SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant / X /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or 14a-12
OPPENHEIMER QUEST OFFICERS VALUE FUND,
a series of Oppenheimer Quest For Value Funds
- -----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Merryl Hoffman, Esq.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X / No fee required.
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
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(1) Title of each class of securities to which transaction applies:
- -----------------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
- -----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount
on which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
<PAGE>
Bridget A. Macaskill
President and
Chief Executive Officer OppenheimerFunds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048-0203
800 525-7048
April 20th, 1998
Dear Oppenheimer Quest Officers Value Fund Shareholder:
One of the things we pride ourselves on at OppenheimerFunds, Inc. is our
commitment to searching for new investment opportunities for our shareholders. I
am writing to you today to let you know about one of those opportunities -- a
positive change that has been proposed for Oppenheimer Quest Officers Value
Fund.
After careful consideration, the Board of Trustees concluded that it would
be in the best interest of shareholders of Oppenheimer Quest Officers Value Fund
to reorganize into another Oppenheimer Quest fund, Oppenheimer Quest Value Fund,
Inc. A shareholder meeting has been scheduled for June 9th, and all Oppenheimer
Quest Officers Value Fund shareholders of record on April 1st are being asked to
vote either in person or by proxy. Enclosed, you will find a notice of the
meeting, a ballot card, a proxy statement detailing the proposal, an Oppenheimer
Quest Value Fund, Inc. prospectus and a postage-paid return envelope for your
use.
Why does the Board of Trustees recommend this reorganization?
The Trustees considered that the Funds have the same investment objective
and employ substantially similar investment techniques and strategies. Pursuant
to the reorganization, shareholders of Oppenheimer Quest Officers Value Fund
would be invested in a comparable fund with a substantially larger asset base -
over $1.3 billion in assets - and would likely incur lower transfer agency and
other non-management and distribution expenses. The Trustees considered the
future viability of Officers Fund due to its small size - under $8 million in
assets - and that its prospects for increasing its asset base to achieve
efficiencies of scale is uncertain due to, among other things, below-average
performance. The reorganization would be implemented without sales charges and
is expected to be a tax-free reorganization. The enclosed proxy statement
contains further discussion.
How do you vote?
No matter how large or small your investment, your vote is important, so
please review the proxy statement carefully. To cast your vote, simply mark,
sign and date the enclosed proxy ballot and return it in the postage-paid
envelope today. Remember, it can be expensive for Officers Fund -- and
ultimately for you as a shareholder -- to remail ballots if not enough responses
are received to conduct the meeting.
If you have any questions about the proposal, please feel free to contact
your financial advisor, or call us at 1-800-525-7048.
As always, we appreciate your confidence in OppenheimerFunds and look
forward to serving you for many years to come.
Sincerely,
[BAM signature]
Enclosures
hoff\298-qof.wpd
<PAGE>
OPPENHEIMER QUEST OFFICERS VALUE FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 9, 1998
To the Shareholders of Oppenheimer Quest Officers Value Fund:
Notice is hereby given that a Special Meeting of the Shareholders of Oppenheimer
Quest Officers Value Fund ("Officers Fund"), a series of Oppenheimer Quest For
Value Funds (the "Trust"), a registered management investment company, will be
held at 6803 South Tucson Way, Englewood, Colorado 80112 at 10:00 A.M., Denver
time, on June 9, 1998, or any adjournments thereof (the "Meeting"), for the
following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization between the
Trust, on behalf of Officers Fund, and Oppenheimer Quest Value Fund, Inc.
("Value Fund"), and the transactions contemplated thereby, including the
transfer of substantially all the assets of Officers Fund to Value Fund in
exchange for Class A shares of Value Fund, the distribution of such Class A
shares of Value Fund to the Class A shareholders of Officers Fund in complete
liquidation of Officers Fund and the cancellation of the outstanding shares of
Officers Fund (the "Proposal").
2. To act upon such other matters as may properly come before the Meeting.
Shareholders of record at the close of business on April 1, 1998 are entitled to
notice of, and to vote at, the Meeting. The Proposal is more fully discussed in
the Proxy Statement and Prospectus. Please read it carefully before telling us,
through your proxy or in person, how you wish your shares to be voted. The
Trust's Board of Trustees recommends a vote in favor of the Proposal. WE URGE
YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
April 6, 1998
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Shareholders who do not expect to attend the Meeting are requested to indicate
voting instructions on the enclosed proxy and to date, sign and return it in the
accompanying postage-paid envelope. To avoid unnecessary duplicate mailings, we
ask your cooperation in promptly mailing your proxy no matter how large or small
your holdings may be.
229
<PAGE>
Oppenheimer Quest Officers Value Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT
Oppenheimer Quest Value Fund, Inc.
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROSPECTUS
This Proxy Statement of Oppenheimer Quest Officers Value Fund ("Officers Fund")
relates to the Agreement and Plan of Reorganization (the "Reorganization
Agreement") and the transactions contemplated thereby (the "Reorganization")
between Oppenheimer Quest For Value Funds (the "Trust"), on behalf of its
series, Officers Fund, and Oppenheimer Quest Value Fund, Inc.("Value Fund").
This Proxy Statement also constitutes a Prospectus of Value Fund included in a
Registration Statement on Form N-14 (the "Registration Statement") filed by
Value Fund with the Securities and Exchange Commission (the "SEC"). Such
Registration Statement relates to the registration of Class A shares of Value
Fund to be offered to the shareholders of Officers Fund pursuant to the
Reorganization Agreement. Officers Fund is located at Two World Trade Center,
New York, New York 10048-0203 (telephone 1-800-525-7048).
This Proxy Statement and Prospectus sets forth concisely information about Value
Fund and the Reorganization that shareholders of Officers Fund should know
before voting on the Reorganization. A copy of the Prospectus for Value Fund,
dated February 27, 1998, is enclosed and incorporated herein by reference. The
following documents have been filed with the SEC and are available without
charge upon written request to OppenheimerFunds Services, the transfer and
shareholder servicing agent for Value Fund and Officers Fund (the "Transfer
Agent"), at P.O. Box 5270, Denver, Colorado 80217, or by calling the toll-free
number shown above: (i) a Prospectus for Officers Fund, dated January 26, 1998;
and (ii) a Statement of Additional Information about Officers Fund, dated
January 26, 1998 (the "Officers Fund Additional Statement"). The following
documents have been filed with the SEC, are incorporated herein by reference and
are available without charge upon written request to the Transfer Agent or by
calling the toll-free number shown above: (i) a Prospectus for Value Fund, dated
February 27, 1998; and (ii) a Statement of Additional Information relating to
the Reorganization described in this Proxy Statement and Prospectus (the
"Additional Statement"), dated April 6, 1998 and filed as part of the
Registration Statement, which Additional Statement includes, among other things,
the Prospectus for Officers Fund, the Officers Fund Additional Statement and a
Statement of Additional Information about Value Fund, dated February 27, 1998
(the "Value Fund Additional Statement") which contains more detailed information
about Value Fund and its management.
Investors are advised to read and retain this Proxy Statement and Prospectus for
future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated April 6, 1998.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
Page
Introduction............................................................1
General..............................................................1
Record Date; Vote Required; Share Information........................2
Proxies..............................................................3
Costs of the Solicitation and the Reorganization.....................3
Comparative Fee Tables..................................................4
Synopsis................................................................7
Purpose of the Meeting...............................................7
Parties to the Reorganization........................................7
The Reorganization .............................................7
Reasons for the Reorganization.......................................8
Tax Consequences of the Reorganization...............................8
Investment Objectives and Policies...................................8
Investment Advisory and Distribution and Service Plan Fees...........9
Purchases, Exchanges and Redemptions................................10
Principal Risk Factors.................................................11
Approval of the Reorganization (The Proposal)..........................13
Reasons for the Reorganization......................................13
The Reorganization..................................................15
Tax Aspects of the Reorganization...................................15
Capitalization Table (Unaudited)....................................17
Comparison Between Officers Fund and Value Fund........................18
Investment Objectives and Policies..................................18
Investment Restrictions.............................................22
Description of Brokerage Practices..................................24
Expense Ratios and Performance......................................25
Shareholder Services................................................26
Rights of Shareholders..............................................27
Organization and History............................................28
Management and Distribution Arrangements............................28
Purchase of Additional Shares.......................................31
Dividends and Distributions.........................................31
Method of Carrying Out the Reorganization .............................31
Additional Information.................................................33
Financial Information...............................................33
Public Information..................................................33
Other Business.........................................................34
Exhibit A - Agreement and Plan of Reorganization by and between
Oppenheimer Quest For Value Funds, on behalf of Oppenheimer Quest
Officers Value Fund, and Oppenheimer Quest Value Fund, Inc. ..........A-1
Enclosure - Prospectus of Oppenheimer Quest Value Fund, Inc. dated February
27, 1998.
<PAGE>
Oppenheimer Quest Officers Value Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT
Oppenheimer Quest Value Fund, Inc.
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROSPECTUS
Special Meeting of Shareholders to be held June 9, 1998
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the shareholders of
Oppenheimer Quest Officers Value Fund ("Officers Fund"), a series of Oppenheimer
Quest For Value Funds (the "Trust"), a registered management investment company,
in connection with the solicitation by the Board of Trustees of the Trust (the
"Board") of proxies to be used at the Special Meeting of Shareholders of
Officers Fund to be held at 6803 South Tucson Way, Englewood, Colorado 80112, at
10:00 A.M., Denver time, on June 9, 1998, or any adjournments thereof (the
"Meeting"). It is expected that the mailing of this Proxy Statement and
Prospectus will commence on or about April 20, 1998.
At the Meeting, shareholders of Officers Fund will be asked to approve an
Agreement and Plan of Reorganization (the "Reorganization Agreement") between
the Trust, on behalf of Officers Fund, and Oppenheimer Quest Value Fund, Inc.
("Value Fund"), and the transactions contemplated thereby (the
"Reorganization"), including the transfer of substantially all the assets of
Officers Fund to Value Fund in exchange for Class A shares of Value Fund, the
distribution of such Class A shares of Value Fund to the shareholders of
Officers Fund in complete liquidation of Officers Fund and the cancellation of
the outstanding shares of Officers Fund. A copy of the Reorganization Agreement
is attached hereto as Exhibit A and is incorporated by reference herein. As a
result of the proposed Reorganization, each shareholder of Officers Fund will
receive that number of Class A shares of Value Fund having an aggregate net
asset value equal to the net asset value of such shareholder's shares of
Officers Fund. This transaction has been structured in a manner intended to
qualify as a tax-free reorganization for federal income tax purposes. See
"Approval of the Reorganization".
Value Fund currently offers Class A, Class B, Class C and Class Y shares. Class
A shares are generally sold with a sales charge imposed at the time of purchase;
however certain purchases of Class A shares aggregating $1 million or more
($500,000 or more as to purchases by certain retirement plans) are not subject
to a sales charge, but may be subject to a contingent deferred sales charge
("CDSC") if redeemed within 12 calendar months (18 calendar months if shares
were purchased prior to May 1, 1997) of the date of purchase. Class B shares are
sold without a front-end sales charge but may be subject to a CDSC if redeemed
within six years of the date of purchase. Class C shares are sold without a
front-end sales charge but may be subject to a CDSC if not held for one year.
Class Y shares are offered at net asset value without sales charge only to
certain
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<PAGE>
institutional investors. As a result of the Reorganization, shareholders of
Officers Fund will receive Class A shares of Value Fund and no sales charge will
be imposed on the Value Fund Class A shares received by Officers Fund's
shareholders in the Reorganization. Because Officers Fund has only Class A
shares outstanding, Value Fund will not issue Class B, Class C or Class Y shares
in the Reorganization. Accordingly, complete information on Class B, Class C and
Class Y shares of Value Fund is not included in this Proxy Statement and
Prospectus, and no offering of Class B, Class C or Class Y shares is made
hereby. Additional information with respect to Value Fund and fees and expenses
is set forth herein, in the Prospectus of Value Fund accompanying this Proxy
Statement and Prospectus and in the Value Fund Statement of Additional
Information ("Value Fund Additional Statement"), both of which are incorporated
herein by reference.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on April 1, 1998 as the record date
(the "Record Date") for the determination of shareholders entitled to notice of,
and to vote at, the Meeting. An affirmative vote of a majority of the Class A
shares of Officers Fund, represented in person or by proxy at the Meeting and
entitled to vote at the Meeting, is required to approve the Reorganization. Each
shareholder will be entitled to one vote for each share and a fractional vote
for each fractional share held of record at the close of business on the Record
Date. Only shareholders of Officers Fund will vote on the Reorganization. The
vote of shareholders of Value Fund is not being solicited.
At the close of business on the Record Date, there were 478,480.793 Class A
shares of Officers Fund issued and outstanding. Although Officers Fund is
authorized to issue Class B and Class C shares, no such shares have been issued
as of this date. At the close of business on the Record Date, there were
63,188,510.138 shares of Value Fund issued and outstanding, consisting of
38,844,991.597 Class A shares, 18,822,525.455 Class B shares, 5,297,856.090
Class C shares and 223,136.996 Class Y shares. The presence in person or by
proxy of the holders of a majority of the shares of Officers Fund constitutes a
quorum for the transaction of business at the Meeting. To the knowledge of
Officers Fund, as of the Record Date, no person owned of record or beneficially
5% or more of its outstanding shares except for: (i) CIBC Oppenheimer Capital
(Accumulation Plan Omnibus Account), Oppenheimer Tower, 1 World Financial
Center, New York, New York 10281-1003 which owned of record 173,147.199 Class A
shares (approximately 36.18% of the Class A shares then outstanding); and (ii)
CIBC Oppenheimer Corp. (for the benefit of a customer), P.O. Box 3484, Church
Street Station, New York, New York 10008-8484 which owned of record 25,177.418
Class B shares (approximately 5.26% of the Class B shares then outstanding). As
of the Record Date, to the knowledge of Value Fund, no person owned of record or
beneficially 5% or more of its outstanding shares except for: (i) Unified
Advisers Inc. (as agent for Value Fund), 429 N. Pennsylvania Street,
Indianapolis, Indiana 46204-1873 which owned of record 2,665,733.480 Class A
shares (approximately 6.86% of the Class A shares then outstanding); (ii)
Merrill Lynch Pierce Fenner & Smith (for the sole benefit of its customers),
4800 Deer Lake Drive E., Flr 3, Jacksonville, Florida 32246-6484 which owned of
record 953,981.296 Class B shares (approximately 5.07% of the Class B shares
then outstanding) and owned of record 623,103.488 Class C shares (approximately
11.75% of the Class C shares then outstanding); and (iii) Massachusetts Mutual
Life Insurance Company, 1295 State Street, Springfield, Massachusetts which
owned of record 223,121.603 Class Y shares (approximately 99.95% of the Class Y
shares then outstanding). Massachusetts Mutual Life Insurance Company is
affiliated with the Manager, as described below. In addition, as of the
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<PAGE>
Record Date, the Trustees and officers of the Trust and the Directors and
officers of Value Fund, in each case, owned less than 1% of the outstanding
shares of Officers Fund and Value Fund, respectively.
