[COVER PAGE]
OPPENHEIMER QUEST OFFICERS VALUE FUND
Annual Report October 31, 1996
[LOGO]OPPENHEIMERFUNDS/R/
<PAGE>
BRIDGET A. MACASKILL
President
Oppenheimer
Quest Officers
Value Fund
DEAR SHAREHOLDER,
Following a summer of uncertainty surrounding the economy and the stock
market, the arrival of fall brought renewed vigor to both. Most notable, the Dow
Jones Industrial Average broke out of its fluctuating pattern and burst through
the once-unimaginable 6,000 mark, sending many stock prices to all-time highs.
But as the Dow began accelerating faster than the economy, a debate erupted
about how long this bull run could last.
Looking back, the autumn rally was clearly a result of three main
factors: solid corporate profits, low inflation and stabilized interest rates,
all of which attracted investors to Wall Street. And though the stock market is
currently highly valued, there continue to be a number of positive economic
influences that may extend the market's uphill run.
We consider the leading catalyst to be the robust returns from corporate
America, where a strong economy boosted third-quarter earnings. To date, we're
still witnessing a cycle of events that could maintain the appeal of these
companies to investors. For example, corporate streamlining efforts, such as
spinoffs of non-core businesses, and consolidation within industries are helping
to increase the cash flow of many firms. In return, additional cash flows enable
these companies to add shareholder value by initiating stock repurchasing
programs. As corporations buy back record amounts of their own stocks, they are
reducing the supply and thereby raising the book value of their outstanding
shares, a move which further contributes to higher stock prices.
Additionally, the demand for stocks remains strong, largely because, as
many experts believe, investors are taking more responsibility for their
retirement investments. Indeed, as the country's baby boomers near retirement,
they are becoming increasingly aware of the need to secure their own financial
future, because they expect less and less from standard company pensions or
Social Security. As a result, equity mutual funds have become the fastest
growing means by which these investors are seeking to achieve their long-term
goals.
While these signs appear favorable for many well-managed companies,
stock valuations remain at historically high levels, causing us to become more
cautious about the market overall. We do not, however, expect to see a
significant market decline. In fact, we are confident that as long as corporate
earnings stay healthy, there will continue to be numerous investment
opportunities available to fill the demand for stocks. Nevertheless, it is
becoming more difficult to uncover true values and justify higher prices.
Therefore, we believe the correct approach to take at this point is to carefully
evaluate companies based on individual merits, such as strong management,
fundamental business policies and long-term prospects for the future.
Your portfolio manager discusses the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/Bridget A. Macaskill
Bridget A. Macaskill
November 21, 1996
2 Oppenheimer Quest Officers Value Fund
<PAGE>
JEFF WHITTINGTON
Portfolio Manager
Q + A
An interview with your Fund's managers.
HOW HAS THE FUND PERFORMED OVER THE PAST YEAR?
Oppenheimer Quest Officers Value Fund performed very well during this period,
and, in fact, it outperformed the S & P 500 each quarter of this fiscal year.(1)
Because this is a "non-diversified fund" we're able to focus our portfolio on
investments we believe offer great opportunities. And through our process of
extensive research, we were able to identify companies that performed well over
the past year.
WHAT CHARACTERISTICS DO YOU LOOK FOR WHEN EVALUATING STOCKS?
We look for strong businesses with effective management that are priced
modestly. In determining what factors single out particular businesses, we look
for three specific traits: profitability, growth and stability. Of the three, we
focus most on profitability because profitable companies tend to have larger
percentages of free cash flow. This excess cash can be put to use in a number of
ways to benefit shareholders, such as paying down debt, buying back stock,
paying dividends, or buying other companies.(2)
WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
We believe that the portfolio's largest holding, a national long distance
reseller, will continue to be a positive contributor to the Fund's performance.
