As filed with the Securities and Exchange Commission on March 5, 1996
Registration No. 33-3076
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 16
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18
(Check appropriate box or boxes.)
ROCHESTER FUND SERIES
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(Exact Name of Registrant as Specified in Charter)
350 Linden Oaks, Rochester, New York 14625
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone number, including Area Code: (716) 383-1300
-----------
Andrew J. Donohue, Esq.
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
(Name and Address of Agent for Service)
-----------
With a copy to:
Robert J. Zutz, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue NW
Washington, D.C. 20036
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement. It is proposed that this filing
become effective:
[ ] Immediately upon filing pursuant to paragraph (b)
[X] On March 11, 1996 pursuant to paragraph (b)
[ ] Sixty days after filing pursuant to paragraph (a)(i)
[ ] On (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph a(ii)
[ ] On (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[ ] this post effective amendment designates a new effective date
for a previously filed post-effective amendment
Registrant's Rule 24f-2 Notice for the most recent fiscal year was filed with
the Securities and Exchange Commission on February 28, 1996.
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<PAGE>
Rochester Fund Series -- The Bond Fund For Growth
Cross Reference Sheet
Form N-1A
Part A of
Form N-1A
Item No. Heading in Prospectus
- --------- ---------------------
1 Front Cover Page
2 Expenses; A Brief Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; How the Fund is Managed -- Organization
and History; Investment Objective and Policies;
Investment Policies and Strategies; Risk Factors
5 About the Fund -- Expenses; How the Fund is Managed; Back
Cover
5A *
6 How the Fund is Managed -- Organization and History; The
Transfer Agent; Dividends, Capital Gains and Taxes;
Investment Objective and Policies
7 Shareholder Account Rules and Policies; How to Buy Shares;
How to Sell Shares; How to Exchange Shares; Special Investor
Services; Distribution and Service Plan and Agreement for
Class A Shares; Distribution and Service Plan and Agreement
for Class B Shares; Distribution and Service Plan and
Agreement for Class C Shares; Distribution and Service Plan
and Agreement for Class M Shares
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information
- --------- ----------------------------------------------
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies -- Other Investment
Techniques and Strategies; Investment Objective and
Policies -- Investment Considerations/Risks
14 How the Fund is Managed -- Trustees and Officers of the Fund
15 How the Fund is Managed -- Major Shareholders
16 How the Fund is Managed -- The Manager and its Affiliates;
Distribution and Service Plans
17 Brokerage Policies of the Fund
18 About Your Account -- Determination of Net Asset Value Per
Share; Dividends, Capital Gains and Taxes
19 Your Investment Account -- How to Buy Shares; How to Sell
Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 Financial Statements
- ---------------
* Not applicable or negative answer.
<PAGE>
OPPENHEIMER BOND FUND FOR GROWTH
BOND FUND SERIES
March 11, 1996
Bond Fund Series is mutual fund consisting of one portfolio, Oppenheimer
Bond Fund For Growth (the "Fund"), which has four classes of shares, Class A
Shares, Class B Shares, Class C Shares and Class M 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 explains concisely what you should know before investing in
the Fund. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about the Fund in the March
11, 1996 Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Fund's Transfer Agent, at 1-800-525-7048, or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).
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 "HOW RISKY IS THE FUND?".
[Logo]
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT
GUARANTEED BY ANY BANK, ARE NOT INSURED BY THE F.D.I.C. OR ANY OTHER AGENCY,
AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
CONTENTS
ABOUT THE FUND
EXPENSES
A BRIEF OVERVIEW OF THE FUND
FINANCIAL HIGHLIGHTS
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT POLICIES AND STRATEGIES
RISK FACTORS
HOW THE FUND IS MANAGED
PERFORMANCE OF THE FUND
ABOUT YOUR ACCOUNT
HOW TO BUY SHARES
Class A Shares
Class B Shares
Class C Shares
Class M Shares
SPECIAL INVESTOR SERVICES
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
HOW TO SELL SHARES
By Mail
By Telephone
HOW TO EXCHANGE SHARES
SHAREHOLDER ACCOUNT RULES AND POLICIES
DIVIDENDS, CAPITAL GAINS AND TAXES
APPENDIX A: DESCRIPTION OF RATINGS
APPENDIX B: SALES CHARGE WAIVERS ON PURCHASES OF CLASS M
SHARES FOR CERTAIN ACCOUNTS ESTABLISHED PRIOR TO
MARCH 11, 1996
-2-
<PAGE>
ABOUT THE FUND
EXPENSES
The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services, and those
expenses are subtracted from the Fund's assets to calculate the Fund's net asset
value per share. All shareholders therefore pay those expenses indirectly.
Shareholders pay other expenses directly, such as sales charges and account
transaction charges. The following tables are provided to help you understand
your direct expenses of investing in the Fund and your share of the Fund's
business operating expenses that you will bear indirectly. The calculations for
Class A Shares, Class B Shares (which were offered to the public initially on
May 2, 1995) and Class M Shares are based on the Fund's expenses during its last
fiscal year which ended December 31, 1995. On March 11, 1996, the Fund
redesignated as "Class M Shares" its Class A Shares which had been outstanding
prior to that date, redesignated as "Class A Shares" its Class Y Shares which
had been outstanding prior to that date and authorized the issuance of a new
class of shares (designated "Class C Shares"). The information for Class C
Shares has been estimated based upon expenses expected to be incurred through
December 31, 1996.
-- SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or
sell shares of the Fund. Please refer to "About Your Account" for an
explanation of how and when these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C Class M
Shares Shares Shares Shares
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge on Purchase
(as a % of offering price) .......................... 5.75%(1) None None 3.25%(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Sales Charge on Reinvested Dividends .................. None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
Contingent Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds)............... None(2) 5.00% in the 1% in first year(4) None
first year declining
to 0% after 6 years(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Exchange Fee .......................................... None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
Redemption Fee ........................................ None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's maximum sales load on Class A Shares of 5.75% declines to 2.00%
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 and letters of intent are explained more fully in the section
entitled "How to Buy Shares -- Class A Shares".
-3-
<PAGE>
(2) If you invest $1 million or more ($500,000 or more for purchases by
OppenheimerFunds prototype 401(k) plans) in Class A Shares you may have
to pay a sales charge of up to 1% if you sell your shares within 18
calendar months from the end of the calendar month in which you purchased
those shares. See "How to Buy Shares -- Class A Shares" below.
(3) With respect to accounts established on or before March 8, 1996, the
contingent deferred sales charge applicable to redemptions of Class B
Shares (as a percentage of the lower of the original purchase price or
the redemption proceeds) is 3.5% within the first year of purchase and
declines to 0% after six years, provided that the shares redeemed were
purchased on or before March 31, 1996. See "How to Buy Shares--Class B
Shares" below.
(4) See "How to Buy Shares -- Class C Shares" below.
(5) The Fund's maximum sales load on Class M 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 and letters of intent are explained more fully in the section
entitled "How to Buy Shares -- Class M Shares".
-- ANNUAL FUND OPERATING EXPENSES are paid out of the Fund's assets and
represent the Fund's expenses in operating its business. For example, the Fund
pays management fees to its investment adviser, OppenheimerFunds, Inc. (which is
referred to in this Prospectus as the "Manager"). The rates of the Manager's
fees are set forth in "How the Fund is Managed" below. The Fund has other
regular expenses for services, such as transfer agent fees, custodial fees paid
to the bank that holds the Fund's portfolio securities, audit fees and legal
expenses. Those expenses are detailed in the Fund's Financial Statements in the
Statement of Additional Information.
Annual Fund Operating Expenses
As a Percentage of Average Net Assets
Class A Class B Class C Class M
Shares Shares Shares Shares
------- ------- ------- -------
Management Fees ....................... 0.53% 0.53% 0.53% 0.53%
12b-1 Distribution Plan Fees(1)........ 0.25% 1.00% 1.00% 0.75%
Other Expenses ........................ 0.30% 0.30% 0.30% 0.30%
Total Fund Operating Expenses(2)....... 1.08% 1.83% 1.83% 1.58%
- ------------
(1) The 12b-1 fess for Class A Shares consist of a service fee of up to 0.25% of
average daily net assets attributable to Class A Shares. The 12b-1 fees for
Class B Shares and Class C Shares consist of an asset-based sales charge of up
to 0.75% and a service fee of 0.25% of average daily net assets attributable to
those respective classes. The 12b-1 fees for Class M Shares consist of an
asset-based sales charge of up to 0.50% and a service fee of up to 0.25% of
average daily net assets attributable to Class M Shares.
(2) The amounts in the table reflect the Fund's interest expense during the
fiscal year ended December 31, 1995. Total Fund Operating Expenses (excluding
interest) for Class A Shares, Class B Shares and Class M Shares would have been
1.06%, 1.81%, and 1.56% respectively, for the fiscal year ended December 31,
1995. During fiscal 1995, the Fund's interest expense was substantially offset
by the incremental interest income generated on bonds purchased with borrowed
funds.
The numbers in the table above with respect to Class B Shares and Class M
Shares are based on the Fund's expenses in its last fiscal year. These amounts
are shown as a percentage of the average net assets of such classes for that
year. The 12b-1 Distribution Plan Fees for Class A Shares consist of service
fees of 0.25% of average net assets of that class. For Class B Shares and Class
C Shares, the 12b-1 Distribution Plan Fees consist of service fees and the
asset-based sales charge; in each instance the service fee is 0.25% of average
net assets of the class and the asset-based sales charge of 0.75% of average net
assets of the class. The Distribution Plan Fees for Class M Shares consist of
service fees (0.25% of average net assets) and the asset-based sales charge of
(0.50% of average net assets). These plans are described in greater detail in
"How to Buy Shares."
The actual expenses for each class of shares in future years may be more or
less than the numbers in the above chart, depending on a number of factors,
including the actual value of the Fund's assets represented by each class of
shares. Class C Shares were not publicly offered during the Fund's fiscal year
ended December 31, 1995. Therefore, the Annual Fund Operating Expenses for Class
C Shares have been estimated based on amounts that would have been payable if
such classes of shares had been outstanding during that fiscal year.
-- EXAMPLES. To try to show the effect of these expenses on an investment
over time, we have created the hypothetical examples shown below. Assume that
you make a $1,000 investment in each class
-4-
<PAGE>
of shares of the Fund, and that the Fund's annual return is 5%, and that its
operating expenses for each class are the ones shown in the Annual Fund
Operating Expenses table above. If you were to redeem your shares at the end of
each period shown below, your investment would incur the following expenses by
the end of 1, 3, 5 and 10 years:
1 YEAR 3 YEARS 5 YEARS 10 YEARS(1)
------ ------- ------- --------
Class A Shares .................... $68 $90 $114 $182
Class B Shares .................... $69 $88 $119 $177
Class C Shares .................... $29 $58 $ 99 $215
Class M Shares .................... $48 $81 $116 $214
If you did not redeem your investment, it would incur the following
expenses:
1 YEAR 3 YEARS 5 YEARS 10 YEARS(1)
------ ------- ------- --------
Class A Shares .................... $68 $90 $114 $182
Class B Shares .................... $19 $58 $ 99 $177
Class C Shares .................... $19 $58 $ 99 $215
Class M Shares .................... $48 $81 $116 $214
- --------
(1) The Class B expenses in years 7 through 10 are based on Class A expenses
shown above, because the Fund automatically converts your Class B Shares
into Class A Shares after 6 years. Because of the effect of the asset-based
sales charge on Class B Shares, Class C Shares and Class M Shares and the
contingent deferred sales charge on Class B and Class C Shares, long-term
Class B, Class C and Class M shareholders could pay the economic equivalent
of an amount greater than the maximum front-end sales charge allowed under
applicable regulations. For Class B shareholders, the automatic conversion
of Class B Shares to Class A Shares is designed to minimize the likelihood
that this will occur. Please refer to "How to Buy Shares -- Class B Shares"
for more information.
These examples show the effect of expenses on an investment. The examples
should not be considered as representations of past or future expenses. Actual
expenses may be greater or less than those shown. For additional information
regarding fees and expenses associated with investing in Class A Shares, Class B
Shares, Class C Shares and Class M Shares, see "How to Buy Shares". Sales
Representatives may receive different compensation for sales of Class A Shares,
Class B Shares, Class C Shares and Class M Shares".
-5-
<PAGE>
A BRIEF OVERVIEW OF THE FUND
Some of the important facts about the Fund are summarized below, with
references to the section of this Prospectus where more complete information can
be found. You should carefully read the entire Prospectus before making a
decision about investing in the Fund. Keep the Prospectus for reference after
you invest, particularly for information about your account, such as how to sell
or exchange shares.
-- WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund's investment objective
is to 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.
-- WHAT DOES THE FUND INVEST IN? The Fund invests primarily in a portfolio
that consists of a variety of convertible fixed income securities which, in the
opinion of the Manager, 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, and other
securities, such as warrants and options, which provide an opportunity for
equity participation. See "Investment Policies and Strategies".
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 "How Risky is
the Fund?". 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.
-- WHO MANAGES THE FUND? The Fund's investment adviser is OppenheimerFunds,
Inc. ("Manager"). The Manager (including a subsidiary) advises investment
company portfolios having over $40 billion in assets at December 31, 1995. The
Manager is paid an advisory fee by the Fund, based on its assets. The Fund's
portfolio manager, who is employed by the Manager and is primarily responsible
for the selection of the Fund's securities, is Michael S. Rosen. The Fund's
Board of Trustees, elected by shareholders, oversees the investment adviser and
the portfolio manager. Please refer to "How the Fund is Managed" for more
information about the Manager and its fees.
-- HOW RISKY IS THE FUND? All investments carry risks to some degree. The
Fund may invest all or any portion of its assets in high-yield, lower-rated
fixed-income securities. The primary advantage of high-yield securities is their
relatively higher investment return. However, such securities are considered
speculative and may be subject to greater market fluctuations and risks of loss
of income and principal and have less liquidity than investments in higher-rated
securities. Fixed-income securities are also subject to interest rate risks and
credit risks which can negatively impact the value of the security and the
Fund's net asset value per share. There are certain risks associated with
investments in foreign securities, including those related to changes in foreign
currency rates, that are not present in domestic securities. These changes
-6-
<PAGE>
affect the value of the Fund's investments and its price per share. In addition,
as a non-diversified fund, the Fund may invest a greater portion of its assets
in the securities of a limited number of issuers than a diversified fund. While
the Manager tries to reduce risks by structuring the Fund's portfolio to include
a broad spectrum of investments, by carefully researching securities before they
are purchased for the portfolio, and in some cases by using hedging techniques,
there is no guarantee of success in achieving the Fund's objective and your
shares may be worth more or less than their original cost when you redeem them.
Please refer to "Risk Factors" for a more complete discussion of these risks. In
the Oppenheimer funds spectrum, the Fund is more aggressive than money market or
investment grade bond funds.
-- HOW CAN I BUY SHARES? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic Investment
Plan under AccountLink. Please refer to "How to Buy Shares" for more details.
-- WILL I PAY A SALES CHARGE TO BUY SHARES? The Fund offers the individual
investor four classes of shares. All classes have the same investment portfolio,
but different expenses. Class A Shares and Class M Shares are offered with
front-end sales charges, starting at 5.75% and 3.25%, respectively, and reduced
for larger purchases. Class B Shares and Class C Shares are offered without a
front-end sales charge, but may be subject to a contingent deferred sales charge
if redeemed within 6 years (Class B) or 12 months (Class C) of purchase. There
is also an annual asset-based sales charge on Class B Shares, Class C Shares and
Class M Shares. Please review "How To Buy Shares" for more details, including a
discussion about factors you and your financial advisor should consider in
determining which class may be appropriate for you.
-- HOW CAN I SELL MY SHARES? Shares can be redeemed by mail or by telephone
call to the Transfer Agent on any business day, or through your dealer. Please
refer to "How to Sell Shares". The Fund also offers exchange privileges to other
Oppenheimer funds, described in "How To Exchange Shares".
-- HOW HAS THE FUND PERFORMED? The Fund measures its performance by quoting
its yield and total returns, which measure historical performance. Those yields
and returns can be compared to the yields and returns (over similar periods) of
other funds. Of course, other funds may have different objectives, investments,
and levels of risk. For additional information regarding the calculation of
yield and total return, see "Performance of the Fund" in the Statement of
Additional Information. Further information about the Fund's performance is set
forth in the Fund's Annual Report to Shareholders which may be obtained without
charge upon request. Please remember that past performance does not guarantee
future results.
-7-
<PAGE>
FINANCIAL HIGHLIGHTS
The table on the following pages presents selected financial information
about the Fund, including per share data and expense ratios and other data based
on the Fund's average net assets. This information has been audited by Price
Waterhouse LLP, the Fund's independent auditors, whose report on the Fund's
financial statements for the fiscal year ended December 31, 1995, is included in
the Statement of Additional Information. On March 11, 1996, the Fund
redesignated as "Class M Shares" its Class A Shares which had been outstanding
prior to that date and redesignated as "Class A Shares" its Class Y Shares which
had been outstanding prior to that date. Class C Shares were not publicly
offered during the fiscal year ended December 31, 1995. Accordingly, no
information on Class C Shares is reflected in the tables which follow or in the
Fund's other financial statements.
<TABLE>
<CAPTION>
CLASS M (formerly Class A)
--------------------------------------------------------------------------------------
PERIODS ENDED DECEMBER 31,
1995 1994 1993 1992+ 1991* 1990 1989 1988 1987 1986**
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $12.20 $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 .................... 0.70 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 .................. 2.42 (0.81) 1.79 2.15 1.53 (1.26) 0.16 0.56 (1.27) (0.27)
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations ........... 3.12 (0.13) 2.38 2.84 2.18 (0.72) 0.73 1.07 (0.85) (0.04)
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
Less distributions to shareholders from:
Net investment income ...... ............. (0.87) (0.69) (0.65) (0.78) (0.69) (0.56) (0.60) (0.54) (0.53) --
Capital gains ............................ (0.49) (0.14) -- -- -- -- -- -- (0.08) --
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
Total distributions ........................ (1.36) (0.83) (0.65) (0.78) (0.69) (0.56) (0.60) (0.54) (0.61) --
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ............. $13.96 $12.20 $13.16 $11.43 $9.37 $7.88 $9.16 $9.03 $8.50 $9.96
====== ======= ====== ====== ====== ====== ====== ====== ====== ======
Total return (excludes sales load) ......... 26.00% (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 (000 omitted)... $239,341 126,691 $69,375 $10,241 $6,403 $6,035 $8,423 $6,008 $5,345 $3,332
Ratio of total expenses to average
net assets ............................. 1.58%(z) 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 (Y)..... 1.56%(z) 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 ..................... 5.12% 5.24% 4.70% 6.62% 7.60% 6.37% 6.17% 5.53% 4.12% 2.28%
Portfolio turnover rate .................... 57.51% 52.82% 88.66% 80.09% 48.55% 33.23% 54.46% 87.08% 107.5% 41.2%
</TABLE>
- --------
+ 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.
Y 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.
(X) On January 4, 1996, OppenheimerFunds, Inc. acquired substantially all of the
assets of Fielding Management Company, Inc. and certain of its affiliates
and was appointed investment adviser to the Fund. Fielding Management
Company, Inc. served as investment adviser to the Fund from its inception on
June 3, 1986 through January 4, 1996.
(Z) Effective in 1995, the ratios do not include reductions from custodian fee
offset arrangements. The 1995 ratio of total expenses and the ratio of total
expenses (excluding interest) to average net assets are 1.57% and 1.54%,
respectively, after including this reduction.
Per share information has been determined on the basis of the weighted
average number of Class A Shares outstanding during the period.
-8-
<PAGE>
The Bond Fund For Growth
Financial Highlights
(For a share outstanding throughout each period)
CLASS A
CLASS B (formerly Class Y)
-------------- ----------------
Period ended Period ended
December 31, December 31,
1995(d) 1995(d)
-------------- --------------
Net asset value, beginning of period $13.11 $13.11
-------------- --------------
Income from investment operations:
Net investment income 0.45 0.54
Net realized and unrealized gain
on investments 1.51 1.48
-------------- --------------
Total from investment operations 1.96 2.02
-------------- --------------
Less distributions to shareholders from:
Net investment income (0.60) (0.68)
Capital gains (0.49) (0.49)
-------------- --------------
Total distributions (1.09) (1.17)
-------------- --------------
Net asset value, end of period $13.98 $13.96
============== ==============
Total return (excludes sales load) 15.09%(d) 15.42%(d)
Ratios/supplemental data:
Net assets, end of period (000 omitted) $34,465 $2,502
Ratio of total expenses
to average net assets 1.69%(a)(b) 1.05%(a)(c)
Ratio of total expenses (excluding
interest) to average net assets(e) 1.64%(a)(b) 1.01%(a)(c)
Ratio of net investment income to
average net assets 4.82%(a) 5.63%(a)
Portfolio turnover rate 57.51% 57.51%
- --------------------------------------------------------------------------------
(a) Annualized.
(b) Effective in 1995, the ratios do not include reductions from custodian fee
offset arrangements. The 1995 ratio of total expenses and the ratio of
total expenses (excluding interest) to average net assets are 1.68% and
1.63%, respectively, after including this reduction.
(c) Effective in 1995, the ratios do not include reductions from custodian
fee offset arrangements. The 1995 ratio of total expenses and the ratio of
total expenses (excluding interest) to average net assets are 1.03% and
1.00%, respectively, after including this reduction.
(d) For the period from May 1, 1995 (inception of offering) to December 31,
1995.
(e) 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.
Per share information has been determined on the basis of the weighted average
number of shares outstanding during the period.
INFORMATION ON BANK LOANS
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bank loans outstanding at end of period (000) .... $ 9,120 $0 $0 $0 $0 $0 $0 $80 $0 $0
Monthly average amount of bank loans outstanding
during the period (000) ........................ $ 769 $246 $213 $22 $45 $11 $47 $89 $0 $0
Monthly average number of shares of the Fund
outstanding during the period (000) ............ 14,143 8,206 2,941 716 702 764 661 645 498 167
Average amount of bank loans per share
outstanding during the period .................. $ 0.05 $.03 $.07 $.03 $.06 $.01 $.07 $.14 $0 $0
</TABLE>
- --------
** The Fund commenced operations on June 3, 1986.
-9-
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
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 the Manager, 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 and other securities which provide an opportunity for equity
participation such as options and warrants. See "Investment Policies and
Strategies".
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 "How Risky is the Fund?".
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.
CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? 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.
INVESTMENT POLICIES AND 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
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
-10-
<PAGE>
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 or other 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 Statement of Additional Information.
The potential for higher returns sought by the Fund are, in the opinion of the
Manager, 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" or "Standard & Poor's") and Moody's Investors Service, Inc.
("Moody's") or in bonds which are unrated. Bonds which are rated BB and lower by
S&P and Ba and lower by Moody's, are commonly referred to as "junk bonds". 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 Manager'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 Manager 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. 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 Statement of Additional Information.
OTHER INVESTMENT TECHNIQUES AND STRATEGIES. The Fund may also use the investment
techniques and strategies described below. These techniques involve certain
risks. The Statement of Additional Information contains more information about
these practices, including limitations on their use that are designed to reduce
some of the risks.
- -- LOANS OF PORTFOLIO SECURITIES. As a fundamental policy, the Fund may lend a
portion of its portfolio securities to brokers, dealers, and other financial
institutions 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 be equal
to at least 102% of the market value of the securities loaned at the time the
loan is made which will at all times thereafter 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") or such lower amount as may be established by the Board of Trustees from
time to time (currently 10% of the Fund's net assets on the date prior to any
loan transaction). 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
-11-
<PAGE>
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 Manager to
be of good financial standing.
- -- 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 an
agreed rate of 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 be at least equal to the repurchase price,
including any such 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 or when the Manager determines that
convertible securities may not best achieve the Fund's investment objectives and
a temporary defensive position may be 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.
- -- ILLIQUID AND RESTRICTED 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 Manager 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 Statement of Additional Information 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 net 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 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)
-12-
<PAGE>
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.
- -- 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 assets
for temporary or emergency purposes, or to purchase additional portfolio
securities. Leveraging, or the purchase of securities with borrowed funds, will
exaggerate any increase or decrease in the market value of the Fund's portfolio.
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. See "Other
Investment Restrictions" in the Statement of Additional Information.
- -- 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 it owns and the underlying stock of its
existing convertible positions; (2) purchasing put options on stocks it owns and
underlying stock of existing convertible positions; and (3) entering into
closing purchase transactions with respect to certain of such options, provided
that all options written or purchased 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 generally 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 Statement of Additional Information
for a further discussion of these investment strategies.
- -- OTHER INVESTMENT RESTRICTIONS
Information about other investment restrictions on the Fund's investment
activities is set forth in the Statement of Additional Information.
-13-
<PAGE>
RISK FACTORS
Credit Quality Considerations
The risks inherent in the Fund depend to a larger degree 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.
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 Manager seeks to monitor the issuers of high yield
securities in its portfolio to seek 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 Manager
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
objective, nor can the Fund guarantee that payments of interest and principal on
portfolio securities will be timely made (or made at all).
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 and/or
expected future financial condition of the issuers of such securities may not be
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 real or anticipated economic downturn is,
therefore, likely to have a negative effect on the
-14-
<PAGE>
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 (or threatens to default), 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, 1995, 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,
0.27%, 3.57%, 6.94%, 9.03%, 11.18%, 24.83%, 1.99%. 0.00% and 0.00% for the Fund,
and (2) all unrated bonds as a group comprised 17.4% 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 Manager, the financial condition of the
issuer of such securities and/or the protection afforded by the terms of the
securities themselves seem to limit the risk to the Fund to a comparable degree
to that of rated securities which are consistent with the Fund's objective 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 may be 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 Manager, appear to have high long term total return potential. The Manager
believes that investments in small capitalization companies may, in many cases,
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 can be expected to
affect the Fund's net asset value, but not the actual income received by the
Fund from its existing 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.
-15-
<PAGE>
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
generally will be required to meet certain tax-related diversification
requirements, which would restrict, to some degree, the amount of the securities
of any one issuer that the Fund could hold.
HOW THE FUND IS MANAGED
ORGANIZATION AND HISTORY. Bond Fund Series (the "Trust") was organized in 1986
as a Massachusetts business trust consisting of one portfolio, the Fund. The
Trust is an open-end, non-diversified management investment company, with an
unlimited number of authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible under
Massachusetts law for protecting the interests of shareholders. The Trustees
meet periodically throughout the year to oversee the Fund's activities, review
its performance, and review the actions of the Manager. "Trustees and Officers
of the Fund" in the Statement of Additional Information names the Trustees and
provides more information about them and the officers of the Fund. Although the
Fund will not normally hold annual meetings of its shareholders, it may hold
shareholder meetings from time to time on important matters, and shareholders
have the right to call a meeting to remove a Trustee or to take other action
described in the Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder approval, to divide
unissued shares of the Fund into two or more classes. The Board has done so, and
the Fund currently has four classes of shares, Class A, Class B, Class C and
Class M. All Classes invest in the same investment portfolio. Each class has its
own dividends and distributions and pays certain expenses which may be different
for the different classes. Each class may have a different net asset value. Each
share has one vote at shareholder meetings, with fractional shares voting
proportionally. Only shares of a particular class vote as a class on matters
that affect that class alone. Shares are freely transferrable. Please refer to
"How the Fund is Managed" in the Statement of Additional Information on voting
of shares.
THE MANAGER AND ITS AFFILIATES. The Fund is managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the Fund's
investments and handles its day-to-day business. The Manager carries out its
duties, subject to the policies established by the Board of Trustees, under an
Investment Advisory Agreement which states the Manager's responsibilities. The
Agreement sets forth the fees paid by the Fund to the Manager and describes the
expenses that the Fund is responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The Manager and
its affiliates currently manages investment companies, including other
Oppenheimer funds, with assets of more than $40 billion as of December 31, 1995,
and with more than 2.8 million shareholder accounts. The Manager is owned by
Oppenheimer Acquisition Corp., a holding company that is owned in part by senior
officers of the Manager and controlled by Massachusetts Mutual Life Insurance
Company.
-16-
<PAGE>
- -- PORTFOLIO MANAGER. The Portfolio Manager of the Fund is Michael S. Rosen. He
has been the person primarily principally responsible for the day-to-day
management of the Fund's portfolio since the Fund's inception in 1986. Mr. Rosen
is Vice President of the Fund, has also served as an officer and director of the
Fund's previous investment adviser.
- -- FEES AND EXPENSES. Under the Investment Advisory Agreement, the Fund pays the
Manager the following annual fees, which decline on additional assets as the
Fund grows: 0.625% of the first $50 million of net assets, 0.500% of the next
$250 million of net assets and 0.4375% of net assets in excess of $300 million.
The Fund's management fee for its last fiscal year was 0.53% of average annual
net assets.
The Fund pays expenses related to its daily operations, such as custodian fees,
Trustees' fees, transfer agency fees, legal and auditing costs. Those expenses
are paid out of the Fund's assets and are not paid directly by shareholders.
However, those expenses reduce the net asset value of shares, and therefore are
indirectly borne by shareholders through their investment. More information
about the Investment Advisory Agreement and the other expenses paid by the Fund
is contained in the Statement of Additional Information.
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 advisable, the Fund
deals directly with the dealers who make a market in the securities involved
except in those circumstances where the Manager believes that better prices and
execution are available elsewhere. It is the policy of the Fund to seek 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.
There is also information about the Fund's brokerage policies and practices in
"Brokerage Policies of the Fund" in the Statement of Additional Information.
That section discusses how brokers and dealers are selected for the Fund's
portfolio transactions. When deciding which brokers to use, the Manager is
permitted by the Investment Advisory Agreement to consider whether brokers have
sold shares of the Fund or any other funds for which the Manager serves as
investment adviser.
- -- THE DISTRIBUTOR. The Fund's shares are sold through dealers and brokers that
have a sales agreement with OppenheimerFunds Distributor, Inc., a subsidiary of
the Manager that acts as the Distributor. The Distributor also distributes the
shares of other mutual funds managed by the Manager (the "Oppenheimer funds")
and is sub-distributor for funds managed by a subsidiary of the Manager.
- -- THE TRANSFER AGENT. The Fund's transfer agent is OppenheimerFunds Services, a
division of the Manager, which acts as the shareholder servicing agent for the
Fund and the other Oppenheimer funds. Shareholders should direct inquiries about
their account to the Transfer Agent at the address and toll-free numbers shown
below in this Prospectus and on the back cover.
PERFORMANCE OF THE FUND
EXPLANATION OF PERFORMANCE TERMINOLOGY. The Fund uses the terms "total return",
"average annual total return" and "yield" to illustrate its performance. The
performance of each class of shares is shown separately, because the performance
of each class of shares will usually be different as a result of the different
kinds of expenses each class bears.
It is important to understand that the Fund's total returns represent past
performance and should not be considered to be predictions of future returns or
performance. This performance data is described below, but more detailed
information about how total returns are calculated is contained in the Statement
of Additional Information, which also contains information about other ways to
measure and compare the Fund's performance. The Fund's investment performance
will vary over time, depending on market conditions, the composition of the
portfolio, expenses and which class of shares you purchase.
- -- TOTAL RETURNS. There are different types of total returns used to measure the
Fund's performance. Total return is the change in value of a hypothetical
investment in the Fund over a given period,
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<PAGE>
assuming that all dividends and capital gains distributions are reinvested in
additional shares. The cumulative total return measures the change in value over
the entire period (for example, ten years). An average annual total return shows
the average rate of return for each year in a period that would produce the
cumulative total return over the entire period. However, average annual total
returns do not show the Fund's actual year-by-year performance.
When total returns are quoted for Class A Shares and Class M Shares, normally
they include the payment of the current maximum initial sales charge. Total
returns may also be quoted "at net asset value," without including the sales
charge, and those returns would be reduced if sales charges were deducted. When
total returns are shown for Class B Shares and Class C Shares, they reflect the
effect of the contingent deferred sales charge that applies to the period for
which total return is shown. They may also be shown based on the change in net
asset value, without including the effect of the contingent deferred sales
charge, and those returns would be reduced if sales charges were deducted.
- -- YIELD. Each Class of shares calculates its yield by dividing the annualized
net investment income per share on the portfolio during a 30-day period by the
maximum offering price on the last day of the period. The yield of each Class
will differ because of the different expenses of each Class of shares. The yield
data represents a hypothetical investment return on the portfolio, and does not
measure an investment return based on dividends actually paid to shareholders.
To show that return, a dividend yield may be calculated. Dividend yield is
calculated by dividing the dividends of a class derived from net investment
income during a stated period by the maximum offering price on the last day of
the period. Yields and dividend yields for Class A Shares and Class M Shares
reflect the deduction of the maximum initial sales charge, but may also be shown
based on the Fund's net asset value per share. Yields for Class B, and Class C
Shares do not reflect the deduction of the contingent deferred sales charge.
For additional information regarding the calculation of yield and total return,
see "Performance of the Fund" in the Statement of Additional Information.
Further information about the Fund's performance is set forth in the Fund's
Annual Report to Shareholders, which may be obtained upon request at no charge.
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ABOUT YOUR ACCOUNT
HOW TO BUY SHARES
CLASSES OF SHARES. The Fund offers investors four different classes of shares.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices.
- -- CLASS A SHARES. If you buy Class A Shares, you pay an initial sales charge on
investments up to $1 million (up to $500,000 for purchases by OppenheimerFunds
prototype 401(k) plans.) If you purchase Class A Shares as part of an investment
of at least $1 million ($500,000 for Oppenheimer funds prototype 401(k) plans)
in shares of one or more Oppenheimer funds, you will not pay an initial sales
charge but if you sell any of those shares within 18 months of buying them, you
may pay a contingent deferred sales charge. The amount of that sales charge will
vary depending on the amount you invested. Sales charge rates are described in
"Buying Class A Shares" below.
- -- CLASS B SHARES. If you buy Class B Shares, you pay no sales charge at the
time of purchase, but if you sell your shares within six years of buying them,
you will normally pay a contingent deferred sales charge that varies depending
on how long you own your shares. It is described in "Buying Class B Shares"
below.
- -- CLASS C SHARES. If you buy Class C Shares, you pay no sales charge at the
time of purchase, but if you sell your shares within 12 months of buying them,
you will normally pay a contingent deferred sales charge of 1%. It is described
in "Buying Class C Shares" below.
- -- CLASS M SHARES. If you buy Class M Shares, you pay an initial sales charge on
investments up to $1 million. Purchase orders for $1 million or more will be
declined. Sales charge rates are described in "Buying Class M Shares" below.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial advisor. The Fund's operating costs that apply to a
class of shares and the effect of the different types of sales charges on your
investment will vary your investment results over time. The most important
factors are how much you plan to invest and how long you plan to hold your
investment. See "How to Exchange Shares". If your goals and objectives change
over time and you plan to purchase additional shares, you should re-evaluate
those factors to see if you should consider another class of shares.
In the following discussion, to help provide you and your financial advisor with
a framework in which to choose a class, we have made some assumptions using a
hypothetical investment in the Fund. We used the sales charge rates that apply
to each class and considered the effect of the annual asset-based sales charge
on Class B, Class C and Class M expenses (which, like all expenses, will affect
your investment return). For the sake of comparison, we have assumed that there
is a 10% rate of appreciation in the investment each year. Of course, the actual
performance of your investment cannot be predicted and will vary, based on the
Fund's actual investment returns and
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the operating expenses borne by each class of shares, and which class of shares
you invest in. The factors discussed below are not intended to be investment
advice or recommendations, because each investor's financial considerations are
different. The discussion below of the factors to consider in purchasing a
particular class of shares assumes that you will purchase only one class of
shares and not a combination of shares of different classes.
- -- HOW LONG DO YOU EXPECT TO HOLD YOUR INVESTMENT? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares. The
effect of the sales charge over time, using our assumptions, will generally
depend on the amount invested. The effect of class-based expenses will also
depend on how much you invest.
- -- Investing for the Short Term. If you have a short-term investment horizon
(that is, you plan to hold your shares for less than six years), you should
probably consider purchasing Class C Shares rather than Class B Shares, because
of the effect of the Class B contingent deferred sales charge if you redeem in
less than 6 years, as well as the effect of the Class B asset-based sales charge
on the investment return for that class in the short-term. Class C Shares might
be the appropriate choice (especially for investments of less than $100,000),
because there is no initial sales charge on Class C Shares, and the contingent
deferred sales charge does not apply to amounts you sell after holding them one
year.
However, if you plan to invest more than $100,000 for the shorter term, then the
more you invest and the more your investment horizon increases toward six years,
Class C Shares might not be as advantageous as Class A Shares or Class M Shares.
That is because the annual asset-based sales charge on Class C Shares will have
a greater impact on your account over the longer term than the reduced front-end
sales charge available for larger purchases of Class A Shares or Class M Shares.
For example, Class A might be more advantageous than Class C (as well as Class
B) for investments of more than $100,000 expected to be held for 5 or 6 years
(or more). For investments over $250,000 expected to be held 4 to 6 years (or
more), Class A Shares may become more advantageous than Class C (and B). If
investing $500,000 or more, Class A may be more advantageous as your investment
horizon approaches three years or more. Investors who are considering whether to
purchase Class A Shares or Class M Shares may want to consider the effect of the
initial sales charge applicable to the amount invested and the effect of the
asset-based sales charge applicable to Class M Shares over the anticipated
length of the investment.
For investors who invest $1 million or more, in most cases Class A Shares will
be the most advantageous choice, no matter how long you intend to hold your
shares. For that reason, the Distributor normally will not accept purchase
orders of $500,000 or more of Class B Shares or $1 million or more of Class C
Shares from a single investor. In addition, the distributor will not accept
purchase orders of $1 million or more of Class M Shares. Of course, these
examples are based on approximations of the effect of current sales charges and
expenses on a hypothetical investment over time, using the assumed annual
performance return stated above, and therefore should not be relied on as rigid
guidelines.
- -- Investing for the Longer Term. If you are investing for the longer-term, for
example, for retirement, and do not expect to need access to your money for
seven years or more, Class B Shares may be an appropriate consideration if you
plan to invest less than $100,000. If you plan to invest more than $100,000 over
the long term, Class A Shares will likely be more advantageous than Class B
Shares or C Shares, as discussed above, because of the effect of the expected
lower expenses for Class A Shares and the reduced initial sales charges
available for larger investments in Class A Shares under the Fund's Right of
Accumulation.
Of course, these examples are based on approximations of the effect of current
sales charges and expenses on a hypothetical investment over time, using the
assumptions stated above. Therefore, these examples should not be relied on as
rigid guidelines.
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<PAGE>
- -- ARE THERE DIFFERENCES IN ACCOUNT FEATURES THAT MATTER TO YOU? Because
some account features may not be available to Class B or Class C shareholders,
or other features (such as Automatic Withdrawal Plans) may not be advisable
because of the contingent deferred sales charge in non-retirement accounts) for
Class B or Class C shareholders, you should carefully review how you plan to use
your investment account before deciding which class of shares to buy. For
example, the exchange privileges available to Class M Shareholders are limited.
See "How to Exchange Shares". Additionally, the dividends payable to Class B,
Class C and Class M shareholders will be reduced by certain expenses borne by
those classes that are not borne by Class A, such as the Class B, Class C and
Class M asset-based sales charges described below and in the Statement of
Additional Information.
- -- HOW DOES IT AFFECT PAYMENTS TO MY BROKER? A salesperson, such as a
broker, or any other person who is entitled to receive compensation for selling
Fund shares may receive different compensation for selling one class than for
selling another class. It is important that investors understand that the
purpose of the Class B and Class C contingent deferred sales charges and the
purpose of asset-based sales charges which are applicable to Class B, Class
C and Class M Shares are the same as the purpose of the front-end sales charge
on sales of Class A Shares and Class M Shares: to compensate the Distributor for
commissions it pays to dealers and financial institutions for selling shares.
HOW MUCH MUST YOU INVEST? Subject to certain exceptions, you can open a
Fund account with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $25. There are reduced minimum
investments under special investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403 (b) (7) custodial plans
and military allotment plans, you can make initial and subsequent investments
for as little as $25; and subsequent purchases of at least $25 can be made by
telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement Accounts
(IRAs), you can make an initial investment of as little as $250 (if your IRA is
established under an Asset Builder Plan, the $25 minimum applies), and
subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying shares by
reinvesting dividends from the Fund or other Oppenheimer funds (a list of them
appears in the Statement of Additional Information, or you can ask your dealer
or call the Transfer Agent), or by reinvesting distributions from unit
investment trusts that have made arrangements with the Distributor.
- -- HOW ARE SHARES PURCHASED? You can buy shares several ways -- through any
dealer, broker or financial institution that has a sales agreement with the
Distributor, or directly through the Distributor, or automatically from your
bank account through an Asset Builder Plan under the Oppenheimer funds
AccountLink service. When you buy shares, be sure to specify Class A, Class B,
Class C or Class M Shares. If you do not choose, your investment will be made in
Class A Shares.
- -- BUYING SHARES THROUGH YOUR DEALER. Your dealer will place your order with the
Distributor on your behalf.
- -- BUYING SHARES THROUGH THE DISTRIBUTOR. Complete an Oppenheimer funds New
Account Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If you
don't list a dealer on the application, the Distributor will act as your agent
in buying the shares. However, we recommend that you discuss your investment
first with a financial advisor, to be sure it is appropriate for you.
- -- BUYING SHARES THROUGH OPPENHEIMERFUNDS ACCOUNTLINK. You can use AccountLink
to link your Fund account with an account at a U.S. bank or other financial
institution that is an Automated Clearing
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<PAGE>
House (ACH) member. You can then transmit funds electronically to purchase
shares, to have the Transfer Agent send redemption proceeds, or to transmit
dividends and distributions.
Shares are purchased for your account on AccountLink on the regular business day
the Distributor is instructed by you to initiate the ACH transfer to buy shares.
You can provide those instructions automatically, under an Asset Builder Plan,
described below, or by telephone instructions using OppenheimerFunds PhoneLink,
also described below. You should request AccountLink privileges on the
application or dealer settlement instructions used to establish your account.
Please refer to "AccountLink" below for more details.
- -- ASSET BUILDER PLANS. You may purchase shares of the Fund (and up to four
other Oppenheimer funds) automatically each month from your account at a bank or
other financial institution under an Asset Builder Plan with AccountLink.
Details are on the Application and in the Statement of Additional Information.
- -- AT WHAT PRICE ARE SHARES SOLD? Shares are sold at the public offering price
based on the net asset value (and any initial sales charge that applies) that is
next determined after the Distributor receives the purchase order in Denver. In
most cases, to enable you to receive that day's offering price, the Distributor
must receive your order by the time of day The New York Stock Exchange closes,
which is normally 4:00 P.M., New York time, but may be earlier on some days (all
references to time in this Prospectus mean "New York time"). The net asset value
of each class of shares is determined as of that time on each day The New York
Stock Exchange is open (which is a "regular business day").
If you buy shares through a dealer, the dealer must receive your order by the
close of The New York Stock Exchange, on a regular business day and transmit it
to the Distributor so that it is received before the Distributor's close of
business that day, which is normally 5:00 P.M. The Distributor may reject any
purchase order for the Fund's shares, in its sole discretion.
BUYING CLASS A SHARES. Class A Shares are sold at their offering price, which is
normally net asset value plus an initial sales charge. However, in some cases,
described below, purchases are not subject to an initial sales charge, and the
offering price will be the net asset value. Special minimum investment
requirements may apply. In some cases, reduced sales charges may be available,
as described below. Out of the amount you invest, the Fund receives the net
asset value to invest for your account. The sales charge varies depending on the
amount of your purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer. The current sales charge rates and
commissions paid to dealers and brokers are as follows:
Front-End Front-End
Sales Charge Sales Charge Commission
as Percentage as Percentage as Percentage
Amount of of Offering of Amount of Offering
Purchase Price Invested Price
- --------- ------------- ------------- -------------
Less than $25,000 ............ 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 ............ 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 ........... 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 ........... 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 ........... 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million ......... 2.00% 2.04% 1.60%
- --------
The Distributor reserves the right to reallow the entire sales charge to
dealers. If that occurs, the dealer may be considered an "underwriter" under
Federal securities laws.
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- -- CLASS A CONTINGENT DEFERRED SALES CHARGE. There is no initial sales charge on
purchases of Class A Shares of any one or more of the OppenheimerFunds in the
following cases:
- -- Purchases aggregating $1 million or more; or
- -- Purchases by an OppenheimerFunds prototype 401(k) plan that: (1) buys shares
costing $500,000 or more, or (2) has, at the time of purchase, 100 or more
eligible participants, or (3) certifies that it projects to have annual plan
purchases of $200,000 or more.
Shares of any of the OppenheimerFunds that offers only one class of shares
that has no designation are considered "Class A Shares" for this purpose.
The Distributor pays dealers of record commissions on those purchases in an
amount equal to the sum of 1.0% of the first $2.5 million, plus 0.50% of the
next $2.5 million, plus 0.25% of purchases over $5 million. That commission will
be paid only on the amount of those purchases in excess of $1 million ($500,000
for purchases by OppenheimerFunds prototype 401(k) plans) that were not
previously subject to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the calendar
month of their purchase, a contingent deferred sales charge (called the "Class A
contingent deferred sales charge") may be deducted from the redemption proceeds.
That sales charge will be equal to either (1) 1.0% of the aggregate net asset
value of the redeemed shares (not including shares purchased by reinvestment of
dividends or capital gain distributions) or (2) the original cost of the shares,
whichever is less. However, the Class A contingent deferred sales charge will
not exceed the aggregate amount of the commissions the Distributor paid to your
dealer on all Class A Shares of all OppenheimerFunds you purchased subject to
the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable, the Fund
will first redeem shares that are not subject to the sales charge, including
shares purchased by reinvestment of dividends and capital gains, and then will
redeem other shares in the order that you purchased them. The Class A contingent
deferred sales charge is waived in certain cases described in "Waivers of Class
A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges of shares
under the Fund's exchange privilege (described below). However, if the shares
acquired by exchange are redeemed within 18 months of the end of the calendar
month of the purchase of the exchanged shares, the sales charge will apply.
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- -- SPECIAL ARRANGEMENTS WITH DEALERS. The Distributor may advance up to 13
months' commissions to dealers that have established special arrangements with
the Distributor for Asset Builder Plans for their clients. Dealers whose sales
of Class A Shares of OppenheimerFunds (other than money market funds) under
OppenheimerFunds-sponsored 403(b)(7) custodial plans exceed $5 million per year
(calculated per quarter), will receive monthly one-half of the Distributor's
retained commissions on those sales, and if those sales exceed $10 million per
year, those dealers will receive the Distributor's entire retained commission on
those sales.