Proxies
The enclosed form of proxy, if properly executed and returned, will be voted (or
counted as an abstention or withheld from voting) in accordance with the choices
specified thereon, and will be included in determining whether there is quorum
to conduct the Meeting. The proxy will be voted in favor of the Proposal unless
a choice is indicated to vote against or to abstain from voting on the Proposal.
Shares owned of record by broker-dealers for the benefit of their customers
("street account shares") will be voted by the broker-dealer based on
instructions received from its customers. If no instructions are received, and
the broker-dealer does not have discretionary power to vote such street account
shares under applicable stock exchange rules, the shares represented thereby
will be considered to be present at the Meeting for purposes of determining the
quorum, but will have the same effect as a vote "against" the Proposal. If a
shareholder executes and returns a proxy but fails to indicate how the votes
should be cast, the proxy will be voted in favor of the Proposal. The proxy may
be revoked at any time prior to the voting thereof by: (i) writing to the
Secretary of Officers Fund at Two World Trade Center, New York, New York
10048-0203 (if received in time to be acted upon); (ii) attending the Meeting
and voting in person; or (iii) signing and returning a new proxy (if returned
and received in time to be voted).
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing and mailing
this Proxy Statement and Prospectus, will be borne by Officers Fund and is not
expected to exceed $25,000. Any documents such as existing Prospectuses or
annual reports that are included in that mailing will be a cost of the fund
issuing the document. In addition to the solicitation of proxies by mail,
proxies may be solicited by officers of Officers Fund or officers and employees
of OppenheimerFunds Services, personally or by telephone or telegraph; any
expenses so incurred will be borne by OppenheimerFunds Services. Proxies may
also be solicited by a proxy solicitation firm hired at Officers Fund's expense
for such purpose. Brokerage houses, banks and other fiduciaries may be requested
to forward soliciting material to the beneficial owners of shares of Officers
Fund and to obtain authorization for the execution of proxies. For those
services, if any, they will be reimbursed by Officers Fund for their reasonable
out-of-pocket expenses.
With respect to the Reorganization, Officers Fund and Value Fund will bear
equally the cost of the tax opinion. Any other out-of-pocket expenses of
Officers Fund and Value Fund associated with the Reorganization, including
legal, accounting and transfer agent expenses, will be borne by Officers Fund
and Value Fund, respectively, in the amounts so incurred by each.
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<PAGE>
COMPARATIVE FEE TABLES
Officers Fund and Value Fund each pay a variety of expenses for management of
their assets, administration, distribution of their shares and other services,
and those expenses are reflected in each fund's net asset value per share.
Shareholders pay other expenses directly, such as sales charges. The following
table is provided to help you compare the direct expenses of investing in
Officers Fund with the direct expenses of investing in Value Fund. Pro forma
transaction charges for the combined fund after giving effect to the
Reorganization will be the same as the charges noted below for Value Fund.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
Officers Fund Value Fund
Class A Class B Class C Class A Class B Class C Class Y
Shares Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charg 5.75% None None 5.75% None None None
on Purchases (as
a % of
offering price)
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Maximum
Deferred Sales None(1) 5% in thee 1% if None(1) 5% in the 1% if None
Charge (as a % first year shares first year shares are
of the lower declining are declining redeemed
of the original to 1% in redeemed to 1% in within 12
purchase price the sixth within 12 the sixth months of
or redemption year and months of year and purchase
proceeds) eliminated purchase eliminated
thereafter thereafter
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Maximum
Sales Charge on None None None None None None None
Reinvested Dividends
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Exchange Fee None None None None None None None
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Redemption Fee None None None None None None None
(1) If you invest $1 million or more ($500,000 or more for purchases by
"Retirement Plans," as defined in "Class A Contingent Deferred Sales Charge" in
each fund's Prospectus) in Class A shares, you may have to pay a sales charge of
up to 1% if you sell your shares within 12 calendar months (18 months for shares
purchased prior to May 1, 1997) from the end of the calendar month during which
you purchased those shares.
</TABLE>
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<PAGE>
Expenses of Value Fund and Officers Fund; Pro Forma Expenses
The following tables are the operating expenses of Class A shares of Officers
Fund and the operating expenses of Class A shares of Value Fund and are based on
expenses for the funds' fiscal year ended October 31, 1997. All amounts shown
are a percentage of net assets of Officers Fund and of Class A shares of Value
Fund. Pro forma expenses for the surviving Value Fund after giving effect to the
Reorganization do not differ from the fees indicated for Value Fund.
Value Fund and Pro Forma
Officers Fund Surviving Value Fund
Class A Class A
Management Fees 0.66% (with waiver) 0.94%
12b-1 Plan Fees None (with waiver) 0.50%
Other Expenses 0.63% 0.16%
Total Fund Operating
Expenses 1.29% (with waivers) 1.60%
The 12b-1 fees for shares of Officers Fund and Value Fund are service fees and
asset-based sales charges. The service fees are a maximum of 0.25% of average
annual net assets of Class A shares of each fund and the asset-based sales
charge for Class A shares is 0.25% of average annual net assets of that class.
The Management Fees, 12b-1 Plan Fees and Total Fund Operating Expenses for
Officers Fund in the table above reflect fee waivers by the Manager and the
Distributor that are currently in effect and are expected to be in effect for
the current fiscal year. These fee waivers, which are described in "Investment
Advisory and Distribution and Service Plan Fees", lowered Officers Fund's
overall expense ratio. Without such fee waivers, Management Fees, 12b-1 Plan
Fees and Total Fund Operating Expenses for Officers Fund would have been 1.00%,
0.50% and 2.13%, respectively.
Examples
To try and show the effect of these expenses on an investment over time, the
hypotheticals shown below have been created. Assume that you make a $1,000
investment in Class A shares of Officers Fund, Class A shares of Value Fund or
Class A shares of the pro forma surviving Value Fund, and that the annual return
is 5% and that the operating expenses for each fund are the ones shown in the
chart above. If you were to redeem your shares at the end of each period shown
below, your investment would incur the following expenses by the end of each
period shown.
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<PAGE>
1 year 3 years 5 years 10 years
Oppenheimer Quest
Officers Value Fund
Class A Shares* $70 $ 96 $124 $204
Oppenheimer Quest
Value Fund, Inc. and Pro Forma
Surviving Fund
Class A Shares* $73 $105 $140 $237
* Expenses for Officers Fund and Value Fund include the Class A initial sales
charge. Currently, only Class A shares of Officers Fund are offered and only to
certain individuals and entities that qualify for a waiver of the Class A
initial sales charge. The expenses in the table above for Officers Fund without
giving effect to the Class A initial sales charge would be $13, $41, $71 and
$156 for the 1 year, 3 years, 5 years and 10 years, respectively. Pro forma
expenses for the surviving Value Fund after giving effect to the Reorganization
do not differ from the fees indicated for Value Fund.
The examples show the effect of expenses on an investment, but are not meant to
state or predict actual or expected costs or investment returns of the funds,
all of which may be more or less than the amounts shown.
-6-
<PAGE>
SYNOPSIS
The following is a synopsis of certain information contained in or incorporated
by reference in this Proxy Statement and Prospectus and presents key
considerations for shareholders of Officers Fund to assist them in determining
whether to approve the Reorganization. This synopsis is only a summary and is
qualified in its entirety by the more detailed information contained in or
incorporated by reference in this Proxy Statement and Prospectus and by the
Reorganization Agreement which is Exhibit A hereto. Shareholders should
carefully review this Proxy Statement and Prospectus and the Reorganization
Agreement in their entirety and, in particular, the current Prospectus of Value
Fund which accompanies this Proxy Statement and Prospectus and is incorporated
herein by reference.
Purpose of the Meeting
At the Meeting, shareholders of Officers Fund will be asked to approve or
disapprove the Reorganization.
Parties to the Reorganization
Oppenheimer Quest For Value Funds (the "Trust") was organized in April 1987 as a
multi-series Massachusetts business trust and Officers Fund is a non-diversified
series of the Trust. The Trust is an open-end management investment company,
with an unlimited number of authorized shares of beneficial interest. Value Fund
is a diversified, open-end management investment company that was organized in
August 1979 as a Maryland corporation.
Officers Fund and Value Fund (each referred to herein as a "fund" and
collectively referred to herein as the "funds") are located at Two World Trade
Center, New York, New York 10048-0203. OppenheimerFunds, Inc. (the "Manager"),
located at Two World Trade Center, New York, New York 10048-0203, acts as
investment adviser to the funds. OpCap Advisors (the "Sub-Adviser") acts as
sub-adviser to the funds and is located at One World Financial Center, New York,
New York 10281. The portfolio manager for Officers Fund (Jeffrey C.
Whittington), and the portfolio manager for Value Fund (Eileen Rominger) are
each employed by the Sub-Adviser. The Trustees of the Trust and the Directors of
Value Fund are the same, and oversee the Manager, the Sub-Adviser and the
portfolio managers. Additional information about the funds, the Manager and the
Sub-Adviser is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of substantially all the
assets of Officers Fund to Value Fund in exchange for the issuance of Class A
shares of Value Fund. The net asset value of Value Fund Class A shares issued in
the exchange will equal the value of the assets of Officers Fund received by
Value Fund. In conjunction with the Closing (as defined below) of the
Reorganization, presently scheduled for June 12, 1998, Officers Fund will
distribute the Class A shares of Value Fund received by Officers Fund on the
Closing Date (as defined below) to holders of Class A shares of Officers Fund.
As a result of the Reorganization, each Class A Officers Fund shareholder will
receive the number of full and fractional Class A Value Fund shares that equals
in value such shareholder's pro rata interest in the assets transferred to Value
Fund as of the Valuation
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<PAGE>
Date (as defined below). The Board has determined that the interests of existing
Officers Fund shareholders will not be diluted as a result of the
Reorganization. For the reasons set forth below under "Approval of the
Reorganization - Reasons for the Reorganization," the Board, including the
trustees who are not "interested persons" of the Trust (the "Independent
Trustees"), as that term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), has concluded that the Reorganization is
in the best interests of Officers Fund and its shareholders and recommends
approval of the Reorganization by Officers Fund shareholders. The Board of
Directors of Value Fund has also approved the Reorganization and determined that
the interests of existing Value Fund shareholders will not be diluted as a
result of the Reorganization. If the Reorganization is not approved, Officers
Fund will continue in existence and the Board will determine whether to pursue
alternative actions.
Reasons for the Reorganization
The Manager proposed to the Board a reorganization into Value Fund so that
shareholders of Officers Fund may become shareholders of a substantially larger
fund, which after such reorganization is anticipated to allow Officers Fund
shareholders to participate in a fund with the same investment objective and
similar investment policies and strategies but with the potential for lower
ongoing transfer agency and other non-management and distribution expenses and,
to the extent the voluntary fee waivers of Officers Fund were terminated, lower
overall operating expenses. The Board also considered information with respect
to the historical performance of the funds. For the one and three year periods
ended October 31, 1997, the average annual total returns at net asset value were
significantly better for Value Fund than for Officers Fund. The Board also
considered that the Reorganization would be a tax free reorganization, and there
would be no sales charge imposed in effecting the Reorganization.
Tax Consequences of the Reorganization
In the opinion of Price Waterhouse LLP, tax adviser to Officers Fund, the
Reorganization will qualify as a tax-free reorganization for Federal income tax
purposes. As a result, it is expected that no gain or loss will be recognized by
either Officers Fund or Value Fund, or by the shareholders of either Officers
Fund or Value Fund, for Federal income tax purposes as a result of the
Reorganization. For further information about the tax consequences of the
Reorganization, see "Approval of the Reorganization - Tax Aspects of the
Reorganization" below.
Investment Objectives and Policies
The investment objectives and investment policies of the funds are substantially
the same. Officers Fund and Value Fund each seek capital appreciation. In
seeking this investment objective, Officers Fund and Value Fund will invest in
securities (primarily equity securities) of companies believed to be undervalued
in the marketplace in relation to factors such as the companies' assets,
earnings, growth potential and cash flows. The funds may also invest in bonds
rated below investment grade by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("S&P") or another rating organization or as
determined to be of similar quality by the Sub-Adviser. Such investment is
limited by Officers Fund to up to 25% of net assets; there is no limit as to
Value Fund,
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although it is the present intention of Value Fund to invest no more than 5% of
its total assets in such securities. The funds may also invest in foreign equity
and debt securities. The funds may use certain hedging instruments to try to
manage investment risks. To provide liquidity, the funds typically invest a
portion of their respective assets in various types of U.S. Government
securities and certain money market instruments; for temporary defensive
purposes, the funds may invest all of their respective assets in such
securities. One important distinction between the funds is with respect to
diversification. Officers Fund is "non-diversified", and may invest in the
securities of a single issuer without limit by the Investment Company Act; this
may result in, among other things, a greater fluctuation in the total market
value of Officers Fund's portfolio. As a result, an investment in Officers Fund
may entail greater risk than an investment in a diversified investment company,
such as Value Fund. See "Principal Risk Factors" and "Comparison Between
Officers Fund and Value Fund".
Investment Advisory and Distribution and Service Plan Fees
The funds obtain investment management services from the Manager pursuant to the
terms of investment advisory agreements that are substantially the same except
for fee amounts. The management fee payable to the Manager is computed on the
net asset value of each fund as of the close of business each day and is payable
monthly. Officers Fund pays a management fee at the annual rate of 1.0% of
average annual net assets. A voluntary waiver of a portion of this fee is
currently in effect, as described below. Value Fund pays a management fee at the
following annual rates: 1.00% of the first $400 million of average annual net
assets; 0.90% of the next $400 million; 0.85% of the next $3.2 billion; 0.80% of
the next $4 billion; and 0.75% of average annual net assets over $8 billion.
The Manager has retained the Sub-Adviser on behalf of each fund to provide
day-to-day portfolio management of the fund. For such services the Manager (not
the fund) pays the Sub-Adviser an annual fee payable monthly based on the
average daily net assets of the fund equal to 40% of the net advisory fee
collected by the Manager based on the net assets of the fund as of November 22,
1995 (the "Base Amount") plus 30% of the investment advisory fee collected by
the Manager based on the total net assets of the fund that exceed the Base
Amount, calculated after any applicable waivers. As to Officers Fund, the
Sub-Adviser voluntarily agreed to waive its entire subadvisory fee. Concurrently
with such waiver, the Manager voluntarily agreed to waive that portion of its
management fee equal to what would otherwise have been payable to the
Sub-Adviser if the Sub- Adviser had not waived its subadvisory fee. These
expense waivers are voluntary and may be modified or withdrawn at any time.
Officers Fund and Value Fund have adopted Distribution and Service Plans under
Rule 12b-1 of the Investment Company Act for Class A shares (the "Plans") to
compensate the Distributor for its services and costs in connection with the
distribution of Class A shares and the personal service and maintenance of
shareholder accounts that hold Class A shares. Under each Plan, the funds pay
the Distributor an asset-based sales charge of 0.25% per annum on Class A shares
and a service fee of 0.25% per annum on Class A shares. All fee amounts are
computed on the average annual net assets of the class determined as of the
close of each regular business day of each fund. The Distributor uses all of the
service fee and a portion of the asset-based sales charge (equal to 0.15%
annually for Class A shares purchased prior to September 1, 1993 and 0.10%
annually for Class A shares purchased on
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or after September 1, 1993) 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 of the funds. The
Distributor retains the balance of the asset-based sales charge to compensate
itself for its other expenditures under the Plan. As to Officers Fund, the
Distributor currently voluntarily waives all fees payable to it under the Class
A Plan. Such waiver may be terminated at any time.
