September 19, 1994
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20548
Re: Oppenheimer Global Emerging Growth Fund
Form N-14 Reg. No. 33-55091
To the Securities and Exchange Commission:
Pursuant to paragraph (e) of Rule 485 under the Securities Act of 1933,
as amended (the "Securities Act"), and in connection with Post-Effective
Amendment No. 1 to the Securities Act Registration Statement of Oppenheimer
Global Emerging Growth Fund on Form N-14, the undersigned attorney, who
prepared such Amendment, hereby represents to the Commission that said
Amendment does not contain disclosures which would render the Registration
Statement ineligible to become effective pursuant to paragraph (b) of Rule
485.
Very truly yours,
/s/ Merryl I. Hoffman
---------------------
Merryl I. Hoffman
Vice President and
Assistant Counsel
(212) 323-0248
<PAGE>
As filed with the Securities and Exchange Commission on September 19, 1994
Registration No. 33-55091
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 1 / X /
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(formerly, Oppenheimer Global Bio-Tech Fund)
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
Executive Vice President & General Counsel
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(212) 323-0256
(Name and Address of Agent for Service)
It is proposed that this filing will become effective on September 19,
1994, pursuant to paragraph (b) of Rule 485.
No filing fee is due because the Registrant has previously registered an
indefinite number of shares under Rule 24f-2; a Rule 24f-2 notice for the
year ended September 30, 1993 was filed on November 23, 1993.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A
Proxy Statement for Oppenheimer Global Environment Fund
and
Prospectus for Oppenheimer Global Emerging Growth Fund
Part B
Statement of Additional Information
Part C
Other Information
Signatures
Exhibits
<PAGE>
FORM N-14
OPPENHEIMER GLOBAL BIO-TECH FUND
(to be named, Oppenheimer Global Emerging Growth Fund)
Cross Reference Sheet
Part A of
Form N-14
Item No. Proxy Statement and Prospectus Heading and/or Title of Document
1 (a) Cross Reference Sheet
(b) Front Cover Page
(c) *
2 (a) *
(b) Table of Contents
3 (a) Synopsis
(b) Principal Risk Factors
4 (a) Synopsis; Approval or Disapproval of the Reorganization;
Comparison between the Fund and Emerging Growth Fund; Method of
Carrying Out the Reorganization; Miscellaneous Information
(b) Approval or Disapproval of the Reorganization - Capitalization
Table (Unaudited)
5 (a) Registrant's Prospectus; Additional Information
(b) *
(c) *
(d) *
(e) Comparison between the Fund and Emerging Growth Fund
(f) Comparison between the Fund and Emerging Growth Fund
6 (a) Prospectus of Oppenheimer Global Environment Fund; Front Cover
Page
(b) Comparison between the Fund and Emerging Growth Fund
(c) *
(d) *
7 (a) Introduction; Synopsis
(b) *
(c) Introduction; Approval or Disapproval of the Reorganization
8 (a) Proxy Statement
(b) *
9 *
Part B of
Form N-14
Item No. Statement of Additional Information Heading
10 Cover Page
11 Table of Contents
12 (a) Registrant's Statement of Additional Information
(b) *
13 (a) Statement of Additional Information about Oppenheimer Global
Environment Fund
(b) *
14 Registrant's Statement of Additional Information; Statement of
Additional Information about Oppenheimer Global Environment
Fund; Semi-Annual Report of Oppenheimer Global Environment Fund
at 3/31/94; Registrant's Semi-Annual Report at 3/31/94
<PAGE>
Part C of
Form N-14
Item No. Other Information Heading
15 Indemnification
16 Exhibits
17 Undertakings
_______________
* Not Applicable or negative answer
<PAGE>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
/ X / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Oppenheimer Global Environment Fund
- ------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Oppenheimer Global Environment Fund
- ------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-
6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee Computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(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:(1)
- ------------------------------------------------------------------
(4)Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------
/ / 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:
- ------------------------------------------------------------------
(2)Form, schedule or registration statement no.:
- ------------------------------------------------------------------
(3)Filing Party:
- ------------------------------------------------------------------
(4)Date Filed:
[FN]
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
September 1994
Dear Oppenheimer Global Environment Shareholder:
In July, I sent a letter to let you know about an important change
being proposed for your Fund. A shareholder meeting has been scheduled
for November 11th, and all shareholders of record on September 8th are
being asked to vote either in person or by proxy. You'll find a notice
of the meeting and a proxy statement detailing the proposal enclosed for
your review.
What is being proposed?
On June 16th, your Board of trustees, who represent you in matters
regarding your Fund, recommended approval of a proposal to reorganize your
Fund into Oppenheimer Global Emerging Growth Fund (formerly Oppenheimer
Global Bio-Tech Fund), a fund that emphasizes investment in emerging
growth companies worldwide.
We proposed this reorganization because we believe small companies
that do business globally are well-positioned to take advantage of the
shifts in world markets today -- and as these markets mature, the
investment opportunities should be very attractive. In addition, some of
the risks associated with sector fund investing may be reduced by
diversifying the Fund's investments across different sectors.
If the proposal is approved, we expect that in mid-November the assets
of your Fund will be transferred into -- and you'll become shareholders
of -- Oppenheimer Global Emerging Growth Fund.
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.
If you have questions, please contact your financial advisor or call
us at 1-800-525-7048.
Sincerely,
(JSF signature)
P.S. Casting your vote is quick and easy, so please take a moment to
complete the proxy ballot.
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER GLOBAL ENVIRONMENT FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 11, 1994
To the Shareholders of Oppenheimer Global Environment Fund:
Notice is hereby given that a Special Meeting of the Shareholders of
Oppenheimer Global Environment Fund (the "Fund"), a registered management
investment company, will be held at 3410 South Galena Street, Denver,
Colorado 80231, at 10:00 A.M., Denver time, on November 11, 1994, or any
adjournments thereof (the "Meeting"), for the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization
between the Fund and Oppenheimer Global Emerging Growth Fund (formerly,
Oppenheimer Global Bio-Tech Fund)("Emerging Growth Fund"), and the
transactions contemplated thereby, including the transfer of substantially
all the assets of the Fund in exchange for shares of Emerging Growth Fund,
the distribution of such shares to the shareholders of the Fund in
complete liquidation of the Fund, the de-registration of the Fund as an
investment company under the Investment Company Act of 1940, as amended,
and the cancellation of the outstanding shares of the Fund (The Proposal);
and
2. To act upon such other matters as may properly come before the
Meeting.
Shareholders of record at the close of business on September 8, 1994 are
entitled to notice of, and to vote at, the Meeting. The Proposal is more
fully discussed in the accompanying 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 Fund'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
September 19, 1994
_______________________________________________________________________
__________
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.
250
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(Formerly, Oppenheimer Global Bio-Tech Fund)
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
This Proxy Statement of Oppenheimer Global Environment Fund (the "Fund")
relating to the Agreement and Plan of Reorganization (the "Reorganization
Agreement") between the Fund and Oppenheimer Global Emerging Growth Fund
(formerly, Oppenheimer Global Bio-Tech Fund) ("Emerging Growth Fund") and
the transactions contemplated thereby (the "Reorganization") also
constitutes a Prospectus of Emerging Growth Fund included in a
Registration Statement on Form N-14 filed by Emerging Growth Fund with the
Securities and Exchange Commission (the "SEC"). Such Registration
Statement relates to the registration of shares of Emerging Growth Fund
to be offered to the shareholders of the Fund pursuant to the
Reorganization Agreement. The Fund is located at Two World Trade Center,
New York, New York 10048-0203 (telephone 1-800-525-7048). Emerging
Growth Fund is a mutual fund with the investment objective of aggressively
seeking capital appreciation through investment in emerging growth
companies located worldwide.
This Proxy Statement and Prospectus sets forth concisely information about
Emerging Growth Fund that shareholders of the Fund should know before
voting on the Reorganization. A copy of the Prospectus for Emerging
Growth Fund, dated September 19, 1994, is enclosed, and is incorporated
herein by reference. The following documents have been filed with the SEC
and are available without charge upon written request to Oppenheimer
Shareholder Services ("OSS"), the transfer and shareholder servicing agent
for Emerging Growth Fund and the Fund, at P.O. Box 5270, Denver, Colorado
80217, or by calling the toll-free number shown above: (i) a Prospectus
for the Fund, dated February 1, 1994, supplemented June 24, 1994 and
further supplemented July 5, 1994; (ii) a Statement of Additional
Information about the Fund, dated February 1, 1994; and (iii) a Statement
of Additional Information about Emerging Growth Fund, dated September 19,
1994 (the "Emerging Growth Fund Additional Statement"). The Emerging
Growth Fund Additional Statement, which is incorporated herein by
reference, contains more detailed information about Emerging Growth Fund
and its management. A Statement of Additional Information relating to the
Reorganization, dated September 19, 1994, has been filed with the SEC as
part of the Emerging Growth Fund Registration Statement on Form N-14 and
is incorporated by reference herein, and is available by written request
to OSS at the same address immediately above or by calling the toll-free
number shown above.
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 OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES 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 September 19, 1994.
<PAGE>
TABLE OF CONTENTS
TO PROXY STATEMENT AND PROSPECTUS
Page
Introduction4
General4
Record Date; Vote Required; Share Information5
Proxies5
Costs of the Solicitation and the Reorganization6
Synopsis6
Parties to the Reorganization6
The Reorganization7
Reasons for the Reorganization7
Tax Consequences of the Reorganization8
Investment Objectives and Policies8
Investment Advisory and Service Plan Fees10
Purchases, Exchanges and Redemptions11
Principal Risk Factors12
Approval or Disapproval of the Reorganization (The Proposal)16
Reasons for the Reorganization16
The Reorganization17
Tax Aspects of the Reorganization18
Capitalization Table (Unaudited)20
Comparison Between the Fund and Emerging Growth Fund21
Investment Objectives and Policies21
Special Investment Methods23
Investment Restrictions25
Portfolio Turnover27
Brokerage Practices27
Expense Ratios and Performance29
Shareholder Services29
Rights of Shareholders30
Management and Distribution Arrangements30
Purchase of Additional Shares32
Method of Carrying Out the Reorganization 33
Miscellaneous35
Additional Information - Emerging Growth Fund Performance35
Financial Information36
Public Information37
Other Business38
Annex A - Agreement and Plan of Reorganization by and between
Oppenheimer Global Environment Fund and Oppenheimer Global Emerging
Growth Fund A-1
The Prospectus for Oppenheimer Global Emerging Growth Fund, dated
September 19, 1994, accompanies this Proxy Statement and Prospectus.
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER GLOBAL ENVIRONMENT FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Special Meeting of Shareholders
to be held November 11, 1994
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the shareholders
of Oppenheimer Global Environment Fund (the "Fund"), a registered
management investment company, in connection with the solicitation by the
Fund's Board of Trustees (the "Board") of proxies to be used at the
Special Meeting of Shareholders of the Fund to be held at 3410 South
Galena Street, Denver, Colorado 80231, at 10:00 A.M., Denver time, on
November 11, 1994, or any adjournments thereof (the "Meeting"). It is
expected that the mailing of this Proxy Statement and Prospectus will
commence on or about September 21, 1994.
At the Meeting, shareholders of the Fund will be asked to approve or
disapprove an Agreement and Plan of Reorganization (the "Reorganization
Agreement") between the Fund and Oppenheimer Global Emerging Growth Fund
(formerly, Oppenheimer Global Bio-Tech Fund)("Emerging Growth Fund"), and
the transactions contemplated thereby (the "Reorganization"), including
the transfer of substantially all the assets of the Fund in exchange for
shares of Emerging Growth Fund, the distribution of such shares to the
shareholders of the Fund in complete liquidation of the Fund, the
deregistration of the Fund as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
cancellation of the outstanding shares of the Fund. Emerging Growth Fund
currently offers shares with a sales charge imposed at the time of
purchase (certain purchases aggregating $1.0 million or more are not
subject to a sales charge, but may be subject to a contingent deferred
sales charge). The shares to be issued by Emerging Growth Fund pursuant
to the Reorganization will be issued at net asset value without a sales
charge. Emerging Growth Fund, formerly known as Oppenheimer Global Bio-
Tech Fund ("Bio-Tech Fund"), changed its name and certain of its
fundamental investment policies effective September 19, 1994.
Accordingly, with respect to periods prior to September 19, 1994, all
references herein to Emerging Growth Fund shall be deemed to refer to Bio-
Tech Fund. Additional information with respect to these changes to
Emerging Growth Fund is set forth herein, in the Prospectus of Emerging
Growth Fund accompanying this Proxy Statement and Prospectus and in the
Emerging Growth Fund Additional Statement which is incorporated herein by
reference.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on September 8, 1994 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 the holders of a majority of the outstanding shares of the Fund
entitled to vote at the Meeting is required for approval of the Proposal.
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 the Fund will vote on
the Reorganization. The vote of shareholders of Emerging Growth Fund is
not being solicited.
At the close of business on the Record Date, there were approximately
2,982,234 shares of the Fund issued and outstanding. The presence in
person or by proxy of the holders of a majority of such shares constitutes
a quorum for the transaction of business at the Meeting. To the knowledge
of the Fund, as of the Record Date, no person owned of record or
beneficially 5% or more of its outstanding shares except for Merrill
Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch"), P.O. Box 30561, New
Brunswick, New Jersey 08989, which owned of record 196,768 shares of the
Fund (6.60% of the outstanding shares of the Fund as of such date). As
of the Record Date, to the knowledge of Emerging Growth Fund, no person
owned of record or beneficially 5% or more of its outstanding shares
except for Merrill Lynch, which owned of record approximately 669,342
shares of Emerging Growth Fund (7.66% of the outstanding shares of
Emerging Growth Fund as of such date).
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 a 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, the broker-dealer may (if permitted under applicable stock
exchange rules), as record holder, vote such shares on the Proposal in the
same proportion as that broker-dealer votes street account shares for
which voting instructions were received in time to be voted. 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 the Fund at Two World Trade Center, 34th
Floor, New York, New York 10048-0203; (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 the Fund.
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 the Fund or officers and employees of OSS,
personally or by telephone or telegraph. Any expenses so incurred will
be borne by OSS. Brokerage houses, banks and other fiduciaries may be
requested to forward soliciting material to the beneficial owners of
shares of the Fund and to obtain authorization for the execution of
proxies. For those services, if any, they will be reimbursed by the Fund
for their reasonable out-of-pocket expenses.
With respect to the Reorganization, the Fund and Emerging Growth Fund will
bear the cost of their respective tax opinion. Any other out-of-pocket
expenses of the Fund and Emerging Growth Fund associated with the
Reorganization, including legal, accounting and transfer agent expenses,
will be borne by the Fund and Emerging Growth Fund, respectively, in the
amounts so incurred by each.
