[FRONT COVER]
Oppenheimer Main Street California Tax-Exempt Fund
Annual Report June 30, 1996
[Picture of Shopping Couple]
"We want
investment
income
that won't
add to our
taxes."
[LOGO-OPPENHEIMERFUNDS (R)]
<PAGE>
News
Standardized Yield
For the 30 Days Ended 6/30/96:(4)
Class A
5.10%
Class B
4.26%
Beat the Average
Total Return for the 5-Year Period
Ended 6/30/96:
Oppenheimer Main Street California
Tax-Exempt Fund
Class A (at net asset value)
44.40%
Lipper California Municipal Debt
Funds Average(5)
41.64%
The Fund's Class A shares are ranked ***** among 924 municipal bond funds as of
6/30/96 by Morningstar Mutual Funds.(6)
This Fund is for California residents who need income that's exempt from income
tax.
How Your Fund Is Managed
Oppenheimer Main Street California Tax-Exempt Fund invests in a diversified
portfolio of California municipal bonds. As a Fund shareholder, you receive
income that is free from federal and California income taxes.(1) Your dividends
don't increase your taxable income the way taxable investments do, so you can
keep more of what you earn.
Performance
Total return at net asset value for the twelve months ended 6/30/96 was 6.73%
for Class A shares and 5.66% for Class B shares.(2)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1- and 5-year periods ended 6/30/96 and since inception
of the Class on 5/18/90 were 1.66%, 6.58% and 7.01%, respectively. For Class B
shares, average annual total returns for the 1-year period ended 6/30/96 and
since inception of the Class on 10/29/93 were 0.66% and 1.84%, respectively.(3)
Outlook
"We think the outlook is positive. From our perspective, the economic growth
rate that set off increases in interest rates will not be enough to make
inflation a serious concern. Thus, we expect any further increase in interest
rates in the near future will be moderate and that the general bond market
should strengthen later in the year."
Jerry Webman, Portfolio Manager
June 30, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest.
1. A portion of the distributions paid by the Fund may be subject to federal and
state income taxes. For investors subject to federal and/or state alternative
minimum tax (AMT), the Fund's distributions may increase this tax. Capital gains
distributions, if any, are taxed as capital gains.
2. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
3. Class A returns show results of hypothetical investments on 6/30/95, 6/30/91
and 5/18/90 (inception of class), after deducting the current maximum initial
sales charge of 4.75%. Class B returns show results of hypothetical investments
on 6/30/95 and 10/29/93 (inception of class), and with the deduction of the
applicable contingent deferred sales charge of 5% (1-year) and 3% (since
inception). An explanation of the different performance calculations is in the
Fund's prospectus.
4. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 6/30/96, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
5. Source: Lipper Analytical Services. The Lipper total return average for the
5-year period was for 46 California municipal debt funds. The average is shown
for comparative purposes only. Oppenheimer Main Street California Tax-Exempt
Fund is characterized by Lipper as a California municipal debt fund. Lipper
performance does not take sales charges into consideration.
6. Source: Morningstar Mutual Funds, 6/30/96. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories (equity, taxable bond, tax-exempt bond, or
"hybrid") based on risk-adjusted investment returns, after considering sales
charges and expenses. Investment return measures a fund's (or class's) 3-, 5-,
and 10-year (depending on the inception of the class or fund) average annual
total returns in excess of 90-day U.S. Treasury bill returns. Risk and returns
are combined to produce star rankings, reflecting performance relative to the
average fund in a fund's category. Five stars is the "highest" ranking (top
10%), 4 star is "above average", and 1 star the "lowest" (bottom 10%). The
5-star current ranking is a weighted average of the 3- and 5-year rankings for
the class, which were 4 and 5, respectively, weighted 40% and 60%. There were
924 and 536 funds ranked in these respective periods. Rankings are subject to
change. The Fund's Class A and Class B shares have the same portfolio.
2 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
[PHOTO-JAMES C. SWAIN] [PHOTO-BRIDGET A. MACASKILL]
James C. Swain Bridget A. Macaskill
Chairman President
Oppenheimer Oppenheimer
Main Street California Main Street California
Tax-Exempt Fund Tax-Exempt Fund
Dear Shareholder,
While municipal bonds have been affected by the concern over inflation in recent
months, we believe that the outlook remains favorable--especially if you're in a
high tax bracket.