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. The payments under the Plan increase the
annual expenses of Class A shares. A description of the Distribution and Service
Plans for Class B and Class C shares of the funds is set forth in their
respective Prospectuses. Class Y shares of Value Fund do not have a Distribution
and Service Plan. The Plans are compensation plans whereby payments by the funds
are made at a fixed rate as specified above and the funds' payments are not
limited to reimbursing the Distributor's costs.
Purchases, Exchanges and Redemptions
Both Officers Fund and Value Fund are part of the OppenheimerFunds complex of
mutual funds. The procedures for purchases, exchanges and redemptions of shares
of the funds are substantially the same. Shares of either fund may be exchanged
for shares of the same class of other Oppenheimer funds offering such shares.
Class A shares of Officers Fund and Value Fund are generally sold subject to a
maximum initial sales charge of 5.75%. Currently, Class A shares of Officers
Fund are only offered to a limited group of individuals and entities as
described in Officers Fund's Prospectus, and such individuals and entities
qualify for purchase of shares at net asset value without a sales charge.
Investors who purchase $1 million or more ($500,000 or more for purchases by
"Retirement Plans" as defined in "Class A Contingent Deferred Sales Charge" in
each fund's Prospectus) in Class A shares pay no initial sales charge but may
have to pay a sales charge of up to 1% if shares are sold within 12 calendar
months (18 months for shares purchased prior to May 1, 1997) from the end of the
calendar month during which shares are purchased. Class A shares of the funds
may also be purchased at reduced sales charges, or at net asset value, under
other circumstances described in the fund's Prospectus. Class B and Class C
shares of the funds generally are sold without a front-end sales charge but may
be subject to a contingent deferred sales charge ("CDSC") upon redemption. Class
Y shares are offered at net asset value without sales charge only to certain
institutional investors. See "Comparative Fee Tables" above for a complete
description of such sales charges. Class A shares of Value Fund received in the
Reorganization will be issued at net asset value and without a sales charge.
Shareholders of the funds may exchange their shares at net asset value for
shares of the same class issued by other mutual funds in the OppenheimerFunds
complex, subject to certain conditions. Class A shares of the funds may be
redeemed without charge at their respective net asset values per share
calculated after the redemption order is received and accepted; however, Class A
shares that were not subject to a front-end sales charge at the time of purchase
in amounts of $1 million or more ($500,000 or more for purchases by certain
retirement plans) may be subject to a CDSC as described above. Services
available to shareholders of both funds include purchase and redemption of
shares
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through OppenheimerFunds AccountLink and PhoneLink (an automated telephone
system), telephone redemptions, and exchanges by telephone to other Oppenheimer
funds which offer Class A, Class B and Class C shares, and reinvestment
privileges. Please see "Shareholder Services," below and each fund's Prospectus
for further information.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in Value Fund,
shareholders should carefully consider the following risk factors, the
information set forth in this Proxy Statement and Prospectus and the more
complete description of risk factors set forth in the documents incorporated by
reference herein, including the Prospectuses of the funds and their respective
Statements of Additional Information.
General
All investments carry risks to some degree, whether they are risks that market
prices of the investment will fluctuate (this is known as "market risk") or that
the underlying issuer will experience financial difficulties and may default on
its obligation under a fixed-income investment to pay interest and repay
principal (this is referred to as "credit risk"). These general investment risks
affect the value of both funds' investments, their investment performance, and
the prices of their shares. Because of the types of the securities in which the
funds invest, and the investment techniques they use, the funds are designed for
long-term investors. There is no assurance that either fund will achieve its
investment objective and when you redeem your shares they may be worth more or
less than what you paid for them.
Stock Investment Risks
Because both funds usually invest a substantial portion (and from time to time
may invest all) of their assets in stocks, the value of each fund's portfolio
will be affected by changes in the stock markets. This market risk will affect
each fund's net asset values per share, which will fluctuate as the values of
the fund's portfolio securities change. Not all stock prices change uniformly or
at the same time, and other factors can affect a particular stock's price (for
example, poor earnings reports by an issuer, loss of major customers, major
litigation against an issuer, or changes in government regulations affecting an
industry). Not all of these factors can be predicted. Changes in the overall
market conditions and prices can occur at any time. Because of the types of
companies each fund invests in and the investment techniques used, some of which
may be speculative, both funds are designed for those investors who are
investing for the long-term and who are willing to accept greater risks of loss
of their capital in the hope of achieving capital appreciation. Investing for
capital appreciation entails the risk of loss of all or part of your principal.
Risks of Fixed-Income Securities
Debt securities are subject to changes in their values due to changes in
prevailing interest rates (this is known as interest rate risk). When prevailing
interest rates fall, the value of already-issued debt securities generally rise.
When interest rates rise, the values of already-issued debt securities
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<PAGE>
generally decline. The magnitude of these fluctuations will often be greater for
longer-term debt securities than shorter-term debt securities. A fund's share
prices can go up or down when interest rates change because of the effect of the
change on the value of the fund's portfolio of debt securities. Debt securities
are also subject to credit risk. Credit risk relates to the ability of the
issuer to meet interest or principal payments on a security as they become due.
Each fund has the ability to invest its net assets (subject to limitations
described below) in high-yield, lower-grade debt securities commonly known as
"junk bonds". However, as of the fiscal year ended October 31, 1997, neither
fund held any high-yield securities. If a fund were to invest in high-yield
securities, those securities may be subject to greater market fluctuation and
risk of loss of income and principal than lower yielding, investment grade
securities. There are additional risks of investing in lower grade securities
that are described in the Prospectus of each fund.
Foreign Securities
There are risks of foreign investing that increase the risk of investing in both
Officers Fund and in Value Fund and also increase the operating costs of both
funds. For example, foreign issuers are not required to use generally-accepted
accounting principles. If foreign securities are not registered for sale in the
U.S. under U.S. securities laws, the issuer does not have to comply with the
disclosure requirements of U.S. laws, which are generally more stringent than
foreign laws. The values of foreign securities investments will be affected by
other factors, including exchange control regulations or currency blockage and
possible expropriation or nationalization of assets. There are risks of changes
in foreign currency values. Because Officers Fund and Value Fund may purchase
securities denominated in foreign currencies, a change in value of a foreign
currency against the U.S. dollar will result in a change in the U.S. dollar
value of securities of that Fund denominated in that currency. There may also be
changes in governmental administration or economic or monetary policy in the
U.S. or abroad that can affect foreign investing. In addition, it is generally
more difficult to obtain court judgments outside the United States if that Fund
has to sue a foreign broker or issuer. Additional costs may be incurred because
foreign broker commissions are generally higher than U.S. rates, and there are
additional custodial costs associated with holding securities abroad. More
information about the risks and potential rewards of investing in foreign
securities is contained in the Statement of Additional Information of both
funds.
Hedging Instruments
Each fund may use certain hedging instruments. The use of hedging instruments
requires special skills and knowledge of investment techniques that are
different than what is required for normal portfolio management. If the
Sub-Adviser uses a hedging instrument at the wrong time or judges market
conditions incorrectly, hedging strategies may reduce the fund's return. Losses
could also be experienced if the prices of its futures and options positions
were not correlated with its other investments or if it could not close out a
position because of an illiquid market for the future or option. Options trading
involves the payment of premiums and has special tax effects on the funds. There
are also special risks in particular hedging strategies. The use of forward
contracts may reduce the gain that would otherwise result from a change in the
relationship between the U.S. dollar and a foreign currency. To limit its
exposure in foreign currency exchange contracts, the funds limit their exposure
to the amount of its assets denominated in foreign currency.
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<PAGE>
Non-Diversification
Officers Fund is classified as a "non-diversified" investment company under the
Investment Company Act so that the proportion of its assets that may be invested
in the securities of a single issuer is not limited by the Investment Company
Act. An investment in Officers Fund therefore may entail greater risk than an
investment in a diversified investment company, such as Value Fund, because a
higher percentage of investments among fewer issuers may result in greater
fluctuation in the total market value of Officers Fund's portfolio, and
economic, political or regulatory developments may have a greater impact on the
value of Officers Fund's portfolio than would be the case if the portfolio were
diversified among more issuers.
APPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
At a meeting held on February 18, 1998, the Board, including the Independent
Trustees, unanimously approved the Reorganization and the Reorganization
Agreement, determined that the Reorganization is in the best interests of
Officers Fund and its shareholders and resolved to recommend that shareholders
of Officers Fund vote for approval of the Reorganization. The Board further
determined that the Reorganization would not result in dilution of Officers
Funds' shareholders' interests.
In evaluating the Reorganization, the Board reviewed and discussed with
independent legal counsel the materials provided by the Manager with respect to
the proposed Reorganization. Included in the materials was information with
respect to the funds' investment objectives and policies, management fees,
distribution fees and other operating expenses, historical performance and asset
size.
The Board was advised that Officers Fund, with approximately only $7 million in
net assets as of October 31, 1997, was a small fund in terms of net assets with
higher shareholder administration, transfer agency, legal and other
non-management fee operating expenses than most other mutual funds in the
OppenheimerFunds complex. Such expenses were 0.63% at October 31, 1997. In
comparison, Value Fund had over $1 billion of net assets as of October 31, 1997,
with substantially lower non-management fee and distribution operating expenses
of 0.16% as of such date. The Board, in reviewing financial information,
considered that after giving effect to the fee waivers for Officers Fund, the
Total Fund Operating Expenses of Value Fund at October 31, 1997 (including
management fee and distribution expenses) were higher than those of Officers
Fund and would be higher on a pro forma basis after giving effect to the
Reorganization; however, without giving effect to the fee waivers for Officers
Fund, which are voluntary and can be terminated by the Manager and OFDI at any
time, the total operating expenses of Value Fund were, and after the
Reorganization would be, lower. See "Comparative Fee Tables". The Board
concluded that pursuant to the Reorganization, the shareholders of Officers Fund
would be shareholders of a substantially larger fund, with the potential to
incur lower ongoing transfer agency and other non-management and distribution
expenses and, to the extent the voluntary fee waivers of Officers Fund were
terminated, lower overall operating expenses. The Board further concluded that
economies of scale that apply to a larger mutual fund may benefit shareholders
of Officers Fund.
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<PAGE>
The Board considered that the funds have the same investment objective of
seeking capital appreciation, that the portfolio managers employ substantially
similar investment techniques and strategies for the funds, and that the
investment policies of the funds as recited in their respective Prospectuses
with respect to purchasing portfolio securities, hedging instruments, illiquid
securities, convertible securities, warrants and rights, portfolio lending and
the borrowing of money are substantially the same. The only notable difference
between the funds regarding investment policy is with respect to
diversification; Officers Fund is a non-diversified investment company, and the
proportion of its assets that may be invested in the securities of a single
issuer is not limited by the Investment Company Act, while Value Fund is a
diversified investment company and is diversified with respect to 75% of its
total assets. Due to these similarities, the Manager advised the Boards that the
portfolio securities held by Officers Fund could be suitable for investment by
Value Fund and, pursuant to the Reorganization, would be acquired without the
payment of brokerage commissions and other fees. The Board determined that the
funds, in terms of investment objectives, techniques and strategies, were
comparable and that pursuant to the Reorganization shareholders of Officers Fund
would be invested in a comparable mutual fund.
In addition to the above, the Board also considered information with respect to
the historical performance of Officers Fund and Value Fund, including the
performance information set forth below in "Expense Ratios and Performance". The
Board was advised by the Manager that overall, the average annual return on
Class A shares for Value Fund was better than that of Officers Fund and that the
prospects for Value Fund's performance in the future were positive. By contrast,
the Board also considered the future viability of Officers Fund due to its small
size, and that its prospects for increasing its asset base to achieve
efficiencies of scale was uncertain due to, among other things, below-average
performance, as discussed below in "Expense Ratios and Performance".
The Board next considered the terms and conditions of the Reorganization,
including that there would be no sales charge imposed in effecting the
Reorganization and that the Reorganization is expected to be a tax free
reorganization.
After consideration of the above factors, and such other factors and information
as the Board deemed relevant, the Board, including the Independent Trustees,
unanimously approved the Reorganization and the Reorganization Agreement and
voted to recommend its approval to the shareholders of Officers Fund.
The Board of Directors of Value Fund, including the Directors who are not
"interested persons" of Value Fund, unanimously approved the Reorganization and
the Reorganization Agreement and determined that the Reorganization is in the
best interests of Value Fund and its shareholders. The Board of Directors
further determined that the Reorganization would not result in dilution of Value
Fund shareholders' interests. The Board of Directors considered, among other
things, that Value Fund could acquire portfolio securities without incurring
brokerage and other transaction expenses,
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and that an increase in the asset base of Value Fund could benefit Value Fund
shareholders due to the economies of scale available to a larger mutual fund.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full as Exhibit A
to this Proxy Statement and Prospectus) contemplates a reorganization under
which (i) all of the assets of Officers Fund (other than the cash reserve
described below (the "Cash Reserve")) will be transferred to Value Fund in
exchange for Class A shares of Value Fund, (ii) these Class A shares of Value
Fund will be distributed among the shareholders of Officers Fund in complete
liquidation of Officers Fund, and (iii) the outstanding shares of Officers Fund
will be canceled. Value Fund will not assume any of Officers Fund's liabilities
except for portfolio securities purchased which have not settled and outstanding
shareholder redemption and dividend checks.
The result of effectuating the Reorganization would be that: (i) Value Fund will
add to its gross assets all of the assets (net of any liability for portfolio
securities purchased but not settled and outstanding shareholder redemption and
dividend checks) of Officers Fund other than its Cash Reserve; and (ii) the
shareholders of Officers Fund as of the close of business on the Closing Date
will become holders of Class A shares of Value Fund.
The effect of the Reorganization will be that shareholders of Officers Fund who
vote their Class A shares in favor of the Reorganization will be electing to
redeem their shares of Officers Fund (at net asset value on the Valuation Date
referred to below under "Method of Carrying Out the Reorganization Plan,"
calculated after subtracting the Cash Reserve) and reinvest the proceeds in
Class A shares of Value Fund at net asset value without sales charge and without
recognition of taxable gain or loss for Federal income tax purposes (see "Tax
Aspects of the Reorganization" below). The Cash Reserve is that amount retained
by Officers Fund which is sufficient in the discretion of the Board for the
payment of: (a) Officers Fund's expenses of liquidation, and (b) its
liabilities, other than those assumed by Value Fund. Officers Fund and Value
Fund will bear all of their respective expenses associated with the
Reorganization, as set forth under "Costs of the Solicitation and the
Reorganization" above. Management estimates that such expenses associated with
the Reorganization to be borne by Officers Fund will not exceed $25,000.
Liabilities as of the
date of the transfer of assets will consist primarily of accrued but unpaid
normal operating expenses of Officers Fund, excluding the cost of any portfolio
securities purchased but not yet settled and outstanding shareholder redemption
and dividend checks. See "Method of Carrying Out the Reorganization Plan" below.
