a further description of the various
costs and expenses listed below, see How to Purchase Shares, How to Redeem
Shares, Exchange Privilege, and Management, Services and Distribution.
Shareholder Transaction Expenses
Class A Shares Class B Shares Class Y Shares
-------------- -------------- --------------
Maximum Sales Load Imposed
on Purchases (as a percentage
of offering price)(1) .......... 3.25% NONE NONE
Maximum Contingent Deferred
Sales Charge ................... NONE 3.5% NONE
(declining to 0%
after six years)
Annual Fund Operating Expenses
As a Percentage of Average Net Assets
Class A Shares Class B Shares Class Y Shares
-------------- -------------- --------------
Management Fees .............. 0.56% 0.56% 0.56%
12b-1 Fees(2) ................ 0.75% 1.00% 0.25%
Other Expenses ............... 0.35% 0.36% 0.25%
Total Fund Operating
Expenses(3) ................ 1.66% 1.92% 1.06%
(1) The Fund's maximum sales load on Class A Shares of 3.25% declines to 1.25%
on investments of $500,000 or more. In addition, the Fund offers several
methods by which investors may aggregate purchases to reduce the applicable
sales load. These methods, which include rights of accumulation, letters of
intent, and group purchases, are explained more fully in the section
entitled Purchasing Class A Shares.
(2) The 12b-1 fees for Class A Shares consist of an asset-based sales charge of
0.50% and a service fee (the "Service Fee") of 0.25%. The 12b-1 fees for
Class B Shares include an asset-based sales charge of 0.75% and a Service
Fee of 0.25%. The 12b-1 fees for Class Y Shares consist of a Service Fee of
0.25%. See Distribution Plans.
(3) Total Fund operating expenses for Class A Shares would have been 1.65%
excluding interest. For the fiscal year ended December 31, 1994, the Fund's
interest expense was substantially offset by the incremental interest
income generated on bonds purchased with borrowed funds. See Management,
Services, and Distribution.
Examples
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return and redemption at the end of each period, and conversion from
Class B Shares to Class A Shares at the beginning of the seventh year:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A ........................ $49 $83 $120 $223
Class B ........................ $55 $85 $119 $212
Class Y ........................ $11 $34 $ 58 $129
Your same investment would incur the following expenses, assuming no
redemption, and conversion from Class B Shares to Class A Shares at the
beginning of the seventh year:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A ........................ $49 $83 $120 $223
Class B ........................ $20 $60 $104 $212
Class Y ........................ $11 $34 $ 58 $129
The above examples should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown. For
Class B Shares and Class Y Shares, the examples are based on estimated data for
the Fund's fiscal year ending December 31, 1995.
Long term shareholders of Class A Shares and Class B Shares may pay more
than the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers, Inc.
For additional information regarding fees and expenses associated with
investing in Class A Shares, Class B Shares, and Class Y Shares of the Fund, see
Alternative Sales Arrangements. Sales representatives may receive different
compensation for sales of Class A Shares, Class B Shares, and Class Y Shares.
2
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
(For a Share Outstanding Throughout the Period)
The following table contains financial information for Class A Shares of
The Bond Fund For Growth for the period from June 3, 1986 to December 31, 1986
and for the eight one-year periods ended December 31, 1994. The information set
forth in this table has been derived from financial statements which have been
examined by Price Waterhouse LLP, independent accountants, whose report thereon
was unqualified. This information should be read in conjunction with the
financial statements and notes thereto which appear in the SAI and may be
obtained from Rochester Fund Distributors, Inc., without charge, upon request.
Financial highlights are not presented for Class B Shares or Class Y Shares
since no shares of those classes were outstanding for the periods indicated.
<TABLE>
<CAPTION>
Periods ended December 31
------------------------------------------------------------------------------
1994 1993 1992+ 1991* 1990 1989 1988 1987 1986**
------ ------ ------ ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $13.16 $11.43 $ 9.37 $7.88 $9.16 $9.03 $8.50 $9.96 $10.00
------ ------ ------ ----- ----- ----- ----- ----- ------
Income from investment operations:
Net investment income ....................... 0.68 0.59 0.69 0.65 0.54 0.57 0.51 0.42 0.23
Net realized and unrealized gain
(loss) on investments ..................... (0.81) 1.79 2.15 1.53 (1.26) 0.16 0.56 (1.27) (0.27)
------ ------ ------ ----- ----- ----- ----- ----- ------
Total from investment operations .............. (0.13) 2.38 2.84 2.18 (0.72) 0.73 1.07 (0.85) (0.04)
------ ------ ------ ----- ----- ----- ----- ----- ------
Less distributions:
Dividends from net investment income ........ (0.69) (0.65) (0.78) (0.69) (0.56) (0.60) (0.54) (0.53) --
Distributions from capital gains ............ (0.14) -- -- -- -- -- -- (0.08) --
------ ------ ------ ----- ----- ----- ----- ----- ------
Total distributions ........................... (0.83) (0.65) (0.78) (0.69) (0.56) (0.60) (0.54) (0.61) --
------ ------ ------ ----- ----- ----- ----- ----- ------
Net asset value, end of period ................ $12.20 $13.16 $11.43 $9.37 $7.88 $9.16 $9.03 $8.50 $ 9.96
====== ====== ====== ===== ===== ===== ===== ===== ======
Total return (excludes sales load) ............ (1.12%) 21.23% 31.19% 28.50% (8.14%) 8.13% 12.43% (9.34%) (0.40%)
Ratios/supplemental data:
Net assets, end of period (thousands) ....... $126,691 $69,375 $10,241 $6,403 $6,035 $8,423 $6,008 $5,345 $3,332
Ratio of total expenses to average
net assets<F1> ............................ 1.66% 1.78% 1.93% 2.01% 2.92% 2.52% 2.67% 2.63% 1.03%
Ratio of total expenses
(excluding interest)
to average net assets ..................... 1.65% 1.75% 1.91% 1.94% 2.90% 2.43% 2.50% 2.63% 1.03%
Ratio of net investment income to
average net assets ........................ 5.24% 4.70% 6.62% 7.60% 6.37% 6.17% 5.53% 4.12% 2.28%
Portfolio turnover rate ..................... 52.82% 88.66% 80.09% 48.55% 33.23% 54.46% 87.08% 107.5% 41.2%
- ------------------
<FN>
+ Net of fees and expenses waived or reimbursed by Fielding Management
Company, Inc. which amounted to $0.01 per share. Without reimbursement, the
ratios would have been 2.06%, 2.04% and 6.50%, respectively.
* Net of fees and expenses waived or reimbursed by Fielding Management
Company, Inc. and Rochester Fund Services, Inc., which amounted to $0.07
per share. Without reimbursement, the ratios would have been 2.82%, 2.75%
and 6.79%, respectively.
** The Fund commenced operations on June 3, 1986.
<F1> During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
</FN>
</TABLE>
Per share information has been determined on the basis of the weighted
average number of Class A Shares outstanding during the period.
3
<PAGE>
Information on Bank Loans
See Leverage Through Borrowing
<TABLE>
<CAPTION>
Periods ended December 31
------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986**
---- ---- ---- ---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bank loans outstanding at
end of period (000) .................. $0 $0 $0 $0 $0 $0 $80 $0 $0
Monthly average amount of
bank loans outstanding
during the period (000) .............. $246 $213 $22 $45 $11 $47 $89 $0 $0
Monthly average number of
shares of the Fund
outstanding during the
period (000) ......................... 8,206 2,941 716 702 764 661 645 498 167
Average amount of bank loans
per share outstanding
during the period .................... $.03 $.07 $.03 $.06 $.01 $.07 $.14 $0 $0
- --------------
<FN>
** The Fund commenced operations on June 3, 1986.
</FN>
</TABLE>
ABOUT THE FUND
The Fund is an open-end, non-diversified management investment company,
organized as a Massachusetts business trust on January 21, 1986. The Fund has
established three classes of shares, known as Class A Shares, Class B Shares,
and Class Y Shares (individually and collectively referred to as "Shares," as
the context may require). Except as otherwise noted in this Prospectus, Class A
Shares are sold subject to a sales charge of up to 3.25% and are redeemed at net
asset value. Class B Shares are sold at net asset value but may be subject to a
contingent deferred sales charge ("CDSC") of up to 3.5% upon redemption. Class Y
Shares are not subject to a sales charge or CDSC. Class A Shares are subject to
an asset-based sales charge of 0.50% and a Service Fee of 0.25%. Class B Shares
are subject to an asset-based sales charge of 0.75% and a Service Fee of 0.25%.
Class Y Shares are subject to a Service Fee of 0.25%. See How to Purchase Shares
and Distribution Plans.
Investment Objective
The Fund seeks a high level of total return on its assets through a
combination of current income and capital appreciation. The Fund invests
primarily in a portfolio that consists of a variety of convertible fixed income
securities which, in the opinion of Fielding Management Company, Inc. (the
"Adviser"), will assist the Fund in achieving its investment objective.
Convertible securities include corporate bonds, notes and preferred stock which
can be converted into (exchanged for) common stock or other securities which
provide an opportunity for equity participation. See Investment
Strategies--Convertible Securities.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in convertible bonds. Many convertible bonds are lower rated,
speculative securities commonly referred to as "junk bonds." See Risk Factors.