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 the 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 the Annex hereto. Shareholders should
carefully review this Proxy Statement and Prospectus and the Annex hereto
in their entirety and, in particular, the current Prospectus of Emerging
Growth Fund which accompanies this Proxy Statement and Prospectus and is
incorporated by reference herein.
Parties to the Reorganization
The Fund is a diversified, open-end, management investment company
organized on November 9, 1989 as a Massachusetts business trust. Emerging
Growth Fund is a diversified, open-end, management investment company
organized on October 30, 1987 as a Massachusetts business trust named
"Oppenheimer Global Bio-Tech Fund." Effective September 19, 1994,
Emerging Growth Fund was re-named "Oppenheimer Global Emerging Growth
Fund" and certain of its fundamental investment policies were changed as
described herein. The Fund and Emerging Growth Fund are each located at
Two World Trade Center, New York, New York 10048-0203. The members of
the Board of the Fund and of the Board of Trustees of Emerging Growth Fund
are the same. Oppenheimer Management Corporation (the "Manager") acts as
investment adviser to the Fund and Emerging Growth Fund (collectively
referred to herein as the "funds"). Additional information about the
parties is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of substantially
all the assets of the Fund to Emerging Growth Fund in exchange for shares
of Emerging Growth Fund. The net asset value of Emerging Growth Fund
shares issued in the exchange will equal the value of the assets of the
Fund received by Emerging Growth Fund. Following the Closing Date (as
hereinafter defined) scheduled for the Reorganization, the Fund will
distribute the shares of Emerging Growth Fund received by the Fund on the
Closing Date to holders of Fund shares issued and outstanding as of the
Valuation Date (as hereinafter defined) in complete liquidation of the
Fund and the Fund will thereafter be dissolved and deregistered under the
Investment Company Act. As a result of the Reorganization, each Fund
shareholder will receive that number of full and fractional Emerging
Growth Fund shares equal in value to such shareholder's pro rata interest
in the assets transferred to Emerging Growth Fund as of the Valuation
Date. The Board has determined that the interests of existing Fund
shareholders will not be diluted as a result of the Reorganization. For
the reasons set forth below under "Approval or Disapproval of the
Reorganization - Reasons for the Reorganization," the Board, including the
trustees who are not "interested persons" (the "Independent Trustees"),
as that term is defined in the Investment Company Act, of the Fund, has
concluded that the Reorganization is in the best interests of the Fund and
its shareholders and recommends approval of the Reorganization by Fund
shareholders. If the Reorganization is not approved, the 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 of the Fund with
Emerging Growth Fund in order to obtain for the Fund's shareholders the
benefits that could be realized from a broader base of investments. The
Manager discussed with the Board the proposal and the investment policies
of Emerging Growth Fund, as well as certain considerations relating to the
Fund, including the Fund's historical performance and future prospects,
changing economic and market conditions, the increased risk of stock price
volatility generally associated with emphasizing investments in only one
sector (such as the environmental sector) and issues pertaining to
Environmental Companies (as defined below). The Board considered that,
in light of the foregoing considerations, the Fund's shareholders would
be better served by ownership in Emerging Growth Fund and its ability to
emphasize investments in emerging growth companies worldwide.
The Board also considered that by reorganizing the Fund with and into
Emerging Growth Fund, shareholders of the Fund would become shareholders
in a considerably larger fund and may benefit from the economies of scale
available to a larger fund, such as lower costs per shareholder account
through lower operating expenses even though, as a percentage of net
assets, the investment management fee rate currently paid by the Fund is
lower than that paid by Emerging Growth Fund. For the fiscal year ended
September 30, 1993, the expense ratio of the Fund and Emerging Growth Fund
was 1.65% and 1.59%, respectively, of that fund's average annual net
assets, although for the six-month period ended March 31, 1994
(unaudited), the expense ratio of the Fund and Emerging Growth Fund was
1.32% (annualized) and 1.73% (annualized), respectively, of that fund's
average annual net assets. For the fiscal year ended September 30, 1993
and the six-month period ended March 31, 1994 (unaudited), on a pro forma
basis giving effect to the Reorganization, the expense ratio of Emerging
Growth Fund, as a percentage of average annual net assets, would be 1.50%
and 1.55%, respectively.
Tax Consequences of the Reorganization
In the opinion of KPMG Peat Marwick LLP ("Peat Marwick"), tax adviser to
the Fund, the Reorganization will qualify as a tax-free reorganization for
Federal income tax purposes. As a result, no gain or loss will be
recognized by the Fund, Emerging Growth Fund, or the shareholders of the
Fund for Federal income tax purposes as a result of the Reorganization.
For further information about the tax consequences of the Reorganization,
see "Approval or Disapproval of the Reorganization - Tax Aspects" below.
Investment Objectives and Policies
As its investment objective, the Fund seeks capital appreciation and
Emerging Growth Fund aggressively seeks capital appreciation, in each case
in the value of its shares.
In seeking its investment objective, as a fundamental investment policy,
the Fund will normally invest at least 65% of its total assets in common
stocks of a variety of Environmental Companies traded in markets in at
least four countries, including the United States. Environmental
Companies are companies that offer products, services or processes that
contribute to a cleaner and healthier environment. These companies have
operations or products relating to pollution control, solid waste
management, hazardous waste treatment and disposal, pulp and paper
recycling, waste-to-energy conversion, asbestos and nuclear waste removal,
the development of energy alternatives, biodegradable products,
biotechnology, related engineering and construction, and the achievement
of cleaner and healthier air, groundwater and foods. To be considered
Environmental Companies for the purpose of the Fund's investment
objective, these companies must invest at least 50% of their research and
development expenditures in, or derive at least 50% of their revenues
from, one or more of the environmental activities identified above. The
Fund normally will invest that portion of its assets not invested in
Environmental Companies in a manner consistent with its objective of
capital appreciation. Such investments are limited to common and
preferred stocks, bonds (required to be rated at least "A" by Standard &
Poor's Corporation ("Standard & Poor's") or Moody's Investors Service,
Inc. ("Moody's") or, if unrated, will be of equivalent quality as
determined by the Manager), warrants and rights, convertible debt (which
may be rated as low as "C" by Moody's or "D" by Standard & Poor's), or
hedging instruments. The Fund is required to have at least one
investment in securities of a U.S. company and may invest without limit
in "foreign securities" (as described below under "Principal Risk
Factors"). No more than 25% of the Fund's total assets, at the time of
purchase, will be invested in securities of issuers organized under the
laws of any one foreign country.
In seeking its investment objective, as a non-fundamental investment
policy, under normal market conditions Emerging Growth Fund will invest
at least 65% of its total assets in common stocks and other equity
securities, including convertible securities, as well as warrants and
rights, of emerging growth companies located in the United States and at
least three foreign countries. As with the Fund, Emerging Growth Fund is
required to have at least one investment in securities of a U.S. company
and may invest without limit in "foreign securities". The Manager will
emphasize investments in aggressive growth opportunities in their earliest
stages that offer the potential for accelerated earnings or revenues
growth. Emerging growth companies tend to be smaller companies that are
developing new products or services or are expanding into new markets for
their products. Emerging growth companies can be any size and can be in
any industry. While they may have what the Manager believes to be
favorable prospects for the long-term, they normally retain a large part
of their earnings for research, development and investment in capital
assets. Therefore, they tend not to emphasize the payment of dividends.
Emerging Growth Fund previously emphasized investments in biotechnology
companies, and was named "Oppenheimer Global Bio-Tech Fund".
At a meeting held September 19, 1994, Emerging Growth Fund's shareholders
approved a proposal to eliminate the fundamental investment policy that
Emerging Growth Fund generally invest at least 65% of its total assets in
biotechnology companies. Effective with such shareholder approval,
Emerging Growth Fund adopted a non-fundamental investment policy of
emphasizing investments in emerging growth companies worldwide. As of the
date of this Proxy Statement and Prospectus, Emerging Growth Fund may be
deemed to concentrate its investments (that is, invest 25% or more of its
total assets) in securities of biotechnology companies. Emerging Growth
Fund intends to concentrate its investments in biotechnology companies for
only an interim period to permit the orderly disposition of certain of
these assets. Except for the foregoing, the Manager does not intend to
concentrate Emerging Growth Fund's investments in any industry.
Under normal circumstances, the funds may hold a portion of their assets
in cash or cash equivalents (commercial paper, Treasury bills and U.S.
Government securities maturing in one year or less) for liquidity
purposes. Under unusual market or economic conditions (including drastic
market fluctuations), for temporary defensive purposes, the funds may
generally invest up to 100% of their assets in (i) obligations issued or
guaranteed by the U.S. Government, its instrumentalities or agencies, (ii)
certificates of deposit, (iii) certain bankers' acceptances, time
deposits, and letters of credit, (iv) commercial paper rated in the three
highest categories by Standard & Poor's or Moody's, and/or (v) short-term
debt securities (maturing in one year or less from the date of purchase).
Investment Advisory and Distribution Plan Fees
The funds obtain investment management services from the Manager. The
management fee is payable monthly and computed on the net asset value of
each fund as of the close of business each day. The Fund pays a
management fee at the annual rate of 0.75% of the first $200 million of
net assets, 0.72% of the next $200 million, 0.69% of the next $200 million
and 0.66% of average net assets in excess of $600 million. Emerging
Growth Fund pays a management fee at the annual rate of 1.0% of the first
$50 million of net assets, 0.75% of the next $150 million, 0.72% of the
next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million and 0.60% of average net assets over $800 million. Both the Fund
and Emerging Growth Fund have service plans pursuant to Rule 12b-1 under
the Investment Company Act under which each fund reimburses Oppenheimer
Funds Distributor, Inc. (the "Distributor"), the distributor of each
fund's shares, quarterly for all or a portion of the Distributor's costs
incurred in connection with the personal service and maintenance of
shareholder accounts that hold the fund's shares. The current maximum
annual fee payable by the funds pursuant to their service plans is 0.25%
of the average of the aggregate net asset value of fund shares held in
these shareholder accounts, computed as of the close of each business day.
As a percentage of net assets, the management fee rate currently paid by
the Fund is lower than that paid by Emerging Growth Fund. See "Comparison
Between the Fund and Emerging Growth Fund - Expense Ratios and
Performance" below.
Purchases, Exchanges and Redemptions
The Fund and Emerging Growth Fund are part of the OppenheimerFunds complex
of mutual funds. The procedures for purchases, exchanges and redemptions
of shares of the funds are the same.
The maximum sales charge on shares of the Fund and Emerging Growth Fund
is 5.75%, and is reduced for purchases of $25,000 or more. For certain
purchases of $1 million or more, the funds do not charge a front-end sales
charge but impose a contingent deferred sales charge of a maximum of 1%
on shares redeemed within 18 months of the end of the calendar month of
their purchase. Shares of Emerging Growth Fund received in the
Reorganization will be issued at net asset value, without a sales charge.
Shareholders of the funds may exchange their shares at net asset value for
shares of any of over 30 equity, fixed-income and money market funds for
which the Distributor or an affiliate acts as the distributor. Shares of
any money market fund purchased without a sales charge may be exchanged
for shares of a fund offered with a sales charge upon payment of the sales
charge. Exchanges are subject to a $5 fee. 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, or they may arrange to have
share redemption proceeds wired to a pre-designated account at a U.S. bank
or other financial institution that is an ACH member ("AccountLink
redemption"). Shareholders of the funds may reinvest redemption proceeds
within six months of a redemption at net asset value in shares of the
funds or any of numerous "Eligible Funds" within the OppenheimerFunds
complex. The Fund and Emerging Growth Fund may redeem accounts valued at
less than $200 if the account has fallen below such stated amount for
reasons other than market value fluctuations. Both funds offer Automatic
Withdrawal and Exchange Plans.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in Emerging
Growth Fund, shareholders should carefully consider the following risk
factors, which is a summary only, relating to both Emerging Growth Fund
and the Fund, in addition to the other 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. As stated in their respective Prospectuses, as a general
matter, each of the Fund and Emerging Growth Fund is intended for
investors seeking capital appreciation over the long term and who are
willing to accept greater risks of loss in the hopes of greater gains.
There is no assurance that either the Fund or Emerging Growth Fund will
achieve its investment objective.
Investment by Emerging Growth Fund in Emerging Growth Companies
Emerging Growth Fund may invest without limit in emerging growth companies
in a variety of industries. Although the Fund may invest up to 25% of its
total assets in emerging growth Environmental Companies, its current
intent is to limit investments in such companies to no more than 5% of its
total assets and to invest a portion of the balance of its portfolio in
well-established Environmental Companies. Emerging growth companies, or
start-up companies, have a limited operating history, with products and
management personnel that have not been thoroughly tested by time or the
marketplace, and their financial resources may not be as substantial as
those of more established companies. Emerging growth companies may be
thinly capitalized and, as a result, may be more susceptible to changes
implemented by the company and general market fluctuations than companies
with larger capitalization. Further, due to the transition period from
development to production for a particular product or project, the revenue
flow of such companies may be erratic and the results of operations may
fluctuate widely from quarter to quarter, which may thereby contribute to
greater stock price volatility. The securities of emerging growth
companies may be of limited liquidity which could cause undesirable delays
in selling such securities at prices representing their fair value.
Concentration by Emerging Growth Fund in Biotechnology Companies
Prior to September 19, 1994, as Bio-Tech Fund, Emerging Growth Fund was
required to invest at least 65% of its total assets in biotechnology
companies. Although this requirement was eliminated by a shareholder
vote, Emerging Growth Fund intends to concentrate its investments (that
is, invest 25% or more of its total assets) in biotechnology companies
located in the United States and at least three foreign countries for only
an interim period to permit the orderly disposition of certain of these
assets. There are several risks particular to concentrating investments
in the biotechnology industry, and certain of which also relate to
emerging growth companies. That industry consists primarily of small,
start-up companies whose fortunes to date have risen mainly on the
strength of expectations about future products, not actual products.
Although numerous biotechnology products are in the research stage by many
companies, only a handful have reached the point of approval by the U.S.
Food & Drug Administration (the "FDA"), the Environmental Protection
Agency (the "EPA"), the U.S. Department of Agriculture (the "USDA") or the
foreign equivalents thereof, and subsequent commercial production and
distribution. While much public attention has been focused on advances
in the areas of cancer, AIDS and cardiovascular research, product testing
remains in the early stages for many products. It is thus uncertain
whether expected results will be achieved. Since few investors have the
capability to evaluate scientific research and development, any news about
a product under development can suddenly cause a company's share value to
soar or to plunge. Biotechnology stocks may advance on the strength of
new product filings with governmental authorities and research progress,
but may also drop sharply in the face of news of regulatory and research
setbacks. In addition, public perception of the industry is varied.