The Reorganization Agreement provides for coordination between the funds as to
their respective portfolios so that, after the closing, Value Fund will be in
compliance with all of its investment policies and restrictions. Officers Fund
will recognize capital gain or loss on any sales made pursuant to this
paragraph.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the Reorganization
Agreement, Officers Fund will pay a dividend or dividends which, together with
all previous dividends, will have the effect of
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distributing to Officers Fund's shareholders all of Officers Fund's investment
company taxable income for taxable years ending on or prior to the Closing Date
(computed without regard to any deduction for dividends paid) and all of its net
capital gain, if any, realized in taxable years ending on or prior to the
Closing Date (after reduction for any available capital loss carry-forward).
Such dividends will be included in the taxable income of Officers Fund's
shareholders as ordinary income and capital gain, respectively.
The exchange of the assets of Officers Fund for Class A shares of Value Fund and
the assumption by Value Fund of certain liabilities of Officers Fund is intended
to qualify for Federal income tax purposes as a tax-free reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code").
Officers Fund has represented to Price Waterhouse LLP, tax adviser to the funds,
that there is no plan or intention by any Officers Fund shareholder who owns 5%
or more of Officers Fund's outstanding shares, and, to Officers Fund's best
knowledge, there is no plan or intention on the part of the remaining Officers
Fund shareholders, to redeem, sell, exchange or otherwise dispose of a number of
Value Fund Class A shares received in the transaction that would reduce Officers
Fund shareholders' ownership of Value Fund shares to a number of shares having a
value, as of the Closing Date, of less than 50% of the value of all the formerly
outstanding Officers Fund shares as of the same date. Value Fund and Officers
Fund have each represented to Price Waterhouse LLP, that, as of the Closing
Date, it will qualify as a regulated investment company or will meet the
diversification test of Section 368(a)(2)(F)(ii) of the Code.
As a condition to the closing of the Reorganization, Value Fund and Officers
Fund will receive the opinion of Price Waterhouse LLP to the effect that, based
on the Reorganization Agreement, the above representations, existing provisions
of the Code, Treasury Regulations issued thereunder, current Revenue Rulings,
Revenue Procedures and court decisions, for Federal income tax purposes:
1. The transactions contemplated by the Reorganization Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1)(c)
of the Code.
2. Officers Fund and Value Fund will each qualify as "a party to a
reorganization" within the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of Officers Fund
upon the distribution of Class A shares of Value Fund to the shareholders
of Officers Fund pursuant to Section
354(a)(1) of the Code.
4. Under Section 361(a) of the Code no gain or loss will be recognized by
Officers Fund by reason of the transfer of its assets solely in exchange
for Class A
shares of Value Fund.
5. Under Section 1032(a) of the Code no gain or loss will be recognized by
Value Fund by reason of the transfer of Officers Fund's assets solely in
exchange for Class A shares of Value Fund.
6. The shareholders of Officers Fund will have the same tax basis and holding
period for the Class A shares of Value Fund that they receive as they had
for Officers Fund shares that they previously held, pursuant to Sections
358(a)(1) and 1223(1) of the Code, respectively.
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7. The securities transferred by Officers Fund to Value Fund will have the
same tax basis and holding period in the hands of Value Fund as they had
for Officers Fund, pursuant to Sections
362(b) and 1223(2) of the Code, respectively.
Shareholders of Officers Fund should consult their tax advisors regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing discussion relates only to the Federal income
tax consequences of the Reorganization, shareholders of Officers Fund should
also consult their tax advisers as to state and local tax consequences, if any,
of the Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of Officers Fund and Value Fund
and indicates the pro forma combined capitalization as of October 31, 1997 as if
the Reorganization had occurred on that date.
Net Asset
Shares Value
Net Assets Outstanding Per Share
Oppenheimer Quest
Officers Value Fund
Class A $ 7,465,799 538,024 $13.88
Oppenheimer Quest
Value Fund, Inc.
Class A $699,230,322 34,130,613 $20.49
Class B* $298, 348,393 14,788,764 $20.17
Class C* $ 82,098,206 4,070,613 $20.17
Class Y* $ 3,086,417 150,224 $20.55
Oppenheimer Quest
Value Fund, Inc.
(Pro Forma Surviving Fund)**
Class A $706,696,121 34,494,976 $20.49
Class B* $298,348,393 14,788,764 $20.17
Class C* $ 82,098,206 4,070,613 $20.17
Class Y* $ 3,086,417 150,224 $20.55
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* No Value Fund Class B, Class C or Class Y shares are being issued in the
Reorganization because Officers Fund does not have Class B, Class C or Class Y
shares. ** Reflects issuance of 364,363 Class A shares of Value Fund in a
tax-free exchange for the net assets of Officers Fund, aggregating $7,465,799.
The pro forma ratio of expenses to average annual net assets of the combined
funds at October 31, 1997 would have been 1.60% with respect to Class A shares.
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COMPARISON BETWEEN
OFFICERS FUND AND VALUE FUND
Comparative information about Officers Fund and Value Fund is presented below.
More complete information about Value Fund and Officers Fund is set forth in
their respective Prospectuses (which as to Value Fund accompanies this Proxy
Statement and Prospectus and is incorporated herein by reference), and
additional information about both funds is set forth in documents that may be
obtained upon request of the transfer agent or upon review at the offices of the
SEC. See "Miscellaneous - Public Information."
Investment Objectives and Policies
The investment objectives and investment policies of the funds are substantially
the same. Each fund seeks capital appreciation. In seeking this investment
objective, each fund will invest in securities (primarily equity securities) of
companies believed to be undervalued in the marketplace in relation to factors
such as the companies' assets, earnings, growth potential and cash flows. Equity
securities are common stocks and preferred stocks; bonds, debentures and notes
convertible into common stocks; and depository receipts for such securities. The
funds may invest their assets in equity securities of companies with no limit as
to market capitalization.
Additional information with respect to the funds' investments and investment
policies is set forth below. Information about the risks and potential rewards
of such investments and investment policies is described above in the section
entitled "Principal Risk Factors" and is contained in each fund's respective
Prospectus and Statement of Additional Information. Unless stated to apply on an
ongoing basis, percentage restrictions set forth below and in "Investment
Restrictions" apply only at the time the fund makes an investment, and the fund
need not sell securities to meet the percentage limits if the value of the
investment increases in proportion to the size of the fund.
Fixed-Income Securities
The funds are permitted to invest in fixed-income securities and may invest up
to 25% of net assets (as to Officers Fund) or without limit (as to Value Fund,
although it is the present intention of Value Fund to invest no more than 5% of
its total assets) in high-yield, lower-grade bonds (commonly known as "high
yield" or "junk bonds"). Such securities are rated below "investment grade,"
which means they have a rating lower than "Baa3" by Moody's or lower than "BBB-"
by S&P or similar ratings by other rating organizations, or if unrated, are
determined by the Sub-Adviser to be of comparable quality to debt securities
rated below investment grade. A reduction in the rating of a security after its
purchase by the fund will not require the fund to dispose of the security. As of
the October 31, 1997, the end of the funds' last fiscal year, neither fund held
securities rated below investment grade.
Both funds may invest in convertible fixed-income securities. These securities
are bonds, debentures or notes that may be converted into or exchanged for a
prescribed amount of company stock of the same or a different issue within a
particular period of time at a specified price or formula. The funds consider
convertible securities to be "equity equivalents" because of the conversion
feature and the
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security's rating has less impact on the investment decision than in the case of
non-convertible securities.
To provide liquidity for the purchase of new instruments and to effect
redemptions of shares, each fund typically invests a part of its assets in
various types of U.S. Government securities and high quality, short-term debt
securities with remaining maturities of one year or less such as government
obligations, certificates of deposit, bankers' acceptances, commercial paper,
short-term corporate securities and repurchase agreements ("money market
instruments").
Foreign Securities
The funds may purchase foreign securities that are listed on a domestic or
foreign securities exchange, traded in domestic or foreign over-the-counter
markets or represented by American Depository Receipts, European Depository
Receipts or Global Depository Receipts. There is no limit to the amount of
foreign securities the funds may acquire. Investments in securities of issuers
in underdeveloped countries or countries that have emerging markets generally
may offer greater potential for gain but involve more risk and may be considered
highly speculative. The funds will hold foreign currency only in connection with
the purchase or sale of foreign securities.
Portfolio Turnover
A change in the securities held by either fund is known as "portfolio turnover."
Neither fund ordinarily engages in short-term trading to try to achieve its
objective. As a result, each fund's portfolio turnover (excluding turnover of
securities having a maturity of one year or less) is not expected to be more
than 100% each year. For each fund's portfolio turnover rate, see "Financial
Highlights" in each fund's respective Prospectus or Annual Report. Portfolio
turnover affects brokerage costs, dealer markups and other transaction costs,
and results in the Fund's realization of capital gains or losses for tax
purposes.
Hedging
Both funds may purchase and sell certain kinds of futures contracts, forward
contracts, and options. These are all referred to as "hedging instruments."
Neither fund uses hedging instruments for speculative purposes, and both have
limits on the use of them. Both funds may use hedging instruments for a number
of purposes. Each fund may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute for
purchasing individual securities. Some of these strategies, such as selling
futures, buying puts and writing covered calls, hedge the fund's portfolio
against price fluctuations. Other hedging strategies, such as buying futures and
call options, tend to increase the funds' exposure to the securities market.
Forward contracts are used by both funds to try to manage foreign currency risks
on foreign investments.
Both funds may buy and sell futures contracts that relate to broadly-based stock
indices (these are referred to as Stock Index Futures) and foreign currencies
(these are called Forward Contracts and are discussed below). Officers Fund may
also buy and sell futures contracts that relate to commodities.
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Both funds may buy and sell exchange-traded put options (puts) and call options
(calls) on broadly- based stock indices to protect their respective assets. A
call or put option may not be purchased by either fund if the value of all of
the fund's put and call options would exceed 5% of the fund's total assets. Each
call the funds write must be "covered" while it is outstanding. That means the
fund must own other securities that are acceptable for the escrow arrangements
required for calls. After Officers Fund writes a call, not more than 25% of its
total assets may be subject to calls. Officers fund will not write a put if it
will require more than 25% of its net assets to be segregated.
Forward contracts are foreign currency exchange contracts. They are used to buy
or sell foreign currency for future delivery at a fixed price. Both funds may
use them to try to "lock in" the U.S. dollar price of a security denominated in
a foreign currency that the fund has bought or sold, or to protect against
possible losses from changes in the relative values of the U.S. dollar and
foreign currency. Both funds limit their exposure in foreign currency exchange
contracts in a particular foreign currency to the amount of their respective
assets denominated in that currency or in a closely- correlated currency.
Loans of Portfolio Securities
To attempt to raise cash for liquidity purposes, the funds may lend their
respective portfolio securities to brokers, dealers and other financial
institutions. The fund must receive collateral for a loan. After any loan, the
value of the securities loaned is not expected to exceed 33-1/3% (as to Officers
Fund) or 10% (as to Value Fund) of the value of the total assets of the fund.
There are some risks in connection with securities lending. The fund might
experience a delay in receiving additional collateral to secure a loan or a
delay in recovery of the loaned securities.
Illiquid and Restricted Securities
Both of the funds may invest in illiquid and restricted securities. Investments
may be illiquid because of the absence of an active trading market, making it
difficult to value them or dispose of them promptly at an acceptable price. A
restricted security is one that has a contractual restriction on its resale or
that cannot be sold publicly until it is registered under the Securities Act of
1933. The funds will not invest more than 15% of their respective net assets in
illiquid and restricted securities, including repurchase agreements that have a
maturity of longer than seven days and certain over-the-counter options. The
funds' percentage limitation on these investments does not apply to certain
restricted securities that are eligible for resale to qualified institutional
purchasers.
Repurchase Agreements
Each of the funds may enter into repurchase agreements to generate income for
liquidity purposes to meet anticipated redemptions, or pending the investment of
proceeds from sales of fund shares or settlement of purchases of portfolio
investments. Neither of the funds will enter into repurchase agreements that
will cause more than 15% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. In a repurchase transaction, the
fund buys a security and simultaneously sells it to the vendor for delivery at a
future date. Repurchase agreements must be fully collateralized. However, if the
vendor fails to pay the resale price on the delivery date, the fund may incur
costs in disposing of the collateral and may experience losses if there is any
delay in its
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ability to do so. The funds may also enter into reverse repurchase agreements.
Under such agreements, the fund sells securities and agrees to repurchase them
at a mutually agreed upon date and price. Reverse repurchase agreements create
leverage, a speculative factor, and will be considered borrowings by the fund
for purposes of certain percentage limitations on borrowing.
"When-Issued" and Delayed Delivery Transactions
Both funds may purchase securities on a "when-issued" basis, and may purchase or
sell such securities on a "delayed delivery" basis or on a "firm commitment"
basis. These terms refer to securities that have been created and for which a
market exists, but which are not available for immediate delivery. During the
period between the purchase and settlement, the underlying securities are
subject to market fluctuations and no interest accrues prior to delivery of the
securities.
Borrowing
As a fundamental policy, neither fund may borrow money in excess of 33-1/3% of
the value of its total assets. Further, Officers Fund will not purchase any
securities at a time while such borrowings exceed 5% of its total assets and
will only borrow as a temporary measure for extraordinary or emergency purposes.
Value Fund may, but has no present intention to, borrow for leveraging purposes.
This investment technique may subject the funds to greater risks and costs,
including the burden of interest expense, an expense the funds would not
otherwise incur. The funds can borrow only if each maintains a 300% ratio of
assets to borrowings at all times in the manner set forth in the Investment
Company Act.
Investment in Other Investment Companies
The funds generally may invest up to 10% of their respective total assets in the
aggregate in shares of other investment companies and up to 5% of their
respective total assets in any one investment company, as long as each
investment does not represent more than 3% of the outstanding voting securities
of the acquired investment company. These limitations do not apply in the case
of investment company securities which may be purchased as part of a plan of
merger, consolidation, reorganization or acquisition. Investment in other
investment companies may involve the payment of substantial premiums above the
value of such investment companies' portfolio securities, and is subject to
limitations under the Investment Company Act and market availability. Neither
fund intends to invest in such investment companies unless, in the judgment of
the Manager, the potential benefits of such investment justify the payment of
any applicable premiums or sales charge. As a shareholder in an investment
company, the fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees. At the same time, the
fund would continue to pay its own management fees and other expenses.
Temporary Defensive Investments
In times of unstable market or economic conditions, when the Sub-Adviser
determines it appropriate to do so to attempt to reduce fluctuations in the
value of the funds' net assets, the funds may assume a temporary defensive
position and invest an unlimited amount of assets in U.S. Government securities
and money market instruments of the type identified above under "Fixed-Income
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Securities". At any time that either fund invests for temporary defensive
purposes, to the extent of such investments, it is not pursuing its investment
objective.
Investing in Small, Unseasoned Companies
Value Fund may invest up to 15% of its total assets and Officers Fund may invest
up to 5% of its total assets in securities of small, unseasoned companies. These
are companies that have been in continuous operation for less than three years,
counting the operations of any predecessors. Securities of these companies may
have limited liquidity (which means that the fund may have difficulty selling
them at an acceptable price when it wants to) and the prices of these securities
may be volatile.