REDUCED SALES CHARGES FOR CLASS A SHARE PURCHASES. You may be eligible to buy
Class A Shares at reduced sales charge rates in one or more of the following
ways:
- -- RIGHT OF ACCUMULATION. To qualify for the lower sales charge rates that apply
to larger purchases of Class A Shares, you and your spouse can add together
Class A and Class B and Class M Shares you purchase for your individual
accounts, or jointly, or for trust or custodial accounts on behalf of your
children who are minors. A fiduciary can count all shares purchased for a trust,
estate or other fiduciary account (including one or more employee benefit plans
of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and Class B
and Class M Shares of the Fund and other OppenheimerFunds to reduce the sales
charge rate that applies to current purchases of Class A Shares. You can also
include Class A and Class B Shares of Oppenheimer funds you previously purchased
subject to an initial or contingent deferred sales charge to reduce the sales
charge rate for current purchases of Class A Shares, provided that you still
hold your investment in one of the OppenheimerFunds. The value of those shares
will be based on the greater of the amount you paid for the shares or their
current value (at offering price). The OppenheimerFunds are listed in "Reduced
Sales Charges" in the Statement of Additional Information, or a list can be
obtained from the Distributor. The reduced sales charge will apply only to
current purchases and must be requested when you buy your shares.
- -- LETTER OF INTENT. Under a Letter of Intent, if you purchase Class A Shares or
Class A Shares and Class B Shares of the Fund and other OppenheimerFunds during
a 13-month period, you can reduce the sales charge rate that applies to your
purchases of Class A Shares. The total amount of your intended purchases of both
Class A and Class B Shares will determine the reduced sales charge rate for the
Class A Shares purchased during that period. This can include purchases made up
to 90 days before the date of the Letter. More information is contained in the
Application and in "Reduced Sales Charges" in the Statement of Additional
Information.
- -- WAIVERS OF CLASS A SALES CHARGES. The Class A sales charges are not imposed
in the circumstances described below. There is an explanation of this policy in
"Reduced Sales Charges" in the Statement of Additional Information.
WAIVERS OF INITIAL AND CONTINGENT DEFERRED SALES CHARGES FOR CERTAIN PURCHASERS.
Class A Shares purchased by the following investors are not subject to any Class
A sales charges:
- -- the Manager or its affiliates;
- -- present or former officers, directors, trustees and employees (and their
"immediate families" as defined in "Reduced Sales Charges" in the Statement of
Additional Information) of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees;
- -- registered management investment companies, or separate accounts of insurance
companies having an agreement with the Manager or the Distributor for that
purpose;
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<PAGE>
- -- dealers or brokers that have a sales agreement with the Distributor, if they
purchase shares for their own accounts or for retirement plans for their
employees;
- -- employees and registered representatives (and their spouses) of dealers or
brokers described above or financial institutions that have entered into sales
arrangements with such dealers or brokers (and are identified to the
Distributor) or with the Distributor; the purchaser must certify to the
Distributor at the time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor children);
- -- dealers, brokers or registered investment advisers that have entered into an
agreement with the Distributor or the Fund providing specifically for the use of
shares of the Fund in particular investment products made available to their
clients (those clients may be charged a transaction fee by their dealer, broker
or adviser for the purchase or sale of Fund shares); or
- -- dealers, brokers or registered investment advisers that have entered into an
agreement with the Distributor to sell shares to defined contribution employee
retirement plans for which the dealer, broker or investment adviser provides
administration services.
- -- the following types of accounts, collectively referred to hereinafter as
"Qualified Institutions", which meet a $50,000 minimum investment requirement:
(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
ERISA, and (4) government entities or authorities.
Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions. Class A Shares issued or purchased in the following transactions
are not subject to Class A sales charges:
- --shares issued in plans of reorganization, such as mergers, asset acquisitions
and exchange offers, to which the Fund is a party;
- -- shares purchased by the reinvestment of loan repayments by a participant in a
retirement plan for which the Manager or its affiliates acts as sponsor;
- -- shares purchased by the reinvestment of dividends or other distributions
reinvested from the Fund or other OppenheimerFunds (other than Oppenheimer Cash
Reserves) or unit investment trusts for which reinvestment arrangements have
been made with the Distributor; or
- -- shares purchased and paid for with the proceeds of shares redeemed in the
past 12 months from a mutual fund (other than a fund managed by the Manager or
any of its subsidiaries) on which an initial sales charge or contingent deferred
sales charge was paid (this waiver also applies to shares purchased by exchange
of shares of Oppenheimer Money Market Fund, Inc. that were purchased and paid
for in this manner); this waiver must be requested when the purchase order is
placed for your shares of the Fund, and the Distributor may require evidence of
your qualification for this waiver.
Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.
The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are redeemed
in the following cases:
- -- for retirement distributions or loans to participants or beneficiaries from
qualified retirement plans, deferred compensation plans or other employee
benefit plans, including OppenheimerFunds prototype 401(k) plans (these are all
referred to as "Retirement Plans");
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<PAGE>
- -- to return excess contributions made to Retirement Plans;
- -- to make Automatic Withdrawal Plan payments that are limited annually to no
more than 12% of the original account value;
- -- involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and Policies,"
below);
- -- if, at the time a purchase order is placed for Class A Shares that would
otherwise be subject to the Class A contingent deferred sales charge, the dealer
agrees in writing to accept the dealer's portion of the commission payable on
the sale in installments of 1/18th of the commission per month (and no further
commission will be payable if the shares are redeemed within 18 months of
purchase); or
- -- for distributions from OppenheimerFunds prototype 401(k) plans for any of the
following cases or purposes: (1) following the death or disability (as defined
in the Internal Revenue Code) of the participant or beneficiary (the death or
disability must occur after the participant's account was established); (2)
hardship withdrawals, as defined in the plan; (3) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (4) to meet the
minimum distribution requirements of the Internal Revenue Code; (5) to establish
"substantially equal periodic payments" as described in Section 72(t) of the
Internal Revenue Code, or (6) separation from service.
- -- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for
Class A Shares to reimburse the Distributor for a portion of its costs incurred
in connection with the personal service and maintenance of shareholder accounts
that hold Class A Shares. Reimbursement is made quarterly at an annual rate that
may not exceed 0.25% of the average annual net assets of Class A Shares of the
Fund. The Distributor uses all of those fees to compensate dealers, brokers,
banks and other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold Class A Shares and to
reimburse itself (if the Fund's Board of Trustees authorizes such
reimbursements, which it has not yet done) for its other expenditures under the
Plan.
Services to be provided include, among others, answering customer inquiries
about the Fund, assisting in establishing and maintaining accounts in the Fund,
making the Fund's investment plans available and providing other services at the
request of the Fund or the Distributor. Payments are made by the Distributor
quarterly at an annual rate not to exceed 0.25% of the average annual net assets
of Class A Shares held in accounts of the dealer or its customers. The payments
under the Plan increase the annual expenses of Class A Shares. For more details,
please refer to "Distribution and Service Plans" in the Statement of Additional
Information.
BUYING CLASS B SHARES. Class B Shares are sold at net asset value per share
without an initial sales charge. However, if Class B Shares are redeemed within
6 years of their purchase, a contingent deferred sales charge will be deducted
from the redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains distributions. The
charge will be assessed on the lesser of the net asset value of the shares at
the time of redemption or the original purchase price. The contingent deferred
sales charge is not imposed on the amount of your account value represented by
an increase in net asset value over the initial purchase price. The Class B
contingent deferred sales charge is paid to the Distributor to reimburse its
expenses of providing distribution-related services to the Fund in connection
with the sale of Class B Shares.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 6 years, and (3) shares held the longest during the 6-year period.
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<PAGE>
The amount of the contingent deferred sales charge will depend on the number of
years since you invested and the dollar amount being redeemed, according to the
following schedule:
Contingent Deferred Sales Charge
Years Since Beginning of Month In on Redemptions in that Year
Which Purchase Order Was Accepted (As % of Amount Subject to Charge)
--------------------------------- ----------------------------------
0 - 1 ........................... 5.0%
1 - 2 ........................... 4.0%
2 - 3 ........................... 3.0%
3 - 4 ........................... 3.0%
4 - 5 ........................... 2.0%
5 - 6 ........................... 1.0%
6 and following ................. None
In the table, a "year" is a 12-month period. All purchases are considered to
have been made on the first regular business day of the month in which the
purchase was made.
For redemptions of Class B Shares purchased on or before March 31, 1996 in
accounts established on or before March 8, 1996, the following contingent
deferred sales charges (as a percentage of the amount subject to the charge)
will apply with respect to the number of years which have elapsed since the
beginning of the month in which the purchase order was accepted: 0-1 years,
3.5%; 1-2 years, 3.0%, 2-3 years, 2.5%; 3-4 years, 2.0%; 4-5 years, 1.5%; 5-6
years, 1.0%, 6 years and thereafter, 0%. Upon an exchange of such shares, the
contingent deferred sales charge schedule of the class of shares of the Fund
into which the exchange was made will be applicable.
- -- AUTOMATIC CONVERSION OF CLASS B SHARES. Seventy-two months after you
purchase Class B Shares, those shares will automatically convert to Class A
Shares. This conversion feature relieves Class B shareholders of the asset-based
sales charge that applies to Class B Shares under the Class B Distribution and
Service Plan, described below. The conversion is based on the relative net asset
value of the two classes, and no sales load or other charge is imposed. When
Class B Shares convert, any other Class B Shares that were acquired by the
reinvestment of dividends and distributions on the converted shares will also
convert to Class A Shares. The conversion feature is subject to the continued
availability of a tax ruling described in "Alternative Sales Arrangements --
Class A, Class B and Class C Shares" in the Statement of Additional Information.
BUYING CLASS C SHARES. Class C Shares are sold at net asset value per share
without an initial sales charge. However, if Class C Shares are redeemed within
12 months of their purchase, a contingent deferred sales charge of 1.0% will be
deducted from the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The charge will be assessed on the lesser of the net asset value
of the shares at the time of redemption or the original purchase price. The
contingent deferred sales charge is not imposed on the amount of your account
value represented by the increase in net asset value over the initial purchase
price (including increases due to the reinvestment of dividends and capital
gains distributions). The Class C contingent deferred sales charge is paid to
the Distributor to reimburse its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C Shares.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 12 months and (3) shares held the longest during the 12-month period.
- -- DISTRIBUTION AND SERVICE PLANS FOR CLASS B AND CLASS C SHARES. The Fund has
adopted Distribution and Service Plans for Class B and Class C Shares to
compensate the Distributor for its services and costs in distributing Class B
and Class C Shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual "asset-based sales charge" of 0.75% per year on Class B
Shares that are outstanding for 6 years or less and on Class C Shares. The
Distributor also receives a service fee of 0.25% per year.
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Under each Plan, both fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The asset-based sales charge allows investors to
buy Class B or Class C Shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The asset-based
sales charge and service fees increase Class B and Class C expenses by up to
1.00% of average net assets per year.
The Distributor uses the service fees to compensate dealers for providing
personal services for accounts that hold Class B or Class C Shares. Those
services are similar to those provided under the Class A Service Plan, described
above. The Distributor pays the 0.25% service fees to dealers in advance for the
first year after Class B or Class C Shares have been sold by the dealer and
retains the service fee paid by the Fund in that year. After the shares have
been held for a year, the Distributor pays the service fees to dealers on a
quarterly basis.
The Distributor currently pays sales commissions of 3.75% of the purchase price
of Class B Shares to dealers from its own resources at the time of sale. The
total amount paid by the Distributor to the dealer at the time of sales of Class
B Shares is therefore 4.00% of the purchase price. The Fund pays the asset-based
sales charge to the Distributor for its services rendered in distributing Class
B Shares. Those payments are retained by the Distributor, and are at a fixed
rate that is not related to the Distributor's expenses. The services rendered by
the Distributor include paying and financing the payment of sales commissions,
service fees and other costs of distributing and selling Class B Shares.
The Distributor currently pays sales commissions of 0.75% of the purchase price
of Class C Shares to dealers from its own resources at the time of sale. The
total amount paid by the Distributor to the dealer at the time of sale of Class
C Shares is therefore 1.00% of the purchase price. The Distributor retains the
asset-based sales charge during the first year Class C Shares are outstanding to
recoup the sales commissions it has paid, the advances of service fee payments
it has made, and its financing costs and other expenses. The Distributor plans
to pay the asset-based sales charge as an ongoing commission to the dealer on
Class C Shares that have been outstanding for a year or more.
The Distributor's actual expenses in selling Class B and Class C Shares may
be more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plans for Class B and Class C Shares. Therefore, those expenses may be
carried over and paid in future years. At December 31, 1995, the end of the
Class B Plan year, Rochester Fund Distributors, Inc., the Fund's previous
principal underwriter, had incurred unreimbursed expenses under the Plan of
$879,023 (equal to 2.55% of the Fund's net assets represented by Class B Shares
on that date), which have been carried over into the present Plan year. If
either Plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to the Distributor for
distributing shares before the Plan was terminated.
- -- WAIVERS OF CLASS B AND CLASS C SALES CHARGES. The Class B and Class C
contingent deferred sales charge will not be applied to shares purchased in
certain types of transactions nor will it apply to Class B and Class C Shares
redeemed in certain circumstances as described below.
Waivers for Redemptions of Shares in Certain Cases. The Class B and Class C
contingent deferred sales charge will be waived for redemptions of shares in the
following cases:
- -- distributions to participants or beneficiaries from Retirement Plans, if the
distributions are made (a) under an Automatic Withdrawal Plan after the
participant reaches age 59 1/2, as long as the payments are no more than 10% of
the account value annually (measured from the date the Transfer Agent receives
the request), or (b) following the death or disability (as defined in the
Internal Revenue Code) of the participant or beneficiary (the death or
disability must have occurred after the account was established);
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- -- redemptions from accounts other than Retirement Plans following the death or
disability of the last surviving shareholder (the death or disability must have
occurred after the account was established and for disability you must provide
evidence of a determination of disability by the Social Security
Administration);
- -- returns of excess contributions to Retirement Plans, and
- -- distributions from IRAs (including SEP-IRAs and SAR/SEP accounts) before the
participant is age 59 1/2, and distributions from 403(b)(7) custodial plans or
pension or profit sharing plans before the participant is age 59 1/2 but only
after the participant has separated from service, if the distributions are made
in substantially equal periodic payments over the life (or life expectancy) of
the participant or the joint lives (or joint life and last survivor expectancy)
of the participant and the participant's designated beneficiary (and the
distributions must comply with other requirements for such distributions under
the Internal Revenue Code and may not exceed 10% of the account value annually,
measured from the date the Transfer Agent receives the request);
- -- shares redeemed involuntarily, as described in "Shareholder Account Rules and
Policies," below; or
- -- distributions from OppenheimerFunds prototype 401(k) plans (1) for hardship
withdrawals; (2) under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code; (3) to meet minimum distribution requirements as defined
in the Internal Revenue Code; (4) to make "substantially equal periodic
payments" as described in Section 72(t) of the Internal Revenue Code; or (5) for
separation from service.
Waivers for Shares Sold or Issued in Certain Transactions. The contingent
deferred sales charge is also waived on Class B and Class C Shares in the
following cases:
- -- shares sold to the Manager or its affiliates;
- -- shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager or the
Distributor for that purpose; or
- -- shares issued in plans of reorganization to which the Fund is a party.
- -- BUYING CLASS M SHARES. Class M Shares are sold at their offering price, which
is normally net asset value plus an initial sales charge. However, with respect
to certain accounts established prior to March 11, 1996, purchases are not
subject to an initial sales charge, and the offering price will be the net asset
value. See Appendix B. Special minimum investment requirements may apply. In
some cases, reduced sales charges may be available, as described below. Out of
the amount you invest, the Fund receives the net asset value to invest for your
account. The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor and allocated to
your dealer as a commission. The current sales charge rates and commissions paid
to dealers and brokers are as follows:
Front End Sales Charge as a Commission as a
Percentage of: Percentage of:
-------------------------------- ---------------
Amount Offering Price Amount Invested Offering Price
- ------ -------------- --------------- ---------------
Less than $250,000 ......... 3.25% 3.36% 3.00%
$250,000 or more but
less than $5,00,000 ........ 2.25% 2.30% 2.00%
$500,000 or more but
less than $999,999 ......... 1.25% 1.27% 1.00%
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Purchases of $1,000,000 or more will be declined. Investors considering an
investment of $1,000,000 or more may want to consider purchasing Class A Shares
of the Fund. The Distributor reserves the right to reallow the entire commission
to dealers. If that occurs, the dealer may be considered an "underwriter" under
Federal securities laws.
- -- SPECIAL ARRANGEMENTS WITH DEALERS. The Distributor may advance up to 13
months' commissions to dealers that have established special arrangements with
the Distributor for Asset Builder Plans for their clients. Dealers whose sales
of Class M Shares of the Fund or Class A Shares of either the Fund or of
Oppenheimer funds (other than money market funds) under
OppenheimerFunds-sponsored 403(b)(7) custodial plans exceed $5 million per year
(calculated per quarter), will receive monthly one-half of the Distributor's
retained commissions on those sales, and if those sales exceed $10 million per
year, those dealers will receive the Distributor's entire retained commission on
those sales.
- -- RIGHT OF ACCUMULATION. To qualify for the lower sales charge rates that apply
to larger purchases of Class M Shares, you and your spouse can add together
Class A, Class B and Class M Shares you purchase for your individual accounts,
or jointly, or for trust or custodial accounts on behalf of your children who
are minors. A fiduciary can count all shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit plans of the
same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and Class B
Shares of the Fund and other Oppenheimer funds to reduce the sales charge rate
that applies to current purchases of Class M Shares. You can also count Class A
and Class B Shares of Oppenheimer funds you previously purchased subject to an
initial or contingent deferred sales charge to reduce the sales charge rate for
current purchases of Class M Shares, provided that you still hold your
investment in one of the Oppenheimer funds. The value of those shares will be
based on the greater of the amount you paid for the shares or their current
value (at offering price). The Oppenheimer funds are listed in "Reduced Sales
Charges" in the Statement of Additional Information, or a list can be obtained
from the Distributor. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
- -- LETTER OF INTENT. Under a Letter of Intent, if you purchase Class A Shares,
Class B Shares and Class M Shares of the Fund and Class A or Class B Shares of
other Oppenheimer funds during a 13-month period, you can reduce the sales
charge rate that applies to your purchases of Class M Shares. The total amount
of your intended purchases of both Class A and Class B will determine the
reduced sales charge rate for the Class M Shares purchased during that period.
This can include purchases made up to 90 days before the date of the Letter.
More information is contained in the Application and in "Reduced Sales Charges"
in the Statement of Additional Information.
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<PAGE>
- -- Distribution and Service Plan for Class M Shares. The Fund has adopted a
Distribution and Service Plan for Class M Shares to reimburse the Distributor
for its expenses incurred in connection with the distribution of Class M
Shares and servicing accounts. Under the Plan, the Fund pays the Distributor an
annual "asset-based sales charge" of up to 0.50% per year on Class M Shares that
are outstanding. The Distributor also receives a service fee of up to 0.25% per
year. Both fees are computed on the average annual net assets of Class M Shares,
determined as of the close of each regular business day. The Distributor uses
the service fee to compensate dealers for providing personal services for
accounts that hold Class M Shares. The Distributor may pay a portion of the
asset-based sales charge which it receives from the Fund to provide additional
compensation to dealers who sell Class M Shares. The asset-based sales charge
and service fee increase Class M expenses by 0.75% of average net assets per
year.
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<PAGE>
SPECIAL INVESTOR SERVICES
ACCOUNTLINK. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send money
electronically between those accounts to perform a number of types of account
transactions. These include purchases of shares by telephone (either through a
service representative or by PhoneLink, described below), automatic investments
under Asset Builder Plans, and sending dividends and distributions or Automatic
Withdrawal Plan payments directly to your bank account. Please refer to the
Application for details or call the Transfer Agent for more information.
AccountLink privileges should be requested on the Application you use to buy
shares, or on your dealer's settlement instructions if you buy your shares
through your dealer. After your account is established, you can request
AccountLink privileges by sending signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each shareholder listed in
the registration on your account as well as to your dealer representative of
record unless and until the Transfer Agent receives written instructions
terminating or changing those privileges. After you establish AccountLink for
your account, any change of bank account information must be made by
signature-guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.
- -- USING ACCOUNTLINK TO BUY SHARES. Purchases may be made by telephone only
after your account has been established. To purchase shares in amounts up to
$250,000 through a telephone representative, call the Distributor at
1-800-852-8457. The purchase payment will be debited from your bank account.
- -- PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions automatically
using a touch-tone phone. PhoneLink may be used on already-established Fund
accounts after you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number: 1-800-533-3310.
- -- Purchasing Shares. You may purchase shares in amounts up to $100,000 by
phone, by calling 1-800- 533-3310. You must have established AccountLink
privileges to link your bank account with the Fund, to pay for these purchases.
- -- Exchanging Shares. With the OppenheimerFunds exchange privilege, described
below, you can exchange shares automatically by phone from your Fund account to
another Oppenheimer funds account you have already established by calling the
special PhoneLink number. Please refer to "How to Exchange Shares," below, for
details.
- -- Selling Shares. You can redeem shares by telephone automatically by calling
the PhoneLink number and the Fund will send the proceeds directly to your
AccountLink bank account. Please refer to "How to Sell Shares," below, for
details.
AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that enable
you to sell shares automatically or exchange them to another OppenheimerFunds
account on a regular basis:
- -- AUTOMATIC WITHDRAWAL PLANS. If your Fund account is $5,000 or more, you can
establish an Automatic Withdrawal Plan to receive payments of at least $50 on a
monthly, quarterly, semi-annual or annual basis. The checks may be sent to you
or sent automatically to your bank account on AccountLink. You may even set up
certain types of withdrawals of up to $1,500 per month by telephone. You should
consult the Application and Statement of Additional Information for more
details.
- -- AUTOMATIC EXCHANGE PLANS. You can authorize the Transfer Agent to exchange an
amount you establish in advance automatically for shares of up to five other
Oppenheimer funds on a monthly,
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<PAGE>
quarterly, semi-annual or annual basis under an Automatic Exchange Plan. The
minimum purchase for each OppenheimerFunds account is $25. These exchanges are
subject to the terms of the Exchange Privilege, described below.
REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A, Class B or
Class M Shares of the Fund, you have up to 6 months to reinvest all or part of
the redemption proceeds in Class A Shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies to redemptions of Class A
or Class M Shares purchased subject to an initial sales charge or to Class A or
Class B Shares on which you paid a contingent deferred sales charge when you
redeemed them. It does not apply to Class C Shares. You must be sure to ask the
Distributor for this privilege when you send your payment. Please consult the
Statement of Additional Information for more details.
RETIREMENT PLANS. Fund shares are available as an investment for your retirement
plans. If you participate in a plan sponsored by your employer, the plan trustee
or administrator must make the purchase of shares for your retirement plan
account. The Distributor offers a number of different retirement plans that can
be used by individuals and employers:
- -- Individual Retirement Accounts including rollover IRAs, for individuals and
their spouses
- -- 403(b)(7) Custodial Plans for employees of eligible tax-exempt organizations,
such as schools, hospitals and charitable organizations
- -- SEP-IRAs (Simplified Employee Pension Plans) for small business owners or
people with income from self-employment, including SAR/SEP-IRAs
- -- Pension and Profit-Sharing Plans for self-employed persons and small business
owners
- -- 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents, which
contain important information and applications.
HOW TO SELL SHARES
You can arrange to take money out of your account by selling (redeeming) some or
all of your shares on any regular business day. Your shares will be sold at the
next net asset value calculated after your order is received and accepted by the
Transfer Agent. The Fund offers you a number of ways to sell your shares: in
writing or by telephone. You can also set up Automatic Withdrawal Plans to
redeem shares on a regular basis, as described above. If you have questions
about any of these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525-7048, for assistance.
- -- RETIREMENT ACCOUNTS. To sell shares in an OppenheimerFunds retirement account
in your name, call the Transfer Agent for a distribution request form. There are
special income tax withholding requirements for distributions from retirement
plans and you must submit a withholding form with your request to avoid delay.
If your retirement plan account is held for you by your employer, you must
arrange for the distribution request to be sent by the plan administrator or
trustee. There are additional details in the Statement of Additional
Information.
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<PAGE>
- -- CERTAIN REQUESTS REQUIRE A SIGNATURE GUARANTEE. To protect you and the Fund
from fraud, certain redemption requests must be in writing and must include a
signature guarantee in the following situations (there may be other situations
also requiring a signature guarantee):
- -- You wish to redeem more than $50,000 worth of shares and receive a check
- -- The redemption check is not payable to all shareholders listed on the account
statement
- -- The redemption check is not sent to the address of record on your account
statement
- -- Shares are being transferred to a Fund account with a different owner or name
- -- Shares are redeemed by someone other than the owners (such as an Executor)
- -- WHERE CAN I HAVE MY SIGNATURE GUARANTEED? The Transfer Agent will accept a
guarantee of your signature by a number of financial institutions, including: a
U.S. bank, trust company, credit union or savings association, or by a foreign
bank that has a U.S. correspondent bank, or by a U.S. registered dealer or
broker in securities, municipal securities or government securities, or by a
U.S. national securities exchange, a registered securities association or a
clearing agency. If you are signing on behalf of a corporation, partnership or
other business, or as a fiduciary, you must also include your title in the
signature.
SELLING SHARES BY MAIL. Write a "letter of instructions" that includes:
- -- Your name
- -- The Fund's name
- -- Your Fund account number (from your account statement)
- -- The dollar amount or number of shares to be redeemed
- -- Any special payment instructions
- -- Any share certificates for the shares you are selling
- -- The signatures of all registered owners exactly as the account is registered,
and
- -- Any special requirements or documents requested by the Transfer Agent to
assure proper authorization of the person asking to sell shares.
USE THE FOLLOWING ADDRESS FOR SEND COURIER OR EXPRESS MAIL
REQUESTS BY MAIL: REQUESTS TO:
- -------------------------------- ----------------------------------
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231
SELLING SHARES BY TELEPHONE. You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price on a regular
business day, your call must be received by the Transfer Agent by the close of
The New York Stock Exchange that day, which is normally 4:00 P.M., but may be
earlier on some days. Shares held in an OppenheimerFunds retirement plan or
under a share certificate may not be redeemed by telephone.
- -- To redeem shares through a service representative, call 1-800-852-8457
- -- To redeem shares automatically on PhoneLink, call 1-800-533-3310
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<PAGE>
Whichever method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds wired to that bank account.
- -- TELEPHONE REDEMPTIONS PAID BY CHECK. Up to $50,000 may be redeemed by
telephone in any 7-day period. The check must be payable to all owners of
record of the shares and must be sent to the address on the account. This
service is not available within 30 days of changing the address on an account.
- -- TELEPHONE REDEMPTIONS THROUGH ACCOUNTLINK. There are no dollar limits on
telephone redemption proceeds sent to a bank account designated when you
establish AccountLink. Normally the ACH wire to your bank is initiated on the
business day after the redemption. You do not receive dividends on the proceeds
of the shares you redeemed while they are waiting to be wired.
SELLING SHARES THROUGH YOUR DEALER. The Distributor has made arrangements to
repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. Please call your dealer for
additional information. Please refer to "Special Arrangements for Repurchase of
Shares from Dealers and Brokers" in the Statement of Additional Information for
more details.
HOW TO EXCHANGE SHARES
Shares of the Fund may be exchanged for shares of certain Oppenheimer funds at
net asset value per share at the time of exchange, without sales charge.
- -- Shares of the fund selected for exchange must be available for sale in your
state of residence
- -- The prospectuses of this Fund and the fund whose shares you want to buy must
offer the exchange privilege
- -- You must hold the shares you buy when you establish your account for at least
7 days before you can exchange them; after the account is open 7 days, you can
exchange shares every regular business day
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- -- You must meet the minimum purchase requirements for the fund you purchase by
exchange
- -- Before exchanging into a fund, you should obtain and read its prospectus
Except with respect to exchanges of Class M Shares, which may be exchanged only
for Class A Shares as described in the following paragraph, shares of a
particular class may be exchanged only for shares of the same class in the other
Oppenheimer funds. For example, you can exchange Class A Shares of this Fund
only for Class A Shares of another fund. At present, Oppenheimer Money Market
Fund, Inc. offers only one class of shares, which are considered "Class A
Shares" for exchange purposes. If a fund has only one class of shares and it
does not have a class designation, that class of shares will be considered
"Class A" for exchange purposes. Class A and Class B Shares of the Fund may not
be exchanged for shares of the same class in either Rochester Fund Municipals
(which offers only Class A Shares) or Limited Term New York Municipal Fund
(which offers both Class A and Class B Shares).
The Fund is currently the only Oppenheimer fund which offers Class M Shares.
Except as described herein there may be no exchanges of any class of shares of
any Oppenheimer fund into Class M Shares of the Fund. With respect to those
accounts established on or before March 8, 1996, Class M Shares may be exchanged
for Class A Shares of Oppenheimer funds including Rochester Fund Municipals and
Limited Term New York Municipal Fund. In addition, Class A Shares of either
Rochester Fund Municipals or Limited Term New York Municipal Fund which were
acquired upon the exchange of Class M Shares may subsequently be exchanged for
Class M Shares of the Fund. With respect to those accounts established after
March 8, 1996, Class M Shares may be exchanged for Class A Shares of Oppenheimer
funds except Rochester Fund Municipals and Limited Term New York Municipal Fund.
Except for Class A Shares of either Oppenheimer Money Market Fund, Inc. or
Oppenheimer Cash Reserves which were acquired upon the exchange of Class M
Shares of the Fund, no exchanges of any class of shares of any Oppenheimer fund
into Class M Shares are permitted. Please refer to "How to Exchange Shares" in
the Statement of Additional Information for more details.
Exchanges may be requested in writing or by telephone:
- -- WRITTEN EXCHANGE REQUESTS. Submit an OppenheimerFunds Exchange Request form,
signed by all owners of the account. Send it to the Transfer Agent at the
addresses listed in "How to Sell Shares."
- -- TELEPHONE EXCHANGE REQUESTS. Telephone exchange requests may be made either
by calling a service representative at 1-800-852-8457 or by using PhoneLink for
automated exchanges, by calling 1-800-533-3310. Telephone exchanges may be made
only between accounts that are registered with the same name(s) and address.
Shares held under certificates may not be exchanged by telephone.
You can find a list of Oppenheimer funds currently available for exchanges in
the Statement of Additional Information or by calling a service representative
at 1-800-525-7048. Exchanges of shares involve a redemption of the shares of the
fund you own and a purchase of shares of the other fund.
There are certain exchange policies you should be aware of:
- -- Shares are normally redeemed from one fund and purchased from the other fund
in the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that is in proper form by the close
of The New York Stock Exchange that day, which is normally 4:00 P.M. but may be
earlier on some days. However, either fund may delay the purchase of shares of
the fund you are exchanging into up to 7 days if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For example,
the receipt of multiple exchange requests from a dealer in a "market-timing"
strategy might require the disposition of securities at a time or price
disadvantageous to the Fund.
- -- Because excessive trading can hurt fund performance and harm shareholders,
the Fund reserves the right to refuse any exchange request that will
disadvantage it, or to refuse multiple exchange requests submitted by a
shareholder or dealer.
- -- The Fund may amend, suspend or terminate the exchange privilege at any time.
Although the Fund will attempt to provide you notice whenever it is reasonably
able to do so, it may impose these changes at any time.
- -- If the Transfer Agent cannot exchange all the shares you request because of a
restriction cited above, only the shares eligible for exchange will be
exchanged.
The Distributor has entered into agreements with certain dealers and investment
advisers permitting them to exchange their clients' shares by telephone. These
privileges are limited under those agreements and the Distributor has the right
to reject or suspend those privileges. As a result, those exchanges may be
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subject to notice requirements, delays and other limitations that do not apply
to shareholders who exchange their shares directly by calling or writing to the
Transfer Agent.
SHAREHOLDER ACCOUNT RULES AND POLICIES
- -- NET ASSET VALUE PER SHARE is determined for each class of shares as of the
close of The New York Stock Exchange, which is normally 4:00 P.M. but may be
earlier on some days, on each day the Exchange is open by dividing the value of
the Fund's net assets attributable to a class by the number of shares of that
class that are outstanding. The Fund's Board of Trustees has established
procedures to value the Fund's securities to determine net asset value. In
general, securities values are based on market value. There are special
procedures for valuing illiquid and restricted securities, obligations for which
market values cannot be readily obtained, and call options and hedging
instruments. These procedures are described more completely in the Statement of
Additional Information.
- -- THE OFFERING OF SHARES may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be suspended
by the Board of Trustees at any time the Board believes it is in the Fund's best
interest to do so.
- -- TELEPHONE TRANSACTION PRIVILEGES for purchases, redemptions or exchanges may
be modified, suspended or terminated by the Fund at any time. If an account has
more than one owner, the Fund and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each owner of the
account and the dealer representative of record for the account unless and until
the Transfer Agent receives cancellation instructions from an owner of the
account.
- -- THE TRANSFER AGENT WILL RECORD ANY TELEPHONE CALLS to verify data concerning
transactions and has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax identification
numbers and other account data or by using PINs, and by confirming such
transactions in writing. If the Transfer Agent does not use reasonable
procedures it may be liable for losses due to unauthorized transactions, but
otherwise neither the Transfer Agent nor the Fund will be liable for losses or
expenses arising out of telephone instructions reasonably believed to be
genuine. If you are unable to reach the Transfer Agent during periods of unusual
market activity, you may not be able to complete a telephone transaction and
should consider placing your order by mail.
- -- REDEMPTION OR TRANSFER REQUESTS WILL NOT BE HONORED UNTIL THE TRANSFER AGENT
RECEIVES ALL REQUIRED DOCUMENTS IN PROPER FORM. From time to time, the Transfer
Agent in its discretion may waive certain of the requirements for redemptions
stated in this Prospectus.
- -- DEALERS THAT CAN PERFORM ACCOUNT TRANSACTIONS FOR THEIR CLIENTS BY
PARTICIPATING IN NETWORKING through the National Securities Clearing Corporation
are responsible for obtaining their clients' permission to perform those
transactions and are responsible to their clients who are shareholders of the
Fund if the dealer performs any transaction erroneously.
- -- THE REDEMPTION PRICE FOR SHARES WILL VARY from day to day because the value
of the securities in the Fund's portfolio fluctuates, and the redemption price,
which is the net asset value per share, will normally be different for Class A,
Class B, Class C and Class M Shares. Therefore, the redemption value of your
shares may be more or less than their original cost.
- -- PAYMENT FOR REDEEMED SHARES is made ordinarily in cash and forwarded by check
or through AccountLink (as elected by the shareholder under the redemption
procedures described above) within 7 days after the Transfer Agent receives
redemption instructions in proper form, except under unusual circumstances
determined by the Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer, payment will
be forwarded within 3
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business days. The Transfer Agent may delay forwarding a check or processing a
payment via AccountLink for recently purchased shares, but only until the
purchase payment has cleared. That delay may be as much as 10 days from the date
the shares were purchased. That delay may be avoided if you purchase shares by
certified check or arrange to have your bank provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
- -- INVOLUNTARY REDEMPTIONS OF SMALL ACCOUNTS may be made by the Fund if the
account value has fallen below $200 for reasons other than the fact that the
market value of shares has dropped, and in some cases involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of share
purchase orders.
- -- "BACKUP WITHHOLDING" of Federal income tax may be applied at the rate of 31%
from dividends, distributions and redemption proceeds (including exchanges) if
you fail to furnish the Fund a certified Social Security or Employer
Identification Number when you sign your application, or if you violate Internal
Revenue Service regulations on tax reporting of income.
- -- THE FUND DOES NOT CHARGE A REDEMPTION FEE, but if your dealer or broker
handles your redemption, they may charge a fee. That fee can be avoided by
redeeming your Fund shares directly through the Transfer Agent. Under the
circumstances described in "How To Buy Shares," you may be subject to a
contingent deferred sales charge when redeeming certain Class A, Class B and
Class C shares.
- -- TO AVOID SENDING DUPLICATE COPIES OF MATERIALS TO HOUSEHOLDS, the Fund will
mail only one copy of each annual and semi-annual report to shareholders having
the same last name and address on the Fund's records. However, each shareholder
may call the Transfer Agent at 1-800-525-7048 to ask that copies of those
materials be sent personally to that shareholder.
DIVIDENDS, CAPITAL GAINS AND TAXES
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").
CAPITAL GAINS. 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.
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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).
DISTRIBUTION OPTIONS. When you open your account, specify on your application
how you want to receive your distributions. For OppenheimerFunds retirement
accounts, all distributions are reinvested.
For other accounts, you have four options:
- -- REINVEST ALL DISTRIBUTIONS IN THE FUND. You can elect to reinvest all
dividends and long-term capital gains distributions in additional shares of the
Fund.
- -- REINVEST LONG-TERM CAPITAL GAINS ONLY. You can elect to reinvest long-term
capital gains in the Fund while receiving dividends by check or sent to your
bank account on AccountLink.
- -- RECEIVE ALL DISTRIBUTIONS IN CASH. You can elect to receive a check for all
dividends and long-term capital gains distributions or have them sent to your
bank on AccountLink.
- -- REINVEST YOUR DISTRIBUTIONS IN ANOTHER OPPENHEIMER FUND ACCOUNT. You can
reinvest all distributions in another Oppenheimer fund account you have
established.
TAXES. If your account is not a tax-deferred retirement account, you should be
aware of the following tax implications of investing in the Fund. Long-term
capital gains are taxable as long-term capital gains when distributed to
shareholders. It does not matter how long you held your shares. Dividends paid
from short-term capital gains and net investment income are taxable as ordinary
income. Distributions are subject to federal income tax and may be subject to
state or local taxes. Your distributions are taxable when paid, whether you
reinvest them in additional shares or take them in cash. Every year the Fund
will send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year.
- -- "BUYING A DIVIDEND": When a fund goes ex-dividend, its share price is reduced
by the amount of the distribution. If you buy shares on or just before the
ex-dividend date, or just before the Fund declares a capital gains distribution,
you will pay the full price for the shares and then receive a portion of the
price back as a taxable dividend or capital gain.
- -- TAXES ON TRANSACTIONS: Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. A capital gain or loss is the
difference between the price you paid for the shares and the price you received
when you sold them.
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<PAGE>
- -- RETURNS OF CAPITAL: In certain cases distributions made by the Fund may be
considered a non-taxable return of capital to shareholders. If that occurs, it
will be identified in notices to shareholders. A non-taxable return of capital
may reduce your tax basis in your Fund shares.
This information is only a summary of certain federal tax information about your
investment. More information is contained in the Statement of Additional
Information, and in addition you should consult with your tax adviser about the
effect of an investment in the Fund on your particular tax situation.
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APPENDIX A: DESCRIPTION OF RATINGS
CATEGORIES OF RATING SERVICES
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
Aaa: Bonds which are rated "Aaa" are judged to be the best quality and to carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, the changes that can be
expected are most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group, they comprise what are generally known
as "high-grade" bonds. They are rated lower than the best bonds because margins
of protection may not be as large as with "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than those of
"Aaa" securities.
A: Bonds which are rated "A" possess many favorable investment attributes and
are to be considered as upper-medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
The investments in which the Fund will principally invest will be in the
lower-rated categories described below.
Baa: Bonds which are rated "Baa" are considered medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and have
speculative characteristics as well.
Ba: Bonds which are rated "Ba" are judged to have speculative elements; their
future cannot be considered well-assured. Often the protection of interest and
principal payments may be very moderate and not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.
B: Bonds which are rated "B" generally lack characteristics of desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated "Caa" are of poor standing and may be in default or
there may be present elements of danger with respect to principal or interest.
Ca: Bonds which are rated "Ca" represent obligations which are speculative in a
high degree and are often in default or have other marked shortcomings.
C: Bonds which are rated "C" are the lowest rated class of bonds and can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.
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<PAGE>
DESCRIPTION OF STANDARD & POOR'S BOND RATINGS
AAA: "AAA" is the highest rating assigned 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 adverse effects of change in
circumstances and economic conditions. The investments in which the Fund will
principally invest will be in the lower-rated categories, described below.
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 category
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.
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: Bonds on which no interest is being paid are rated "C".
D: Bonds rated "D" are in payment default and payment of interest and/or
repayment of principal is in arrears.
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APPENDIX B
SALES CHARGE WAIVERS ON PURCHASES OF CLASS M SHARES FOR ACCOUNTS ESTABLISHED
PRIOR TO MARCH 11, 1996
The Fund may sell Class M Shares at net asset value to investors who satisfy the
following criteria and who, prior to March 11, 1996, had established accounts,
pursuant to which such investors were permitted to purchase the Fund's then
outstanding Class A Shares at net asset value: (a) the Manager or its
affiliates, (b) present or former officers, directors, trustees and employees
(and their "immediate families" as defined in the Statement of Additional
Information) of the Fund, the Manager and its affiliates, and retirement plans
established by them for their employees, (c) registered management investment
companies, or separate accounts of insurance companies having an agreement with
the Manager or the Distributor for that purpose, (d) dealers or brokers that
have a sales agreement with the Distributor, if they purchase shares for their
own accounts or for retirement plans for their employees, (e) employees and
registered representatives (and their spouses) of dealers or brokers described
above or financial institutions that have entered into sales arrangements with
such dealers or brokers (and are identified to the Distributor) or with the
Distributor; the purchaser must certify to the Distributor at the time of
purchase that the purchase is for the purchaser's own account (or for the
benefit of such employee's spouse or minor children), (f) dealers, brokers or
registered investment advisers that have entered into an agreement with the
Distributor providing specifically for the use of shares of the Fund in
particular investment products made available to their clients (those clients
may be charged a transaction fee by their dealer, broker or adviser on the
purchase of Fund shares), and (g) dealers, brokers or registered investment
advisers that have entered into an agreement with the Distributor to sell shares
to defined contribution employee retirement plans for which the dealer, broker
or investment adviser provides administrative services.
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<PAGE>
OPPENHEIMER BOND FUND FOR GROWTH
350 Linden Oaks
Rochester, New York 14625-2807
INVESTMENT ADVISOR
Oppenheimer Funds, Inc.
Two World Trade Center
New York, New York 10048-0203
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
TRANSFER AND SHAREHOLDER SERVICE AGENT
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
INDEPENDENT AUDITORS
Price Waterhouse LLP
1900 Chase Square
Rochester, New York 14604-1984
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 200036-5891
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR THE STATEMENT OF ADDITIONAL INFORMATION, AND IF GIVEN OR MADE,
SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND, OPPENHEIMERFUNDS, INC, OPPENHEIMERFUNDS DISTRIBUTOR OR
ANY AFFILIATE THEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH STATE.
[Inventory Code Number]
<PAGE>
BOND FUND SERIES-OPPENHEIMER BOND FUND FOR GROWTH
350 Linden Oaks, Rochester, New York 14625
1-800-525-7048
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 11, 1996
This Statement of Additional Information of Bond Fund Series-Oppenheimer
Bond Fund for Growth (the "Fund") is not a Prospectus. This document contains
additional information about the Fund and supplements information in the
Prospectus dated March 11, 1996. It should be read together with the Prospectus,
which may be obtained by writing to OppenheimerFunds Services, the Fund's
Transfer Agent, at P.O. Box 5270, Denver, Colorado 80217 or by calling the
Transfer Agent at the toll-free number shown above.
TABLE OF CONTENTS
PAGE
----
ABOUT THE FUND
Investment Objective and Policies .......................................... 2
Investment Policies and Strategies..................................... 2
Other Investment Techniques and Strategies............................. 5
Other Investment Restrictions.......................................... 10
How the Fund is Managed..................................................... 12
Organization and History............................................... 12
Trustees and Officers of the Fund...................................... 13
The Manager and Its Affiliates......................................... 18
Brokerage Policies of the Fund.............................................. 20
Performance of the Fund..................................................... 21
Distribution and Service Plans.............................................. 26
ABOUT YOUR ACCOUNT
How To Buy Shares........................................................... 28
How To Sell Shares ......................................................... 35
How To Exchange Shares...................................................... 39
Dividends, Capital Gains and Taxes.......................................... 41
Additional Information About the Fund....................................... 42
FINANCIAL INFORMATION ABOUT THE FUND
Financial Statements........................................................ 44
Independent Auditors' Report................................................ 59
Appendix A: Description of Bond Ratings....................................A-1
<PAGE>
ABOUT THE FUND
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT POLICIES AND STRATEGIES. The investment objectives and policies of
the Fund are described in the Prospectus. Set forth below is supplemental
information about those policies and the types of securities in which the Fund
invests, as well as the strategies the Fund may use to try to achieve its
objectives. Capitalized terms used in this Statement of Additional Information
have the same meaning as those terms have in the Prospectus.
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 which consists of a variety of fixed income securities,
including convertible securities, which in the opinion of OppenheimerFunds, Inc.
(the "Manager") 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 participation. 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. High yield bonds generally offer a higher yield to
maturity than bonds with higher ratings as compensation for holding an
obligation perceived to be of greater risk. The high yield opportunity has been
the result of wide yield spreads between high yield obligations and high grade
obligations, with actual losses resulting from default remaining low relative to
the values of outstanding high yield bonds. In addition to offering higher
absolute returns, high yield securities have greater potential than high-grade
bonds for better relative performance if their credit quality improves.
The Manager evaluates the investment merits of fixed-income securities
primarily through the exercise of its own investment analysis. This may include
consideration of the financial strength of the issuer, including its historic
and current financial condition, the trading activity in its securities, present
and anticipated cash flow, estimated current value of assets in relation to
historical cost, the issuer's experience and managerial expertise,
responsiveness to changes in interest rates and business conditions, debt
maturity schedules, current and future borrowing requirements, and any change in
the financial condition of the issuer and its continuing ability to meet its
future obligations. The Manager also may consider anticipated changes in
business conditions, levels of interest rates of bonds as contrasted with levels
of cash dividends, industry and regional prospects, the availability of new
investment opportunities, and the general economic, legislative and monetary
outlook for specific industries, the nation and the world.
The Fund is classified as non-diversified within the meaning of the
Investment Company Act of 1940, as amended, (the "Act"), which means that the
Fund is not limited by the Act in the proportion of its assets that it may
invest in obligations of a single issuer. The Fund intends to continue to
qualify as a "regulated investment company," however, under the Internal Revenue
Code of 1986, as amended (the "Code"). See Dividends, Capital Gains and Taxes.
In addition to satisfying other requirements to so qualify, the Fund will
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limit its investments so that, at the close of each quarter of its taxable year,
(i) not more than 25% of the market value of its total assets will be invested
in the securities of a single issuer and (ii) with respect to 50% of its total
assets, not more than 5% will be invested in the securities of a single issuer.
In contrast, a fund which elects to be classified as "diversified" under the
Investment Company Act must satisfy the foregoing 5% requirement with respect to
75% of its assets at all times. To the extent that the Fund assumes large
positions in the obligations of a small number of issuers, the Fund's total
return may fluctuate to a greater extent than that of a diversified company as a
result of changes in the financial condition or in the market's assessment of
the issuers.
-- CONVERTIBLE FIXED INCOME SECURITIES. Convertible securities are fixed
income securities which may be exchanged for or converted into the underlying
common stock of the issuer at the option of the holder during a specified period
of time. Convertible securities may take the form of convertible preferred
stock, convertible bonds or notes, or other fixed income securities with stock
purchase warrants, or a combination of the features of several of these
securities. Because of the conversion feature, the price of a convertible
security will normally vary in some proportion to changes in the price of the
underlying common stock. Convertible fixed income securities are generally
characterized by less price volatility than the common stocks into which they
are convertible because of their comparatively higher yields. The investment
characteristics of each convertible security vary widely, and such versatility
permits the Fund to use convertible securities in different ways in pursuing its
investment objective of high total return. For example, the Fund may invest in
convertible securities which provide a relatively high level of income, with
less appreciation potential as well as those with high appreciation potential
and a relatively low level of income or convertible securities which provide
some combination of both income and appreciation potential.