The balance of up to 35% of the total assets comprising the Fund's portfolio may
be invested in other types of convertible securities as well as common stocks,
non-convertible fixed income securities, cash and money market securities,
including repurchase agreements. No more than 15% of the total assets of the
Fund, however, may be invested in non-dividend paying common stocks. If, at any
time, the market value of the Fund's investments in cash, common stocks and
non-convertible securities exceeds 35% of the market value of its total assets
as a result of market conditions or a call by an issuer of its convertible
securities, the Fund will (except when a temporary defensive position is deemed
advisable) thereafter invest only in convertible bonds until the 65% standard is
met. The Fund will not be required to sell any of its securities to comply with
the 65% standard.
The investment objective of the Fund is not a fundamental policy and, as
such, may be changed without shareholder approval. As a matter of policy,
however, the Fund will not change its objective without the approval of the
majority of the Board of Trustees. Although the Fund will seek to make
investments in accordance with its investment objective, there is no assurance
that the Fund will achieve its objective and there can be no guarantee that the
value of an investment in Fund Shares might not decline.
4
<PAGE>
INVESTMENT STRATEGIES
Convertible Securities
A convertible security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed amount of
common stock of the same or a different issue within a particular period of time
at a specified price or formula. A convertible security entitles the holder to
receive interest paid or accrued on debt or dividends paid on preferred stock
until the convertible security matures or is redeemed, converted or exchanged.
Convertible securities have unique investment characteristics in that they
generally (1) have higher yields than common stocks, but lower yields than
comparable non-convertible securities, (2) are less subject to fluctuation in
value than the underlying stock because they have fixed income characteristics,
and (3) provide the potential for capital appreciation if the market price of
the underlying common stock increases. See the Statement of Additional
Information for a further discussion of convertible securities.
The Fund may invest in various types of recently developed derivative
convertible securities, such as mandatory conversion securities, equity-linked
debt securities and convertible preferred stock. Mandatory conversion
securities, which provide a relatively high level of current income, may be
purchased as possible alternatives to direct investments in either the related
common stocks or fixed income securities in order to seek the higher returns
which are consistent with the Fund's investment objective. Such securities may
combine some of the features of debt securities and equity securities, including
both common stock and preferred stock. Unlike the more traditional convertible
securities, these securities are characterized by a mandatory conversion feature
and an adjustable conversion ratio. One type of mandatory conversion security
which may be purchased by the Fund is the equity-linked debt security, a debt
security whose principal amount at maturity is dependent upon the performance of
a specified equity security. The performance of these securities is dependent
upon the performance of the linked equity security and may be influenced by
interest rate changes. Such securities also are subject to credit risk with
respect to the issuer of the debt security. Certain of these convertible
securities offer limited potential for capital appreciation and, in some
instances, may involve losses equal to the value of the security. The Fund also
may be exposed to counterparty risk if the issuing firm of such a security
experiences financial difficulties that render it unable to perform according to
the terms of the security. The market for such securities is relatively new and,
therefore, it is not possible to predict how they might trade in the secondary
markets or whether such markets will be liquid or illiquid. For a further
description of these securities and other risks associated with them, see the
SAI.
The potential for higher returns sought by the Fund are generally
obtainable from investments in bonds which are rated in the lower rating
categories of nationally recognized statistical rating organizations ("NRSROs"),
including but not limited to Standard & Poor's Ratings Group ("S&P") and Moody's
Investors Service, Inc. ("Moody's") (BB and lower by S&P and Ba and lower by
Moody's), (commonly referred to as "junk bonds") or in bonds which are unrated.
The Fund will not, however, invest in convertible fixed income securities having
a rating by an NRSRO of less than C or in convertible securities which are in
default at the time of purchase. Convertible securities rated C by S&P are
described as having the highest degree of speculation with respect to the
capacity to pay interest and principal in accordance with the terms of the
obligation. Because investment in lower rated and unrated fixed income
securities involves greater investment risk, achievement of the Fund's
investment objectives will be more dependent on the Adviser's credit analysis
than would be the case if the Fund were investing in higher quality debt
securities. Since the ratings of rating agencies are used only as preliminary
indicators of investment quality, the Adviser employs its own credit research
and analyses from which it has developed a credit rating system based upon
comparative credit analyses of issuers within the same industry. These analyses
may take into consideration, among other things, the issuer's financial
soundness, its anticipated cash flow, interest or dividend coverage, asset
coverage, sinking fund provisions, responsiveness to changes in interest rates
and business conditions and liquidation value relative to the market price of
the security.
5
<PAGE>
Borrowing for Investment Purposes
As a fundamental policy, the Fund may borrow money, but only from banks, in
amounts up to 5% of its total net assets for temporary or emergency purposes, or
to purchase additional portfolio securities. See Investment Restrictions in the
SAI. The Investment Company Act of 1940 (the "Act") requires the Fund to
maintain asset coverage of at least 300% for all such borrowings and, should
such asset coverage at any time fall below 300%, the Fund would be required to
reduce its borrowings within three days to the extent necessary to meet the
requirements of the Act. The Fund might be required to sell securities at a time
when it would be disadvantageous to do so in order to reduce its borrowings.
Lending of Portfolio Securities
As a fundamental policy, the Fund may lend a portion of its portfolio
securities to broker-dealers, institutions and other persons as a means of
earning additional income on its portfolio assets. Any such loans will be
continuously secured by collateral consisting of cash, securities of the U.S.
government and its agencies and instrumentalities or approved bank letters of
credit, or any combination thereof, which will at all times equal at least 100%
of the market value of the loaned securities. Such loans will not be made if, as
a result thereof, the aggregate amount of all outstanding loans of the Fund's
portfolio securities would exceed the maximum percentage of its assets permitted
by law or applicable guidelines of the Securities and Exchange Commission
("SEC"). Guidelines established by the SEC currently permit the Fund to loan an
amount of its portfolio securities equal in value up to 33-1/3% of the value of
its total assets. The Fund will receive interest on the securities loaned and
simultaneously earn either interest on the investment of the cash collateral or
fee income if the collateral for the loan does not consist of cash. However, the
Fund will normally pay lending fees and related expenses from the interest
earned on invested collateral. If the borrower of the securities fails
financially, there could be a risk of delay in recovery of the securities or
loss of rights in the collateral. The Fund will attempt to minimize such risks,
however, by making loans to only such borrowers which are believed by the Fund's
Adviser to be of good financial standing.
Illiquid Securities
The Fund may invest up to an aggregate of 15% of its net assets in illiquid
securities which may include, but are not limited to, securities which have not
been registered under the Securities Act of 1933, as amended (the "1933 Act"),
repurchase agreements with remaining maturities of more than seven days, and
securities for which market quotations are not readily available. Securities
which have not been registered under the 1933 Act are deemed to be "restricted
securities" because they cannot be resold except in reliance upon an available
exemption from the registration requirements. Rule 144A under the 1933 Act
permits certain resales of restricted securities provided that such securities
have been determined to be eligible for resale under the provisions of Rule 144A
("Rule 144A Securities"). Rule 144A Securities which are deemed to be liquid by
the Fund's Adviser pursuant to certain guidelines and procedures as discussed in
the Statement of Additional Information are excluded from the Fund's 15%
limitation on investments in Illiquid Securities. See the SAI for further
information. The Fund's policy with respect to illiquid securities is
non-fundamental and, as such, may be changed without shareholder approval.
Eurodollar convertible securities are generally traded on the European
exchanges, are not registered under the 1933 Act and may not be sold to U.S.
investors except in reliance upon an available exemption from the 1933 Act.
However, there exists a liquid institutional market for many of these Eurodollar
convertible securities which are convertible into securities which trade on a
U.S. exchange, and one or more U.S. broker-dealers may make a market in the
security. Eurodollar securities trade without limitation and are not considered
illiquid securities for purposes of the Fund's non-fundamental policy of
investing no more than an aggregate of 15% of its net assets in such securities.
Foreign Securities
The Fund may invest up to 15% of its assets in securities of foreign
issuers which are generally denominated in foreign currencies. Investments in
securities of foreign issuers involve certain risks not ordinarily associated
with
6
<PAGE>
investments in the securities of domestic issuers. Such risks include, but are
not limited to: (1) political and financial instability abroad; (2) less
liquidity and greater volatility of foreign investments; (3) less public
information regarding foreign companies; (4) less government regulation and
supervision of foreign stock exchanges, brokers and listed companies; (5) lack
of uniform accounting, auditing and financial reporting standards; (6) delays in
transaction settlement in foreign markets; (7) possibility of an imposition of
confiscatory foreign taxes; (8) possible limitation on the removal of securities
or other assets of the Fund; (9) restrictions on foreign investments and
repatriation of capital; (10) currency fluctuations; (11) cost and possible
restriction of currency conversion; (12) withholding taxes on interest and
dividends earned in foreign countries; and (13) possibly higher commissions,
custodian fees and management costs than in the United States.
The Fund may purchase sponsored American Depository Receipts ("ADRs") or
U.S. dollar denominated securities of foreign issuers, which are not subject to
the 15% limitation on investments in securities of foreign issuers. ADRs are
receipts issued by U.S. banks or trust companies in respect of securities of
foreign issuers held on deposit for use in the U.S. securities markets. While
ADRs may not necessarily be denominated in the same currency as the securities
into which they may be converted, many of the risks associated with foreign
securities may also apply to ADRs, such as confiscatory taxation or
nationalization, and less comprehensive disclosure requirements for the
underlying securities.