Warrants and Rights
Warrants basically are options to purchase stock at set prices that are valid
for a limited period of time. Rights are similar to warrants but normally have a
short duration and are distributed directly by the issuer to its shareholders.
Officers Fund may invest up to 5% of its total assets in warrants or rights.
Value Fund may not invest more than 5% of its total assets in warrants; this 5%
limitation does not apply to warrants Value Fund has acquired as part of units
with other securities or that are attached to other securities.
Investment Restrictions
Both Officers Fund and Value Fund have certain additional investment
restrictions that, together with their investment objectives, are fundamental
policies, changeable only by shareholder approval. Generally, these investment
restrictions are similar between the funds and are discussed below.
Similar investment restrictions that are fundamental policies:
Concentration: Officers Fund cannot concentrate its investments in any
particular industry, but if deemed appropriate for attaining its investment
objective, the fund may invest up to 25% of its total assets (valued at the time
of investment) in any one industry classification used by the fund for
investment purposes (for this purpose, a foreign government is considered an
industry); (this restriction does not apply to U.S. Government securities);
Value Fund has the same restriction.
Borrowing: Neither fund may borrow money in excess of 33-1/3% of the value of
the its total assets
(see "Borrowing" above).
Real Estate: Officers Fund cannot invest in real estate or interests in real
estate (including limited partnership interests), but may purchase readily
marketable securities of companies holding real estate or interests therein;
Value Fund has the same restriction.
Underwriting: Officers Fund cannot underwrite securities of other companies,
except insofar as it might be deemed to be an underwriter for purposes of the
Securities Act of 1933 in the resale of any securities held in its own portfolio
(except that the fund may in the future invest all of its investable
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assets in an open-end management investment company with substantially the same
investment objective and restrictions as the fund); Value Fund has the same
restriction.
Pledge Assets: Officers Fund cannot mortgage, hypothecate or pledge any of
its assets; Value Fund
has the same restriction.
Investment in Certain Issuers: Officers Fund cannot invest or hold securities of
any issuer if the officers and Trustees of the Trust or its Manager or
Sub-Adviser owning individually more then 1/2 of 1% of the securities of such
issuer together own more than 5% of the securities of such issuer; Value Fund
has the same restriction.
Investment for Control: Officers Fund cannot invest in companies for the primary
purpose of acquiring control or management thereof (except that the fund may in
the future invest all of its investable assets in an open-end management
investment company with substantially the same investment objective and
restrictions as the fund); Value Fund has the same restriction.
Investment in Commodities: Officers Fund cannot invest in physical commodities
or physical commodity contracts; however, the fund may: (i) buy and sell hedging
instruments to the extent specified in its Prospectus from time to time, and
(ii) buy and sell options, futures, securities or other instruments backed by,
or the investment return from which is linked to changes in the price of,
physical commodities; Value Fund has the same restriction but is limited as to
(ii) to options on stock indices.
Options: Officers Fund cannot write, purchase or sell puts, calls, or
combinations thereof on individual stocks, but may purchase or sell exchange
traded put and call options on stock indices to protect the fund's assets; Value
Fund has the same restriction.
Different investment restrictions that are fundamental policies:
Diversification: Value Fund cannot, with respect to 75% of its total assets,
invest more than 5% of the value of its total assets in the securities of any
one issuer or purchase more than 10% of the outstanding voting securities of any
one issuer (other than U.S. Government securities issued or guaranteed by the
U.S. Government or any agency or instrumentality thereof) or purchase more than
10% of any class of security of any issuer, with all outstanding debt securities
and all preferred stock of an issuer each being considered as one class (this
restriction does not apply to U.S. Government securities); as described above,
Officers Fund is classified as a "non-diversified" investment company under the
Investment Company Act.
Set forth below are certain non-fundamental policies and guidelines of the funds
changeable without shareholder vote.
Margin and Short Sales: Officers Fund cannot purchase securities on margin, or
make short sales of securities; Value Fund has the same restriction.
Loans: Officers Fund cannot make loans to any person or individual (except that
portfolio securities may be loaned within the limitations set forth in the
Prospectus); Value Fund has the same restriction.
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Oil, Gas and Mineral Investment: Officers Fund cannot invest in interests in
oil, gas or other mineral exploration or development programs or leases; Value
Fund has the same restriction.
Description of Brokerage Practices
The brokerage practices of the funds are the same. Portfolio decisions are based
upon recommendations of the portfolio manager and the judgment of the portfolio
managers. The funds will pay brokerage commissions on transactions in listed
options and equity securities. Prices of portfolio securities purchased from
underwriters of new issues include a commission or concession paid by the issuer
to the underwriter, and prices of debt securities purchased from dealers include
a spread between the bid and asked prices.
Transactions may be directed to dealers during the course of an underwriting in
return for their brokerage and research services, which are intangible and on
which no dollar value can be placed. There is no formula for such allocation.
The research information may or may not be useful to one or more of the funds
and/or other accounts of the Manager or the Sub-Adviser; information received in
connection with directed orders of other accounts managed by the Manager or the
Sub-Adviser or its affiliates may or may not be useful to one or more of the
funds. Such information may be in written or oral form and includes information
on particular companies and industries as well as market, economic or
institutional activity areas. It serves to broaden the scope and supplement the
research activities of the Manager or the Sub-Adviser, to make available
additional views for consid eration and comparison, and to enable the Manager or
the Sub-Adviser to obtain market information for the valuation of securities
held in the fund's assets.
Sales of shares of the funds, subject to applicable rules covering the
Distributor's activities in this area, will also be considered as a factor in
the direction of portfolio transactions to dealers, but only in conformity with
the price, execution and other considerations and practices discussed above. The
funds will not purchase any securities from or sell any securities to an
affiliated broker-dealer acting as principal for its own account.
The Sub-Adviser currently serves as investment manager to a number of clients,
including other investment companies, and may in the future act as investment
manager or advisor to others. It is the practice of the Sub-Adviser to cause
purchase or sale transactions to be allocated among the funds and others whose
assets it manages in such manner as it deems equitable. In making such
allocations among the funds and other client accounts, the main factors
considered are the respective investment objectives, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and the
opinions of the persons responsible for managing the portfolios of each fund and
other client accounts.
When orders to purchase or sell the same security on identical terms are placed
by more than one of the funds and/or other advisory accounts managed by the
Sub-Adviser or its affiliates, the transactions are generally executed as
received, although a fund or advisory account that does not direct trades to a
specific broker ("free trades") usually will have its order executed first.
Purchases are combined where possible for the purpose of negotiating brokerage
commissions, which in some cases might have a detrimental effect on the price or
volume of the security in a particular transaction as far as the fund is
concerned. Orders placed by accounts that direct trades to a specific broker
will generally
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be executed after the free trades. All orders placed on behalf of the fund are
considered free trades. However, having an order placed first in the market does
not necessarily guarantee the most favorable price.
The following table presents information as to the allocation of brokerage
commissions paid by the funds for the fiscal years ended October 31, 1995, 1996
and 1997. Prior to November 3, 1997, Oppenheimer & Co., Inc. ("OpCo"), a
broker-dealer, was an affiliate of the Sub-Adviser.
Total Amount of
Total Transactions Where
For the Brokerage Brokerage Commissios BrokerageCommissions
Fiscal Year Commissions Paid to Opco Paid to Opco
Ended Paid Dollar Amount % Dollar Amount %
Value Fund
10/31/95 $309,310 $156,970 50.7% $ 99,572,945 52.1%
10/31/96 $387,892 $159,127 41.0 % $135,054,378 39.4%
10/31/97 $484,014 $198,916 41.1 % $198,471,852 38.4%
Officers Fund
10/31/95 $11,593 $ 4,461 38.5% $2,153,416 39.8%
10/31/96 $34,368 $13,921 40.5% $8,359,426 34.3%
10/31/97 $39,359 $13,558 34.4 % $4,535,870 20.2%
During Value Fund's fiscal year ended October 31, 1997, $50,922 was paid by
Value Fund to brokers as commissions in return for research services; the
aggregate dollar amount of those transactions was $47,589,083. During Officers
Fund's fiscal year ended October 31, 1997, $3,255 was paid by Officers Fund to
brokers as commissions in return for research services; the aggregate dollar
amount of those transactions was $1,589,791.
Please refer to the Statement of Additional Information for each fund for
further information on each fund's brokerage practices.
Expense Ratios and Performance
The ratio of expenses to average annual net assets for Class A shares of
Officers Fund for the fiscal year ended October 31, 1997 both before and after
giving effect to fee waivers was 2.13% and 1.29%, respectively. The ratio of
expenses to average annual net assets for Class A shares of Value Fund for the
fiscal year ended October 31, 1997 was 1.60%. Further details are set forth
above under "Comparative Fee Tables", and in Officers Fund's Annual Report as of
October 31, 1997 and Value Fund's Annual Report as of October 31, 1997, which
are included in the Statement of Additional Information.
The average annual total returns on an investment in Class A shares of Officers
Fund for the one year period ended October 31, 1997 and for the period from
November 8, 1994 (commencement of operations) to October 31, 1997 were (4.28%)
and 17.01%, respectively. The average annual total returns at net asset value
for Class A shares of Officers Fund for the one year period ended October 31,
1997 and for the period from November 8, 1994 through October 31, 1997 were
1.56% and
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19.36%, respectively. Total returns for Officers Fund reflect the waiver of
management fees and distribution expenses as described herein. Without such
waivers, the total returns for Officers Fund for such periods would have been
lower. These waivers became effective on August 1, 1996 and are currently in
effect.
The average annual total returns on an investment in Class A shares of Value
Fund for the one, five and ten year periods ended October 31, 1997 and for the
period from April 30, 1980 (commencement of operations) to October 31, 1997 were
18.20%, 17.42%, 15.88% and 19.02%, respectively. The average annual total
returns at net asset value for Class A shares for the one, five and ten year
periods ended October 31, 1997 and for the period from April 30, 1980 through
October 31, 1997 were 25.41%, 18.82%, 16.57% and 19.43%, respectively.
An explanation of the different performance calculations is set forth in each
fund's Prospectus.
Shareholder Services
The policies of Officers Fund and Value Fund with respect to minimum initial
investments and subsequent investments by its shareholders are the same. Both
Officers Fund and Value Fund offer the following privileges: (i) Right of
Accumulation, (ii) Letter of Intent, (iii) reinvestment of dividends and
distributions at net asset value, (iv) net asset value purchases by certain
individuals and entities, (v) Asset Builder (automatic investment) Plans, (vi)
Automatic Withdrawal and Exchange Plans for shareholders who own shares of the
fund valued at $5,000 or more, (vii) AccountLink and PhoneLink arrangements,
(viii) exchanges of shares for shares of the same class of certain other funds
at net asset value, and (ix) telephone redemption and exchange privileges.
Shareholders may purchase shares through OppenheimerFunds AccountLink, which
links a shareholder account to an account at a bank or financial institution and
enables shareholders to send money electronically between those accounts to
perform a number of types of account transactions. This includes the purchase of
shares through the automated telephone system (PhoneLink). Exchanges can also be
made by telephone, or automatically through PhoneLink. After AccountLink
privileges have been established with a bank account, shares may be purchased by
telephone in an amount up to $100,000. Shares of either fund may be exchanged
for shares of certain OppenheimerFunds at net asset value per share; however,
shares of a particular class may be exchanged only for shares of the same class
of other OppenheimerFunds. Shareholders of the funds may redeem their shares by
written request or by telephone request in an amount up to $50,000 in any
seven-day period. Shareholders may arrange to have share redemption proceeds
wired to a predesignated account at a U.S. bank or other financial institution
that is an ACH member, through AccountLink. There is no dollar limit on
telephone redemption proceeds sent to a bank account when AccountLink has been
established. Shareholders may also redeem shares automatically by telephone by
using PhoneLink. Shareholders of the funds may also have the Transfer Agent send
redemption proceeds of $2,500 or more by Federal Funds wire to a designated
commercial bank which is a member of the Federal Reserve wire system.
Shareholders of the funds have up to six months to reinvest redemption proceeds
of their Class A shares which they purchase subject to a sales charge or, as to
Value Fund, their Class B shares on which they paid a contingent deferred sales
charge, in Class A shares of the funds or other Oppenheimer funds without paying
a sales charge. Each fund may redeem accounts valued at less than $500 if the
account has fallen below such stated amount for
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reasons other than market value fluctuations. Both funds offer Automatic
Withdrawal and Automatic Exchange Plans under certain conditions.
Rights of Shareholders
The shares of each fund, including shares of each class, entitle the holder to
one vote per share on the election of Trustees of the Trust or Directors of
Value Funds, as applicable, and on all other matters submitted to shareholders
of the fund. Each share of the fund represents an interest in the fund
proportionately equal to the interest 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 shareholder meetings.
Shareholders of Value Fund vote together, and shareholders of Officers Fund vote
together with the shareholders of other series of the Trust in the aggregate, on
certain matters at shareholder meetings, such as the election of Trustees and
ratification of appointment of auditors. 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 are not affected by that matter are not
entitled to vote on the proposal. For example, only shareholders of a series,
such as Officers Fund, vote exclusively on any material amendment to the
investment advisory agreement with respect to the series. Only shareholders of a
class of shares vote on certain amendments to the Distribution and/or Service
Plans if the amendments affect only that class. The Board and the Board of
Directors of Value Fund are authorized to create new series and classes of
series. The Boards may reclassify unissued shares of the funds into additional
series or classes of shares. The Boards 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 each fund. Shares do not
have cumulative voting rights or preemptive or subscription rights. Shares may
be voted in person or by proxy. Each share has one vote at shareholder meetings,
with fractional shares voting proportionately. Shares of a particular class vote
together on matters that affect that class. Most amendments to the Declaration
of Trust governing Officers Fund or the Articles of Incorporation governing
Value Fund require the approval of a "majority" of the outstanding voting
securities (as defined in the Investment Company Act) of the respective Trust or
Value Fund's shares without regard to class. Under certain circumstances,
shareholders of Officers Fund may be held personally liable as partners for the
fund's obligations, however, under the Declaration of Trust such a shareholder
is entitled to certain indemnification rights and the risk of a shareholder
incurring any such loss is limited to the remote circumstances in which the fund
is unable to meet its obligations.
As to Value Fund, outstanding Class A, B, C and Y shares participate equally in
the fund's dividends and distributions and in the fund's net assets upon
liquidation, after taking into account the different expenses paid by each
class. Distributions and dividends for each class will be different, and Class B
and Class C dividends and distributions will be lower than Class A and Class Y
dividends. Officers Fund has one class of shares outstanding.
It is not contemplated that the Trust or Value Fund will hold regular annual
meetings of shareholders. Under the Investment Company Act, shareholders of
Officers Fund do not have rights of appraisal as a result of the transactions
contemplated by the Reorganization Agreement. However, they have the right at
any time prior to the consummation of such transaction to redeem their shares at
net asset value, less any applicable contingent deferred sales charge.
Shareholders of both of the funds have
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the right, under certain circumstances, to remove a Trustee or Director and will
be assisted in communicating with other shareholders for such purpose.