Convertible bonds and convertible preferred stocks are fixed income
securities that retain the investment characteristics of fixed income securities
until they have been converted. The holder is entitled to receive the fixed
income of a bond or the dividend preference of a preferred stock until the
holder elects to exercise the conversion privilege. Convertible securities are
senior securities, and therefore, have a claim to assets of the corporation
prior to the holders of common stock upon liquidation. Convertible securities,
however, are generally subordinated to similar non-convertible securities of the
same company. The interest income and dividends from convertible bonds and
preferred stocks provide a stable stream of income with yields which are
generally higher than common stocks, but lower than non-convertible securities
of similar quality.
As with all fixed income securities, various market forces influence the
market value of convertible securities, including changes in the level of
interest rates. As the level of interest rates increases, the market value of
convertible securities may decline and, conversely, as interest rates decline,
the market value of convertible securities may increase. The unique investment
characteristic of convertible securities, the right to be exchanged for the
issuer's common stock, causes the market value of convertible securities to
increase when the value of the underlying common stock increases. Since
securities prices fluctuate, however, there can be no assurance that the market
value of convertible securities will increase. Convertible securities generally
will not reflect quite as great a degree of capital appreciation as the
underlying stock. When the underlying common stock is experiencing a decline,
the value of the convertible security tends to decline to a level approximating
the yield-to-maturity basis of straight non-convertible debt of similar quality,
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often called "investment value," and may not experience the same decline as the
underlying common stock.
Many convertible securities sell at a premium over their conversion values
(i.e., the number of shares of common stock to be received upon conversion
multiplied by the current market price of the stock). This premium represents
the price investors are willing to pay for the privilege of purchasing a fixed
income security with a possibility of capital appreciation due to the conversion
privilege. There can be no assurance that the underlying common stock will
appreciate enough for this premium to be recovered by the Fund on any particular
convertible security.
-- INVESTMENT RISKS OF FIXED-INCOME SECURITIES. All fixed-income securities
are subject to two types of risks: credit risk and interest rate risk. Credit
risk relates to the ability of the issuer to meet interest or principal payments
on a security as they become due. Generally, higher yielding lower-grade bonds
are subject to credit risk to a greater extent than lower yielding, investment
grade bonds. Interest rate risk refers to the fluctuations in value of
fixed-income securities resulting solely from the inverse relationship between
price and yield of outstanding fixed-income securities. An increase in
prevailing interest rates will generally reduce the market value of
already-issued fixed-income investments, and a decline in interest rates will
tend to increase their value. In addition, debt securities with longer
maturities, which tend to produce higher yields, are subject to potentially
greater changes in their prices from changes in interest rates than obligations
with shorter maturities. Fluctuations in the market value of fixed-income
securities after the Fund buys them will not affect the interest payable on
those securities, nor the cash income from such securities. However, those price
fluctuations will be reflected in the valuations of these securities and
therefore the Fund's net asset values.
As stated in the Prospectus, the fixed-income securities in which the Fund will
principally invest will be in those in the lower rating categories or in those
which are unrated. The Fund may invest in securities rated as low as "C" by a
nationally recognized statistical rating organization ("NRSRO") or in bonds
which are unrated. The Manager will not rely solely on the ratings assigned by
rating services and may invest, without limit, in unrated securities which
offer, in the opinion of the Manager, yields and risks comparable to those of
rated securities in which the Fund may invest. The Fund will not invest in
securities which are in default at the time of purchase. 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
upon the Manager's credit analysis than would be the case if the Fund were
investing in higher quality debt securities.
Some of the principal risks of high yield securities include: (i) limited
liquidity and secondary market support, (ii) substantial market price volatility
resulting from changes in prevailing interest rates, (iii) subordination of the
holder's claims to the prior claims of banks and other senior lenders in
bankruptcy proceedings, (iv) the operation of mandatory sinking fund or
call/redemption provisions during periods of declining interest rates, whereby
the holder might receive redemption proceeds at times when only lower-yielding
portfolio securities are available for investment, (v) the possibility that
earnings of the issuer may be insufficient to meet its debt service, and (vi)
the issuer's low creditworthiness and potential for insolvency during periods of
rising interest rates and economic downturn. Some high yield bonds pay interest
in kind rather than in cash.
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As a result of the limited liquidity of high yield securities, their prices
have at times experienced significant and rapid decline when a significant
number of holders of high yield securities simultaneously decided to sell them.
A decline is also likely in the high yield bond market during an economic
downturn. An economic downturn or an increase in interest rates could severely
disrupt the market for high yield securities and adversely affect the value of
outstanding securities and the ability of the issuers to repay principal and
interest. In addition, in recent years there have been several Congressional
attempts to limit the use or limit tax and other advantages of high yield bonds.
If enacted, such proposals could adversely affect the value of these securities
and consequently the Fund's net asset value per share. For example, federally
insured savings and loan associations have been required to divest their
investments in high yield securities.
-- CONVERTIBLE PREFERRED STOCK. The Fund may invest in a type of
convertible preferred stock that is an equity security with certain
characteristics of both a debt security and a call option. These securities can
be considered "derivative" securities because of their imbedded option
component. These stock instruments trade under a variety of acronyms. They
typically provide for a three-year period prior to conversion to common stock
(although they are callable by the issuer prior to conversion) and pay a
cumulative, fixed dividend that is senior to, and expected to be in excess of,
the dividends paid on the common stock of the same issuer. At the mandatory
conversion date, the preferred stock is converted into not more than one share
of the issuer's common stock at the "call price" that was established at the
time the preferred stock was issued. Generally, the call price is 30% to 45%
above the price of the issuer's common stock at the time the preferred stock is
issued and may be subject to downward adjustment over time. If the price per
share of the related common stock on the mandatory conversion date is less than
the call price, the holder of the preferred stock will nonetheless receive only
one share of common stock for each share of preferred stock (plus cash in the
amount of any accrued but unpaid dividends). At any time prior to the mandatory
conversion date, the issuer may redeem the preferred stock upon issuing to the
holder a number of shares of common stock equal to the call price of the
preferred stock in effect on the date of redemption divided by the market value
of the common stock, with such market value typically determined one or two
trading days prior to the date notice of redemption is given. The issuer must
also pay the holder of the preferred stock cash in an amount equal to any
accrued but unpaid dividends on the preferred stock.
This convertible preferred stock is subject to the same market risk as the
common stock of the issuer, except to the extent that such risk is mitigated by
the higher dividend paid on the preferred stock. The opportunity for equity
appreciation afforded by an investment in such convertible preferred stock,
however, is limited, because in the event the market value of the issuer's
common stock increases to or above the call price of the preferred stock, the
issuer may (and would be expected to) call the preferred stock for redemption at
the call price. This convertible preferred stock is also subject to credit risk
with regard to the ability of the issuer to pay the dividend established upon
issuance of the preferred stock. Generally, convertible preferred stock is less
volatile than the related common stock of the issuer.
OTHER INVESTMENT TECHNIQUES AND STRATEGIES
-- SHORT SALES. Although the Fund may not make short sales generally, the
Fund may make short sales "against the box." While a short sale is made by
selling a security the Fund does
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not own, a short sale is said to have been made "against the box" to the extent
that the Fund contemporaneously owns or has the right to obtain securities
identical to those sold short at no added cost. The Fund will engage in this
type of transaction only when (i) the yield on the convertible bond or preferred
stock is substantially larger than that on the common stock so that the Fund may
benefit from this incremental cash flow without bearing any market risk; (ii)
the Manager believes that the premium on the convertible bond or preferred stock
relative to the common stock is unusually small and will widen to a more normal
range; or (iii) there is a large unrealized gain in a portfolio security which
the Manager wishes to sell and the Manager believes that it will be advantageous
to defer the realization of the gain until a subsequent tax year. When a short
sale is effected, any decline in the value of the Fund's portfolio securities
would be reduced by a gain in the short sale transaction. Conversely, any
increase in the value of the Fund's portfolio securities would be reduced by a
loss in the short sale transaction. The extent to which such gains or losses are
reduced will depend upon the amount of the security sold short relative to the
amount the Fund owns, either directly or indirectly, and, in the case where the
Fund owns convertible securities, changes in the conversion premium (the
difference between a convertible security's market price and its value if it
were converted into its underlying common stock). As a fundamental policy, the
Fund may not make short sales or maintain a short position unless at all times
when a short position is open, not more than 10% of that Fund's total assets
(taken at current value) is held as collateral for such sales at any one time.
-- WARRANTS. The Fund has adopted as a fundamental policy that it may
invest up to 15% of the value of its net assets at the time of purchase in
warrants (other than those that have been acquired in units or attached to other
securities). This fundamental policy is currently limited by an operational
policy which provides that the Fund may not invest more than 5% of the value of
the Funds' net assets in warrants, valued at market. Included within that
amount, but not to exceed 2% of the value of the Funds' net assets, may be
warrants which are not listed in the New York or American Stock Exchange.
Warrants acquired by the Fund in units or attached to securities may be deemed
to be without value for purposes of the limitation imposed by the operational
policy. A warrant basically is an option to purchase common stock at a specific
price (usually at a premium above the market value of the optioned common stock
at issuance) valid for a specific period of time. Warrants may have a life
ranging from less than a year to twenty years or may be perpetual. However, many
warrants have expiration dates after which they are worthless unless such
warrants are exercised or sold before expiration. In addition, if the market
price of the common stock does not exceed the warrant's exercise price during
the life of the warrant, the warrant will expire worthless. Warrants have no
voting rights, pay no dividends and have no rights with respect to the assets of
the corporation issuing them. The percentage increase or decrease in the market
price of a warrant may tend to be greater than the percentage increase or
decrease in the market price of the optioned common stock.
-- FUND'S USE OF LISTED OPTIONS. The Fund will limit options trading
activity 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 will write covered call options in an attempt to increase its
income. The Fund may
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also purchase put options on stock in order to attempt to hedge its portfolio
and to reduce investment risks. Hedging strategies are defensive in nature; some
capital gain potential is forsaken in advancing markets for a reduction of risk
in declining markets. No assurances can be made that these options hedging
strategies will result in successful investments by the Fund.
-- CHARACTERISTICS OF LISTED OPTIONS. Because listed options can be
employed in a variety of ways to pursue a variety of investment objectives, it
follows that the risks and potential rewards of options trading depend in large
measure on the manner in which the options are used. Listed options are puts and
calls on common stock. A call option conveys the right to buy and a put option
conveys the right to sell. Although put options and call options are generally
traded on the same underlying securities, it should be clearly understood that
call options and put options are separate and distinct investment securities.
The purchase or sale of a call in no way involves a put. The purchase or sale of
a put in no way involves a call.
The option contract has a duration period of up to nine months and
precisely identifies the underlying security. Options traded on options
exchanges (the "Exchanges"), have standardized the terms of options contracts.
An options contract has four specifications: (1) the type (put or call); (2) the
underlying common stock name; (3) the expiration date; and (4) the exercise or
strike price. Option contracts give their holder the right to buy or sell a
stated number of shares, usually 100, of a particular underlying common stock,
at a fixed price (called the strike price) for a predetermined period of time
(called the expiration period). An option is a wasting asset; that is, it has
only an initial value that declines as time passes. It may expire having no
value, or the holder may have to exercise it in order to recover some value
before expiration. Of course, the holder may sell the option in the listed
option market before expiration.
Although an option is a security, it derives its value from the underlying
common stock. The option price fluctuates as the price of the underlying stock
rises or falls. Splits and stock dividends in the underlying stock affect the
terms of listed options, although cash dividends do not.
-- COVERED CALL OPTION WRITING. A call option gives the purchaser of the
option the right to buy, and imposes on the writer the obligation to sell, the
underlying security at the exercise price during the option period. The Fund may
write "covered" call options, that is, options on securities the Fund holds in
its portfolio or has an immediate right to acquire, without additional
consideration, upon conversion or exchange of securities currently held in its
portfolio. For writing a call option, the Fund is paid a sales price or premium.
If the call option expires unexercised, the Fund realizes a gain equal to the
amount of the premium received upon writing the option, less transaction costs.
So long as the obligation of a writer continues, he may be assigned an exercise
notice by the broker-dealer through whom such a call option was sold, requiring
him to deliver the underlying security against payment of the exercise price.
This obligation terminates upon expiration of the call option, or at such
earlier time at which the writer effects a closing purchase transaction (i.e.,
the purchase of a call option on the same security with the same exercise price
and expiration date as the call option already written). Once a writer has been
assigned an exercise notice with respect to a call option, he will thereafter be
unable to effect a closing purchase transaction with respect to that option. In
return for the
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premium it receives, so long as the Fund's obligation as a writer continues, it
will forego the opportunity to profit from any price increase in the underlying
stock above the exercise price.
The Fund will write covered call options for hedging purposes in order to
protect against possible declines in the market values of the stocks or
convertible securities held in its portfolio. If, for example, the market price
of a common stock underlying a convertible security held by a Fund declines and
the convertible security also declines in value, such decline will be offset in
part (or wholly) by the receipt of the premium on covered call options written
by the Fund on such stock. However, if the market price of the underlying common
stock increases and the convertible security held by a Fund also increases in
value, such increases will be offset in part (or wholly) by any loss resulting
from the cancellation of the Fund's position through closing purchase
transactions on covered call options written by the Fund or the opportunity loss
if the option is exercised. The main risk of any covered call writing strategy
is that the common stock/covered call "package" (such as that embedded in a
mandatory conversion security) will underperform the common stock alone should
the stock's price rise substantially above the strike price of the call option.
The Fund may not sell any covered call options if, as a result of such
sale, the aggregate value of its securities underlying such options (valued at
the lower of the option price or market price) would exceed 25% of its net
assets. This limitation may not be changed by the Fund without shareholder
approval. Although the Fund may write covered call options on up to 25% of its
assets, the Fund has no present intention of writing covered call options on
more than 5% of its net assets in such securities. To secure its obligation to
deliver the underlying security, the Fund, as the writer of a call option, is
required to deposit in escrow with its custodian the underlying common stock or
a security immediately convertible into the underlying common stock in
accordance with the rules of the Options Clearing Corporation and of the various
Exchanges.
-- PURCHASE OF PUT OPTIONS. The Fund will also purchase put options in an
attempt to hedge its portfolio and to reduce investment risks. When a
convertible security is purchased because the Manager believes the market price
of such security may rise, the Manager may nonetheless wish to protect the
holdings of such security against a decline in market value by purchasing a put
option on the common stock underlying such security. A put option gives the
purchaser the right to sell the underlying common stock at the put exercise
price regardless of any decline in the underlying stock's market price.
Thus, the purchase of a put option when used as a defensive measure
provides profits should the underlying common stock decline, which would be of
use to offset losses from the corresponding decline in the value of the
convertible security held. The reduction in loss that this defensive strategy
provides is limited to the profit made on the put option transaction, less the
premium paid for the put option, less the transaction costs incurred in
connection with the put. Should the underlying common stock, and consequently
the convertible securities held, increase in value, the profit realized would be
reduced by the cost of the purchase of the put options.
-- RISKS OF TRANSACTIONS IN STOCK OPTIONS. An option position may be closed
out by the Fund only on an Exchange which provides a secondary market for an
option of the same series. Although the Fund will generally purchase or write
only those options for which there is
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an active secondary market, there is no assurance that a liquid secondary market
on an Exchange will exist for any particular option or at any particular time.
Absence of a liquid secondary market on an Exchange may result from a variety of
economic, market and regulatory factors including the suspension of trading or
an insufficient amount of trading interest. For example, if trading were
suspended in an option purchased or written by the Fund, the Fund would not be
able to close out the option. If the Fund, as a covered call option writer, is
unable to effect a closing purchase transaction in a secondary market, the Fund
will not be able to sell the underlying common stock until the option expires or
until it delivers the underlying common stock upon exercise. Similarly, in the
absence of a liquid secondary market, the Fund, as the purchaser of a put
option, would be able to realize a profit or limit a loss on such option only by
exercising such option and, in the case of a put option on stock, by incurring
additional transaction costs on the disposition of the underlying security.
The Exchanges have established limitations governing the maximum number of
calls and puts of each class which may be held or written by an investor or
group of investors acting in concert (regardless of whether the options are
written on the same or different Exchanges or are held or written in one or more
accounts or through one or more brokers). An Exchange may order the liquidation
of positions found to be in violation of these limits. The Manager does not
anticipate that such limits will affect the Fund's option trading activities.
-- MANDATORY CONVERSION SECURITIES. In addition to the more traditional
convertible securities in which the Fund may invest as described in the
Prospectus, the Fund may also invest in more recently developed varieties of
convertible securities which are referred to herein as "mandatory conversion
securities." Such securities may combine several of the features of debt
securities and equity securities, including both preferred stock and common
stock. Unlike the more traditional convertible securities, however, many of
these securities are characterized by a mandatory conversion feature and an
adjustable conversion ratio. Thus, many of these securities offer limited
potential for capital appreciation and, in some instances, involve unlimited
potential for loss of capital. These securities are designed and marketed by
major investment banking firms and trade in the marketplace under various
acronyms which are proprietary to the investment banking firm. The Fund may be
exposed to counterparty risk to the extent it invests in "synthetic mandatory
conversion securities," which are issued by investment banking firms and are
unsecured obligations of the issuing firm. Should the issuing firm of such a
security experience financial difficulty, its ability to perform according to
the terms of the security may become impaired. The mandatory conversion
securities which may be purchased by the Fund include, but are not limited to,
the so-called equity-linked debt securities and certain varieties of convertible
preferred stock. The market for these securities is relatively new.
-- EQUITY-LINKED DEBT SECURITIES. The Fund may purchase debt securities
whose principal amount at maturity is dependent upon the performance of a
specified equity security. Equity-linked debt securities differ from ordinary
debt securities in that the principal amount received at maturity is not fixed,
but is based on the price of the linked equity security at the time the debt
security matures. Such debt securities usually mature in three to four years,
and during the years to maturity pay interest at a favorable fixed rate.
Although the debt securities are typically adjusted for diluting events such as
stock splits, stock dividends and certain other events affecting the market
value of the linked equity security, the debt securities are not adjusted for
subsequent issuances of
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the linked equity security for cash. Such an issuance could adversely affect the
price of the debt security. In general, however, such debt securities are less
volatile than the equity securities to which they are linked.
OTHER INVESTMENT RESTRICTIONS
Specific investment restrictions help the Fund limit investment risks for
shareholders. The following investment restrictions are fundamental investment
policies of the Fund and cannot be changed without approval of a majority of the
outstanding voting securities of the Fund (defined for purposes of the
Prospectus and this Statement as the lesser of: (i) 67% of the shares present or
represented by proxy at a meeting at which more than 50% of the outstanding
shares are present or represented by proxy; or (ii) more than 50% of the
outstanding shares). These restrictions provide that the Fund may not:
1. Invest more than 25% of the value of the Fund's total assets in the
securities of any one issuer or any group of issuers in the same industry,
which restriction will not, however, prevent it from investing more than
25% of such Fund's total assets in securities of the United States
Government, its agencies or instrumentalities.
2. Make any investment if, as a result thereof, less than 50% of the
Fund's total assets would be in cash, cash items, U.S. Government
securities, and securities of issuers in which its investment is limited to
not more than 5% of the value of the Fund's total assets and not more than
10% of the outstanding voting securities of any issuer.
3. Purchase securities on margin, but the Fund may obtain unsecured
loans to purchase securities and may also borrow amounts equivalent to up
to 5% of the Fund's net assets for temporary, extraordinary or emergency
purposes. The aggregate of all unsecured loans, however, may not exceed 50%
of the Fund's total assets.
4. Make short sales on securities or maintain a short position, unless
at all times when a short position is open, the Fund owns an equal amount
of such securities or owns securities which, without payment of any further
consideration, are convertible into or exchangeable for securities of the
same issue as, and equal in amount to, the securities sold short; no more
than 10% of the Fund's total assets will be held as collateral for such
short sales at any one time. See Short Sales.
5. Engage in the purchase and sale of put and call options or in
writing such options except as set forth herein and in the Prospectus.
6. Invest in warrants other than warrants acquired by the Fund as part
of a unit or attached to securities at the time of purchase, and other than
the investment of no more than 15% of the value of its net assets in
warrants valued at the lower of cost or market (of which not more
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than 5% of the Fund's net assets may be invested in warrants not listed on
the New York or American Stock Exchange).
7. Make loans, provided that this policy does not prohibit the Fund
from (1) making loans of its portfolio securities, (2) purchasing notes,
bonds or other evidences of indebtedness or making deposits with banks and
other financial institutions, and (3) entering into repurchase agreements.
8. Purchase or sell real estate, or real estate mortgage loans
provided, however, that the Fund may invest not more than 5% of its total
assets in marketable securities of real estate investment trusts.
9. Deal in commodities or commodities contracts.
10. Purchase or retain securities of any issuer if any of its officers
and trustees, or any of the officers and directors of the Manager (as
hereinafter defined) or Distributor (as hereinafter defined), own
individually beneficially more than 0.5% of the outstanding securities of
such issuer, or if all of those persons together own more than 5% of that
issuer's securities.
11. Invest more than 5% of the value of its total assets in securities
of any company (including its predecessors) that has not been in business
for at least three consecutive years.
12. Issue any securities which are senior to shares of the Fund.
13. Underwrite securities of other issuers.
14. Acquire securities of any other investment company, if as a result
of such acquisition, the Fund would own in the aggregate: (i) more than 3%
of the voting stock of such investment company; (ii) securities of such
investment company having an aggregate value in excess of 5% of the value
of the total assets of the Fund; or (iii) securities of such investment
company and of any other investment companies (but excluding treasury stock
of those funds) having an aggregate value in excess of 10% of the total
assets of the Fund. However, none of these limitations is applicable to a
security received as a dividend or as a result of an offer of exchange, a
merger or plan of reorganization.
The percentage limitations on investments which are set forth herein are
applied at the time an investment is made. No violation of the percentage
limitation will occur unless the limitation is exceeded immediately after an
investment is made and as a result thereof.
-- OPERATIONAL POLICIES.
The following restrictions are operational investment policies of the Fund.
While these operating investment policies are not fundamental policies and do
not require shareholder approval to be changed and may be changed by the Board
of Trustees, the Fund has, as a matter of policy, agreed not to change these
policies without prior notice to its shareholders. These operating policies
provide that the Fund may not:
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A. Invest in any issuer for the purpose of exercising control or
management of that issuer, unless approved by the Fund's Board of Trustees.
B. Invest any part of its total assets in interests in oil, gas, or
other mineral exploration or development programs, although it may invest
in securities of companies which invest in or sponsor such programs. The
Fund may not invest in oil, gas or other mineral leases.
C. Invest more than 5% of the value of the Fund's assets in warrants,
valued at the lower of cost or market. Included within that amount, but not
to exceed 2% of the value of the Fund's net assets, may be warrants which
are not listed on the New York or American Stock Exchange. Warrants
acquired by the Fund in units or attached to securities may be deemed to be
without value.
D. For purposes of Fundamental Investment Restriction No. 1 described
above, the Fund's policy with respect to concentration of investments shall
be interpreted as prohibiting the Fund from making an investment in the
securities of any one issuer or group of issuers in the same industry if,
upon making the proposed investment, 25% or more of the value of its
(total) assets would be invested in such industry.
| | ILLIQUID SECURITIES. As a non-fundamental policy, the Fund may not
invest more than 15% of the value of the Fund's net assets in Illiquid
Securities. An additional operational policy of the Fund provides that certain
"restricted securities," as defined in the section entitled "Illiquid
Securities" in the prospectus, may be excluded from the Fund's 15% limitation on
investments in Illiquid Securities. Rule 144A under the Securities Act of 1933,
as amended, permits certain resales of unregistered securities (i.e., restricted
securities) provided that such securities have been determined to be eligible
for resale under the provisions of Rule 144A. The Fund's Board of Trustees has
adopted guidelines and procedures to be utilized by the investment adviser for
determining the liquidity of such Rule 144A securities and for monitoring the
investment adviser's implementation of the guidelines and procedures. Such
determination will be based upon all relevant factors including, among other
things: (1) the unregistered nature of a Rule 144A security; (2) the frequency
of trades and quotes for the security; (3) the number of dealers willing to
purchase or sell the security and the number of potential purchasers; (4) dealer
undertakings to make a market in the security; and (5) the nature of the
security and the nature of marketplace trades, including, the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
transfer.
HOW THE FUND IS MANAGED
ORGANIZATION AND HISTORY. As a Massachusetts business trust, the Fund is not
required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law, or when a shareholder meeting is
called by the Trustees. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to remove a
Trustee. The Trustees will call a meeting of shareholders to vote on the removal
of a Trustee upon the written request of the record holders of 10% of its
outstanding shares. In addition, if the Trustees receive a request from at least
10 shareholders (who have been shareholders for at least six months) holding
shares of the Fund valued at $25,000 or more or holding at least 1% of the
Fund's outstanding shares, whichever is less, stating that they wish to
communicate with other shareholders to request a meeting to remove a Trustee,
the Trustees will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the
applicants' expense, or the Trustees may take such other action as set forth
under Section 16(c) of the Investment Company Act.
Each share of the Fund represents an interest in the Fund proportionately
equal to the interest
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of each other share of the same class and entitles the holder to one vote per
share (and a fractional vote for a fractional share) on matters submitted to
their vote at shareholders' meetings. Shareholders of the Fund vote together in
the aggregate on certain matters at shareholders' meetings, such as the election
of Trustees and ratification of appointment of auditors for the Fund.
Shareholders of a particular series or class vote separately on proposals which
affect that series or class, and shareholders of a series or class which is not
affected by that matter are not entitled to vote on the proposal.
The Trustees are authorized to create new series and classes of series. The
Trustees may reclassify unissued shares of the Fund or its series or classes
into additional series or classes of shares. The Trustees may also divide or
combine the shares of a class into a greater or lesser number of shares without
thereby changing the proportionate beneficial interest of a shareholder in the
Fund. Shares do not have cumulative voting rights or preemptive or subscription
rights. Shares may be voted in person or by proxy.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides for
indemnification and reimbursement of expenses out of its property for any
shareholder held personally liable for its obligations. The Declaration of Trust
also provides that the Fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances, the risk of a Fund shareholder incurring financial
loss on account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any shareholder
of the Trust, agrees under the Trust's Declaration of Trust to look solely to
the assets of the Trust for satisfaction of any claim or demand which may arise
out of any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
The Fund is currently the only series of a business trust organized under
the laws of the Commonwealth of Massachusetts in 1986. From 1990 through April
30, 1993, the Fund's name was Rochester Convertible Fund, at which time the name
of the trust was changed to Rochester Fund Series and the name of the Fund was
changed to The Bond Fund For Growth. On March 8, 1996, the name of the trust was
changed to Bond Fund Series and the name of the Fund was changed to Oppenheimer
Bond Fund for Growth.
TRUSTEES AND OFFICERS OF THE FUND. The Fund's Trustees and officers, one of
which is the Fund's portfolio manager, are listed below, together with principal
occupations and business affiliations during the past five years. The address of
each is Two World Trade Center, New York, New York 10048, except as noted. All
of the trustees are also trustees of Rochester Fund Municipals and Rochester
Portfolio Series--Limited Term New York Municipal Fund. With the exception of
Mr. Cannon, all of the trustees are also trustees or directors of Oppenheimer
Quest Growth & Income Value Fund, Oppenheimer Quest Officers Value Fund,
Oppenheimer Quest Opportunity Value Fund, Oppenheimer Quest Small Cap Fund,
Oppenheimer Quest Value Fund, Inc., and Oppenheimer Quest Global Value Fund,
Inc. Ms. Macaskill (in her capacity as President), Messrs. Donohue, Bowen, Zack,
Bishop and Farrar, respectively, hold the same offices with the New York-based
Oppenheimer Funds as with the Fund. As of February 16, 1996 the trustees and
officers of the Fund as a group owned less than 1% of the outstanding shares of
the then outstanding Class A Shares and Class B Shares of the Fund. As of that
date the trustees and officers of the Fund as a group owned beneficially and of
record 21% of the Fund's then outstanding Class Y Shares (which have since been
redesignated as Class A Shares).
BRIDGET A. MACASKILL, CHAIRMAN OF THE BOARD OF TRUSTEES AND PRESIDENT*; AGE: 47.
Chairman of the Board, President and Trustee of the Fund, Rochester Fund
Municipals and Rochester Portfolio Series-Limited Term New York Municipal Fund,
January 5, 1996 - present; President, Chief Executive Officer and a Director of
the Manager; formerly an Executive Vice President of the Manager; President and
a Director of Oppenheimer Acquisition Corp. and HarbourView Asset Management
Corporation, ("HarbourView"); a Director of Oppenheimer Partnership Holdings,
Inc., a holding company subsidiary of the Manager; Chairman and a Director of
the Transfer Agent; all of which are subsidiaries of the Manager; President and
a Trustee of the New York-based Oppenheimer funds.
- --------
* A Trustee who is an "interested person" as defined in the Investment Company
Act.
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<PAGE>
JOHN CANNON, TRUSTEE; AGE 66
620 Sentry Parkway West, Suite 220, Blue Bell, Pennsylvania 19422
Consultant; Chairman and Treasurer, CDC Associates, Inc., registered investment
adviser, 1993-February, 1996; prior thereto, President, AMA Investment Advisers,
Inc., a mutual fund investment adviser, 1976-1991; Senior Vice President AMA
Investment Advisers, Inc., 1991-1993; Director, Neuberger & Berman Income
Managers Trust, Neuberger & Berman Income Funds and Neuberger & Berman Income
Trust, 1995-present; Trustee of Rochester Fund Municipals and Rochester
Portfolio Series-Limited Term New York Municipal Fund.
PAUL Y. CLINTON, TRUSTEE; AGE: 65
946 Morris Avenue, Bryn Mawr, Pennsylvania 19010
Principal of Clinton Management Associates, a financial and venture capital
consulting firm; formerly, Director, External Affairs, Kravco Corporation, a
national real estate owner and property management corporation; formerly
President of Essex Management Corporation, a management consulting company;
Trustee of Capital Cash Management and Prime Cash Fund, each of which is a
money-market fund; Director of Oppenheimer Quest Value Fund, Inc.,
Oppenheimer Quest Global Value Fund, Inc. and Quest Cash Reserves, Inc. and
Trustee of Quest For Value Accumulation Trust, all of which are open-end
investment companies. Formerly a general partner of Capital Growth Fund, a
venture capital partnership; formerly a general partner of Essex Limited
Partnership, an investment partnership; formerly President of Geneve Corp., a
venture capital fund; formerly Chairman of Woodland Capital Corp., a small
business investment company; formerly Vice President of W.R. Grace & Co.;
Trustee of Rochester Fund Municipals and Rochester Portfolio Series-Limited Term
New York Municipal Fund.
THOMAS W, COURTNEY, TRUSTEE; AGE: 62
P.O. Box 580, Sewickley, Pennsylvania 15143
Principal of Courtney Associates, Inc., a venture capital firm; former General
Partner of Trivest Venture Fund, a private venture capital fund; former
President of Investment Counseling, Federated Investors, Inc.; Trustee of Cash
Assets Trust, a money market fund; Director of Quest Cash Reserves, Inc.,
Oppenheimer Quest Value Fund, Inc. and Oppenheimer Quest Global Value Fund,
Inc. and Trustee of Quest for Value Accumulation Trust, all of which are
open-end investment companies; former President of Boston Company Institutional
Investors; Trustee of Hawaiian Tax-Free Trust and Tax-Free Trust of Arizona,
tax-exempt bond funds; Director of several privately owned corporations; former
Director of Financial Analysts Federation; Trustee of Rochester Fund Municipals
and Rochester Portfolio Series-Limited Term New York Municipal Fund.
LACY B. HERRMANN, TRUSTEE; AGE: 66
380 Madison Avenue, Suite 2300, New York, New York 10017
President and Chairman of the Board of Aquila Management Corporation, the
sponsoring organization and Administrator and/or Sub-Adviser to the following
open-end investment companies, and Chairman of the Board of Trustees and
President of each: Churchill Cash Reserves Trust, Short Term Asset Reserves,
Pacific Capital Cash Assets Trust, Pacific Capital U.S. Treasuries Cash Assets
Trust, Pacific Capital Tax-Free Cash Assets Trust, Prime Cash Fund, Narragansett
Insured Tax-Free Income Fund, Tax-Free Fund For Utah, Churchill Tax-Free Fund
of Kentucky, Tax-Free Fund of Colorado, Tax-Free Trust of Oregon, Tax-Free Trust
of Arizona, Hawaiian Tax-Free Trust, and
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Aquila Rocky Mountain Equity Fund; Vice President, Director, Secretary, and
formerly Treasurer of Aquila Distributors, Inc., distributor of the above funds;
President and Chairman of the Board of Trustees of Capital Cash Management Trust
("CCMT"), and an Officer and Trustee/Director of its predecessors; President and
Director of STCM Management Company, Inc., sponsor and adviser to CCMT;
Chairman, President and a Director of InCap Management Corporation, formerly
sub-adviser and administrator of Prime Cash Fund and Short Term Asset Reserves;
Director or Trustee of Quest Cash Reserves, Inc., Oppenheimer Quest Global Value
Fund, Inc. and Oppenheimer Quest Value Fund, Inc. and Trustee of Quest for Value
Accumulation Trust and The Saratoga Advantage Trust, each of which is an
open-end investment company; Trustee of Rochester Fund Municipals and Rochester
Portfolio Series-Limited Term New York Municipal Fund; Trustee of Brown
University.
GEORGE LOFT, TRUSTEE; AGE: 81
51 Herrick Road, Sharon, Connecticut 06069
Private Investor; Director of Quest Cash Reserves, Inc., Oppenheimer Quest
Value Fund, Inc. and Oppenheimer Quest Global Value Fund, Inc. and Trustee of
Quest for Value Accumulation Trust and The Saratoga Advantage Trust, all of
which are open-end investment companies, and Director of the Quest for Value
Dual Purpose Fund, Inc., a closed-end investment company; Trustee of Rochester
Fund Municipals and Rochester Portfolio Series-Limited Term New York Municipal
Fund.
MICHAEL S. ROSEN, VICE PRESIDENT; AGE 35
350 Linden Oaks, Rochester, New York 14625
Vice President and Portfolio Manager of the Fund, 1986-present; Vice President
of the Manager, January 5, 1996-present; President of the Rochester Division of
the Manager, January 5, 1996-present; Vice President of Rochester Fund
Municipals, 1986-January 4, 1996; Vice President of Rochester Portfolio Series -
Limited Term New York Municipal Fund, 1991-January 4, 1996; Vice President of
Rochester Tax Managed Fund, Inc., 1985-February, 1996; Trustee of the Fund,
Rochester Fund Municipals and Rochester Portfolio Series-Limited Term New York
Municipal Fund, 1993-January 4, 1996; Vice President and a Director, Fielding
Management Company, Inc. 1988-present; President and a Director, Rochester
Fund Distributors, Inc. 1990-present; Vice President and a Director, Rochester
Capital Advisors, Inc. 1993-present; Vice President and a Director, Rochester
Fund Services, Inc. 1986-present.
ANDREW J. DONOHUE, SECRETARY; AGE: 45
Secretary of the Fund, Rochester Fund Municipals and Rochester Portfolio
Series-Limited Term New York Municipal Fund, January 5, 1996-present;
Executive Vice President and General Counsel of the Manager and the Distributor;
President and Director of Centennial Asset Management Corporation, an investment
advisory subsidiary of the Manager ("Centennial"); an Officer of other
Oppenheimer funds; formerly Senior Vice President and Associate General Counsel
of the Manager and the Distributor, partner in Kraft & McManimon (a law firm),
an Officer of First Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment advisor), and a Director
and an Officer of First Investors Family of Funds and First Investors Life
Insurance Company.
GEORGE C. BOWEN, TREASURER; AGE: 59
3410 South Galena Street Denver, Colorado 80231
Treasurer of the Fund, Rochester Fund Municipals and Rochester Portfolio
Series-Limited Term New York Municipal Fund, January 5, 1996-present; Senior
Vice President and Treasurer of the Manager; Vice President and
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<PAGE>
Treasurer of the Distributor and HarbourView; Senior Vice President, Treasurer,
Assistant Secretary and a Director of Centennial; Vice President, Treasurer and
Secretary of the Transfer Agent and Shareholder Financial Services, Inc.,
("SFSI"), a transfer agent subsidiary of the Manager; an Officer of other
Oppenheimer funds.
ROBERT G. ZACK, ASSISTANT SECRETARY; AGE: 47
Assistant Secretary of the Fund, Rochester Fund Municipals and Rochester
Portfolio Series-Limited Term New York Municipal Fund, January 5, 1996-
present; Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of the Transfer Agent and SFSI; an Officer of other
Oppenheimer funds.
ROBERT BISHOP, ASSISTANT TREASURER; AGE: 37
410 South Galena Street, Denver, Colorado 80231
Assistant Treasurer of the Fund, Rochester Fund Municipals and Rochester
Portfolio Series-Limited Term New York Municipal Fund, January 5, 1996 to
present; Assistant Vice President of the Adviser/Mutual Fund Accounting; an
Officer of other Oppenheimer funds; previously a Fund Controller for the
Manager, prior to which he was an Accountant for Yale & Seffinger, P.C., an
accounting firm, and previously an Accountant and Commissions Supervisor for
Stuart James Company Inc., a broker-dealer.
SCOTT FARRAR, ASSISTANT TREASURER; AGE: 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Treasurer of the Fund, Rochester Fund Municipals and Rochester
Portfolio Series-Limited Term New York Municipal Fund, January 5, 1996-present;
Assistant Vice President of the Adviser/Mutual Fund Accounting; an
Officer of other Oppenheimer funds; previously a Fund Controller for the
Manager, prior to which he was an International Mutual Fund Supervisor for Brown
Brothers Harriman & Co., a bank, and previously a Senior Fund Accountant for
State Street Bank & Trust Company.
ADELE CAMPBELL, ASSISTANT TREASURER; AGE 32
350 Linden Oaks, Rochester, New York 14625
Assistant Treasurer of the Fund, Rochester Fund Municipals and Rochester
Portfolio Series-Limited Term New York, January 31, 1996-present and May 1,
1995-January 4, 1996; Assistant Vice President of the Manager, January 5,
1996-present; Assistant Vice President, Rochester Fund Services, Inc., January,
1994-January 1996; Assistant Manager, Fund Accounting, Rochester Fund Services,
June, 1992-January, 1996; prior to that, Audit Manager, Price Waterhouse, LLP.
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<PAGE>
-- REMUNERATION OF TRUSTEES. All officers of the Fund and Ms. Macaskill, a
Trustee and President, are officers or directors of the Manager and receive no
salary or fee from the Fund. The following table sets forth the aggregate
compensation received by the non-interested Trustees from the Fund during the
fiscal year ended December 31, 1995.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
AGGREGATE BENEFITS ESTIMATED TOTAL
COMPENSATION ACCRUED AS ANNUAL COMPENSATION
FROM THE PART OF FUND BENEFITS UPON FROM FUND
NAME OF PERSON FUND(1) EXPENSES(2) RETIREMENT(2) COMPLEX(3)
- -------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
John Cannon $2,950 $0 $0 $29,400
Paul Y. Clinton ............. $ 0 $0 $0 $ 0
Thomas W. Courtney .......... $ 0 $0 $0 $ 0
Lacy B. Herrmann ............ $ 0 $0 $0 $ 0
George Loft ................. $ 0 $0 $0 $ 0
</TABLE>
- ----------
(1) During the fiscal year ended December 31, 1995, only one of the Fund's
current trustees, John Cannon, served as a Trustee of the Fund. Four other
trustees received compensation from funds which are now part of the fund
complex.
(2) The Board of Rochester Fund Municipals has adopted a Retirement Plan for
Independent Trustees of that Fund. Under the terms of the Retirement Plan,
as amended and restated on October 16, 1995, an eligible Trustee (an
Independent Trustee who has served as such for at least three years prior
to retirement) may receive an annual benefit equal to the product of $1500
multiplied by the number of years of service as an Independent Trustee up
to a maximum of nine years. The maximum annual benefit which may be paid to
an eligible Trustee under the Retirement Plan is $13,500. The Retirement
Plan will be effective for all eligible Trustees who have dates of
retirement occurring on or after December 31, 1995. Subject to certain
exceptions, retirement is mandatory at age 72 in order to qualify for the
Retirement Plan. Although the Retirement Plan permits Eligible Trustees to
elect early retirement at age 63, retirement benefits are not payable to
Eligible Trustees who elect early retirement until age 65. The Retirement
Plan provides that no Independent Trustee who is elected as a Trustee of
Rochester Fund Municipals after September 30, 1995, will be eligible to
receive benefits thereunder. Mr. Cannon is the only current Independent
Trustee who may be eligible to receive benefits under the Retirement Plan.
The estimate of annual benefits payable to Mr. Cannon under the Retirement
Plan is based upon the assumption that Mr. Cannon, who was first elected as
a Trustee of the Fund in 1992, will serve as an Independent Trustee of
Rochester Fund Municipals for nine years.
(3) Includes compensation received during the fiscal year ended December 31,
1995, from all registered investment companies within the Fund Complex
during that year which consisted of the Fund, Rochester Fund Municipals,
Rochester Portfolio Series-Limited Term New York Municipal Fund, and
Rochester Tax Managed Fund, Inc. On June 28, 1995, the Fund acquired all of
the assets and assumed all of the liabilities of Rochester Tax Managed
Fund, Inc.
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<PAGE>
- -- CLASSES OF SHARES; MAJOR SHAREHOLDERS. The Fund currently offers four classes
of shares of beneficial interest: Class A Shares, Class B Shares, Class C Shares
and Class M Shares. The different classes of shares represent investments in the
same portfolio of securities, but are subject to different expenses and are
likely to have different share prices. On March 11, 1996, the Fund redesignated
as Class M Shares its Class A Shares which had been outstanding prior to that
date, redesignated as Class A Shares its Class Y Shares which had been
outstanding prior to that date and authorized the issuance of Class C Shares. As
of February 16, 1996, no person owned of record or was known by the Fund to own
beneficially 5% or more of the Fund as a whole or the Fund's then outstanding
Class A, Class B or Class Y Shares, except as described herein. Merrill Lynch
Pierce Fenner and Smith, Inc., 4800 Deer Lake Drive, EFL 3, Jacksonville,
Florida as of that date, the record owner of 21% and 36% of the Fund's Class A
Shares and Class B Shares then outstanding, respectively. In addition, as of
that date, the Fund's Class Y Shares then outstanding were owned both of record
and beneficially as follows: George Eastman House Inc. Archive Endowment Fund
Inc., 51%, Fielding Management Company, Inc. Pension Plan, 20% and Michael S.
Rosen, 21%. Mr. Rosen is an officer of the Fund.
THE MANAGER AND ITS AFFILIATES. The Manager is wholly-owned by Oppenheimer
Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts Mutual
Life Insurance Company. OAC is also owned in part by certain of the Manager's
directors and officers, some of whom serve as officers of the Fund and one of
whom (Ms. Macaskill) serves as a Trustee of the Fund.
The Manager and the Fund have a Code of Ethics. It is designed to detect
and prevent improper personal trading by certain employees, including portfolio
managers, that would compete with or take advantage of the Fund's portfolio
transactions. Compliance with the Code of Ethics is carefully monitored and
strictly enforced by the Manager.
- -- THE INVESTMENT ADVISORY AGREEMENT. The Investment Advisory Agreement between
the Manager and the Fund which was entered into on January 4, 1996 ("Advisory
Agreement") requires the Manager, at its expense, to provide the Fund with
adequate office space, facilities and equipment, and to provide and supervise
the activities of all administrative and clerical personnel required to provide
effective corporate administration for the Fund, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and the composition of proxy materials and
registration statements for continuous public sale of shares of the Fund. For
these services, the Manager will receive from the Fund an annual fee, computed
and payable monthly as a percentage of average daily net assets, as follows:
average daily net assets up to $50 million, 0.625%; average daily net assets on
the next $250 million, 0.50%; and average daily net assets in excess of $300
million, 0.4375%.
Expenses not expressly assumed by the Manager under the Advisory Agreement
or by the Distributor are paid by the Fund. The Advisory Agreement lists
examples of expenses paid by the Fund, the major categories of which relate to
interest, taxes, brokerage commissions, fees to certain Trustees, legal and
audit expenses, custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs, and non-recurring expenses, including
litigation. For the Fund's fiscal years ended December 31, 1993, 1994 and 1995,
the management fees paid by the Fund to its previous investment adviser,
Fielding Management Company, Inc. were $225,722, $596,082 and $1,030,091
respectively.
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<PAGE>
The Advisory Agreement contains no expense limitation. However,
independently of the Agreement, the Manager has voluntarily undertaken that the
total expenses of the Fund in any fiscal year (exclusive of taxes, interest,
brokerage commissions, and any extraordinary non-recurring expenses, such as
litigation costs) shall not exceed the most stringent state regulatory
limitation on Fund expenses applicable to the Fund. The payment of the
management fee will be reduced so that at no time will there be any accrued but
unpaid liability under the above expense limitation. The Manager reserves the
right to amend or terminate this expense limitation at any time.
The Advisory Agreement provides that in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties
thereunder, the Manager shall not be liable for any loss sustained by reason of
good faith errors or omissions on its part with respect to any matters to which
the Advisory Agreement relates. The Agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to use the name
"Oppenheimer" in connection with other investment companies for which it may act
as investment adviser. If the Manager shall no longer act as investment adviser
to the Fund, the right of the Fund to use the name "Oppenheimer" as part of its
name may be withdrawn.
- -- THE DISTRIBUTOR. Under its General Distributor's Agreement with the Fund,
which was entered into on January 4, 1996, OppenheimerFunds Distributor, Inc.
(the "Distributor") acts as the Fund's principal underwriter in the continuous
public offering of the Fund's Class A, Class B, Class C and Class M Shares, but
is not obligated to sell a specific number of shares. Expenses normally
attributable to sales (other than those paid under the Distribution and Service
Plans, but including advertising and the cost of printing and mailing
prospectuses, other than those furnished to existing shareholders) are borne by
the Distributor. During the Fund's fiscal years ended December 31, 1993, 1994
and 1995, the aggregate amount of sales charge on sales of the Fund's then
outstanding Class A Shares (which have since been redesignated as Class M
Shares) was $1,625,106, $1,699,143 and $2,744,786 respectively, of which
Rochester Fund Distributors, Inc., the Fund's previous principal underwriter,
retained $148,714, $171,428 and $227,846 in those respective years. The Fund's
Class Y Shares, which were offered to the public commencing on May 2, 1995, were
offered only to certain classes of investors and without sales charge until the
redesignation of that class of shares as Class A Shares on March 11, 1996. Class
C Shares (as currently offered) were not offered during those periods and, thus,
no contingent deferred sales charges were collected by the Fund's previous
distributor. Class B Shares were offered to the public commencing on May 2,
1995. During the period from May 2, 1995 through December 31, 1995, the
contingent deferred sales charge collected by Rochester Fund Distributors, Inc.
on the redemption of Class B Shares totalled $5,001. For additional information
about distribution of the Fund's shares and the payments made by the Fund to the
Distributor in connection with such activities, please refer to "Distribution
and Service Plans," below.