Let's review the first half of the year. The most widely quoted interest
rate on long-term bonds, the benchmark 30-year U.S. Treasury bond, rose from 6%
in January to 7% by mid-year. Municipal bond yields tend to track Treasuries
pretty closely, yielding slightly less--about 80-85% of Treasuries--because
their interest is free from federal income tax. But during those six months,
yields on muni bonds rose proportionately, increasing their after-tax advantage.
So, while the current rise in interest rates over the past six months
pushed bond prices lower, our outlook for the rest of the year is much more
positive. Although the prices of food and gas, the most common gauges of
inflation, have increased recently, we believe that inflation is likely to
remain under control. We feel that food production will be able to meet demand
and, unlike previous energy disruptions, there doesn't appear to be a shortage
of crude oil in the world today. Thus, we are confident that the general
long-term trend is for moderate growth and low inflation. And while we
anticipate that interest rates will fluctuate over the near term, we feel bond
market conditions should improve in the coming months.
A number of other developments bode well for the municipal bond market. The
first is the muni bond's continuing status as one of the few true remaining tax
shelters, as earlier proposals for flat tax legislation seems to have quieted
down considerably. Another factor favorably impacting the municipal bond market
is the strengthening financial condition of many municipalities throughout the
United States. This is particularly true of California, which is one of the
nation's largest issuers of municipal bonds.
Finally, the tax-free market is also benefiting from a shrinking supply of
securities. About ten years ago, a surge of municipal bond issuance occurred
just prior to the Tax Reform Act of 1986. By today's standards, these bonds paid
very high interest. This year, billions of dollars worth of these bonds are
being redeemed by issuers who were contractually obligated to wait at least ten
years to "call" them. As a result, the supply of securities is falling, and the
former bondholders are receiving cash which they will either reinvest in the
municipal bond market or place elsewhere.
All things considered--the prospect of lower interest rates, the
diminishing likelihood of major tax legislation, the strengthening economies of
states and localities, as well as the shrinking supply of securities--the
outlook is very positive for municipal bond investors.
Your portfolio managers discuss the outlook for your Fund in light of these
broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, and we look forward to helping you reach your investment goals
in the future.
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 22, 1996
3 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Q + A
[PHOTO-ROBERT PATTERSON AND LEN DARLING] [PHOTO-MICHAEL MACIOLEK]
Q How did
the Fund
perform?
An interview with your Fund's managers.
How has the Fund performed over the past year?
The Fund did very well for the year. It first took advantage of the bond
market's strength in 1995 and then held its own as the market declined this
year. Our performance for the full year ranks us 36th out of 96 California
municipal debt funds.(1) And, as the market weakened due to this year's interest
rate increases, our relative performance actually improved. Due to the strategic
positioning decisions we made going into this year, we finished in 11th place as
of June 30th.
[PHOTO-CARYN HALBRECHT]
What factors contributed to your strong performance during the market's
difficulties?
A major factor in the Fund's performance was our emphasis on pre-refunded bonds,
which performed extremely well versus other municipal bonds. Because these
issues have escrowed money to repay bondholders, pre-refunded bonds have low
credit risk, pay very high income and have relatively low sensitivity to changes
in interest rates. With interest rates rising over much of the period, these
bonds performed extremely well compared to other municipal bonds.
Another factor in our strong performance was the relatively small
percentage we owned of municipal bonds trading at a discount. Discount bonds
tend to be more volatile than bonds trading at par or a premium and are prone to
significant price declines when interest rates are rising.
Our shorter-than-average duration, a measure of the portfolio's price
sensitivity to interest rates, was particularly helpful in a rising rate
environment. While a long duration strategy can benefit bond investors when
rates decline, the opposite is typically true
1. Source: Lipper Analytical Services, June 1996. This comparison does not take
the sales charge into account.
4 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Facing page
Top left: Robert Patterson, Portfolio Manager, with Len Darling, Executive VP,
Director of Fixed Income Investments
Top right: Michael Maciolek, Securities Analyst
Bottom: Caryn Halbrecht, Vice President, Tax-Exempt Portfolio Manager
This page
Top right: Robert Patterson
Bottom: Caryn Halbrecht with Donna Compert, Municipal Securities Trader
A Our
strategic
positioning
helped us
respond
to market
volatility.
when rates rise. Finally, a relatively limited supply of new municipal bonds,
coupled with steady demand, further enhanced our performance.
Did any investments perform poorly?
As always, our philosophy is to diversify the Fund's assets across a broad range
of fixed-income securities. Consequently, our holdings in long-term municipal
bonds underperformed other municipal bond sectors.
What areas are you currently targeting?