Although the industry is subject to the regulatory scrutiny of the FDA,
the EPA, the USDA or their foreign counterparts and state and local
governments, some fear that potentially harmful organisms and bacteria
may be released into the environment. Ethical questions may be raised by
possible uses of some biotechnology products. The revenue flow of start-
up biotechnology companies may be erratic, and the companies may suffer
continuing losses during a project's transition from development to
production. Patent protection is another source of uncertainty. The
industry is one of intense competition, and small start-up companies are
often burdened with a continuing need to raise capital. All such factors,
when considered in conjunction with the small size of the majority of
biotechnology companies, cause the industry and individual companies to
be highly volatile.
Concentration by the Fund in Environmental Companies
The Fund invests primarily in the securities of Environmental Companies.
To a limited extent, Emerging Growth Fund may invest in the securities of
emerging growth Environmental Companies (and, for a period of time, if the
Reorganization is approved, will maintain the investments of the Fund in
Environmental Companies as of the closing date of the Reorganization,
which is expected to constitute less than 10% of Emerging Growth Fund's
portfolio). The operations of Environmental Companies are subject to
extensive federal, state, local and foreign regulation. Environmental
Companies may be insulated from certain conventional economic forces
because their products and services are required by government
regulations. However, any relaxation of environmental protection laws or
the degree of their enforcement could cause a decline in the demand for
the products and services of these companies. Further, confusion over new
government regulations can inhibit a company's performance, and it could
take years to translate environmental legislation into sales and profits.
Losses may result from large product development or expansion costs,
unprotected marketing or distribution systems, erratic revenue flows and
low profit margins. Additional problems facing Environmental Companies
include difficulty in financing the high costs of technological
development, uncertainties in developing technology, high capital costs,
increased competition due to low barriers to entry (once technology has
been developed and is in place), and difficulty in finding experienced
employees in this young industry.
Foreign Securities
The funds may invest without limit (subject to the requirement to also
invest in the United States) in "foreign securities," which are securities
issued by companies organized under the laws of countries other than the
United Sates that are traded on foreign securities or exchanges or in
foreign over the counter markets. Investment in foreign securities
involves considerations and risks not associated with investment in
securities of U.S. issuers. For example, foreign issuers are not required
to use accounting methods that correspond to generally-accepted accounting
principles. If foreign securities are not registered under the Securities
Act of 1933, as amended (the "Securities Act"), the issuer may not have
to comply with the disclosure requirements of the Securities Exchange Act
of 1934, as amended. The values of foreign securities investments will
be affected by a variety of factors including, among others, incomplete
or inaccurate information available as to foreign issuers, changes in
relative currency rates, exchange control regulations or currency
blockage, expropriation or nationalization of assets, application of
foreign tax laws (including withholding taxes), changes in governmental
administration or economic or monetary policy in the U.S. or abroad, or
changed circumstances in dealings between nations. In addition, it is
generally more difficult to obtain and enforce court judgments outside the
U.S. Additional costs may be incurred in connection with investments in
foreign securities because of generally higher foreign commissions and the
additional custodial costs associated with monitoring foreign securities.
Foreign securities markets may be less liquid, more volatile and less
subject to governmental regulation than in the U.S.
Borrowing for Leverage
The funds may borrow up to 10% of the value of their respective total
assets from banks on an unsecured basis to buy securities. This is a
speculative investment method known as "leverage." Leveraging may subject
an investment in the fund to greater risks and costs than funds that do
not borrow. These risks may include the possible reduction of income and
increased fluctuation in the fund's net asset value per share, since the
fund pays interest on borrowings.
Convertible Securities
The funds may invest in convertible securities. In making its investments
on behalf of the funds in convertible debt, the Manager looks primarily
to the conversion feature and treats such convertible securities as equity
securities. The funds may invest in convertible debt rated as low as "C"
by Moody's or "D" by Standard & Poor's. Such ratings indicate that the
obligations are speculative to a high degree and may be in default. Risks
of lower-rated securities include (i) limited liquidity and secondary
market support, (ii) the possibility that earnings of the issuer may be
insufficient to meet its debt service, and (iii) the issuer's low
creditworthiness and potential for insolvency during periods of rising
interest rates and economic downturn.
Risks of Options and Futures Trading
The funds may write covered call options and engage in hedging
transactions, including the purchase of "relative performance call
options," as described below in "Comparison Between the Fund and Emerging
Growth Fund - Special Investment Methods". Subject to their respective
investment restrictions and the limitations that may be set by the Board
of Trustees from time to time, the funds could utilize additional
derivative investments. There are certain risks in writing calls. If a
call written by the fund is exercised, the fund forgoes any profit from
any increase in the market price above the call price of the underlying
investment on which the call was written. In addition, the fund could
experience capital losses which might cause previously distributed short-
term capital gains to be re-characterized as a non-taxable return of
capital to shareholders. In writing puts, there is the risk that the fund
may be required to buy the underlying security at a disadvantageous price.
The principal risks of trading futures are (i) possible imperfect
correlation between the prices of the futures and the market value of the
debt securities in the fund's portfolio, (ii) possible lack of a liquid
secondary market for closing out a futures position, (iii) the need for
additional skills and techniques beyond those required for normal
portfolio management and (iv) losses on futures resulting from interest
rate movements not anticipated by the Manager. Relative performance call
options are subject to the risk that the value of the option may decline
because of adverse movement in the market indices.
APPROVAL OR DISAPPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
At a meeting of the Board held on June 16, 1994 the Board, including the
Independent Trustees, determined that the Reorganization is advisable, is
in the best interests of Fund shareholders and that no Fund shareholder's
interest will be diluted as a result of the Reorganization. The Board
unanimously adopted and recommended to the shareholders of the Fund that
they approve the Reorganization, including the Reorganization Agreement.
At the meeting of the Board, the Manager proposed to the Board a
reorganization of the Fund with Emerging Growth Fund in order to obtain
for the Fund's shareholders the benefits that could be realized from a
broader base of investments. The Manager discussed with the Board the
proposal and the investment policies of Emerging Growth Fund, as well as
certain considerations relating to the Fund, including the Fund's
historical performance and future prospects, changing economic and market
conditions, the increased risk of stock price volatility generally
associated with emphasizing investments in only one sector (such as the
environmental sector) and issues pertaining to Environmental Companies (as
defined below). The Board considered that, in light of the foregoing
considerations, the Fund's shareholders would be better served by
ownership in Emerging Growth Fund and its ability to emphasize investments
in emerging growth companies worldwide. The global "theme oriented
approach" used by the Manager in managing Emerging Growth Fund seeks to
capitalize on important global trends that are believed to offer the most
promising long-term growth opportunities. This would provide the
flexibility to pursue growth opportunities in a variety of industries,
including the environmental sector. These sectors could change from time
to time as the Manager reviewed important global trends. The risk of
volatility generally associated with emphasizing investments in only one
sector (for example, the environmental sector) should be greatly reduced,
although emerging growth companies may be more volatile than mature
companies. The Manager stated its belief that this change to the Fund
would be consistent with the Manager's overall philosophy to provide
shareholders with the most responsible portfolio management.
The Board also considered that by reorganizing the Fund with and into
Emerging Growth Fund, shareholders of the Fund would become shareholders
in a considerably larger fund and may benefit from the economies of scale
available to a larger fund, such as lower costs per shareholder account
through lower operating expenses even though, as a percentage of net
assets, the investment management fee rate currently paid by the Fund is
lower than that paid by Emerging Growth Fund. For the fiscal year ended
September 30, 1993, the expense ratio of the Fund and Emerging Growth Fund
was 1.65% and 1.59%, respectively, of that fund's average annual net
assets, although for the six-month period ended March 31, 1994
(unaudited), the expense ratio of the Fund and Emerging Growth Fund was
1.32% (annualized) and 1.73% (annualized), respectively, of that fund's
average annual net assets. For the fiscal year ended September 30, 1993
and the six-month period ended March 31, 1994 (unaudited), on a pro forma
basis giving effect to the Reorganization, the expense ratio of Emerging
Growth Fund, as a percentage of average annual net assets, would be 1.50%
and 1.55%, respectively.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full as
Annex A to this Proxy Statement and Prospectus) contemplates a
reorganization under which (i) all of the assets of the Fund (other than
the cash reserve described below (the "Cash Reserve")) would be
transferred to Emerging Growth Fund in exchange for shares of Emerging
Growth Fund, (ii) these shares would be distributed among the shareholders
of the Fund in complete liquidation of the Fund, (iii) the Fund would be
deregistered as an investment company under the Investment Company Act and
(iv) the outstanding shares of the Fund would be cancelled. Emerging
Growth Fund will not assume any of the 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) Emerging
Growth Fund would 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 the Fund other
than its Cash Reserve; and (ii) the shareholders of the Fund as of the
close of business on the Closing Date would become shareholders of
Emerging Growth Fund.
The effect of the Reorganization will be that shareholders of the Fund who
vote their shares in favor of the Reorganization will be electing to
achieve the equivalent of redeeming their shares of the 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 shares of Emerging Growth 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 the
Fund which is sufficient in the discretion of the Board for the payment
of: (a) the Fund's expenses of liquidation, and (b) its liabilities,
other than those assumed by Emerging Growth Fund. The Fund and Emerging
Growth 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 the Fund will not exceed $_____.
Liabilities as of the date of the transfer of assets will consist
primarily of accrued but unpaid normal operating expenses of the 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, Emerging
Growth Fund will be in compliance with all of its investment policies and
restrictions. The Fund will recognize capital gain or loss on any sales
made pursuant to this paragraph. As noted in "Tax Aspects of the
Reorganization" below, if the Fund realizes net gain from the sale of
securities in 1994, such gain, to the extent not offset by capital loss
carry-forwards, will be distributed to shareholders prior to the Closing
Date and will be taxable to shareholders as capital gain.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the Reorganization
Agreement, the Fund will pay a dividend or dividends which, together with
all previous such dividends, will have the effect of distributing to the
Fund's shareholders all of the 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 the Fund's
shareholders as ordinary income and capital gain, respectively.
The exchange of the assets of the Fund for shares of Emerging Growth Fund
and the assumption by Emerging Growth Fund of certain liabilities of the
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"). The Fund has represented to Peat Marwick,
tax adviser to the Fund, that there is no plan or intention by any Fund
shareholder who owns 5% or more of the Fund's outstanding shares, and, to
the Fund's best knowledge, there is no plan or intention on the part of
the remaining Fund shareholders, to redeem, sell, exchange or otherwise
dispose of a number of Emerging Growth Fund shares received in the
transaction that would reduce the Fund shareholders' ownership of Emerging
Growth 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 Fund
shares as of the same date. The Fund and Emerging Growth Fund have each
further represented to Peat Marwick that, as of the Closing Date, the Fund
and Emerging Growth Fund will qualify as regulated investment companies
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, Emerging Growth Fund
and the Fund will receive the opinion of Peat Marwick to the effect that,
based on the Reorganization Agreement, the above representations and other
representations made by the funds to Peat Marwick, 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) of the Code.
2. The Fund and Emerging Growth 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 the Fund
upon the distribution of shares of beneficial interest in Emerging
Growth Fund to the shareholders of the Fund pursuant to Section 354
of the Code.
4. Under Section 361(a) of the Code no gain or loss will be recognized
by the Fund by reason of the transfer of its assets solely in
exchange for shares of Emerging Growth Fund.
5. Under Section 1032 of the Code no gain or loss will be recognized by
Emerging Growth Fund by reason of the transfer of the Fund's assets
solely in exchange for shares of Emerging Growth Fund.
6. The shareholders of the Fund will have the same tax basis and
holding period for the shares of beneficial interest in Emerging
Growth Fund that they receive as they had for the Fund stock that
they previously held, pursuant to Sections 358(a) and 1223(1) of the
Code, respectively.
7. The securities transferred by the Fund to Emerging Growth Fund will
have the same tax basis and holding period in the hands of Emerging
Growth Fund as they had for the Fund, pursuant to Sections 362(b)
and 1223(1) of the Code, respectively.
Shareholders of the Fund should consult their tax advisers regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the Federal
income tax consequences of the Reorganization, shareholders of the 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 the Fund and Emerging
Growth Fund and indicates the pro forma combined capitalization as of
September 30, 1993 and March 31, 1994 as if the Reorganization had
occurred on such dates.
September 30, 1993
Net Asset
Shares Value
Net Assets Outstanding Per Share
Oppenheimer Global Emerging $199,696,617 9,226,406 $21.64
Growth Fund
Oppenheimer Global $ 43,271,541 4,119,629 $10.50
Environment Fund
Surviving Fund (Oppenheimer
Global Emerging Growth Fund) $242,968,158 11,226,016* $21.64
____________________
* Reflects issuance of 1,999,610 shares of Emerging Growth Fund in a
tax-free exchange for the net assets of the Fund, aggregating
$43,271,541.
March 31, 1994
Net Asset
Shares Value
Net Assets Outstanding Per Share
Oppenheimer Global Emerging $187,262,178 8,955,930 $20.91
Growth Fund
Oppenheimer Global $ 36,049,945 3,470,011 $10.39
Environment Fund
Surviving Fund (Oppenheimer
Global Emerging Growth Fund) $223,308,123 10,679,790* $20.91
____________________
* Reflects issuance of 1,723,860 shares of Emerging Growth Fund in a
tax-free exchange for the net assets of the Fund, aggregating
$36,045,945.
The pro forma ratio of expenses to average annual net assets of the
combined funds at September 30, 1993 and March 31, 1994 would have been
1.50% and 1.55%, respectively.
COMPARISON BETWEEN THE FUND AND EMERGING GROWTH FUND
Certain comparative information about the Fund and Emerging Growth Fund
is presented below. Additional information about Emerging Growth Fund is
set forth in its Prospectus, accompanying this Proxy Statement and
Prospectus, and additional information about both funds is set forth in
the Statement of Additional Information relating to the Reorganization and
other documents that may be obtained upon request to OSS or are available
for review at the offices of the SEC. See "Miscellaneous - Public
Information."
Investment Objectives and Policies
As its investment objective, the Fund seeks capital appreciation and
Emerging Growth Fund aggressively seeks capital appreciation, in each case
in the value of its shares. Current income is not an objective of either
fund. In seeking their investment objectives, the Fund and Emerging
Growth Fund employ different investment policies as described in detail
below. The Manager is the investment adviser to both the Fund and
Emerging Growth Fund.
The Fund
In seeking its investment objective, as a fundamental investment policy,
the Fund will normally invest at least 65% of its total assets in common
stocks of a variety of Environmental Companies traded in markets in at
least four countries, including the United States.