Warrants, Options and Short Sales
The Fund may invest up to 5% of the value of its net assets at the time of
purchase in warrants. It also may utilize listed options trading and has limited
such trading to (1) writing (i.e. selling) covered call options on stocks and
the underlying stock of existing convertible positions; (2) purchasing put
options on stocks; and (3) entering into closing purchase transactions with
respect to certain of such options, provided that all options traded by the Fund
are listed on a national securities exchange. The Fund also has the ability to
purchase put options in an attempt to hedge its portfolio to reduce investment
risks. The Fund's covered call writing is intended to provide income to the Fund
beyond the level of income available from convertible securities alone. The Fund
may also make short sales "against the box." See the SAI for a further
discussion of these investment strategies.
Repurchase Agreements
Under a repurchase agreement, the Fund may purchase U.S. Government
securities and concurrently enter into an agreement with the seller which agrees
to repurchase such securities at the Fund's cost plus interest within a
specified time (normally seven days or less). Repurchase agreements will be
collateralized by the U.S. Government securities, and the value of such
collateral will always be at least equal to the repurchase price, including any
accrued interest. The Fund will only enter into repurchase agreements where the
custodian of the Fund has acquired actual or constructive possession of the
collateral, including transfer of U.S. Government securities by book-entry in
the Federal Reserve book-entry system. In the event of a default or bankruptcy
by a seller, the Fund may incur a loss, may have difficulty in perfecting
ownership of the collateral, and may incur expenses in selling the collateral.
Temporary Investments
Temporary investments may be made without limitation in periods of unusual
market conditions when the Adviser determines that convertible securities would
not best achieve the Fund's investment objectives and a temporary defensive
position is warranted. Such investments may be made in money market instruments
consisting of obligations of, or guaranteed as to principal and interest by, the
U.S. Government or its agencies or instrumentalities, certificates of deposit,
bankers' acceptances and other obligations of domestic banks having total assets
of at least $500 million and which are regulated by the U.S. Government, its
agencies or instrumentalities, commercial paper rated in the highest category by
an NRSRO and repurchase agreements with banks or broker-dealers in securities.
Other Investment Restrictions
Information about other investment restrictions on the Fund's investment
activities is set forth in Investment Objectives, Strategies and Risk Factors in
the SAI.
7
<PAGE>
Portfolio Transactions
The Fund has no obligation to deal with any dealer or group of dealers in
the execution of transactions in securities of the Fund. Where possible, the
Fund deals directly with the dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. It is the policy of the Fund to obtain the best net results
in conducting portfolio transactions for the Fund, taking into account such
factors as price (including the applicable dealer spread), and the firm's
general execution capabilities. Where more than one dealer is able to provide
the most competitive price and the execution capabilities of the dealers are
comparable, the sale of shares of the Fund may be taken into consideration as a
factor in the selection of dealers to execute portfolio transactions for the
Fund. The portfolio securities of the Fund generally are traded on a net basis
and normally do not involve the payment of brokerage commissions. The cost of
securities transactions of the Fund primarily consists of paying dealer or
underwriter spreads.
RISK FACTORS
Credit Quality Considerations
The risks inherent in the Fund depend primarily upon the maturity and/or
quality of securities in the Fund's portfolio, as well as on market and general
economic conditions. The Fund is designed for investors who seek a higher total
return than that offered by other fixed income securities and who can accept
greater levels of credit and other risks associated with lower quality
securities. The Fund may invest, without limit, in convertible bonds which are
in the lower rating categories of an NRSRO (such as those rated BB and below by
S&P or those rated Ba and below by Moody's), often referred to as "junk bonds",
or in convertible bonds which are unrated. Lower rated convertible debt
securities are considered speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
The Fund will not, however, invest in convertible fixed income securities having
a rating by an NRSRO of less than C or in convertible securities which are in
default at the time of purchase. Descriptions of S&P rating categories are set
forth in Appendix A to this prospectus. In addition, descriptions of rating
categories established by Moody's and Fitch are set forth in the SAI.
Certain risks are associated with applying credit ratings as a method for
evaluating high yield securities. Credit ratings evaluate the safety of
scheduled payments, not market value risk of high yield securities. Since credit
rating agencies may fail to timely change the credit ratings to reflect
subsequent events, the Adviser must monitor the issuers of high yield securities
in its portfolio to determine if the issuers will have sufficient cash flow and
profits to meet required payments, and to attempt to assure the liquidity of the
securities so the Fund can meet redemption requests. If, after purchase by the
Fund, the rating of a portfolio security is lost or reduced, the Fund would not
be required to sell the security, but the Adviser would consider such a change
in deciding whether the Fund should retain the security in its portfolio. There
is no guarantee that the Fund will achieve its objectives, nor can the Fund
guarantee that payments of interest and principal on portfolio securities will
be timely made.
The Fund's investments in high yield, lower rated securities and unrated
securities involve certain special risk factors. Medium to lower rated and
comparable unrated securities may offer yields which are higher than higher
rated securities with comparable maturities because the historical financial
condition of the issuers of such securities may not have been as strong as that
of other issuers. Since medium to lower rated and comparable unrated securities
generally involve greater risk of loss of income and principal than that of
higher rated securities, investors should carefully consider the relative risks
associated with investments in securities which carry medium to lower ratings
and in comparable unrated securities.
The high yield fixed income securities markets are relatively new, and
their growth during the 1980s paralleled a long economic expansion. The lower
ratings of high yield securities reflect the greater possibility that adverse
changes in the economic environment, the financial condition of their issuers or
both could impair the ability of their issuers to service payment obligations,
to meet projected business goals and/or to obtain additional financing. Under
such circumstances, the value of high yield securities may be more volatile and
the markets for such securities may be less liquid than those for higher-rated
securities. A protracted
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economic downturn is, therefore, likely to have a negative effect on the high
yield securities markets and on the value of the high yield securities in the
Fund's portfolio. If the issuer of a fixed income security owned by the Fund
defaults, the Fund may incur additional expenses seeking recovery and protecting
the interests of its shareholders.
Based upon the weighted average ratings of total Fund assets during the
twelve months ending December 31, 1994, the percentage of the Fund's total
investments represented by (1) bonds rated by S&P/Moody's separated into each of
their respective rating categories (AAA/Aaa, AA/Aa, A/A, BBB/Baa, BB/Ba, B/B,
CCC/Caa, CC/Ca or C/C) by monthly dollar weighted average were, respectively,
0.46%, 2.53%, 5.48%, 10.35%, 9.00%, 27.56%, 2.48%, 0%, and 0% for the Fund, and
(2) all unrated bonds as a group comprised 14.72% of the Fund's assets.
Marketability Considerations
Some issuers of convertible fixed income securities do not seek ratings for
their securities. Such unrated securities may be considered for investment by
the Fund when, in the opinion of the Adviser, the financial condition of the
issuer of such securities and/or the protection afforded by the terms of the
securities themselves limit the risk to the Fund to a comparable degree to that
of rated securities which are consistent with the Fund's objectives and
policies. The market for these unrated securities is usually less broad than the
market for rated securities, which could adversely affect their marketability.
Some of the high yield securities owned by the Fund may be held by
relatively few institutional investors and are thinly traded. This may have a
negative impact on the Board of Trustees' ability to accurately value such
securities and the Fund's assets, as well as on the Fund's ability to dispose of
the securities. Adverse publicity and investor perceptions of the high yield
securities market or of specific issuers, whether or not based on fundamental
analysis, may decrease the values and liquidity of high yield securities,
especially in a thinly traded market.
Capitalization of Issuers
The Fund may invest in convertible securities issued by companies which are
in the small to medium size category, that is, with capital valued in the market
between $20 million and $1 billion, although investments may also be made in
convertible fixed income securities of larger companies which, in the opinion of
the Adviser, appear to have high long term total return potential. The Adviser
believes that investments in small capitalization companies may offer greater
opportunities for high total return than investments in larger, more established
companies. Investing in smaller, newer issuers generally involves greater risks
than investing in larger, more established issuers. Companies in which the Fund
is likely to invest may have limited product lines, markets or financial
resources and may lack management depth. The securities issued by such companies
may have limited marketability and may be subject to more abrupt or erratic
market movements than securities of larger, more established companies or the
market in general. Investors should consult with their financial consultants as
to what, if any, portion of their assets might be appropriate for an investment
in the Fund.
Interest Rate Risk
Like all fixed income securities, the price of a convertible security will
be affected by interest rate fluctuations. A decline in prevailing levels of
interest rates generally increases the value of fixed income securities in the
Fund's portfolio, while an increase in interest rates usually reduces the value
of those securities. As a result, interest rate fluctuations will affect the
Fund's net asset value, but not the income received by the Fund from its
portfolio securities. Because yields on convertible fixed income securities
available for purchase by the Fund vary over time, however, no specific yield on
shares of the Fund can be assured.
Non-Diversification
The Fund expects that it normally will invest in a substantial number
of issuers; however, as a non-diversified investment company, the Fund may
invest a greater portion of its assets in the securities of a limited number of
issuers than a diversified fund. The Fund's ability to invest a greater
proportion of its assets in the securities of a smaller number of issuers may
enhance the Fund's ability to achieve capital appreciation, but may also make
the Fund more susceptible to any single economic, political or regulatory
occurrence. However, as of the last day of each fiscal quarter, the Fund
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generally will be required to meet certain tax-related diversification
requirements, which would restrict the amount of the securities of any one
issuer that the Fund could hold.
