<PAGE>
[Cover Page]
OPPENHEIMER QUEST OFFICERS VALUE FUND
Annual Report October 31, 1997
[Logo]OppenheimerFunds sm
THE RIGHT WAY TO INVEST
<PAGE>
Bridget A. Macaskill
President
Oppenheimer
Quest
Officers Value Fund
Dear Shareholder,
As you are no doubt aware, during the end of October and early November many
stock markets around the world recorded their all-time largest point declines,
followed by subsequent gains and continued volatility, leaving investors
uncertain about what would occur next.
To put those events in focus, let's look at a "snapshot" of the two-week time
period. Sharp declines in the overseas stock markets, particularly in Asia,
triggered a series of sell-offs throughout Europe, Latin America and the United
States. In response, the U.S. stock market, as measured by the Dow Jones
Industrial Average, dropped 554 points on October 27, its largest point decline
in history. However, almost as quickly, the U.S. stock market bounced back over
the succeeding few days, regaining nearly all of its losses.
While no one could have predicted the timing or extent of these fluctuations,
many analysts, including our fund managers here at OppenheimerFunds, had warned
of a correction for several months. We believed that U.S. valuations were too
high, stocks were expensive relative to bonds, recent corporate earnings were
somewhat disappointing and that Federal Reserve Chairman Alan Greenspan could
possibly seek a short-term interest rate hike. While only one short-term
interest rate hike occurred in March of 1997, the other factors have held true.
We'd like to take this opportunity to remind shareholders that stock market
volatility is a normal and expected part of the business cycle. As Alan
Greenspan suggested, in years to come this period will likely be remembered as a
positive change for a market that was growing too quickly.
For frequent market updates, please visit our web site at
WWW.OPPENHEIMERFUNDS.COM or call 1-800-835-3104 to listen to our recorded
messages. In the meantime, thank you for your confidence in OppenheimerFunds,
THE RIGHT WAY TO INVEST. We look forward to helping you reach your investment
goals in the future.
/s/Bridget A. Macaskill
Bridget A. Macaskill
November 21, 1997
2 Oppenheimer Quest Officers Value Fund
<PAGE>
JEFFREY C. WHITTINGTON
Portfolio Manager
Q + A
An interview with your Fund's manager.
HOW DID THE FUND PERFORM OVER THE PAST YEAR?
Oppenheimer Quest Officers Value Fund delivered an average annual total return
of 1.56%, without sales charges, for the one-year period ended 10/31/97.(1) This
reflects an improvement over the first half of the fiscal year, when the Fund's
performance was hindered by the poor performance of a few large holdings.
Because the fund had only 18 common stock positions as of October 31, 1997, it
exhibited more volatility--both positively and negatively--than the S&P 500. A
decline in even just one position can impact the entire portfolio. In the first
six-month period of the past year, the poor performance of LucasVarity (the
Fund's largest holding at the time) dramatically affected the Fund's return.
However, limiting the number of stocks in the portfolio can also be
advantageous. In particular, we are able to gain more insight into each
individual holding. We look very closely at the performance of each holding--and
reduce or sell underperforming holdings. This allows us to replace them with the
stocks of companies which we believe offer more favorable returns over the long
term.
WHICH INVESTMENTS CONTRIBUTED THE MOST TO THE FUND'S PERFORMANCE?(2)
UCAR International, a basic materials firm--was also the Fund's strongest
performer. UCAR was able to generate large amounts of free cash flow within the
steel-processing industry. Management wisely allocated these assets to paying
down debt. In addition, they recently announced a share-repurchase program.
The Fund also benefited from major holdings in ACE Ltd. and Mid Ocean Ltd., two
Bermuda-based insurance companies. Since there's not a lot of competition in
their specialty-oriented lines of insurance, these companies generate an
enormous amount of excess capital--which, in turn, allows them to underwrite a
substantial business volume. Operating in Bermuda, these companies have very low
expense structures relative to U.S. and European competitors. Plus, in line with
the Fund's value strategy, in our opinion, these companies are still modestly
valued.