Because we believe the interest rate environment will be slightly lower later
in the year, we're buying securities with a higher degree of exposure to the
market. We're buying some longer-term bonds that tend to be more volatile. But
at the same time, by maintaining a fully diversified portfolio, we're taking
appropriate measures to offset the possibility that rates may continue to rise.
We've also been buying bonds issued by projects and localities that are
well-positioned to benefit from ongoing regional economic recovery. For
instance, we recently purchased Los Angeles County bonds, which we believe offer
attractive yields. We also purchased Puerto Rico hospital bonds for portfolio
diversification. We think that a more aggressive posture is appropriate as
California credits improve. Finally, we continue to look for high income
opportunities across the board, conducting careful research and trying to lock
in our income, using bonds with call-protection whenever possible.(2)
[PHOTO-CARYN HALBRECHT WITH DONNA COMPERT]
[PHOTO-ROBERT PATTERSON]
What is your outlook for the Fund?
We think the outlook is positive. From our perspective, the economic growth rate
that set off increases in interest rates will not be enough to make inflation a
serious concern. Thus, we expect any further increase in interest rates in the
near future will be moderate and that the general bond market should strengthen
later in the year. Still, we're very pleased with how well the Fund has
responded to market difficulties so far this year and we are confident that we
may do even better if the market improves.
2. The Fund's portfolio is subject to change.
5 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Statement of Investments June 30, 1996
<TABLE>
<CAPTION>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
===================================================================================================================================
Municipal Bonds and Notes--98.2%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California--89.3%
Alameda County, California Certificates of Participation,
Prerefunded, BIG Insured, 7.25%, 6/1/09 Aaa/AAA $1,635,000 $ 1,841,067
---------------------------------------------------------------------------------------------------------------
Anaheim, California Public Financing
Authority Tax Allocation Revenue Bonds,
MBIA Insured, 6.45%, 12/28/18 Aaa/AAA 2,000,000 2,093,726
---------------------------------------------------------------------------------------------------------------
Berkeley, California Health Facility Revenue Bonds,
Alta Bates Medical Center, Series A, 6.50%, 12/1/11 Baa/BBB+ 1,500,000 1,513,438
---------------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority
Revenue Bonds, Episcopal Homes Project,
Series A, 7.80%, 7/1/15 NR/A 1,000,000 1,067,014
---------------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority
Revenue Refunding Bonds, Catholic Health Care West,
Series A, MBIA Insured, 5%, 7/1/11 Aaa/AAA 2,500,000 2,322,662
---------------------------------------------------------------------------------------------------------------
California Housing Finance Agency Home Mtg.
Revenue Bonds, Series C, 6.75%, 2/1/25 Aa/AA- 4,990,000 5,212,264
---------------------------------------------------------------------------------------------------------------
California Housing Finance Agency Single Family Mtg.
Purchase Revenue Bonds, Series A-2, 6.45%, 8/1/25 Aaa/AAA 2,500,000 2,560,437
---------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority
Revenue Bonds, Pacific Gas & Electric Co. Project,
Series B, 6.35%, 6/1/09 A1/A 2,000,000 2,099,548
---------------------------------------------------------------------------------------------------------------
California State Department of Water Resources
Revenue Bonds, Central Valley Project, Prerefunded,
Series H, 6.90%, 12/1/25 Aaa/AA 1,000,000 1,098,780
---------------------------------------------------------------------------------------------------------------
California State Public Works Board Lease
Revenue Bonds, Department of Corrections,
Series A, AMBAC Insured, 5.25%, 1/1/21 Aaa/AAA/AAA 2,250,000 2,061,718
---------------------------------------------------------------------------------------------------------------
California State Public Works Board Lease Revenue
Bonds, Department of Corrections-Madera State Prison,
Series E, 5.50%, 6/1/15 A1/A-/A- 2,000,000 1,866,268
---------------------------------------------------------------------------------------------------------------
Capistrano, California Unified School District
Community Facilities District Special Tax Bonds,
No. 87-1, 7.60%, 9/1/14 NR/NR 1,000,000 1,015,586
---------------------------------------------------------------------------------------------------------------
Corona, California Certificates of Participation,
Prerefunded, Series B, 10%, 11/1/20 Aaa/AAA 3,250,000 4,235,299
---------------------------------------------------------------------------------------------------------------
Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds, Sr. Lien,
Series A, 6.50%, 1/1/32 Baa/BBB-/BBB 1,400,000 1,403,860
---------------------------------------------------------------------------------------------------------------
Long Beach, California Harbor Revenue Bonds,
5.125%, 5/15/18 Aa/AA- 2,000,000 1,775,864
---------------------------------------------------------------------------------------------------------------
Los Angeles County, California Certificates of
Participation, Disney Parking Project,
Zero Coupon, 6.95%, 9/1/11(1) Baa1/BBB/A- 2,340,000 838,337
---------------------------------------------------------------------------------------------------------------