DIVIDENDS AND OTHER DISTRIBUTIONS
There are two types of distributions which the Fund may make to its
shareholders, income dividends and capital gain distributions. Distributions
paid by the Fund with respect to Class Y Shares likely will be greater than
those paid with respect to Class A Shares and Class B Shares because expenses
attributable to Class A Shares and Class B Shares generally will be higher.
Distributions paid by the Fund with respect to Class A Shares likely will be
greater than those paid with respect to Class B Shares because expenses
attributable to Class B Shares generally will be higher.
Income Dividends. The Fund receives income in the form of interest and
dividends paid by its investments. This income, less the expenses incurred in
the Fund's operations, is referred to as net investment income. Income dividends
are declared and recorded each day based on estimated net investment income.
Such dividends are paid quarterly. Investors earn such dividends beginning on
the day payment for Shares is received to the day prior to the settlement date
of redemption. For federal tax purposes, all distributions declared in the
fourth quarter of any calendar year are deemed paid in that calendar year even
if they are distributed in January of the following year. Any net gain the Fund
may realize from transactions in securities held less than the period required
for long term capital gain recognition (taking into account any carryover of
capital losses from previous years), while technically a distribution from
capital gain, is taxed as an income dividend under the Internal Revenue Code of
1986, as amended (the "Code"). See Tax Matters.
Capital Gains Distributions. If, during any fiscal year, the Fund realizes
a net gain on transactions in securities held for more than one year, it has a
net long term capital gain. After deduction of the amount of any net short term
loss, the balance may be used to offset any carryover of capital losses from
previous years, or, if there is no loss carryover, will be paid out to
shareholders as a capital gain distribution. Capital gain distributions, if any,
will be paid to shareholders of record prior to the end of each calendar year.
Because the value of Fund Shares is based directly on the amount of its net
assets, rather than on the principle of supply and demand, any distribution of
income or capital gain will result in a decrease in the value of Fund Shares
equal to the amount of the distribution.
All dividends and capital gain distributions are paid in additional full
and fractional Shares at net asset value for each shareholder's account unless
otherwise requested on the Account Application or by notifying the Fund in
writing or by telephone. Notice will be effective for the current dividend or
distribution only if it is received by the Fund at least five business days
before the record date. Notice received thereafter will be effective commencing
with the next dividend or distribution. Income dividends and capital gain
distributions will be credited to a shareholder's account in additional shares
valued at the closing net asset value (without a sales load).
If the U.S. Postal Service cannot deliver a shareholder's check, or if a
shareholder's check remains uncashed for six months, the Fund reserves the right
to credit the shareholder's account with additional shares of the Fund at the
then current net asset value in lieu of the cash payment and to thereafter issue
such shareholder's dividends in additional Shares of the Fund.
Stock certificates will not be issued in connection with distributions
which are paid in additional Shares unless a written request is received and
certain other procedures are followed. Call Shareholder Services at (716)
383-1966 for more information. Shareholders will be advised of the nature of a
distribution, the number of Shares purchased and the price following each such
distribution.
ALTERNATIVE SALES ARRANGEMENTS
The three classes of Shares which the Fund offers incur sales charges in
different forms and amounts and incur different levels of expenses.
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Class A Shares
Shareholders who purchase Class A Shares pay a sales charge at the time of
purchase. As a result, Class A Shares are not subject to any charges when they
are redeemed. Certain purchases of Class A Shares qualify for reduced sales
charges. Class A Shares currently incur an asset-based sales charge of 0.50% and
a Service Fee at the annual rate of 0.25% of the Fund's average net assets
attributable to Class A Shares. See Purchasing Class A Shares.
Class B Shares
Class B Shares of the Fund are sold without an initial sales charge, but
are subject to a CDSC of up to 3.5% if redeemed within the first year, declining
to 0% after the sixth year. Class B Shares also incur an asset-based sales
charge, currently at the annual rate of 0.75% of the Fund's average daily net
assets attributable to Class B Shares, as well as a Service Fee of 0.25%. Class
B Shares will convert automatically to Class A Shares, based on relative net
asset value, approximately six years after purchase. Class B Shares provide
shareholders the benefit of putting all of the investor's dollars to work from
the time the investment is made, but likely will have a higher expense ratio and
pay lower dividends than Class A Shares and Class Y Shares due to the higher
asset-based sales charge. Class B Shares will convert into Class A Shares after
approximately 6 years and thereafter will pay the lower ongoing expenses
associated with Class A Shares. See Purchasing Class B Shares.
Class Y Shares
Class Y Shares are available to (1) discretionary accounts of registered
investment advisers who charge an investment advisory fee; (2) banks and trust
institutions investing for their own accounts or for accounts of their trust
customers; (3) qualified plans under the ERISA definition of fiduciary; and (4)
government entities or authorities (collectively, "Qualified Institutions").
Class Y Shares are sold without an initial sales charge or CDSC. Class Y Shares
are subject to a Service Fee of 0.25%. See Purchasing Class Y Shares.
Factors to Consider in Choosing a Class of Shares
The decision as to which class of Shares provides a more suitable
investment for an investor depends on a number of factors, including the amount
invested and the intended length of investment. Investors making large
investments, thus qualifying for a reduced sales charge, might consider Class A
Shares. Investors who prefer that 100% of their purchase be invested
immediately, or who want to spread the sales charge payment over time, might
consider Class B Shares. Orders for Class B Shares for $250,000 or more will be
declined because the investor would not realize the economies of scale available
to them through a similar investment in Class A Shares. Investors who meet the
above criteria for purchases of Class Y Shares and are able to meet the higher
minimum investment requirements should take advantage of the reduced expenses
that Class Y Shares offer. For more information about these sales arrangements,
contact your investment dealer or Shareholder Services at The Rochester Funds.
Shares may only be exchanged for Shares of the same class of one of the other
Rochester Funds. See Exchange Privilege.
HOW TO PURCHASE SHARES
Shares of the Fund are being continuously offered through securities
dealers who execute a sales agreement with Rochester Fund Distributors, Inc.
(the "Distributor"), 350 Linden Oaks, Rochester, NY 14625-2807, the principal
underwriter of the Fund. The minimum initial investment in Class A and Class B
Shares is $2,000 and subsequent investments must be $100 or more. The minimum
initial investment in Class Y Shares is $50,000 and subsequent investments must
be $1,000 or more. Such minimum investment requirements may be modified at the
discretion of the Distributor.
Purchase of Fund Shares with Securities. In addition to cash purchases, the
Distributor may accept securities as payment for Shares at the applicable public
offering price. By purchasing Shares with securities, investors can avoid
brokerage costs related to the sale of those securities although the usual sales
load will be applicable to all such purchases. Investors should be aware,
however, that the purchase of Shares with securities is generally a taxable
event.
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The Distributor may reject in whole or in part any or all offers to pay for
purchases of Shares with securities, may require partial payment in cash for
such purchases, for example, to provide funds for the applicable sales load, and
may discontinue accepting securities as payment for Shares at any time without
notice. The Fund will value accepted securities in the manner provided for
valuing portfolio securities of the Fund. The Distributor will only accept
securities which are delivered in proper form. The Distributor will not accept
illiquid securities in payment for Fund shares. Additional information is
available from the Distributor.
There Are Several Ways You Can Invest
Through the Distributor. Complete an Account Application and return it with
a check payable to the Distributor, who will act as your agent in purchasing
Shares.
Through Your Investment Dealer. Many investment dealers and financial
institutions have a sales agreement with the Distributor and will be glad to
accept your order. If you do not have an account with a dealer, the Distributor
can refer you to one.
Through the Automatic Bank Draft Plan. The Automatic Bank Draft Plan is
available as a convenience to all shareholders of the Fund. Under this plan, you
may elect to make investments ($100 minimum) automatically by arranging to have
pre-authorized checks drawn on your bank account by Rochester Fund Services,
Inc. (the "Agent"). This plan is available only if your bank agrees to
participate. There is no charge for this service and it may be terminated at any
time upon written notice to the Agent. See Shareholder Services.
Automatic Investment Plan. Investments of $100 or more may be made through
a shareholder's checking account by Automated Clearing House ("ACH") funds. For
information on how to establish a plan contact Shareholder Services at (716)
383-1966.
Certificates
To facilitate redemptions and transfers, most shareholders elect not to
receive stock certificates; however, the Fund will issue them if requested in
writing or by telephone if you have owned the Shares for at least 30 days. If
you lose a stock certificate, you may incur an expense to replace it. Call
Shareholder Services for more information.
Purchase Price of Shares
Shares of the Fund are offered at the public offering price (which is the
net asset value plus a sales charge for Class A Shares and the net asset value
for Class B Shares and Class Y Shares) next computed after receipt by the
Distributor of an order from a qualified securities dealer, by mail, or by
telephone from the investor directly, in good order. The net asset value of
Shares is determined once daily as of the close of the New York Stock Exchange
(the "Exchange") on each day that the Exchange is open.
For the purpose of the computation of the applicable public offering price,
orders for Shares placed by the mailing of an Account Application with a check
payable to the Fund are considered processed upon receipt by the Distributor.