Once again, H&R Block was a valuable contributor to the Fund's
performance--particularly over the past six- month period. That's partly due to
the fact that they recently sold off the CompuServe online service and its
unprofitable consumer operations. In addition to trimming its operations, H&R
Block stock is a model of consistency--they've reported gains in all but one of
the past 20 years.
WHICH INVESTMENTS DIDN'T PERFORM AS WELL AS EXPECTED?
The stocks of oil and gas exploration companies have been particularly volatile
over the past year. That's one of the reasons why the Fund's fifth largest
holding, Triton Energy, has continued to underperform. However, we have
confidence in the company's management and still believe Triton has real
long-term value.
LucasVarity, a British electrical equipment conglomerate, was a disappointment
earlier in the year due to the merger of Lucas Industries and Varity.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2. The Fund's portfolio is subject to change.
OppenheimerFunds, Inc. became the Fund's advisor on 11/22/95. The Fund's
subadvisor is OpCap Advisors, which was the Fund's advisor prior to 11/22/95.
The portfolio manager is employed by the Fund's subadvisor.
3 Oppenheimer Quest Officers Value Fund
<PAGE>
However, the new company recently reported stabilized earnings and they're
benefiting from a strong UK market. The investment community likes the fact that
the company is on budget for earnings and cost cutting for the year.
WHAT CHALLENGES DOES THE FUND FACE IN THE COMING MONTHS?
Our constant challenge is to maintain a portfolio of companies which are
above-average in their profitability, growth and stability. We don't try to time
the market or invest based on what we think interest rates, corporate profits or
the economy might do in the near term.
In our view, the biggest risk in any investment is the price that you pay for
it. That's why the Fund employs a "bottom-up" approach to stock selection.
Rather than targeting specific industries or sectors, we identify good, solid
individual companies that we believe are reasonably valued and may deliver a
high return on capital based on above-average growth prospects.
WHAT IS YOUR OUTLOOK FOR THE FUND?
While we like the portfolio of stocks the Fund currently owns, no one knows for
sure what the market or interest rates may do through the end of the year and
into 1998. We believe that, over time, by owning a portfolio of the best
companies with the best management at the best prices, the Fund can outperform
the S&P 500 benchmark in all different economic scenarios.//
4 Oppenheimer Quest Officers Value Fund
<PAGE>
STATEMENT OF INVESTMENTS OCTOBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
============================================================================================================================
COMMON STOCKS - 90.9%
- ----------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE - 5.2%
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wang Laboratories, Inc. (1) 16,800 $ 388,500
- ---------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 10.1%
- ---------------------------------------------------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 11,000 377,438
- ---------------------------------------------------------------------------------------------------------------------------
H & R Block, Inc. 10,100 373,700
----------
751,138
- ---------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 5.0%
- ---------------------------------------------------------------------------------------------------------------------------
CalEnergy, Inc. (1) 11,000 376,750
- ---------------------------------------------------------------------------------------------------------------------------
FOOD - 5.5%
- ---------------------------------------------------------------------------------------------------------------------------
Triarc Cos. (1) 18,300 414,038
- ---------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 4.9%
- ---------------------------------------------------------------------------------------------------------------------------
Allegiance Corp. 13,100 363,525
- ---------------------------------------------------------------------------------------------------------------------------
INSURANCE - 15.3%
- ---------------------------------------------------------------------------------------------------------------------------
ACE Ltd. 4,000 371,750
- ---------------------------------------------------------------------------------------------------------------------------
EXEL Ltd. 6,300 380,756
- ---------------------------------------------------------------------------------------------------------------------------
Mid Ocean Ltd. 6,000 389,250
----------
1,141,756
- ---------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 5.1%
- ---------------------------------------------------------------------------------------------------------------------------
Tricon Global Restaurants, Inc. (1) 12,500 378,906
- ---------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 5.1%
- ---------------------------------------------------------------------------------------------------------------------------
LucasVarity plc, ADR 11,100 378,788
- ---------------------------------------------------------------------------------------------------------------------------
METALS - 4.9%
- ---------------------------------------------------------------------------------------------------------------------------
UCAR International, Inc. (1) 9,700 363,750
- ---------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED - 5.1%
- ---------------------------------------------------------------------------------------------------------------------------
Triton Energy Ltd. (1) 9,800 383,425
- ---------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY - 19.5%(2)
- ---------------------------------------------------------------------------------------------------------------------------