This company has shown impressive volume growth and high returns relative to its
competitors. As a facilities-based company, they own their plants rather than
rent, and in doing so are able to produce better profit margins. They have also
assembled a strong management team from the leaders of recent acquisitions, each
of whom have maintained their equity investments in this company.
Another strong contributor to the portfolio is an insurance company that
specializes in providing excess general product liability coverage. This is a
very profitable business which has recently been diversified into other similar
product lines, such as property and catastrophe reinsurance. Because these other
product lines are very closely related to their primary business, they have been
able to streamline expenses and provide excess free capital.
DID ANY INVESTMENTS NEGATIVELY IMPACT PERFORMANCE?
Not really. Because we use a bottom-up approach to stock picking, the decisions
we make are based on very specific criteria. Rather than focusing on trends or
themes in the marketplace, the key factors that drive the names in our portfolio
tend to be company-specific events.
WHAT IS YOUR OUTLOOK FOR THE FUND?
Our outlook is positive. This has been a terrific year for the stock market,
one in which we were able to benefit from the performance of many of our
holdings. However, we believe that price is the biggest risk when selecting
stocks, and as the prices of some of our holdings have climbed, we've been
trimming our positions and taking profits. Our belief is that the stock market
has now entered a more normal period, one where returns and volatility will be
more in line with historical averages. As this occurs, we expect to find more
opportunities for good companies that are modestly valued.//
1. The Fund's investments are not limited to securities in the S&P 500 Index,
which cannot be purchased directly by investors.
2. The Fund's portfolio is subject to change.
3 Oppenheimer Quest Officers Value Fund
<PAGE>
<TABLE>
<CAPTION>
=========================================
STATEMENT OF INVESTMENTS OCTOBER 31, 1996
FACE MARKET VALUE
AMOUNT SEE NOTE 1
==============================================================================================================================
<S> <C> <C> <C>
SHORT-TERM NOTES - 3.2%
- ------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 5.22%, 11/13/96(1) $ 206,000 $ 205,648
-------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 5.50%, 11/1/96(1) 159,000 159,000
------------
Total Short-Term Notes (Cost $364,648) 364,648
==============================================================================================================================
U.S. GOVERNMENT OBLIGATIONS - 8.9%
- ------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 6.75%, 8/15/26 (Cost $996,569) 1,000,000 1,012,187
SHARES
==============================================================================================================================
COMMON STOCKS - 85.9%
- ------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 4.5%
-------------------------------------------------------------------------------------------------------------------
Tracor, Inc.(2) 22,500 511,875
- ------------------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING - 8.5%
-------------------------------------------------------------------------------------------------------------------
Borg-Warner Automotive, Inc. 12,200 468,175
-------------------------------------------------------------------------------------------------------------------
Team Rental Group, Inc.(2) 27,000 506,250
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE - 4.5%
-------------------------------------------------------------------------------------------------------------------
Wang Laboratories, Inc.(2) 22,000 514,250
- ------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 4.5%
-------------------------------------------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 18,000 513,000
- ------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 2.0%
-------------------------------------------------------------------------------------------------------------------
Paracelsus Healthcare Corp.(2) 53,400 233,625
- ------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 20.3%
-------------------------------------------------------------------------------------------------------------------
ACE Ltd. 15,900 870,525
-------------------------------------------------------------------------------------------------------------------
Delphi Financial Group, Inc., Cl. A 18,600 520,800
-------------------------------------------------------------------------------------------------------------------
EXEL Ltd. 12,000 456,000
-------------------------------------------------------------------------------------------------------------------