- -- THE TRANSFER AGENT. OppenheimerFunds Services, a division of the Manager,
serves as the Fund's Transfer Agent pursuant to a Service Contract dated March
8, 1996. The Transfer Agent is responsible for maintaining shareholder
accounting records, and for shareholder servicing and administrative functions.
The Transfer Agent is compensated on the basis of a fixed fee per account and
percentage of the Fund's average daily net assets. The compensation paid by the
Fund for such services under a comparable arrangement with Rochester Fund
Services, Inc., the Fund's previous shareholder services agent, for the fiscal
years ending December 31, 1993, 1994 and 1995 was $61,641, $165,127, and
$307,960, respectively.
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<PAGE>
BROKERAGE POLICIES OF THE FUND
BROKERAGE PROVISIONS OF THE INVESTMENT ADVISORY AGREEMENT. One of the duties of
the Manager under the Advisory Agreement is to arrange the portfolio
transactions for the Fund. The Advisory Agreement contains provisions relating
to the employment of broker-dealers ("brokers") to effect the Fund's portfolio
transactions. In doing so, the Manager is authorized by the Advisory Agreement
to employ broker-dealers, including "affiliated" brokers, as that term is
defined in the Investment Company Act, as may, in its best judgment based on all
relevant factors, implement the policy of the Fund to obtain, at reasonable
expense, the "best execution" (prompt and reliable execution at the most
favorable price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions paid
to the extent consistent with the interest and policies of the Fund as
established by its Board of Trustees.
Under the Advisory Agreement, the Manager is authorized to select brokers
that provide brokerage and/or research services for the Fund and/or the other
accounts over which the Manager or its affiliates have investment discretion.
The commissions paid to such brokers may be higher than that which would have
been charged by another qualified broker if a good faith determination is made
by the Manager that the commission is fair and reasonable in relation to the
services provided. Subject to the foregoing considerations, the Manager may also
consider sales of shares of the Fund and other investment companies managed by
the Manager or its affiliates as a factor in the selection of brokers for the
Fund's portfolio transactions.
DESCRIPTION OF BROKERAGE PRACTICES FOLLOWED BY THE MANAGER. Subject to the
provisions of the Advisory Agreement and the procedures and rules described
above, allocations of brokerage are generally made by the Manager's portfolio
traders based upon recommendations from the Manager's portfolio managers. In
certain instances, portfolio managers may directly place trades and allocate
brokerage, also subject to the provisions of the Advisory Agreement and the
procedures and rules described above. In either case, brokerage is allocated
under the supervision of the Manager's executive officers. Transactions in
securities other than those for which an exchange is the primary market are
generally done with principals or market makers. As stated in the prospectus,
the portfolio securities of the Fund are generally traded on a net basis and, as
such, do not involve the payment of brokerage commissions. It is the policy of
the Manager 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, both the
sale of Fund shares and the receipt of research may be taken into consideration
as factors in the selection of dealers to execute portfolio transactions for the
Fund. The transaction costs associated with such transactions consist primarily
of the payment of dealer and underwriter spreads. Brokerage commissions are paid
primarily for effecting transactions in listed securities and or for certain
fixed-income agency transactions, in the
-20-
<PAGE>
secondary market, otherwise only if it appears likely that a better price or
execution can be obtained. When the Fund engages in an option transaction,
ordinarily the same broker will be used for the purchase or sale of the option
and any transaction in the securities to which the option relates. When
possible, concurrent orders to purchase or sell the same security by more than
one of the accounts managed by the Manager or its affiliates are combined. The
transactions effected pursuant to such combined orders are averaged as to price
and allocated in accordance with the purchase or sale orders actually placed for
each account.
The research services provided by a particular broker may be useful in one
or more of the advisory accounts of the Manager and its affiliates. The research
services provided by brokers broaden the scope and supplement the research
activities of the Manager, by making available additional views for
consideration and comparisons. The Board of Trustees, including the
"independent" Trustees of the Fund (those Trustees of the Fund who are not
"interested persons" as defined in the Investment Company Act, and who have no
direct or indirect financial interest in the operation of the Advisory Agreement
or the Distribution Plans described below) annually reviews information
furnished by the Manager as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such commissions
was reasonably related to the value or benefit of such services. Total brokerage
commissions paid by the Fund (not including any spreads or concessions on
principal transactions on a net trade basis) for the fiscal years ended December
31, 1993, 1994 and 1995 were approximately $19,847, $44,872 and $86,680
respectively.
A change in securities held by the Fund is known as "portfolio turnover".
The Fund's options hedging and income strategies may increase the portfolio
turnover of the Fund. Therefore, the portfolio turnover of the Fund may be
higher than other investment companies not utilizing such options trading
techniques. As portfolio turnover increases, the Fund can be expected to incur
brokerage commission expenses and transaction costs which will be borne by the
Fund. In any particular year, however, market conditions could result in
portfolio activity at a greater or lesser rate than anticipated. For the fiscal
years ended December 31, 1993, 1994, and 1995 the Fund's portfolio turnover
rates were and 88.66%, 52.82% and 57.51% respectively.
PERFORMANCE OF THE FUND
YIELD AND TOTAL RETURN INFORMATION. As described in the Prospectus, from time to
time the "standardized yield," "dividend yield," "average annual total return,"
"cumulative total return," "average annual total return at net asset value" and
"total return at net asset value" of an investment in a class of shares of the
Fund may be advertised. An explanation of how these total returns are calculated
for each class and the components of those calculations is set forth below. The
Fund currently offers four classes of shares of beneficial interest: Class A
Shares, Class B Shares, Class C Shares and Class M Shares. The different classes
of shares represent investments in the same portfolio of securities, but are
subject to different expenses and are likely to have different share prices. On
March 11, 1996, the Fund redesignated as "Class M Shares" its Class A Shares
which had been outstanding prior to that date, redesignated as "Class A Shares"
its Class Y Shares which had been outstanding prior to that date and authorized
the issuance of a new class of shares (Class C Shares). Class B Shares were
first publicly offered on May 2, 1995. No performance information is presented
below for Class C Shares because no shares of that class were issued during the
fiscal year ended
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<PAGE>
December 31, 1995.
The Fund's advertisements of its performance data with respect to any class
must, under applicable rules of the Securities and Exchange Commission, include
the average annual total returns for that class of shares of the Fund for the 1,
5, and 10-year periods (or the life of the class, if less) ending as of the most
recently-ended calendar quarter prior to the publication of the advertisement.
This enables an investor to compare the Fund's performance to the performance of
other funds for the same periods. However, a number of factors should be
considered before using such information as a basis for comparison with other
investments. An investment in the Fund is not insured; its returns and share
prices are not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their original
cost. Returns for any given past period are not a prediction or representation
by the Fund of future returns. The returns of each class of shares of the Fund
are affected by portfolio quality, the type of investments the Fund holds and
its operating expenses allocated to the particular class.
| | STANDARDIZED YIELDS
| | YIELD. The Fund's "yield" (referred to as "standardized yield") for a
given 30-day period for a class of shares is calculated using the following
formula set forth in rules adopted by the Securities and Exchange Commission
that apply to all funds that quote yields:
a-b
Standardized Yield = 2[ (----- + 1)(superior6) - 1]
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense
reimbursements).
c = the average daily number of shares of that class outstanding
during the 30-day period that were entitled to receive
dividends.
d = the maximum offering price per share of that class on the last
day of the period, adjusted for undistributed net investment
income.
The standardized yield of a class of shares for a 30-day period may differ from
its yield for any other period. The SEC formula assumes that the standardized
yield for a 30-day period occurs at a constant rate for a six-month period and
is annualized at the end of the six-month period. This standardized yield is not
based on actual distributions paid by the Fund to shareholders in the 30-day
period, but is a hypothetical yield based upon the net investment income from
the Fund's portfolio investments calculated for that period. The standardized
yield may differ from the "dividend yield" of that class, described below.
Additionally, because each class of shares is subject to different expenses, it
is likely that the standardized yields of the Fund's classes of shares will
differ. For the 30-day period ended December 31, 1995, the standardized yields
for the Fund's then outstanding Class A, Class B and Class Y Shares were 5.29%,
5.29% and 5.97%, respectively. The Fund's then outstanding Class A Shares have
been redesignated as Class M Shares and its then outstanding Class Y Shares have
been redesignated as Class A Shares. No standardized yields are presented for
Class C Shares
-22-
<PAGE>
because no shares of that class were issued during the fiscal year ended
December 31, 1995.
| | DIVIDEND YIELD AND DISTRIBUTION RETURN. From time to time the Fund may
quote a "dividend yield" or a "distribution return" for each class. Dividend
yield is based on the dividends paid on shares of a class from dividends derived
from net investment income during a stated period. Distribution return includes
dividends derived from net investment income and from realized capital gains
declared during a stated period. Under those calculations, the dividends and/or
distributions for that class declared during a stated period of one year or less
(for example, 30 days) are added together, and the sum is divided by the maximum
offering price per share of that class on the last day of the period. When the
result is annualized for a period of less than one year, the "dividend yield" is
calculated as follows:
Dividends of the Class
Dividend Yield of the Class = (divided by) Number of days (accrual period) x 365
Max. Offering Price of the Class (last day of period)
The maximum offering price for Class A Shares and Class M Shares includes
the maximum front-end sales charge. For Class B or Class C Shares, the maximum
offering price is the net asset value per share, without considering the effect
of contingent deferred sales charges.
- -- TOTAL RETURN INFORMATION
| | AVERAGE ANNUAL TOTAL RETURNS. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n") to achieve an Ending Redeemable Value ("ERV") of
that investment, according to the following formula:
( EVR )(superior 1/n)
(-----) -1 = Average Annual Total Return
( P )
| | CUMULATIVE TOTAL RETURNS. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV-P
--------- = Total Return
P
In calculating total returns for Class A Shares and Class M Shares, the
current maximum sales charges of 5.75% and 3.25%, respectively (as a percentage
of the offering price) are deducted from the initial investment ("P") (unless
the return is shown at net asset value, as described below).
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<PAGE>
For Class B shares, payment of a contingent deferred sales charge of 5.0% for
the first year, 4.0% for the second year, 3.0% for the third year, 3.0% for the
fourth year, 2.0% for the fifth year and 1.0% for the sixth year, and none
thereafter, is applied, as described in the Prospectus. For Class C Shares, the
payment of the 1% contingent deferred sales charge for the first 12 months is
applied as described in the Prospectus. Total returns also assume that all
dividends and capital gains distributions during the period are reinvested to
buy additional shares at net asset value per share, and that the investment is
redeemed at the end of the period. The "average annual total returns" on an
investment in the then outstanding Class A Shares of the Fund (which have now
been redesignated as Class M Shares) for the one and five year periods ended
December 31, 1995 and for the period from June 3, 1986 through December 31,
1995, were 21.90%, 19.77% and 9.97% respectively. The cumulative "total return"
on Class A Shares (which have now been redesignated as Class M Shares) for the
period from June 3, 1986 through December 31, 1995 was 148.34%. The cumulative
total returns on Class B Shares and Class Y Shares for the period from May 1,
1995 through December 31, 1995 were 11.59% and 15.42%, respectively. The Fund's
Class Y Shares were redesignated as Class A Shares on March 11, 1996.
-- TOTAL RETURNS AT NET ASSET VALUE. From time to time the Fund may also
quote an average annual total return at net asset value or a cumulative total
return at net asset value for Class A, Class B, Class C or Class M Shares. Each
is based on the difference in net asset value per share at the beginning and the
end of the period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions. The
cumulative total return at net asset value of the Fund's Class A Shares (which
have been redesignated as Class M Shares) for the one year period ended December
31, 1995 and the period from June 3, 1986 through December 31, 1995 was 26.00%
and 156.78%, respectively. The cumulative total returns at net asset value for
Class B Shares and Class Y Shares for the period from May 1, 1995 through
December 31, 1995 were 15.09% and 15.42% respectively. The Fund's Class Y Shares
were redesignated as Class A Shares on March 11, 1996.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A, Class B, Class C or Class M Shares. However,
when comparing total return of an investment in Class A, Class B, Class C or
Class M Shares of the Fund with that of other alternatives, investors should
understand that as the Fund invests in high yield securities, its shares are
subject to greater market risks than shares of funds having other investment
objectives and that the Fund is designed for investors who are willing to accept
greater risk of loss in the hopes of realizing greater gains.
OTHER PERFORMANCE COMPARISONS. From time to time the Fund may publish the
ranking of its Class A, Class B, Class C or Class M Shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent service. Lipper
monitors the performance of regulated investment companies, including the Fund,
and ranks their performance for various periods based on categories relating to
investment objectives. The performance of the Fund's classes are ranked against
(i) all other funds (excluding money market funds), (ii) all other high current
yield or fixed income funds and (iii) all other such funds in a specific size
category. The Lipper performance rankings are based on total returns that
include the reinvestment of capital gain distributions and income dividends but
do not take sales charges or taxes into consideration.
From time to time the Fund may publish the ranking of the performance of
its Class A, Class
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<PAGE>
B, Class C or Class M Shares by Morningstar, Inc., an independent mutual fund
monitoring service that ranks mutual funds, including the Fund, monthly in broad
investment categories (equity, taxable bond, municipal bond and hybrid) based on
risk-adjusted investment return. Investment return measures a fund's three, five
and ten-year average annual total returns (when available) in excess of 90-day
U.S. Treasury bill returns after considering sales charges and expenses. Risk
reflects fund performance below 90-day U.S. Treasury bill monthly returns. Risk
and return are combined to produce star rankings reflecting performance relative
to the average fund in a fund's category. Five stars is the "highest" ranking
(top 10%), four stars is "above average" (next 22.5%), three stars is "average"
(next 35%), two stars is "below average" (next 22.5%) and one star is "lowest"
(bottom 10%). Morningstar ranks the Class A, Class B, Class C and Class M Shares
of the Fund in relation to other rated high yield funds. Rankings are subject to
change.
The total return on an investment in the Fund's Class A, Class B, Class C
or Class M Shares may be compared with performance for the same period of
comparable indices, including but not limited to The First Boston Convertible
Securities Index and the Goldman Sachs 100 Convertible Index. Both indices serve
as a standard of comparison and measurement of market opportunities for
convertible funds and illustrates the unique and dynamic characteristics of the
convertible securities market. The First Boston Convertible Securities index is
calculated at each month end. The Goldman Sachs 100 Convertible Index is
comprised of 100 convertible securities. Index performance does not reflect any
commissions or expenses that would be incurred if an investor individually
purchased or sold the securities represented in an Index.
Investors may also wish to compare the return on the Fund's Class A, Class
B, Class C or Class M Shares to the returns on fixed income investments
available from banks and thrift institutions, such as certificates of deposit,
ordinary interest-paying checking and savings accounts, and other forms of fixed
or variable time deposits, and various other instruments such as Treasury bills.
However, the Fund's returns and share price are not guaranteed by the FDIC or
any other agency and will fluctuate daily, while bank depository obligations may
be insured by the FDIC and may provide fixed rates of return, and Treasury bills
are guaranteed as to principal and interest by the U.S. government.
From time to time, the Fund's Manager may publish rankings or ratings of
the Manager (or Transfer Agent) or the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of shareholder/investor
services by third parties may compare the OppenheimerFunds' services to those of
other mutual fund families selected by the rating or ranking services and may be
based upon the opinions of the rating or ranking service itself, based on its
research or judgment, or based upon surveys of investors, brokers, shareholders
or others.
The performance of the Fund's Class A, Class B, Class C or Class M Shares
may also be compared in publications to (i) the performance of various market
indices or to other investments for which reliable performance data is
available, and (ii) to averages, performance rankings or other benchmarks
prepared by recognized mutual fund statistical services.
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DISTRIBUTION AND SERVICE PLANS
The Fund has adopted a Service Plan for Class A Shares and Distribution and
Service Plans for Class B Shares, Class C Shares and Class M Shares under Rule
12b-1 of the Investment Company Act, pursuant to which the Fund makes payment to
the Distributor in connection with the distribution and/or servicing of shares
of that class as described in the Prospectus (collectively, the "Plans"). Each
Plan is described in detail in the Prospectus. Each Plan has been approved by a
vote of (i) the Board of Trustees of the Fund, including a majority of the
"Independent Trustees", cast in person at a meeting called for the purpose of
voting on that Plan, and (ii) the holders of a "majority" (as defined in the
Investment Company Act) of the shares of each class. For the Distribution and
Service Plan for Class C Shares, that vote was cast by the Manager as the sole
initial holder of Class C Shares of the Fund. The fee structure of each of the
Plans which became effective on January 4, 1996 (Class A Shares, Class B Shares
and Class M Shares) is identical to the fee structure of the Distribution Plan
for each class of shares as in effect prior to that time. Prior to March 11,
1996, the Fund's Class M Shares had been designated as its Class A Shares and
its Class A Shares had been designated as Class Y Shares. Class C Shares were
initially offered on March 11, 1996. The Class C Plan was not in effect during
the fiscal year ended December 31, 1995.
In addition, under the Plans, the Manager and the Distributor, in their
sole discretion, from time to time, may use their own resources (which, in the
case of the Manager, may include profits from the advisory fee it receives from
the Fund), to make payments to brokers, dealers or other financial institutions
(each is referred to as a "Recipient" under the Plans) for distribution and
administrative services they perform, at no cost to the Fund. The Distributor
and the Manager may, in their sole discretion, increase or decrease the amount
of payments they make to Recipients from their own resources.
Unless terminated as described below, each Plan continues in effect from
year to year but only as long as such continuance is specifically approved at
least annually by the Fund's Board of Trustees, including the Independent
Trustees, by a vote cast in person at a meeting called for the purpose of voting
on such continuance. Each Plan may be terminated at any time by the vote of a
majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of that class. No Plan may be amended to increase materially the amount of
payments to be made unless such amendment is approved by the class affected by
the amendment. In addition, because Class B Shares of the Fund automatically
convert into Class A Shares after six years, the Fund is required to obtain the
approval of Class B as well as Class A shareholders for a proposed amendment to
the Class A Plan that would materially increase the amount to be paid by Class A
shareholders under the Class A Plan. Such approval must be by a "majority" (as
defined in the Investment Company Act), of the Class A and Class B Shares voting
separately by class. All material amendments must be approved by the Board and
the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Trustees at least quarterly for
its review, detailing the amount of all payments made pursuant to each Plan, the
identity of each Recipient that received any such payment, and the purpose of
the payments. The report for the Class B and Class C Plans shall also include
the distribution costs of that quarter, and such costs for previous fiscal
period that have been carried forward, as explained in the Prospectus and below.
Those reports will be subject to the review and
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approval of the Independent Trustees in the exercise of their fiduciary duty.
Each Plan further provides that while it is in effect, the selection or
replacement and nomination of those Trustees of the Fund who are not "interested
persons" of the Fund is committed to the discretion of the Independent Trustees.
This does not prevent the involvement of others in such selection and nomination
if the final decision as to any such selection or nomination is approved by a
majority of such Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any quarter if
the aggregate net asset value of all Fund shares held by the Recipient for
itself and its customers, did not exceed a minimum amount, if any, that may be
determined from time to time by a majority of the Fund's Independent Trustees.
[Initially the Board of Trustees has set the fees at the maximum rate and set no
minimum amount of the assets.]
For the fiscal year ended December 31, 1995, payments under the then
existing Class A Plan totalled $1,324,659, consisting of $445,207 paid as
service fees and $869,542 paid as an asset-based sales charge. Of the total
amount of service fees paid, $433,379 was paid to recipients and $21,828 was
retained by Rochester Fund Distributors, Inc., the Fund's previous distributor,
for its services in maintaining shareholder accounts. Expenditures under the
asset-based sales charge were made as follows: advertising, $8,734; printing and
mailing prospectuses, $293,665 compensation to sales personnel, $134,278 and
compensation to dealers, $432,775. Any unreimbursed expenses incurred with
respect to Class A Shares for any fiscal quarter by the Distributor may not be
recovered under the Class A Plan in subsequent fiscal quarters. Effective as of
March 11, 1996, the Class A Plan was redesignated as Plan for Class M Shares.
For the fiscal year ended December 31, 1995, payments under the Class B
Plan totaled $92,392, all of which was paid to Rochester Fund Distributors,
Inc., the Fund's previous distributor as compensation. No amounts were paid by
Rochester Fund Distributors, Inc. to Recipients as reimbursement for expenses
incurred by them for services in maintaining shareholder accounts under the
Class B Plan.
For the fiscal year ended December 31, 1995, payments under the Class Y
Plan totaled $3,302, all of which was retained by Rochester Fund Distributors,
Inc., for its services in maintaining shareholder accounts. Any unreimbursed
expenses incurred with respect to Class Y Shares for any fiscal quarter by the
Distributor may not be recovered under the Class Y Plan in subsequent fiscal
quarters. Effective as of March 11, 1996, the Class Y Plan was redesignated as a
Plan for Class A Shares.
The Class B Plan and the Class C Plan allow the service fee payment to be
paid by the Distributor to Recipients in advance for the first year such shares
are outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net asset valued Class B and
Class C Shares sold. An exchange of shares does not entitle the Recipient to an
advance service fee payment. In the event Class B or Class C Shares are redeemed
during the first year that the shares are outstanding, the Recipient will be
obligated to repay a pro rata portion of the advance payment for those shares to
the Distributor.
Although the Class B and Class C Plans permit the Distributor to retain
both the asset-based sales charges and the service fees on such shares, or to
pay Recipients the service fee on a quarterly
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<PAGE>
basis, without payment in advance, the Distributor presently intends to pay the
service fee to Recipients in the manner described above. A minimum holding
period may be established from time to time under the Class B Plan and the Class
C Plan by the Board. Initially, the Board has set no minimum holding period. All
payments under the Class B Plan and the Class C Plan are subject to the
limitations imposed by the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., on payments of asset-based sales charges and service
fees.
Asset-based sales charge payments are designed to permit an investor to
purchase shares of the Fund without the assessment of a front-end sales load and
at the same time permit the Distributor to compensate brokers and dealers in
connection with the sale of Class B and Class C Shares of the Fund. The
Distributor's actual distribution expenses for any given year may exceed the
aggregate of payments received pursuant to the Class B Plan and Class C Plan and
from contingent deferred sales charges, and such expenses will be carried
forward and paid in future years. The Fund will be charged only for interest
expenses, carrying charges or other financial costs that are directly related to
the carry-forward of actual distribution expenses. For example, if the
Distributor incurred distribution expenses of $4 million in a given fiscal year,
of which $2,000,000 was recovered in the form of contingent deferred sales
charges paid by investors and $1,600,000 was reimbursed in the form of payments
made by the Fund to the Distributor under the Class B Plan, the balance of
$400,000 (plus interest) would be subject to recovery in future fiscal years
from such sources.
The Class B and Class C Plans provide for the distributor to be compensated
at a flat rate, whether the Distributor's distribution expenses are more or less
than the amounts paid by the Fund during that period. Such payments are made in
recognition that the Distributor (i) pays sales commissions to authorized
brokers and dealers at the time of sale and pays service fees as described in
the Prospectus, (ii) may finance such commissions and/or the advance of the
service fee payment to Recipients under those Plans, or may provide such
financing from its own resources, or from an affiliate, (iii) employs personnel
to support distribution of shares, and (iv) may bear the costs of sales
literature, advertising and prospectuses (other than those furnished to current
shareholders), state "blue sky" registration fees and certain other distribution
expenses.
ABOUT YOUR ACCOUNT
HOW TO BUY SHARES
ALTERNATIVE SALES ARRANGEMENTS - CLASS A, CLASS B, CLASS C AND CLASS M SHARES.
The availability of four classes of shares permits an investor to choose the
method of purchasing shares that is more beneficial to the investor depending on
the amount of the purchase, the length of time the investor expects to hold
shares and other relevant circumstances. Any salesperson or other person
entitled to receive compensation for selling Fund shares may receive different
compensation with respect to one class of shares than another.
The four classes of shares each represent an interest in the same portfolio
investments of the Fund. However, each class has different shareholder
privileges and features. The net income attributable to Class B, Class C and
Class M Shares and the dividends payable on Class B, Class
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C and Class M Shares will be reduced by incremental expenses borne by those
classes, including the asset-based sales charge to which Class B, Class C and
Class M Shares are subject.
The conversion of Class B Shares to Class A Shares after six years is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax adviser, to the effect
that the conversion of Class B Shares does not constitute a taxable event for
the holder under Federal income tax law. If such a revenue ruling or opinion is
no longer available, the automatic conversion feature may be suspended, in which
event no further conversions of Class B Shares would occur while such suspension
remained in effect. Although Class B Shares could then be exchanged for Class A
Shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the holder, and absent such exchange, Class B Shares might continue to
be subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B, Class C and Class M Shares
recognizes two types of expenses. General expenses that do not pertain
specifically to any class are allocated pro rata to the shares of each class,
based on the percentage of the net assets of such class to the Fund's total
assets, and then equally to each outstanding share within a given class. Such
general expenses include (i) management fees, (ii) legal, bookkeeping and audit
fees, (iii) printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, (iv) fees to unaffiliated Trustees, (v) custodian expenses, (vi)
share issuance costs, (vii) organization and start-up costs, (viii) interest,
taxes and brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to a class are
allocated equally to each outstanding share within that class. Such expenses
include (i) Distribution and/or Service Plan fees, (ii) incremental transfer and
shareholder servicing agent fees and expenses, (iii) registration fees and (iv)
shareholder meeting expenses, to the extent that such expenses pertain to a
specific class rather than to the Fund as a whole.
DETERMINATION OF NET ASSET VALUE PER SHARE. The net asset values per share of
Class A, Class B, Class C and Class M Shares of the Fund are determined as of
the close of business of The New York Stock Exchange on each day that the
Exchange is open, by dividing the value of the Fund's net assets attributable to
that class by the number of shares of that class outstanding. The Exchange
normally closes at 4:00 P.M., New York time, but may close earlier on some days
(for example, in case of weather emergencies or on days falling before a
holiday). The Exchange's most recent annual holiday schedule (which is subject
to change) states that it will close on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It may also close on other days. Trading may occur in debt
securities and in foreign securities when the Exchange is closed (including
weekends and holidays). Because the Fund's net asset values will not be
calculated on those days, the Fund's net asset value per share may be
significantly affected on such days when shareholders may not purchase or redeem
shares.
The Fund's Board of Trustees has established procedures for the valuation
of the Fund's securities, generally as follows: (i) equity securities traded on
a securities exchange or on the Nasdaq National Market System ("Nasdaq") are
valued at the last reported sale prices on their primary exchange or Nasdaq that
day (or, in the absence of sales that day, at values based on the last sale
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prices of the preceding trading day, or closing bid and asked prices); (ii)
securities actively traded on a foreign securities exchange are valued at the
last sales price available to the pricing service approved by the Fund's Board
of Trustees or to the Manager as reported by the principal exchange on which the
security is traded; (iii) unlisted foreign securities or listed foreign
securities not actively traded are valued as in (i) above, if available, or at
the mean between "bid" and "asked" prices obtained from active market makers in
the security on the basis of reasonable inquiry; (iv) long-term debt securities
having a remaining maturity in excess of 60 days are valued at the mean between
the "bid" and "asked" prices determined by a portfolio pricing service approved
by the Fund's Board of Trustees or obtained from active market makers in the
security on the basis of reasonable inquiry; (v) debt instruments having a
maturity of more than one year when issued, and non-money market type
instruments having a maturity of one year or less when issued, which have a
remaining maturity of 60 days or less are valued at the mean between "bid" and
"asked" prices determined by a pricing service approved by the Fund's Board of
Trustees or obtained from active market makers in the security on the basis of
reasonable inquiry; (vi) money market-type debt securities having a maturity of
less than one year when issued that having a remaining maturity of 60 days or
less are valued at cost, adjusted for amortization of premiums and accretion of
discounts; and (vii) securities (including restricted securities) not having
readily-available market quotations are valued at fair value under the Board's
procedures.
Trading in securities on European and Asian exchanges and over-the-counter
markets is normally completed before the close of the Exchange. Events affecting
the values of foreign securities traded in such markets that occur between the
time their prices are determined and the close of the Exchange will not be
reflected in the Fund's calculation of its net asset value unless the Board of
Trustees or the Manager, under procedures established by the Board, determines
that the particular event would materially affect the Fund's net asset values,
in which case an adjustment would be made. Foreign currency will be valued as
close to the time fixed for the valuation date as is reasonably practicable. The
values of securities denominated in foreign currency will be converted to U.S.
dollars at the prevailing rates of exchange at the time of valuation. In the
case of U.S. government and foreign securities and corporate bonds, where last
sale information is not generally available, such pricing procedures may include
"matrix" comparisons to the prices for comparable instruments on the basis of
quality, yield, maturity and other special factors involved. The Trustees will
monitor the accuracy of pricing services by comparing prices used for portfolio
evaluation to actual sales prices of selected securities.
Puts and calls held by the Fund are valued at the last sales price
on the principal exchange on which they are traded, or on Nasdaq, as applicable
as determined by a pricing service approved by the Board of Directors or by the
Manager, or, if there are no sales that day, in accordance with (i), above.
Forward currency contracts are valued at the closing price on the London foreign
exchange market as provided by a reliable bank, dealer or pricing service. When
the Fund writes an option, an amount equal to the premium received by the Fund
is included in the Fund's Statement of Assets and Liabilities as an asset, and
an equivalent deferred credit is included in the liability section. The deferred
credit is adjusted ("marked-to-market") to reflect the current market value of
the option. In determining the Fund's gain on investments, if a call written by
the Fund is exercised, the proceeds are increased by the premium received. If a
call or put written by the Fund expires, the Fund has a gain in the amount of
the premium; if the Fund enters into a closing purchase transaction, it will
have a gain or loss depending on whether the premium was more
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or less than the cost of the closing transaction. If the Fund exercises a put it
holds, the amount the Fund receives on its sale of the underlying investment is
reduced by the amount of premium paid by the Fund.
ACCOUNTLINK. When shares are purchased through AccountLink, each purchase must
be at least $25.00. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House transfer to
buy shares. Dividends will begin to accrue on shares purchased by the proceeds
of ACH transfers on the business day the Fund receives Federal Funds for the
purchase through the ACH system before the close of The New York Stock Exchange.
The Exchange normally closes at 4:00 P.M., but may close earlier on certain
days. If Federal Funds are received on a business day after the close of the
Exchange, the shares will be purchased and dividends will begin to accrue on the
next regular business day. The proceeds of ACH transfers are normally received
by the Fund 3 days after the transfers are initiated. The Distributor and the
Fund are not responsible for any delays in purchasing shares resulting from
delays in ACH transmissions.
REDUCED SALES CHARGES. See How to Purchase Shares in the Prospectus for a
description of how shares of each class are offered to the public and how the
excess of public offering price over the net amount invested, if any, is
allocated to authorized dealers. The Prospectus describes several special
purchase plans and methods by which shares of each class may be purchased. As
discussed in the Prospectus, a reduced sales charge rate may be obtained for
Class A Shares and Class M Shares under Right of Accumulation and Letters of
Intent because of the economies of sales efforts and expenses realized by the
Distributor, dealers and brokers making such sales. No sales charge is imposed
in certain circumstances described in the Prospectus because the Distributor or
dealer or broker incurs little or no selling expenses. The term "immediate
family" refers to one's spouse, children, grandchildren, parents, grandparents,
parents-in-law, brothers and sisters, sons-and daughters-in-law, siblings, a
sibling's spouse and a spouse's siblings.
-- THE OPPENHEIMER FUNDS. The Oppenheimer funds are those mutual funds for
which the Distributor acts as the distributor or the sub-distributor and include
the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
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Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer U.S. Government Trust
Oppenheimer Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Enterprise Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Fund
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest Global Value Fund, Inc.
Bond Fund Series--Oppenheimer Bond Fund for Growth
Rochester Fund Municipals*
Rochester Portfolio Series-Limited Term New York Municipal Fund*
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
*Shares of the Fund are not presently exchangeable for shares of these funds
except as described in "How to Exchange Shares."
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There is an initial sales charge on the purchase of Class A Shares of each
of the Oppenheimer funds except Money Market Funds (under certain circumstances
described herein, redemption proceeds of Money Market Fund shares may be subject
to a contingent deferred sales charge).
-- LETTERS OF INTENT. A Letter of Intent (referred to as a "Letter") is an
investor's statement in writing to the Distributor of the intention to purchase
Class A Shares and Class M Shares of the Fund (and Class A and Class B Shares of
other Oppenheimer funds) during a 13-month period (the "Letter of Intent
period"), which may, at the investor's request, include purchases made up to 90
days prior to the date of the Letter. The Letter states the investor's intention
to make the aggregate amount of purchases of shares which, when added to the
investor's holdings of shares of those funds, will equal or exceed the amount
specified in the Letter. Purchases made by reinvestment of dividends or
distributions of capital gains and purchases made at net asset value without
sales charge do not count toward satisfying the amount of the Letter. A Letter
enables an investor to count the Class A and Class B Shares purchased under the
Letter to obtain the reduced sales charge rate on purchases of Class A Shares
and Class M Shares of the Fund (and Class A Shares and Class B Shares of other
Oppenheimer funds) that applies under the Right of Accumulation to current
purchases of Class A Shares or Class M Shares. Each purchase of Class A Shares
or Class M Shares under the Letter will be made at the public offering price
(including the sales charge) that applies to a single lump-sum purchase of
shares in the amount intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of Intent
period, when added to the value (at offering price) of the investor's holdings
of shares on the last day of that period, do not equal or exceed the intended
purchase amount, the investor agrees to pay the additional amount of sales
charge applicable to such purchases, as set forth in "Terms of Escrow," below
(as those terms may be amended from time to time). The investor agrees that
shares equal in value to 5% of the intended purchase amount will be held in
escrow by the Transfer Agent subject to the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the Prospectus, this Statement of Additional
Information and the Application used for such Letter of Intent, and if such
terms are amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the Transfer
Agent will not hold shares in escrow. If the intended purchase amount under the
Letter entered into by an OppenheimerFunds prototype 401(k) plan is not
purchased by the plan by the end of the Letter of Intent period, there will be
no adjustment of commissions paid to the broker-dealer or financial institution
of record for accounts held in the name of that plan.
If the total eligible purchases made during the Letter of Intent period do
not equal or exceed the intended purchase amount, the commissions previously
paid to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to actual
purchases. If total eligible purchases during the Letter of Intent period exceed
the intended purchase amount and exceed the amount needed to qualify for the
next sales charge rate
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reduction set forth in the applicable prospectus, the sales charges paid will be
adjusted to the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid to the
dealer over the amount of commissions that apply to the actual amount of
purchases. The excess commissions returned to the Distributor will be used to
purchase additional shares for the investor's account at the net asset value per
share in effect on the date of such purchase, promptly after the Distributor's
receipt thereof.
In determining the total amount of purchases made under a Letter, shares
redeemed by the investor prior to the termination of the Letter of Intent period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.
| | Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary) made
pursuant to a Letter, shares of the Fund equal in value up to 5% of the intended
purchase amount specified in the Letter shall be held in escrow by the Transfer
Agent. For example, if the intended purchase amount is $50,000, the escrow shall
be shares valued in the amount of $2,500 (computed at the public offering price
adjusted for a $50,000 purchase). Any dividends and capital gains distributions
on the escrowed shares will be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is completed
within the thirteen-month Letter of Intent period, the escrowed shares will be
promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended purchase amount
specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid
and the amount of sales charges which would have been paid if the total amount
purchased had been made at a single time. Such sales charge adjustment will
apply to any shares redeemed prior to the completion of the Letter. If such
difference in sales charges is not paid within twenty days after a request from
the Distributor or the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares necessary to
realize such difference in sales charges. Full and fractional shares remaining
after such redemption will be released from escrow. If a request is received to
redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and appoints
the Transfer Agent as attorney-in-fact to surrender for redemption any or all
escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include (a) Class A Shares
sold with a front-end sales charge or subject to a Class A contingent deferred
sales charge, (b) Class M Shares sold with a front-end sales charge, (c) Class B
Shares of other Oppenheimer funds acquired subject to a contingent deferred
sales charge, and (d) Class A Shares or Class B Shares acquired in exchange for
either (i) Class A Shares of one of the other Oppenheimer funds that were
acquired subject to a Class A initial or contingent deferred sales charge or
(ii) Class B Shares of one of the other Oppenheimer funds that were acquired
subject to a contingent deferred sales charge.
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6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares," and the escrow will
be transferred to that other fund.
ASSET BUILDER PLANS. To establish an Asset Builder Plan from a bank account, a
check (minimum $25) for the initial purchase must accompany the application.
Shares purchased by Asset Builder Plan payments from bank accounts are subject
to the redemption restrictions for recent purchases described in "How To Sell
Shares," in the Prospectus. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use those accounts for monthly automatic purchases
of shares of up to four other Oppenheimer funds.
There is a front-end sales charge on the purchase of certain Oppenheimer
funds, or a contingent deferred sales charge may apply to shares purchased by
Asset Builder payments. An application should be obtained from the Distributor,
completed and returned, and a prospectus of the selected fund(s) should be
obtained from the Distributor or your financial advisor before initiating Asset
Builder payments. The amount of the Asset Builder investment may be changed or
the automatic investments may be terminated at any time by writing to the
Transfer Agent. A reasonable period (approximately 15 days) is required after
the Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans at any
time without prior notice.
CANCELLATION OF PURCHASE ORDERS. Cancellation of purchase orders for the Fund's
shares (for example, when a purchase check is returned to the Fund unpaid)
causes a loss to be incurred when the net asset value of the Fund's shares on
the cancellation date is less than on the purchase date. That loss is equal to
the amount of the decline in the net asset value per share multiplied by the
number of shares in the purchase order. The investor is responsible for that
loss. If the investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the Distributor for that amount by redeeming
shares from any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
HOW TO SELL SHARES
Information on how to sell shares of the Fund is stated in the Prospectus.
The information below supplements the terms and conditions for redemptions set
forth in the Prospectus.
-- INVOLUNTARY REDEMPTIONS. The Fund's Board of Trustees has the right to
cause the involuntary redemption of the shares held in any account if the
aggregate net asset value of those shares is less than $200 or such lesser
amount as the Board may fix. The Board of Trustees will not cause the
involuntary redemption of shares in an account if the aggregate net asset value
of the shares has fallen below the stated minimum solely as a result of market
fluctuations. Should the
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<PAGE>
Board elect to exercise this right, it may also fix, in accordance with the
Investment Company Act, the requirements for any notice to be given to the
shareholders in question (not less than 30 days), or the Board may set
requirements for granting permission to the Shareholder to increase the
investment, and set other terms and conditions so that the shares would not be
involuntarily redeemed.
REINVESTMENT PRIVILEGE. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of (i) Class A Shares, (ii)
Class B Shares or (iii) Class C Shares that were subject to the Class C
contingent deferred sales charge when redeemed, or (iv) Class M Shares. The
reinvestment may be made without sales charge only in Class A Shares of the Fund
or any of the other Oppenheimer funds into which shares of the Fund are
exchangeable as described below, at the net asset value next computed after the
Transfer Agent receives the reinvestment order. The shareholder must ask the
Distributor for that privilege at the time of reinvestment. Any capital gain
that was realized when the shares were redeemed is taxable, and reinvestment
will not alter any capital gains tax payable on that gain. If there has been a
capital loss on the redemption, some or all of the loss may not be tax
deductible, depending on the timing and amount of the reinvestment. Under the
Code, if the redemption proceeds of Fund shares on which a sales charge was paid
are reinvested in shares of the Fund or another of the Oppenheimer funds within
90 days of payment of the sales charge, the shareholder's basis in the shares of
the Fund that were redeemed may not include the amount of the sales charge paid.
That would reduce the loss or increase the gain recognized from the redemption.
However, in that case the sales charge would be added to the basis of the shares
acquired by the reinvestment of the redemption proceeds. The Fund may amend,
suspend or cease offering this reinvestment privilege at any time as to shares
redeemed after the date of such amendment, suspension or cessation.
TRANSFERS OF SHARES. Shares are not subject to the payment of a contingent
deferred sales charge of any class at the time of transfer to the name of
another person or entity (whether the transfer occurs by absolute assignment,
gift or bequest, not involving, directly or indirectly, a public sale). The
transferred shares will remain subject to the contingent deferred sales charge,
calculated as if the transferee shareholder had acquired the transferred shares
in the same manner and at the same time as the transferring shareholder. If less
than all shares held in an account are transferred, and some but not all shares
in the account would be subject to a contingent deferred sales charge if
redeemed at the time of transfer, the priorities described in the Prospectus
under "How to Buy Shares" for the imposition of the Class B or Class C
contingent deferred sales charge will be followed in determining the order in
which shares are transferred.
DISTRIBUTIONS FROM RETIREMENT PLANS. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans or
pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address listed
in "How To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the plan and
the Fund's other redemption requirements. Participants (other than self-employed
persons maintaining a plan account in their own name) in
OppenheimerFunds-sponsored prototype pension, profit-sharing or 401(k) plans may
not directly redeem or exchange shares held for their account under those plans.
The employer or plan administrator must sign the request. Distributions from
pension and profit sharing plans are subject to special requirements under the
Code and certain documents (available from the Transfer Agent) must be completed
before the
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<PAGE>
distribution may be made. Distributions from retirement plans are subject to
withholding requirements under the Code, and IRS Form W-4P (available from the
Transfer Agent) must be submitted to the Transfer Agent with the distribution
request, or the distribution may be delayed. Unless the shareholder has provided
the Transfer Agent with a certified tax identification number, the Code requires
that tax be withheld from any distribution even if the shareholder elects not to
have tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a distribution
satisfies the conditions of applicable tax laws and will not be responsible for
any tax penalties assessed in connection with a distribution.
SPECIAL ARRANGEMENTS FOR REPURCHASE OF SHARES FROM DEALERS AND BROKERS. The
Distributor is the Fund's agent to repurchase its shares from authorized dealers
or brokers. The repurchase price per share will be the net asset value next
computed after the Distributor receives the order placed by the dealer or
broker, except that if the Distributor receives a repurchase order from a dealer
or broker after the close of The New York Stock Exchange on a regular business
day, it will be processed at that day's net asset value if the order was
received by the dealer or broker from its customers prior to the time the
Exchange closes (normally, that is 4:00 P.M., but may be earlier on some days)
and the order was transmitted to and received by the Distributor prior to its
close of business that day (normally 5:00 P.M.). Ordinarily, for accounts
redeemed by a broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the Distributor's
receipt the required redemption documents in proper form, with the signature(s)
of the registered owners guaranteed on the redemption document as described in
the Prospectus.
AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. Investors owning shares of the Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(minimum $50) automatically on a monthly, quarterly, semi-annual or annual basis
under an Automatic Withdrawal Plan. Shares will be redeemed three business days
prior to the date requested by the shareholder for receipt of the payment.
Automatic withdrawals of up to $1,500 per month may be requested by telephone if
payments are to be made by check payable to all shareholders of record and sent
to the address of record for the account (and if the address has not been
changed within the prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on this basis.
Payments are normally made by check, but shareholders having AccountLink
privileges (see "How To Buy Shares") may arrange to have Automatic Withdrawal
Plan payments transferred to the bank account designated on the OppenheimerFunds
New Account Application or signature-guaranteed instructions. The Fund cannot
guarantee receipt of a payment on the date requested and reserves the right to
amend, suspend or discontinue offering such plans at any time without prior
notice. Because of the sales charge assessed on Class A and Class M Share
purchases, shareholders should not make regular additional Class A or Class M
Share purchases while participating in an Automatic Withdrawal Plan. Class B and
Class C shareholders should not establish withdrawal plans because of the
imposition of the contingent deferred sales charge on such withdrawals (except
where the contingent deferred sales charge is waived as described in the
Prospectus under "Waivers of Class B Contingent Deferred Sales Charge" or in
"Waivers of Class C Contingent Deferred Sales Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated below and
in the provisions of the OppenheimerFunds Application relating to such Plans, as
well as the Prospectus. These provisions may be amended from time to time by the
Fund and/or the Distributor. When adopted, such amendments will automatically
apply to existing Plans.
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<PAGE>
-- AUTOMATIC EXCHANGE PLANS. Shareholders can authorize the Transfer Agent
(on the OppenheimerFunds Application or signature-guaranteed instructions) to
exchange a pre-determined amount of shares of the Fund for shares (of the same
class) of other Oppenheimer funds automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount
that may be exchanged to each other fund account is $25. Exchanges made under
these plans are subject to the restrictions that apply to exchanges as set forth
in "How to Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
-- AUTOMATIC WITHDRAWAL PLANS. Fund shares will be redeemed as necessary to
meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first and shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales
charge, to the extent necessary to make withdrawal payments. Depending upon the
amount withdrawn, the investor's principal may be depleted. Payments made under
withdrawal plans should not be considered as a yield or income on your
investment.
The Transfer Agent will administer the investor's Automatic Withdrawal Plan
(the "Plan") as agent for the investor (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent. The Transfer
Agent and the Fund shall incur no liability to the Planholder for any action
taken or omitted by the Transfer Agent in good faith to administer the Plan.
Certificates will not be issued for shares of the Fund purchased for and held
under the Plan, but the Transfer Agent will credit all such shares to the
account of the Planholder on the records of the Fund. Any share certificates
held by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the account
may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made at
the net asset value per share determined on the redemption date. Checks or
AccountLink payments of the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment (receipt of payment on the date selected cannot be guaranteed),
according to the choice specified in writing by the Planholder.
The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time in mailing such notification
for the requested change to be put in effect. The Planholder may, at any time,
instruct the Transfer Agent by written notice (in proper form in accordance with
the requirements of the then-current Prospectus of the Fund) to redeem all, or
any part of, the shares held under the Plan. In that case, the Transfer Agent
will redeem the number of shares requested at the net asset value per share in
effect in accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to the
Transfer Agent. A Plan may also be terminated at any time by the Transfer Agent
upon receiving directions to that effect from the Fund. The Transfer Agent will
also terminate a Plan upon receipt of evidence
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<PAGE>
satisfactory to it of the death or legal incapacity of the Planholder. Upon
termination of a Plan by the Transfer Agent or the Fund, shares that have not
been redeemed from the account will be held in uncertificated form in the name
of the Planholder, and the account will continue as a dividend-reinvestment,
uncertificated account unless and until proper instructions are received from
the Planholder or his or her executor or guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the Planholder
may request issuance of a portion of the shares in certificated form. Upon
written request from the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued without causing the
withdrawal checks to stop because of exhaustion of uncertificated shares needed
to continue payments. However, should such uncertificated shares become
exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act
as agent in administering the Plan.