CommScope, Inc. (1) 29,600 325,600
- ---------------------------------------------------------------------------------------------------------------------------
NextLevel Systems, Inc. (1) 27,900 376,650
- ---------------------------------------------------------------------------------------------------------------------------
Tele-Communications TCI Ventures Group, Cl. A (1) 16,500 380,531
- ---------------------------------------------------------------------------------------------------------------------------
WorldCom, Inc. 11,200 376,600
----------
1,459,381
- ---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.2%
- ---------------------------------------------------------------------------------------------------------------------------
Canadian Pacific Ltd. (New) 12,900 384,581
----------
Total Common Stocks (Cost $6,255,367) 6,784,538
FACE
AMOUNT
===========================================================================================================================
SHORT-TERM NOTES - 5.0%
- ---------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Corp., 5.60%, 11/6/97 (Cost $374,708) (3) $375,000 374,708
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $6,630,075) 95.9% 7,159,246
- ---------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 4.1 306,553
-------- ----------
NET ASSETS 100.0% $7,465,799
======== ==========
</TABLE>
5 Oppenheimer Quest Officers Value Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. Non-income producing security.
2. The Fund may have elements of risk due to concentrated investments in
specific industries. Such concentrations may subject the Fund to additional
risks resulting from future political or economic conditions.
3. 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.
See accompanying Notes to Financial Statements.
6 Oppenheimer Quest Officers Value Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997
<TABLE>
================================================================================================================
ASSETS
<S> <C>
Investments, at value (cost $6,630,075) - see accompanying statement $7,159,246
- ----------------------------------------------------------------------------------------------------------------
Cash 58,067
- ----------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 535,267
Shares of beneficial interest sold 1,135
- ----------------------------------------------------------------------------------------------------------------
Deferred organization costs - Note 1 2,882
- ----------------------------------------------------------------------------------------------------------------
Other 510
----------
Total assets 7,757,107
================================================================================================================
LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 272,099
Shareholder reports 8,654
Transfer agent and accounting services fees 985
Other 9,570
----------
Total liabilities 291,308
================================================================================================================
NET ASSETS $7,465,799
==========
================================================================================================================
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $5,380
- ----------------------------------------------------------------------------------------------------------------
Additional paid-in capital 6,721,187
- ----------------------------------------------------------------------------------------------------------------
Accumulated net investment income 32,360
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 177,701
- ----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Note 3 529,171
----------
Net assets $7,465,799
==========
================================================================================================================
NET ASSET VALUE PER SHARE
Net asset value and redemption price per share (based on
net assets of $7,465,799 and 538,024 shares of beneficial interest outstanding) $13.88
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $14.73
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer Quest Officers Value Fund
<PAGE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1997
<TABLE>
================================================================================================================
INVESTMENT INCOME
<S> <C>
Dividends (net of foreign withholding taxes of $3,500) $ 97,231
- ----------------------------------------------------------------------------------------------------------------
Interest 57,030
--------
Total income 154,261
================================================================================================================
EXPENSES
Management fees - Note 4 91,482
- ----------------------------------------------------------------------------------------------------------------
Service plan fees - Note 4 45,741
- ----------------------------------------------------------------------------------------------------------------
Shareholder reports 12,450
- ----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 11,089
- ----------------------------------------------------------------------------------------------------------------
Transfer agent and accounting services fees - Note 4 10,171
- ----------------------------------------------------------------------------------------------------------------
Registration and filing fees 10,006
- ----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 9,706
- ----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses
- ----------------------------------------------------------------------------------------------------------------
Other 1,090
--------
Total expenses 197,014
Less expenses paid indirectly - Note 4 (1,640)
Less reimbursement of expenses by OppenheimerFunds, Inc. - Note 4 (77,149)
--------
Net expenses 118,225