Mid Ocean Ltd. 10,000 470,000
------------
2,317,325
- ------------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 2.7%
-------------------------------------------------------------------------------------------------------------------
Trump Hotels & Casino Resorts, Inc.(2) 19,500 309,562
- ------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 4.0%
-------------------------------------------------------------------------------------------------------------------
LucasVarity plc, ADR(2) 11,454 461,024
- ------------------------------------------------------------------------------------------------------------------------------
MEDIA - 4.6%
-------------------------------------------------------------------------------------------------------------------
Hollinger International, Inc. 42,000 525,000
- ------------------------------------------------------------------------------------------------------------------------------
METALS - 4.4%
-------------------------------------------------------------------------------------------------------------------
UCAR International, Inc.(2) 12,800 500,800
- ------------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED - 3.5%
-------------------------------------------------------------------------------------------------------------------
Triton Energy Corp.(2) 8,900 397,162
- ------------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY - 4.2%
-------------------------------------------------------------------------------------------------------------------
Nu-Kote Holding, Inc., Cl. A(2) 50,800 482,600
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY - 9.8%
-------------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(2) 45,700 1,113,938
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.4%
-------------------------------------------------------------------------------------------------------------------
Canadian Pacific Ltd. (New) 38,200 964,550
------------
Total Common Stocks (Cost $8,969,890) 9,819,136
-------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $10,331,107) 98.0% 11,195,971
-------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 2.0 233,331
------ ------------
NET ASSETS 100.0% $11,429,302
====== ============
</TABLE>
1. Short-term notes are generally traded on a discount basis; the
interest rate is the discount rate received by the Fund at the time
of purchase.
2. Non-income producing security.
See accompanying Notes to Financial Statements.
4 Oppenheimer Quest Officers Value Fund
<PAGE>
<TABLE>
====================================================
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1996
==============================================================================================================================
<S> <C> <C>
ASSETS Investments, at value (cost $10,331,107) - see accompanying statement $11,195,971
----------------------------------------------------------------------------------------------------
Receivables:
Investments sold 224,088
Interest 16,137
Shares of beneficial interest sold 15,585
----------------------------------------------------------------------------------------------------
Deferred organization costs - Note 1 4,567
----------------------------------------------------------------------------------------------------
Other 693
------------
Total assets 11,457,041
==============================================================================================================================
LIABILITIES Bank overdraft 5,995
----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Legal and auditing fees 8,225
Shareholder reports 6,435
Registration and filing fees 2,174
Custodian fees 1,485
Shares of beneficial interest redeemed 1,200
Transfer agent and accounting service fees 839
Other 1,386
------------
Total liabilities 27,739
==============================================================================================================================
NET ASSETS $11,429,302
============
==============================================================================================================================
COMPOSITION OF Par value of shares of beneficial interest $7,488
NET ASSETS ----------------------------------------------------------------------------------------------------
Additional paid-in capital 9,515,737
----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 1,041,213
----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Note 3 864,864
------------
Net assets - applicable to 748,785 shares of beneficial
interest outstanding $11,429,302
============
==============================================================================================================================
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE $15.26
=======
</TABLE>
See accompanying Notes to Financial Statements.