Organization and History
The Trust, Oppenheimer Quest For Value Funds, was organized in April 1987 as a
multi-series Massachusetts business trust and Officers Fund is a non-diversified
series of the Trust. The Trust is an open-end management investment company,
with an unlimited number of authorized shares of beneficial interest. Value Fund
is a diversified, open-end management investment company that was organized in
August 1979 as a Maryland corporation. The Manager acts as investment adviser to
the funds, the Sub-Adviser acts as sub-adviser to the funds and the portfolio
managers for the funds are employed by the Sub-Adviser. The Trustees of the
Trust and the Directors of Value Fund are the same, and oversee the Manager, the
Sub-Adviser and the portfolio managers.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York 10048-0203,
acts as the investment adviser to both Officers Fund and Value Fund. The terms
and conditions of the investment advisory agreement for each fund are
substantially the same. The monthly management fee payable to the Manager by
each fund is set forth under "Synopsis Investment Advisory and Distribution and
Service Plan Fees" along with the fees paid by the Manager to the Sub-Adviser
for the funds. The 12b-1 Distribution and Service Plan fees paid by the funds
with respect to Class A shares are also set forth above under "Synopsis
Investment Advisory and Distribution and Service Plan Fees."
Pursuant to each investment advisory agreement, the Manager acts as the
investment adviser for the funds and supervises the investment program of the
funds. The investment advisory agreements state that the Manager will provide
administrative services for the funds, including completion and maintenance of
records, preparation and filing of reports required by the SEC, reports to
shareholders, and composition of proxy statements and registration statements
required by Federal and state securities laws. Further, the Manager has agreed
to furnish the funds with office space, facilities and equipment and arrange for
its employees to serve as officers of the Trust (as to Officers Fund) and Value
Fund. The administrative services to be provided by the Manager under the
investment advisory agreement will be at its own expense, except that the funds
pay the Manager an annual fee for calculating their respective daily net asset
value at an annual rate of $6,000 (as to Officers Fund) and $55,000 (as to Value
Fund), plus reimbursement for out-of-pocket expenses.
The Sub-Adviser acts as the sub-adviser to the funds pursuant to the terms of a
subadvisory agreement between the Manager and the Sub-Adviser for each fund. The
Sub-Adviser previously acted as the investment adviser to the funds prior to
November 22, 1995. The terms and conditions of the subadvisory agreements for
each fund are substantially the same. The subadvisory agreements provide that
the Sub-Adviser will regularly provide investment advice with respect to the
funds, invest and reinvest cash, securities and the property comprising the
assets of each fund and perform such other duties and responsibilities as are
set forth in its contract with the Manager. The Manager, not the funds, pays the
Sub-Adviser.
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Expenses not expressly assumed by the Manager under each fund's advisory
agreement or by the Distributor under the General Distributor's Agreement are
paid by the funds. The investment advisory agreements list examples of expenses
paid by the funds, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees or Directors, legal and audit
expenses, custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including litigation
costs. The management fee paid by Officers Fund for the fiscal year ended
October 31, 1997 was $60,074 (after giving effect to fee waivers). During the
fiscal year ended October 31, 1997, Officers Fund also paid or accrued
accounting service fees to the Manager in the amount of $5,987. The management
fee paid by Value Fund for the fiscal year ended October 31, 1997 was
$7,708,982. During the fiscal year ended October 31, 1997, Value Fund also paid
or accrued accounting service fees to the Manager in the amount of $54,325.
The investment advisory agreement for Officers Fund contains no expense
limitation. However, independently of the Agreement, effective August 1, 1996,
the Manager voluntarily agreed to waive that portion of its management fee equal
to what the Manager would have been required to pay the Sub-Adviser under the
Subadvisory Agreement described below. Pursuant to the foregoing, the Manager's
fee at the end of any month will be reduced or eliminated such that there will
not be any accrued but unpaid liability under the fee waiver. Any waiver of fees
would lower Officers Fund's overall expense ratio and increase its total return
during any period in which they are in effect.
The investment advisory agreement provides that in the absence of willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
reckless disregard for its obligations and duties under the advisory agreement,
the Manager is not liable for any loss resulting from good faith errors or
omissions on its part with respect to any of its duties thereunder. The
investment advisory agreement permits the Manager to act as investment adviser
for any other person, firm or corporation and to use the name "Oppenheimer" or
"Quest For Value" in connection with its other investment companies for which it
may act as an investment adviser or general distributor. If the Manager shall no
longer act as investment adviser to a fund, the right of the fund to use
"Oppenheimer" or "Quest For Value" as part of its name may be withdrawn.
The Manager is controlled by Oppenheimer Acquisition Corp., a holding company
owned in part by senior management of the Manager and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance company
that also advises pension plans and investment companies. The Manager has
operated as an investment company adviser since 1959. The Manager and its
affiliates currently advise investment companies with combined net assets
aggregating over $85 billion as of March 31, 1998, with more than 4 million
shareholder accounts. OppenheimerFunds Services, a division of the Manager, acts
as transfer and shareholder servicing agent for Officers Fund and Value Fund and
for certain other open-end funds managed by the Manager and its affiliates; for
its services, the funds pay the transfer agent an annual maintenance fee for
each fund shareholder account and reimburse the transfer agent for its out of
pocket expenses.
The Sub-Adviser is a majority owned subsidiary of Oppenheimer Capital, a
registered investment advisor, whose employees perform all investment advisory
services provided to the funds by the Sub- Adviser. On November 4, 1997, PIMCO
Advisors L.P. ("PIMCO Advisors"), a registered investment adviser with $125
billion in assets under management through various subsidiaries and affiliates,
acquired control of Oppenheimer Capital and the Sub-Adviser. On November 5,
1997, the
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new Sub-Advisory Agreement between the Sub-Adviser and the Manager became
effective. On November 30, 1997, Oppenheimer Capital merged with a subsidiary of
PIMCO Advisors and, as a result, Oppenheimer Capital and the Sub-Adviser became
indirect wholly-owned subsidiaries of PIMCO Advisors. PIMCO Advisors has two
general partners: PIMCO Partners, G.P., a California general partnership ("PIMCO
GP"), and PIMCO Advisors Holdings L.P. (formerly Oppenheimer Capital, L.P.), an
NYSE-listed Delaware limited partnership of which PIMCO GP is the sole general
partner.
PIMCO GP beneficially owns or controls (through its general partner interest in
Oppenheimer Capital, L.P.) greater than 80% of the units of limited partnership
("Units") of PIMCO Advisors. PIMCO GP has two general partners. The first of
these is Pacific Investment Management Company, a wholly-owned subsidiary of
Pacific Financial Asset Management Company, which is a direct subsidiary of
Pacific Life Insurance Company ("Pacific Life").
The managing general partner of PIMCO GP is PIMCO Partners L.L.C. ("PPLLC"), a
California limited liability company. PPLLC's members are the Managing Directors
(the "PIMCO Managers") of Pacific Investment Management Company, a subsidiary of
PIMCO Advisors (the "PIMCO Subpartnership"). The PIMCO Managers are: William H.
Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich, III, Brent R.
Harris, John L. Hague, William S. Thompson Jr., William C. Powers, David H.
Edington, Benjamin Trosky, William R. Benz, II and Lee R. Thomas, III.
PIMCO Advisors is governed by a Management Board, which consists of sixteen
members, pursuant to a delegation by its general partners. PIMCO GP has the
power to designate up to nine members of the Management Board and the PIMCO
Subpartnership, of which the PIMCO Managers are the Managing Directors, has the
power to designate up to two members. In addition, PIMCO GP, as the controlling
general partner of PIMCO Advisors, has the power to revoke the delegation to the
Management Board and exercise control of PIMCO Advisors. As a result, Pacific
Life and/or the PIMCO Managers may be deemed to control PIMCO Advisors. Pacific
Life and the PIMCO Managers disclaim such control.
The Distributor, under a General Distributor's Agreement for each of the funds,
acts as the principal underwriter in the continuous public offering of Class A,
Class B and Class C shares of each fund but is not obligated to sell a specific
number of shares. To date, Class B and Class C shares of Officers Fund have not
been issued. Expenses normally attributable to sales, including advertising and
the cost of printing and mailing Prospectuses, other than those furnished to
existing shareholders, are borne by the Distributor. During Officers Fund's
fiscal year ended October 31, 1997, the aggregate amount of sales charges on
sales of its Class A shares was $1,822, none of which was retained by the
Distributor or an affiliated broker. During Value Fund's fiscal year ended
October 31, 1997, the aggregate amount of sales charges on sales of its Class A
shares was $3,638,204, of which the Distributor and affiliated brokers retained
$910,431. For additional information about distribution of the funds' shares and
the payments made by the funds to the Distributor in connection with such
activities, please refer to "Distribution and Service Plans," in each fund's
Statement of Additional Information.
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Purchase of Additional Shares
Class A shares of Officers Fund and Class A shares of Value Fund generally may
be purchased with an initial sales charge of 5.75% for purchases of less than
$25,000. The sales charge of 5.75% is reduced for purchases of either fund's
Class A shares of $25,000 or more. For purchases of $1 million or more ($500,000
or more for purchases by "Retirement Plans", as defined in each fund's
Prospectus) if those shares are redeemed within 12 calendar months (18 months
for shares purchased prior to May 1, 1997) of the end of the calendar month of
their purchase, a contingent sales charge may be deducted from the redemption
proceeds. Class A shares of Officers Fund have to date been sold to a limited
group of individuals and entities, as noted above, and who have qualified for a
waiver of the Class A sales charge as set forth in the fund's Prospectus.
Class B shares of the funds are sold at net asset value without an initial sales
charge, however, if Class B shares are redeemed within six years of the end of
the calendar month of their purchase, a contingent deferred sales charge may be
deducted of up to 5%, depending upon how long such shares had been held. Class C
shares may be purchased without an initial sales charge, but if sold within 12
months of buying them, a contingent deferred sales charge of 1% may be deducted.
The Class A shares to be issued under the Reorganization Agreement will be
issued by Value Fund at net asset value. Future dividends and capital gain
distributions of Value Fund, if any, may be reinvested without sales charge. The
initial sales charge and contingent deferred sales charge on Class A shares of
Value Fund will only affect shareholders of Officers Fund to the extent that
they desire to make additional purchases of shares of Value Fund in addition to
the shares which they will receive as a result of the Reorganization and to the
extent that they no longer qualify for a waiver of the Class A sales charge as
set forth in Value Fund's current Prospectus.
Dividends and Distributions
The funds declare dividends from net investment income on an annual basis and
normally pay those dividends to shareholders following the end of their
respective fiscal years (October 31). The funds may also make distributions
annually in December out of any net short-term or long-term capital gains, and
may make supplemental distributions of dividends and capital gains following its
fiscal year. Dividends are paid separately for each class of shares and
normally, the dividends on Class A and Class Y shares are generally expected to
be higher than for Class B and Class C shares because the expenses allocable to
Class B and Class C shares will generally be higher than for Class A and Class Y
shares. There is no fixed dividend rate for either fund and there can be no
assurance that either fund will pay any dividends or distributions.
METHOD OF CARRYING OUT THE REORGANIZATION
The consummation of the transactions contemplated by the Reorganization
Agreement is contingent upon the approval of the Reorganization by the
shareholders of Officers Fund and the receipt of the opinions and certificates
set forth in Sections 10 and 11 of the Reorganization Agreement and the
occurrence of the events described in those Sections. Under the Reorganization
Agreement, all the assets of Officers Fund, excluding the Cash Reserve, will be
delivered to Value Fund in exchange for
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Class A shares of Value Fund. The Cash Reserve to be retained by Officers Fund
will be sufficient in the discretion of the Board for the payment of Officers
Fund's liabilities, and Officers Fund's expenses of liquidation.
Assuming the shareholders of Officers Fund approve the Reorganization, the
actual exchange of assets is expected to take place on June 12, 1998, or as soon
thereafter as is practicable (the "Closing Date") on the basis of net asset
values as of the close of business on the business day preceding the Closing
Date (the "Valuation Date"). Under the Reorganization Agreement, all redemptions
of shares of Officers Fund shall be permanently suspended at the close of
business on the Valuation Date; only redemption requests received in proper form
on or prior to the close of business on that date shall be fulfilled by it;
redemption requests received by Officers Fund after that date will be treated as
requests for redemptions of Class A shares of Value Fund to be distributed to
the shareholders requesting redemption. The exchange of assets for shares will
be done on the basis of the per share net asset value of the Class A shares of
Value Fund, and the value of the assets of Officers Fund to be transferred as of
the close of business on the Valuation Date, valued in the manner used by Value
Fund in the valuation of assets. Value Fund is not assuming any of the
liabilities of Officers Fund, except for portfolio securities purchased which
have not settled and outstanding shareholder redemption and dividend checks.
The net asset value of the shares transferred by Value Fund to Officers Fund
will be the same as the value of the assets received by Value Fund. For example,
if, on the Valuation Date, Officers Fund were to have securities with a market
value of $95,000 and cash in the amount of $10,000 (of which $5,000 was to be
retained by it as the Cash Reserve), the value of the assets which would be
transferred to Value Fund would be $100,000. If the net asset value per Class A
share of Value Fund were $10 per share at the close of business on the Valuation
Date, the number of Class A shares to be issued would be 10,000 ($100,000 /
$10). These 10,000 Class A shares of Value Fund would be distributed to the
former shareholders of Officers Fund. This example is given for illustration
purposes only and does not bear any relationship to the dollar amounts or shares
expected to be involved in the Reorganization.
In conjunction with the Closing Date, Officers Fund will distribute on a pro
rata basis to its shareholders of record on the Valuation Date the Class A
shares of Value Fund received by Officers Fund at the closing, in liquidation of
the outstanding shares of Officers Fund, and the outstanding shares of Officers
Fund will be canceled. To assist Officers Fund in this distribution, Value Fund
will, in accordance with a shareholder list supplied by Officers Fund, cause its
transfer agent to credit and confirm an appropriate number of shares of Value
Fund to each shareholder of Officers Fund. Certificates for Class A shares of
Value Fund will be issued upon written request of a former shareholder of
Officers Fund but only for whole shares with fractional shares credited to the
name of the shareholder on the books of Value Fund and only of shares
represented by certificates are delivered for cancellation. Former shareholders
of Officers Fund who wish certificates representing their shares of Value Fund
must, after receipt of their confirmations, make a written request to
OppenheimerFunds Services, P.O. Box 5270, Denver, Colorado 80217. Shareholders
of Officers Fund holding certificates representing their shares will not be
required to surrender their certificates to anyone in connection with the
Reorganization. After the Reorganization, however, it will be necessary for such
shareholders to surrender such certificates in order to redeem, transfer, pledge
or exchange any shares of Value Fund.
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Under the Reorganization Agreement, within one year after the Closing Date,
Officers Fund shall: (a) either pay or make provision for all of its debts and
taxes; and (b) either (i) transfer any remaining amount of the Cash Reserve to
Value Fund, if such remaining amount is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of Officers Fund who were
such on the Valuation Date. Such remaining amount shall be deemed to be material
if the amount to be distributed, after deducting the estimated expenses of the
distribution, equals or exceeds one cent per share of the number of Officers
Fund shares outstanding on the Valuation Date. Within one year after the Closing
Date, Officers Fund will complete its liquidation.