Los Angeles, California Convention & Exhibition
Center Authority Refunding Certificates of
Participation, Prerefunded, Series A, 7.375%, 8/15/18 Aaa/AAA 1,600,000 1,763,333
---------------------------------------------------------------------------------------------------------------
Los Angeles, California Wastewater System Revenue
Refunding Bonds, Series D, FGIC Insured, 8.70%, 11/1/03 Aaa/AAA/AAA 5,115,000 6,311,582
</TABLE>
6 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California
(continued)
Metropolitan Water District of Southern California
Waterworks Revenue Refunding Bonds, 5.55%, 10/30/20 Aa/AA $3,000,000 $ 2,842,776
---------------------------------------------------------------------------------------------------------------
Newport Mesa, California Unified School District
Special Tax Revenue Refunding Bonds, Community
Facilities District No. 90-1, 6.625%, 9/1/14 NR/NR 2,000,000 1,981,010
---------------------------------------------------------------------------------------------------------------
Orange County, California Community Facilities
District Special Tax Bonds, No. 87-3, Prerefunded,
Series A, 8.05%, 8/15/08 NR/NR 1,480,000 1,624,184
---------------------------------------------------------------------------------------------------------------
Orange County, California Community Facilities
District Special Tax Bonds, No. 88-1, Aliso Viejo,
Prerefunded, Series A, 7.35%, 8/15/18 NR/AAA 3,000,000 3,467,577
---------------------------------------------------------------------------------------------------------------
Pittsburg, California Improvement Bond Act of 1915 Bonds,
Assessment District 1990-01, 7.75%, 9/2/20 NR/NR 95,000 96,129
---------------------------------------------------------------------------------------------------------------
Pomona, California Single Family Mtg. Revenue
Refunding Bonds, Escrowed to Maturity,
Series A, 7.60%, 5/1/23 NR/AAA 2,500,000 3,057,065
---------------------------------------------------------------------------------------------------------------
Redding, California Electric System Revenue
Certificates of Participation, FGIC Insured,
Inverse Floater, 7.28%, 6/1/19(2) Aaa/AAA/AAA 1,150,000 1,052,986
---------------------------------------------------------------------------------------------------------------
Redding, California Electric System Revenue
Certificates of Participation, MBIA Insured,
Inverse Floater, 8.90%, 7/8/22(2) Aaa/AAA 500,000 552,476
---------------------------------------------------------------------------------------------------------------
Regents of the University of California Revenue
Bonds, Multiple Purpose Projects, Prerefunded,
Series A, 6.875%, 9/1/16 NR/A- 250,000 282,516
---------------------------------------------------------------------------------------------------------------
Riverside County, California Community Facilities
District Special Tax Bonds, No. 88-12, 7.55%, 9/1/17 NR/NR 1,500,000 1,512,970
---------------------------------------------------------------------------------------------------------------
Sacramento County, California Single Family Mtg.
Revenue Bonds, Escrowed to Maturity, 8.125%, 7/1/16(3) Aaa/AAA 2,810,000 3,525,400
---------------------------------------------------------------------------------------------------------------
Sacramento, California Municipal Utility District
Electric Revenue Refunding Bonds, FGIC Insured,
Inverse Floater, 8.64%, 8/15/18(2) Aaa/AAA/AAA 1,500,000 1,465,492
---------------------------------------------------------------------------------------------------------------
San Bernardino County, California Certificates of
Participation, Medical Center Financing Project,
5.50%, 8/1/17 Baa1/A- 1,750,000 1,565,247
---------------------------------------------------------------------------------------------------------------
San Diego County, California Water Authority
Revenue Certificates of Participation, Series 91-B,
MBIA Insured, Inverse Floater, 8.67%, 4/8/21(2) Aaa/AAA 1,000,000 1,051,824
---------------------------------------------------------------------------------------------------------------
San Francisco, California Bay Area Rapid Transit
District Sales Tax Revenue Refunding Bonds,
AMBAC Insured, 6.75%, 7/1/11 Aaa/AAA/AAA 1,000,000 1,120,046
---------------------------------------------------------------------------------------------------------------
San Joaquin Hills, California Transportation Corridor
Agency Toll Road Revenue Bonds, Sr. Lien, 6.75%, 1/1/32 NR/NR/BBB 3,500,000 3,574,788
---------------------------------------------------------------------------------------------------------------
Southern California Home Financing Authority
Single Family Mtg. Revenue Bonds, Series A, 7.35%, 9/1/24 NR/AAA 285,000 298,541
---------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority
Power Project Revenue Bonds, San Juan Unit 3,
Series A, MBIA Insured, 5%, 1/1/20 Aaa/AAA 1,000,000 880,565
---------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority
Transmission Project Revenue Bonds,
Inverse Floater, 7.81%, 7/1/12(2) Aa/A+ 2,500,000 2,504,252
-----------
73,536,627
</TABLE>
7 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Possessions--8.9%
Puerto Rico Commonwealth General Obligation Bonds,
MBIA Insured, Inverse Floater, 7.78%, 7/1/08(2) Aaa/AAA $1,500,000 $ 1,522,179
---------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway Authority
Revenue Bonds, Prerefunded, Series P, 8.125%, 7/1/13 Aaa/AAA 2,000,000 2,189,944
---------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Public Improvement
General Obligation Bonds, Prerefunded,
Series A, 7.75%, 7/1/17 NR/AAA 1,000,000 1,107,783
---------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Corp. Single Family Mtg.