Purchase of Shares through authorized dealers must be received by such dealers
prior to 4:00 p.m. New York time (the "Closing") in order to receive such
trading day's public offering price. Orders received by the Distributor
subsequent to the Closing are confirmed at the public offering price determined
as of the Closing on the next trading day. If a dealer who has a sales agreement
with the Distributor receives an order prior to the Closing and fails to
transmit such order to the Distributor prior to its close of business on that
day (5:00 p.m. New York time), any resulting loss will be borne by the dealer.
The net asset value per Share of each class of the Fund, the price at which
Shares of each class are redeemed, is computed by dividing the value of the
Fund's total assets, less its liabilities attributable to a class, by the total
number of Shares of that class outstanding. The net asset value of the Shares of
each class of the Fund fluctuate based on the market value of the Fund's
investments. Procedures describing the method of valuation of individual
securities are discussed in the SAI. The net asset value for Class A Shares,
Class B Shares, and Class Y Shares may differ primarily due to the variance in
daily net income realized by each class.
The Distributor may provide promotional incentives or compensation to
dealers that sell Shares of the Fund in
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addition to sales loads. In some instances, these incentives may be made
available only to certain dealers who have sold specified amounts of Shares.
Dealers may not use sales of the Fund's Shares to qualify for such incentives to
the extent that such sales may be prohibited by the laws of any state or
self-regulatory agency such as the National Association of Securities Dealers,
Inc.
PURCHASING CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a
sales load. The following table shows the sales load at various investment
levels for the purchase of Class A Shares of the Fund:
Sales Load Sales Load Reallowance
as % of as % of to Dealers
Public Net as % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ------------------ ---------- ---------- -----------
Less than $250,000 .................... 3.25% 3.36% 3.00%
$250,000 to $499,999 .................. 2.25% 2.30% 2.00%
$500,000 to $999,999 .................. 1.25% 1.27% 1.00%
Purchases of $1,000,000 or more will be made without a sales load. The
Distributor may make a payment out of its own resources to dealers in an amount
not to exceed .25% of purchases of $1,000,000 or more.
Information with regard to any of the following special purchase plans or
methods may be obtained from the Distributor.
Reduced Sales Loads
Class A Shares of the Fund may be purchased under a variety of plans which
provide for reduced sales loads. To obtain the reduction of a sales load you or
your dealer must notify the Distributor at the time of the sale which qualifies
for the reduction.
Right of Accumulation. The total value (at the public offering price) of
Class A Shares of the Fund and shares of Eligible Funds (as described in
Exchange Privilege) registered to you, your spouse or your children under 21,
may be combined with the amount of your current purchase in determining the
sales load to be paid.
Letter of Intent. Reduced sales loads will apply to purchases of Class A
Shares made within a period of thirteen months by any person pursuant to a
non-binding Letter of Intent. A shareholder may include the combined value (at
the applicable public offering price) of Class A Shares of the Fund, and of
Shares of eligible funds (as described in Exchange Privilege) held by the
shareholder of record as of the date of the Letter of Intent as an "accumulation
credit" toward the completion of the intention expressed in the Letter of
Intent. A shareholder's holdings in the Class A Shares of the Fund and Shares of
any Eligible Funds acquired more than 90 days before the Letter of Intent is
filed, will be counted towards completion of the Letter of Intent, but will not
be entitled to a retroactive downward adjustment of sales load.
Group Purchases. An individual who is a member of a qualified group may
also purchase Class A Shares of the Fund at the reduced sales load applicable to
the group taken as a whole. The sales load is based upon the aggregate amount of
Class A Shares previously purchased and still owned by the group, plus the
securities currently being purchased. A "qualified group" is one with more than
10 members and which (1) has been in existence for more than six months, (2) has
a purpose other than acquiring Class A Shares of the Fund at a discount and (3)
satisfies uniform criteria which enables the Distributor to realize economies of
scale in its costs of distributing Class A Shares.
Other Discounts
The Fund may sell Class A Shares at net asset value to the Fund's Trustees
(and their families), employees and clients of the Adviser and affiliates (and
their families), registered representatives and other employees (and their
families) of broker-dealers having dealer agreements with the Distributor and in
connection with the acquisition by the Fund of the assets of another investment
company.
PURCHASING CLASS B SHARES
Class B Shares of the Fund are sold without an initial sales charge,
although a CDSC will be imposed if you redeem Class B Shares of the Fund within
six years of purchase. The following types of Class B Shares may be redeemed
without charge at any time: (1) Class B Shares acquired by reinvestment of
distributions and (2) Class B Shares held for
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<PAGE>
more than six full years from the date of purchase. Subject to the foregoing
exclusions, the amount of the charge is determined as a percentage of the lesser
of the current market value or the cost of the Class B Shares at the time of
purchase. Therefore, when a Class B Share is redeemed, any increase in value
above the initial purchase price is not subject to any CDSC. The amount of the
CDSC, which depends on the number of years since you invested and the dollar
amount redeemed, will be calculated according to the following tables:
Years Since Purchase CDSC As a Percentage of Dollar
Payment Made Amount Subject to Charge
- ---------------- --------------------------
0-1 ........................... 3.5%
1-2 ........................... 3.0%
2-3 ........................... 2.5%
3-4 ........................... 2.0%
4-5 ........................... 1.5%
5-6 ........................... 1.0%
6 and thereafter .............. NONE
In determining whether a CDSC is applicable to a redemption, the
calculation will be determined in a manner that results in the lowest possible
charge to the shareholder. In computing the CDSC it will be assumed that
redemptions occur in the following order: (1) any Class A Shares in the
shareholder account; (2) Class B Shares acquired pursuant to the reinvestment of
dividends or distributions; (3) Class B Shares held for more than six years from
the date of purchase; and (4) Class B Shares held longest, if redeemed before
six years from the purchase date. The charge will not be applied to amounts
representing increases in net asset value above the original purchase price. For
information on how sales charges are calculated on exchanges of Class B Shares,
see Exchange Privilege. The Distributor receives the entire amount of any CDSC
you pay.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of Class B Shares until the time of
redemption of such Shares. For example, assume you purchased 100 Class B Shares
at a price of $10 per Class B Share for a total cost of $1,000. You then
received an additional five Class B Shares through dividend reinvestment and net
asset value has increased to $12 per share. During the second year after your
original purchase you elect to redeem 50 Class B Shares ($600 in proceeds). In
calculating your proceeds, the five Class B Shares received through dividend
reinvestment ($60) would not be subject to any charge. With respect to the
remaining 45 Class B Shares, the charge would be applied to the original price
per Class B Share ($10) of these Class B Shares or $450. The charge would not
apply to the increase in net asset value of $2. Therefore, you would expect to
pay a charge of 3.00% of $450 or $13.50.
Waiver of the CDSC
The CDSC will be waived with respect to the following redemptions: (1)
redemptions following the death or disability, as defined in Section 72(m)(7) of
the Code, of a shareholder; and (2) involuntary redemptions by the Fund of
Shares in shareholder accounts that do not comply with the minimum balance
requirements. Shareholders must notify the Distributor in writing that they are
entitled to the waiver. The Trustees may discontinue the waiver of the CDSC at
any time, although shareholders will be notified of such termination. Any Shares
purchased prior to the discontinuation of the waiver would continue to have the
CDSC waived as provided in the prospectus at the time those Shares were
purchased.
Conversion of Class B Shares
Class B Shares of the Fund will convert into Class A Shares automatically
approximately six years after the purchase date, except as noted below. Class B
Shares acquired by exchange from Class B Shares of another of The Rochester
Funds will convert into Class A Shares based on the time of the initial
purchase. Each time any Class B Shares in the Shareholder's account convert to
Class A Shares, the same percentage of Class B Shares acquired through payment
of dividends and distributions will also convert to Class A Shares. The
conversion of Class B Shares to Class A Shares is subject to the continuing
availability of a ruling from the Internal Revenue Service or an opinion of
counsel that such conversions will not constitute taxable events for Federal tax
purposes. There can be no assurance that such ruling or opinion will be
available, and no conversions of Class B Shares to Class A Shares will occur if
such ruling or opinion is not available. In such event, Class B Shares would
continue to be subject to higher expenses than Class A Shares for an indefinite
period. Shareholders holding Class B Shares may be affected by changes to the
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<PAGE>
Class A Shares Distribution Plan. The Board will monitor for conflicts of
interest among classes and will take any action necessary to eliminate
conflicts.
PURCHASING CLASS Y SHARES
Qualified Institutions may open an account for $50,000 or more by
completing and returning a signed account application. Dealers and brokers who
have a signed sales agreement with the Distributor may enter confirmed purchase
orders for Class Y Shares on behalf of customers by telephone. The Fund and the
Distributor reserve the right to suspend the offering of Class Y Shares for a
period of time and to reject any order for the purchase of Class Y Shares.
Purchase orders may be refused if, in the opinion of the Adviser, they are of a
size that would disrupt the management of the Fund. Investors interested in
purchasing Class Y Shares of the Fund should contact their sales representative
or the Distributor for specific information on opening an account.