The Fund normally will invest that portion of its assets not invested in
Environmental Companies in a manner consistent with its objective of
capital appreciation. Such investments are limited to common and
preferred stocks, bonds (required to be rated at least "A" by Standard &
Poor's or Moody's or, if unrated, will be of equivalent quality as
determined by the Manager), warrants and rights, convertible debt (which
may be rated as low as "C" by Moody's or "D" by Standard & Poor's), or
hedging instruments. The Fund is required to have at least one
investment in securities of a U.S. company and may invest without limit
in "foreign securities," which include securities issued by companies
organized under the laws of countries other than the United States that
are traded on foreign securities exchanges or in foreign over-the-counter
markets. No more than 25% of the Fund's total assets, at the time of
purchase, will be invested in securities of issuers organized under the
laws of any one foreign country.
Under normal circumstances, the Fund may hold a portion of its assets in
cash equivalents (commercial paper, Treasury bills and U.S. Government
securities maturing in one year or less) for liquidity purposes. Under
unusual market or economic conditions (including drastic market
fluctuations), for temporary defensive purposes, the Fund may invest up
to 100% of its assets in (i) obligations issued or guaranteed by the U.S.
Government, its instrumentalities or agencies, (ii) certificates of
deposit, (iii) bankers' acceptances, time deposits, and letters of credit
if they are payable in the U.S. or London, England and are issued or
guaranteed by a domestic or foreign bank having total assets in excess of
$1 billion, (iv) commercial paper rated in the three highest categories
by Standard & Poor's or Moody's, and/or (v) short-term debt securities
(i.e., those maturing in one year or less from the date of purchase),
including rated or unrated bonds, debentures and preferred stocks.
Emerging Growth Fund
In seeking its investment objective, as a non-fundamental investment
policy, under normal market conditions Emerging Growth Fund will invest
at least 65% of its total assets in common stocks and other equity
securities, including convertible securities, as well as warrants and
rights, of emerging growth companies located in the United States and at
least three foreign countries. As with the Fund, Emerging Growth Fund is
required to have at least one investment in securities of a U.S. company
and may invest without limit in "foreign securities" generally. The
Manager will emphasize investments in aggressive growth opportunities in
their earliest stages that offer the potential for accelerated earnings
or revenues growth. Emerging growth companies tend to be smaller
companies that are developing new products or services or are expanding
into new markets for their products. Emerging growth companies can be any
size and can be in any industry. While they may have what the Manager
believes to be favorable prospects for the long-term, they normally retain
a large part of their earnings for research, development and investment
in capital assets. Therefore, they tend not to emphasize the payment of
dividends. Emerging Growth Fund previously emphasized investments in
biotechnology companies, and was named "Oppenheimer Global Bio-Tech Fund".
At a meeting held September 19, 1994, Emerging Growth Fund's shareholders
approved a proposal to eliminate the fundamental investment policy that
Emerging Growth Fund generally invest at least 65% of its total assets in
biotechnology companies. Effective with such shareholder approval,
Emerging Growth Fund adopted a non-fundamental investment policy of
emphasizing investments in emerging growth companies worldwide. As of the
date of this Proxy Statement and Prospectus, Emerging Growth Fund may be
deemed to concentrate its investments (that is, invest 25% or more of its
total assets) in securities of biotechnology companies. Emerging Growth
Fund intends to concentrate its investments in biotechnology companies for
only an interim period to permit the orderly disposition of certain of
these assets. Except for the foregoing, the Manager does not intend to
concentrate Emerging Growth Fund's investments in any industry.
As a global emerging growth fund, Emerging Growth Fund pursues growth
opportunities in their early stages as it looks for the most promising
areas, both in the U.S. and abroad, for accelerated growth of earnings or
revenues. Emerging Growth Fund employs a global "theme oriented approach"
that seeks to capitalize on important global trends that the Manager
believes offer promising areas for long-term growth. Examples of some
current themes include telecommunications, infrastructure, developing
capital markets, technology, energy, emerging consumer markets,
healthcare/biotechnology, corporate restructuring and the environment.
The Manager further believes that certain non-U.S. stocks will continue
to outperform U.S. stocks due to rebounding economies overseas and
earnings growth rates that the Manager anticipates will be significantly
higher than those of domestic markets.
When investing Emerging Growth Fund's assets, the Manager considers many
factors, including general economic conditions abroad relative to the U.S.
and the trends in foreign and domestic stock markets. Emerging Growth Fund
may try to hedge against losses in the value of its portfolio of
securities by using hedging strategies described below. When market
conditions are unstable, Emerging Growth Fund may invest substantial
amounts of its assets in debt securities, such as money market instruments
or government securities.
To maintain liquidity for investment purposes or meet redemption and
exchange requests, Emerging Growth Fund may hold cash or cash equivalents
(commercial paper, Treasury bills and U.S. Government securities maturing
in one year or less). Under unusual market or economic conditions
(including drastic market fluctuations), for temporary defensive purposes
Emerging Growth Fund may invest up to 100% of its assets in: (i)
obligations issued or guaranteed by the U.S. Government, its
instrumentalities or agencies, (ii) certificates of deposit, (iii)
bankers' acceptances and other bank obligations (that, unlike with the
Fund, are not required to be payable in the U.S. or London, England nor
issued or guaranteed by a domestic or foreign bank having total assets in
excess of $1 billion), (iv) commercial paper rated in the highest category
by an established rating agency (as to the Fund, commercial paper must be
rated in the three highest categories by Standard & Poor's or Moody's),
or (v) short-term debt securities (i.e. those maturing in one year or less
from the date of purchase), including rated or unrated bonds and
debentures, and preferred stocks.
Special Investment Methods
Each of the Fund and Emerging Growth Fund uses the special investment
methods summarized below.
Borrowing. From time to time, each of the Fund and Emerging Growth Fund
may increase its ownership of securities by borrowing up to 10% of the
value of its total assets from banks on an unsecured basis and investing
the borrowed funds (on which the fund will pay interest), subject to the
300% asset coverage requirement of the Investment Company Act. Purchasing
securities with borrowed funds is a speculative investment method known
as leverage. There are risks associated with leveraging purchases of
portfolio securities by borrowing, including a possible reduction of
income and increased fluctuation of net asset value per share.
Short Sales Against-the-Box. The funds may not sell securities short
except in transactions referred to as "short sales against-the-box." No
more than 15% of the fund's net assets will be held as collateral for such
short sales at any one time.
Covered Calls and Puts. To generate additional income or, as to Emerging
Growth Fund, for defensive purposes, the funds may write (i.e., sell) call
options on securities ("calls") if (i) the calls are "covered" (i.e., the
fund owns the securities or futures subject to the call or other
securities acceptable for applicable escrow arrangements); (ii) as to
Emerging Growth Fund, after any sale not more than 25% of its total assets
are subject to calls; and (iii) the calls are listed on a domestic (and,
as to the Fund, foreign) securities exchange, quoted on the Automated
Quotation System of the National Association of Securities Dealers, Inc.
or traded in the over the counter market. The Fund may also purchase puts
and calls on securities to seek capital appreciation.
Hedging. For hedging purposes as a temporary defensive maneuver, each
fund may purchase and sell certain Stock Index Futures (defined below),
foreign currency futures, foreign currency exchange contracts, and call
and put options on securities, Stock Index Futures, broadly-based stock
or securities indices and foreign currencies as hereinafter described
(collectively referred to as "Hedging Instruments"). Emerging Growth Fund
may also enter into interest rate swaps, but only as to security positions
held by Emerging Growth Fund and not with respect to more than 50% of its
total assets. The funds may write put options only if they are covered
by segregated liquid assets with not more than 50% of the fund's total
assets segregated to cover puts at the time of investment and, as to the
Fund, the put is traded on a domestic or foreign securities exchange or
over-the-counter market. The funds may purchase calls or puts only if,
after such purchase, the value of all put and call options held by the
fund would not exceed 5% of the fund's total assets. The foregoing
percentage limitations are not fundamental investment policies. The funds
may buy and sell futures contracts only if they relate to broadly-based
stock indices ("Stock Index Futures"). The funds may purchase and write
puts and calls on foreign currencies that are traded on a securities or
commodities exchange or over-the-counter market or quoted by major
recognized dealers in such options. The Funds may purchase "relative
performance call options," which are call options that have a cash
settlement based on the difference between the returns on two market
indices.
Illiquid and Restricted Securities. The Fund will not purchase or
otherwise acquire any securities that may be illiquid by virtue of the
absence of a readily-available market or because their disposition would
be subject to legal restrictions ("restricted securities") if, as a
result, more than 15% of the Fund's net assets would be invested in
securities that are illiquid (including repurchase agreements maturing in
more than seven days). This policy does not limit the acquisition of
restricted securities eligible for resale to qualified institutional
buyers pursuant to Rule 144A under the Securities Act that are determined
to be liquid by the Fund's Board of Trustees or by the Manager under
Board-approved guidelines. Such guidelines take into account, among other
factors, trading activity for such securities and the availability of
reliable pricing information. If there is a lack of trading interest in
particular Rule 144A securities, the Fund's holdings of those securities
may be illiquid. There may be undesirable delays in selling such
securities at prices representing their fair value. The Fund currently
intends to invest no more than 10% of its net assets in illiquid or
restricted securities, excluding securities eligible for resale pursuant
to Rule 144A. Emerging Growth Fund has an identical policy with respect
to investment in restricted and illiquid securities.
Loans of Portfolio Securities. To attempt to increase income for
liquidity purposes, each fund may lend its portfolio securities (other
than in repurchase transactions) to brokers, dealers and other financial
institutions meeting specified credit conditions if the loan is
collateralized in accordance with applicable regulatory requirements and
if, after any loan, the value of the securities loaned does not exceed 25%
of the value of that fund's total assets. Each fund did not lend any
securities in the past year and presently does not intend that the value
of securities loaned in the current fiscal year will exceed 5% of the
value of its total assets.
Repurchase Agreements. Each fund may acquire securities subject to
repurchase agreements to generate income on funds held 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. If the vendor fails to pay the agreed-upon resale price on
the delivery date, the fund's risks may include any costs of disposing of
such collateral, and any loss from any delay in foreclosing on the
collateral. Each fund's repurchase agreements are intended to be fully
collateralized. There is no limit on the amount of the fund's net assets
that may be subject to repurchase agreements having a maturity of seven
days or less. Neither fund will enter into a repurchase agreement which
will cause more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days.
Investment Restrictions
Each of the Fund and Emerging Growth Fund has certain investment
restrictions that, together with its investment objectives, are
fundamental policies changeable only by shareholder approval. Set forth
below is a summary of these investment restrictions, which summary is
qualified in its entirety by the investment policies and restrictions of
the funds contained in their respective Prospectuses and Statements of
Additional Information.
The Fund and Emerging Growth Fund cannot: purchase securities of any one
issuer (other than the U.S. Government or its agencies or
instrumentalities) if, as to the Fund, the Fund would own more than 10%
of that issuer's voting securities or, as to Emerging Growth Fund, more
than 5% of Emerging Growth Fund's assets would be invested in securities
of that issuer; with respect to 75% of total assets, purchase securities
of any one issuer (other than the U.S. Government or its agencies or
instrumentalities) if, as to the Fund, more than 5% of the Fund's total
assets would be invested in securities of that issuer or, as to Emerging
Growth Fund, it would then own more than 10% of the voting securities or
10% of any class of securities of that issuer (all debt and all preferred
stock of an issuer are respectively considered single classes for this
purpose); invest in companies for the purpose of acquiring control or
management thereof; invest in interests in oil or gas exploration or
development programs or mineral related programs; purchase securities on
margin except the funds may make margin deposits in connection with the
use of permitted Hedging Instruments; underwrite securities except to the
extent the fund may be deemed to be an underwriter in connection with the
sale of securities held in its portfolio; purchase real estate or
interests therein and, as to the Fund, sell real estate, however the Fund
may purchase debt securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts, which
invest in real estate or interests therein and Emerging Growth Fund may
purchase readily marketable securities of companies holding real estate
or interests therein; purchase or hold securities of any issuer if
officers, trustees and directors of the Manager or the fund who own
individually more than .5% of the securities of such issuer together own
beneficially more than 5% of the securities of such issuer; borrow money
in excess of 10% of the value of total assets; deviate from the percentage
restrictions set forth in their respective Prospectuses with respect to
warrants and rights, loans of portfolio securities and short sales-
against-the box, the type of foreign securities that may be purchased and,
as to the Fund, the types of options that may be purchased or sold; invest
in (and, as to the Fund, sell) commodities or commodity contracts,
however, the funds may buy and sell permitted Hedging Instruments whether
or not considered a commodity or commodity contract; lend money, however
the funds may enter into repurchase agreements and the funds may purchase
all or a portion of an issue of bonds, debentures, commercial paper or
other similar corporate obligations of the types that are usually
purchased by institutions, whether or not publicly distributed (provided
that as to the Fund such obligations which are not publicly distributed
will be subject to the percentage limits applicable to illiquid and
restricted securities); mortgage or pledge any of its assets, however this
does not prohibit the escrow arrangements contemplated in the use of
Hedging Instruments and, in addition, as to the Fund, does not prohibit
the Fund from pledging its assets for collateral arrangements; and, except
in a merger, consolidation, reorganization or acquisition of assets,
invest, as to the Fund, more than 5% of total assets through open market
purchases in other investment companies and, as to Emerging Growth Fund,
invest more than 10% of its assets through open market purchases in
closed-end investment companies, including small business investment
companies, nor make any such investments at commission rates in excess of
normal brokerage commissions. In addition to the foregoing, the Fund may
not concentrate investments to the extent that more than 25% of the value
of its total assets is invested in securities of issuers in the same
industry (other than securities of the U.S. Government, its agencies or
instrumentalities and securities of Environmental Companies in which the
Fund will normally invest at least 65% of its total assets).
Portfolio Turnover
Generally, the Fund and Emerging Growth Fund will not trade in securities
for short-term profits. However, when circumstances warrant, to take
advantage of differences in securities prices and yields or of
fluctuations in interest rates consistent with their investment
objectives, the Fund and Emerging Growth Fund may sell securities without
regard to the length of time held. It is expected that Emerging Growth
Fund may engage more frequently than the Fund in short-term trading and
as a result, Emerging Growth Fund's portfolio turnover may be higher than
other mutual funds, although it is not expected to be more than 150% each
year. The degree of portfolio activity will affect brokerage costs of the
funds. If a fund derives 30% or more of its gross income from the sale
of securities held less than three months, the fund may fail to qualify
under the Code as a regulated investment company and would lose certain
beneficial tax treatment of its income.
For the fiscal year ended September 30, 1993, the portfolio turnover rates
for the Fund and Emerging Growth Fund were 141.6% and 41.0%, respectively.