Revenue Bonds, Portfolio 1, Series B, 7.65%, 10/15/22 Aaa/AAA 285,000 295,895
---------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Medical & Environmental
Pollution Control Facilities Tourist Revenue Bonds,
Mennonite General Hospital Project,
Series A, 6.50%, 7/1/12 NR/BBB-/BBB 600,000 598,224
---------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Guaranteed
Public Education & Health Facilities Revenue Bonds,
Prerefunded, Series H, 7.875%, 7/1/07 Aaa/AAA 1,500,000 1,590,874
---------------------------------------------------------------------------------------------------------------
7,304,899
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $80,855,707) 98.2% 80,841,526
- -----------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.8 1,513,529
---------- -----------
Net Assets 100.0% $82,355,055
========== ===========
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
2. Represents the current interest rate for a variable rate bond. Variable rate
bonds known as "inverse floaters" pay interest at a rate that varies inversely
with short-term interest rates. As interest rates rise, inverse floaters produce
less current income. Their price may be more volatile than the price of a
comparable fixed-rate security. Inverse floaters amount to $8,149,209 or 9.90%
of the Fund's net assets at June 30, 1996.
3. Securities with an aggregate market value of $94,094 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
As of June 30, 1996, securities subject to the alternative minimum tax amounted
to $15,472,055 or 18.79% of the Fund's net assets.
Distribution of investments by industry, as a percentage of total investments at
value, is as follows:
Industry Market Value Percent
- --------------------------------------------------------------------------------
Utilities $17,760,733 22.0%
Housing 14,949,602 18.5
Lease/Rental 14,171,269 17.5
Special Tax Bonds 11,791,182 14.6
Transportation 10,064,501 12.5
Hospitals 5,501,339 6.8
General Obligation Bonds 2,629,962 3.3
Pollution Control 2,099,548 2.6
Education 1,873,390 2.2
----------- -----
$80,841,526 100.0%
=========== =====
See accompanying Notes to Financial Statements.