5 Oppenheimer Quest Officers Value Fund
<PAGE>
<TABLE>
<CAPTION>
===========================================================
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1996
==============================================================================================================================
<S> <C> <C>
INVESTMENT INCOME Dividends (net of foreign withholding taxes of $2,183) $ 62,089
----------------------------------------------------------------------------------------------------
Interest 42,672
------------
Total income 104,761
==============================================================================================================================
EXPENSES Management fees - Note 4 60,540
----------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4 19,597
----------------------------------------------------------------------------------------------------
Legal and auditing fees 25,307
----------------------------------------------------------------------------------------------------
Registration and filing fees 17,469
----------------------------------------------------------------------------------------------------
Shareholder reports 13,720
----------------------------------------------------------------------------------------------------
Transfer agent and accounting service fees - Note 4 9,987
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 5,985
----------------------------------------------------------------------------------------------------
Other 3,483
------------
Total expenses 156,088
------------
Less reimbursement of expenses by OppenheimerFunds, Inc. - Note 4 (22,269)
------------
Net expenses 133,819
==============================================================================================================================
NET INVESTMENT LOSS (29,058)
==============================================================================================================================
REALIZED AND Net realized gain on investments 1,103,769
UNREALIZED GAIN ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 570,237
------------
Net realized and unrealized gain 1,674,006
==============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,644,948
============
</TABLE>
<TABLE>
<CAPTION>
===================================
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED PERIOD ENDED
OCTOBER 31, 1996 OCTOBER 31,
1995(1)
==============================================================================================================================
<S> <C> <C> <C>
OPERATIONS Net investment income (loss) $ (29,058) $68,846
----------------------------------------------------------------------------------------------------
Net realized gain 1,103,769 257,638
--------------------------------
Net change in unrealized appreciation or depreciation 570,237 294,627
--------------------------------
Net increase in net assets resulting
from operations 1,644,948 621,111
==============================================================================================================================
DIVIDENDS AND Dividends from net investment income (84,879) (7,466)
DISTRIBUTIONS ----------------------------------------------------------------------------------------------------
TO SHAREHOLDERS Distributions from net realized gain (267,637) --
==============================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions - Note 2 6,490,302 3,032,923
==============================================================================================================================
NET ASSETS Total increase 7,782,734 3,646,568
----------------------------------------------------------------------------------------------------
Beginning of period 3,646,568 --
------------ ------------
End of period (including undistributed net investment
income $61,380 for 1995) $11,429,302 $ 3,646,568
============ ============
</TABLE>
1. For the period November 8, 1994 (commencement of
operations) to October 31, 1995.
See accompanying Notes to Financial Statements.
6 Oppenheimer Quest Officers Value Fund
<PAGE>
<TABLE>
<CAPTION>
====================
FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 31,
1996(2) 1995(1)
===============================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C>
Net asset value, beginning of period $12.30 $10.00
- -----------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (.01) .24
Net realized and unrealized gain 4.06 2.10
- -----------------------------------------------------------------------------------------------
Total income from investment
operations 4.05 2.34
- -----------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.26) (.04)
Distributions from net realized gain (.83) --
--------------------------------------
Total dividends and distributions
to shareholders (1.09) (.04)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $15.26 $12.30
======================================
===============================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 35.17% 23.44%
===============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $11,429 $3,647
- -----------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 6,973 $2,873
- -----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (0.42)%(6) 2.44%(4)(5)
Expenses 1.92% (6) 0.00%(4)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 137.4% 108.0%
Average brokerage commission rate(8) $0.0501 --
</TABLE>
1. For the period from November 8, 1994 (commencement of operations) to October
31, 1995.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment adviser to
the Fund.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
4. During the period noted above, the former Manager voluntarily waived all of
its fees and reimbursed the Fund for all of its operating expenses. If such
waivers and reimbursements had not been in effect, the annualized ratio of net
investment income to average daily net assets and the annualized ratio of net
expenses to average daily net assets would have been 0.47% and 1.97%,
respectively.
5. Annualized.
6. The ratio of net investment income to average daily net assets and the ratio
of net expenses to average net assets would have been (0.74)% and 2.24%,
respectively, absent the voluntary reimbursement by both the former Manager and
the current Manager.
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended October 31, 1996 were $15,705,162 and $8,679,712, respectively.
8. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
7 Oppenheimer Quest Officers Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Officers Value Fund (the Fund), formerly named Quest for
Value Officers Fund, a series of Oppenheimer Quest for Value Funds, is a
non-diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Fund's investment objective
is to seek capital appreciation primarily through investment in equity
securities. On November 22, 1995, OCC Distributors (previously Quest for
Value Distributors), OpCap Advisors (previously Quest for Value Advisors)
and their parent Oppenheimer Capital consummated a transaction with
OppenheimerFunds, Inc. (the Manager), which resulted in the sale to the
Manager of certain mutual fund assets of OCC Distributors and OpCap
Advisors including the transfer of Quest for Value Funds and the use of the
name "Quest for Value." As part of the transaction, the Fund has entered
into an investment advisory agreement with the Manager and the Manager has
entered into a sub-advisory agreement with OpCap Advisors (the former
Manager). The Fund is authorized to issue Class A, Class B and Class C
shares. Initially, only shares of Class A will be offered to officers,
trustees and employees of the Fund, the Manager and its affiliates, their
relatives or any trust, pension, profit sharing or other benefit plan for
any of them. Class B and Class C shares may be subject to a contingent
deferred sales charge. All three classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
distribution and/or service plan, expenses directly attributable to a
particular class and exclusive voting rights with respect to matters
affecting a single class. Class B shares will automatically convert to
Class A shares six years after the date of purchase. The following is a
summary of significant accounting policies consistently followed by the
Fund.
INVESTMENT VALUATION. Portfolio securities are valued at the close of the
New York Stock Exchange on each trading day. Listed and unlisted securities
for which such information is regularly reported are valued at the last
sale price of the day or, in the absence of sales, at values based on the
closing bid or the last sale price on the prior trading day. Long-term and
short-term "non-money market" debt securities are valued by a portfolio
pricing service approved by the Board of Trustees. Such securities which
cannot be valued by the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by
the Board of Trustees to determine fair value in good faith. Short-term
"money market type" debt securities having a remaining maturity of 60 days
or less are valued at cost (or last determined market value) adjusted for
amortization to maturity of any premium or discount.
FEDERAL TAXES. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
ORGANIZATION COSTS. The former Manager advanced $7,600 for organization and
start-up costs of the Fund. Such expenses are being amortized over a five
year period from the date operations commenced.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement and
tax purposes. The character of the distributions made during the year from
net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
During the year ended October 31, 1996, the Fund adjusted the
classifications of net investment income and capital gain (loss) to
shareholders to reflect the differences between financial statement amounts
and distributions determined in accordance with income tax regulations.
Accordingly, during the year ended October 31, 1996, amounts have been
reclassified to reflect a decrease in accumulated net realized gain on
investments of $52,557. Net investment loss was decreased by the same
amount.
8 Oppenheimer Quest Officers Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income is
recorded on the ex-dividend date. Realized gains and losses on investments
and unrealized appreciation and depreciation are determined on an
identified cost basis, which is the same basis used for federal income tax
purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED (1)
OCTOBER 31, 1996 OCTOBER 31, 1995
SHARES AMOUNT SHARES AMOUNT
--------------------------- --------------------------
Class A:
<S> <C> <C> <C> <C>
Sold 538,510 $ 7,749,424 339,572 $3,529,359
Dividends and distributions
reinvested 27,528 337,769 713 7,226
Redeemed (113,652) (1,596,891) (43,886) (503,662)
--------- ------------ -------- -----------
Net increase 452,386 $ 6,490,302 296,399 $3,032,923
========= ============ ======== ===========
</TABLE>
1) For the period November 8, 1994 (commencement of operations) to
October 31, 1995.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1996, net unrealized appreciation on investments of $864,864
was composed of gross appreciation of $1,499,990, and gross depreciation of
$635,126.
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. Effective August 1, 1996, the fee was
reduced from 1.00% of average annual net assets to 0.60% of the first $4
million of average annual net assets and 0.70% of net assets in excess of $4
million. Prior to November 22, 1995, management fees were paid to the former
Manager at an annual rate of 1.00% of the Fund's average net assets. The
Manager has agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable regulatory limit
on Fund expenses. For the period November 1, 1995 to November 21, 1995, the
former Manager voluntarily waived its investment advisory fee and reimbursed
the Fund for all other operating expenses for a combined total of $8,962.
From November 22, 1995 to February 1, 1996, the Manager voluntarily
reimbursed the Fund for all operating expenses totaling $13,307. The Manager
acts as the accounting agent for the Fund at an annual fee of $6,000, plus
out-of-pocket costs and expenses reasonably incurred. Prior to November 22,
1995, accounting service fees were paid monthly to the former Manager.