For the six months ended March 31, 1994 (unaudited), the portfolio
turnover rates for the Fund and Emerging Growth Fund were 47.4% and 30.2%,
respectively.
Description of Brokerage Practices
Brokerage practices for the Fund and Emerging Growth Fund are the same.
Subject to the provisions of the Fund's and Emerging Growth Fund's
respective investment advisory agreements with the Manager, allocations
of brokerage are made by portfolio managers under the supervision of the
Manager's executive officers. Transactions in securities other than those
for which an exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid primarily for
effecting transactions in listed securities and otherwise only if it
appears likely that a better price or execution can be obtained. When the
fund engages in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transactions in the
securities to which the option relates. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager or it affiliates are combined. Transactions
effected pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed
for each account. Option commissions may be relatively higher than those
which would apply to direct purchases and sales of portfolio securities.
The research services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and its affiliates,
and investment research received for the commissions of those other
accounts may be useful both to the fund and one or more of such other
accounts. Such research, which may be supplied by a third party at the
instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid for in
commission dollars. The research services provided by brokers broaden the
scope and supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and enabling
the Manager to obtain market information for the valuation of securities
held in the fund's portfolio or being considered for purchase. The Board
of Trustees, including the Independent Trustees of the Fund and Emerging
Growth Fund, annually reviews information furnished by the Manager
relative to the commissions paid to brokers furnishing such services in
an effort to ascertain that the amount of such commissions was reasonably
related to the value or the benefit of such services.
During the Fund's fiscal years ended September 30, 1991, 1992 and 1993,
total brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were $135,193,
$247,261 and $416,080, respectively. During the fiscal years ended
September 30, 1993, $158,802 was paid to brokers as commissions in return
for research services (including special research, statistical information
and execution); the aggregate dollar amount of those transactions was
$42,756,378. The transactions giving rise to those commissions were
allocated in accordance with the Manager's internal allocation procedures.
During Emerging Growth Fund's fiscal years ended September 30, 1991, 1992,
and 1993, total brokerage commissions paid by the Fund (not including
spreads or concessions on principal transactions on a net trade basis)
were $15,139, $19,803 and $414,002, respectively. During the fiscal year
ended September 30, 1993, $36,731 was paid to brokers as commissions in
return for research services (including special research, statistical
information and execution); the aggregate dollar amount of those
transactions was $19,817,816. The transactions giving rise to those
commissions were allocated in accordance with the Manager's internal
allocation procedures.
Expense Ratios and Performance
The ratio of expenses to average net assets for the Fund for the fiscal
year ended September 30, 1993 and the six months ended March 31, 1994
(unaudited) were 1.65% and 1.32% (annualized), respectively. The ratio
of expenses to average net assets for Emerging Growth Fund for the fiscal
year ended September 30, 1993 and the six months ended March 31, 1994
(unaudited) were 1.59% and 1.73% (annualized), respectively. Further
details are set forth under "Fund Expenses" and "Financial Highlights" in
Emerging Growth Fund's Prospectus dated September 19, 1994, which
accompanies this Proxy Statement and Prospectus, and in the Fund's Annual
Report as of September 30, 1993 and Semi-Annual Report as of March 31,
1994, and Emerging Growth Fund's Annual Report as of September 30, 1993
and Semi-Annual Report as of March 31, 1994, which are included in the
Additional Statement. The Fund's average annual total returns for the 1-
year period ended March 31, 1994 and since inception of the Fund (March
2, 1990) were (1.81)% and (2.01)%, respectively. Under its prior
investment policy of emphasizing investment in securities of biotechnology
companies, Emerging Growth Fund's average annual total returns for the 1-
and 5- year periods ended March 31, 1994 and from inception of Emerging
Growth Fund (December 30, 1987) to March 31, 1994 were 3.80%, 12.84% and
11.98%, respectively.
Shareholder Services
The policies of the Fund and Emerging Growth Fund with respect to minimum
initial investments and subsequent investments by its shareholders are the
same. Both the Fund and Emerging Growth Fund offer the following
privileges: (i) Rights of Accumulation, (ii) Letters 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) reinvestment of net redemption proceeds at net asset
value within six months of a redemption, (viii) AccountLink and PhoneLink
arrangements, (ix) exchanges of shares for shares of certain other funds
at net asset value, and (x) telephone redemption and exchange privileges.
Rights of Shareholders
Shares of the Fund and Emerging Growth Fund are redeemable at their net
asset value. The shares of each such fund entitle the holder to one vote
per share on the election of trustees and all other matters submitted to
shareholders of the fund. Shares of the Fund and the shares of Emerging
Growth Fund which Fund shareholders will receive in the Reorganization
participate equally in the fund's dividends and distributions and in the
fund's net assets on liquidation. All shares of each, when issued, are
fully paid and non-assessable (except to the extent described below) and
have no preference, preemptive or conversion rights. It is not
contemplated that either the Fund or Emerging Growth Fund will hold
regular annual meetings of shareholders. Under the Investment Company
Act, shareholders of the 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. Shareholders of
the Fund and Emerging Growth Fund have the right, under certain
circumstances, to remove a Trustee and will be assisted in communicating
with other shareholders for such purpose.
The Fund and Emerging Growth Fund, organized as Massachusetts Business
Trusts, are governed principally by their Declaration of Trust and by-
laws. The shareholders of the Fund and Emerging Growth Fund have certain
rights to call a meeting of shareholders as described in their respective
Statements of Additional Information. Amendments to the Declaration of
Trust require the approval of a "majority" (as defined in the Investment
Company Act) of the fund's shareholders. Under certain circumstances,
shareholders of the fund may be held personally liable as partners for the
fund's obligations, and under the Declaration of Trust such a shareholder
is entitled to indemnification by the fund; 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.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York 10048-
0203, acts as the investment adviser for the Fund pursuant to an
investment advisory agreement with the Fund dated October 22, 1990 (the
"Fund Advisory Agreement") and acts as the investment adviser to Emerging
Growth Fund pursuant to an investment advisory agreement with Emerging
Growth Fund dated June 1, 1992 (the "Emerging Growth Fund Advisory
Agreement"). The Fund Advisory Agreement was submitted to and approved
by the shareholders of the Fund at a meeting held October 1, 1990. The
Emerging Growth Fund Advisory Agreement was submitted to and approved by
the shareholders of Emerging Growth Fund at a meeting held on May 15,
1992. The monthly management fee payable to the Manager by each fund and
the 12b-1 service plan fee paid by each fund to the Distributor is set
forth above under "Synopsis - Investment Advisory and Service Plan Fees."
Pursuant to the Fund Advisory Agreement and the Emerging Growth Fund
Advisory Agreement (collectively, the "Advisory Agreements"), the Manager
supervises the investment operations of the funds and the composition of
their portfolios and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
The Manager also provides the Fund and Emerging Growth Fund with adequate
office space, facilities and equipment and provides, and supervises the
activities of, all administrative and clerical personnel required to
provide effective administration, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of each fund.
For the fiscal year ended September 30, 1993 and the six months ended
March 31, 1994 (unaudited), the management fees paid by the Fund were
$352,886 and $155,149, respectively. For the fiscal year ended September
30, 1993 and the six months ended March 31, 1994 (unaudited), the
management fees paid by Emerging Growth Fund were $1,580,012 and $864,226,
respectively. The Advisory Agreements contain no expense limitation.
However, independently of the agreements, the Manager has undertaken that
the total expenses of the Fund and Emerging Growth Fund in any fiscal year
(including the management fee but exclusive of taxes, interest, brokerage
commissions, distribution plan payments and any extraordinary non-
recurring expenses, including litigation) shall not exceed the most
stringent state regulatory limitation on fund expenses applicable to the
funds. At present, that limitation is imposed by California and limits
expenses (with specified exclusions) to 2.5% of the first $30 million of
average annual net assets, 2% of the next $70 million and 1.5% of average
annual net assets in excess of $100 million. The Manager reserves the
right to change or eliminate the expense limitation at any time and there
can be no assurance as to the duration of the expense limitation.
The Manager is controlled by Oppenheimer Acquisition Corporation, 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 $28 billion
as of June 30, 1994, with more than 1.8 million shareholder accounts.
OSS, a division of the Manager, acts as transfer and shareholder servicing
agent on an at-cost basis for the Fund and Emerging Growth Fund and for
certain other open-end funds managed by the Manager and its affiliates.
The Distributor, a wholly-owned subsidiary of the Manager, acts as the
general distributor of each fund's shares under a General Distributor's
Agreement for each fund dated December 10, 1992. The General
Distributor's Agreement is subject to the same annual renewal requirements
and termination provisions as the Advisory Agreements. For the fiscal
year ended September 30, 1993, selling charges on the Fund's shares
amounted to $279,673, of which the Distributor and an affiliated broker-
dealer retained $61,218 in the aggregate. For the fiscal year ended
September 30, 1993, selling charges on Emerging Growth Fund's shares
amounted to $4,353,366, of which the Distributor and an affiliated broker-
dealer retained $940,768 in the aggregate.
Purchase of Additional Shares
Shares of the Fund and Emerging Growth Fund are sold at net asset value
plus a maximum sales charge of 5.75% of the offering price. The sales
charge is reduced for purchases of either fund's shares of $25,000 or
more. On certain purchases of shares of $1 million or more, a contingent
deferred sales charge of 1% is imposed when such shares are redeemed
within 18 months of the end of the calendar month of their purchase,
subject to certain conditions.
The sales charge on shares of Emerging Growth Fund will only affect
shareholders of the Fund to the extent that they desire to make additional
purchases of shares of Emerging Growth Fund in addition to the shares
which they will receive as a result of the Reorganization. The shares to
be issued under the Reorganization Agreement will be issued by Emerging
Growth Fund at net asset value without a sales charge. Future dividends
and capital gain distributions of Emerging Growth Fund, if any, may be
reinvested without sales charge. Any Fund shareholder who is entitled to
a reduced sales charge on additional purchases by reason of a Letter of
Intent or Rights of Accumulation based upon holdings of shares of the Fund
will continue to be entitled to a reduced sales charge on any future
purchase of shares of Emerging Growth Fund.
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 the Fund and the satisfaction of the other conditions and
the receipt of the opinions and certificates set forth in Sections 10 and
11 of the Reorganization Agreement. Under the Reorganization Agreement,
all the assets of the Fund, excluding the Cash Reserve, will be delivered
to Emerging Growth Fund in exchange for shares of Emerging Growth Fund.
The Cash Reserve to be retained by the Fund will be sufficient in the
discretion of the Board for the payment of the Fund's liabilities, and the
Fund's expenses of liquidation.
Assuming the shareholders of the Fund approve the Reorganization at the
Meeting, the actual exchange of assets is expected to take place 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 the Fund shall be permanently suspended 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 the Fund after that date will be treated
as requests for redemptions of the shares of Emerging Growth 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 shares of Emerging Growth Fund, and the value of the assets
of the Fund to be transferred as of the close of business on the Valuation
Date, in the manner used by Emerging Growth Fund in the valuation of
assets. Emerging Growth Fund is not assuming any of the liabilities of
the 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 Emerging Growth Fund to
the Fund will be the same as the value of the assets of the portfolio
received by Emerging Growth Fund. For example, if, on the Valuation Date,
the 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
Emerging Growth Fund would be $100,000. If the net asset value per share
of Emerging Growth Fund were $10 per share at the close of business on the
Valuation Date, the number of shares to be issued would be 10,000
($100,000 divided by $10). These 10,000 shares of Emerging Growth Fund would be
distributed to the former shareholders of the 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.
After the Closing Date, the Fund will distribute on a pro rata basis to
its shareholders of record on the Valuation Date the shares of Emerging
Growth Fund received by the Fund at the closing, in liquidation of the
outstanding shares of the Fund, and the outstanding shares of the Fund
will be cancelled. To assist the Fund in this distribution, Emerging
Growth Fund will, in accordance with a shareholder list supplied by the
Fund, cause its transfer agent to credit and confirm an appropriate number
of shares of Emerging Growth Fund to each shareholder of the Fund.
Certificates for shares of Emerging Growth Fund will be issued upon
written request of a former shareholder of the Fund but only for whole
shares with fractional shares credited to the name of the shareholder on
the books of Emerging Growth Fund. Former shareholders of the Fund who
wish certificates representing their shares of Emerging Growth Fund must,
after receipt of their confirmations, make a written request to OSS, at
P.O. Box 5270, Denver, Colorado 80217. Shareholders of the 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 or exchange
any shares of Emerging Growth Fund.
Under the Reorganization Agreement, within one year after the Closing
Date, the 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 Emerging Growth Fund, if such remaining amount is not
material (as defined below) or (ii) distribute such remaining amount to
the shareholders of the 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 Fund shares
outstanding on the Valuation Date. Within one year after the Closing
Date, the Fund will complete its liquidation.
Under the Reorganization Agreement, either the Fund or Emerging Growth
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 Agreement is not consummated for any
reason, the Board will consider and may submit to the shareholders other
alternatives.
MISCELLANEOUS
Additional Information - Emerging Growth Fund Performance
During Emerging Growth Fund's fiscal year ended September 30, 1993, as the
Bio-Tech Fund, the Manager sought to maintain a balance between
established and emerging bio-tech companies, focusing on diversification
and stock selection. With interest rates abroad declining, Emerging
Growth Fund expanded its European holdings. Emerging Growth Fund also
added five equity private placements and two convertible issues to its
portfolio, which the Manager believed would tend to resist sharp declines
during market retreats while offering possible strong returns in rising
markets. Emerging Growth Fund did not maintain a policy or practice as
to the maintenance of a specified level of distributions to shareholders.
The performance graph set forth below depicts the performance of a
hypothetical investment of $10,000 in shares of Emerging Growth Fund on
December 30, 1987 (commencement of operations) at the offering price,
including the sales charge in effect on that date, held through September
30, 1993, with all dividends and distributions reinvested in additional
shares at net asset value on the reinvestment date, without sales charge.
The Bio-Tech Fund became Emerging Growth Fund effective on September 19,
1994; accordingly, the performance graph set forth below makes reference
to "Oppenheimer Global Bio-Tech Fund" only. The graph compares the
average annual total return of Emerging Growth Fund's shares over that
period with the performance of the Standard & Poor's ("S&P") 500 Index,
an unmanaged index of common stocks widely used as a measure of general
stock market performance. The performance of the S&P 500 Index includes
a factor for the reinvestment of dividend income but does not reflect
reinvestment of capital gains or take into account sales charges or other
initial or ongoing expenses of such stocks. Emerging Growth Fund's total
return reflects the deduction of the current maximum sales charge of 5.75%
and includes reinvestment of all dividends and capital gains
distributions, but does not consider taxes. Fund shareholders will not
pay a sales charge on Emerging Growth Fund shares received in the
Reorganization.