Under the Reorganization Agreement, either Officers Fund or Value Fund may
abandon and terminate the Reorganization Agreement without liability if the
other party breaches any material provision of the Reorganization Agreement or,
if prior to the closing, any legal, administrative or other proceeding shall be
instituted or threatened (i) seeking to restrain or otherwise prohibit the
transactions contemplated by the Reorganization Agreement and/or (ii) asserting
a material liability of either party, which proceeding or liability has not been
terminated or the threat thereto removed prior to the Closing Date.
In the event that the Reorganization is not consummated for any reason, the
Board will consider and may submit to the shareholders of Officers Fund other
alternatives.
ADDITIONAL INFORMATION
Financial Information
The Reorganization will be accounted for by the surviving fund in its financial
statements similar to a pooling without restatement. Further financial
information as to Officers Fund is contained in its current Prospectus, which is
available without charge from OppenheimerFunds Services, the Transfer Agent,
P.O. Box 5270, Denver, Colorado 80217, and is incorporated herein by reference,
and in its Annual Report as of October 31, 1997, which are included in its
Statement of Additional Information. Financial information for Value Fund is
contained in its current Prospectus accompanying this Proxy Statement and
Prospectus and incorporated herein by reference, and in its Annual Report as of
October 31, 1997, which are included in its Statement of Additional Information.
Public Information
Additional information about Officers Fund and Value Fund is available, as
applicable, in the following documents: (i) Value Fund's Prospectus dated
February 27, 1998 accompanying this Proxy Statement and incorporated herein;
(ii) Officers Fund's Prospectus dated January 26, 1998, which may be obtained
without charge by writing to OppenheimerFunds Services, P.O. Box 5270, Denver,
Colorado 80217; (iii) Value Fund's Annual Report as of October 31, 1997, which
may be obtained without charge by writing to OppenheimerFunds Services at the
address indicated above; and (iv) Officers Fund's Annual Report as of October
31, 1997, which may be obtained without charge by writing to OppenheimerFunds
Services at the address indicated above. The documents set forth in (ii), (iii)
and (iv) above are included in the Additional Statement and the Additional
Statement is
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incorporated herein by reference. All of the foregoing documents may be obtained
by calling the toll-free number on the cover of this Proxy Statement and
Prospectus.
Additional information about the following matters is contained in the
Additional Statement which incorporates by reference the Value Fund Additional
Statement, the Officers Fund's Prospectus and the Officers Fund's Additional
Statement: the organization and operation of Value Fund and Officers Fund; more
information on investment policies, practices and risks; information about the
Trust and Value Fund's respective Boards and their responsibilities; a further
description of the services provided by Value Fund's and Officers Fund's
investment adviser, sub-adviser, distributor, and transfer and shareholder
servicing agent; dividend policies; tax matters; an explanation of the method of
determining the offering price of the shares and/or contingent deferred sales
charges, as applicable of Class A, Class B and Class C shares of Value Fund and
Officers Fund; purchase, redemption and exchange programs; the different
expenses paid by each class of shares; and distribution arrangements.
Value Fund and the Trust, on behalf of Officers Fund, are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and in accordance therewith, file reports and other information with the SEC.
Proxy material, reports and other information about Officers Fund and Value Fund
which are of public record can be inspected and copied at public reference
facilities maintained by the SEC in Washington, D.C. and certain of its regional
offices, and copies of such materials can be obtained at prescribed rates from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, Washington, D.C. 20549.
OTHER BUSINESS
Management of Officers Fund knows of no business other than the matters
specified above which will be presented at the Meeting. Since matters not known
at the time of the solicitation may come before the Meeting, the proxy as
solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote this proxy in accordance with their judgment on such matters.
By Order of the Board of Trustees
Andrew J. Donohue, Secretary
April 6, 1998 229
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
February 18, 1998 by and between Oppenheimer Quest For Value Funds (the
"Trust"), on behalf of its series, Oppenheimer Quest Officers Value Fund
("Officers Fund"), a Massachusetts business trust, and Oppenheimer Quest Value
Fund, Inc. ("Value Fund"), a Maryland Corporation.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type;
and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as amended
(the "Code"), of Officers Fund through the acquisition by Value Fund of
substantially all of the assets of Officers Fund in exchange for the voting
shares of beneficial interest ("shares") of Class A of Value Fund and the
assumption by Value Fund of certain liabilities of Officers Fund, which Class A
shares of Value Fund are to be distributed by Officers Fund pro rata to its
shareholders in complete liquidation of Officers Fund and complete cancellation
of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. The parties hereto hereby adopt this Agreement and Plan of
Reorganization (the "Agreement") pursuant to Section 368(a)(1) of the Code as
follows: The reorganization will be comprised of the acquisition by Value Fund
of substantially all of the assets of Officers Fund in exchange for Class A
shares of Value Fund and the assumption by Value Fund of certain liabilities of
Officers Fund, followed by the distribution of such Class A shares of Value Fund
shares to the shareholders of Officers Fund in exchange for their shares of
Officers Fund, all upon and subject to the terms of the Agreement hereinafter
set forth.
The share transfer books of Officers Fund will be permanently closed
at the close of business on the Valuation Date (as hereinafter defined) and only
redemption requests received in proper form on or prior to the close of business
on the Valuation Date shall be fulfilled by Officers Fund; redemption requests
received by Officers Fund after that date shall be treated as requests for the
redemption of the shares of Value Fund to be distributed to the shareholder in
question as provided in Section 5 hereof.
2. On the Closing Date (as hereinafter defined), all of the assets of
Officers Fund on that date, excluding a cash reserve (the "Cash Reserve") to be
retained by Officers Fund sufficient in its
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discretion for the payment of the expenses of Officers Fund's dissolution and
its liabilities, but not in excess of the amount contemplated by Section 10E,
shall be delivered as provided in Section 8 to Value Fund, in exchange for and
against delivery to Officers Fund on the Closing Date of a number of Class A
shares of Value Fund, having an aggregate net asset value equal to the value of
the assets of Officers Fund so transferred and delivered.
3. The net asset value of Class A shares of Value Fund and the value of
the assets of Officers Fund to be transferred shall in each case be determined
as of the close of business of The New York Stock Exchange on the Valuation
Date. The computation of the net asset value of the Class A shares of Value Fund
and the Class A shares of Officers Fund shall be done in the manner used by
Value Fund and Officers Fund, respectively, in the computation of such net asset
value per share as set forth in their respective prospectuses. The methods used
by Value Fund in such computation shall be applied to the valuation of the
assets of Officers Fund to be transferred to Value Fund.
Officers Fund shall declare and pay, immediately prior to the
Valuation Date, a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to Officers Fund's shareholders
all of Officers Fund's investment company taxable income for taxable years
ending on or prior to the Closing Date (computed without regard to any dividends
paid) and all of its net capital gain, if any, realized in taxable years ending
on or prior to the Closing Date (after reduction for any capital loss
carry-forward).
4. The closing (the "Closing") shall be at the offices of
OppenheimerFunds, Inc. (the "Agent"), Two World Trade Center, 34th Floor, New
York, New York 10048, at 4:00 P.M. New York time on June 12, 1998 or at such
other time or place as the parties may designate or as provided below (the
"Closing Date"). The business day preceding the Closing Date is herein referred
to as the "Valuation Date."
In the event that on the Valuation Date either party has, pursuant
to the Investment Company Act of 1940, as amended (the "Act"), or any rule,
regulation or order thereunder, suspended the redemption of its shares or
postponed payment therefore, the Closing Date shall be postponed until the first
business day after the date when both parties have ceased such suspension or
postponement; provided, however, that if such suspension shall continue for a
period of 60 days beyond the Valuation Date, then the other party to the
Agreement shall be permitted to terminate the Agreement without liability to
either party for such termination.
5. In conjunction with the Closing, Officers Fund shall distribute on a
pro rata basis to the shareholders of Officers Fund on the Valuation Date the
Class A shares of Value Fund received by Officers Fund on the Closing Date in
exchange for the assets of Officers Fund in complete liquidation of Officers
Fund; for the purpose of the distribution by Officers Fund of Class A shares of
Value Fund to Officers Fund's shareholders, Value Fund will promptly cause its
transfer agent to: (a) credit an appropriate number of Class A shares of Value
Fund on the books of Value Fund to each Class A shareholder of Officers Fund in
accordance with a list (the "Shareholder List") of Officers Fund shareholders
received from Officers Fund; and (b) confirm an appropriate number of Class A
shares of Value Fund to each shareholder of Officers Fund; certificates for
Class A shares of Value
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Fund will be issued upon written request of a former shareholder of Officers
Fund but only for whole shares, with fractional shares credited to the name of
the shareholder on the books of Value Fund.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of Officers Fund,
indicating his or her share balance. Officers Fund agrees to supply the
Shareholder List to Value Fund not later than the Closing Date. Shareholders of
Officers Fund holding certificates representing their shares shall not be
required to surrender their certificates to anyone in connection with the
reorganization. After the Closing Date, however, it will be necessary for such
shareholders to surrender their certificates in order to redeem, transfer or
pledge the shares of Value Fund which they received.
6. Within one year after the Closing Date, Officers Fund shall (a) either
pay or make provision for payment of all of its liabilities and taxes, and (b)
either (i) transfer any remaining amount of the Cash Reserve to Value Fund, if
such remaining amount (as reduced by the estimated cost of distributing it to
shareholders) is not material (as defined below) or (ii) distribute such
remaining amount to the shareholders of Officers Fund on the Valuation Date.
Such remaining amount shall be deemed to be material if the amount to be
distributed, after deduction of the estimated expenses of the distribution,
equals or exceeds one cent per share of Officers Fund outstanding on the
Valuation Date.
7. Prior to the Closing Date, there shall be coordination between the
parties as to their respective portfolios so that, after the Closing, Value Fund
will be in compliance with all of its investment policies and restrictions. At
the Closing, Officers Fund shall deliver to Value Fund two copies of a list
setting forth the securities then owned by Officers Fund. Promptly after the
Closing, Officers Fund shall provide Value Fund a list setting forth the
respective federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to Value Fund of
record ownership thereof by The Depository Trust Company or through the Federal
Reserve Book Entry System or any other depository approved by Officers Fund
pursuant to Rule 17f-4 and Rule 17f-5 under the Act shall be endorsed and
delivered, or transferred by appropriate transfer or assignment documents, by
Officers Fund on the Closing Date to Value Fund, or at its direction, to its
custodian bank, in proper form for transfer in such condition as to constitute
good delivery thereof in accordance with the custom of brokers and shall be
accompanied by all necessary state transfer stamps, if any. The cash delivered
shall be in the form of certified or bank cashiers' checks or by bank wire or
intra-bank transfer payable to the order of Value Fund for the account of Value
Fund. Class A shares of Value Fund representing the number of Class A shares of
Value Fund being delivered against the assets of Officers Fund, registered in
the name of Officers Fund, shall be transferred to Officers Fund on the Closing
Date. Such shares shall thereupon be assigned by Officers Fund to its
shareholders so that the shares of Value Fund may be distributed as provided in
Section 5.
If, at the Closing Date, Officers Fund is unable to make delivery
under this Section 8 to Value Fund of any of its portfolio securities or cash
for the reason that any of such securities purchased by Officers Fund, or the
cash proceeds of a sale of portfolio securities, prior to the Closing Date have
not yet been delivered to it or Officers Fund's custodian, then the delivery
requirements of this Section 8 with respect to said undelivered securities or
cash will be waived and Officers Fund
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will deliver to Value Fund by or on the Closing Date with respect to said
undelivered securities or cash executed copies of an agreement or agreements of
assignment in a form reasonably satisfactory to Value Fund, together with such
other documents, including a due bill or due bills and brokers' confirmation
slips as may reasonably be required by Value Fund.
9. Value Fund shall not assume the liabilities (except for portfolio
securities purchased which have not settled and for shareholder redemption and
dividend checks outstanding) of Officers Fund, but Officers Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so far as
may be possible, prior to the Closing Date. The cost of printing and mailing the
proxies and proxy statements will be borne by Officers Fund. Officers Fund and
Value Fund will bear the cost of their respective tax opinion. Any documents
such as existing prospectuses or annual reports that are included in that
mailing will be a cost of the fund issuing the document. Any other out-of-pocket
expenses of Value Fund and Officers Fund associated with this reorganization,
including legal, accounting and transfer agent expenses, will be borne by
Officers Fund and Value Fund, respectively, in the amounts so incurred by each.
10. The obligations of Value Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of the Trust shall have authorized the
execution of the Agreement, and the shareholders of Officers Fund shall have
approved the Agreement and the transactions contemplated hereby, and Officers
Fund shall have furnished to Value Fund copies of resolutions to that effect
certified by the Secretary or the Assistant Secretary of the Trust; such
shareholder approval shall have been by the affirmative vote of "a majority of
the outstanding voting securities" (as defined in the Act) of Officers Fund at a
meeting for which proxies have been solicited by the Proxy Statement and
Prospectus (as hereinafter defined).
B. Value Fund shall have received an opinion dated the Closing Date
of counsel to Officers Fund, to the effect that (i) Officers Fund is a series of
the Trust which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with full powers to
carry on its business as then being conducted and to enter into and perform the
Agreement (Massachusetts counsel may be relied upon for this opinion); and (ii)
that all action necessary to make the Agreement, according to its terms, valid,
binding and enforceable on Officers Fund and to authorize effectively the
transactions contemplated by the Agreement have been taken by Officers Fund.
C. The representations and warranties of Officers Fund contained
herein shall be true and correct at and as of the Closing Date, and Value Fund
shall have been furnished with a certificate of the President, or a Vice
President, or the Secretary or the Assistant Secretary or the Treasurer of the
Trust, dated the Closing Date, to that effect.
D. On the Closing Date, Officers Fund shall have furnished to Value
Fund a certificate of the Treasurer or Assistant Treasurer of the Trust as to
the amount of the capital loss carry-over and net unrealized appreciation or
depreciation, if any, with respect to Officers Fund as of the Closing Date.
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E. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of Officers Fund at the close of
business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Value Fund under
the Securities Act of 1933, as amended (the "1933 Act"), containing a
preliminary form of the Proxy Statement and Prospectus, shall have become
effective under the 1933 Act not later than May 1, 1998.
G. On the Closing Date, Value Fund shall have received a letter of
Andrew J. Donohue or other senior executive officer of OppenheimerFunds, Inc.
acceptable to Value Fund, stating that nothing has come to his or her attention
which in his or her judgment would indicate that as of the Closing Date there
were any material actual or contingent liabilities of Officers Fund arising out
of litigation brought against Officers Fund or claims asserted against it, or
pending or to the best of his or her knowledge threatened claims or litigation
not reflected in or apparent from the most recent audited financial statements
and footnotes thereto of Officers Fund delivered to Value Fund. Such letter may
also include such additional statements relating to the scope of the review
conducted by such person and his or her responsibilities and liabilities as are
not unreasonable under the circumstances.