DISTRIBUTION PLANS
Pursuant to Rule 12b-1 under the Act, the Fund has adopted a Distribution
Plan with respect to each class of Shares (collectively, the "Plans") which
permits the Fund to pay to the Distributor a Service Fee in connection with the
distribution of each class of Shares in an amount of up to .25% per annum of the
relative net assets attributable to each class of Shares. In the case of the
Plans for the Class A Shares and the Class Y Shares, the Service Fee is paid to
the Distributor as reimbursement for payment by the Distributor to compensate
brokers, dealers and banks for service performed and/or maintenance of
shareholder accounts pursuant to the provisions of the service agreement. In the
case of the Plan for the Class B Shares, the Service Fee is paid to the
Distributor as compensation. The Distributor also makes payments to brokers,
dealers and banks to compensate them for providing personal services to Class B
Shareholders and for maintaining accounts of Class B Shareholders. The Fund may
also pay the Distributor an asset-based sales charge of up to 0.50% per annum of
the relative net assets attributable to Class A Shares and up to 0.75% per annum
of the relative net assets attributable to Class B Shares which is used by the
Distributor primarily to compensate brokers and dealers in connection with the
sales of Class A and Class B Shares. Up to 0.25% of the Class A Shares'
asset-based sales charge may be paid to brokers, dealers, banks, and other
institutions for reimbursement of sales related expenses, and up to 0.25% may be
retained by the Distributor as reimbursement for expenses incurred by it in
connection with the distribution of Class A Shares, including, but not limited
to, compensation of sales personnel, telephone, overhead, printing of sales
literature and prospectuses, seminars and similar promotional items, including
broker incentives. The asset based sales charge of up to 0.75% per annum which
the Fund may pay to the Distributor with respect to relative net assets
attributable to Class B Shares is paid to the Distributor as compensation for
services rendered and expenses borne by the Distributor in connection with the
distribution of Class B Shares. See the SAI for further information about the
Plans.
Although Class B Shares of the Fund are sold without an initial sales
charge, the Distributor pays a sales commission equal to 3.00% (including a
prepaid service fee of 0.25%) to dealers who sell Class B Shares of the Fund.
These commissions are not paid on exchanges from other Rochester Funds and sales
to investors exempt from the CDSC.
Banks and other financial institutions may be subject to various state laws
regarding the services described above and may be required to register as
dealers pursuant to state law.
SHAREHOLDER SERVICES
Account Information
Shareholders with inquiries on accounts not held by their dealer may call
the Fund or the Agent at (716) 383-1966 (9:00 a.m.-5:00 p.m. New York time) or
write to the address provided on the back of this Prospectus.
Exchange Privilege
The Rochester Funds group currently consists of two investment companies in
addition to the Fund, Rochester Fund Municipals and Limited Term New York
Municipal Fund, each of which has distinct investment objectives and policies.
As described below, a shareholder may exchange Shares of the Fund for the same
class of shares of another of The Rochester Funds which are eligible for sale in
the
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<PAGE>
Shareholder's state of residence (collectively the "Eligible Funds"). Not all of
The Rochester Funds offer more than one class of shares. If the other Rochester
Fund offers only one class of shares, only Class A Shares may be exchanged for
such class. Shareholders wishing to make an exchange into an Eligible Fund
should obtain and review a prospectus of the appropriate Eligible Fund before
making the exchange.
If you exchange Shares subject to a CDSC, the transaction will not be
subject to the CDSC. However, when you redeem the Shares acquired through the
exchange, the redemption may be subject to the CDSC, depending upon when you
originally purchased the Shares. You will pay the CDSC of the Rochester Fund
which you originally purchased, without regard to any exchanges. For purposes of
computing the CDSC, the length of time you have owned your Shares will be
measured from the date of original purchase, as determined by the Fund (see
Purchasing Class B Shares) and will not be affected by any exchange.
Shares of an Eligible Fund which have been held for at least 15 days may be
exchanged for Shares of the same class of another Eligible Fund on the basis of
the relative net asset values of each Fund's shares at the time of the exchange
(without sales charge).
Shareholders may effect exchanges of noncertificated shares by telephone.
The privilege is available to all shareholders unless requested otherwise by the
shareholder on the Account Application. Telephone Exchange Authorization Forms
are available from the Distributor upon request. In order to effect an exchange
by telephone shareholders may call the Agent weekdays (except holidays) between
9:00 a.m. and 5:00 p.m. (New York time). All exchanges will be made on the basis
of the relative net asset value of the two funds next determined after the
request is received in good order. Exchange requests received after the close of
regular trading on the New York Stock Exchange, generally 4:00 p.m. (New York
time) will be processed at the net asset value determined as of the close of
business on the following business day. Telephone exchanges are available only
in nonretirement accounts registered in the same name. Shareholders are limited
to one telephone exchange within any 30-day period for each account authorized
to make such exchanges.
The Fund, the Agent and their affiliates will not be liable for any loss,
damage, cost or expense arising out of any instruction (or any interpretation of
such instruction) received by telephone which they reasonably believe to be
authentic. In acting upon telephone instructions, the Agent utilizes procedures
which are reasonably designed to ensure that such instructions are genuine. For
a description of such procedures, see the SAI. Your telephone call will be
recorded and a written confirmation of the exchange will be mailed to you. If
reasonable procedures are not followed by the Fund, it may be liable for losses
due to unauthorized or fraudulent telephone exchanges. The Fund reserves the
right, in its sole discretion, upon 60 days' notice, to materially modify or
discontinue the telephone exchange privilege. During times of drastic economic
or market conditions, telephone exchanges may be difficult to implement. If you
experience difficulty in making a telephone exchange, you may transmit your
request to the address listed on the back of this prospectus and it will be
implemented at the next determined net asset value (subject to any applicable
sales load) following receipt in good order by the Agent.
See Tax Matters for an explanation of the tax consequences of exercising
the exchange privilege.
Reinvestment Privilege
If you redeem Class A Shares or Class B Shares of the Fund and you decide
to reinvest in Shares of the Fund, you may, within 90 calendar days of the date
of redemption, use all or any part of the proceeds of the redemption to
reinvest, free of sales load, in Class A Shares of the Fund. The Fund will not,
however, refund any CDSC paid as a result of a redemption of Class B Shares.
Your investment will be reinvested at the net asset value per Class A Share next
determined after your request is accepted. You must inform the Agent that this
purchase represents a reinvestment. If you redeem Class A Shares or Class B
Shares of the Fund and immediately invest the proceeds of the redemption in a
money market fund, you may, upon notification to the Fund within one year of
such transaction, reinvest, free of sales load, the exact amount of the proceeds
of the redemption in Class A Shares of the Fund. Your investment will be
reinvested at the net asset value per Class A Share established at the close of
business of the Exchange on the day your request is accepted. There may be
certain limits on
16
<PAGE>
facilitating such a transaction with respect to wire orders. Shareholders should
consult with their dealers with respect to facilitating such transactions. The
Fund reserves the right to require proof of the validity of any request for
reinvestment pursuant to this service. You may use these respective reinvestment
privileges only once a calendar year.
See Tax Matters for an explanation of the tax consequences of exercising
the reinvestment privilege.
RETIREMENT PLANS OFFERING TAX BENEFITS
The Federal tax laws provide for a variety of retirement plans which may
offer tax benefits. The following plans may be funded with Shares of the Fund:
o Individual retirement accounts (IRAs)
o Simplified employee pension plans (SEP-IRAs)
If a shareholder is a participant in such a retirement plan, any capital
gain and ordinary income earned by the assets held in the plan on the
shareholder's behalf will be exempt from taxation until distributed to the
shareholder pursuant to the plan. In addition, contributions to the various
types of plans may be deductible (within prescribed limitations) from gross
income for federal income tax purposes in the year for which the contribution is
designated. Upon distribution, capital gains and other income distributed will
be taxed as ordinary income, and under certain circumstances, such as a
"premature" distribution, the distribution will be subject to a penalty.
Explanations of the eligibility requirements, allowable tax advantages and
penalties, fees and charges of the custodian bank, forms for adoption, and
additional information are available from the Distributor.
A shareholder who believes it would be beneficial to establish or continue
an investment in Fund Shares utilizing either plan should first seek the advice
of legal counsel or another qualified tax adviser who can explain the applicable
tax laws. A shareholder who chooses to participate in any such a plan is
required to bear the cost of such participation.
HOW TO REDEEM SHARES
By Mail. A shareholder may redeem Shares at any time and receive the value
of such Fund's Shares by forwarding a written request signed by all registered
owners to the Agent. The shareholder will then receive from the Fund the value
of the shares based upon the net asset value per Share, less any applicable CDSC
on Class B Shares, next computed after a written request in good order is
received by the Agent. Redemption requests received after the time at which the
net asset value is calculated each day (at the close of the Exchange) will
receive the price calculated on the following business day. Any certificates
representing Fund shares being redeemed must be submitted with the written
redemption request.
For the shareholder's protection, and to be considered in good order,
signature(s) must be guaranteed if the redemption request involves any of the
following:
(1) the proceeds of the redemption are over $100,000;
(2) the proceeds (in any amount) are to be paid to someone other than the
registered owner(s) of the account; or
(3) the proceeds (in any amount) are to be sent to any address other than
the shareholder's address of record, pre-authorized bank account or
brokerage firm account.
Eligible signature guarantors are determined in accordance with standards
and procedures adopted by the Agent from time to time. A notarized signature is
not acceptable.