8 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities June 30, 1996
===================================================================================================================================
<S> <C> <C>
Assets Investments, at value (cost $80,855,707)--see accompanying statement $80,841,526
---------------------------------------------------------------------------------------------------------------
Cash 387,266
---------------------------------------------------------------------------------------------------------------
Receivables:
Interest 1,553,092
Shares of capital stock sold 1,766
---------------------------------------------------------------------------------------------------------------
Other 5,867
------------
Total assets 82,789,517
===================================================================================================================================
Liabilities Payables and other liabilities:
Dividends 288,015
Shares of capital stock redeemed 88,610
Shareholder reports 28,389
Daily variation on futures contracts--Note 5 13,787
Transfer and shareholder servicing agent fees 3,584
Distribution and service plan fees 3,147
Other 8,930
------------
Total liabilities 434,462
===================================================================================================================================
Net Assets $82,355,055
============
===================================================================================================================================
Composition of
Net Assets Par value of shares of capital stock $ 67,763
---------------------------------------------------------------------------------------------------------------
Additional paid-in capital 82,451,294
---------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (132,853)
---------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 14,344
---------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Note 3 (45,493)
------------
Net assets $82,355,055
============
===================================================================================================================================
Net Asset Value
Per Share Class A Shares:
Net asset value and redemption price per share (based on
net assets of $76,912,890 and 6,328,049 shares of capital stock outstanding) $12.15
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $12.76
---------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $5,442,165 and 448,274 shares of capital stock outstanding) $12.14
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations For the Year Ended June 30, 1996
===================================================================================================================================
<S> <C> <C>
Investment Income Interest $5,417,420
===================================================================================================================================
Expenses Management fees--Note 4 330,555
---------------------------------------------------------------------------------------------------------------
Shareholder reports 59,148
---------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 55,205
---------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class B 38,469
---------------------------------------------------------------------------------------------------------------
Legal and auditing fees 9,937
---------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 9,164
---------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 5,572
Class B 1,055
---------------------------------------------------------------------------------------------------------------
Insurance expenses 3,740
---------------------------------------------------------------------------------------------------------------
Directors' fees and expenses 1,857
---------------------------------------------------------------------------------------------------------------
Other 6,361
------------
Total expenses 521,063
Less expenses paid indirectly (7,886)
------------
Net expenses 513,177
===================================================================================================================================
Net Investment Income 4,904,243
===================================================================================================================================
Realized and
Unrealized
Gain (Loss) Net realized gain (loss) on:
Investments 37,776
Closing of futures contracts (24,718)
------------
Net realized gain 13,058
---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 446,150
------------
Net realized and unrealized gain 459,208
===================================================================================================================================
Net Increase in Net Assets Resulting From Operations $5,363,451
============
</TABLE>
See accompanying Notes to Financial Statements
10 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Year Ended June 30,
1996 1995
===================================================================================================================================
<S> <C> <C> <C>
Operations Net investment income $ 4,904,243 $ 4,872,375
---------------------------------------------------------------------------------------------------------------
Net realized gain 13,058 21,062
---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 446,150 1,550,552
----------- -----------
Net increase in net assets resulting from operations 5,363,451 6,443,989
===================================================================================================================================
Dividends and
Distributions to
Shareholders Dividends from net investment income:
Class A (4,694,006) (4,502,183)
Class B (189,244) (89,348)
---------------------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A -- (258,329)
Class B -- (8,756)
---------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (11,115) --
Class B (475) --
---------------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain:
Class A (60,043) --
Class B (2,568) --
===================================================================================================================================
Capital Stock
Transactions Net increase (decrease) in net assets resulting from
capital stock transactions--Note 2:
Class A (1,651,052) (2,943,992)
Class B 2,817,402 1,383,961
===================================================================================================================================
Net Assets Total increase 1,572,350 25,342
---------------------------------------------------------------------------------------------------------------
Beginning of period 80,782,705 80,757,363
----------- -----------
End of period (including overdistributed net investment income
of $132,853 and $98,805, respectively) $82,355,055 $80,782,705
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A Class B
------------------------------------------------------ -------------------------------
Year Ended June 30, Year Ended June 30,
1996 1995 1994 1993 1992 1996 1995 1994(1)
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $12.09 $11.82 $12.66 $12.05 $11.61 $12.08 $11.80 $12.90
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .73 .73 .75 .80 .82 .61 .62 .38
Net realized and unrealized
gain (loss) .07 .27 (.80) .64 .45 .07 .27 (1.07)
------- ------- ------- ------- ------- ------ ------ ------
Total income (loss)
from investment operations .80 1.00 (.05) 1.44 1.27 .68 .89 (.69)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.73) (.69) (.73) (.81) (.82) (.61) (.57) (.37)
Dividends in excess of net
investment income -- (.04) (.03) -- -- -- (.04) (.01)
Distributions from net
realized gain --(2) -- -- (.02) (.01) --(2) -- --
Distributions in excess of net
realized gain (.01) -- (.03) -- -- (.01) -- (.03)
------- ------- ------- ------- ------- ------ ------ ------
Total dividends and
distributions to shareholders (.74) (.73) (.79) (.83) (.83) (.62) (.61) (.41)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.15 $12.09 $11.82 $12.66 $12.05 $12.14 $12.08 $11.80
======= ======= ======= ======= ======= ====== ====== ======
===================================================================================================================================
Total Return, at Net
Asset Value(3) 6.73% 8.93% (0.60)% 12.53% 11.21% 5.66% 7.90% (5.42)%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $76,913 $78,134 $79,555 $72,387 $40,055 $5,442 $2,648 $1,203
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $78,676 $76,148 $81,741 $54,840 $26,304 $3,848 $1,904 $649
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.99% 6.27% 6.09% 6.46% 6.74% 4.94% 5.17% 4.91%(4)
Expenses(5) 0.58% 0.57% 0.53% 0.39% 0.32% 1.60% 1.55% 1.62%(4)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 33.1% 14.2% 20.2% 5.8% 25.7% 33.1% 14.2% 20.2%
</TABLE>
1. For the period from October 29, 1993 (inception of offering) to June 30, 1994
2. Less than $.005 per share.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
4. Annualized.
5. Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1996 were $29,530,605 and $26,880,864, respectively.