================================================================================================================
NET INVESTMENT INCOME 36,036
================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments 236,859
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (335,693)
--------
Net realized and unrealized loss (98,834)
================================================================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(62,798)
========
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Quest Officers Value Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1997 1996
================================================================================================================
OPERATIONS
<S> <C> <C>
Net investment income (loss) $ 36,036 $ (29,058)
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 236,859 1,103,769
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (335,693) 570,237
-----------------------------
Net increase (decrease) in net assets resulting from operations (62,798) 1,644,948
================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income -- (84,879)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (1,104,047) (267,637)
================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions - Note 2 (2,796,658) 6,490,302
================================================================================================================
NET ASSETS
Total increase (decrease) (3,963,503) 7,782,734
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 11,429,302 3,646,568
-----------------------------
End of period (including undistributed net investment
income of $32,360 for the year ended 10/31/97) $ 7,465,799 $11,429,302
=============================
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Quest Officers Value Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1997 1996(2) 1995(1)
===================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C>
Net asset value, beginning of period $15.26 $12.30 $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .07 (.01) .24
Net realized and unrealized gain .03 4.06 2.10
------ ------ ------
Total income from investment
operations .10 4.05 2.34
- ---------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.26) (.04)
Distributions from net realized gain (1.48) (.83) --
------ ------ ------
Total dividends and distributions
to shareholders (1.48) (1.09) (.04)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $13.88 $15.26 $12.30
====== ====== ======
===================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 1.56% 35.17% 23.44%
===================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $7,466 $11,429 $3,647
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $9,148 $ 6,973 $2,873
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.39%(6) (0.42)%(6)% 2.44%(4)(5)
Expenses, before voluntary reimbursement by
the Manager 2.15%(7) 2.24% 1.97%(5)
Expenses, net of voluntary reimbursement by
the Manager 1.29% 1.92% 0.00%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 111.0% 137.4% 108.0%
Average brokerage commission rate(9) $0.0551 $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 advisor 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 would have been 0.47%.
5. Annualized.
6. For the years ended October 31, 1997 and 1996, the ratio of net investment
income to average net assets would have been (0.47)% and (0.74)%, respectively,
absent the voluntary reimbursement by both the former Manager and the current
Manager.
7. The expense ratio reflects the effect of expenses paid indirectly by
the Fund.
8. 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, 1997 were $9,257,710 and $13,205,846, respectively.
9. 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.
10 Oppenheimer Quest Officers Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Officers Value Fund (the 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. It is the intention of the
Fund to continue to invest in a non-diversified portfolio of primarily equity
securities believed to be under valued in the market place. The Fund's
investment advisor is OppenheimerFunds, Inc. (the 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. 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 an
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 due to capital loss
carryforwards. Also, due to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the fiscal year in which the
income or realized gain was recorded by the Fund.
The Fund adjusts the classification of distributions 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, 1997, amounts have been reclassified to reflect a decrease in
undistributed net investment income of $3,676. Accumulated net realized gain on
investments was increased by the same amount.
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. Interest income is accrued on a daily basis. 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.
11 Oppenheimer Quest Officers Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
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 YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
--------------------------- ----------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Class A:
Sold 131,978 $ 1,769,834 538,510 $ 7,749,424
Dividends and distributions
reinvested 85,094 1,083,250 27,528 337,769
Redeemed (427,833) (5,649,742) (113,652) (1,596,891)
--------- ------------ --------- ------------
Net increase (decrease) (210,761) $(2,796,658) 452,386 $ 6,490,302
========= ============ ========= ============
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1997, net unrealized appreciation on investments of $529,171 was
composed of gross appreciation of $833,571, and gross depreciation of $304,400.
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
voluntarily 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. Such waivers amounted to $31,408. 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.