HOW TO EXCHANGE SHARES
As stated in the Prospectus, except with respect to exchanges of Class M
Shares, which may be exchanged only for Class A Shares as described in the
following paragraph, shares of a particular class may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A Shares of this Fund only for Class A Shares of another fund. At
present, Oppenheimer Money Market Fund, Inc. offers only one class of shares,
which are considered "Class A Shares" for exchange purposes. If a fund has only
one class of shares and it does not have a class designation, that class of
shares will be considered "Class A" for exchange purposes. Exchanges of Class A
and Class B Shares of the Fund may not be exchanged for shares of the same class
in either Rochester Fund Municipals (which offers only Class A Shares) or
Limited Term New York Municipal Fund (which offers both Class A and Class B
Shares). In some cases, sales charges may be imposed on exchange transactions.
The Fund is currently the only Oppenheimer fund which offers Class M
Shares. Except as described herein there may be no exchanges of any class of
shares of any Oppenheimer fund into Class M Shares of the Fund. With respect to
those accounts established on or before March 8, 1996, Class M Shares may be
exchanged for Class A Shares of Oppenheimer funds including Rochester Fund
Municipals and Limited Term New York Municipal Fund. In addition, Class A Shares
of either Rochester Fund Municipals or Limited Term New York Municipal Fund
which were acquired upon the exchange of Class M Shares may subsequently be
exchanged for Class M Shares of the Fund. With respect to those accounts
established after March 8, 1996, Class M Shares may be exchanged for Class A
Shares of Oppenheimer funds except Rochester Fund Municipals and Limited Term
New York Municipal Fund. Except for Class A Shares of either Oppenheimer Money
Market Fund, Inc. or Oppenheimer Cash Reserves which were acquired upon the
exchange of Class M Shares of the Fund, no exchanges of any class of shares of
any Oppenheimer fund into Class M Shares are permitted. A list showing which
funds offer which class can be obtained by calling the Distributor at
1-800-525-7048.
Class A Shares of Oppenheimer funds may be exchanged at net asset value for
shares of any Money Market Fund. Shares of any Money Market Fund purchased
without a sales charge may be exchanged for shares of Oppenheimer funds offered
with a sales charge upon payment of the sales charge (or, if applicable, may be
used to purchase shares of Oppenheimer funds subject to a contingent deferred
sales charge). However, shares of Oppenheimer Money Market Fund, Inc. purchased
with the redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 12 months prior
to that purchase may subsequently be exchanged for shares of other Oppenheimer
funds without being subject to an initial or contingent deferred sales charge,
whichever is applicable. To qualify for that privilege, the investor or the
investor's dealer must notify the Distributor of eligibility for this privilege
at the time the shares of Oppenheimer Money Market Fund, Inc. are purchased,
and, if requested, must supply proof of entitlement to this privilege. No
contingent deferred sales charge is imposed on exchanges of shares of either
class purchased subject to a contingent deferred sales charge. However, when
Class A Shares acquired by exchange of Class A Shares of other Oppenheimer funds
purchased subject to a Class A contingent deferred sales charge are redeemed
within 18 months of the end of the calendar month of the initial purchase of the
exchanged Class A Shares, the Class A contingent deferred sales charge is
imposed on the redeemed shares (see "Class A Contingent Deferred Sales Charge"
in the Prospectus). The Class B contingent deferred sales charge is imposed on
Class B Shares acquired by exchange if they are redeemed within 6 years of the
initial purchase of the exchanged Class B Shares. The Class C contingent
deferred sales charge is imposed on Class C
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<PAGE>
Shares acquired by exchange if they are redeemed within 12 months of the initial
purchase of the exchanged Class C Shares.
When Class B or Class C Shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the imposition
of the Class B or the Class C contingent deferred sales charge will be followed
in determining the order in which the shares are exchanged. Shareholders should
take into account the effect of any exchange on the applicability and rate of
any contingent deferred sales charge that might be imposed in the subsequent
redemption of remaining shares. Shareholders owning shares of more than one
class must specify whether they intend to exchange Class A, Class B, Class C
Shares or Class M Shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The Fund
may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may be less
than the number requested if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or this Statement of
Additional Information or would include shares covered by a share certificate
that is not tendered with the request. In those cases, only the shares available
for exchange without restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of, the
fund to which the exchange is to be made. For full or partial exchanges of an
account made by telephone, any special account features such as Asset Builder
Plans, Automatic Withdrawal Plans, checkwriting, if available, and retirement
plan contributions will be switched to the new account unless the Transfer Agent
is instructed otherwise. If all telephone lines are busy (which might occur, for
example, during periods of substantial market fluctuations), shareholders might
not be able to request exchanges by telephone and would have to submit written
exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the "Redemption
Date"). Normally, shares of the fund to be acquired are purchased on the
Redemption Date, but such purchases may be delayed by either fund up to five
business days if it determines that it would be disadvantaged by an immediate
transfer of the redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may disadvantage it (for
example, if the receipt of multiple exchange requests from a dealer might
require the disposition of portfolio securities at a time or at a price that
might be disadvantageous to the Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure that
the Fund selected is appropriate for his or her investment and should be aware
of the tax consequences of an exchange. For federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above, discusses some
of the tax consequences of reinvestment of redemption proceeds in such cases.
The Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.
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<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. Dividends will be payable on shares held of record
at the time of the previous determination of net asset value. However, daily
dividends on newly purchased shares will not be declared or paid until such time
as Federal Funds (funds credited to a member bank's account at the Federal
Reserve Bank) are available from the purchase payment for such shares. Normally,
purchase checks received from investors are converted to Federal Funds on the
next business day. If all shares in an account are redeemed, all dividends
accrued on shares in the account will be paid together with the redemption
proceeds. Dividends will be declared on shares repurchased by a dealer or broker
for three business days following the trade date (i.e., to and including the day
prior to settlement of the repurchase).
Dividends, distributions and the proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund, Inc.,
as promptly as possible after the return of such checks to the Transfer Agent,
in order to enable the investor to earn a return on otherwise idle funds.
TAX STATUS OF THE FUND'S DIVIDENDS AND DISTRIBUTIONS. The Federal tax treatment
of the Fund's dividends and distributions is explained in the Prospectus under
the caption "Dividends, Distributions and Taxes." Special provisions of the Code
govern the dividends-received deduction for corporate shareholders. Long-term
capital gains distributions are not eligible for the deduction. In addition, the
amount of dividends paid by the Fund which may qualify for the deduction is
limited to the aggregate amount of qualifying dividends (generally dividends
from domestic corporations) which the Fund derives from its portfolio
investments held for a minimum period, usually 46 days. A corporate shareholder
will not be eligible for the deduction on dividends paid on shares held by the
shareholder for 45 days or less. To the extent that the Fund derives a
substantial portion of its gross income from option premiums, interest income or
short-term gains from the sale of securities, or dividends from foreign
corporations, its dividends will not qualify for the deduction.
Under the Code, by December 31 each year the Fund must distribute 98% of
its taxable investment income earned from January 1 through December 31 of that
year and 98% of its capital gains realized in the period from November 1 of the
prior year to October 31 of the current year or else the Fund must pay an excise
tax on the amounts not distributed. While it is presently anticipated that the
Fund's distributions will meet those requirements, the Fund's Board and Manager
might determine that in a particular year it would be in the best interest of
the Fund not to distribute income or capital gains at the mandated levels and to
pay the excise tax on the undistributed amounts, which would reduce the amount
available for distribution to shareholders.
The Code requires that a holder (such as the Fund) of a zero coupon
security accrue a portion of the discount at which the security was purchased as
income each year even though the Fund receives no interest payment in cash on
the security during the year. The Fund may also from time to time receive
payment-in-kind securities in lieu of cash interest payments. As an investment
company, the Fund must pay out substantially all of its net investment income
each year. Accordingly, the Fund may be required to pay out as an income
distribution each year an amount which is greater than the total amount of cash
interest the Fund actually received. Such distributions will be made from the
cash assets of the Fund or by liquidation of portfolio securities, if necessary.
If a distribution of cash necessitates the liquidation of portfolio securities,
the Fund may realize a gain or loss from such sales. In the event the Fund
realizes net capital gains from such transactions, its shareholders may receive
a larger capital gain distribution than they would have had in the absence of
such transactions.
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<PAGE>
ADDITIONAL INFORMATION ABOUT THE FUND
THE CUSTODIAN. Investors Bank & Trust Company, whose principal business address
is 89 South Street, Boston, MA 02111, is currently the custodian of the Fund's
assets. The custodian's responsibilities include safeguarding and controlling
the Fund's portfolio securities and handling the delivery of such securities to
and from the Fund. It will be the practice of the Fund to deal with the
custodian in a manner uninfluenced by any banking relationship the custodian may
have with the Manager and its affiliates. It is anticipated that on or about
April 15, 1996, the Bank of New York, One Wall Street, New York, New York 10015,
will replace Investors Bank & Trust Company as the Fund's custodian.
INDEPENDENT AUDITORS. Price Waterhouse LLP, 1900 Chase Square, Rochester, NY
14604, serves as the Fund's independent accountants. The services provided by
Price Waterhouse LLP include auditing services and review and consultations on
various filings by the Fund with the Securities and Exchange Commission and tax
authorities. They also act as auditors for certain other funds advised by the
Manager and its affiliates.
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INVESTMENT ADVISER
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
TRANSFER AGENT
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
INDEPENDENT AUDITORS
Price Waterhouse LLP
1900 Chase Square
Rochester, NY 14604
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036
43
<PAGE>
The Bond Fund For Growth
Portfolio of Investments
December 31, 1995
<TABLE>
<CAPTION>
Par Value/ Interest Maturity Market
Shares Security Description Rate Date Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONVERTIBLE DEBT - 86.3%
Banks-Other Major - 2.3%
$ 500,000 Bangkok Bank Public Co. Ltd. (a) (d) 3.25% 03/03/04 $ 532,500
$5,000,000 Mitsubishi Bank, Ltd. 3.00% 11/30/02 5,775,000
-----------
Total $ 6,307,500
- ------------------------------------------------------------------------------------------------------------------------------------
Banks-Regional - 1.2%
$2,977,000 First Republic Bancorp Inc. 7.25% 12/01/02 $ 3,192,832
- ------------------------------------------------------------------------------------------------------------------------------------
Biotechnology - 1.3%
$1,750,000 Chiron Corp. (d) 1.90% 11/17/00 1,788,273
15,000 Lehman Brothers Holdings Inc. - Amgen Inc. YEELDS 6.50% 01/15/97(g) 915,000
14,000 Salomon Inc. - Amgen Inc. ELKS 6.50% 02/01/97(g) 909,118
-----------
Total $ 3,612,391
- ------------------------------------------------------------------------------------------------------------------------------------
Broadcasting - 1.0%
$1,505,000 Rogers Communications, Inc. LYONS 0.00% 05/20/13 522,987
$2,050,000 Scandinavian Broadcasting System SA 7.25% 08/01/05 2,103,812
-----------
Total $ 2,626,799
- ------------------------------------------------------------------------------------------------------------------------------------
Building Materials - 2.8%
$6,000,000 Cemex, S.A. de C.V. 4.25% 11/01/97 5,073,720
$4,500,000 Empresas ICA Sociedad Controladora, S.A. de C.V. 5.00% 03/15/04 2,370,915
$ 500,000 Nippon Denro Ispat Ltd. (a) (d) 3.00% 04/01/01 280,625
-----------
Total $ 7,725,260
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware - 7.0%
$ 300,000 Comptronix Corp. 6.75% 03/01/02 152,250
$3,425,000 Conner Peripherals, Inc. 6.50% 03/01/02 3,476,375
$2,000,000 EMC Corp. 4.25% 01/01/01 1,998,120
$ 450,000 SubMicron Systems Corp. (a) (b) (e) 9.00% 12/15/97 427,262
$6,000,000 Telxon Corp. (d) 5.75% 01/01/03 6,435,000
$ 400,000 Telxon Corp. 7.50% 06/01/12 415,000
$7,200,000 Unisys Corp. 8.25% 08/01/00 6,403,464
-----------
Total $19,307,471
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software - 3.5%
$3,117,000 MacNeal-Schwendler Corp. 7.875% 08/18/04 3,586,483
15,000 Salomon Inc. - Microsoft Corp. ELKS 5.000% 11/01/96(g) 1,560,000
$4,000,000 SoftKey International Inc. (d) 5.500% 11/01/00 3,005,000
$2,000,000 Spectrum Holobyte, Inc. (d) 6.500% 09/15/02 1,470,000
-----------
Total $ 9,621,483
- ------------------------------------------------------------------------------------------------------------------------------------
Conglomerates - 0.9%
$2,500,000 Alfa, S.A. de C.V. (d) 8.00% 09/15/00 $ 2,423,425
- ------------------------------------------------------------------------------------------------------------------------------------
Drugs - 1.7%
10,000 Bear Stearns Cos. Inc. - Merck & Co., Inc. CHIPS 5.50% 02/11/97(g) 455,000
$ 500,000 IVAX Corp. (d) 6.50% 11/15/01 531,560
$ 900,000 MEDIQ Inc. (NutraMax Products, Inc.) 7.50% 07/15/03 713,250
$2,000,000 Sandoz AG (d) 2.00% 10/06/02 1,895,000
$1,000,000 Sepracor Inc. (d) 7.00% 12/01/02 1,122,500
-----------
Total $ 4,717,310
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment - 6.5%
$ 500,000 Aeroflex, Inc. 7.50% 06/15/04 496,250
$2,000,000 California Microwave, Inc. 5.25% 12/15/03 1,700,000
$1,000,000 Cooper Industries, Inc. 7.05% 01/01/15 1,030,000
$3,331,000 Ducommun Inc. 7.75% 03/31/11 3,564,170
$5,500,000 General Instrument Corp. 5.00% 06/15/00 6,001,875
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Par Value/ Interest Maturity Market
Shares Security Description Rate Date Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Electrical Equipment - (continued)
$2,500,000 MagneTek, Inc. 8.00% 09/15/01 $ 2,231,250
$1,800,000 Porta Systems Corp. (a) (c) 6.00% 07/01/02 603,000
$2,440,000 Recognition International, Inc. 7.25% 04/15/11 2,232,600
-----------
Total $17,859,145
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics-Instruments - 11.7%
$5,000,000 ADT Operations, Inc. (ADT Ltd.) LYONS 0.00% 07/06/10 2,382,800
$2,500,000 Audiovox Corp. 6.25% 03/15/01 1,568,750
$ 355,000 Aurora Electronics, Inc. 7.75% 04/15/01 227,200
$1,500,000 Emerson Radio Corp. (a) 8.50% 08/15/02 1,095,000
$2,250,000 Laidlaw Inc. (ADT Ltd.) (d) 6.00% 01/15/99 2,683,125
$7,000,000 Thermo Electron Corp. (d) 4.25% 01/01/03 7,621,250
$8,155,000 Thermo Optek Corp. (d) 5.00% 10/15/00 8,562,750
$5,335,000 ThermoQuest Corp. (d) 5.00% 08/15/00 5,601,750
$2,500,000 Zenith Electronics Corp. (d) 8.50% 11/19/00 2,518,750
-----------
Total $32,261,375
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics-Semi-Conductors - 2.0%
$5,000,000 Integrated Device Technology, Inc. 5.50% 06/01/02 4,112,500
$1,500,000 Xilinx, Inc. 5.25% 11/01/02 1,366,875
-----------
Total $ 5,479,375
- ------------------------------------------------------------------------------------------------------------------------------------
Entertainment - 2.5%
$3,000,000 Discovery Zone, Inc. LYONS 0.00% 10/14/13 787,500
$2,000,000 Hasbro, Inc. 6.00% 11/15/98 2,190,000
$3,919,100 Time Warner, Inc. 8.75% 01/10/15 4,061,167
-----------
Total $ 7,038,667
- ------------------------------------------------------------------------------------------------------------------------------------
Fertilizers - 0.5%
$ 980,000 IMC Global, Inc. (f) 6.25% 12/01/01 $ 1,265,425
- ------------------------------------------------------------------------------------------------------------------------------------
Finance Companies - 0.4%
$1,850,000 Lomas Financial Corp. (a) (c) 9.00% 10/31/03 146,261
17,000 Merrill Lynch & Co., Inc.
(MGIC Investment Corp.) STRYPES 6.50% 08/15/98(g) 881,875
-----------
Total $ 1,028,136
- ------------------------------------------------------------------------------------------------------------------------------------
Foods - 1.2%
$3,405,000 Chock Full O' Nuts Corp. 8.00% 09/15/06 $ 3,217,725
- ------------------------------------------------------------------------------------------------------------------------------------
Home Builders - 2.4%
$2,000,000 Continental Homes Holding Corp. 6.875% 11/01/02 2,377,500
$2,750,000 Engle Homes, Inc. 7.00% 03/01/03 2,413,125
$1,940,000 U.S. Home Corp. 4.875% 11/01/05 1,872,100
-----------
Total $ 6,662,725
- ------------------------------------------------------------------------------------------------------------------------------------
Hospital Management - 1.9%
$2,165,000 Beverly Enterprises, Inc. 5.50% 08/01/18 2,062,162
$ 700,000 Integrated Health Services, Inc. 5.75% 01/01/01 706,125
$1,900,000 Pacific Physicians Services, Inc. 5.50% 12/15/03 1,837,053
$ 625,000 TheraTx, Inc. (d) 8.00% 02/01/02 575,781
-----------
Total $ 5,181,121
- ------------------------------------------------------------------------------------------------------------------------------------
Hospital-Supplies - 1.6%
$3,500,000 Fisher Scientific International Inc. 4.75% 03/01/03 3,747,170
$ 500,000 Maxxim Medical, Inc. 6.75% 03/01/03 526,250
$ 500,000 Physicians Clinical Laboratory, Inc. (a) (c) (d) 7.50% 08/15/00 45,000
-----------
Total $ 4,318,420
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance-Casualty - 2.4%
$4,000,000 Chubb Corp. 6.00% 05/15/98 4,495,000
$2,000,000 Trenwick Group Inc. 6.00% 12/15/99 2,300,000
-----------
Total $ 6,795,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
Par Value/ Interest Maturity Market
Shares Security Description Rate Date Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insurance-Multiline - 2.0%
$4,110,000 Old Republic International Corp. 5.75% 08/15/02 $ 5,628,111
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure Time - 4.3%
$2,415,000 Bell Sports Corp. 4.25% 11/15/00 1,691,997
$1,500,000 Microtel Franchise & Development Corp. (a) (b) (e) 8.00% 02/01/04 3,112,500
$1,500,000 Microtel Franchise & Development Corp. (a) (b) (e) 8.00% 02/01/05 3,112,500
$ 350,000 Travel Ports of America, Inc. (a) (b) 8.50% 01/15/05 361,371
$1,750,000 Travel Ports of America, Inc. (a) (b) (d) 8.50% 01/15/05 1,806,858
$2,000,000 WMS Industries Inc. 5.75% 11/30/02 1,720,000
-----------
Total $11,805,226
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery-Industrial/Specialty - 3.8%
$3,130,000 Mascotech, Inc. 4.50% 12/15/03 2,449,225
$ 500,000 Park-Ohio Industries, Inc. 7.25% 06/15/04 505,000
$5,154,000 Raymond Corp. 6.50% 12/15/03 7,164,060
$ 500,000 Varlen Corp. 6.50% 06/01/03 505,935
-----------
Total $10,624,220
- ------------------------------------------------------------------------------------------------------------------------------------
Merchandising-Drug - 0.6%
$3,000,000 Rite Aid Corp. 0.00% 07/24/06 $ 1,673,430
- ------------------------------------------------------------------------------------------------------------------------------------
Merchandising-Specialty - 2.7%
$2,800,000 Ben Franklin Retail Stores, Inc. 7.50% 06/01/03 1,863,736
$ 400,000 Eagle Hardware & Garden, Inc. 6.25% 03/15/01 287,500
$1,385,000 General Host Corp. 8.00% 02/15/02 1,121,850
$2,000,000 Lechters, Inc. 5.00% 09/27/01 1,190,000
$2,050,000 Michaels Stores, Inc. 4.75% 01/15/03 1,609,250
$ 500,000 Pier 1 Imports, Inc. (General Host Corp.) (a) (d) 8.50% 12/01/00 420,000
$1,500,000 Sports & Recreation, Inc. 4.25% 11/01/00 1,038,750
-----------
Total $ 7,531,086
- ------------------------------------------------------------------------------------------------------------------------------------
Metals-Miscellaneous - 0.2%
$ 500,000 GE Capital Corp. Global Medium-Term Notes (a) (d) 2.50% 02/14/97 $ 512,500
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Consumer Staples - 1.5%
$2,000,000 Olsten Corp. (The) (f) 4.875% 05/15/03 2,340,000
$2,000,000 Pharmaceutical Marketing Services, Inc. 6.25% 02/01/03 1,810,000
-----------
Total $ 4,150,000
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Transportation - 0.3%
$ 750,000 CareLine, Inc. (Laidlaw Inc.) 8.00% 05/01/01 $ 845,625
- ------------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated Domestic - 0.6%
$ 750,000 Oryx Energy Co. 7.50% 05/15/14 673,125
$1,000,000 USX - US Steel Group, Inc.\USX - Marathon Group 7.00% 06/15/17 950,620
-----------
Total $ 1,623,745
- ------------------------------------------------------------------------------------------------------------------------------------
Paper & Forest Products - 2.3%
$6,295,000 Repap Enterprises, Inc. 8.50% 08/01/97 $ 6,287,131
- ------------------------------------------------------------------------------------------------------------------------------------
Pollution Control - 1.3%
35,000 Browning-Ferris Industries, Inc. ACES-a 7.25% 06/30/98(g) 1,098,125
$ 458,000 Roy F. Weston, Inc. 7.00% 04/15/02 403,040
$2,466,000 WMX Technologies, Inc. 2.00% 01/24/05 2,120,760
-----------
Total $ 3,621,925
- ------------------------------------------------------------------------------------------------------------------------------------
Publishing & Printing - 2.0%
$ 750,000 Graphic Industries, Inc. 7.00% 05/15/06 703,125
$1,132,000 National Education Corp. 6.50% 05/15/11 803,720
$1,210,000 Scantron Corp. (John H. Harland Co.) 6.75% 06/01/11 1,179,750
$3,000,000 Thomas Nelson, Inc. 5.75% 11/30/99 2,906,250
-----------
Total $ 5,592,845
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
Par Value/ Interest Maturity Market
Shares Security Description Rate Date Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Real Estate - 1.9%
$2,000,000 Henderson Capital International Ltd. 5.00% 10/27/96 $ 2,057,500
$ 500,000 Hysan Development Co. Ltd. (a) (d) 6.75% 06/01/00 535,000
$2,885,000 Patten Corp. 8.25% 05/15/12 2,603,713
-----------
Total $ 5,196,213
- ------------------------------------------------------------------------------------------------------------------------------------
Restaurants - 1.4%
$3,000,000 Flagstar Cos. Inc. 10.00% 11/01/14 1,672,500
$2,000,000 Grand Metropolitan PLC (d) 6.50% 01/31/00 2,323,740
-----------
Total $ 3,996,240
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications - 1.6%
$2,500,000 Compania Telecomunicacion Chile SA 4.50% 01/15/03 2,781,250
10,000 First Chicago NBD Corp.
(Nextel Communications, Inc.) DECS 5.50% 02/15/97(g) 180,000
25,000 Sprint Corp. (Southern New England
Telecommunications Corp.) DECS 8.25% 03/31/00(g) 950,000
$ 500,000 Telekom Malaysia Berhad (a) (d) 4.00% 10/03/04 487,500
-----------
Total $ 4,398,750
- ------------------------------------------------------------------------------------------------------------------------------------
Textile-Apparel & Products - 2.4%
$5,000,000 Danskin, Inc. (a) (b) (e) 8.00% 09/01/02 $ 6,845,250
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco - 1.2%
$ 300,000 Dimon, Inc. 7.75% 09/30/06 397,197
$4,334,000 Standard Commercial Corp. 7.25% 03/31/07 3,066,305
-----------
Total $ 3,463,502
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities-Electric - 1.4%
$3,753,000 AES Corp. 6.50% 03/15/02 $ 3,935,959
- ------------------------------------------------------------------------------------------------------------------------------------
Total convertible debt (cost $228,952,658) $238,373,343
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Annual Market
Shares Security Description Dividend Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 14.2%
Aerospace/Defense - 0.3%
20,000 Kaman Corp. Series 2 $ 3.25 $ 957,500
- ------------------------------------------------------------------------------------------------------------------------------------
Automobiles - 0.1%
2,000 Ford Motor Co. Series A $ 4.20 $ 189,500
- ------------------------------------------------------------------------------------------------------------------------------------
Banks-Regional - 0.1%
7,500 Mid Am, Inc. Series A $ 1.8125 $ 274,215
- ------------------------------------------------------------------------------------------------------------------------------------
Building Materials - 1.8%
85,000 Owens-Corning Capital L.L.C. MIPS (d) $ 3.25 $ 5,084,020
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.0%
2,150 LSB Industries, Inc. Series 2 $ 3.25 $ 72,025
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware - 0.1%
82,020 Comptronix Corp. Series A 6.00% $ 287,070
- ------------------------------------------------------------------------------------------------------------------------------------
Conglomerates - 0.7%
15,000 Alco Standard Corp. ACES-b $ 5.04 1,282,500
15,000 Corning Delaware, L.P. MIPS $ 3.00 755,625
-----------
Total $ 2,038,125
- ------------------------------------------------------------------------------------------------------------------------------------
Finance Companies - 1.6%
70,000 Phoenix Duff & Phelps Corp. Series A $ 1.50 1,767,500
30,000 Travelers Group, Inc. Series B (f) $ 2.75 2,617,500
-----------
Total $ 4,385,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
Annual Market
Shares Security Description Dividend Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance-Casualty - 0.5%
25,000 St. Paul Capital L.L.C. MIPS $ 3.00 $ 1,406,250
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance-Life - 0.2%
8,000 Conseco, Inc. Series D $ 3.25 $ 424,000
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance-Miscellaneous - 0.3%
15,000 Alexander & Alexander Services, Inc. (d) $ 3.625 $ 729,375
- ------------------------------------------------------------------------------------------------------------------------------------
Metals-Steel - 0.5%
30,000 WHX Corp. Series B $ 3.75 $ 1,275,000
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Capital Goods-Technology - 0.0%
20,000 KENETECH Corp. PRIDES $ 1.67 $ 35,620
- ------------------------------------------------------------------------------------------------------------------------------------
Oil & Gas Products - 0.6%
85,000 ICO, Inc. $ 1.6875 $ 1,734,510
- ------------------------------------------------------------------------------------------------------------------------------------
Paper & Forest Products - 1.1%
40,000 International Paper Co. $ 2.625 1,812,480
5,000 James River Corp. Series K $ 3.375 230,625
18,600 James River Corp. Series L $ 3.500 862,575
-----------
Total $ 2,905,680
- ------------------------------------------------------------------------------------------------------------------------------------
Pollution Control - 0.4%
65,000 International Technology Corp. $ 1.75 $ 1,145,625
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate - 0.5%
110,000 Capstead Mortgage Corp. Series B $ 1.26 $ 1,430,000
- ------------------------------------------------------------------------------------------------------------------------------------
Savings & Loan - 3.6%
89,000 ONBANCorp, Inc. Series B $ 1.6875 2,497,518
176,840 RCSB Financial, Inc. Series B (f) $ 1.75 6,531,939
17,500 Sovereign Bancorp, Inc. Series B $ 3.125 1,000,773
-----------
Total $10,030,230
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications - 0.1%
4,000 Philippine Long Distance Telephone Co. Series III $ 3.50 $ 208,248
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco - 1.1%
483,900 RJR Nabisco Holdings Corp. PERCS $0.60125 $ 3,084,862
- ------------------------------------------------------------------------------------------------------------------------------------
Truckers - 0.6%
50,000 Arkansas Best Corp. Series A $ 2.875 $ 1,581,250
- ------------------------------------------------------------------------------------------------------------------------------------
Total convertible preferred stocks (cost $36,798,972) $39,278,105
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Security Description Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
COMMON STOCKS AND WARRANTS - 3.4%
Banks-Regional - 0.2%
13,910 Fleet Financial Group, Inc. (f) $ 566,833
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware - 0.0%
27,000 SubMicron Systems Corp., warrants, strike $14.00,
Expires 12/13/00 (a) (b) (e) $ 49,059
- ------------------------------------------------------------------------------------------------------------------------------------
Drugs - 0.4%
10,020 American Home Products Corp. (f) $ 971,940
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance-Casualty - 0.5%
30,001 Orion Capital Corp. $ 1,301,293
- ------------------------------------------------------------------------------------------------------------------------------------
Hospital Management - 0.2%
9,100 Columbia/HCA Healthcare Corp. (f) $ 461,825
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Security Description Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Leisure Time - 0.0%
5,000 Travel Ports of America, Inc., warrants, strike $3.60,
Expires 01/15/05 (b) $ 4,235
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous-Financial - 1.0%
63,159 SunAmerica, Inc. $ 3,000,066
- ------------------------------------------------------------------------------------------------------------------------------------
Paper & Forest Products - 0.2%
9,272 Federal Paper Board Co., Inc. $ 480,985
- ------------------------------------------------------------------------------------------------------------------------------------
Savings & Loan - 0.2%
17,588 Progressive Bank, Inc. $ 507,854
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.7%
22,000 Philip Morris Cos., Inc. (f) $ 1,991,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total common stocks and warrants (cost $4,070,180) $ 9,335,090
====================================================================================================================================
Total investments (cost $269,821,810) - 103.9% $286,986,538
------------
</TABLE>
CALL OPTIONS OUTSTANDING - (0.3%)
<TABLE>
<CAPTION>
Exercise
Shares Month/
Subject Liabilities for Call Exercise Market
To Call Options Outstanding Price Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10,000 American Home Products Corp. Jan/90 ($ 73,120)
9,100 Columbia/HCA Healthcare Corp. Feb/50 (21,321)
13,900 Fleet Financial Group, Inc. Apr/40 (36,488)
15,000 IMC Global, Inc. Apr/40 (51,555)
25,000 Olsten Corp. (The) Feb/40 (29,675)
22,000 Philip Morris Cos., Inc. Mar/80 (262,614)
39,500 RCSB Financial, Inc. Jan/25 (8,611)
40,000 RCSB Financial, Inc. Jan/22.5 (55,000)
42,000 RCSB Financial, Inc. Apr/25 (49,854)
20,000 Travelers Group, Inc. Mar/60 (96,240)
- ------------------------------------------------------------------------------------------------------------------------------------
Total call options outstanding (premiums received $580,692) ($684,478)
------------
Other assets and liabilities (net) - (3.6%) (9,994,470)
------------
Net assets at market - 100.0% $276,307,590
============
</TABLE>
(a) Illiquid security.
(b) Fair valued security.
(c) Non-income producing security.
(d) SEC Rule 144A restriction (See Note 3).
(e) Restricted security (See Note 3).
(f) Security held in connection with call option outstanding.
(g) Redeemable in cash at the lesser of a multiple of the issue price or an
amount based on the price of the stated company's common stock at maturity.
See accompanying notes to financial statements.
================================================================================
Portfolio Abbreviations:
ACES-a Automatic Common Exchange Securities
ACES-b Automatically Convertible Equity Securities
CHIPS Common-linked Higher Income Participation Securities
DECS Debt Exchangeable for Common Stock
ELKS Equity-Linked Securities
LYONS Liquid Yield Option Notes
MIPS Monthly Income Preferred Securities
PERCS Preferred Equity Redemption Cumulative Stock
PRIDES Preferred Redeemable Increased Dividend Equity Securities
STRYPES Structured Yield Product Exchangeable for Stock
YEELDS Yield Enhanced Equity Linked Debt Securities
Asset Composition Table
December 31, 1995 (Unaudited)
Percentage
Rating of Bonds
---------- ----------
AAA 0.2%
AA 6.7%
A 14.3%
BBB 12.0%
BB 10.8%
B 27.2%
Below B 2.8%
Not rated 26.0%
-----
Total 100.0%
=====
49
<PAGE>
The Bond Fund For Growth
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments at market (Cost $269,821,810) $286,986,538
Cash and cash equivalents 22,476
Dividends and interest receivable 3,597,928
Receivable for capital shares sold 4,686,950
Receivable for investments sold 1,175,000
Other assets 43,518
-------------
Total assets 296,512,410
-------------
Liabilities
Payable for investments purchased 8,658,887
Payable for capital shares repurchased 475,798
Demand note payable to Bank (Interest rate 6.5% at 12/31/95) 9,120,000
Call options outstanding (Premiums received $580,692) 684,478
Accrued taxes 1,094,278
Other liabilities 171,379
-------------
Total liabilities 20,204,820
-------------
Net Assets $276,307,590
=============
=====================================================================================
Represented by
Paid in capital $259,414,130
Excess of distributions over net investment income (40,930)
Accumulated net realized loss on investments and options (126,552)
Net unrealized appreciation of investments and options 17,060,942
-------------
Total - Representing net assets applicable to capital shares
outstanding $276,307,590
=============
=====================================================================================
Computation of net asset value and offering price
Class A Shares:
Net asset value and redemption price per share
($239,340,681 divided by 17,143,195 shares) $13.96
=============
Offering price per share (100/96.75 of $13.96) * $14.43
=============
Class B Shares:
Net asset value, redemption price and offering price per
share ($34,465,026 divided by 2,464,766 shares) + $13.98
=============
Class Y Shares:
Net asset value, redemption price and offering price per
share ($2,501,883 divided by 179,155 shares) $13.96
=============
</TABLE>
* On single retail sales of less than $250,000. On sales of $250,000 or more
and on group sales the offering price is reduced.
+ Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See accompanying notes to financial statements.
50
<PAGE>
The Bond Fund For Growth
================================================================================
Statement of Operations
Year ended December 31, 1995
Inventment Income:
Interest $ 10,382,346
Dividends 2,502,387
------------
Total investment income 12,884,733
------------
Expenses:
Distribution fees - Class A 1,324,659
Distribution fees - Class B 92,392
Distribution fees - Class Y 3,032
Management fees 1,030,091
Shareholder servicing
agent fees - Class A 230,475
Shareholder servicing
agent fees - Class B 14,271
Shareholder servicing
agent fees - Class Y 764
Registration fees 89,072
Accounting and auditing 82,499
Shareholder communications 51,538
Custodian fees 30,507
Legal fees 27,930
Trustees' fees 15,000
Miscellaneous 10,470
Interest 52,337
------------
Total expenses 3,055,037
Expenses paid indirectly (Note 4) (25,560)
------------
Net expenses 3,029,477
------------
Net investment income 9,855,256
------------
Realized and unrealized gain
(loss) on investments and options:
Net realized gain on investments 10,092,619
Net realized loss on options (619,854)
------------
Total net realized gain 9,472,765
------------
Net increase in unrealized
appreciation:
Investments 21,450,248
Options 8,410
------------
Total increase in unrealized
appreciation 21,458,658
------------
Net gain on investments
and options 30,931,423
------------
Net increase in net assets
resulting from operations $ 40,786,679
============
================================================================================
Statement of Changes in Net Assets
Year ended December 31, 1995 1994
------------- -------------
Increase in net assets -
Operations:
Net investment income .................. $ 9,855,256 $ 5,552,021
Net realized gain from
security transactions ................ 9,472,765 2,246,856
Increase (decrease) in
unrealized appreciation .............. 21,458,658 (10,516,166)
------------- -------------
Increase (decrease) in net
assets resulting
from operations ...................... 40,786,679 (2,717,289)
------------- -------------
Distributions to shareholders
from:
Net investment income -
Class A .............................. (11,839,019) (5,616,654)
Net investment income -
Class B .............................. (728,015) --
Net investment income -
Class Y .............................. (92,063) --
Capital gains - Class A ................ (8,052,576) (1,445,043)
Capital gains - Class B ................ (1,126,719) --
Capital gains - Class Y ................ (80,834) --
------------- -------------
Total distributions
to shareholders .................... (21,919,226) (7,061,697)
------------- -------------
Fund share transactions:
Increase in net assets
derived from Fund share
transactions (Note 5) ................ 130,749,104 67,095,060
------------- -------------
Increase in net assets ................... 149,616,557 57,316,074
Net assets:
Beginning of year ........................ 126,691,033 69,374,959
------------- -------------
End of year (including excess of
distributions over net investment
income of $40,930 - 1995 and
$24,929 - 1994) ........................ $ 276,307,590 $ 126,691,033
============= =============
See accompanying notes to financial statements.
51
<PAGE>
The Bond Fund For Growth
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------------
Year ended December 31,
1995 1994 1993 1992 (a) 1991 (b)
-------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.20 $13.16 $11.43 $9.37 $7.88
-------- -------- ------- ------- ------
Income from investment operations:
Net investment income 0.70 0.68 0.59 0.69 0.65
Net realized and unrealized gain
(loss) on investments 2.42 (0.81) 1.79 2.15 1.53
-------- -------- ------- ------- ------
Total from investment operations 3.12 (0.13) 2.38 2.84 2.18
-------- -------- ------- ------- ------
Less distributions to shareholders from:
Net investment income (0.87) (0.69) (0.65) (0.78) (0.69)
Capital gains (0.49) (0.14) -- -- --
-------- -------- ------- ------- ------
Total distributions (1.36) (0.83) (0.65) (0.78) (0.69)
-------- -------- ------- ------- ------
Net asset value, end of year $13.96 $12.20 $13.16 $11.43 $9.37
======== ======== ======= ======= ======
Total return (excludes sales load) 26.00% (1.12%) 21.23% 31.19% 28.50%
Ratios/supplemental data:
Net assets, end of year (000 omitted) $239,341 $126,691 $69,375 $10,241 $6,403
Ratio of total expenses
to average net assets 1.58%(c) 1.66% 1.78% 1.93% 2.01%
Ratio of total expenses (excluding
interest) to average net assets (d) 1.56%(c) 1.65% 1.75% 1.91% 1.94%
Ratio of net investment income to
average net assets 5.12% 5.24% 4.70% 6.62% 7.60%
Portfolio turnover rate 57.51% 52.82% 88.66% 80.09% 48.55%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) 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.
(b) 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.
(c) Effective in 1995, the ratios do not include reductions from custodian fee
offset arrangements. The 1995 ratio of total expenses and the ratio of
total expenses (excluding interest) to average net assets are 1.57% and
1.54%, respectively, after including this reduction. See Note 4.
(d) 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.
Per share information has been determined on the basis of the weighted number of
shares outstanding during the period.
52
<PAGE>
The Bond Fund For Growth
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Class B Class Y
----------------------- -----------------------
Period ended Period ended
December 31, 1995 (d) December 31, 1995 (d)
----------------------- -----------------------
<S> <C> <C>
Net asset value, beginning of period $13.11 $13.11
----------------------- -----------------------
Income from investment operations:
Net investment income 0.45 0.54
Net realized and unrealized gain
on investments 1.51 1.48
----------------------- -----------------------
Total from investment operations 1.96 2.02
----------------------- -----------------------
Less distributions to shareholders from:
Net investment income (0.60) (0.68)
Capital gains (0.49) (0.49)
----------------------- -----------------------
Total distributions (1.09) (1.17)
----------------------- -----------------------
Net asset value, end of period $13.98 $13.96
======================= =======================
Total return (excludes sales load) 15.09%(d) 15.42%(d)
Ratios/supplemental data:
Net assets, end of period (000 omitted) $34,465 $2,502
Ratio of total expenses
to average net assets 1.69%(a)(b) 1.05%(a)(c)
Ratio of total expenses (excluding
interest) to average net assets (e) 1.64%(a)(b) 1.01%(a)(c)
Ratio of net investment income to
average net assets 4.82%(a) 5.63%(a)
Portfolio turnover rate 57.51% 57.51%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Annualized.
(b) Effective in 1995, the ratios do not include reductions from custodian fee
offset arrangements. The 1995 ratio of total expenses and the ratio of
total expenses (excluding interest) to average net assets are 1.68%
and1.63%, respectively, after including this reduction. See Note 4.
(c) Effective in 1995, the ratios do not include reductions from custodian fee
offset arrangements. The 1995 ratio of total expenses and the ratio of
total expenses (excluding interest) to average net assets are 1.03%
and1.00%, respectively, after including this reduction. See Note 4.
(d) For the period from May 1, 1995 (inception of offering) to December 31,
1995.
(e) 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.
Per share information has been determined on the basis of the weighted number of
shares outstanding during the period.
53
<PAGE>
The Bond Fund For Growth
Notes to Financial Statements
December 31, 1995
Note 1. Significant Accounting Policies:
The Bond Fund For Growth (the "Fund") is a series of Rochester Fund Series which
is registered under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company. The Fund seeks a high
level of total return on its assets through a combination of current income and
capital appreciation. The Fund offers Class A, Class B and Class Y Shares. Class
A Shares are sold with a front-end sales charge. Class B Shares may be subject
to a contingent deferred sales charge. Class Y Shares are sold only to qualified
institutions and are not subject to any sales charge. All three classes of
shares have identical rights to earnings, assets and voting privileges, except
that each class has its own distribution plan, expenses directly attributable to
a particular class and exclusive voting rights with respect to matters affecting
a single class. Class B Shares will automatically convert to Class A Shares six
years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements:
Security valuation. Investments in securities traded on a national securities
exchange are valued at the closing sales price on the last business day of the
period; securities traded in the over-the-counter market, listed securities for
which no sale was reported on that date and exchange traded convertible bonds
where the last sales price is not considered to be representative of the most
recent bid and ask prices are valued at the mean between the bid and ask prices.
In some instances, securities which trade on an exchange or in the
over-the-counter market, but trade more actively in a dealer market, are valued
at the mean of the reported bid and ask price by a dealer. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Trustees.
Security transactions and related investment income. Security transactions are
recorded on the trade date. Cost is determined and realized gains and losses are
based upon the specific identification method for both financial statement and
federal income tax purposes. Interest income is recorded on the accrual basis.
In computing net investment income, the Fund accretes original issue discount.
Market discount is accreted at the time of sale (to the extent of the lesser of
the accrued market discount or the disposition gain) and is treated as income,
rather than capital gain. Dividend income is recorded on the ex-dividend date.
Call options. Call options are written by the Fund only on securities owned by
the Fund and all such options are listed on a national securities exchange. When
the Fund sells an option, the premium received is recorded in the Statement of
Assets and Liabilities as an asset and as an equivalent liability. The amount of
the liability is subsequently adjusted to reflect the current market value of
the option written. The Fund's use of written options involves, to varying
degrees, elements of market risk in excess of the amount recognized in the
Statement of Assets and Liabilities. The contract amounts reflect the extent of
the Fund's involvement in these financial instruments. Risks arise from the
possible movements in securities' values underlying these instruments. The
Fund's activities in written options are conducted through regulated exchanges
which do not result in counterparty credit risks.
Allocation of income, expenses and gains and losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
Distributions to shareholders. Income distributions are declared and recorded
separately for Class A, Class B and Class Y Shares each day based on estimated
net investment income. Such distributions are paid quarterly. Capital gain
distributions, if any, are recorded on the ex-dividend date and paid annually.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences include the treatment of wash sales.
Reclassifications are made to the Fund's capital accounts to reflect income and
gains available for distribution (or available capital loss carryovers) under
income tax regulations.
Federal income taxes. During any particular year, the Fund is required to
distribute certain minimum amounts of net realized capital gains and net
investment income in order to avoid a federal income or excise tax. It is the
Fund's intention to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable and tax-exempt income to shareholders. As of December 31, 1995, the Fund
has an accrued tax liability of $1,094,278 for net unrealized gains at the time
of the acquisition of Rochester Tax Managed Fund, Inc. by the Fund (see Note 6).
54
<PAGE>
Other. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
Note 2. Management Fee and Other Transactions with Affiliated Parties:
Ronald H. Fielding, President and a trustee of the Fund, is also an officer,
director, and controlling shareholder of Fielding Management Company, Inc.
("FMC"), the Fund's investment adviser, as well as an officer, director and
controlling shareholder of Rochester Fund Distributors, Inc. ("RFD"), the Fund's
principal underwriter, and an officer, director and controlling shareholder of
Rochester Fund Services, Inc. ("RFS"), the Fund's shareholder servicing,
accounting and pricing agent. See Note 7.
The management fee payable to FMC is based on an annual rate of .625% of average
daily net assets up to $50 million, .50% of average daily net assets on the next
$250 million, and .4375% of average daily net assets in excess of $300 million.
During 1995, FMC received fees of $1,030,091 for management and investment
advisory services.
The Fund has adopted a distribution plan with respect to its Class A Shares (the
"Class A Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940, as
amended, which permits the Fund to pay an asset based sales charge of up to .50%
per annum of its relative net assets attributable to Class A Shares for certain
sales related distribution expenses and a service fee of up to .25% per annum of
relative net assets attributable to Class A Shares for expenses incurred in
connection with the maintenance of shareholder accounts. For the year ended
December 31, 1995, the Fund paid distribution fees on the Class A Plan of
$1,324,659 to RFD. From this amount, RFD made payments of $780,467 to broker
dealers and financial institutions.
The Fund has adopted a separate distribution plan with respect to its Class B
Shares (the "Class B Plan") pursuant to Rule 12b-1 of the Investment Company Act
of 1940, as amended, which permits the Fund to pay an asset based sales charge
of up to .75% per annum of its relative net assets attributable to Class B
Shares for certain sales related distribution expenses and a service fee of up
to .25% per annum of relative net assets attributable to Class B Shares for
expenses incurred in connection with the maintenance of shareholder accounts.
For the year ended December 31, 1995, the Fund paid distribution fees on the
Class B Plan of $92,392 to RFD.
The Fund has also adopted a distribution plan with respect to its Class Y Shares
(the "Class Y Plan") pursuant to Rule 12b-1 of the Investment Company Act of
1940, as amended, which permits the Fund to pay a service fee of up to .25% per
annum of relative net assets attributable to Class Y Shares for expenses
incurred in connection with the maintenance of shareholder accounts. For the
year ended December 31, 1995, the Fund paid distribution fees on the Class Y
Plan of $3,032 to RFD. From this amount, RFD made payments of $471 to broker
dealers and financial institutions.
For the year ended December 31, 1995, RFD, acting as underwriter, received
$228,970 as its portion of the sales charge from the sale of Class A Shares of
the Fund. Class B Shares are sold without an initial sales charge; however, RFD
pays a sales commission of 3% (including a prepaid service fee of .25%) to
dealers who sell Class B Shares. A contingent deferred sales charge is imposed
on Class B Shares redemptions within six years of purchase. During 1995, RFD
received contingent deferred sales charges of $5,001 from redemptions of Class B
Shares. Class Y Shares are sold without an initial sales charge or a contingent
deferred sales charge.
The shareholder servicing agent fee charged by RFS to the Fund is based on an
annual maintenance fee of $24.12 for each Class A and Class Y shareholder
account and $26.02 for each Class B shareholder account. For the year ended
December 31, 1995, RFS received $230,475, $14,271 and $764 in shareholder
servicing agent fees for Class A, Class B and Class Y Shares, respectively.
During 1995, the Fund was charged $62,450 by RFS for pricing and accounting
services.
Note 3. Portfolio Information:
Purchases at cost and proceeds from sales of investment securities for the year
ended December 31, 1995 were $258,429,455 and $136,312,744, respectively.