See accompanying Notes to Financial Statements.
12 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant
Accounting Policies
Oppenheimer Main Street California Tax-Exempt Fund (the Fund) is a separate
series of Oppenheimer Main Street Funds, Inc., an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek as high a level of current income which
is exempt from Federal and California personal income taxes for individual
investors that is consistent with preservation of capital. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers both Class A
and Class B shares. Class A shares are sold with a front-end sales charge. Class
B shares may be subject to a contingent deferred sales charge. Both classes of
shares have identical rights to earnings, assets and voting privileges, except
that each class has its own distribution and/or service plan, expenses directly
attributable to a particular class and exclusive voting rights with respect to
matters affecting a single class. Class B shares will automatically convert to
Class A shares six years after the date of purchase. The following is a summary
of significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
asked price or the last sale price on the prior trading day. Long-term and
short-term "non-money market" debt securities are valued by a portfolio pricing
service approved by the Board of Directors. Such securities which cannot be
valued by the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by the
Board of Directors to determine fair value in good faith. Short-term "money
market type" debt securities having a remaining maturity of 60 days or less are
valued at cost (or last determined market value) adjusted for amortization to
maturity of any premium or discount.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A and Class B shares from net investment income each day the New York
Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of premium amortization. The character of the distributions
made during the year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax purposes. Also, due
to timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
During the year ended June 30, 1996, the Fund changed the classification of
distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. Accordingly, during the year ended June 30, 1996,
amounts have been reclassified to reflect an increase in overdistributed net
investment income of $55,041 and an increase in accumulated net realized gain on
investments of $55,041.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Original issue discount on securities purchased
is amortized over the life of the respective securities, in accordance with
federal income tax requirements. For bonds acquired after April 30, 1993, on
disposition or maturity, taxable ordinary income is recognized to the extent of
the lesser of gain or market discount that would have accrued over the holding
period. Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes. The Fund concentrates its investments in
California and, therefore, may have more credit risks related to the economic
conditions of California than a portfolio with a broader geographical
diversification.
13 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
1. Significant
Accounting Policies
(continued)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
================================================================================
2. Capital Stock
The Fund has authorized 26,250,000 shares of $.01 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended June 30, 1996 Year Ended June 30, 1995
--------------------------- ------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 387,788 $ 4,767,548 549,187 $ 6,492,313
Dividends and distributions reinvested 243,712 2,993,646 262,815 3,070,057
Redeemed (765,193) (9,412,246) (1,081,996) (12,506,362)
------- ----------- --------- ------------
Net decrease (133,693) $(1,651,052) (269,994) $ (2,943,992)
======= =========== ========= ============
- -----------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 247,941 $ 3,048,438 125,642 $ 1,482,012
Dividends and distributions reinvested 9,629 117,946 4,898 57,310
Redeemed (28,549) (348,982) (13,193) (155,361)
------- ----------- --------- ------------
Net increase 229,021 $ 2,817,402 117,347 $ 1,383,961
======= =========== ========= ============
</TABLE>
================================================================================
3. Unrealized Gains and
Losses on Investments
At June 30, 1996, net unrealized depreciation on investments of $14,181 was
composed of gross appreciation of $1,512,748, and gross depreciation of
$1,526,929.
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.55% of average
annual net assets, with a contractual waiver when net assets are less than $100
million. Annual fees, reflecting this waiver, are 0.40% of net assets of $75
million or more but less than $100 million, 0.25% of net assets of $50 million
or more but less than $75 million, 0.15% of net assets of $25 million or more
but less than $50 million, and 0% of net assets less than $25 million. The
Manager has agreed to assume Fund expenses (with specified exceptions) in excess
of the regulatory limitation of the state of California.
For the year ended June 30, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $134,177, of which $28,111 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B shares
totaled $118,388. During the year ended June 30, 1996, OFDI received contingent
deferred sales charges of $3,991 upon redemption of Class B shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class B shares to reimburse OFDI for its services and costs in distributing
Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B shares that are
outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per
year to reimburse dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual net assets of Class
B shares, determined as of the close of each regular business day. If the Plan
is terminated by the Fund, the Board of Directors may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain expenses it
incurred before the Plan was terminated. During the year ended June 30, 1996,
OFDI retained $33,636 as reimbursement for Class B sales commissions and service
fee advances, as well as financing costs. As of June 30, 1996, OFDI had incurred
unreimbursed expenses of $215,851 for Class B.