Comparison of Change
In Value of $10,000
Hypothetical Investment in
Oppenheimer Global Emerging Growth Fund
S&P 500 Index
Average Annual Total Return of Emerging Growth Fund at 9/30/93
1 Year 5 Year Life*
1.59% 14.42% 13.63%
Oppenheimer
Fiscal Year Global S&P 500
(Period Ended) Emerging Growth Fund Index
12/30/87* $ 9,425 $10,000
9/30/88 $10,019 $11,308
9/30/89 $11,542 $15,034
9/30/90 $11,275 $13,645
9/30/91 $25,681 $17,887
9/30/92 $19,339 $19,862
9/30/93 $20,846 $22,438
Past performance is not predictive of future performance.
*Emerging Growth Fund began operations on 12/30/87 as "Oppenheimer Global
Bio-Tech Fund." The fund's name and certain of its fundamental investment
policies were changed effective September 19, 1994.
Financial Information
The Reorganization will be accounted for by the surviving fund in its
financial statements similar to a pooling. Further financial information
as to the Fund is contained in its current Prospectus, which is available
without charge from OSS, P.O. Box 5270, Denver, Colorado 80217, and is
incorporated herein, and in its audited financial statements as of
September 30, 1993, and unaudited financial statements as of March 31,
1994, which are included in the Statement of Additional Information
relating to the Reorganization. Financial information for Emerging Growth
Fund is contained in its current Prospectus accompanying this Proxy
Statement and Prospectus and incorporated herein, and in its audited
financial statements as of September 30, 1993 and unaudited financial
statements as of March 31, 1994, which are also included in the Statement
of Additional Information relating to the Reorganization.
Public Information
Additional information about the Fund and Emerging Growth Fund is
available, as applicable, in the following documents which are
incorporated herein by reference: (i) Emerging Growth Fund's Prospectus
dated September 19, 1994, accompanying this Proxy Statement and Prospectus
and incorporated herein; (ii) the Fund's Prospectus dated February 1,
1994, supplemented June 24, 1994 and further supplemented July 5, 1994,
which may be obtained without charge by writing to OSS, P.O. Box 5270,
Denver, Colorado 80217; (iii) Emerging Growth Fund's Annual Report as of
September 30, 1993 and Semi-Annual Report as of March 31, 1994, which may
be obtained without charge by writing to OSS at the address indicated
above; and (iv) the Fund's Annual Report as of September 30, 1993 and
Semi-Annual Report as of March 31, 1994, which may be obtained without
charge by writing to OSS at the address indicated above. All of the
foregoing documents may also 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
Statement of Additional Information relating to the Reorganization, which
incorporates by reference the Emerging Growth Fund Additional Statement,
and the Fund's Prospectus dated February 1, 1994, supplemented June 24,
1994 and further supplemented July 5, 1994 and Statement of Additional
Information dated February 1, 1994: the organization and operation of
Emerging Growth Fund and the Fund; more information on investment
policies, practices and risks; information about the Fund's and Emerging
Growth Fund's respective Boards of Trustees and their responsibilities;
a further description of the services provided by Emerging Growth Fund's
and the Fund's investment 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
of Emerging Growth Fund and the Fund; purchase, redemption and exchange
programs; and distribution arrangements.
The Fund and Emerging Growth 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 the Fund and Emerging
Growth 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, Securities and Exchange
Commission, Washington, D.C. 20549.
OTHER BUSINESS
Management of the 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 Directors
Andrew J. Donohue, Secretary
September 19, 1994250
<PAGE>
ANNEX A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
September 19, 1994 by and between Oppenheimer Global Environment Fund (the
"Fund"), a Massachusetts business trust, and Oppenheimer Global Emerging
Growth Fund ("Emerging Growth Fund"), a Massachusetts business trust.
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 the Fund through the acquisition by Emerging
Growth Fund of substantially all of the assets of the Fund in exchange for
the voting shares of beneficial interest ("shares") of Emerging Growth
Fund and the assumption by Emerging Growth Fund of certain liabilities of
the Fund, which shares of Emerging Growth Fund are thereafter to be
distributed by the Fund pro rata to its shareholders in complete
liquidation of the 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 a Plan of Reorganization pursuant
to Section 368(a)(1) of the Code as follows: The reorganization will be
comprised of the acquisition by Emerging Growth Fund of substantially all
of the properties and assets of the Fund in exchange for shares of
Emerging Growth Fund and the assumption by Emerging Growth Fund of certain
liabilities of the Fund, followed by the distribution of such Emerging
Growth Fund shares to the shareholders of the Fund in exchange for their
shares of the Fund, all upon and subject to the terms of the Agreement
hereinafter set forth.
The share transfer books of the 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 the Fund; redemption
requests received by the Fund after that date shall be treated as requests
for the redemption of the shares of Emerging Growth Fund to be distributed
to the shareholder in question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the
assets of the Fund on that date, excluding a cash reserve (the "Cash
Reserve") to be retained by the Fund sufficient in its discretion for the
payment of the expenses of the 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 Emerging Growth Fund, in exchange
for and against delivery to the Fund on the Closing Date of a number of
shares of Emerging Growth Fund having an aggregate net asset value equal
to the value of the assets of the Fund so transferred and delivered.
3. The net asset value of shares of Emerging Growth Fund and the
value of the assets of the 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 shares
of Emerging Growth Fund and the Fund shall be done in the manner used by
Emerging Growth Fund and the Fund, respectively, in the computation of
such net asset value per share as set forth in their respective
prospectuses. The methods used by Emerging Growth Fund in such
computation shall be applied to the valuation of the assets of the Fund
to be transferred to Emerging Growth Fund.
The 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 the Fund's
shareholders all of the 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 office of
Oppenheimer Management Corporation (the "Agent"), Two World Trade Center,
Suite 3400, New York, New York 10048, at 4:00 P.M. New York time on
November 18, 1994, 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 therefor, 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. As soon as practicable after the Closing, the Fund shall
distribute on a pro rata basis to the shareholders of the Fund on the
Valuation Date the shares of Emerging Growth Fund received by the Fund on
the Closing Date in exchange for the assets of the Fund in complete
liquidation of the Fund; for the purpose of the distribution by the Fund
of such shares of Emerging Growth Fund to its shareholders, Emerging
Growth Fund will promptly cause its transfer agent to: (a) credit an
appropriate number of shares of Emerging Growth Fund on the books of
Emerging Growth Fund to each shareholder of the Fund in accordance with
a list (the "Shareholder List") of its shareholders received from the
Fund; and (b) confirm an appropriate number of shares of Emerging Growth
Fund to each shareholder of the Fund; certificates for shares of Emerging
Growth Fund will be issued upon written request of a former shareholder
of the Fund but only for whole shares with fractional shares credited to
the name of the shareholder on the books of Emerging Growth Fund.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of the Fund,
indicating his or her share balance. The Fund agrees to supply the
Shareholder List to Emerging Growth Fund not later than the Closing Date.
Shareholders of the 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 Emerging Growth Fund
which they received.
6. Within one year after the Closing Date, the 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 Emerging Growth 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 the 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 the 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,
Emerging Growth Fund will be in compliance with all of its investment
policies and restrictions. At the Closing, the Fund shall deliver to
Emerging Growth Fund two copies of a list setting forth the securities
then owned by the Fund. Promptly after the Closing, the Fund shall
provide Emerging Growth Fund a list setting forth the respective federal
income tax bases thereof.
8. Portfolio securities or written evidence acceptable to
Emerging Growth Fund of record ownership thereof by The Depository Trust
Company or through the Federal Reserve Book Entry System or any other
depository approved by the Fund pursuant to Rule 17f-4 under the Act shall
be endorsed and delivered, or transferred by appropriate transfer or
assignment documents, by the Fund on the Closing Date to Emerging Growth
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 Emerging Growth Fund for the account
of Emerging Growth Fund. Shares of Emerging Growth Fund representing the
number of shares of Emerging Growth Fund being delivered against the
assets of the Fund, registered in the name of the Fund, shall be
transferred to the Fund on the Closing Date. Such shares shall thereupon
be assigned by the Fund to its shareholders so that the shares of Emerging
Growth Fund may be distributed as provided in Section 5.
If, at the Closing Date, the Fund is unable to make delivery under this
Section 8 to Emerging Growth Fund of any of its portfolio securities or
cash for the reason that any of such securities purchased by the Fund, or
the cash proceeds of a sale of portfolio securities, prior to the Closing
Date have not yet been delivered to it or the Fund's custodian, then the
delivery requirements of this Section 8 with respect to said undelivered
securities or cash will be waived and the Fund will deliver to Emerging
Growth Fund by or on the Closing Date and with respect to said undelivered
securities or cash executed copies of an agreement or agreements of
assignment in a form reasonably satisfactory to Emerging Growth Fund,
together with such other documents, including a due bill or due bills and
brokers' confirmation slips as may reasonably be required by Emerging
Growth Fund.
9. Emerging Growth Fund shall not assume the liabilities (except
for portfolio securities purchased which have not settled and for
shareholder redemption and dividend checks outstanding) of the Fund, but
the 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 the Fund. The Fund and Emerging Growth 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 Emerging Growth Fund and the Fund associated with this reorganization,
including legal, accounting and transfer agent expenses, will be borne by
the Fund and Emerging Growth Fund, respectively, in the amounts so
incurred by each.
10. The obligations of Emerging Growth Fund hereunder shall be subject
to the following conditions:
A. The Board of Trustees of the Fund shall have authorized the
execution of the Agreement, and the shareholders of the Fund shall have
approved the Agreement and the transactions contemplated hereby, and the
Fund shall have furnished to Emerging Growth Fund copies of resolutions
to that effect certified by the Secretary or an Assistant Secretary of the
Fund; such shareholder approval shall have been by the affirmative vote
of "a majority of the outstanding voting securities" (as defined in the
Act) of the Fund at a meeting for which proxies have been solicited by the
Proxy Statement and Prospectus (as hereinafter defined).
B. Emerging Growth Fund shall have received an opinion dated the
Closing Date of counsel to the Fund, to the effect that (i) the Fund 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; and (ii) that all action necessary to make the
Agreement, according to its terms, valid, binding and enforceable on the
Fund and to authorize effectively the transactions contemplated by the
Agreement have been taken by the Fund.
C. The representations and warranties of the Fund contained herein
shall be true and correct at and as of the Closing Date, and Emerging
Growth 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 Fund, dated the Closing Date, to that effect.
D. On the Closing Date, the Fund shall have furnished to Emerging
Growth Fund a certificate of the Treasurer or Assistant Treasurer of the
Fund as to the amount of the capital loss carry-over and net unrealized
appreciation or depreciation, if any, with respect to the Fund as of the
Closing Date.
E. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of the Fund at the close of
business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Emerging Growth
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 December 1, 1994.
G. On the Closing Date, Emerging Growth Fund shall have received a
letter of Andrew J. Donohue or other senior executive officer of
Oppenheimer Management Corporation acceptable to Emerging Growth 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 the Fund arising out of
litigation brought against the 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 the Fund delivered to
Emerging Growth 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. Emerging Growth Fund shall have received an opinion, dated the
Closing Date, of KPMG Peat Marwick LLP, to the same effect as the opinion
contemplated by Section 11.E. of the Agreement.
I. Emerging Growth Fund shall have received at the closing all of
the assets of the 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 the Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of Emerging Growth Fund shall have
authorized the execution of the Agreement, and the transactions
contemplated hereby, and Emerging Growth Fund shall have furnished to the
Fund copies of resolutions to that effect certified by the Secretary or
an Assistant Secretary of Emerging Growth Fund.
B. The 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 the Fund,
and the Fund shall have furnished Emerging Growth Fund copies of
resolutions to that effect certified by the Secretary or an Assistant
Secretary of the Fund.
C. The Fund shall have received an opinion dated the Closing Date
of counsel to Emerging Growth Fund, to the effect that (i) Emerging Growth
Fund 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; (ii) all action necessary to make the
Agreement, according to its terms, valid, binding and enforceable upon
Emerging Growth Fund and to authorize effectively the transactions
contemplated by the Agreement have been taken by Emerging Growth Fund, and
(iii) the shares of Emerging Growth Fund to be issued hereunder are duly
authorized and when issued will be validly issued, fully-paid and non-
assessable, except as set forth in Emerging Growth Fund's then current
Prospectus and Statement of Additional Information.
D. The representations and warranties of Emerging Growth Fund
contained herein shall be true and correct at and as of the Closing Date,
and the Fund shall have been furnished with a certificate of the
President, a Vice President or the Secretary or an Assistant Secretary or
the Treasurer of Emerging Growth Fund to that effect dated the Closing
Date.
E. The Fund shall have received an opinion of KPMG Peat Marwick LLP
to the effect that the Federal tax consequences of the transaction, if
carried out in the manner outlined in this Plan of Reorganization and in
accordance with (i) the Fund's representation that there is no plan or
intention by any Fund shareholder who owns 5% or more of the Fund's
outstanding shares, and, to the Fund's best knowledge, there is no plan
or intention on the part of the remaining Fund shareholders, to redeem,
sell, exchange or otherwise dispose of a number of Emerging Growth Fund
shares received in the transaction that would reduce the Fund
shareholders' ownership of Emerging Growth 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 Fund shares as of the same date,
(ii) the representation by each of the Fund and Emerging Growth Fund that,
as of the Closing Date, the Fund and Emerging Growth Fund will qualify as
regulated investment companies or will meet the diversification test of
Section 368(a)(2)(F)(ii) of the Code, and (iii) the other representations
by each of the Fund and Emerging Growth Fund made to KPMG Peat Marwick LLP
and set forth in the opinion, will generally 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. The Fund and Emerging Growth 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
the Fund upon the distribution of shares of beneficial interest in
Emerging Growth Fund to the shareholders of the Fund pursuant to Section
354 of the Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by the Fund by reason of the transfer of substantially all its
assets in exchange for shares of Emerging Growth Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Emerging Growth Fund by reason of the transfer of
substantially all the Fund's assets in exchange for shares of Emerging
Growth Fund and Emerging Growth Fund's assumption of certain liabilities
of the Fund.
6. The shareholders of the Fund will have the same tax basis
and holding period for the shares of beneficial interest in Emerging
Growth Fund that they receive as they had for the Fund shares that they
previously held, pursuant to Section 358(a) and 1223(1), respectively, of
the Code.
7. The securities transferred by the Fund to Emerging Growth
Fund will have the same tax basis and holding period in the hands of
Emerging Growth Fund as they had for the 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 the Fund at the close of
business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Emerging Growth
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 December 1, 1994.