55
<PAGE>
The Fund had transactions in call options as follows:
Number of
Contracts Premiums
--------- -----------
Options Outstanding at
December 31, 1994 0 $ 0
Options written 5,740 1,282,510
Options acquired as a result of the
June 28, 1995 acquisition of
Rochester Tax Managed Fund, Inc. 655 92,417
Options expired, exercised and
terminated in closing purchase
transactions (4,030) (794,235)
------ -----------
Options outstanding at
December 31, 1995 2,365 $ 580,692
====== ===========
The Fund has no specific percentage limitation on restricted securities except
to the extent of the security's liquidity. The Fund may not invest more than 15%
of its net assets in illiquid securities. At December 31, 1995, the Fund held
$20,372,186 in illiquid securities (constituting 7.4% of net assets). The Fund
held $72,537,853 in restricted securities at December 31, 1995, comprising
approximately 26.3% of net assets. The majority of these securities, although
not registered under the Securities Act of 1933, as amended (the "Act"), may be
resold to certain qualified institutional buyers in reliance upon Rule 144A
under the Act and are considered to be liquid due to the active institutional
market that exists for these securities.
<TABLE>
<CAPTION>
Date of Purchase % of Net
Description Acquisition Cost Assets
----------- ----------- ---- ------
<S> <C> <C> <C>
Alexander & Alexander Services, Inc., $3.625+ 3/94 & 1/95 $ 638,750 0.3%
Alfa, S.A. de C.V., 8.0%, 2000+ 9/95 2,500,000 0.9%
Bangkok Bank Public Co. Ltd., 3.25%, 2004+ 2/94 500,000 0.2%
Chiron Corp., 1.9%, 2000+ 11/93 & 1/95 1,340,263 0.6%
Danskin, Inc., 8.0%, 2002 8/95 5,000,000 2.5%
GE Capital Corp., Global Med-Term Notes, 2.5%, 1997+ 1/94 500,000 0.2%
Grand Metropolitan PLC, 6.5%,2000+ 1/95 & 9/95 2,070,313 0.8%
Hysan Development Co. Ltd., 6.75%, 2000+ 5/95 500,000 0.2%
IVAX Corp., 6.5%, 2001+ 9/94 465,000 0.2%
Laidlaw Inc. (ADT Ltd.), 6.0%, 1999+ 12/93 - 4/94 2,347,500 1.0%
Microtel Franchise & Dev. Corp., 8.0%, 2004 1/94 1,500,000 1.1%
Microtel Franchise & Dev. Corp., 8.0%, 2005 1/95 1,500,000 1.1%
Nippon Denro Ispat Ltd., 3.0%, 2001+ 3/94 500,000 0.1%
Owens-Corning Capital L.L.C. MIPS, $3.25+ 5/95 - 10/95 4,461,250 1.8%
Physicians Clinical Laboratory, Inc., 7.5%, 2000+ 2/94 515,000 0.0%
Pier 1 Imports, Inc. (General Host), 8.5%, 2000+ 12/94 470,000 0.2%
Sandoz AG, 2.0%, 2002+ 9/95 1,623,400 0.7%
Sepracor Inc., 7.0%, 2002+ 11/95 1,000,000 0.4%
SoftKey International Inc., 5.5%, 2000+ 10/95 - 12/95 3,682,500 1.1%
Spectrum Holobyte, Inc., 6.5%, 2002+ 9/95 2,000,000 0.5%
SubMicron Systems Corp., 9.0%, 1997 12/95 450,000 0.2%
SubMicron Systems Corp., warrants, strike $14.00, 2000 12/95 0 0.0%
Telekom Malaysia Berhad, 4.0%, 2004+ 9/94 500,000 0.2%
Telxon Corp., 5.75%, 2003+ 12/95 6,000,000 2.3%
TheraTx, Inc., 8.0%, 2002+ 4/95 571,875 0.2%
Thermo Electron Corp., 4.25%, 2003+ 11/95 7,000,000 2.8%
Thermo Optek Corp., 5.0%, 2000+ 9/95 & 12/95 8,184,475 3.1%
ThermoQuest Corp., 5.0%, 2000+ 7/95 - 12/95 5,555,875 2.0%
Travel Ports of America, Inc., 8.5%, 2005+ 2/95 & 8/95 1,750,625 0.7%
Zenith Electronics Corp., 8.5%, 2000+ 9/95 - 11/95 2,562,500 0.9%
----
26.3%
====
</TABLE>
+SEC Rule 144A restriction.
56
<PAGE>
Investments in non-U.S. issuers equals approximately 14.18% of net assets at
December 31, 1995. All investments of foreign issuers are denominated in U.S.
dollars.
Unrealized appreciation (depreciation) at December 31, 1995 based on cost of
securities for federal income tax purposes of $269,966,460 was:
Gross unrealized appreciation $30,279,334
Gross unrealized depreciation (13,259,256)
-----------
Net unrealized appreciation $17,020,078
===========
Note 4. Bank Borrowings and Expense Offset Arrangements:
The Fund may borrow up to 5% of its total net assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The Fund has
entered into an agreement which enables it to participate with other funds
managed by FMC, or an affiliate of FMC, in an unsecured line of credit with a
bank which permits borrowings up to $70 million, collectively. Interest is
charged to each fund, based on its borrowings, at a rate equal to the New York
Interbank Offer Rate (NIBOR) plus .75%. Borrowings are payable on demand.
The Fund had borrowings of $9,120,000 outstanding at December 31, 1995. For the
year ended December 31, 1995, the average monthly loan balance was $768,898 at a
weighted average interest rate of 7.115%. The maximum amount of borrowings
outstanding at any month-end was $9,120,000.
The Fund's custodian bank has agreed to reduce its fees when the Fund maintains
cash on deposit in the non-interest bearing custody account. For the year ended
December 31, 1995, custodian fee offset arrangements reduced expenses by
$25,560.
Note 5. Shares of Beneficial Interest:
The Agreement and Declaration of Trust permits the Fund to issue an unlimited
number of shares of beneficial interest of each class, par value $.01 per share.
Transactions in Fund shares were as follows:
Class A:
<TABLE>
<CAPTION>
Year ended December 31, 1995 1994
---- ----
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 7,217,942 $ 99,835,909 5,704,417 $ 74,824,458
Shares issued on reinvestment
of distributions 1,158,342 16,067,613 415,454 5,248,037
Shares issued in connection
with the acquisition of
Rochester Tax Managed Fund, Inc. 660,637 9,039,351
Shares repurchased (2,278,192) (31,392,544) (1,008,951) (12,977,435)
---------- ------------ ---------- ------------
Net increase in
shares outstanding 6,758,729 $ 93,550,329 5,110,920 $ 67,095,060
========== ============ ========== ============
</TABLE>
Class B:
Period May 1 - December 31, 1995
--------------------------------
Shares Amount
---------- ------------
Shares sold 2,362,379 $ 33,327,370
Shares issued on reinvestment
of distributions 114,523 1,597,930
Shares repurchased (12,136) (175,070)
---------- ------------
Net increase
in shares outstanding 2,464,766 $ 34,750,230
========== ============
57
<PAGE>
Class Y:
Period May 1 - December 31, 1995
--------------------------------
Shares Amount
-------- -----------
Shares sold 167,169 $ 2,280,841
Shares issued on reinvestment
of distributions 12,344 172,794
Shares repurchased (358) (5,090)
-------- -----------
Net increase
in shares outstanding 179,155 $ 2,448,545
======== ===========
Note 6. Acquisition:
On June 28, 1995, the Fund acquired all of the assets and liabilities of
Rochester Tax Managed Fund, Inc. (RTMF). The acquisition was accomplished by a
tax-free exchange of 660,637 Class A shares of the Fund (valued at $9,039,351)
for 760,094 shares of RTMF. The net assets of RTMF were valued at $9,039,351 and
included unrealized appreciation of $4,275,694. Prior to the acquisition, RTMF
did not distribute its net investment income or realized gains and was taxed as
a C corporation. Accordingly, an accrued tax liability was assumed by the Fund
on the date of the acquisition (see Note 1). During the second half of 1995,
approximately $2,788,000 of accumulated earnings and profits resulting from the
June 28, 1995 acquisition of RTMF was distributed to shareholders of the Fund.
The aggregate net assets of the Fund after the acquisition were $189,184,982.
Note 7. Subsequent Event:
On January 4, 1996, FMC (the Fund's investment adviser), RFD (the Fund's
principal underwriter) and RFS (the Fund's shareholder servicing, accounting and
pricing agent) consummated a transaction with OppenheimerFunds, Inc. ("OFI"),
which resulted in the sale to OFI of certain assets of FMC, RFD and RFS,
including the transfer of the investment advisory agreement and other contracts
with the Fund and the use of the name "The Rochester Funds". This transaction
received approval by the Fund's shareholders on December 20, 1995.
58
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees of The Bond Fund For Growth
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Bond Fund For Growth (the
"Fund") at December 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1995 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Rochester, New York
January 30, 1996
59
<PAGE>
APPENDIX A
DESCRIPTION OF BOND RATINGS
DESCRIPTION OF MOODY'S INVESTORS SERVICES, INC.
CORPORATE BOND RATINGS
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamental strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in Aaa
securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
A-1
<PAGE>
Moody's applies numerical modifiers 1, 2 and 3 to show relative standing
within the major rating categories, except in the Aaa category. The modifier 1
indicates a ranking for the security in the higher end of a rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking
in the lower end of a rating category.
Con. (---) -- Bonds for which the security depends upon the completion of
some act of the fulfillment of some condition are rated conditionally. These
are bonds secured by (1) earnings of projects under construction, (2) earnings
of projects unseasoned in operation experiences, (3) rentals which begin when
facilities are completed, or (4) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of condition.
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.
A-2
<PAGE>
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.
"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.
A-3
<PAGE>
FITCH INVESTORS SERVICES, INC.
AAA bonds (highest quality): "The obligor has an extraordinary ability to pay
interest and repay principal which is unlikely to be affected by reasonably
foreseeable events."
AA bonds (high quality): "the obligor's ability to pay interest and repay
principal, while very strong, is somewhat less than for AAA rated securities or
more subject to possible change over the term of the issue."
A bonds (good quality): "the obligor's ability to pay interest and repay
principal is strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings."
BBB bonds (satisfactory bonds): "the obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to weaken this ability than bonds
with higher ratings."
A-4
<PAGE>
ROCHESTER FUND SERIES
THE BOND FUND FOR GROWTH
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) Financial Highlights (see Part A. Prospectus): Filed herewith
(2) Report of Independent Accountants (see Part B, Statement of Additional
Information): Filed herewith
(3) Portfolio of Investments (see Part B, Statement of Additional
Information): Filed herewith
(4) Statement of Assets and Liabilities (see Part B, Statement of
Additional Information): Filed herewith
(5) Statement of Operations (see Part B, Statement of Additional
Information): Filed herewith
(6) Statement of Changes in Net Assets (see Part B, Statement of Additional
Information): Filed herewith
(7) Notes to Financial Statements (see Part B, Statement of Additional
Information): Filed herewith
(b) Exhibits:
(1) Amendment to Amended and Restated Declaration of Trust as filed with
the Common of Massachusetts on February 7, 1996, effective March 8, 1996--filed
herewith
(2) Bylaws--filed with Registrant's Post Effective Amendment filed May 1,
1987--incorporated by reference
(3) Not Applicable
(4) (a) Specimen Share Certificate representing Class A Shares of
Oppenheimer Bond Fund for Growth, a portfolio of the Registrant--filed herewith
(b) Specimen Share Certificate representing Class B Shares of Oppenheimer
Bond Fund for Growth, a portfolio of the Registrant--filed herewith
(c) Specimen Share Certificate representing Class C Shares of Oppenheimer
Bond Fund for Growth, a portfolio of the Registrant--filed herewith
(d) Specimen Share Certificate representing Class M Shares of Oppenheimer
Bond Fund for Growth, a portfolio of the Registrant--filed herewith
(5) Investment Advisory Agreement dated January 4, 1996 with Oppenheimer
Management Corporation--filed with Post Effective Amendment No. 15 of the
Registrant filed January 11, 1996--incorporated by reference
(6) (a) General Distributor's Agreement dated January 4, 1996 with
Oppenheimer Funds Distributor, Inc.--filed with Post Effective Amendment No. 15
of the Registrant filed January 11, 1996--incorporated by reference
(b) Form of Oppenheimer Funds Distributor Inc. Dealer Agreement--Filed
with Post-Effective Amendment No. 14 of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850) filed September 30, 1994--incorporated by reference
(c) Form of Oppenheimer Funds Distributor Inc. Broker Agreement--Filed
with Post-Effective Amendment No. 14 of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850) filed September 30, 1994--incorporated by reference
(d) Form of Oppenheimer Funds Distributor Inc. Agency Agreement--Filed
with Post-Effective Amendment No. 14 of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850) filed September 30, 1994--incorporated by reference
(7) Not Applicable
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(8) Acknowledgement of Assignment of Custodian Agreement with Investors
Bank & Trust Company--filed with Registrant's Post Effective Amendment No. 9
filed May 1, 1991--incorporated by reference
(9) Form of Service Contract with Oppenheimer Shareholder Services--filed
with Post Effective Amendment No. 15 of the Registrant filed January 11,
1996--incorporated by reference
(10) Consent of Counsel--incorporated by reference to the Registrant's
Rule 24f-2 Notice filed on February 28, 1996
(11) Independent Auditor's Consent--filed herewith
(12) Not Applicable
(13) Form of Investment Representation Letter from Oppenheimer Funds, Inc.
relating to Class C Shares investment--filed herewith
(14) (a) Form of Individual Retirement Account (IRA) Plan: previously filed
with Post Effective Amendment No. 21 to the Registration Statement of
Oppenheimer U.S. Government Trust (File No. 2-76645), August 25, 1993, and
incorporated herein by reference
(b) Form of Standardized and Non-standardized Profit Sharing and Money
Purchase Pension Plan for self-employed persons and corporations: previously
filed with Post Effective Amendment No. 3 to the Registration Statement of
Oppenheimer Global Growth & Income Fund (File No. 33-33799), February 1, 1992,
refiled with Post Effective Amendment No. 7 of Oppenheimer Global Growth &
Income Fund (Reg. No. 33-33799), December 1, 1994, pursuant to Item 102 of
Regulation S-T and incorporated herein by reference
(c) Form of Tax Sheltered Retirement Plan and Custody Agreement for
employees of public schools and tax-exempt organizations: previously filed with
Post Effective Amendment No. 47 to the Registration Statement of Oppenheimer
Growth Fund (File No. 2-45272), October 21, 1994 and incorporated herein by
reference
(d) Form of Simplified Employee Pension IRA: previously filed with Post
Effective Amendment No. 15 to the Registration Statement of Oppenheimer Mortgage
Income Fund (Reg. No. 33-6614), January 19, 1995 and incorporated herein by
reference
(e) Form of Prototype 401(k) Plan: previously filed with Post Effective
Amendment No. 7 to the Registration Statement of Oppenheimer Strategic Income &
Growth Fund (Reg. No. 33-47378), September 28, 1995 and incorporated herein by
reference
(15) (a) Amended and Restated Service Plan and Agreement with Oppenheimer
Funds Distributor, Inc. dated January 4, 1996 for Class A Shares--filed with
Post Effective Amendment No. 15 of the Registrant filed January 11,
1996--incorporated by reference
(b) Amended and Restated Distribution and Service Plan and Agreement with
Oppenheimer Funds Distributor, Inc. dated January 4, 1996 for Class B
Shares--filed with Post Effective Amendment No. 15 of the Registrant filed
January 11, 1996--incorporated by reference
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(c) Form of Distribution and Service Plan and Agreement with Oppenheimer
Funds Distributor, Inc. for Class C Shares--filed with Post Effective Amendment
No. 15 of the Registrant filed January 11, 1996--incorporated by reference
(d) Form of Distribution and Service Plan and Agreement with Oppenheimer
Funds Distributor, Inc. for Class M Shares--filed herewith
(16) Performance Computation Schedule--filed herewith
(17) (a) Financial Data Schedule for Class A Shares--filed herewith
(b) Financial Data Schedule for Class B Shares--filed herewith
(c) Financial Data Schedule for Class C Shares--none
(d) Financial Data Schedule for Class M Shares--filed herewith
(18) Oppenheimer Fund Multiple Class Plan under Rule 18f-3 dated January 5,
1996--filed with Post Effective Amendment No. 15 of the Registrant filed January
11, 1996--incorporated by reference
-- Powers of Attorney--filed with Post Effective Amendment No. 15 of the
Registrant filed January 11, 1996--incorporated by reference
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Board of Trustees of the Registrant is identical to the Boards of
Trustees of Rochester Fund Municipals ("RFM") and the Limited Term New York
Municipal Fund ("LTNYX") (collectively "The Rochester Funds").
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ITEM 26. NUMBER OF HOLDERS OF SECURITIES
Title of Class Number of Record Holders as of January 31, 1996
Shares of
beneficial interest,
Class A ............................. 14,308
Shares of
beneficial interest,
Class B ............................. 2,618
Shares of
beneficial interest,
Class C.............................. -0-
Shares of
beneficial interest,
Class M.............................. -0-
Shares of
beneficial interest,
Class Y.............................. 23
ITEM 27. INDEMNIFICATION
Registrant's Amended and Restated Agreement and Declaration of Trust (the
"Declaration of Trust"), which is referenced herein (see Exhibit 1), contains
certain provisions relating to the indemnification of Registrant's officers and
trustees. Section 6.4 of Registrant's Declaration of Trust provides that
Registrant shall indemnify (from the assets of the Fund or Funds in question)
each of its trustees and officers (including persons who served at Registrant's
request as directors, officers or trustees of another organization in which
Registrant has any interest as a shareholder, creditor or otherwise hereinafter
referred to as a "Covered Person") against all liabilities, including but not
limited to, amounts paid for satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable accountants' and counsel
fees, incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such person may be or may have been threatened, while in office or thereafter,
by reason of being or having been such a trustee or officer, director or
trustee, except with respect to any matter as to which it has been determined in
one of the manners described below, that such Covered Person (i) did not act in
good faith in the reasonable belief that such Covered Person's action was in or
not opposed to the best interest of Registrant or (ii) had acted with willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct described in (i) and (ii) being referred to hereafter as
"Disabling Conduct".
Section 6.4 provides that a determination that the Covered Conduct may be
made by (i) a final decision on the merits by a court or other body before whom
the proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the indemnity was not liable by reason of Disabling Conduct
by (a) a vote of a majority of a quorum of trustees who are neither "interested
persons" of Registrant as defined in Section 2(a)(19) of the 1940 Act nor
parties to the proceeding, or (b) an independent legal counsel in a written
opinion.
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In addition, Section 6.4 provides that expenses, including accountants' and
counsel fees so incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or penalties), may be
paid from time to time in advance of the final disposition of any such action,
suit or proceeding, provided that the Covered Person shall have undertaken to
repay the amounts so paid to the Sub-trust in question if it is ultimately
determined that indemnification of such expenses is not authorized under Article
6 and (i) the Covered Person shall have provided security for such undertaking,
(ii) Registrant shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of disinterested trustees who are not
a party to the proceeding, by an independent legal counsel in a written opinion,
based upon a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the Covered Person ultimately
will be found entitled to indemnification.
Section 6.1 of Registrant's Agreement and Declaration of Trust provides,
among other things, that nothing in the Agreement and Declaration of Trust shall
protect any trustee or officer against any liability to Registrant or the
shareholders to which such trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of trustee or such officer.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
During the last two fiscal years, all other business, profession, vocation
or employment of a substantial nature in which the investment adviser of
Registrant and each director, officer or partner of that investment adviser have
been engaged for their own account or in the capacity of director, officer,
employee, partner or trustee is as follows:
(a) OppenheimerFunds, Inc. is the investment adviser of the Registrant; it
and certain subsidiaries and affiliates act in the same capacity to other
registered investment companies as described in Parts A and B hereof and listed
in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each officer
and director of OppenheimerFunds, Inc. is, or at any time during the past two
fiscal years has been, engaged for his/her own account or in the capacity of
director, officer, employee, partner or trustee.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Lawrence Apolito, None.
Vice President
Victor Babin, None.
Senior Vice President
Robert J. Bishop, Treasurer of the Oppenheimer Funds
Assistant Vice President (listed below); previously a Fund Controller for
OppenheimerFunds, Inc. (the "Manager").
Bruce Bartlett, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc., Oppenheimer
Main Street Funds, Inc. and Oppenheimer Variable
Account Funds; formerly a Vice President and
Senior Portfolio Manager at First of America
Investment Corp.
George Bowen, Treasurer of the New York-based Oppenheimer Funds;
Senior Vice President Vice President, Secretary and Treasurer and
and Treasurer Treasurer of the Denver-based Oppenheimer Funds.
Vice President and Treasurer of Oppenheimer Funds
Distributor, Inc. (the "Distributor") and
HarbourView Asset Management Corporation
("HarbourView"), an investment adviser subsidiary
of the Manager OMC; Senior Vice President,
Treasurer, Assistant Secretary and a director of
Centennial Asset Management Corporation
("Centennial"), an investment adviser subsidiary
of the Manager; Vice President, Treasurer and
Secretary of Shareholder Services, Inc. ("SSI")
and Shareholder Financial Services, Inc. ("SFSI"),
transfer agent subsidiaries of the Manager;
President, Treasurer and Director of Centennial
Capital Corporation; Vice President and Treasurer
of Main Street Advisers.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Centennial California Tax Trust, Centennial
New York Tax Exempt Trust and Centennial Tax
Exempt Trust; Vice President of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human Resources,
American Cancer Society.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Lynn Coluccy, Formerly Vice President\Director of Internal Audit
Vice President of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
Senior Vice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer Variable
Account Funds; Senior Vice President and Portfolio
Manager of Oppenheimer Strategic Income & Growth
Fund; Vice President of Oppenheimer Quest Value
Fund, Inc., Oppenheimer Quest Officers Value Fund,
Oppenheimer Quest For Value Funds and Oppenheimer
Quest Global Value Fund, Inc.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based Oppenheimer
Executive Vice President Funds and Rochester based Oppenheimer Funds;
& General Counsel Vice President of the Denver-based
Oppenheimer Funds; Executive Vice President,
Director and General Counsel of the Distributor;
formerly Senior Vice President and Associate
General Counsel of the Manager and the
Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Variable Account Funds and
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the Oppenheimer Funds;
Assistant Vice President previously a Fund Controller for the Manager.
Ronald H. Fielding Chairman of the Board and Director of Rochester
Senior Vice President Fund Distributors, Inc. ("RFD"); President and
Director of Fielding Management Company, Inc.
("FMC"); President and Director of Rochester
Capital Advisors, Inc. ("RCAI"); President and
Director of Rochester Fund Services, Inc. ("RFS");
President and Director of Rochester Tax Managed
Fund, Inc.; Vice President and Portfolio Manager
of Rochester Fund Municipals and Rochester
Portfolio Series--Limited Term New York Municipal
Fund; previously President and Trustee of
Rochester Fund Municipals, Rochester Portfolio
Series--Limited Term New York Municipal Fund and
Bond Fund Series--Oppenheimer Bond Fund for
Growth.
Katherine P. Feld Vice President and Secretary of Oppenheimer Fund
Vice President and Distributors, Inc.; Secretary of HarbourView, Main
Secretary Street Advisers, Inc. and Centennial, Secretary,
Vice President and Director of Centennial Capital
Corp.
Jon S. Fossel, Director of OAC, the Manager's parent holding
Chairman of the Board company; President, CEO and a director of
and Director HarbourView; a director of SSI and SFSI;
President, Director, Trustee, and Managing General
Partner of the Denver-based Oppenheimer Funds;
President and Chairman of the Board of Main Street
Advisers, Inc.; formerly Chief Executive Officer
of the Manager.
Patricia C. Foster Formerly Secretary and General Counsel of RFD,
Vice President FMC, FCAI, RFS, Rochester Fund Municipals,
Rochester Portfolio Series--Limited Term New York
Municipal Fund, Rochester Tax Managed Fund, Inc.,
Bond Fund Series--Oppenheimier Bond Fund for
Growth.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Robert G. Galli, Trustee of the New York-based
Vice Chairman Oppenheimer Funds; Vice President and Counsel of
OAC; formerly he held the following positions: a
director of the Distributor, Vice President and a
director of HarbourView and Centennial, a director
of SFSI and SSI, an officer of other Oppenheimer
Funds and Executive Vice President & General
Counsel of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman Brothers.
Mildred Gottlieb, Formerly served as a Strategy Consultant
Assistant Vice President for the Private Client Division of Merrill Lynch.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Fund and
Oppenheimer Intermediate Tax Exempt Fund; an
officer of other Oppenheimer Funds; formerly Vice
President of Fixed Income Portfolio Management at
Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Bennett Inkeles, Formerly employed by Doremus & Company, an
Assistant Vice President advertising agency.
Frank Jennings Portfolio Manager of Oppenheimer Global
Vice President Growth & Income Fund. Formerly a Managing
Director of Global Equities at Paine Webber's
Mitchell Hutchins division.
Stephen Jobe, None.
Vice President
Heidi Kagan, None.
Assistant Vice President
Avram Kornberg, Formerly a Vice President with Bankers Trust.
Vice President
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund and Oppenheimer Variable Account
Funds; Associate Portfolio Manager of Oppenheimer
Discovery Fund. Formerly a Securities Analyst for
Columbus Circle Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, President, Director and Trustee of the Oppenheimer
President, Chief Executive Funds; President and a Director of OAC,
Officer and Director HarbourView and Oppenheimer Partnership Holdings,
Inc; Director of Main Street Advisers, Inc.;
Chairman and Director of SSI.
Sally Marzouk, None.
Vice President
Marilyn Miller, Formerly a Director of marketing for
Vice President TransAmerica Fund Management Company.
Robert J. Milnamow, Vice President and Portfolio Manager of
Vice President Oppenheimer Main Street Funds, Inc. Formerly a
Portfolio Manager with Phoenix Securities Group.
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Variable Account Funds, Oppenheimer
Asset Allocation Fund, Oppenheimer Strategic
Income Fund, Oppenheimer Strategic Income & Growth
Fund; an officer of other Oppenheimer Funds.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street Funds, Inc., Oppenheimer
Multi-State Tax-Exempt Trust, Oppenheimer
Tax-Exempt Fund, Oppenheimer California Tax-Exempt
Fund, Oppenheimer New York Tax-Exempt Fund and
Oppenheimer Tax-Free Bond Fund; Vice President of
The New York Tax-Exempt Income Fund, Inc.; Vice
President of Oppenheimer Multi-Sector Income
Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer Growth
Assistant Vice President Fund; Vice President and Portfolio Manager of
Oppenheimer Target Fund and Oppenheimer Variable
Account Funds. Formerly Senior Investment Officer
and Portfolio Manager with Chemical Bank.
Russell Read, Formerly an International Finance Consultant
Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-Government
Trust; an officer of other Oppenheimer Funds;
formerly a Securities Analyst for the Manager.
David Robertson, None.
Vice President
Adam Rochlin, Formerly a Product Manager for Metropolitan
Assistant Vice President Life Insurance Company.
Michael S. Rosen, Vice President of RFS; President and Director of
Vice President RFD; Vice President and Director of FMC; Vice
President and director of RCAI; Vice President and
Director of Rochester Tax Managed Fund Inc.; Vice
President and Portfolio Manager of Bond Fund
Series--Oppenheimer Bond Fund for Growth;
previously Vice President and Trustee of Rochester
Fund Municipals and Rochester Portfolio Series
Limited Term New York Municipal Fund.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund,
Oppenheimer U.S. Government Trust and Oppenheimer
Integrity Funds. Formerly Vice President and
Senior Portfolio Manager for Delaware Investment
Advisors.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund, Oppenheimer
Fund and Oppenheimer Variable Account Funds; an
officer of other Oppenheimer Funds; formerly Vice
President and Portfolio Manager/Security Analyst
for Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
James Ruff, None.
Executive Vice President
Ellen Schoenfeld, None.
Assistant Vice President
Diane Sobin, Vice President and Portfolio Manager of
Vice President Oppehneimer Gold & Special Minerals Fund,
Oppenheimer Total Return Fund, Inc. Oppenheimer
Main Street Funds, Inc. and Oppenheimer Variable
Account Funds; formerly a Vice President and
Senior Portfolio Manager for Dean Witter
InterCapital, Inc.
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus Oppenheimer Funds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Income Fund, Oppenheimer
Strategic Income & Growth Fund; an officer of
other Oppenheimer Funds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion Income Fund and Oppenheimer
High Yield Fund; an officer of other Oppenheimer
Funds.
John Stoma, Vice President Formerly Vice President of Pension Marketing with
Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors Oppenheimer Funds; President and a Director
and Director of Centennial; formerly President and Director of
OAMC, and Chairman of the Board of SSI.
James Tobin, Vice President None.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Jay Tracey, Vice President Vice President of the Manager; Vice President and
Portfolio Manager of Oppenheimer Discovery Fund.
Formerly Managing Director of Buckingham Capital
Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Jeffrey Van Giesen Formerly employed by Kidder Peabody Asset
Vice President Management.
Ashwin Vasan, Vice President and Portfolio Manager of
Vice President Oppenheimer Multi-Sector Income Trust, Oppenheimer
Multi-Government Trust and Oppenheimer
International Bond Fund; an officer of other
Oppenheimer Funds.
Valerie Victorson, None.
Vice President
Dorothy Warmack, Vice President and Portfolio Manager of Daily
Vice President Cash Accumulation Fund, Inc., Oppenheimer Cash
Reserves, Centennial America Fund, L.P.,
Centennial Government Trust and Centennial Money
Market Trust; Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Variable Account Funds,
Oppenheimer Global Fund and Oppenheimer Global
Growth & Income Fund; Vice President of
HarbourView; an officer of other Oppenheimer
Funds.
Susan Wilson-Perez, None.
Vice President
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc., Centennial
America Fund, L.P., Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the Oppenheimer
and Assistant Secretary Funds; Assistant Secretary of SSI, SFSI; an
officer of other Oppenheimer Funds.
Eva A. Zeff, An officer of certain Oppenheimer Funds; Assistant
Assistant Vice President Vice President formerly a Securities Analyst for
the Manager.
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Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- -------------------------- ------------------------------
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Oppenheimer Variable Account Funds, Centennial
America Fund, L.P., Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
Oppenheimer Funds.
The Oppenheimer Funds include the New York-based Oppenheimer Funds, and the
Denver-based Oppenheimer Funds and the Rochester-based Oppenheimer Funds set
forth below:
New York-based Oppenheimer Funds
--------------------------------
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest for Value Funds
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based Oppenheimer Funds
------------------------------
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
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Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Rochester-based Funds
-----------------
Rochester Fund Municipals
Bond Fund Series--Oppenheimer Bond Fund for Growth
(f/k/a Rochester Fund Series--The Bond Fund For Growth)
Rochester Portfolio Series--Limited Term New York
Municipal Fund
The address of OppenheimerFunds, Inc. the New York-based Oppenheimer
Funds, Oppenheimer Funds Distributor, Inc., Harbourview Asset Management Corp.,
Oppenheimer Partnership Holdings, Inc., and Oppenheimer Acquisition Corp. is Two
World Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., Oppenheimer Shareholder Services,
Centennial Asset Management Corporation, Centennial Capital Corp., and Main
Street Advisers, Inc. is 3410 South Galena Street, Denver, Colorado 80231.
The address of Rochester-based Oppenheimer Funds is 350 Linden Oaks,
Rochester, New York 14625
ITEM 29. PRINCIPAL UNDERWRITERS
(a) OppenheimerFunds Distributor, Inc. is the Distributor of Registrant's
shares. It is also the Distributor of each of the other registered open-end
investment companies for which Oppenheimer Funds, Inc. is the investment
adviser, as described in Part A and B of this Registration Statement and listed
in Item 28(b) above.
(b) The directors and officers of the Registrant's principal underwriter
are:
Positions
and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
George Clarence Bowen+ Vice President & Treasurer Vice President and
Treasurer of the
NY-based Oppenheimer
Funds/Vice President,
Secretary and Treasurer
of the Denver-based
Oppenheimer Funds;
Treasurer of the
Rochester-based
Oppenhemier Funds.
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
C-14
<PAGE>
Positions
and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Bill Coughlin Vice President None
1400 Laurel Avenue
Apt. W710
Minneapolis, MN 55403
Mary Crooks+ Vice President None
Paul Delli Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary of the
President & Director NY-based Oppenheimer
Funds, and the
Rochester-based
Oppenheimer Funds;
Vice President of the
Denver-based
Oppenheimer Funds
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding++ Vice President None
Reed F. Finley Vice President - None
1657 Graefield Financial Institution Div.
Birmingham, MI 48009
Wendy Fishler* Vice President - None
Financial Institution Div.
Wayne Flanagan Vice President - None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Senior Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
C-15
<PAGE>
Positions
and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Mark D. Johnson Vice President None
7512 Cromwell Dr. Apt 1
Clayton, MO 63105
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
C-16
<PAGE>
Positions
and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
664 Circuit Road
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
Michael S. Rosen++ Vice President Vice President
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
C-17
<PAGE>
Positions
and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
- --------
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
++ 350 Linden Oaks, Rochester, NY 14625-2807
C-18
<PAGE>
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books or other documents required to be maintained by Section
31(a) of the Investment Company Act and the General Rules and Regulations
promulgated thereunder, are in possesion of OppenheimerFunds, Inc. at its
offices at 3410 South Galena Street, Denver, Colorado 80231, except that records
with regard to items covered by Registrant's Custodian Agreement, are maintained
by, or under agreement with, its Custodian, Investors Bank & Trust Company, 89
South Street, Boston, MA 02111.
ITEM 31. MANAGEMENT SERVICES
There are no management-related service contracts not discussed in Parts A
and B of this Form under which services are provided to the Registrant and,
therefore, this Item 31 is not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable
(b) Not applicable
(c) The Registrant hereby undertakes to furnish each person to whom a
Prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
C-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York on the 5th day of
March, 1996
ROCHESTER FUND SERIES
By: BRIDGET A. MACASKILL*
--------------------------------
Bridget A. Macaskill, Chairman
of the Board and President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
Signatures Title Date
- ---------- ----- ----
BRIDGET A. MACASKILL* Chairman of the Board, March 5, 1996
- ---------------------------- President (Principal
Bridget A. Macaskill Executive Officer) and
Trustee
GEORGE C. BOWEN* Treasurer (Principal March 5, 1996
- ---------------------------- Financial and Accounting
George C. Bowen Officer)
JOHN CANNON* Trustee March 5, 1996
- ---------------------------- John Cannon
PAUL Y. CLINTON* Trustee March 5, 1996
- ----------------------------
Paul Y. Clinton
THOMAS W. COURTNEY* Trustee March 5, 1996
- ----------------------------
Thomas W. Courtney
LACY B. HERRMANN* Trustee March 5, 1996
- ----------------------------
Lacy B. Herrmann
GEORGE LOFT* Trustee March 5, 1996
- ----------------------------
George Loft
*By: /s/ ROBERT G. ZACK
------------------------
Robert G. Zack,
Attorney-in-Fact
EXHIBIT 1
ROCHESTER FUND SERIES
AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
This amendment to the Amended and Restated Agreement and Declaration of Trust of
Rochester Fund Series (the "Restated Declaration of Trust") executed this 1st
day of February, 1996.
WHEREAS, the Trustees established Rochester Fund Series (the "Trust"), a
business trust currently with one series, The Bond Fund For Growth, under the
laws of the Commonwealth of Massachusetts, for the investment and reinvestment
of funds contributed thereto, under an Agreement and Declaration of Trust dated
January 10, 1986 as filed with the Commonwealth of Massachusetts on January 21,
1986, as amended on March 31, 1986, December 29, 1989, January 25, 1990 and
April 23, 1993; and
WHEREAS, the Restated Declaration of Trust dated January 26, 1995 was filed by
the Trust with the Commonwealth of Massachusetts on February 8, 1995 as amended
on November 7, 1995; and
WHEREAS, Section 7.3 of the Restated Declaration of Trust requires that
amendments thereto be by an instrument in writing signed by an officer of the
Trust pursuant to a majority vote of the Trustees and filed with the
Commonwealth of Massachusetts; and
WHEREAS, the Trustees now desire to amend the Restated Delcaration of Trust and
such amendment and filing thereof have been approved by a majority of the
Trustees.
NOW, THEREFORE,
1. The Restated Declaration of Trust is hereby amended to revise the
introductory paragraph, Section 1.1 entitled "Name" and Section 4.3 entitled
"Establishment and Designation of Series" in order to change
1
<PAGE>
the names of the trust and the series established thereunder.
2. The first "Whereas" clause of the Restated Declaration of Trust is hereby
amended to read as follows:
"WHEREAS, the Trustees established Bond Fund Series (formerly known as
Rochester Fund Series) (the "Trust"), a business trust currently with one
series, Oppenheimer Bond Fund for Growth (formerly known as The Bond Fund
for Growth) (the "Fund"), under the laws of the Commonwealth of
Massachusetts, for the investment and reinvestment of funds contributed
thereto, under an Agreement and Declaration of Trust (the "Declaration of
Trust") dated January 10, 1986 as filed with the Commonwealth of
Massachusetts on January 21, 1986, as amended pursuant to Amendments dated
March 31, 1986, December 29, 1989, January 25, 1990, and April 23, 1993;"
3. Section 1.1 shall read as follows:
"Section 1.1 Name. This Trust shall be known as Bond Fund Series and the
Trustees shall conduct the business of the Trust under that name or any
other name or names as they may from time to time determine."
4. The first paragraph of Section 4.3 shall read as follows:
"Section 4.3 Establishment and Designation of Series. Without limiting the
authority of the Trustees set forth Section 4.1 to establish and designate
any further Series, the Trustees hereby establish and designate one Series:
Oppenheimer Bond Fund for Growth and any Shares of any further Series that
may from time to time be established and designated by the Trustees shall
(unless the Trustees otherwise determine with respect to some further
Series at the time of establishing and designating the same) have the
following relative rights and preferences:"
5. These revisions to the Restated Declaration of Trust shall become effective
on March 8, 1996.
6. all other terms and conditions of the Restated Declaration of Trust shall
remain the same.
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be signed
under penalties of perjury on the day and year first set forth above.
Rochester Fund Series
/S/ MICHAEL S. ROSEN
___________________________________
Michael S. Rosen, Vice President
2
EXHIBIT 24(B)(4)(A)
Oppenheimer Bond Fund for Growth
Class A Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within decorative
border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS A SHARES;
certificate number above
(centered Bond Fund Series
below boxes) Series: Oppenheimer Bond Fund for Growth
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP 097877104
(at left) is the owner of
(centered) FULLY PAID CLASS A SHARES OF
BENEFICIAL INTEREST OF
OPPENHEIMER BOND FUND FOR GROWTH, a series of Bond Fund Series
(hereinafter called the "Fund"), transferable only on the books of
the Fund by the holder hereof in person or by duly authorized
attorney, upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and
shall be held subject to all of the provisions of the Declaration
of Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until countersigned
by the Transfer Agent.
WITNESS the facsimile seal of the Fund and the signatures of its
duly authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
SECRETARY PRESIDENT
<PAGE>
EXHIBIT 24(B)(4)(A)
PAGE 2
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
BOND FUND SERIES
SEAL
1986
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.
Denver (Colo) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as tenants with rights of
survivorship and not as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
EXHIBIT 24(B)(4)(A)
PAGE 3
- --------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- --------------------------------------------------------------------------------
________________________________________________ Class A Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face
of the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
- -----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
EXHIBIT 24(B)(4)(B)
Oppenheimer Bond Fund for Growth
Class B Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within decorative
border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS B SHARES;
certificate number above
(centered Bond Fund Series
below boxes) Series: Oppenheimer Bond Fund for Growth
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP 097877203
(at left) is the owner of
(centered) FULLY PAID CLASS B SHARES OF
BENEFICIAL INTEREST OF
OPPENHEIMER BOND FUND FOR GROWTH, a series of Bond Fund Series
(hereinafter called the "Fund"), transferable only on
the books of the Fund by the holder hereof in person
or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate
and the shares represented hereby are issued and
shall be held subject to all of the provisions of the
Declaration of Trust of the Fund to all of which the
holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer
Agent.
WITNESS the facsimile seal of the Fund and the
signatures of its duly authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
SECRETARY PRESIDENT
<PAGE>
EXHIBIT 24(B)(4)(B)
PAGE 2
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
BOND FUND SERIES
SEAL
1986
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.
Denver (Colo) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as tenants with
rights of survivorship and not as
tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
EXHIBIT 24(B)(4)(B)
PAGE 3
- --------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- --------------------------------------------------------------------------------
________________________________________________ Class B Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
- -----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
EXHIBIT 24(B)(4)(C)
Oppenheimer Bond Fund for Growth
Class C Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within decorative
border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS C SHARES;
certificate number above
(centered Bond Fund Series
below boxes) Series: Oppenheimer Bond Fund for Growth
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP 097877302
(at left) is the owner of
(centered) FULLY PAID CLASS C SHARES OF
BENEFICIAL INTEREST OF
OPPENHEIMER BOND FUND FOR GROWTH, a series of Bond Fund Series
(hereinafter called the "Fund"), transferable only on the books of the
Fund by the holder hereof in person or by duly authorized attorney,
upon surrender of this certificate properly endorsed. This certificate
and the shares represented hereby are issued and shall be held subject
to all of the provisions of the Declaration of Trust of the Fund to
all of which the holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Fund and the signatures of its duly
authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
SECRETARY PRESIDENT
<PAGE>
EXHIBIT 24(B)(4)(C)
PAGE 2
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
BOND FUND SERIES
SEAL
1986
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.
Denver (Colo) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as tenants with rights of
survivorship and not as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
EXHIBIT 24(B)(4)(C)
PAGE 3
- --------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- --------------------------------------------------------------------------------
________________________________________________ Class C Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
- -----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
EXHIBIT 24(B)(4)(D)
Oppenheimer Bond Fund for Growth
Class M Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within decorative
border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS M SHARES;
certificate number above
(centered Bond Fund Series
below boxes) Series: Oppenheimer Bond Fund for Growth
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP 097877401
(at left) is the owner of
(centered) FULLY PAID CLASS M SHARES OF
BENEFICIAL INTEREST OF
OPPENHEIMER BOND FUND FOR GROWTH, a series of Bond Fund Series
(hereinafter called the "Fund"), transferable only on the books of the
Fund by the holder hereof in person or by duly authorized attorney,
upon surrender of this certificate properly endorsed. This certificate
and the shares represented hereby are issued and shall be held subject
to all of the provisions of the Declaration of Trust of the Fund to
all of which the holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Fund and the signatures of its duly
authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
SECRETARY PRESIDENT
<PAGE>
EXHIBIT 24(B)(4)(D)
PAGE 2
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
BOND FUND SERIES
SEAL
1986
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.
Denver (Colo) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as tenants with rights of
survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
EXHIBIT 24(B)(4)(D)
PAGE 3
- --------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- --------------------------------------------------------------------------------
________________________________________________ Class M Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
- -----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 16 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
January 30, 1996, relating to the financial statements and schedule of financial
highlights of Rochester Fund Series--The Bond Fund For Growth (to be known as
Bond Fund Series--Oppenheimer Bond Fund For Growth) which appears in such
Statement of Additional Information, and to the incorporation by reference of
our report into the Prospectus which constitutes part of this Registration
Statement. We also consent to the reference to us under the heading "Financial
Highlights" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Rochester, New York
March 5, 1996
EXHIBIT 13
March 11, 1996
The Board of Trustees
Bond Fund Series
Two World Trade Center
New York, New York 10048-0203
To the Board of Trustees:
OppenheimerFunds, Inc. ("Oppenheimer") herewith purchases _______________
Class C shares, of Bond Fund Series--Oppenheimer Bond Fund for Growth (the
"Fund") at a net asset value per share of $_____ for such class, for an
aggregate purchase price of $1,000.00. In connection with such purchase,
Oppenheimer represents that such purchase is made for investment purposes by
Oppenheimer without any present intention of redeeming or selling such shares.
Very truly yours,
OppenheimerFunds, Inc.
By: ____________________________________
EXHIBIT 15 (d)
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS M SHARES OF
BOND FUND SERIES
OPPENHEIMER BOND FUND FOR GROWTH
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated as of March 11,
1996 by and between BOND FUND SERIES (the "Trust"), on behalf of OPPENHEIMER
BOND FUND FOR GROWTH (the "Fund"), and OPPENHEIMERFUNDS DISTRIBUTOR, INC. (the
"Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class M shares of the Fund which, prior to March 11, 1996 were designated as
Class A shares of the Fund, (the "Shares"). This Plan is contemplated by Rule
12b-l (the "Rule") under the Investment Company Act of 1940 (the "1940 Act"),
pursuant to which the Fund will reimburse the Distributor for a portion of its
costs incurred in connection with the distribution of Shares, and the personal
service and maintenance of shareholder accounts that hold Shares ("Accounts").
The Fund may act as distributor of securities of which it is the issuer,
pursuant to the Rule, according to the terms of this Plan. The Distributor is
authorized under the Plan to pay "Recipients," as hereinafter defined, for
rendering (1) distribution assistance in connection with the sale of Shares
and/or (2) administrative support services with respect to Accounts. Such
Recipients are intended to have certain rights as third-party beneficiaries
under this Plan. The terms and provisions of this Plan shall be interpreted and
defined in a manner consistent with the provisions and definitions contained in
(i) the 1940 Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of
Fair Practice of the National Association of Securities Dealers, Inc., or its
successor (the "NASD Rules of Fair Practice") and (iv) any conditions pertaining
either to distribution-related expenses or to a plan of distribution, to which
the Fund is subject under any order on which the Fund relies, issued at any time
by the Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative
or both) in the distribution of Shares or has provided administrative
support services with respect to Shares held by Customers (defined below)
of the Recipient; (ii) shall furnish the Distributor (on behalf of the
Fund) with such information as the Distributor shall reasonably request to
answer such questions as may arise concerning the sale of Shares; and (iii)
has been selected by the Distributor to receive payments under the Plan.
Notwithstanding the foregoing, a majority of the Trust's Board of Trustees
(the "Board") who are not "interested persons" (as defined in the 1940 Act)
and who have no direct or indirect financial interest in the operation of
this Plan or in any agreements relating to this Plan (the "Independent
Trustees") may remove any broker,
<PAGE>
dealer, bank or other person or entity as a Recipient, whereupon such
person's or entity's rights as a third-party beneficiary hereof shall
terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such brokerage or
other customers, or investment advisory or other clients of such Recipient
and/or accounts as to which such Recipient is a fiduciary or custodian or
co-fiduciary or co-custodian (collectively, the "Customers"), but in no
event shall any such Shares be deemed owned by more than one Recipient for
purposes of this Plan. In the event that more than one person or entity
would otherwise qualify as Recipients as to the same Shares, the Recipient
which is the dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares for purposes of
this Plan.
3. Payments for Distribution Assistance and Administrative Support Services.
(a) The Fund will make payments to the Distributor, (i) within forty-five
(45) days of the end of each calendar quarter, in an amount which shall be
the lesser of 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day or (ii) the Distributor's actual expenses
under the Plan for that quarter of the type approved by the Board (the
"Service Fee"), plus (ii) within ten (10) days of the end of each month, in
the aggregate amount of 0.0417% (0.50% on an annual basis) of the average
during the month of the aggregate net asset value of Shares computed as of
the close of each business day (the "Asset-Based Sales Charge") outstanding
for six years or less (the "Maximum Holding Period"). Such Service Fee
payments received from the Fund will compensate the Distributor and
Recipients for providing administrative support services with respect to
Accounts. Such Asset-Based Sales Charge payments received from the Fund
will compensate the Distributor and Recipients for providing distribution
assistance in connection with the sale of Shares.