The Manager pays OpCap Advisors (the Sub-Advisor) based on the fee schedule set
forth in the Prospectus. The Sub-Advisor waived all fees under the agreement for
the year ended October 31, 1997. On February 13, 1997 PIMCO Advisors L.P.,
signed a definitive agreement with Oppenheimer Group, Inc. and its subsidiary
Oppenheimer Financial Corp. for PIMCO Advisors L.P. and its affiliate, Thomson
Advisory Group, Inc., to acquire the one-third managing general partner interest
in Oppenheimer Capital (the parent of OpCap Advisors) and the 1.0% general
interest in Oppenheimer Capital L.P.
For the year ended October 31, 1997, commissions (sales charges paid by
investors) on sales of Class A shares totaled $1,822, of which $1,738 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 year ended October 31, 1997, the Fund paid OFS $3,726.
Expenses paid indirectly represent a reduction of custodian fees for earnings on
cash balances maintained by the Fund.
The Fund has 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 pays an annual asset-based
sales charge to OFDI of 0.25% per year on Class A shares. The Fund also pays a
service fee to OFDI of 0.25% per year. Both fees are 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 uses 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 retains the
balance of the asset-based sales charge to reimburse itself for its other
expenditures under the Plan. Effective August 1, 1996, OFDI has voluntarily
waived all fees under this plan. Such waivers amounted to $45,741.
5. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended October 31, 1997.
12 Oppenheimer Quest Officers Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
6. SUBSEQUENT EVENT
On October 22, 1997, the Board of Trustees approved the reorganization of
Oppenheimer Quest Officers Value Fund with and into Oppenheimer Quest Capital
Value Fund, Inc. Shareholders of the Fund will be asked to approve a
reorganization whereby shareholders would receive shares of Oppenheimer Quest
Capital Value Fund, Inc. If shareholder approval is received, it is expected
that the reorganization will occur during the second quarter of calendar 1998.
13 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 for Value Funds
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, (one of the portfolios constituting Oppenheimer Quest for Value Funds,
hereafter referred to as the Fund), at October 31, 1997, the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for each of the two 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 October 31, 1997 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased had not been received, provide 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, 1997
14 Oppenheimer Quest Officers Value Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1998 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $1.4838 were paid to shareholders on December 18, 1996, of
which $0.3693 was designated as a "capital gain distribution" for federal income
tax purposes. Whether received in stock or in cash, the capital gain
distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended October 31, 1997 which
are not designated as capital gain distributions should be multiplied by 100.00%
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 advisor for specific guidance.
SHAREHOLDER MEETING (Unaudited)
On May 6, 1997, a special shareholder meeting was held at which the selection of
Price Waterhouse LLP as the independent accountants and auditors of the Fund for
the fiscal year beginning November 1, 1996 was ratified (Proposal No. 1), the
proposed changes to certain of the Fund's fundamental investment policies,
including changes to the investment objective were approved (Proposal No. 2),
the Investment Advisory Agreement between the Fund and OppenheimerFunds, Inc.
was approved (Proposal No. 3), the Subadvisory Agreement between
OppenheimerFunds, Inc. and OpCap Advisors was approved (Proposal No. 4), and the
Fund's Class A 12b-1 Distribution and Service Plan was approved by Class A
shareholders (Proposal No. 5) as described in the Fund's proxy statement for
that meeting. The following is a report of the votes cast:
<TABLE>
<CAPTION>
Withheld/
Proposal For Against Abstain Broker Non-Votes Total
- -------- --- ------- --------- ---------------- -----
<S> <C> <C> <C> <C> <C>
Proposal No. 1 418,214.641 -- -- 293,434 418,214.641
Proposal No. 2 405,402.866 12,811.775 -- 293,434 418,214.641
Proposal No. 3 405,402.866 12,811.775 -- 293,434 418,214.641
Proposal No. 4 404,865.866 12,811.775 537 293,434 418,214.641
Proposal No. 5 404,171.093 14,043.548 -- 293,434 418,214.641
</TABLE>
15 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 ADVISOR OppenheimerFunds, Inc.
SUB-ADVISOR 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.
16 Oppenheimer Quest Officers Value Fund