H. Value Fund shall have received an opinion, dated the Closing
Date, of Price Waterhouse LLP, to the same effect as the opinion contemplated by
Section
11.E. of the Agreement.
I. Value Fund shall have received at the Closing all of the assets
of Officers Fund to be conveyed hereunder, which assets shall be free and clear
of all liens, encumbrances, security interests, restrictions and limitations
whatsoever.
11. The obligations of Officers Fund hereunder shall be subject to the
following conditions:
A. The Board of Directors of Value Fund shall have authorized the
execution of the Agreement, and the transactions contemplated thereby, and Value
Fund shall have furnished to Officers Fund copies of resolutions to that effect
certified by the Secretary or the Assistant Secretary of Value Fund.
B. Officers Fund's shareholders shall have approved the Agreement
and the transactions contemplated hereby, by an affirmative vote of "a majority
of the outstanding voting securities" (as defined in the Act) of Officers Fund,
and Officers Fund shall have furnished Value Fund copies of resolutions to that
effect certified by the Secretary or an Assistant Secretary of the Trust.
C. Officers Fund shall have received an opinion dated the Closing
Date of counsel to Value Fund, to the effect that (i) Value Fund is duly
organized, validly existing and in good standing under the laws of the State of
Maryland with full powers to carry on its business as then being conducted and
to enter into and perform the Agreement (Maryland counsel may be relied upon for
this opinion); (ii) all action necessary to make the Agreement, according to its
terms, valid, binding and enforceable upon Value Fund and to authorize
effectively the transactions contemplated
A-5
<PAGE>
by the Agreement have been taken by Value Fund, and (iii) the shares of Value
Fund to be issued hereunder are duly authorized and when issued will be validly
issued, fully-paid and non-assessable.
D. The representations and warranties of Value Fund contained herein
shall be true and correct at and as of the Closing Date, and Officers Fund shall
have been furnished with a certificate of the President, a Vice President or the
Secretary or the Assistant Secretary or the Treasurer of Value Fund to that
effect dated the Closing Date.
E. Officers Fund shall have received an opinion of Price Waterhouse
LLP to the effect that the Federal tax consequences of the transaction, if
carried out in the manner outlined in the Agreement and in accordance with (i)
Officers Fund's representation that there is no plan or intention by any
Officers Fund shareholder who owns 5% or more of Officers Fund's outstanding
shares, and, to Officers Fund's best knowledge, there is no plan or intention on
the part of the remaining Officers Fund shareholders, to redeem, sell, exchange
or otherwise dispose of a number of Value Fund shares received in the
transaction that would reduce Officers Fund shareholders' ownership of Value
Fund shares to a number of shares having a value, as of the Closing Date, of
less than 50% of the value of all of the formerly outstanding Officers Fund
shares as of the same date, and (ii) the representation by each of Officers Fund
and Value Fund that, as of the Closing Date, Officers Fund and Value Fund will
qualify as regulated investment companies or will meet the diversification test
of Section 368(a)(2)(F)(ii) of the Code, will be as follows:
1. The transactions contemplated by the Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1) of the
Code, and under the regulations promulgated thereunder.
2. Officers Fund and Value Fund will each qualify as a "party
to a reorganization" within the meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of
Officers Fund upon the distribution of Class A shares of beneficial interest in
Value Fund to the shareholders of Officers Fund pursuant to Section 354 of the
Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by Officers Fund by reason of the transfer of substantially all its
assets in exchange for Class A shares of Value Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Value Fund by reason of the transfer of substantially all of
Officers Fund's assets in exchange for Class A shares of Value Fund and Value
Fund's assumption of certain liabilities of Officers Fund.
6. The shareholders of Officers Fund will have the same tax
basis and holding period for the Class A shares of beneficial interest in Value
Fund that they receive as they had for Officers Fund shares that they previously
held, pursuant to Section 358(a) and 1223(1), respectively, of the Code.
A-6
<PAGE>
7. The securities transferred by Officers Fund to Value Fund
will have the same tax basis and holding period in the hands of Value Fund as
they had for Officers Fund, pursuant to Section 362(b) and 1223(1),
respectively, of the Code.
F. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of Officers Fund at the close of
business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Value Fund under
the 1933 Act, containing a preliminary form of the Proxy Statement and
Prospectus, shall have become effective under the 1933 Act not later than May 1,
1998.
H. On the Closing Date, Officers Fund shall have received a letter
of Andrew J. Donohue or other senior executive officer of OppenheimerFunds, Inc.
acceptable to Officers Fund, stating that nothing has come to his or her
attention which in his or her judgment would indicate that as of the Closing
Date there were any material actual or contingent liabilities of Value Fund
arising out of litigation brought against Value Fund or claims asserted against
it, or pending or, to the best of his or her knowledge, threatened claims or
litigation not reflected in or apparent by the most recent audited financial
statements and footnotes thereto of Value Fund delivered to Officers Fund. Such
letter may also include such additional statements relating to the scope of the
review conducted by such person and his or her responsibilities and liabilities
as are not unreasonable under the circumstances.
I. Officers Fund shall acknowledge receipt of the Class A shares of
Value Fund.
12. The Trust on behalf of Officers Fund hereby represents and warrants
that:
A. The financial statements of Officers Fund as at October 31, 1997
(audited) heretofore furnished to Value Fund, present fairly the financial
position, results of operations, and changes in net assets of Officers Fund as
of that date, in conformity with generally accepted accounting principles
applied on a basis consistent with the preceding year; and that from October 31,
1997 through the date hereof there have not been, and through the Closing Date
there will not be, any material adverse change in the business or financial
condition of Officers Fund, it being agreed that a decrease in the size of
Officers Fund due to a diminution in the value of its portfolio and/or
redemption of its shares shall not be considered a material adverse change;
B. Contingent upon approval of the Agreement and the transactions
contemplated thereby by Officers Fund's shareholders, Officers Fund has
authority to transfer all of the assets of Officers Fund to be conveyed
hereunder free and clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in
Officers Fund's Registration Statement under the 1933 Act, as amended, is true,
correct and complete, conforms to the requirements of the 1933 Act and does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, as amended, was, as of the date of the
filing of the last Post- Effective Amendment, true, correct and complete,
conformed to the requirements of the 1933 Act
A-7
<PAGE>
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
D. There is no material contingent liability of Officers Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of Officers Fund, threatened against Officers Fund,
not reflected in such Prospectus;
E. Except for the Agreement, there are no material contracts
outstanding to which Officers Fund is a party other than those ordinary in the
conduct of its business;
F. Officers Fund is a series of the Trust which is a business trust
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts; and has all necessary and material Federal and
state authorizations to own all of its assets and to carry on its business as
now being conducted; and Officers Fund is duly registered under the Act and such
registration has not been rescinded or revoked and is in full force and effect;
G. All Federal and other tax returns and reports of Officers Fund
required by law to be filed have been filed, and all Federal and other taxes
shown due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of Officers
Fund no such return is currently under audit and no assessment has been asserted
with respect to such returns and to the extent such tax returns with respect to
the taxable year of Officers Fund ended October 31, 1997 have not been filed,
such returns will be filed when required and the amount of tax shown as due
thereon shall be paid when due; and
H. Officers Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Officers Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and Officers Fund intends to meet such requirements
with respect to its current taxable year.
13. Value Fund hereby represents and warrants that:
A. The financial statements of Value Fund as at October 31, 1997
(audited) heretofore furnished to Officers Fund, present fairly the financial
position, results of operations, and changes in net assets of Value Fund, as of
that date, in conformity with generally accepted accounting principles applied
on a basis consistent with the preceding year; and that from October 31, 1997
through the date hereof there have not been, and through the Closing Date there
will not be, any material adverse changes in the business or financial condition
of Value Fund, it being understood that a decrease in the size of Value Fund due
to a diminution in the value of its portfolio and/or redemption of its shares
shall not be considered a material or adverse change;
B. The Prospectus, as amended and supplemented, contained in Value
Fund's Registration Statement under the 1933 Act, is true, correct and complete,
conforms to the requirements of the 1933 Act and does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Registration Statement, as amended, was, as of the date of the filing of the
last Post- Effective Amendment, true, correct and complete, conformed to the
requirements of the 1933 Act
A-8
<PAGE>
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
C. Except for this Agreement, there is no material contingent
liability of Value Fund and no material claim and no material legal,
administrative or other proceedings pending or, to the knowledge of Value Fund,
threatened against Value Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which Value Fund
is a party other than those ordinary in the conduct of its business;
E. Value Fund is a Maryland corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland; has all
necessary and material Federal and state authorizations to own all its
properties and assets and to carry on its business as now being conducted; the
Class A shares of Value Fund which it issues to Officers Fund pursuant to the
Agreement will be duly authorized, validly issued, fully-paid and
non-assessable, will conform to the description thereof contained in Value
Fund's Registration Statement and will be duly registered under the 1933 Act and
in the states where registration is required; and Value Fund is duly registered
under the Act and such registration has not been revoked or rescinded and is in
full force and effect;
F. All Federal and other tax returns and reports of Value Fund
required by law to be filed have been filed, and all Federal and other taxes
shown due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of Value Fund
no such return is currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with respect to the
taxable year of Value Fund ended October 31, 1997 have not been filed, such
returns will be filed when required and the amount of tax shown as due thereon
shall be paid when due;
G. Value Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Value Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and Value Fund intends to meet such requirements
with respect to its current taxable year;
H. Value Fund has no plan or intention (i) to dispose of any of the
assets transferred by Officers Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the Class A shares issued by it
in the reorganization other than pursuant to valid requests of shareholders; and
I. After consummation of the transactions contemplated by the
Agreement, Value Fund intends to operate its business in a substantially
unchanged manner.
14. Each party hereby represents to the other that no broker or finder has
been employed by it with respect to the Agreement or the transactions
contemplated hereby. Each party also represents and warrants to the other that
the information concerning it in the Proxy Statement and Prospectus will not as
of its date contain any untrue statement of a material fact or omit to state a
fact necessary to make the statements concerning it therein not misleading and
that the financial statements concerning it will present the information shown
fairly in accordance with generally
A-9
<PAGE>
accepted accounting principles applied on a basis consistent with the preceding
year. Each party also represents and warrants to the other that the Agreement is
valid, binding and enforceable in accordance with its terms and that the
execution, delivery and performance of the Agreement will not result in any
violation of, or be in conflict with, any provision of any charter, by-laws,
contract, agreement, judgment, decree or order to which it is subject or to
which it is a party. Value Fund hereby represents to and covenants with Officers
Fund that, if the reorganization becomes effective, Value Fund will treat each
shareholder of Officers Fund who received any of Value Fund's shares as a result
of the reorganization as having made the minimum initial purchase of shares of
Value Fund received by such shareholder for the purpose of making additional
investments in shares of Value Fund, regardless of the value of the shares of
Value Fund received.
15. Value Fund agrees that it will prepare and file a Registration
Statement on Form N-14 under the 1933 Act which shall contain a preliminary form
of proxy statement and prospectus contemplated by Rule 145 under the 1933 Act.
The final form of such proxy statement and prospectus is referred to in the
Agreement as the "Proxy Statement and Prospectus." Each party agrees that it
will use its best efforts to have such Registration Statement declared effective
and to supply such information concerning itself for inclusion in the Proxy
Statement and Prospectus as may be necessary or desirable in this connection.
Officers Fund covenants and agrees to deregister as an investment company under
the Investment Company Act of 1940, as amended, as soon as practicable to the
extent required, and, upon closing, to cause the cancellation of its outstanding
shares.
16. The obligations of the parties under the Agreement shall be subject to
the right of either party to abandon and terminate the Agreement without
liability if the other party breaches any material provision of the Agreement or
if any material legal, administrative or other proceeding shall be instituted or
threatened between the date of the Agreement and the Closing Date (i) seeking to
restrain or otherwise prohibit the transactions contemplated hereby and/or (ii)
asserting a material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. The Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
Agreement. The rights and obligations of each party pursuant to the Agreement
shall not be assignable.
18. All prior or contemporaneous agreements and representations are merged
into the Agreement, which constitutes the entire contract between the parties
hereto. No amendment or modification hereof shall be of any force and effect
unless in writing and signed by the parties and no party shall be deemed to have
waived any provision herein for its benefit unless it executes a written
acknowledgment of such waiver.
19. Officers Fund understands that the obligations of Value Fund under the
Agreement are not binding upon any Director or shareholder of Value Fund
personally, but bind only Value Fund and Value Fund's property.
20. Value Fund understands that the obligations of Officers Fund under the
Agreement are not binding upon any Trustee or shareholder of Officers Fund
personally, but bind only Officers Fund and Officers Fund's property. Value Fund
represents that it has notice of the provisions of the
A-10
<PAGE>
Declaration of Trust of Officers Fund disclaiming shareholder and Trustee
liability for acts or obligations of Officers Fund.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to be
executed and attested by its officers thereunto duly authorized on the date
first set forth above.
OPPENHEIMER QUEST VALUE FUND, INC.
By: /s/ Andrew J. Donohue
Andrew Donohue
Secretary
OPPENHEIMER QUEST FOR VALUE FUNDS
on behalf of
OPPENHEIMER QUEST OFFICERS VALUE FUND
By: /s/ Robert C. Doll
Robert C. Doll
Vice President
229proxy.3
A-11
Oppenheimer Quest Officers Value Fund
Proxy For Special Shareholders Meeting To Be Held June 9, 1998
The undersigned shareholder of Oppenheimer Quest Officers Value Fund, a series
of Oppenheimer Quest For Value Funds ("Officers Fund"), does hereby appoint
George C. Bowen, Andrew J. Donohue, Robert Bishop and Scott Farrar, and each of
them, as attorneys-in-fact and proxies of the undersigned, with full power of
substitution, to attend the Special Meeting of Shareholders of Officers Fund to
be held on June 9, 1998 at 6803 South Tucson Way, Englewood, Colorado at 10:00
A.M., Denver time, and at all adjournments thereof, and to vote the shares held
in the name of the undersigned on the record date for said meeting on the
Proposal specified on the reverse side. Said attorneys-in-fact shall vote in
accordance with their best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO RECOMMENDS A VOTE FOR
THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS
INDICATED ON THE REVERSE SIDE OR FOR NO CHOICE IS INDICATED.
Please mark your proxy, date and sign it on the reverse side and return it
promptly in the accompanying envelope, which requires no postage if mailed in
the United States.
The Proposal:
To approve or disapprove an Agreement and Plan of Reorganization between
Oppenheimer Quest For Value Funds, on behalf of Officers Fund, and
Oppenheimer Quest Value Fund, Inc. ("Value Fund") and the transactions
contemplated thereby, including the transfer of substantially all the assets
of Officers Fund to Value Fund in exchange for Class A shares of Value Fund,
the distribution of such Class A shares of Value Fund to the Class A
shareholders of Officers Fund in complete liquidation of Officers Fund, and
the cancellation of the outstanding shares of Officers Fund.
FOR______ AGAINST______ ABSTAIN_______
Dated: _________________________________, 1998
(Month) (Day)
---------------------------------
Signature(s)
---------------------------------
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing as
custodian, attorney, executor, administrator, trustee, etc., please give your
full title as such. All joint owners should sign this proxy. If the account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give his or her title.
229merge\229.bal