The administrative support services in connection with the Accounts to be
rendered by Recipients may include, but shall not be limited to, the following:
answering routine inquiries concerning the Fund, assisting in the establishment
and maintenance of accounts or sub-accounts in the Fund and processing Share
redemption transactions, making the Fund's investment plans and dividend payment
options available, and providing such other information and services in
connection with the rendering of personal services and/or the maintenance of
Accounts, as the Distributor or the Fund may reasonably request.
The distribution assistance in connection with the sale of Shares to be
rendered by the Distributor and Recipients may include, but shall not be limited
to, the following: distributing sales literature and prospectuses other than
those furnished to current holders of the Fund's Shares ("Shareholders"), and
providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified
-2-
<PAGE>
Holdings of Shares to entitle it to payments under the Plan. In the event that
either the Distributor or the Board should have reason to believe that,
notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Trustees still is not satisfied, either may take
appropriate steps to terminate the Recipient's status as such under the Plan,
whereupon such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter,
at a rate not to exceed 0.0625% (0.25 % on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of Shares
computed as of the close of each business day, constituting Qualified
Holdings owned beneficially or of record by the Recipient or by its
Customers for a period of more than the minimum period (the "Minimum
Holding Period"), if any, to be set from time to time by a majority of the
Independent Trustees.
Alternatively, the Distributor may, at its sole option, make service fee
payments ("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed (i) 0.25% of the average during the calendar quarter of the aggregate
net asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day, constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers for a period of
more than one (1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by Article III, Section 26, of the NASD Rules of Fair
Practice. In the event Shares are redeemed less than one year after the date
such Shares were sold, the Recipient is obligated and will repay to the
Distributor on demand a pro rata portion of such Advance Service Fee Payments,
based on the ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this paragraph
(b) may, at the Distributor's sole option, be made more often than quarterly,
and sooner than the end of the calendar quarter. In addition, the Distributor
may make asset-based sales charge payments to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed 0.125% (0.50% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of Shares computed as of the close of
each business day, constituting Qualified Holdings owned beneficially or of
record by the Recipient or by its Customers. However, no such service fee or
asset-based sales charge payments (collectively, the "Recipient Payments") shall
be made to any Recipient for any such quarter in which its Qualified Holdings do
not equal or exceed, at the end of such
-3-
<PAGE>
quarter, the minimum amount ("Minimum Qualified Holdings"), if any, to be set
from time to time by a majority of the Independent Trustees.
A majority of the Independent Trustees may at any time or from time to time
decrease and thereafter adjust the rate of fees to be paid to the Distributor or
to any Recipient, but not to exceed the rate set forth above, and/or direct the
Distributor to increase or decrease the Minimum Holding Period or the Minimum
Qualified Holdings. The Distributor shall notify all Recipients of the Minimum
Qualified Holdings, Maximum Holding Period and Minimum Holding Period, if any,
and the rates of Recipient Payments hereunder applicable to Recipients, and
shall provide each Recipient with written notice within thirty (30) days after
any change in these provisions. Inclusion of such provisions or a change in such
provisions in a revised current prospectus shall constitute sufficient notice.
The Distributor may make Plan payments to any "affiliated person" (as defined in
the 1940 Act) of the Distributor if such affiliated person qualifies as a
Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III, Section 26, of
the NASD Rules of Fair Practice. The distribution assistance and
administrative support services to be rendered by the Distributor in
connection with the Shares may include, but shall not be limited to, the
following: (i) paying sales commissions to any broker, dealer, bank or
other person or entity that sells Shares, and\or paying such persons
Advance Service Fee Payments in advance of, and\or greater than, the amount
provided for in Section 3(b) of this Agreement; (ii) paying compensation to
and expenses of personnel of the Distributor who support distribution of
Shares by Recipients; (iii) obtaining financing or providing such financing
from its own resources, or from an affiliate, for the interest and other
borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to
the Fund; (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses
(other than those furnished to current Shareholders) and state "blue sky"
registration expenses; and (v) any service rendered by the Distributor that
a Recipient may render pursuant to part (a) of this Section 3. Such
services include distribution assistance and administrative support
services rendered in connection with Shares acquired (i) by purchase, (ii)
in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (ii) pursuant to a
plan of reorganization to which the Fund is a party. In the event that the
Board should have reason to believe that the Distributor may not be
rendering appropriate distribution assistance or administrative support
services in connection with the sale of Shares, then the Distributor, at
the request of the Board, shall provide the Board with a written report or
other information to verify that the Distributor is providing appropriate
services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by
OppenheimerFunds, Inc. ("Manager") from its own resources (which may
include profits derived from the advisory fee it receives from the Fund),
or (ii) by the Distributor (a subsidiary of the Manager), from its own
resources, from Asset-Based Sales Charge payments or from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any
-4-
<PAGE>
way make the Fund liable to make any payment whatsoever to any person or
entity other than directly to the Distributor. In no event shall the
amounts to be paid to the Distributor exceed the rate of fees to be paid by
the Fund to the Distributor set forth in paragraph (a) of this section 3.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of those persons to be Trustees of the Trust who are
not "interested persons" of the Trust ("Disinterested Trustees") shall be
committed to the discretion of such Disinterested Trustees. Nothing herein shall
prevent the Disinterested Trustees from soliciting the views or the involvement
of others in such selection or nomination if the final decision on any such
selection and nomination is approved by a majority of the incumbent
Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Trust shall
provide at least quarterly written reports to the Fund's Board for its review,
detailing, the amount of all payments made pursuant to this Plan, the identity
of the Recipient of each such payment, and the purpose for which the payments
were made. The report shall state whether all provisions of Section 3 of this
Plan have been complied with. The Distributor shall annually certify to the
Board the amount of its total expenses incurred that year with respect to the
personal service and maintenance of Accounts in conjunction with the Board's
annual review of the continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Trustees cast in person at a
meeting called on October 16, 1995, for the purpose of voting on this Plan and
by Class A shareholders of the Fund (who, as of March 11, 1996 has been
redesignated Class M shareholders of the Fund) at a meeting held on December 20,
1995. On March 8, 1996, this Plan shall replace the Fund's Distribution and
Service Plan and Agreement for the Class A Shares adopted June 3, 1986, and
amended May 1, 1993, July 22, 1993, October 20, 1994 and January 26, 1995.
Unless terminated as hereinafter provided, it shall continue in effect from year
to year from the date first set forth above or as the Board may otherwise
determine only so long as such continuance is specifically approved at least
annually by a vote of the Board and its Independent Trustees cast in person at a
meeting called for the purpose of voting on such continuance. This Plan may not
be amended to increase materially the amount of payments to be made without
approval of the Class M Shareholders, in the manner described above, and all
material amendments must be approved by a vote of the Board and of the
Independent Trustees. This Plan may be terminated at any time by vote of a
majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the 1940 Act) of the Fund's outstanding voting
securities of the Class.
-5-
<PAGE>
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee of the Trust or shareholder of the Fund personally, but bind only the
Fund and the Fund's property. The Distributor represents that it has notice of
the provisions of the Declaration of Trust of the Trust disclaiming shareholder
and Trustee liability for acts or obligations of the Fund.
BOND FUND SERIES, on behalf of
OPPENHEIMER BOND FUND FOR GROWTH
By:
---------------------------------------------
Michael S. Rosen, Vice President
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:
---------------------------------------------
Andrew J. Donohue, Executive Vice President
-6-
EXHIBIT 16
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Dec-94 Inc/cg $0.318 $12.20 $12.20 0.0424 81.9672 31-Dec-94 $12.61 $12.20 1,000.0000
81.9672 31-Jan-95 $12.82 $12.40 1,016.3934
81.9672 28-Feb-95 $13.02 $12.60 1,032.7869
28-Mar-95 Inc $0.160 $12.81 $12.81 1.0238 82.9910 31-Mar-95 $13.30 $12.87 1,068.0943
82.9910 30-Apr-95 $13.55 $13.11 1,088.0122
82.9910 31-May-95 $13.80 $13.35 1,107.9300
27-Jun-95 Inc $0.169698283 $13.70 $13.70 1.0280 84.0190 30-Jun-95 $14.19 $13.73 1,153.5811
84.0190 31-Jul-95 $14.72 $14.24 1,196.4307
84.0190 31-Aug-95 $14.88 $14.40 1,209.8738
27-Sep-95 Inc $0.237073657 $14.60 $14.60 1.3643 85.3833 30-Sep-95 $15.10 $14.61 1,247.4502
85.3833 31-0ct-95 $14.66 $14.18 1,210.7354
85.3833 30-Nov-95 $14.95 $14.46 1,234.6427
27-Dec-95 Inc/cg $0.792099462 $13.87 $13.87 4.8761 90.2594 31-Dec-95 $14.43 $13.96 1,260.0214
</TABLE>
NAV
Average annual return for the one year period ending 12/31/95 26.002%
Cumulative return for the one year period ending 12/31/95 26.002%
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Dec-94 Inc/cg $0.318 $12.20 $12.20 0.0424 79.3021 31-Dec-94 $12.61 $12.20 967.4861
79.3021 31-Jan-95 $12.82 $12.40 983.3466
79.3021 28-Feb-95 $13.02 $12.60 999.2070
28-Mar-95 Inc $0.160 $12.81 $12.81 0.9905 80.2926 31-Mar-95 $13.30 $12.87 1,033.3663
80.2926 30-Apr-95 $13.55 $13.11 1,052.6365
80.2926 31-May-95 $13.80 $13.35 1,071.9068
27-Jun-95 Inc $0.169698283 $13.70 $13.70 0.9946 81.2872 30-Jun-95 $14.19 $13.73 1,116.0738
81.2872 31-Jul-95 $14.72 $14.24 1,157.5303
81.2872 31-Aug-95 $14.88 $14.40 1,170.5363
27-Sep-95 Inc $0.237073657 $14.60 $14.60 1.3199 82.6071 30-Sep-95 $15.10 $14.61 1,206.8903
82.6071 31-0ct-95 $14.66 $14.18 1,171.3693
82.6071 30-Nov-95 $14.95 $14.46 1,194.4993
27-Dec-95 Inc/cg $0.792099462 $13.87 $13.87 4.7176 87.3247 31-Dec-95 $14.43 $13.96 1,219.0534
</TABLE>
POP
Average annual return for the one year period ending 12/31/95 21.905%
Cumulative return for the one year period ending 12/31/95 21.905%
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
28-Dec-90 Inc $0.1200 $ 7.84 $ 7.84 0.0193 126.9036 31-Dec-90 $ 8.14 $ 7.88 1,000.0000
126.9036 31-Jan-91 $ 8.22 $ 7.95 1,008.8832
126.9036 28-Feb-91 $ 8.74 $ 8.46 1,073.6041
22-Mar-91 Inc $0.1200 $ 8.52 $ 8.52 1.7874 128.6910 28-Mar-91 $ 8.81 $ 8.52 1,096.4469
128.6910 30-Apr-91 $ 8.90 $ 8.61 1,108.0291
128.6910 31-May-91 $ 9.01 $ 8.72 1,122.1851
21-Jun-91 Inc $0.1400 $ 8.56 $ 8.56 2.1048 130.7958 28-Jun-91 $ 8.76 $ 8.48 1,109.1480
130.7958 31-Jul-91 $ 9.05 $ 8.76 1,145.7708
130.7958 30-Aug-91 $ 9.32 $ 9.02 1,179.7777
23-Sep-91 Inc $0.1900 $ 8.96 $ 8.96 2.7736 133.5694 30-Sep-91 $ 9.29 $ 8.99 1,200.7885
133.5694 31-0ct-91 $ 9.47 $ 9.16 1,223.4953
133.5694 29-Nov-91 $ 9.33 $ 9.03 1,206.1313
30-Dec-91 Inc $0.2488 $ 9.32 $ 9.32 3.5650 137.1344 31-Dec-91 $ 9.68 $ 9.37 1,284.9489
137.1344 31-Jan-92 $ 9.93 $ 9.61 1,317.8611
137.1344 28-Feb-92 $10.24 $ 9.91 1,359.0014
25-Mar-92 Inc $0.1650 $10.14 $10.14 2.2315 139.3659 31-Mar-92 $10.42 $10.08 1,404.8078
139.3659 30-Apr-92 $10.34 $10.00 1,393.6585
139.3659 29-May-92 $10.57 $10.23 1,425.7127
24-Jun-92 Inc $0.1800 $10.05 $10.05 2.4961 141.8620 30-Jun-92 $10.42 $10.08 1,429.9685
141.8620 31-Jui-92 $10.88 $10.53 1,493.8064
141.8620 31-Aug-92 $10.88 $10.53 1,493.8064
24-Sep-92 Inc $0.1900 $10.77 $10.77 2.5027 144.3647 30-Sep-92 $11.17 $10.81 1,560.5819
144.3647 30-0ct-92 $11.25 $10.88 1,570.6874
144.3647 30-Nov-92 $11.49 $11.12 1,605.3349
30-Dec-92 Inc $0.245 $11.37 $11.37 3.1108 147.4755 31-Dec-92 $11.81 $11.43 1,685.6444
147.4755 31-Jan-93 $12.26 $11.86 1,749.0589
147.4755 28-Feb-93 $12.26 $11.86 1,749.0589
23-Mar-93 Inc $0.150 $12.06 $12.06 1.8343 149.3098 31-Mar-93 $12.47 $12.06 1,800.6756
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
149.3098 30-Apr-93 $12.23 $11.83 1,766.3344
149.3098 31-May-93 $12.37 $11.97 1,787.2377
23-Jun-93 Inc $0.160 $11.88 $11.88 2.0109 151.3207 30-Jun-93 $12.48 $12.07 1,826.4403
151.3207 31-Jul-93 $12.89 $12.47 1,886.9685
151.3207 31-Aug-93 $13.16 $12.73 1,926.3119
27-Sep-93 Inc $0.170 $12.92 $12.92 1.9911 153.3118 30-Sep-93 $13.40 $12.96 1,986.9203
153.3118 29-0ct-93 $13.56 $13.12 2,011.4502
153.3118 30-Nov-93 $13.53 $13.09 2,006.8509
30-Dec-93 Inc $0.170 $13.11 $13.11 1.9880 155.2998 31-Dec-93 $13.60 $13.16 2,043.7448
155.2998 31-Jan-94 $14.11 $13.65 2,119.8416
25-Mar-94 Inc $0.150 $13.55 $13.55 1.7192 155.0998 30-Mar-94 $13.08 $13.62 2,075.2806
157.0190 30-Apr-94 $13.34 $12.91 2,027.1147
157.0190 31-May-94 $13.19 $12.76 2,003.5618
24-Jun-94 Inc $0.180 $12.72 $12.72 2.2220 159.2410 30-Jun-94 $13.14 $12.71 2,023.9525
159.2410 31-Jul-94 $13.28 $12.85 2,046.2462
159.2410 31-Aug-94 $13.63 $13.19 2,100.3882
27-Sep-94 Inc $0.180 $13.10 $13.10 2.1880 161.4290 30-Sep-94 $13.59 $13.15 2,122.7907
161.4290 31-0ct-94 $13.41 $12.97 2,093.7335
161.4290 30-Nov-94 $12.98 $12.56 2,027.5477
30-Dec-94 Inc/cg $0.318 $12.20 $12.20 4.2077 165.6367 31-Dec-94 $12.61 $12.20 2,020.7672
165.6367 31-Jan-95 $12.82 $12.40 2,053.8945
165.6367 28-Feb-95 $13.02 $12.60 2,087.0218
28-Mar-95 Inc $0.160 $12.81 $12.81 2.0688 167.7055 31-Mar-95 $13.30 $12.87 2,158.3692
167.7055 30-Apr-95 $13.55 $13.11 2,198.6185
167.7055 31-May-95 $13.80 $13.35 2,238.8678
27-Jun-95 Inc $0.169698283 $13.70 $13.70 2.0773 169.7828 30-Jun-95 $14.19 $13.73 2,331.1172
169.7828 31-Jul-95 $14.72 $14.24 2,417.7064
169.7828 31-Aug-95 $14.88 $14.40 2,444.8716
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
27-Sep-95 Inc $0.237073657 $14.60 $14.60 2.7569 172.5397 30-Sep-95 $15.10 $14.61 2,520.8043
172.5397 31-0ct-95 $14.66 $14.18 2,446.6123
172.5397 30-Nov-95 $14.95 $14.46 2,494.9234
27-Dec-95 Inc/cg $0.792099462 $13.87 $13.87 9.8535 182.3932 31-Dec-95 $14.43 $13.96 2,546.2084
</TABLE>
NAV
Average annual return for the five year period ending 12/31/95 20.55%
Cumulative return for the five year period ending 12/31/95 154.62%
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
28-Dec-90 Inc $0.1200 $ 7.84 $ 7.84 0.0193 122.8501 31-Dec-90 $ 8.14 $ 7.88 968.0590
122.8501 31-Jan-91 $ 8.22 $ 7.95 976.6585
122.8501 28-Feb-91 $ 8.74 $ 8.46 1,039.3120
22-Mar-91 Inc $0.1200 $ 8.52 $ 8.52 1.7303 124.5804 28-Mar-91 $ 8.81 $ 8.52 1,061.4252
124.5804 30-Apr-91 $ 8.90 $ 8.61 1,072.6374
124.5804 31-May-91 $ 9.01 $ 8.72 1,086.3413
21-Jun-91 Inc $0.1400 $ 8.56 $ 8.56 2.0375 126.6179 28-Jun-91 $ 8.76 $ 8.48 1,073.7200
126.6179 31-Jul-91 $ 9.05 $ 8.76 1,109.1730
126.6179 30-Aug-91 $ 9.32 $ 9.02 1,142.0937
23-Sep-91 Inc $0.1900 $ 8.96 $ 8.96 2.6850 129.3029 30-Sep-91 $ 9.29 $ 8.99 1,162.4333
129.3029 31-0ct-91 $ 9.47 $ 9.16 1,184.4148
129.3029 29-Nov-91 $ 9.33 $ 9.03 1,167.6054
30-Dec-91 Inc $0.2488 $ 9.32 $ 9.32 3.4511 132.7540 31-Dec-91 $ 9.68 $ 9.37 1,243.9052
132.7540 31-Jan-92 $ 9.93 $ 9.61 1,275.7662
132.7540 28-Feb-92 $10.24 $ 9.91 1,315.5924
25-Mar-92 Inc $0.1650 $10.14 $10.14 2.1602 134.9142 31-Mar-92 $10.42 $10.08 1,359.9354
134.9142 30-Apr-92 $10.34 $10.00 1,349.1422
134.9142 29-May-92 $10.57 $10.23 1,380.1725
24-Jun-92 Inc $0.1800 $10.05 $10.05 2.4164 137.3306 30-Jun-92 $10.42 $10.08 1,384.2927
137.3306 31-Jul-92 $10.88 $10.53 1,446.0915
137.3306 31-Aug-92 $10.88 $10.53 1,446.0915
24-Sep-92 Inc $0.1900 $10.77 $10.77 2.4227 139.7533 30-Sep-92 $11.17 $10.81 1,510.7334
139.7533 30-0ct-92 $11.25 $10.88 1,520.5162
139.7533 30-Nov-92 $11.49 $11.12 1,554.0570
30-Dec-92 Inc $0.245 $11.37 $11.37 3.0114 142.7647 31-Dec-92 $11.81 $11.43 1,631.8008
142.7647 31-Jan-93 $12.26 $11.86 1,693.1896
142.7647 28-Feb-93 $12.26 $11.86 1,693.1896
23-Mar-93 Inc $0.150 $12.06 $12.06 1.7757 144.5404 31-Mar-93 $12.47 $12.06 1,743.1575
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
144.5404 30-Apr-93 $12.23 $11.83 1,709.9132
144.5404 31-May-93 $12.37 $11.97 1,730.1489
23-Jun-93 Inc $0.160 $11.88 $11.88 1.9467 146.4871 30-Jun-93 $12.48 $12.07 1,768.0996
146.4871 31-Jul-93 $12.89 $12.47 1,826.6944
146.4871 31-Aug-93 $13.16 $12.73 1,864,7811
27-Sep-93 Inc $0.170 $12.92 $12.92 1.9275 148.4146 30-Sep-93 $13.40 $12.96 1,923.4535
148.4146 29-0ct-93 $13.56 $13.12 1,947.1999
148.4146 30-Nov-93 $13.53 $13.09 1,942.7474
30-Dec-93 Inc $0.170 $13.11 $13.11 1.9245 150.3391 31-Dec-93 $13.60 $13.16 1,978.4629
150.3391 31-Jan-94 $14.11 $13.65 2,052.1290
25-Mar-94 Inc $0.150 $13.55 $13.55 1.6643 150.0094 31-Mar-94 $13.08 $13.62 2,007.0689
152.0034 30-Apr-94 $13.34 $12.91 1,962.3642
152.0034 31-May-94 $13.19 $12.76 1,939.5637
24-Jun-94 Inc $0.180 $12.72 $12.72 2.1510 154.1544 30-Jun-94 $13.14 $12.71 1,959.3027
154.1544 31-Jul-94 $13.28 $12.85 1,980.8843
154.1544 31-Aug-94 $13.63 $13.19 2,033.2968
27-Sep-94 Inc $0.180 $13.10 $13.10 2.1182 156.2726 30-Sep-94 $13.59 $13.15 2,054.9850
156.2726 31-0ct-94 $13.41 $12.97 2,026.8559
156.2726 30-Nov-94 $12.98 $12.56 1,962.7841
30-Dec-94 Inc/cg $0.318 $12.20 $12.20 4.0733 160.3459 31-Dec-94 $12.61 $12.20 1,956.2203
160.3459 31-Jan-95 $12.82 $12.40 1,988.2894
160.3459 28-Feb-95 $13.02 $12.60 2,020.3586
28-Mar-95 Inc $0.160 $12.81 $12.81 2.0028 162.3487 31-Mar-95 $13.30 $12.87 2,089.4281
162.3487 30-Apr-95 $13.55 $13.11 2,128.3918
162.3487 31-May-95 $13.80 $13.35 2,167.3555
27-Jun-95 Inc $0.169698283 $13.70 $13.70 2.0110 164.3597 30-Jun-95 $14.19 $13.73 2,256.6590
164.3597 31-Jul-95 $14.72 $14.24 2,340.4825
164.3597 31-Aug-95 $14.88 $14.40 2,366.7800
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
27-Sep-95 Inc $0.237073657 $14.60 $14.60 2.6689 167.0286 30-Sep-95 $15.10 $14.61 2,440.2882
167.0286 31-0ct-95 $14.66 $14.18 2,368.4659
167.0286 30-Nov-95 $14.95 $14.46 2,415.2339
27-Dec-95 Inc/cg $0.792099462 $13.87 $13.87 9.5388 176.5674 31-Dec-95 $14.43 $13.96 2,464.8812
</TABLE>
POP
Average annual return for the five year period ending 12/31/95 19.77%
Cumulative return for the five year period ending 12/31/95 146.49%
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
96.7118 05-Jun-86 $10.34 $10.00 967.1180
96.7118 30-Jun-86 $10.50 $10.16 982.5919
96.7118 31-Jul-86 $10.38 $10.04 970.9865
96.7118 29-Aug-86 $10.54 $10.20 986.4603
96.7118 30-Sep-86 $10.34 $10.00 967.1180
96.7118 31-0ct-86 $10.61 $10.27 993.2302
96.7118 30-Nov-86 $10.45 $10.11 977.7563
96.7118 31-Dec-86 $10.29 $ 9.96 963.2495
96.7118 30-Jan-87 $10.79 $10.44 1,009.6712
02-Feb-87 Income $0.136 $10.44 $10.44 1.2598 97.9716 27-Feb-87 $11.37 $11.00 1,077.6876
97.9716 31-Mar-87 $11.62 $11.24 1,101.2008
16-Apr-87 Income $0.100 $11.04 $11.04 0.8874 98.8590 30-Apr-87 $11.57 $11.19 1,106.2322
98.8590 29-May-87 $11.31 $10.94 1,081.5174
98.8590 30-Jun-87 $11.46 $11.09 1,096.3463
17-Jul-87 Income $0.116 $10.97 $10.97 1.0454 99.9044 31-Jul-87 $11.29 $10.92 1,090.9560
99.9044 31-Aug-87 $11.29 $10.92 1,090.9560
99.9044 30-Sep-87 $10.91 $10.56 1,054.9905
16-0ct-87 Income $0.130 $10.23 $10.23 1.2696 101.1740 30-0ct-87 $ 9.19 $ 8.89 899.4368
101.1740 30-Nov-87 $ 8.60 $ 8.32 841.7677
31-Dec-87 Inc/STG $0.132 $ 8.50 $ 8.50 1.5712 102.7452 31-Dec-87 $ 8.79 $ 8.50 873.3342
102.7452 29-Jan-88 $ 9.25 $ 8.95 919.5695
102.7452 29-Feb-88 $ 9.72 $ 9.40 965.8049
25-Mar-88 Income $0.130 $ 9.47 $ 9.47 1.4104 104.1556 31-Mar-88 $ 9.80 $ 9.48 987.3951
104.1556 29-Apr-88 $ 9.85 $ 9.53 992.6029
104.1556 31-May-88 $ 9.79 $ 9.47 986.3535
24-Jun-88 Inc $0.13 $ 9.71 $ 9.71 1.3945 105.5501 30-Jun-88 $10.04 $ 9.71 1,024.8915
105.5501 29-Jul-88 $ 9.88 $ 9.56 1,009.0589
105.5501 31-Aug-88 $ 9.63 $ 9.32 983.7269
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
23-Sep-88 Inc $0.13 $9.35 $9.35 1.4675 107.0176 30-Sep-88 $ 9.64 $9.33 998.4742
107.0176 31-0ct-88 $ 9.72 $9.40 1,005.9654
107.0176 30-Nov-88 $ 9.21 $8.91 953.5268
30-Dec-88 Inc $0.1452 $9.03 $9.03 1.7208 108.7384 30-Dec-88 $ 9.33 $9.03 981.9077
108.7384 31-Jan-89 $ 9.34 $9.04 982.9951
108.7384 28-Feb-89 $ 9.34 $9.04 982.9951
27-Mar-89 Inc $0.1300 $9.04 $9.04 1.5637 110.3021 31-Mar-89 $ 9.33 $9.03 996.0280
110.3021 28-Apr-89 $ 9.61 $9.30 1,025.8095
110.3021 31-May-89 $ 9.58 $9.27 1,022.5005
23-Jun-89 Inc $0.1300 $9.26 $9.26 1.5485 111.8506 23-Jun-89 $ 9.55 $9.24 1,033.4995
111.8506 31-Jul-89 $ 9.81 $9.49 1,061.4622
111.8506 31-Aug-89 $10.01 $9.68 1,082.7138
25-Sep-89 Inc $0.1300 $9.70 $9.70 1.4990 113.3496 29-Sep-89 $10.03 $9.70 1,099.4911
113.3496 31-0ct-89 $ 9.47 $9.16 1,038.2823
113.3496 30-Nov-89 $ 9.52 $9.21 1,043.9498
28-Sep-89 Inc $0.2063 $9.11 $9.11 2.5662 115.9158 29-Dec-89 $ 9.47 $9.16 1,061.7887
115.9158 31-Jan-90 $ 9.05 $8.76 1,015.4224
115.9158 28-Feb-90 $ 8.96 $8.67 1,004.9900
23-Mar-90 Inc $0.1400 $8.74 $8.74 1.8568 117.7726 30-Mar-90 $ 9.09 $8.79 1,035.2211
117.7726 30-Apr-90 $ 9.01 $8.72 1,026.9771
117.7726 31-May-90 $ 9.10 $8.80 1,036.3989
22-Jun-90 Inc $0.1500 $8.97 $8.97 1.9694 119.7420 29-Jun-90 $ 9.25 $8.95 1,071.6909
119.7420 31-Jul-90 $ 9.09 $8.79 1,052.5322
119.7420 31-Aug-90 $ 8.49 $8.21 983.0818
21-Sep-90 Inc $0.1450 $8.01 $8.01 2.1676 121.9096 28-Sep-90 $ 8.13 $7.87 959.4285
121.9096 31-Oct-90 $ 7.82 $7.57 922.8557
121.9096 30-Nov-90 $ 8.05 $7.79 949.6758
28-Dec-90 Inc $0.1200 $7.84 $7.84 1.8660 123.7756 31-Dec-90 $ 8.14 $7.88 975.3517
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
123.7756 31-Jan-91 $ 8.22 $ 7.95 984.0160
123.7756 28-Feb-91 $ 8.74 $ 8.46 1,047.1416
22-Mar-91 Inc $0.1200 $ 8.52 $ 8.52 1.7433 125.5189 28-Mar-91 $ 8.81 $ 8.52 1,069.4210
125.5189 30-Apr-91 $ 8.90 $ 8.61 1,080.7177
125.5189 31-May-91 $ 9.01 $ 8.72 1,094.5248
21-Jun-91 Inc $0.1400 $ 8.56 $ 8.56 2.0529 127.5718 28-Jun-91 $ 8.76 $ 8.48 1,081.8089
127.5718 31-Jul-91 $ 9.05 $ 8.76 1,117.5290
127.5718 30-Aug-91 $ 9.32 $ 9.02 1,150.6976
23-Sep-91 Inc $0.1900 $ 8.96 $ 8.96 2.7052 130.2770 30-Sep-91 $ 9.29 $ 8.99 1,171.1902
130.2770 31-0ct-91 $ 9.47 $ 9.16 1,193.3373
130.2770 29-Nov-91 $ 9.33 $ 9.03 1,176.4013
30-Dec-91 Inc $0.2488 $ 9.32 $ 9.32 3.4771 133.7541 31-Dec-91 $ 9.68 $ 9.37 1,253.2759
133.7541 31-Jan-92 $ 9.93 $ 9.61 1,285.3769
133.7541 28-Feb-92 $10.24 $ 9.91 1,325.5031
25-Mar-92 Inc $0.1650 $10.14 $10.14 2.1765 135.9306 31-Mar-92 $10.42 $10.08 1,370.1804
135.9306 30-Apr-92 $10.34 $10.00 1,359.3060
135.9306 29-May-92 $10.57 $10.23 1,390.5700
24-Jun-92 Inc $0.1800 $10.05 $10.05 2.4346 138.3652 30-Jun-92 $10.42 $10.08 1,394.7212
138.3652 31-Jul-92 $10.88 $10.53 1,456.9855
138.3652 31-Aug-92 $10.88 $10.53 1,456.9855
24-Sep-92 Inc $0.1900 $10.77 $10.77 2.4410 140.8062 30-Sep-92 $11.17 $10.81 1,522.1150
140.8062 30-0ct-92 $11.25 $10.88 1,531.9714
140.8062 30-Nov-92 $11.49 $11.12 1,565.7649
30-Dec-92 Inc $0.245 $11.37 $11.37 3.0341 143.8403 31-Dec-92 $11.81 $11.43 1,644.0946
143.8403 31-Jan-93 $12.26 $11.86 1,705.9459
143.8403 28-Feb-93 $12.26 $11.86 1,705.9459
23-Mar-93 Inc $0.150 $12.06 $12.06 1.7891 145.6294 31-Mar-93 $12.47 $12.06 1,756.2906
145.6294 30-Apr-93 $12.23 $11.83 1,722.7958
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
145.6294 31-May-93 $12.37 $11.97 1,743.1839
23-Jun-93 Inc $0.160 $11.88 $11.88 1.9613 147.5907 30-Jun-93 $12.48 $12.07 1,781.4197
147.5907 31-Jul-93 $12.89 $12.47 1,840.4560
147.5907 31-Aug-93 $13.16 $12.73 1,878.8296
27-Sep-93 Inc $0.170 $12.92 $12.92 1.9420 149.5327 30-Sep-93 $13.40 $12.96 1,937.9438
149.5327 29-0ct-93 $13.56 $13.12 1,961.8690
149.5327 30-Nov-93 $13.53 $13.09 1,957.3830
30-Dec-93 Inc $0.170 $13.11 $13.11 1.9390 151.4717 31-Dec-93 $13.60 $13.16 1,993.3676
151.4717 31-Jan-94 $14.11 $13.65 2,067.5887
25-Mar-94 Inc $0.150 $13.55 $13.55 1.6768 153.4785 31-Mar-94 $13.08 $13.02 2,063.0045
153.1485 30-Apr-94 $13.34 $12.91 1,977.1471
153.1485 31-May-94 $13.19 $12.76 1,954.1748
24-Jun-94 Inc $0.180 $12.72 $12.72 2.1672 155.3157 30-Jun-94 $13.14 $12.71 1,974.0625
155.3157 31-Jul-94 $13.28 $12.85 1,995.8067
155.3157 31-Aug-94 $13.63 $13.19 2,048.6141
27-Sep-94 Inc $0.180 $13.10 $13.10 2.1341 157.4498 30-Sep-94 $13.59 $13.15 2,070.4649
157.4498 31-0ct-94 $13.41 $12.97 2,042.1239
157.4498 30-Nov-94 $12.98 $12.56 1,977.5695
30-Dec-94 Inc/cg $0.318 $12.20 $12.20 4.1040 161.5538 31-Dec-94 $12.61 $12.20 1,970.9563
161.5538 31-Jan-95 $12.82 $12.40 2,003.2671
161.5538 28-Feb-95 $13.02 $12.60 2,035.5779
28-Mar-95 Inc $0.160 $12.81 $12.81 2.0178 163.5716 31-Mar-95 $13.30 $12.87 2,105.1665
163.5716 30-Apr-95 $13.55 $13.11 2,144.4237
163.5716 31-May-95 $13.80 $13.35 2,183.6808
27-Jun-95 Inc $0.169698283 $13.70 $13.70 2.0261 165.5977 30-Jun-95 $14.19 $13.73 2,273.6564
165.5977 31-Jul-95 $14.72 $14.24 2,358.1112
165.5977 31-Aug-95 $14.88 $14.40 2,384.6069
27-Sep-95 Inc $0.237073657 $14.60 $14.60 2.6890 168.2867 30-Sep-95 $15.10 $14.61 2,458.6687
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
168.2867 31-0ct-95 $14.66 $14.18 2,386.3054
168.2867 30-Nov-95 $14.95 $14.46 2,433.4257
27-Dec-95 Inc/cg $0.792099462 $13.87 $13.87 9.6107 177.8974 31-Dec-95 $14.43 $13.96 2,483.4477
</TABLE>
POP
Average annual return for the life (9.57 years) period ending 12/31/95 9.97%
Cumulative return for the life (9.57 years) period ending 12/31/95 148.34%
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
100.0000 05-Jun-86 $10.34 $10.00 1,000.0000
100.0000 30-Jun-86 $10.50 $10.16 1,016.0000
100.0000 31-Jul-86 $10.38 $10.04 1,004.0000
100.0000 29-Aug-86 $10.54 $10.20 1,020.0000
100.0000 30-Sep-86 $10.34 $10.00 1,000.0000
100.0000 31-0ct-86 $10.61 $10.27 1,027.0000
100.0000 30-Nov-86 $10.45 $10.11 1,011.0000
100.0000 31-Dec-86 $10.29 $ 9.96 996.0000
100.0000 30-Jan-87 $10.79 $10.44 1,044.0000
02-Feb-87 Income $0.136 $10.44 $10.44 1.3027 101.3027 27-Feb-87 $11.37 $11.00 1,114.3297
101.3027 31-Mar-87 $11.62 $11.24 1,138.6423
16-Apr-87 Income $0.100 $11.04 $11.04 0.9176 102.2203 30-Apr-87 $11.57 $11.19 1,143.8452
102.2203 29-May-87 $11.31 $10.94 1,118.2901
102.2203 30-Jun-87 $11.46 $11.09 1,133.6231
17-Jul-87 Income $0.116 $10.97 $10.97 1.0809 103.3012 31-Jul-87 $11.29 $10.92 1,128.0491
103.3012 31-Aug-87 $11.29 $10.92 1,128.0491
103.3012 30-Sep-87 $10.91 $10.56 1,090.8607
16-0ct-87 Income $0.130 $10.23 $10.23 1.3127 104.6139 30-0ct-87 $ 9.19 $ 8.89 930.0176
104.6139 30-Nov-87 $ 8.60 $ 8.32 870.3876
31-Dec-87 lnc/STG $0.132 $8.50 $8.50 1.6246 106.2385 31-Dec-87 $ 8.79 $ 8.50 903.0273
106.2385 29-Jan-88 $ 9.25 $ 8.95 950.8346
106.2385 29-Feb-88 $ 9.72 $ 9.40 998.6419
25-Mar-88 Income $0.130 $9.47 $9.47 1.4584 107.6969 31-Mar-88 $ 9.80 $ 9.48 1,020.9666
107.6969 29-Apr-88 $ 9.85 $ 9.53 1,026.3515
107.6969 31-May-88 $ 9.79 $ 9.47 1,019.8896
24-Jun-88 Inc $0.13 $9.71 $9.71 1.4419 109.1388 30-Jun-88 $10.04 $ 9.71 1,059.7377
109.1388 29-Jul-88 $ 9.88 $ 9.56 1,043.3669
109.1388 31-Aug-88 $ 9.63 $ 9.32 1,017.1736
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
23-Sep-88 Inc $0.13 $9.35 $9.35 1.5174 110.6562 30-Sep-88 $ 9.64 $9.33 1,032.4223
110.6562 31-0ct-88 $ 9.72 $9.40 1,040.1683
110.6562 30-Nov-88 $ 9.21 $8.91 985.9467
30-Dec-88 Inc $0.1452 $9.03 $9.03 1.7793 112.4355 30-Dec-88 $ 9.33 $9.03 1,015.2926
112.4355 31-Jan-89 $ 9.34 $9.04 1,016.4169
112.4355 28-Feb-89 $ 9.34 $9.04 1,016.4169
27-Mar-89 Inc $0.1300 $9.04 $9.04 1.6169 114.0524 31-Mar-89 $ 9.33 $9.03 1,029.8932
114.0524 28-Apr-89 $ 9.61 $9.30 1,060.6873
114.0524 31-May-89 $ 9.58 $9.27 1,057.2657
23-Jun-89 Inc $0.1300 $9.26 $9.26 1.6012 115.6536 23-Jun-89 $ 9.55 $9.24 1,068.6393
115.6536 31-Jul-89 $ 9.81 $9.49 1,097.5527
115.6536 31-Aug-89 $10.01 $9.68 1,119.5268
25-Sep-89 Inc $0.1300 $9.70 $9.70 1.5500 117.2036 29-Sep-89 $10.03 $9.70 1,136.8749
117.2036 31-0ct-89 $ 9.47 $9.16 1,073.5850
117.2036 30-Nov-89 $ 9.52 $9.21 1,079.4452
28-Sep-89 Inc $0.2063 $9.11 $9.11 2.6535 119.8571 29-Dec-89 $ 9.47 $9.16 1,097.8910
119.8571 31-Jan-90 $ 9.05 $8.76 1,049.9482
119.8571 28-Feb-90 $ 8.96 $8.67 1,039.1611
23-Mar-90 Inc $0.1400 $8.74 $8.74 1.9199 121.7770 30-Mar-90 $ 9.09 $8.79 1,070.4198
121.7770 30-Apr-90 $ 9.01 $8.72 1,061.8954
121.7770 31-May-90 $ 9.10 $8.80 1,071.6376
22-Jun-90 Inc $0.1500 $8.97 $8.97 2.0364 123.8134 29-Jun-90 $ 9.25 $8.95 1,108.1299
123.8134 31-Jul-90 $ 9.09 $8.79 1,088.3198
123.8134 31-Aug-90 $ 8.49 $8.21 1,016.5080
21-Sep-90 Inc $0.1450 $8.01 $8.01 2.2413 126.0547 28-Sep-90 $ 8.13 $7.87 992.0505
126.0547 31-Oct-90 $ 7.82 $7.57 954.2341
126.0547 30-Nov-90 $ 8.05 $7.79 981.9661
28-Dec-90 Inc $0.1200 $7.84 $7.84 1.9294 127.9841 31-Dec-90 $ 8.14 $7.88 1,008.5147
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
127.9841 31-Jan-91 $ 8.22 $ 7.95 1,017.4736
127.9841 28-Feb-91 $ 8.74 $ 8.46 1,082.7455
22-Mar-91 Inc $0.1200 $ 8.52 $ 8.52 1.8026 129.7867 28-Mar-91 $ 8.81 $ 8.52 1,105.7827
129.7867 30-Apr-91 $ 8.90 $ 8.61 1,117.4635
129.7867 31-May-91 $ 9.01 $ 8.72 1,131.7400
21-Jun-91 Inc $0.1400 $ 8.56 $ 8.56 2.1227 131.9094 28-Jun-91 $ 8.76 $ 8.48 1,118.5917
131.9094 31-Jul-91 $ 9.05 $ 8.76 1,155.5263
131.9094 30-Aug-91 $ 9.32 $ 9.02 1,189.8228
23-Sep-91 Inc $0.1900 $ 8.96 $ 8.96 2.7972 134.7066 30-Sep-91 $ 9.29 $ 8.99 1,211.0123
134.7066 31-0ct-91 $ 9.47 $ 9.16 1,233.9125
134.7066 29-Nov-91 $ 9.33 $ 9.03 1,216.4006
30-Dec-91 Inc $0.2488 $ 9.32 $ 9.32 3.5953 138.3019 31-Dec-91 $ 9.68 $ 9.37 1,295.8888
138.3019 31-Jan-92 $ 9.93 $ 9.61 1,329.0813
138.3019 28-Feb-92 $10.24 $ 9.91 1,370.5718
25-Mar-92 Inc $0.1650 $10.14 $10.14 2.2505 140.5524 31-Mar-92 $10.42 $10.08 1,416.7682
140.5524 30-Apr-92 $10.34 $10.00 1,405.5240
140.5524 29-May-92 $10.57 $10.23 1,437.8511
24-Jun-92 Inc $0.1800 $10.05 $10.05 2.5174 143.0698 30-Jun-92 $10.42 $10.08 1,442.1436
143.0698 31-Jul-92 $10.88 $10.53 1,506.5250
143.0698 31-Aug-92 $10.88 $10.53 1,506.5250
24-Sep-92 Inc $0.1900 $10.77 $10.77 2.5240 145.5938 30-Sep-92 $11.17 $10.81 1,573.8690
145.5938 30-0ct-92 $11.25 $10.88 1,584.0605
145.5938 30-Nov-92 $11.49 $11.12 1,619.0031
30-Dec-92 Inc $0.245 $11.37 $11.37 3.1372 148.7310 31-Dec-92 $11.81 $11.43 1,699.9953
148.7310 31-Jan-93 $12.26 $11.86 1,763.9497
148.7310 28-Feb-93 $12.26 $11.86 1,763.9497
23-Mar-93 Inc $0.150 $12.06 $12.06 1.8499 150.5809 31-Mar-93 $12.47 $12.06 1,816.0057
150.5809 30-Apr-93 $12.23 $11.83 1,781.3720
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
150.5809 31-May-93 $12.37 $11.97 1,802.4534
23-Jun-93 Inc $0.160 $11.88 $11.88 2.0280 152.6089 30-Jun-93 $12.48 $12.07 1,841.9894
152.6089 31-Jul-93 $12.89 $12.47 1,903.0330
152.6089 31-Aug-93 $13.16 $12.73 1,942.7113
27-Sep-93 Inc $0.170 $12.92 $12.92 2.0080 154.6169 30-Sep-93 $13.40 $12.96 2,003.8350
154.6169 29-0ct-93 $13.56 $13.12 2,028.5737
154.6169 30-Nov-93 $13.53 $13.09 2,023.9352
30-Dec-93 Inc $0.170 $13.11 $13.11 2.0049 156.6218 31-Dec-93 $13.60 $13.16 2,061.1429
156.6218 31-Jan-94 $14.11 $13.65 2,137.8876
25-Mar-94 Inc $0.150 $13.55 $13.55 1.7338 158.6256 31-Mar-94 $13.08 $13.02 2,093.8779
158.3556 30-Apr-94 $13.34 $12.91 2,044.3708
158.3556 31-May-94 $13.19 $12.76 2,020.6175
24-Jun-94 Inc $0.180 $12.72 $12.72 2.2409 160.5965 30-Jun-94 $13.14 $12.71 2,041.1815
160.5965 31-Jul-94 $13.28 $12.85 2,063.6650
160.5965 31-Aug-94 $13.63 $13.19 2,118.2678
27-Sep-94 Inc $0.180 $13.10 $13.10 2.2067 162.8032 30-Sep-94 $13.59 $13.15 2,140.8621
162.8032 31-0ct-94 $13.41 $12.97 2,111.5575
162.8032 30-Nov-94 $12.98 $12.56 2,044.8082
30-Dec-94 Inc/cg $0.318 $12.20 $12.20 4.2436 167.0468 31-Dec-94 $12.61 $12.20 2,037,9710
167.0468 31-Jan-95 $12.82 $12.40 2,071.3803
167.0468 28-Feb-95 $13.02 $12.60 2,104.7897
28-Mar-95 Inc $0.160 $12.81 $12.81 2.0865 169.1333 31-Mar-95 $13.30 $12.87 2,176.7456
169.1333 30-Apr-95 $13.55 $13.11 2,217.3376
169.1333 31-May-95 $13.80 $13.35 2,257.9296
27-Jun-95 Inc $0.169698283 $13.70 $13.70 2.0950 171.2283 30-Jun-95 $14.19 $13.73 2,350.9646
171.2283 31-Jul-95 $14.72 $14.24 2,438.2910
171.2283 31-Aug-95 $14.88 $14.40 2,465.6875
27-Sep-95 Inc $0.237073657 $14.60 $14.60 2.7804 174.0087 30-Sep-95 $15.10 $14.61 2,542.2671
</TABLE>
<PAGE>
The Bond Fund For Growth