H. On the Closing Date, the Fund shall have received a letter of
Andrew J. Donohue or other senior executive officer of Oppenheimer
Management Corporation acceptable to the 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 Emerging Growth Fund arising out of litigation brought
against Emerging Growth 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 Emerging Growth Fund delivered to the 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. The Fund shall acknowledge receipt of the shares of Emerging
Growth Fund.
12. The Fund hereby represents and warrants that:
A. The financial statements of the Fund as at September 30, 1993
(audited) and March 31, 1994 (unaudited) heretofore furnished to Emerging
Growth Fund, present fairly the financial position, results of operations,
and changes in net assets of the Fund as of that date, in conformity with
generally accepted accounting principles applied on a basis consistent
with the preceding year; and that from September 30, 1993 through the date
hereof there has not been, and through the Closing Date there will not be,
any material adverse change in the business or financial condition of the
Fund, it being agreed that a decrease in the size of the 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 hereby by the Fund's shareholders, the Fund has authority to
transfer all of the assets of the 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 the
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 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 the Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of the Fund, threatened against the Fund, not
reflected in such Prospectus;
E. There are no material contracts outstanding to which the Fund is
a party other than those ordinary in the conduct of its business;
F. The Fund 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 the
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 the 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 the 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 the Fund ended
September 30, 1993 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. The Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, the Fund has met the
requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and the Fund intends to meet such
requirements with respect to its current taxable year.
13. Emerging Growth Fund hereby represents and warrants that:
A. The financial statements of Emerging Growth Fund as at September
30, 1993 (audited) and March 31, 1994 (unaudited) heretofore furnished to
the Fund, present fairly the financial position, results of operations,
and changes in net assets of Emerging Growth Fund, as of that date, in
conformity with generally accepted accounting principles applied on a
basis consistent with the preceding year; and that from September 30, 1993
through the date hereof there has not been, and through the Closing Date
there will not be, any material adverse change in the business or
financial condition of Emerging Growth Fund, it being understood that a
decrease in the size of Emerging Growth 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
Emerging Growth 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 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. There is no material contingent liability of Emerging Growth Fund
and no material claim and no material legal, administrative or other
proceedings pending or, to the knowledge of Emerging Growth Fund,
threatened against Emerging Growth Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which Emerging
Growth Fund is a party other than those ordinary in the conduct of its
business;
E. Emerging Growth Fund is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts; 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 shares of Emerging Growth Fund which
it issues to the Fund pursuant to the Agreement will be duly authorized,
validly issued, fully-paid and non-assessable, except as otherwise set
forth in Emerging Growth Fund's Registration Statement; and will conform
to the description thereof contained in Emerging Growth Fund's
Registration Statement, will be duly registered under the 1933 Act and in
the states where registration is required; and Emerging Growth 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 Emerging Growth
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 Emerging Growth 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
Emerging Growth Fund ended September 30, 1993 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. Emerging Growth Fund has elected to be treated as a regulated
investment company and, for each fiscal year of its operations, Emerging
Growth Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and Emerging
Growth Fund intends to meet such requirements with respect to its current
taxable year;
H. Emerging Growth Fund has no plan or intention (i) to dispose of
any of the assets transferred by the Fund, other than in the ordinary
course of business, or (ii) to redeem or reacquire any of the 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, Emerging Growth 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
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. Emerging Growth Fund
hereby represents to and covenants with the Fund that, if the
reorganization becomes effective, Emerging Growth Fund will treat each
shareholder of the Fund who received any of Emerging Growth Fund's shares
as a result of the reorganization as having made the minimum initial
purchase of shares of Emerging Growth Fund received by such shareholder
for the purpose of making additional investments in shares of Emerging
Growth Fund, regardless of the value of the shares of Emerging Growth Fund
received.
15. Emerging Growth 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. Emerging
Growth Fund covenants and agrees to deregister as an investment company
under the Investment Company Act of 1940, as amended, as soon as
practicable and, thereafter, 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 counterpart, each of which shall
be deemed an original, but 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 acknowledgement of such waiver.
19. The Fund understands that the obligations of Emerging Growth Fund
under the Agreement are not binding upon any Trustee or shareholder of
Emerging Growth Fund personally, but bind only Emerging Growth Fund and
Emerging Growth Fund's property. The Fund represents that it has notice
of the provisions of the Declaration of Trust of Emerging Growth Fund
disclaiming shareholder and Trustee liability for acts or obligations of
Emerging Growth Fund.
20. Emerging Growth Fund understands that the obligations of the Fund
under the Agreement are not binding upon any Trustee or shareholder of the
Fund personally, but bind only the Fund and the Fund's property. Emerging
Growth Fund represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the 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.
Attest: OPPENHEIMER GLOBAL ENVIRONMENT FUND
/s/ Robert G. Zack By: /s/ Andrew J. Donohue
Robert G. Zack Andrew J. Donohue
Assistant Secretary Vice President
Attest: OPPENHEIMER GLOBAL EMERGING GROWTH
FUND
/s/ Robert G. Zack By: /s/ Andrew J. Donohue
Robert G. Zack Andrew J. Donohue
Assistant Secretary Vice President
<PAGE>
Preliminary Copy - For the Information of the Securities and Exchange
Commission Only
OPPENHEIMER GLOBAL ENVIRONMENT FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD NOVEMBER 11, 1994
The undersigned shareholder of Oppenheimer Global Environment Fund (the
"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 the Fund to be held on November 11,
1994, at 3410 South Galena Street, Denver, 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 IF 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 an Agreement and Plan of Reorganization between the Fund
and Oppenheimer Global Emerging Growth Fund, and the transactions
contemplated thereby, including the transfer of substantially all the
assets of the Fund in exchange for shares of Oppenheimer Global
Emerging Growth Fund, the distribution of such shares to the
shareholders of the Fund in complete liquidation of the Fund, the
deregistration of the Fund as an investment company under the
Investment Company Act of 1940, as amended, and the cancellation of
the outstanding shares of the Fund.
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1994
(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.
250
<PAGE>
Oppenheimer Global Emerging Growth Fund
(formerly "Oppenheimer Global Bio-Tech Fund")
Prospectus dated September 19, 1994
Oppenheimer Global Emerging Growth Fund (the "Fund") is a mutual fund
that aggressively seeks capital appreciation as its investment objective.
Current income is not an objective of the Fund. The Fund emphasizes
investments in emerging growth companies worldwide that offer the
potential for accelerated growth of earnings or revenue. In an uncertain
investment environment, defensive investment methods may be stressed. The
Fund is designed for investors who are willing to accept greater risks of
loss in the hopes of greater gains, and is not intended for those who
desire assured income and conservation of capital.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the September 19, 1994, Statement of Additional Information. For
a free copy, call Oppenheimer Shareholder Services, the Fund's Transfer
Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
Because of the Fund's investment policies and practices, the Fund's shares
may be considered to be speculative.
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
Page
ABOUT THE FUND
Expenses
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange
Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services, and
those expenses are reflected in the Fund's net asset value per share. As
a shareholder, you pay those expenses indirectly. Shareholders pay other
expenses directly, such as sales charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's operating expenses that you might expect
to bear indirectly. The calculations are based on the Fund's expenses
during its fiscal year ended September 30, 1993.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to pages 13 through 19 for
an explanation of how and when these charges apply.
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75%
Sales Charge on Reinvested Dividends None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds) None(1)
Exchange Fee $5.00
(1) If you invest more than $1 million in shares of the Fund, you may
have to pay a sales charge of up to 1% if you sell your shares within
18 calendar months from the end of the calendar month during which
you purchased those shares. See "How to Buy Shares," below.
(2) Fee is waived for automated exchanges on PhoneLink, described in "How
to Buy Shares."
- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (the "Manager"), and other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds its portfolio securities, audit fees and legal and other
expenses. The following numbers are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of the Fund's
shares for that year. The "12b-1 Distribution Plan Fees" are the Service
Plan Fees (which are a maximum of 0.25% of average annual net assets).
Management Fees 0.81%
12b-1 Distribution Plan Fees 0.24%
Other Expenses 0.53%
Total Fund Operating Expenses 1.58%
- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples shown
below. Assume that you make a $1,000 investment in shares of the Fund, and
that the Fund's annual return is 5%, and that its operating expenses 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:
1 year 3 years 5 years 10 years
$73 $105 $139 $236
If you did not redeem your investment, it would incur the following
expenses:
$73 $105 $139 $236
These 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 Fund, all of which will vary.
<PAGE>
Financial Highlights
The table on this page presents selected financial information about
the Fund, including per share data and expense ratios and other data based
on the Fund's average net assets. The information for the fiscal year
ended September 30, 1993 has been audited by KPMG Peat Marwick LLP, the
Fund's independent auditors, whose report on the Fund's financial
statements for the fiscal year ended September 30, 1993, is included in
the Statement of Additional Information. The semi-annual information for
the six months ended March 31, 1994 is unaudited.
<TABLE>
<CAPTION>
Year Ended September 30,
1993 1992 1991+ 1990 1989 1988++
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 20.25 $ 26.90 $ 11.81 $ 12.09 $ 10.63 $ 10.00
Income (loss) from investment operations:
Net investment income (loss) (.10) (.17) (.03) (.02) (.10) .14
Net realized and unrealized gain (loss)
on investments, options written
and translation of assets and
liabilities in foreign currencies 1.69 (6.47) 15.12 (.26) 1.69 .49
Total income (loss) from
investment operations 1.59 (6.64) 15.09 (.28) 1.59 .63
Dividends and distributions to shareholders:
Dividends from net investment income -- (.01) -- -- (.10) --
Distributions from net realized
gain on investments (.20) -- -- -- (.03) --
Total dividends and
distributions to shareholders (.20) (.01) -- -- (.13) --
Net asset value, end of period $ 21.64 $ 20.25 $ 26.90 $ 11.81 $ 12.09 $ 10.63
Total Return,
at Net Asset Value** 7.79% (24.70)% 127.78% (2.32)% 15.21% 6.30%
Ratios/Supplemental Data:
Net assets, end of
period (in thousands) $199,697 $129,634 $103,352 $16,217 $3,872 $1,921
Average net assets
(in thousands) $194,184 $166,144 $ 50,989 $ 8,716 $2,343 $1,394
Number of shares outstanding
at end of period (in thousands) 9,226 6,400 3,841 1,373 320 181
Ratios to average net assets:
Net investment income (loss) (.80)% (.71)% (.18)% (.37)% (.70)% 1.41%*
Expenses 1.59% 1.39% 1.50% 1.78% 2.40% 2.06%*
Portfolio turnover rate*** 41.0% 2.6% 11.2% 16.6% 17.1% 1.7%
</TABLE>
* Annualized.
** Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
*** 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 year ended September 30, 1993 were
$119,628,848 and $70,050,079, respectively.
+ Per share amounts calculated based on the weighted average number of
shares outstanding during the period.
++ For the period from December 30, 1987 (commencement of operations) to
September 30, 1988. Per share amounts calculated based on the weighted
average number of shares outstanding during the period.
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
---------------- ------------------------------------------------------
(Unaudited) 1993 1992 1991(1) 1990 1989
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
- ------------
Per Share Operating Data
Net asset value, beginning
of period $21.64 $20.25 $26.90 $11.81 $12.09 $10.63
- ------------
Income (loss) from
investment operations:
Net investment loss (.16) (.10) (.17) (.03) (.02) (.10)
Net realized and unrealized gain
(loss) on investments,
options written and foreign
currency transactions (.40) 1.69 (6.47) 15.12 (.26) 1.69
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations (.56) 1.59 (6.64) 15.09 (.28) 1.59
- ------------
Dividends and distributions
to shareholders:
Dividends from net
investment income -- -- (.01) -- -- (.10)
Distributions from net realized
gain on investments,
options written and foreign
currency transactions (.17) (.20) -- -- -- (.03)
--------- --------- --------- --------- --------- ---------
Total dividends and
distributions to shareholders (.17) (.20) (.01) -- -- (.13)
- ------------
Net asset value, end of period $20.91 $21.64 $20.25 $26.90 $11.81 $12.09
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------
Total Return, at Net Asset Value(2) (2.65)% 7.79% (24.70)% 127.78% (2.32)% 15.21%
- ------------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $187,262 $199,697 $129,634 $103,352 $16,217 $3,872
- ------------
Average net assets
(in thousands) $212,204 $194,184 $166,144 $50,989 $8,716 $2,343
- ------------
Number of shares outstanding
at end of period (in thousands) 8,956 9,226 6,400 3,841 1,373 320
- ------------
Ratios to average net assets:
Net investment loss (1.28)%(3) (.80)% (.71)% (.18)% (.37)% (.70)%
Expenses 1.73%(3) 1.59% 1.39% 1.50% 1.78% 2.40%
- ------------
Portfolio turnover rate(4) 30.2% 41.0% 2.6% 11.2% 16.6% 17.1%
<FN>
1. Per share amounts calculated based on the weighted average number of
shares
outstanding during the period.
2. Assumes a hypothetical initial investment on the business day before
the
first day of the fiscal period, with all dividends and distributions
reinvested
in additional shares on the reinvestment date, and redemption at the net
asset
value calculated on the last business day of the fiscal period. Sales
charges
are not reflected in the total returns.
3. Annualized.
4. 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
six
months ended March 31, 1994 were $59,163,268 and $67,607,516,
respectively.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to seek capital appreciation for
shareholders. The Fund does not invest to seek current income to pay to
shareholders.
Investment Policies and Strategies. The Fund seeks its investment
objective by emphasizing investment in common stocks or other equity
securities, including convertible securities, and may hold warrants and
rights. These may include securities of U.S. companies or foreign
companies, as discussed below.
As a non-fundamental policy, the Fund, under normal market
conditions, invests at least 65% of its total assets in securities of
emerging growth companies located in the United States and at least three
foreign countries. As a global emerging growth fund, the Fund looks for
the most promising areas, both in the U.S. and abroad, for accelerated
growth of earnings or revenues.
The Fund may also seek to take advantage of changes in the business
cycle by investing in companies that are sensitive to those changes, if
the Manager believes they present opportunities for accelerated growth.
For example, when the economy is expanding, companies in the financial
services and consumer products industries may be in a position to benefit
from changes in the business cycle and may present long-term growth
opportunities.
When investing the Fund's assets, the Manager considers many factors,
including general economic conditions abroad relative to the U.S. and the
trends in foreign and domestic stock markets. The Fund may try to hedge
against losses in the value of its portfolio of securities by using
hedging strategies described below. When market conditions are unstable,
the Fund may invest substantial amounts of its assets in debt securities,
such as money market instruments or government securities, as described
below. The Fund's portfolio manager may employ special investment
techniques in selecting securities for the Fund. These are also described
below. Additional information may be found about them under the same
headings in the Statement of Additional Information.