Payment for the redeemed Shares will be sent to the shareholder within
seven days after receipt of the request in good order, except that the Fund may
delay the mailing of the redemption check or a portion thereof until the Fund's
depository bank has made fully available for withdrawal the check used to
purchase Fund Shares, which may take up to 15 days.
Through your Investment Dealer. For the convenience of its shareholders,
the Fund has authorized the Distributor to act as its agent to accept orders
from dealers' authorized order rooms for the redemption of Fund Shares. The Fund
may revoke or suspend this authorization at any time. The redemption price is
the net asset value, less any applicable CDSC on Class B Shares, next determined
following the time at which the Shares are offered for redemption to the dealer.
Payment of the redemption proceeds is made to the dealer who placed the order
within seven days after receipt of the order provided that within this time,
delivery of certificates for Shares in good order is
17
<PAGE>
received, or for open accounts, upon the receipt of a written request for
redemption as described above, and, if required, any supporting documents.
Neither the Fund nor the Distributor may make a charge upon such a redemption,
other than any applicable CDSC on Class B Shares. However, a dealer may make a
charge as agent for the shareholder in the redemption of Fund Shares. If a
shareholder is unable to execute a transaction by telephone to his dealer, or a
dealer is unable to execute a transaction by telephone to the Distributor (for
example, during times of unusual market activity), the Shareholder or dealer
should consider placing the order by mail.
Systematic Withdrawal Plan. A Systematic Withdrawal Plan ("SWP") is
available to Shareholders which provides for monthly payments by ACH funds or
check. Withdrawals of Class B Shares through the SWP may be subject to a CDSC.
For information on how to establish an SWP, contact Shareholder Services at
(716) 383-1966.
Required Redemption. The Fund may, in order to reduce its expenses, require
any shareholder with Shares having a net asset value in the aggregate of less
than $1,500, to redeem such Shares. Such required redemption would relate only
to a shareholder whose holdings had fallen below $1,500 by reason of redemption.
Notice of any required redemption (which would be made only in cash at net asset
value without payment of any CDSC) would be given to any such shareholder at
least 30 days prior to any such required redemption, during which time the
shareholder would have the opportunity to bring the account to a value of
$1,500. The provisions relating to the reinvestment privilege would not be
applicable to any such redeemed shares. Required redemptions are not applicable
where a shareholder is making continuous regular investments in the Fund through
an Automatic Bank Draft Plan.
PERFORMANCE
Advertisements and other sales literature for each class of Shares of the
Fund may refer to its "yield" and "average annual total return." When the Fund
advertises the yield of a class of Shares it will also advertise the average
annual total return for the most recent one-year period, five-year period and
for the life of that class of Shares of the Fund. Such calculations are
determined in accordance with rules established by the Securities and Exchange
Commission and are applicable to all investment companies and are not indicative
of the dividends or other distributions which were or will be paid to the Fund's
shareholders. Dividends or distributions paid to shareholders are reflected in
the current distribution rate or taxable equivalent distribution rate which may
be quoted to shareholders.
The advertised yield of a class of shares of the fund will be based upon a
30-day period stated in the advertisement. Yield is calculated by dividing the
net investment income per share of a class earned during the period by the
maximum offering price per share of that class on the last day of the period.
The result is then "annualized" using a formula that provides for semiannual
compounding of income. The fund's yield for a class reflects the deduction of
the maximum initial sales charge but does not reflect the deduction of any cdsc.
The average annual total return of Shares of the Fund is computed by
finding the average annual compounded rate of return of a class over a period
that would equate the initial amount invested in that class to the ending
redeemable value. The calculation assumes that the maximum sales load charge is
deducted from an initial $1,000 investment in Class A Shares, and that the CDSC
is deducted in the case of Class B Shares. The calculation also assumes that
dividends and capital gains distributions are reinvested at net asset value. The
calculation includes all recurring fees that are charged to all shareholder
accounts.
For additional information regarding the calculation of yield and total
return, see Calculation of Performance Data in the SAI. Further information
about the Fund's performance is set forth in the Fund's Annual Report to
Shareholders, which may be obtained upon request without charge.
TAX MATTERS
During the taxable year ended December 31, 1994, the Fund qualified for
treatment as a regulated investment company under Subchapter M of the Code. The
Fund intends to continue to so qualify for the current and future taxable years.
The Fund intends to avoid incurring liability for federal income tax on its
investment company taxable income (consisting generally of net investment
income, any
18
<PAGE>
net short-term capital gain, and any net gains from certain foreign currency
transactions) and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) and a 4% federal excise tax on certain
undistributed income and gains, by distributing substantially all of that income
and gain and by meeting other applicable requirements of the Code.
Except with respect to distributions to qualified retirement plans,
dividends from investment company taxable income generally are taxable to
shareholders as ordinary income, whether received in cash or in additional
Shares. Distributions of net capital gain, when designated as such, are treated
as long-term capital gains to shareholders, other than qualified retirement
plans, whether received in cash or additional Shares and regardless of the
length of time Shares have been held. Any net gain the Fund may realize from
transactions in securities held less than the period required for long term
capital gain recognition (taking into account any carryover of capital losses
from previous years), while technically a distribution from capital gains, is
taxed as an income dividend under the Code.
The Fund is required to withhold 31% of all dividends, capital gain
distributions and redemption proceeds (including any applicable CDSC) payable to
individuals and certain other noncorporate shareholders who do not furnish the
Fund with a correct taxpayer identification number. Withholding at that rate
from dividends and capital gain distributions also is required for such
shareholders who otherwise are subject to backup withholding.
A redemption of Fund Shares may result in taxable gain or loss to the
redeeming shareholder, depending on whether the redemption proceeds are more or
less than the shareholder's adjusted basis for the redeemed Shares (which
normally includes any sales load paid). An exchange of Fund Shares for shares of
any Eligible Fund generally will have similar tax consequences. However, special
rules apply when a shareholder (1) disposes of Fund Shares through an exchange
or redemption within 90 days after purchase thereof and (2) subsequently
acquires Shares of an Eligible Fund or reacquires Fund Shares without paying a
sales load due to the exchange privilege or 90-day reinvestment privilege. See
Shareholder Services. In these cases, any gain on the disposition of the
original Fund Shares will be increased, or loss decreased, by the amount of the
sales load paid when those Shares were acquired, and that amount will increase
the basis of the subsequently acquired Shares. In addition, if a shareholder
purchases Fund Shares (whether pursuant to the reinvestment privileges or
otherwise) within 30 days before or after redeeming other Fund Shares at a loss,
all or a portion of that loss will not be deductible and will increase the basis
of the newly purchased Shares.
Information as to the character of Fund distributions will be provided
annually. Shareholders who have not been in the Fund for a full taxable year may
get distributions of income and/or capital gains which are not equivalent to the
actual amount applicable to the period for which they have held Shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders--see the SAI
for a further discussion--and is not intended to be a substitute for careful tax
planning. There may be tax considerations involved with the automatic conversion
of Class B Shares to Class A Shares--see Conversion of Class B Shares for
further information. There may also be other federal, state or local tax
considerations applicable to a particular investor. Prospective investors
therefore are urged to consult their own tax advisors.
MANAGEMENT, SERVICES AND DISTRIBUTION
The Bond Fund For Growth. The Fund offers an unlimited number of Shares of
beneficial interest, divided into three classes, each Share of which is entitled
to one vote. Fractional Shares have the same rights as full Shares to the extent
of their proportionate interest. All Shares of each portfolio or class in the
Trust have equal voting rights, except that, in matters affecting only a
particular portfolio or class, only Shares of that portfolio or class are
entitled to vote. The Fund acts as its own transfer agent and dividend paying
agent.
The Fund has a Board of Trustees which has the primary responsibility for
the overall management of the Fund. The Trustees elect the officers of the Fund
who are responsible for administering its day-to-day operations. Under the
Fund's Declaration of Trust, no annual or regular meeting of shareholders is
required, but special meetings will be called
19
<PAGE>
for certain purposes such as electing trustees, changing fundamental policies or
approving a management contract. The Declaration of Trust of the Fund provides
that the trustees shall call and give notice of a meeting of shareholders for
the purpose of voting upon removal of any trustee when requested in writing by
shareholders holding not less than 10% of the shares of the Fund.
Fielding Management Company, Inc. The Adviser, located at 350 Linden Oaks,
Rochester, New York 14625-2807, serves as Adviser to the Fund pursuant to an
investment advisory agreement dated May 1, 1987 (the "Investment Advisory
Agreement"). The Adviser provides the Fund with investment supervision and
management, administrative services and office space. The Adviser is entitled to
receive, pursuant to the Investment Advisory Agreement, an annual fee, payable
monthly, of 0.625% of its average daily net assets up to $50,000,000, 0.50% of
its average daily net assets on the next $250,000,000, and 0.4375% of its
average daily net assets in excess of $300,000,000.
The Adviser, an investment adviser registered under the Investment Advisers
Act of 1940, was organized as a corporation under the laws of the state of New
York in 1982. Michael S. Rosen, Vice President and a trustee of the Fund, has
been primarily responsible for matters relating to portfolio strategy and
day-to-day management of the Fund's portfolio since its inception. Mr. Rosen has
been Vice President, Secretary and a director of the Adviser since 1988. Ronald
H. Fielding, President and a trustee of the Fund, is also responsible for
matters relating to portfolio strategy. Mr. Fielding has been President and a
director of the Adviser since 1982.