Total Return Calculation
<TABLE>
<CAPTION>
Load Applicable
Dist Dist Dist Reinvest Share Share Date
Date Type Amount NAV Rate Reinvest Balance POP NAV ERV
- --------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
174.0087 31-0ct-95 $14.66 $14.18 2,467.4434
174.0087 30-Nov-95 $14.95 $14.46 2,516.1658
27-Dec-95 Inc/cg $0.792099462 $13.87 $13.87 9.9374 183.9461 31-Dec-95 $14.43 $13.96 2,567.8876
</TABLE>
NAV
Average annual return for the life (9.57 years) period ending 12/31/95 10.36%
Cumulative return for the life (9.57 years) period ending 12/31/95 156.79%
<PAGE>
The Bond Fund For Growth
Class B
Total Return Calculation
<TABLE>
<CAPTION>
Lessor of
Load Applicable Cost or
Dist Dist Dist Reinvest Share Share Date NAV ERV Redemption ERV
Date Type Amount Rate Reinvest Balance BEFORE CDSC Value AFTER CDCS
- -------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.0000 01-May-95 $13.11 $13.1100 0.46 $12.6500
1.0000 31-May-95 $13.37 $13.3700 0.46 $12.9100
27-Jun-95 Inc 0.08633079 $13.72 0.0063 1.0063 30-Jun-95 $13.75 $13.8366 0.46 $13.3766
1.0063 31-Jul-95 $14.26 $14.3498 0.46 $13.8898
1.0063 31-Aug-95 $14.42 $14.5108 0.46 $14.0508
27-Sep-95 Inc 0.22513999 $14.62 0.0155 1.0218 30-Sep-95 $14.63 $14.9489 0.46 $14.4889
1.0218 31-0ct-95 $14.20 $14.5096 0.46 $14.0496
1.0218 30-Nov-95 $14.48 $14.7957 0.46 $14.3357
27-Dec-95 Inc/cg 0.78177531 $13.89 0.0575 1.0793 31-Dec-95 $13.98 $15.0886 0.46 $14.6286
</TABLE>
shares at cost = 1
Total Return (F/S)
1.150922959
15.09%
<PAGE>
The Bond Fund For Growth
Class B
Total Return Calculation
<TABLE>
<CAPTION>
Lessor of
Load Applicable Cost or
Dist Dist Dist Reinvest Share Share Date NAV ERV Redemption ERV
Date Type Amount Rate Reinvest Balance BEFORE CDSC Value AFTER CDCS
- -------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
76.2777 01-May-95 $13.11 $1,000.0000 35 $ 965.0000
76.2777 31-May-95 $13.37 $1,019.8300 35 $ 984.8300
27-Jun-95 Inc 0.08633079 $13.72 0.4800 76.7577 30-Jun-95 $13.75 $1,055.4200 35 $1,020.4200
76.7577 31-Jul-95 $14.26 $1,094.5600 35 $1,059.5600
76.7577 31-Aug-95 $14.42 $1,106.8500 35 $1,071.8500
27-Sep-95 Inc 0.22513999 $14.62 1.1820 77.9397 30-Sep-95 $14.63 $1,140.2600 35 $1,105.2600
77.9397 31-0ct-95 $14.20 $1,106.7400 35 $1,071.7400
77.9397 30-Nov-95 $14.48 $1,128.5700 35 $1,093.5700
27-Dec-95 Inc/cg 0.78177531 $13.89 4.3867 82.3264 31-Dec-95 $13.98 $1,150.9200 35 $1,115.9200
</TABLE>
shares at cost = 76.277650648
Total Return 11.59%
<PAGE>
<TABLE>
<CAPTION>
THE BOND FUND FOR GROWTH
FOR THE 30 DAY PERIOD ENDING 12/31/95
11/30/95 Purchase Accrued
Settle Date Price or Int +
of Purchase Par/ Coupon/ Maturity 30-Nov-95 Accrued Market
or Sale Shares Issue Rate Date Market Value Int Value
- ----------- ---------- ---------------------------- ------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-95 $5,000,000 ADT Lyons 0.000 06-Jul-10 $46.25 $0.0000 $46.2500
30-Nov-95 $3,753,000 AES 6.500 15-Mar-02 $101.00 $1.3542 $102.3542
30-Nov-95 $500,000 Aeroflex 7.500 15-Jun-04 $99.00 $3.4375 $102.4375
30-Nov-95 $2,500,000 Alfa 8.000 22-Sep-00 $95.88 $1.5111 $97.3861
18-Dec-95 $250,000 Analog Devices 3.500 12-Dec-00 $100.00 $0.0583 $100.0583
18-Dec-95 ($250,000) Analog Devices 3.500 12-Dec-00 $100.0583
30-Nov-95 $2,500,000 Audiovox 6.250 15-Mar-01 $64.00 $1.3021 $65.3021
30-Nov-95 $355,000 Aurora Electronics 7.750 15-Apr-01 $67.00 $0.9688 $67.9688
30-Nov-95 $500,000 Bangkok Bank 3.250 03-Mar-04 $101.00 $2.4104 $103.4104
30-Nov-95 $2,415,000 Bell Sports 4.250 15-Nov-00 $73.38 $0.1771 $73.5521
30-Nov-95 $2,800,000 Ben Franklin Retail Stores 7.500 01-Jun-03 $67.50 $3.7292 $71.2292
30-Nov-95 $2,165,000 Beverly Enterprises 5.500 01-Aug-18 $100.50 $1.8181 $102.3181
30-Nov-95 $1,175,000 Cabot Medical 7.500 01-Mar-99 $99.00 $1.8542 $100.8542
30-Nov-95 $2,000,000 California Microwave 5.250 15-Dec-03 $96.00 $2.4063 $98.4063
30-Nov-95 $750,000 Careline (Registered) 8.000 01-May-01 $110.00 $0.6444 $110.6444
30-Nov-95 $6,000,000 Cemex (EURO) 4.250 01-Nov-97 $84.00 $0.3424 $84.3424
30-Nov-95 $1,750,000 Chiron 1.900 17-Nov-00 $96.50 $0.0686 $96.5686
30-Nov-95 $2,332,000 Chock Full o' Nuts 8.000 15-Sep-06 $95.25 $1.6667 $96.9167
26-Dec-95 $413,000 Chock Full o' Nuts 8.000 15-Sep-06 $93.50 $2.2444 $95.7444
30-Nov-95 $4,000,000 Chubb Capital 6.000 15-May-98 $114.50 $3.2500 $117.7500
30-Nov-95 $2,500,000 Telefonos Chile 4.500 15-Jan-03 $105.00 $3.9375 $108.9375
30-Nov-95 $300,000 Comptronix 6.750 01-Mar-02 $54.50 $5.0438 $59.5438
30-Nov-95 $3,425,000 Conner Peripherals 6.500 01-Mar-02 $105.50 $1.6069 $107.1069
30-Nov-95 $2,000,000 Continental Homes 6.875 01-Nov-02 $100.50 $0.5538 $101.0538
30-Nov-95 $1,000,000 Cooper Industries 7.050 01-Jan-15 $102.25 $2.9179 $105.1679
30-Nov-95 $5,000,000 Danskin 8.000 01-Sep-02 $152.78 $1.9778 $154.7558
30-Nov-95 $300,000 Dibrell Brothers 7.750 30-Sep-06 $129.50 $1.2917 $130.7917
06-Dec-95 $2,000,000 Discovery Zone 0.000 14-Oct-13 $25.75 $0.0000 $25.7500
08-Dec-95 $1,000,000 Discovery Zone 0.000 14-Oct-13 $26.25 $0.0000 $26.2500
30-Nov-95 $3,331,000 Ducommon 7.750 31-Mar-11 $107.00 $1.2917 $108.2917
30-Nov-95 $2,000,000 EMC 4.250 01-Jan-01 $107.50 $1.7590 $109.2590
30-Nov-95 $400,000 Eagle Hardware 6.250 15-Mar-01 $73.50 $1.3021 $74.8021
30-Nov-95 $1,500,000 Emerson Radio 8.500 15-Aug-02 $82.50 $2.4792 $84.9792
30-Nov-95 $4,500,000 Empressas ICA 5.000 15-Mar-04 $53.50 $1.0417 $54.5417
30-Nov-95 $2,750,000 Engle Homes (Registered) 7.000 01-Mar-03 $86.50 $1.7306 $88.2306
12-Dec-95 $75,000 First Republic Bancorp 7.250 01-Dec-02 $104.50 $0.2215 $104.7215
30-Nov-95 $2,902,000 First Republic Bancorp 7.250 01-Dec-02 $102.00 $3.6049 $105.6049
30-Nov-95 $3,500,000 Fisher Scientific 4.750 01-Mar-03 $106.50 $1.1743 $107.6743
30-Nov-95 $2,000,000 Flagstar 10.000 14-Nov-14 $55.00 $0.4444 $55.4444
06-Dec-95 $1,000,000 Flagstar 10.000 14-Nov-14 $55.00 $0.6111 $55.6111
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
11/30/95
Settle Date Income
of Purchase Par/ Days Coupon for 30 Day
or Sale Shares Issue Held Freq YTM Period
- ----------- ---------- ---------------------------- ---- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
30-Nov-95 $5,000,000 ADT Lyons 30 2 5.3519 $10,313.60
30-Nov-95 $3,753,000 AES 30 2 6.3026 $20,175.49
30-Nov-95 $500,000 Aeroflex 30 2 7.6608 $3,269.81
30-Nov-95 $2,500,000 Alfa 30 2 9.0716 $18,405.22
18-Dec-95 $250,000 Analog Devices 13 2 3.4999 $316.15
18-Dec-95 ($250,000) Analog Devices 13 2 3.4999 ($316.15)
30-Nov-95 $2,500,000 Audiovox 30 2 16.7671 $22,811.04
30-Nov-95 $355,000 Aurora Electronics 30 2 17.4498 $3,508.70
30-Nov-95 $500,000 Bangkok Bank 30 1 3.1095 $1,339.81
30-Nov-95 $2,415,000 Bell Sports 30 2 11.4315 $16,921.32
30-Nov-95 $2,800,000 Ben Franklin Retail Stores 30 2 14.8211 $24,632.95
30-Nov-95 $2,165,000 Beverly Enterprises 30 2 5.4606 $10,080.27
30-Nov-95 $1,175,000 Cabot Medical 30 2 7.8479 $7,750.05
30-Nov-95 $2,000,000 California Microwave 30 2 5.8809 $9,645.37
30-Nov-95 $750,000 Careline (Registered) 30 2 5.8203 $4,024.91
30-Nov-95 $6,000,000 Cemex (EURO) 30 1 14.3552 $60,537.68
30-Nov-95 $1,750,000 Chiron 30 2 2.6572 $3,742.10
30-Nov-95 $2,332,000 Chock Full o' Nuts 30 2 8.6840 $16,355.57
26-Dec-95 $413,000 Chock Full o' Nuts 5 2 8.9525 $491.67
30-Nov-95 $4,000,000 Chubb Capital 30 1 0.0920 $361.21
30-Nov-95 $2,500,000 Telefonos Chile 30 1 3.6878 $8,369.53
30-Nov-95 $300,000 Comptronix 30 1 20.1422 $2,998.36
30-Nov-95 $3,425,000 Conner Peripherals 30 2 5.4482 $16,655.14
30-Nov-95 $2,000,000 Continental Homes 30 2 6.7819 $11,422.20
30-Nov-95 $1,000,000 Cooper Industries 30 2 6.8364 $5,991.40
30-Nov-95 $5,000,000 Danskin 30 2 0.1435 $925.15
30-Nov-95 $300,000 Dibrell Brothers 30 2 4.3118 $1,409.87
06-Dec-95 $2,000,000 Discovery Zone 25 2 7.7446 $2,769.76
08-Dec-95 $1,000,000 Discovery Zone 23 2 7.6352 $1,280.48
30-Nov-95 $3,331,000 Ducommon 30 2 6.9968 $21,032.36
30-Nov-95 $2,000,000 EMC 30 2 2.6631 $4,849.41
30-Nov-95 $400,000 Eagle Hardware 30 2 13.3930 $3,339.41
30-Nov-95 $1,500,000 Emerson Radio 30 2 12.4126 $13,185.19
30-Nov-95 $4,500,000 Empressas ICA 30 2 14.9693 $30,616.97
30-Nov-95 $2,750,000 Engle Homes (Registered) 30 2 9.6247 $19,460.69
12-Dec-95 $75,000 First Republic Bancorp 19 2 6.4379 $266.87
30-Nov-95 $2,902,000 First Republic Bancorp 30 2 6.8852 $17,583.90
30-Nov-95 $3,500,000 Fisher Scientific 30 2 3.7184 $11,677.62
30-Nov-95 $2,000,000 Flagstar 30 2 18.7094 $17,288.86
06-Dec-95 $1,000,000 Flagstar 25 2 18.7090 $7,225.20
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE BOND FUND FOR GROWTH
FOR THE 30 DAY PERIOD ENDING 12/31/95
11/30/95 Purchase Accrued
Settle Date Price or Int +
of Purchase Par/ Coupon/ Maturity 30-Nov-95 Accrued Market
or Sale Shares Issue Rate Date Market Value Int Value
- ----------- ---------- ---------------------------- ------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-95 $500,000 Base Metal Bull Notes 2.500 14-Feb-97 $102.50 $0.7361 $103.2361
30-Nov-95 $1,385,000 General Host 8.000 15-Feb-02 $86.00 $2.3333 $88.3333
30-Nov-95 $5,500,000 General Instruments 5.000 15-Jun-00 $116.50 $2.2917 $118.7917
30-Nov-95 $2,000,000 Grand Metropolitan 6.500 31-Jan-00 $113.00 $2.1667 $115.1667
30-Nov-95 $750,000 Graphic Industries 7.000 15-May-06 $93.00 $0.2917 $93.2917
30-Nov-95 $500,000 Hysan Dev 6.750 01-Jun-00 $106.25 $3.3563 $109.6063
30-Nov-95 $2,000,000 Hasbro 6.000 15-Nov-98 $110.75 $0.2500 $111.0000
30-Nov-95 $2,000,000 Henderson Capital 4.000 27-Oct-96 $102.00 $0.3667 $102.3667
30-Nov-95 $980,000 IMC Global 6.250 01-Dec-01 $123.75 $3.1076 $126.8576
28-Dec-95 $5,000,000 Intergrated Devices 5.500 01-Jun-02 $83.75 $0.4125 $84.1625
30-Nov-95 $700,000 Integrated Health Services 5.750 01-Jan-01 $95.50 $2.3799 $97.8799
30-Nov-95 $750,000 Interface 8.000 15-Sep-13 $102.50 $1.6667 $104.1667
21-Dec-95 ($750,000) Interface 8.000 15-Sep-13 $104.1667
30-Nov-95 $500,000 IVAX 6.500 15-Nov-01 $102.00 $0.2708 $102.2708
30-Nov-95 $2,250,000 N Laidlaw (ADT) 6.000 15-Jan-99 $119.50 $2.2500 $121.7500
12-Dec-95 $2,000,000 Lechters 5.000 27-Sep-01 $60.00 $1.0417 $61.0417
30-Nov-95 $3,750,000 F Lomas Financial 9.000 31-Oct-03 $11.00 $0.7500 $11.7500
14-Dec-95 ($1,900,000) Lomas Financial 9.000 31-Oct-03 $11.7500
30-Nov-95 $5,000,000 Mitsubishi 3.000 30-Nov-02 $110.25 $0.0000 $110.2500
30-Nov-95 $2,402,000 MacNeal-Schwendler 7.875 18-Aug-04 $113.13 $2.2313 $115.3563
13-Dec-95 $715,000 MacNeal-Schwendler 7.875 18-Aug-04 $111.50 $2.5156 $114.0156
30-Nov-95 $2,500,000 Magnetek 8.000 15-Sep-01 $88.00 $1.6667 $89.6667
30-Nov-95 $3,130,000 Mascotech 4.500 15-Dec-03 $77.00 $2.0625 $79.0625
30-Nov-95 $500,000 Maxxim Medical 6.750 01-Mar-03 $102.50 $1.6688 $104.1688
30-Nov-95 $900,000 Mediq (Nutramax) 7.500 15-Jul-03 $78.00 $2.8125 $80.8125
30-Nov-95 $2,050,000 Michaels Stores 4.750 15-Jan-03 $79.50 $1.7813 $81.2813
30-Nov-95 $1,500,000 N Microtel Franchise & Devel 8.000 01-Feb-04 $176.25 $0.6444 $176.8944
30-Nov-95 $1,500,000 N Microtel Franchise & Devel 8.000 01-Feb-05 $176.25 $0.6444 $176.8944
30-Nov-95 $1,132,000 National Education 6.500 15-May-11 $71.00 $0.2708 $71.2708
30-Nov-95 $500,000 Nippon Denro Ispat 3.000 01-Apr-01 $51.50 $1.9917 $53.4917
30-Nov-95 $4,110,000 Old Republic 5.750 15-Aug-02 $132.50 $1.6771 $134.1771
30-Nov-95 $2,000,000 Olsten 4.875 15-May-03 $121.00 $0.2031 $121.2031
30-Nov-95 $750,000 Oryx Energy 7.500 15-May-14 $42.00 $0.3125 $42.3125
30-Nov-95 $1,900,000 Pacific Physician 5.500 15-Dec-03 $90.50 $2.5208 $93.0208
30-Nov-95 $500,000 Park-Ohio Industries 7.250 15-Jun-04 $85.75 $3.3229 $89.0729
30-Nov-95 $2,885,000 Patten 8.250 01-May-12 $96.25 $0.6646 $96.9146
30-Nov-95 $2,000,000 Pharmaceutical Mktg 6.250 01-Feb-03 $89.50 $5.1910 $94.6910
30-Nov-95 $500,000 F Physicaina Clin Lab 7.500 15-Aug-00 $88.00 $2.1875 $90.1875
30-Nov-95 $500,000 Pier 1 (General Host) 8.500 01-Dec-00 $94.75 $8.4764 $103.2264
30-Nov-95 $1,800,000 F Porta Systems 6.000 01-Jul-02 $30.50 $2.4833 $32.9833
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
11/30/95
Settle Date Income
of Purchase Par/ Days Coupon for 30 Day
or Sale Shares Issue Held Freq YTM Period
- ----------- ---------- ---------------------------- ---- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
30-Nov-95 $500,000 Base Metal Bull Notes 30 2 0.4186 $180.06
30-Nov-95 $1,385,000 General Host 30 2 11.1816 $11,399.84
30-Nov-95 $5,500,000 General Instruments 30 2 1.2513 $6,812.74
30-Nov-95 $2,000,000 Grand Metropolitan 30 2 3.1452 $6,037.05
30-Nov-95 $750,000 Graphic Industries 30 2 7.9997 $4,664.42
30-Nov-95 $500,000 Hysan Dev 30 2 5.1761 $2,363.87
30-Nov-95 $2,000,000 Hasbro 30 2 2.2247 $4,115.69
30-Nov-95 $2,000,000 Henderson Capital 30 2 1.7692 $3,018.51
30-Nov-95 $980,000 IMC Global 30 2 2.0278 $2,100.81
28-Dec-95 $5,000,000 Intergrated Devices 3 2 8.8707 $3,110.74
30-Nov-95 $700,000 Integrated Health Services 30 2 6.8100 $3,888.29
30-Nov-95 $750,000 Interface 30 2 7.7370 $5,037.12
21-Dec-95 ($750,000) Interface 10 2 7.7370 ($1,679.04)
30-Nov-95 $500,000 IVAX 30 2 6.0939 $2,596.80
30-Nov-95 $2,250,000 N Laidlaw (ADT) 30 2 (0.2155) $12,500.00
12-Dec-95 $2,000,000 Lechters 19 2 15.7829 $10,169.38
30-Nov-95 $3,750,000 F Lomas Financial 30 2 83.6993 $0.00
14-Dec-95 ($1,900,000) Lomas Financial 17 2 83.6993 $0.00
30-Nov-95 $5,000,000 Mitsubishi 30 2 1.4546 $6,682.01
30-Nov-95 $2,402,000 MacNeal-Schwendler 30 2 5.9234 $13,677.48
13-Dec-95 $715,000 MacNeal-Schwendler 18 2 6.1438 $2,504.26
30-Nov-95 $2,500,000 Magnetek 30 2 10.8376 $20,245.26
30-Nov-95 $3,130,000 Mascotech 30 2 8.5065 $17,542.32
30-Nov-95 $500,000 Maxxim Medical 30 2 6.3128 $2,739.98
30-Nov-95 $900,000 Mediq (Nutramax) 30 2 11.9762 $7,258.71
30-Nov-95 $2,050,000 Michaels Stores 30 2 8.6643 $12,030.80
30-Nov-95 $1,500,000 N Microtel Franchise & Devel 30 12 (0.9663) $10,000.00
30-Nov-95 $1,500,000 N Microtel Franchise & Devel 30 12 (0.2282) $10,000.00
30-Nov-95 $1,132,000 National Education 30 12 10.2445 $6,887.61
30-Nov-95 $500,000 Nippon Denro Ispat 30 1 17.7946 $3,966.09
30-Nov-95 $4,110,000 Old Republic 30 2 0.7696 $3,536.84
30-Nov-95 $2,000,000 Olsten 30 2 1.8478 $3,732.64
30-Nov-95 $750,000 Oryx Energy 30 2 18.8254 $4,978.44
30-Nov-95 $1,900,000 Pacific Physician 30 2 7.0683 $10,410.46
30-Nov-95 $500,000 Park-Ohio Industries 30 2 9.7448 $3,616.66
30-Nov-95 $2,885,000 Patten 30 2 8.6814 $20,227.57
30-Nov-95 $2,000,000 Pharmaceutical Mktg 30 1 8.2408 $13,005.45
30-Nov-95 $500,000 F Physicaina Clin Lab 30 2 10.8125 $0.00
30-Nov-95 $500,000 Pier 1 (General Host) 30 1 9.8798 $4,249.40
30-Nov-95 $1,800,000 F Porta Systems 30 1 32.9846 $0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE BOND FUND FOR GROWTH
FOR THE 30 DAY PERIOD ENDING 12/31/95
11/30/95 Purchase Accrued
Settle Date Price or Int +
of Purchase Par/ Coupon/ Maturity 30-Nov-95 Accrued Market
or Sale Shares Issue Rate Date Market Value Int Value
- ----------- ---------- ---------------------------- ------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-95 $5,154,000 Raymond Corp 6.500 15-Dec-03 $129.00 $2.9792 $131.9792
30-Nov-95 $2,440,000 Recognition International 7.250 15-Apr-11 $90.50 $0.9063 $91.4063
08-Dec-95 $1,000,000 Repap Enterprises 8.500 01-Aug-97 $103.00 $2.9986 $105.9986
30-Nov-95 $5,295,000 Repap Enterprises 8.500 01-Aug-97 $103.50 $2.8097 $106.3097
30-Nov-95 $3,000,000 Rite Aid 0.000 24-Jul-06 $51.63 $0.0000 $51.6250
30-Nov-95 $1,505,000 Roger Comm LYONS 0.000 20-May-13 $32.25 $0.0000 $32.2500
30-Nov-95 $2,000,000 Sandoz 2.000 06-Oct-02 $93.38 $0.3000 $93.6750
30-Nov-95 $1,210,000 Scan-Tron (Harland) 6.750 01-Jun-11 $98.00 $3.3563 $101.3563
30-Nov-95 $2,050,000 Scandinavian Broadcasting 7.250 01-Aug-05 $105.50 $2.3965 $107.8965
30-Nov-95 $1,000,000 Sepracor 7.000 01-Dec-02 $102.50 $3.4806 $105.9806
30-Nov-95 $5,000,000 Softkey 5.500 01-Nov-00 $86.25 $0.4431 $86.6931
08-Dec-95 $1,000,000 Softkey 5.500 01-Nov-00 $81.75 $0.5653 $82.3153
30-Nov-95 $1,500,000 Sports & Rec 4.250 01-Nov-00 $68.00 $0.3424 $68.3424
30-Nov-95 $4,334,000 Standard Commercial 7.250 31-Mar-07 $72.75 $1.2083 $73.9583
13-Dec-95 $450,000 SubMicron 9.000 15-Dec-97 $100.00 $4.4500 $104.4500
30-Nov-95 $500,000 Telekom Malaysia 4.000 01-Jun-04 $96.00 $1.9889 $97.9889
30-Nov-95 $400,000 Telxon 7.500 01-Jun-12 $102.00 $3.7292 $105.7292
12-Dec-95 $6,000,000 Telxon 5.750 01-Jan-03 $100.00 $2.5715 $102.5715
30-Nov-95 $625,000 Theratx 8.000 01-Feb-02 $93.25 $0.6444 $93.8944
30-Nov-95 $7,500,000 Thermo Optek 5.000 15-Oct-00 $104.00 $0.6250 $104.6250
11-Dec-95 $655,000 Thermo Optek 5.000 15-Oct-00 $104.50 $0.7778 $105.2778
30-Nov-95 $5,230,000 Thermoquest 5.000 15-Aug-00 $105.00 $0.2083 $105.2083
11-Dec-95 $105,000 Thermoquest 5.000 15-Aug-00 $105.50 $0.3611 $105.8611
30-Nov-95 $3,919,100 Time Warner 8.750 10-Jan-15 $104.00 $1.2153 $105.2153
30-Nov-95 $200,000 Travel Ports of Amer (Reg S) 8.500 15-Jan-05 $100.00 $1.0625 $101.0625
20-Dec-95 $150,000 Travel Ports of Amer (Reg S) 8.500 15-Jan-05 $108.13 $1.5347 $109.6597
30-Nov-95 $1,750,000 Travel Ports of Amer (Reg D) 8.500 15-Jan-05 $100.00 $1.0625 $101.0625
30-Nov-95 $2,000,000 Trenwick Group 6.000 15-Dec-99 $108.75 $5.7500 $114.5000
30-Nov-95 $1,000,000 USX (Marathon) 7.000 15-Jun-17 $95.63 $3.2083 $98.8333
30-Nov-95 $6,200,000 Unisys 8.250 01-Aug-00 $92.50 $2.7271 $95.2271
30-Nov-95 $1,940,000 US Homes 4.875 01-Nov-05 $90.50 $0.3927 $90.8927
04-Dec-95 $1,000,000 US T Bill 0.000 14-Dec-95 $99.85 $0.0000 $99.8483
06-Dec-95 $500,000 US T Bill 0.000 14-Dec-95 $99.87 $0.0000 $99.8744
07-Dec-95 $2,000,000 US T Bill 0.000 14-Dec-95 $99.89 $0.0000 $99.8897
14-Dec-95 ($3,500,000) US T Bill 0.000 14-Dec-95 $99.8897
05-Dec-95 $1,000,000 US T Bill 0.000 07-Dec-95 $99.97 $0.0000 $99.9708
07-Dec-95 ($1,000,000) US T Bill 0.000 07-Dec-95 $99.9708
30-Nov-95 $500,000 Varlen 6.500 01-Jun-03 $110.00 $3.2319 $113.2319
30-Nov-95 $2,000,000 WMS Industries 5.750 30-Nov-02 $89.00 $0.0000 $89.0000
30-Nov-95 $2,466,000 WMX Technologies 2.000 24-Jan-05 $86.75 $0.7000 $87.4500
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
11/30/95
Settle Date Income
of Purchase Par/ Days Coupon for 30 Day
or Sale Shares Issue Held Freq YTM Period
- ----------- ---------- ---------------------------- ---- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
30-Nov-95 $5,154,000 Raymond Corp 30 2 2.4970 $14,154.28
30-Nov-95 $2,440,000 Recognition International 30 2 8.3572 $15,532.68
08-Dec-95 $1,000,000 Repap Enterprises 23 2 6.5400 $4,429.01
30-Nov-95 $5,295,000 Repap Enterprises 30 2 6.2503 $29,319.44
30-Nov-95 $3,000,000 Rite Aid 30 2 6.3055 $8,138.00
30-Nov-95 $1,505,000 Roger Comm LYONS 30 2 6.5829 $2,662.57
30-Nov-95 $2,000,000 Sandoz 30 2 3.0799 $4,808.49
30-Nov-95 $1,210,000 Scan-Tron (Harland) 30 2 6.9629 $7,116.17
30-Nov-95 $2,050,000 Scandinavian Broadcasting 30 2 6.4740 $11,933.11
30-Nov-95 $1,000,000 Sepracor 30 2 6.5491 $5,784.00
30-Nov-95 $5,000,000 Softkey 30 2 9.0204 $32,583.52
08-Dec-95 $1,000,000 Softkey 23 2 10.3400 $5,437.83
30-Nov-95 $1,500,000 Sports & Rec 30 2 13.3219 $11,380.63
30-Nov-95 $4,334,000 Standard Commercial 30 2 11.6350 $31,078.65
13-Dec-95 $450,000 SubMicron 18 2 8.9994 $2,114.97
30-Nov-95 $500,000 Telekom Malaysia 30 2 4.5731 $1,867.13
30-Nov-95 $400,000 Telxon 30 2 7.2896 $2,569.09
12-Dec-95 $6,000,000 Telxon 19 2 5.7493 $18,674.38
30-Nov-95 $625,000 Theratx 30 4 9.4555 $4,624.06
30-Nov-95 $7,500,000 Thermo Optek 30 4 4.0904 $26,747.55
11-Dec-95 $655,000 Thermo Optek 20 4 3.9739 $1,522.38
30-Nov-95 $5,230,000 Thermoquest 30 4 3.8341 $17,580.42
11-Dec-95 $105,000 Thermoquest 20 4 3.7134 $229.31
30-Nov-95 $3,919,100 Time Warner 30 4 8.3293 $28,621.57
30-Nov-95 $200,000 Travel Ports of Amer (Reg S) 30 4 8.4991 $1,431.57
20-Dec-95 $150,000 Travel Ports of Amer (Reg S) 11 4 7.2682 $365.31
30-Nov-95 $1,750,000 Travel Ports of Amer (Reg D) 30 4 8.4991 $12,526.23
30-Nov-95 $2,000,000 Trenwick Group 30 1 3.6321 $6,931.23
30-Nov-95 $1,000,000 USX (Marathon) 30 2 7.4091 $6,102.26
30-Nov-95 $6,200,000 Unisys 30 2 10.3075 $50,713.46
30-Nov-95 $1,940,000 US Homes 30 2 6.1690 $9,064.95
04-Dec-95 $1,000,000 US T Bill 27 2 5.4695 $4,095.90
06-Dec-95 $500,000 US T Bill 25 2 5.6591 $1,962.50
07-Dec-95 $2,000,000 US T Bill 24 2 5.6788 $7,563.43
14-Dec-95 ($3,500,000) US T Bill 17 2 5.6788 ($9,375.44)
05-Dec-95 $1,000,000 US T Bill 26 2 5.2575 $3,796.00
07-Dec-95 ($1,000,000) US T Bill 24 2 5.2575 ($3,503.98)
30-Nov-95 $500,000 Varlen 30 2 4.8916 $2,307.84
30-Nov-95 $2,000,000 WMS Industries 30 2 7.8204 $11,600.24
30-Nov-95 $2,466,000 WMX Technologies 30 2 3.7217 $6,688.20
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE BOND FUND FOR GROWTH
FOR THE 30 DAY PERIOD ENDING 12/31/95
11/30/95 Purchase Accrued
Settle Date Price or Int +
of Purchase Par/ Coupon/ Maturity 30-Nov-95 Accrued Market
or Sale Shares Issue Rate Date Market Value Int Value
- ----------- ---------- ---------------------------- ------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-95 $458,000 Weston Roy F 7.000 15-Apr-02 $88.00 $0.8750 $88.8750
30-Nov-95 $1,500,000 Xilinx 5.250 01-Nov-02 $92.50 $0.4229 $92.9229
30-Nov-95 $3,500,000 Zenith Elec 8.500 18-Jan-01 $100.50 $3.1167 $103.6167
21-Dec-95 ($3,500,000) Zenith Elec 8.500 18-Jan-01 $103.6167
30-Nov-95 $2,500,000 Zenith Elec 8.500 19-Nov-00 $100.50 $0.2597 $100.7597
30-Nov-95 15,000 Alco Standard $5.04 ACES 5.0400
30-Nov-95 15,000 Alex & Alex $3.625 cv pfd 3.6250
30-Nov-95 10,020 American Home Products 3.0000
30-Nov-95 50,000 Arkansas Best $2.875 cv pfd 2.8750
30-Nov-95 10,000 Bear St $2.01 MRK CHIPS 2.0100
30-Nov-95 35,000 Browning Ferris $2.58 ACES 2.5800
30-Nov-95 110,000 Capstead Mtg $1.26 cv pfd 1.2600
30-Nov-95 9,100 Columbia Healthcare 0.1200
30-Nov-95 79,631 Comptronix $.60 cv pfd A 0.6000
30-Nov-95 8,000 Conseco $3.25 cv pfd Ser D 3.2500
30-Nov-95 15,000 Corning $3.00 MIPS 3.0000
30-Nov-95 9,272 Federal Paper Board 1.6000
30-Nov-95 10,000 FNB $1.99 Nextel DECS 1.9900
30-Nov-95 13,910 Fleet Financial 1.6000
30-Nov-95 2,000 Ford Motor $4.20 cv pfd 4.2000
30-Nov-95 85,000 ICO $1.6875 cv pfd 1.6875
30-Nov-95 40,000 Int'l Paper $2.625 cv pfd 2.6250
30-Nov-95 65,000 Int'l Tech $1.75 cv pfd 1.7500
30-Nov-95 5,000 James River $3.375 cv pfd 3.3750
30-Nov-95 18,600 James River $3.50 cv pfd L 3.5000
30-Nov-95 20,000 Kaman $3.25 cv pfd Ser 2 3.2500
30-Nov-95 20,000 Kennetech $1.67 PRIDES 1.6700
30-Nov-95 2,150 LSB Ind $3.25 cv pfd ser 2 3.2500
30-Nov-95 15,000 Lehman $2.94 Amgen YEELDS 2.9413
30-Nov-95 17,000 Merrill $3.12 (MGIC) STRYPES 3.1200
30-Nov-95 7,500 Mid Am $1.8125 cv pfd 1.8125
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
11/30/95
Settle Date Income
of Purchase Par/ Days Coupon for 30 Day
or Sale Shares Issue Held Freq YTM Period
- ----------- ---------- ---------------------------- ---- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
30-Nov-95 $458,000 Weston Roy F 30 2 9.5534 $3,240.58
30-Nov-95 $1,500,000 Xilinx 30 2 6.6174 $7,686.36
30-Nov-95 $3,500,000 Zenith Elec 30 2 8.3740 $25,307.53
21-Dec-95 ($3,500,000) Zenith Elec 10 2 8.3740 ($8,435.84)
30-Nov-95 $2,500,000 Zenith Elec 30 2 8.3737 $17,577.74
30-Nov-95 15,000 Alco Standard $5.04 ACES 30 $6,300.00
30-Nov-95 15,000 Alex & Alex $3.625 cv pfd 30 $4,531.25
30-Nov-95 10,020 American Home Products 30 $2,505.00
30-Nov-95 50,000 Arkansas Best $2.875 cv pfd 30 $11,979.17
30-Nov-95 10,000 Bear St $2.01 MRK CHIPS 30 $1,675.00
30-Nov-95 35,000 Browning Ferris $2.58 ACES 30 $7,525.00
30-Nov-95 110,000 Capstead Mtg $1.26 cv pfd 30 $11,550.00
30-Nov-95 9,100 Columbia Healthcare 30 $91.00
30-Nov-95 79,631 Comptronix $.60 cv pfd A 30 $3,981.55
30-Nov-95 8,000 Conseco $3.25 cv pfd Ser D 30 $2,166.67
30-Nov-95 15,000 Corning $3.00 MIPS 30 $3,750.00
30-Nov-95 9,272 Federal Paper Board 30 $1,236.27
30-Nov-95 10,000 FNB $1.99 Nextel DECS 30 $1,658.33
30-Nov-95 13,910 Fleet Financial 30 $1,854.67
30-Nov-95 2,000 Ford Motor $4.20 cv pfd 30 $700.00
30-Nov-95 85,000 ICO $1.6875 cv pfd 30 $11,953.13
30-Nov-95 40,000 Int'l Paper $2.625 cv pfd 30 $8,750.00
30-Nov-95 65,000 Int'l Tech $1.75 cv pfd 30 $9,479.17
30-Nov-95 5,000 James River $3.375 cv pfd 30 $1,406.25
30-Nov-95 18,600 James River $3.50 cv pfd L 30 $5,425.00
30-Nov-95 20,000 Kaman $3.25 cv pfd Ser 2 30 $5,416.67
30-Nov-95 20,000 Kennetech $1.67 PRIDES 30 $2,783.33
30-Nov-95 2,150 LSB Ind $3.25 cv pfd ser 2 30 $582.29
30-Nov-95 15,000 Lehman $2.94 Amgen YEELDS 30 $3,676.56
30-Nov-95 17,000 Merrill $3.12 (MGIC) STRYPES 30 $4,420.00
30-Nov-95 7,500 Mid Am $1.8125 cv pfd 30 $1,132.81
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE BOND FUND FOR GROWTH
FOR THE 30 DAY PERIOD ENDING 12/31/95
11/30/95 Purchase Accrued
Settle Date Price or Int +
of Purchase Par/ Coupon/ Maturity 30-Nov-95 Accrued Market
or Sale Shares Issue Rate Date Market Value Int Value
- ----------- ---------- ---------------------------- ------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-95 40,700 Morgan Stan $1.235 IGT PERQS 1.2350
01-Dec-95 (40,700) Morgan Stan $1.235 IGT PERQS 1.2350
30-Nov-95 89,000 Onbancorp $1.6875 cv pfd ser B 1.6875
30-Nov-95 30,001 Orion 0.8000
30-Nov-95 85,000 Owens-Corning $3.25 MIPS 3.2500
30-Nov-95 22,000 Philip Morris 3.3000
30-Nov-95 4,000 Phil LD $3.50 cv pfd Ser III 3.5000
30-Nov-95 70,000 Phoenix Duff & $1.50 cv pfd 1.5000
30-Nov-95 17,588 Progressive Bank 0.6000
30-Nov-95 433,900 RJR Nabisco $.60125 PERC c 0.6013
07-Dec-95 50,000 RJR Nabisco $.60125 PERC c 0.6013
30-Nov-95 176,840 Roch Comm Sav $1.75 cv pfd 1.7500
30-Nov-95 25,000 St. Paul $3.00 MIPS 3.0000
30-Nov-95 15,000 Salomon Microsoft ELKS 3.9938
30-Nov-95 14,000 Salomon Amgen ELKS 3.1850
30-Nov-95 10,000 Salomon PRI ELKS 3.0200
04-Dec-95 (10,000) Salomon PRI ELKS 3.0200
30-Nov-95 17,500 Sovereign Bancorp $3.125 cv pfd 3.1250
30-Nov-95 25,000 Sprint $2.6292 DECS 2.6292
13-Dec-95 27,000 SubMicron $14.00 0.0000
30-Nov-95 61,800 SunAmerica $2.78 cv pfd ser D 2.7800
30-Nov-95 5,000 Travel Ports Warrants 0.0000
30-Nov-95 30,000 Travelers $2.75 cv pfd 2.7500
30-Nov-95 20,000 U S Surgical $2.20 DECS 2.2000
01-Dec-95 (20,000) U S Surgical $2.20 DECS 2.2000
30-Nov-95 30,000 WHX Corp $3.75 cv pfd Ser B 3.7500
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
11/30/95
Settle Date Income
of Purchase Par/ Days Coupon for 30 Day
or Sale Shares Issue Held Freq YTM Period
- ----------- ---------- ---------------------------- ---- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
30-Nov-95 40,700 Morgan Stan $1.235 IGT PERQS 30 $4,188.71
01-Dec-95 (40,700) Morgan Stan $1.235 IGT PERQS 30 ($4,188.71)
30-Nov-95 89,000 Onbancorp $1.6875 cv pfd ser B 30 $12,515.63
30-Nov-95 30,001 Orion 30 $2,000.07
30-Nov-95 85,000 Owens-Corning $3.25 MIPS 30 $23,020.83
30-Nov-95 22,000 Philip Morris 30 $6,050.00
30-Nov-95 4,000 Phil LD $3.50 cv pfd Ser III 30 $1,166.67
30-Nov-95 70,000 Phoenix Duff & $1.50 cv pfd 30 $8,750.00
30-Nov-95 17,588 Progressive Bank 30 $879.40
30-Nov-95 433,900 RJR Nabisco $.60125 PERC c 30 $21,740.20
07-Dec-95 50,000 RJR Nabisco $.60125 PERC c 24 $2,004.17
30-Nov-95 176,840 Roch Comm Sav $1.75 cv pfd 30 $25,789.17
30-Nov-95 25,000 St. Paul $3.00 MIPS 30 $6,250.00
30-Nov-95 15,000 Salomon Microsoft ELKS 30 $4,992.25
30-Nov-95 14,000 Salomon Amgen ELKS 30 $3,715.83
30-Nov-95 10,000 Salomon PRI ELKS 30 $2,516.67
04-Dec-95 (10,000) Salomon PRI ELKS 27 ($2,265.00)
30-Nov-95 17,500 Sovereign Bancorp $3.125 cv pfd 30 $4,557.29
30-Nov-95 25,000 Sprint $2.6292 DECS 30 $5,477.50
13-Dec-95 27,000 SubMicron $14.00 18 $0.00
30-Nov-95 61,800 SunAmerica $2.78 cv pfd ser D 30 $14,317.00
30-Nov-95 5,000 Travel Ports Warrants 30 $0.00
30-Nov-95 30,000 Travelers $2.75 cv pfd 30 $6,875.00
30-Nov-95 20,000 U S Surgical $2.20 DECS 30 $3,666.67
01-Dec-95 (20,000) U S Surgical $2.20 DECS 30 ($3,666.67)
30-Nov-95 30,000 WHX Corp $3.75 cv pfd Ser B 30 $9,375.00
-------------
Total 30 day income $1,409,135.51
=============
Expense $237,793.76
Class A Income 87.2849741% $1,229,963.56
Expense $203,950.33
Shares eligible for
distribution 16,305,376
Offering price $14.43
Yield 5.29%
Class B Income 11.8340515% $166,757.82
Expense $32,724.57
Shares eligible for
distribution 2,196,779
Offering price $13.98
Yield 5.29%
Class Y Income 0.8809744% $12,414.12
Expense $1,118.86
Shares eligible for
distribution 164,670
Offering price $13.96
Yield 5.97%
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000788959
<NAME> ROCHESTER FUND SERIES, THE BOND FUND FOR GROWTH
<SERIES>
<NUMBER> 1
<NAME> CLASS M
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 269,821,810
<INVESTMENTS-AT-VALUE> 286,986,538
<RECEIVABLES> 9,459,878
<ASSETS-OTHER> 65,994
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 296,512,410
<PAYABLE-FOR-SECURITIES> 8,658,887
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,545,933
<TOTAL-LIABILITIES> 20,204,820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 259,414,130
<SHARES-COMMON-STOCK> 17,143,195
<SHARES-COMMON-PRIOR> 10,384,466
<ACCUMULATED-NII-CURRENT> (126,522)
<OVERDISTRIBUTION-NII> (40,930)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,060,942
<NET-ASSETS> 276,307,590
<DIVIDEND-INCOME> 2,502,387
<INTEREST-INCOME> 10,382,346
<OTHER-INCOME> 0
<EXPENSES-NET> 3,029,477
<NET-INVESTMENT-INCOME> 9,855,256
<REALIZED-GAINS-CURRENT> 9,472,765
<APPREC-INCREASE-CURRENT> 21,458,658
<NET-CHANGE-FROM-OPS> 40,786,679
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11,839,019)
<DISTRIBUTIONS-OF-GAINS> (8,052,576)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,878,579
<NUMBER-OF-SHARES-REDEEMED> (2,278,192)
<SHARES-REINVESTED> 1,158,342
<NET-CHANGE-IN-ASSETS> 149,616,557
<ACCUMULATED-NII-PRIOR> (24,929)
<ACCUMULATED-GAINS-PRIOR> (339,187)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,030,091
<INTEREST-EXPENSE> 52,337
<GROSS-EXPENSE> 3,055,037
<AVERAGE-NET-ASSETS> 193,581,020
<PER-SHARE-NAV-BEGIN> 12.20
<PER-SHARE-NII> .70
<PER-SHARE-GAIN-APPREC> 2.42
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.36)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.96
<EXPENSE-RATIO> 1.58
<AVG-DEBT-OUTSTANDING> 768,898
<AVG-DEBT-PER-SHARE> .04
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000788959
<NAME> ROCHESTER FUND SERIES, THE BOND FUND FOR GROWTH
<SERIES>
<NUMBER> 2
<NAME> CLASS B
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 269,821,810
<INVESTMENTS-AT-VALUE> 286,986,538
<RECEIVABLES> 9,459,878
<ASSETS-OTHER> 65,994
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 296,512,410
<PAYABLE-FOR-SECURITIES> 8,658,887
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,545,933
<TOTAL-LIABILITIES> 20,204,820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 259,414,130
<SHARES-COMMON-STOCK> 2,464,766
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (126,522)
<OVERDISTRIBUTION-NII> (40,930)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,060,942
<NET-ASSETS> 276,307,590
<DIVIDEND-INCOME> 2,502,387
<INTEREST-INCOME> 10,382,346
<OTHER-INCOME> 0
<EXPENSES-NET> 3,029,477
<NET-INVESTMENT-INCOME> 9,855,256
<REALIZED-GAINS-CURRENT> 9,472,765
<APPREC-INCREASE-CURRENT> 21,458,658
<NET-CHANGE-FROM-OPS> 40,786,679
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (728,015)
<DISTRIBUTIONS-OF-GAINS> (1,126,719)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,362,379
<NUMBER-OF-SHARES-REDEEMED> (12,136)
<SHARES-REINVESTED> 114,523
<NET-CHANGE-IN-ASSETS> 149,616,557
<ACCUMULATED-NII-PRIOR> (24,929)
<ACCUMULATED-GAINS-PRIOR> (339,187)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,030,091
<INTEREST-EXPENSE> 52,337
<GROSS-EXPENSE> 3,055,037
<AVERAGE-NET-ASSETS> 193,581,020
<PER-SHARE-NAV-BEGIN> 13.11
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> 1.51
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.09)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.98
<EXPENSE-RATIO> 1.69
<AVG-DEBT-OUTSTANDING> 768,898
<AVG-DEBT-PER-SHARE> .04
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000788959
<NAME> ROCHESTER FUND SERIES, THE BOND FUND FOR GROWTH
<SERIES>
<NUMBER> 3
<NAME> CLASS A
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 269,821,810
<INVESTMENTS-AT-VALUE> 286,986,538
<RECEIVABLES> 9,459,878
<ASSETS-OTHER> 65,994
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 296,512,410
<PAYABLE-FOR-SECURITIES> 8,658,887
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,545,933
<TOTAL-LIABILITIES> 20,204,820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 259,414,130
<SHARES-COMMON-STOCK> 179,155
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (126,522)
<OVERDISTRIBUTION-NII> (40,930)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,060,942
<NET-ASSETS> 276,307,590
<DIVIDEND-INCOME> 2,502,387
<INTEREST-INCOME> 10,382,346
<OTHER-INCOME> 0
<EXPENSES-NET> 3,029,477
<NET-INVESTMENT-INCOME> 9,855,256
<REALIZED-GAINS-CURRENT> 9,472,765
<APPREC-INCREASE-CURRENT> 21,458,658
<NET-CHANGE-FROM-OPS> 40,786,679
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (92,063)
<DISTRIBUTIONS-OF-GAINS> (80,834)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 167,169
<NUMBER-OF-SHARES-REDEEMED> (358)
<SHARES-REINVESTED> 12,344
<NET-CHANGE-IN-ASSETS> 149,616,557
<ACCUMULATED-NII-PRIOR> (24,929)
<ACCUMULATED-GAINS-PRIOR> (339,187)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,030,091
<INTEREST-EXPENSE> 52,337
<GROSS-EXPENSE> 3,055,037
<AVERAGE-NET-ASSETS> 193,581,020
<PER-SHARE-NAV-BEGIN> 13.11
<PER-SHARE-NII> .54
<PER-SHARE-GAIN-APPREC> 1.48
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.17)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.96
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 768,898
<AVG-DEBT-PER-SHARE> .04
</TABLE>