From November 22, 1995 to July 31, 1996, the Manager paid OpCap Advisors
(the Sub-Adviser) $11,796 based on the fee schedule set forth in the
Prospectus. Effective August 1, 1996, the Sub-Adviser waived all fees under
the agreement.
For the year ended October 31, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $17,524, which was retained by
OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the Manager, as
general distributor, and by affiliated broker/dealers.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. The Fund pays OFS an annual maintenance fee of $14.85
for each Fund shareholder account and reimburses OFS for its out-of-pocket
expenses. During the period ended October 31, 1996, the Fund paid OFS
$4,162.
9 Oppenheimer Quest Officers Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
Prior to August 1, 1996, the Fund adopted a Distribution and Service Plan
for Class A shares to compensate OppenheimerFunds Distributor, Inc. (OFDI)
for a portion of its costs incurred in connection with the personal service
and maintenance of accounts that hold Class A shares. Under the Plan, the
Fund paid an annual asset-based sales charge to OFDI of 0.25% per year on
Class A shares. The Fund also paid a service fee to OFDI of 0.25% per year.
Both fees were computed on the average annual net assets of Class A shares
of the Fund, determined as of the close of each regular business day. OFDI
used all of the service fee and a portion of the asset-based sales charge to
compensate brokers, dealers, banks and other financial institutions
quarterly for providing personal service and maintenance of accounts of
their customers that hold Class A shares. OFDI retained the balance of the
asset-based sales charge to reimburse itself for its other expenditures
under the Plan. Effective August 1, 1996, the Distribution and Service Plan
for Class A was discontinued.
10 Oppenheimer Quest Officers Value Fund
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Oppenheimer Quest Officers Value Fund
To the Board of Trustees and Shareholders of
Oppenheimer Quest Officers Value Fund
In our opinion, the accompanying statement of assets and liabilities,
including the statement 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
Oppenheimer Quest Officers Value Fund (formerly Quest for Value Officers
Fund, one of the portfolios constituting Oppenheimer Quest for Value Funds,
formerly Quest for Value Family of Funds, hereafter referred to as the
Fund) at October 31, 1996, the results of its operations, the changes in
its net assets and the financial highlights for the year 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 audit. We conducted our audit 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 audit, which included
confirmation of securities at October 31, 1996 by correspondence with the
custodian and the application of alternative auditing procedures for
unsettled security transactions, provides a reasonable basis for the
opinion expressed above. The financial statements of the Fund for the
period ended October 31, 1995 were audited by other independent accountants
whose report dated December 20, 1995 expressed an unqualified opinion on
those statements.
Price Waterhouse LLP
Denver, Colorado
November 21, 1996
11 Oppenheimer Quest Officers Value Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1997 shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1996.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended October 31, 1996
which are not designated as capital gain distributions should be multiplied
by 5.77% to arrive at the net amount eligible for the corporate
dividend-received deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax adviser for specific
guidance.
12 Oppenheimer Quest Officers Value Fund
<PAGE>
OPPENHEIMER QUEST OFFICERS VALUE FUND
A Series of Oppenheimer Quest for Value Funds
OFFICERS AND TRUSTEES Bridget A. Macaskill, Chairman of the Board of
Trustees and President
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Lacy B. Herrmann, Trustee
George Loft, Trustee
Robert C. Doll, Jr., Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISER OppenheimerFunds, Inc.
SUB-ADVISER OpCap Advisors
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER SERVICING
AGENT
CUSTODIAN OF PORTFOLIO State Street Bank and Trust Company
SECURITIES
INDEPENDENT Price Waterhouse LLP
ACCOUNTANTS
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer Quest Officers
Value Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Quest Officers Value Fund. For material information concerning
the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of the
principal amount invested.
13 Oppenheimer Quest Officers Value Fund