Rochester Fund Services, Inc. The Agent, an affiliate of the Adviser, has
been retained by the Fund to provide certain administrative services necessary
to the conduct of its affairs, including the daily determination of its net
asset value per Share of each class of the Fund, and dividends, and the
maintenance of its Fund and general accounting records. For providing such
services, the Agent receives a monthly account maintenance fee from the Fund.
Rochester Fund Distributors, Inc. The Distributor, also an affiliate of the
Adviser, is the Fund's principal underwriter and distributor. Under the terms of
its underwriting agreement with the Fund, the Distributor markets and
distributes the Fund's Shares and is responsible for preparing advertising and
sales literature, and printing and mailing prospectuses to prospective
investors.
20
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APPENDIX A
DESCRIPTION OF BOND RATINGS
Standard & Poor's Rating Group Bond Ratings
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this capacity
than for bonds in the A category.
BB--B--CCC--CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
C--The rating C is reserved for income bonds on which no interest is being
paid.
D--Bonds rated D are in default, and payment of principal and/or interest
is in arrears.
Plus (+) or minus (-):--The ratings from AA to BBB may be modified by the
addition of a plus or minus sign to show relative standing within the major
ratings categories.
Provisional Ratings:--The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the issuance of bonds being rated and indicates that
payment of debt service requirements is largely or entirely dependent upon the
successful and timely completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of such completion.
Accordingly, the investor should exercise his own judgement with respect to such
likelihood and risk.
Standard & Poor's Rating Group
Preferred Stock Rating Definitions
"AAA"--This is the highest rating that may be assigned by Standard & Poor's
to a preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.
"AA"--A preferred stock issue rate "AA" also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated "AAA."
"A"--An issue rated "A" is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.
"BBB"--An issue rated "BBB" is regarded as backed by an adequate capacity
to pay the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.
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"BB," "B," "CCC" Preferred stock rated "BB," "B," and "CCC" are regarded,
on balance, as predominantly speculative with respect to the issuer's capacity
to pay preferred stock obligations. "BB" indicates the lowest degree of
speculation and "CCC" the highest degree of speculation. While such issues will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
"CC"--The rating "CC" is reserved for a preferred stock issue in arrears on
dividends or sinking fund payments but that is currently paying.
"C"--A preferred stock rated "C" is a non-paying issue.
"D"--A preferred stock rated "D" is a non-paying issue with the issuer in
default on debt instruments.
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<PAGE>
Account Application
The Rochester Funds
- -------------------------------------------------------------------------------
Mail completed The person or persons (the "Investor") who are executing
application to: this Account Application authorize Rochester Fund Services,
Rochester Fund Inc. to open or revise an account to purchase common shares
Services Inc. of the Fund indicated below (collectively "The Rochester
350 Linden Oaks Funds") in accordance with these instructions and all other
Rochester, NY applicable provisions in this Account Application, and all
14625 provisions in the current Prospectus of the indicated Fund,
(716) 383-1966 which Prospectus the investor acknowledges having received
from its Dealer prior to, or simultaneously with, the
execution of this Account Application.
- -------------------------------------------------------------------------------
Account Type/ [ ] Individual_____________________________________________
Name First Name Middle Initial Last Name
(Please Print
or Type) Joint [ ] JTTEN:
[ ] Owner [ ] Ten Com:_____________________________________
First Name Middle Initial Last Name
Uniform Gift/
[ ] Transfer to Minor______________________________________
Custodian
[ ]UTMA [ ]UGMA First Name Middle Initial Last Name
as Custodian for________________________________________
Name of Minor(s) State in which
gift is made
[ ] Trust, ________________________________________________
Corporation, Name of Trust or Name of Trustee(s)
Partnership Organization or Officer
Other Entity as it Appears on
Trust Agreement
______________________________________________
For the Benefit of Date of Trust
YOU MUST _____________________ ______________ __________ __________
COMPLETE Address City State Zip
THIS SECTION
FOR ALL __________________________________________Telephone numbers
ACCOUNT TYPES Day Phone Evening Phone will be used for
(include area code) (include area code) non-soliciting
purposes only
- -------------------------------------------------------------------------------
Fund and Fund Name Share Class Amount
Privilege [ ] Rochester Fund
Selections Municipals
(minimum $2,000)
Please indicate RMUNX Class A
your Mutual Fund only available $__________
Investment Choice(s)
and circle the
appropriate Share [ ] Limited Term NY
Class (if Municipal Fund
applicable). (minimum $5,000)
(Please notice the LTNYX Class A $__________
minimum required
investment for the LTNBX Class B $__________
fund you choose.
Subsequent [ ] The Bond Fund
purchases must For Growth
be in amount of (minimum $2,000)
$100 or more for RCVGX Class A $__________
each fund.)
RCVEX Class B $__________
RCVYX (Institutional
Investors only) Class Y
(minimum $50,000) $__________
TOTAL: $
==========
Please enclose a check for this amount payable
to Rochester Fund Distributors, Inc.
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<PAGE>
Dividend and [ ] Reinvest dividends Please complete the following
Capital Gain in shares and pay if dividend distributions are
capital gains in cash to be mailed to another
(Distributions will address or will be payable to
be reinvested in [ ] Pay dividends in another payee:
additional shares, cash and reinvest
unless specified capital gains in _____________________________
otherwise.) shares Name
[ ] Pay all dividends _____________________________
and capital gains Address
in cash
_____________________________
City/State/Zip
[ ] I do not want Telephone ----------------------------
Exchange Privileges. Signature Guarantee required
Telephone Exchange is for above transaction
automatic (where
applicable) unless A signature guarantee may be
otherwise specified obtained at any commercial
here. bank or from your broker
dealer.
- --------------------------------------------------------------------------------
Signature and I (we) am of legal age to make this purchase. Under the
Taxpayer penalties of perjury, I certify that the tax identifying or
Certification social security number contained herein is true, correct and
complete and I am not subject to backup withholding under
section 3406(a)(1)(C) of the Internal Revenue Code. I (we)
hereby agree that, upon acceptance by Rochester Fund
Distributors, Inc. ("RFD"), this Account Application will be
a contract governed by the laws of the State of New York. In
addition, I (we) hereby agree that any controversy arising
out of or in relation to my (our) account or this contact
shall be settled by arbitration before the National
Association of Securities Dealers, Inc. or any other
self-regulatory organization of which RFD is a member.
___________________________ _______________________________
Owner's Signature Date Owner's Social State in which
Security/Tax ID signed
(Minor's SS# if
UGMA/UTMA)
___________________________ For Tax Purposes: (check
Joint Owner's Date appropriate box:)
Signature (if any) [ ] I am a citizen [ ] Other__
of US
{ } I am a resident [ ] Other__
of US
(Non-resident Aliens must
provide the W-8 form)
- -------------------------------------------------------------------------------
Registered
Representative ____________________________________________________________
Identification First Name Middle Initial Last Name Representative Number
(Broker/Dealer
Use Only) ____________________________________________________________
Registered Representative Signature Office Phone Number
(required)
____________________________________________________________
Firm Name Branch Number
______________________________________
Dealer Authorized Signature (required)
____________________________________________________________
Address City State Zip
Please make your check payable to Rochester Fund
Distributors, Inc. and mail to: 350 Linden Oaks, Rochester,
NY 14625. A shareholder package containing fund privileges
will be forwarded upon processing of your application.
The broker-dealer ("Dealer") signing the Application hereby agrees to all
applicable provisions of this Application. The Dealer will act as principal in
all purchases by the investor of Fund shares indicated herein and authorizes and
appoints RFD to execute such purchases and to confirm such purchases to the
Investor. RFD will remit monthly to the Dealer the amount of any commissions
due, except that no commissions will be paid to the Dealer on any transactions
for which the Dealer's net sales commissions are less than $5.00. The Dealer
also represents that it may lawfully sell shares of the indicated Fund in the
state designated as the Investor's record address, and that it has a currently
effective Dealer Agreement with Rochester Fund Distributors, Inc. authorizing
the Dealer to sell common shares of The Rochester Funds.
The Dealer signature guarantees the signature and legal capacity of the
Investor. If the Investor does not sign this Application, the Dealer warrants
that this application is completed in accordance with the Investor's
instructions and information and agrees to indemnify The Rochester Funds and
Rochester Fund Distributors, Inc. from any loss or liability from acting or
relying upon such instructions and information.
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----------------------
Investment Adviser
Rochester Capital Advisors, L.P.
Distributor
Rochester Fund Distributors, Inc.
Shareholder Services Agent
Rochester Fund Services, Inc.
350 Linden Oaks
Rochester, NY 14625-2807
(716) 383-1300
----------------------
Custodian
Investors Bank & Trust Company
Boston, MA
Independent Accountants
Price Waterhouse LLP
Rochester, NY
Legal Counsel
Kirkpatrick & Lockhart
Washington, D.C.
----------------------
For further information with respect to the Fund and the shares offered hereby,
reference is made to the Registration Statement filed with the Securities and
Exchange Commission.
----------------------
Your Investment Dealer is:
Item # ROC 504141
THE
[LOGO] BOND FUND
FOR GROWTH
Rochester Fund Series
350 Linden Oaks
Rochester, NY 14625-2807
(716) 383-1300
PROSPECTUS May 1, 1995,
as supplemented on
July 5, 1995