14 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
================================================================================
5. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognized a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At June 30, 1996, the Fund had outstanding futures contracts to sell debt
securities as follows:
<TABLE>
<CAPTION>
Number of Valuation as of Unrealized
Contracts to Sell Expiration Date Futures Contracts June 30, 1996 Depreciation
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds 9/96 12 $1,314,375 $31,312
</TABLE>
15 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Independent Auditors' Report
================================================================================
The Board of Directors and Shareholders of Oppenheimer Main Street California
Tax-Exempt Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Main Street California Tax-Exempt
Fund as of June 30, 1996, the related statement of operations for the year then
ended, the statements of changes in net assets for the years ended June 30, 1996
and 1995, and the financial highlights for the period July 1, 1991 to June 30,
1996. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at June 30,
1996 by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer Main
Street California Tax-Exempt Fund at June 30, 1996, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
July 22, 1996
16 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Federal Income Tax Information (Unaudited)
================================================================================
In early 1997, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended June
30, 1996 are eligible for the corporate dividend-received deduction. The
dividends were derived from interest on municipal bonds and are not subject to
federal income tax. To the extent a shareholder is subject to any state or local
tax laws, some or all of the dividends received may be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
17 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
Oppenheimer Main Street California Tax-Exempt Fund
A Series of Oppenheimer Main Street Funds, Inc.
================================================================================
Officers and Directors
James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Director and President
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Jerry A. Webman, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder
Servicing Agent
OppenheimerFunds Services
================================================================================
Custodian of
Portfolio Securities
The Bank of New York
================================================================================
Independent Auditors
Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of Oppenheimer Main Street California
Tax-Exempt Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Main Street California Tax-Exempt Fund. For material information
concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
18 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
OppenheimerFunds Family
================================================================================
OppenheimerFunds offers over 50 funds designed to fit virtually every investment
goal. Whether you're investing for retirement, your children's education or
tax-free income, we have the funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing
that you are investing with a respected financial institution with over 35 years
of experience in helping people just like you reach their financial goals. And
you're investing with a leader in global, growth stock and flexible fixed-income
investments--with over 3 million shareholder accounts and more than $50 billion
under OppenheimerFunds' management and that of our affiliates.
At OppenheimerFunds we don't charge a fee to exchange shares. And you can
exchange shares easily by mail or by telephone.(1) For more information on
Oppenheimer funds, please contact your financial advisor or call us at
1-800-525-7048 for a prospectus. You may also write us at the address shown on
the back cover. As always, please read the prospectus carefully before you
invest.
================================================================================
Stock Funds
Global Emerging Growth Fund Growth Fund
Enterprise Fund(2) Global Fund
International Growth Fund Quest Global Value Fund
Discovery Fund Disciplined Value Fund
Quest Small Cap Value Fund Oppenheimer Fund
Gold & Special Minerals Fund Value Stock Fund
Target Fund Quest Value Fund
================================================================================
Stock & Bond Funds
Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
================================================================================
Bond Funds
International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
================================================================================
Tax-Exempt Funds
California Tax-Exempt Fund(3) Insured Tax-Exempt Fund
Florida Tax-Exempt Fund(3) Intermediate Tax-Exempt Fund
New Jersey Tax-Exempt Fund(3)
New York Tax-Exempt Fund(3) Rochester Division
Pennsylvania Tax-Exempt Fund(3) Rochester Fund Municipals
Tax-Free Bond Fund Limited Term New York Municipal Fund
================================================================================
Money Market Funds(4)
Money Market Fund Cash Reserves
================================================================================
LifeSpan
Growth Fund Income Fund
Balanced Fund
1. Exchange privileges are subject to change or termination. Shares may be
exchanged only for shares of the same class of eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
U.S. government and there can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per share. Oppenheimer funds
are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center,
New York, NY 10048-0203.
(C) Copyright 1996 OppenheimerFunds, Inc. All rights reserved.
19 Oppenheimer Main Street California Tax-Exempt Fund
<PAGE>
[BACK COVER]
Information
General Information
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PhoneLink
24 hours a day, automated
information and transactions
1-800-533-3310
Telecommunications Device
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Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RA0725.001.0696 August 31, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Services
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
[Oppenheimer Logo (R)]
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
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