The Fund previously emphasized investments in biotechnology
companies, and was named "Oppenheimer Global Bio-Tech Fund". At a meeting
held September 19, 1994, the Fund's shareholders approved a proposal to
expand the Fund's investment policies to emphasize investments in emerging
growth companies worldwide, and to eliminate the policy that the Fund
would generally invest at least 65% of its total assets in biotechnology
companies. The Fund's fundamental investment objective of capital
appreciation remained unchanged. The Fund's Board of Trustees
simultaneously changed the Fund's name to "Oppenheimer Global Emerging
Growth Fund" to reflect its revised investment policies.
The Fund reserves the freedom to concentrate its investments (that
is,, invest 25% or more of its total assets) in securities of
biotechnology companies for an interim transition period to permit an
ordinary reduction in its bio-tech position. However, unanticipated
market conditions affecting the Fund's current portfolio holdings or
unanticipated redemptions of Fund shares might make it impracticable for
the Fund to quickly reduce its bio-tech position in an orderly manner to
less than 25% of its total assets until circumstances permit. The Fund
defines biotechnology companies as those with a significant business or
investment in biotechnology. For purposes of its interim biotechnology
concentration policy, the Fund's biotechnology classifications include
agricultural biotechnology, pharmaceuticals, genetic engineering and human
health care. Otherwise, the Fund does not intend to concentrate its
investments in any industry.
The Fund has entered into an agreement with Oppenheimer Global Environment
Fund ("Global Environment Fund") to acquire substantially all of the assets
of Global Environment Fund, subject to approval by shareholders of Global
Environment Fund. The Fund anticipates that it would maintain, at least
for an interim period, a substantial portion of the assets of Global
Environment Fund that are invested in environmental securities, most of which
will qualify as emerging growth companies.
- What Are "Emerging Growth" Companies? The Manager will emphasize
investments in aggressive growth opportunities that offer the potential
for accelerated earnings or revenues growth. Emerging growth companies
tend to be smaller companies that are developing new products or services
or are expanding into new markets for their products. Emerging growth
companies can be any size and can be in any industry. While they may have
what the Manager believes to be favorable prospects for the long-term,
they normally retain a large part of their earnings for research,
development and investment in capital assets. Therefore, they tend not to
emphasize the payment of dividends. The Manager intends to use a global
"theme oriented approach" in managing the Fund, thereby seeking to
capitalize on important global trends. Examples of current themes include
special telecommunications, infrastructure spending, efficiency enhancing
technology, energy logistics, emerging consumer markets, healthcare/
biotechnology and the environment.
- Investment Risks. Expanding the Fund's investment policies to
emphasize investments in emerging growth companies worldwide serves to
diversify the Fund's investments across a number of sectors, in addition
to the biotechnology sector. Diversification reduces some of the risk to
a shareholder's principal, while providing greater growth potential.
Nevertheless, because of the types of companies the Fund invests in and
the investment techniques the Fund uses, some of which may be speculative,
it is designed for those 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. There is no assurance
that the Fund will achieve its objective, and when you redeem your shares,
they may be worth more or less than what you paid for them.
- Special Risks - Borrowing for Leverage. The Fund may borrow up to
10% of the value of its assets from banks on an unsecured basis to buy
securities. This is a speculative investment method known as "leverage."
Leveraging may subject an investment in the Fund to greater risks and
costs than funds that do not borrow. These risks may include the possible
reduction of income and increased fluctuation in the Fund's net asset
value per share, since the Fund pays interest on borrowings. Borrowing is
subject to regulatory limits, described in more detail in the Statement
of Additional Information.
- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund may engage frequently in short-
term trading to try to achieve its objective. As a result, the Fund's
portfolio turnover may be higher than other mutual funds, although it is
not expected to be more than 150% each year. The "Financial Highlights,"
above, show the Fund's portfolio turnover rate during past fiscal years.
High turnover and short-term trading may cause the Fund to have relatively
larger commission expenses and transaction costs than funds that do not
engage in short-term trading. Additionally, high portfolio turnover may
affect the ability of the Fund to qualify for tax deductions for payments
made to shareholders as a "regulated investment company" under the
Internal Revenue Code. The Fund qualified in its last fiscal year and
intends to do so in the coming year, although it reserves the right not
to qualify.
- Can the Fund's Investment Objective and Policies Change? The Fund
has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those policies. The Fund's investment policies and
practices are not "fundamental" unless the Prospectus or Statement of
Additional Information says that a particular policy is "fundamental."
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's
investment objective is a fundamental policy. The Fund's Board of Trustees
may change non-fundamental policies without shareholder approval, although
significant changes will be described in amendments to this Prospectus.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below, which involve
certain risks. The Statement of Additional Information contains more
information about these practices, including limitations designed to
reduce some of the risks.
- Foreign Securities. The Fund may purchase equity (and debt)
securities issued or guaranteed by foreign companies or foreign
governments or their agencies. The Fund may buy securities of companies
in any country, developed or underdeveloped. There is no limit on the
amount of the Fund's assets that may be invested in foreign securities.
Foreign currency will be held by the Fund only in connection with the
purchase or sale of foreign securities. If the Fund's securities are held
abroad, the countries in which they are held and the sub-custodians
holding them must be approved by the Fund's Board of Trustees.
Foreign securities have special risks. For example, foreign issuers
are not subject to the same accounting and disclosure requirements that
U.S. companies are subject to. The value of foreign investments may be
affected by changes in foreign currency rates, exchange control
regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or abroad, or other
political and economic factors. More information about the risks and
potential rewards of investing in foreign securities is contained in the
Statement of Additional Information.
- Warrants and Rights. The Fund may invest up to 5% of its total
assets in warrants or rights (other than those that have been acquired in
units or attached to other securities). No more than 2% of the Fund's
assets may be invested in warrants that are not listed on the New York or
American Stock Exchanges.
- Investing in Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies that have
been in operation for less than three years, even after including the
operations of any predecessors. Securities of these companies may have
limited liquidity and may be subject to volatility in their prices. The
Fund currently intends to invest no more than 10% of its total assets in
securities of small, unseasoned issuers while reserving the right to
invest up to 25% of its total assets in such issuers.
- Writing Covered Calls. The Fund may write (that is, sell) covered
call options (calls) to raise cash for liquidity purposes (for example,
to meet redemption requirements) or for defensive reasons. The Fund may
write calls only if certain conditions are met: (1) after writing any
call, not more than 25% of the Fund's total assets may be subject to
calls; (2) the calls are listed on a domestic securities exchange, quoted
on the Automated Quotation System of the National Association of
Securities Dealers, Inc.; ("NASDAQ") or traded in the over-the-counter
market; and (3) each call must be "covered" while it is outstanding; that
is, the Fund must own the securities on which the call is written or it
must own other securities that are acceptable for the escrow arrangements
required for calls. If a covered call written by the Fund is exercised
on a security that has increased in value, the Fund will be required to
sell the security at the call price and will not be able to realize any
profit on the security above the call price.
- Hedging With Options and Futures Contracts. The Fund may buy and
sell options and futures contracts to try to manage its exposure to
declining prices on its portfolio securities or to establish a position
in the equity 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
buying call options, tend to increase the Fund's exposure to the market.
The Fund may purchase certain kinds of put and call options, Stock
Index Futures (described below), financial futures and options on Stock
Index Futures and on broadly-based stock indices. These are all referred
to as "hedging instruments." The Fund does not use hedging instruments
for speculative purposes. The hedging instruments the Fund may use are
described below and in greater detail in "Other Investment Techniques and
Strategies" in the Statement of Additional Information.
The Fund may purchase put options ("puts") which relate to (1)
securities or Stock Index Futures, whether or not the Fund owns the
particular security or Stock Index Future in its portfolio, or (2)
broadly-based stock indices. The Fund may write puts on securities or
Stock Index Futures in an amount up to 50% of its total assets only if
such puts are covered by segregated liquid assets. In writing puts, there
is a risk that the Fund may be required to buy the underlying security at
a disadvantageous price. The Fund may purchase calls only on securities,
broadly-based stock indices or Stock Index Futures, or to terminate its
obligation on a call the Fund previously wrote. The Fund may also
purchase "relative performance call options." These are call options that
have a cash settlement based on the difference between the returns on two
market indices. These options are subject to the risk that the value of
the option may decline because of adverse movements in the market indices.
A call or put may not be purchased if the value of all of the Fund's put
and call options would exceed 5% of the Fund's total assets. The Fund may
buy and sell futures contracts only if they relate to broadly-based stock
indices (these are referred to as "Stock Index Futures"), as described in
the Statement of Additional Information.
Hedging instruments can be volatile investments and may involve
special risks. If the Manager uses a hedging instrument at the wrong time
or judges market conditions incorrectly, hedging strategies may reduce the
Fund's return. The Fund could also experience losses 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 Fund. There are also special risks in particular hedging
strategies. For example, in writing puts, there is a risk that the Fund
may be required to buy the underlying security at a disadvantageous price.
These risks and the hedging strategies the Fund may use are described in
greater detail in the Statement of Additional Information.
- Illiquid and Restricted Securities. Under the policies established
by the Fund's Board of Trustees, the Manager determines the liquidity of
the Fund's investments. 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 which cannot be sold
publicly until it is registered under the Securities Act of 1933. The Fund
will not invest more than 10% of its net assets in illiquid or restricted
securities (that limit may increase to 15% if certain state laws are
changed or the Fund's shares are no longer sold in those states). Certain
restricted securities, eligible for resale to qualified institutional
purchasers, are not subject to that limit.
- Loans of Portfolio Securities. To raise cash for liquidity
purposes, the Fund may lend its portfolio securities to certain types of
eligible borrowers approved by the Board of Trustees. Each loan must be
collateralized in accordance with applicable regulatory requirements.
After any loan, the value of the securities loaned must not exceed 25% of
the value of the Fund's net assets. 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. The Fund presently does not intend to engage in loans
of securities that will exceed 5% of the value of the Fund's total assets
in the coming year.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. There is no limit on the amount of the Fund's net assets that
may be subject to repurchase agreements of seven days or less. Repurchase
agreements must be fully collateralized. However, if the vendor of the
securities under a repurchase agreement 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 ability to do so.
The Fund will not enter into a repurchase agreement which causes more than
10% of its net assets to be subject to repurchase agreements having a
maturity beyond seven days.
- Short Sales "Against-the-Box". The Fund may not sell securities
short except in collateralized transactions referred to as short sales
"against-the-box." No more than 15% of the Fund's net assets will be held
as collateral for such short sales at any one time.
- Temporary Defensive Investments. When stock market prices are
falling or in other unusual economic or business circumstances, the Fund
may invest all or a portion of its assets in defensive securities.
Securities selected for defensive purposes may include debt securities,
such as rated or unrated bonds and debentures, and preferred stocks, cash
or cash equivalents, such as U.S. Treasury Bills and other short-term
obligations of the U.S. Government, its agencies or instrumentalities, or
commercial paper rated "A-1" or better by Standard & Poor's Corporation
or "P-1" or better by Moody's Investors Service, Inc.
Other Investment Restrictions. The Fund has other investment restrictions
which are fundamental policies. Under these fundamental policies, the
Fund cannot do any of the following: (1) invest in securities of any one
issuer (other than the U.S. Government or any of its agencies or
instrumentalities) if immediately thereafter more than 5% of the Fund's
assets would be invested in securities of that issuer; (2) with respect
to 75% of its assets, invest in securities of any one issuer (other than
the U.S. Government or any of its agencies or instrumentalities) if the
Fund would then own more than 10% of the voting securities or 10% of any
class of securities of that issuer (all debt and all preferred stock of
an issuer are respectively considered single classes for this purpose);
(3) borrow money in excess of 10% of the value of its net assets; (4)
invest in other open-end investment companies, except in a merger,
consolidation, reorganization or acquisition of assets, or invest more
than 10% of its assets through open-market purchases in closed-end
investment companies, including small business investment companies, nor
make any such investments at commission rates in excess of normal
brokerage commissions; or (5) deviate from the percentage restrictions
listed under "Borrowing," "Warrants and Rights," "Loans of Portfolio
Securities" and "Short Sales Against-the-Box" or from the restrictions
under "Foreign Securities" as to what foreign securities may be purchased.
All of the percentage restrictions described above and elsewhere in
this Prospectus (other than the percentage limits that apply to borrowing,
described in the Statement of Additional Information) apply only at the
time the Fund purchases a security, and the Fund need not dispose of a
security merely because the Fund's assets have changed or the security has
increased in value relative to the size of the Fund. There are other
fundamental policies discussed in the Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1987 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and provides more information about them
and the officers of the Fund. Although the Fund is not required by law
to hold annual meetings, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.
Presently, shares of the Fund are of one class and are freely
transferrable. However, the Board of Trustees has the power, without
shareholder approval, to divide unissued shares of the Fund into two or
more classes which may have separate assets and liabilities which would
represent identical interests in the same portfolio of investments but
have different expenses.
The Manager and Its Affiliates. The Fund is managed by the Manager, which
chooses the Fund's investments and handles its day-to-day business. The
Manager carries out its duties, subject to the policies established by the
Board of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities and its fees, and describes the expenses that
the Fund pays to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $28 billion as
of June 30, 1994, and with more than 1.8 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company.
- Portfolio Manager. The Portfolio Manager of the Fund is James
Ayer. He has been the person principally responsible for the day-to-day
management of the Fund's portfolio since August, 1994. During the past
five years, Mr. Ayer has also served as Assistant Vice President of the
Manager researching and investing in small capitalization companies
for other OppenheimerFunds and as Vice President and portfolio manager of
Oppenheimer Gold & Special Minerals Fund, prior to which he was an
International Equities Investment Officer with Brown Brothers
Harriman & Company.
- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 1.0% of the first $50 million of
average annual net assets; 0.75% of the next $150 million; 0.72% of the
next $200 million; 0.69% of the next $200 million; 0.66% of the next $200
million; and 0.60% of net assets in excess of $800 million. That fee rate
is higher than that paid by most other investment companies. The Fund's
management fee for its last fiscal year ended September 30, 1993 was 0.81%
of average annual net assets.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Distributor. The
Distributor also distributes the shares of other mutual funds managed by
the Manager (the "OppenheimerFunds") and is sub-distributor for funds
managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
account to the Transfer Agent at the address and toll-free numbers shown
below in this Prospectus or on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses certain terms to
illustrate its performance: "total return" and "average annual total
return." This performance information may be useful to help you see how
well your investment has done and to compare it to other funds or market
indices, as we have done below.
It is important to understand that the Fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary, depending on
market conditions, the composition of the portfolio, and expenses that the
Fund incurs.
- Total Returns. There are different types of total returns used to
measure the Fund's performance. Total return is the change in value of
a hypothetical investment in the Fund over a given period, assuming that
all dividends and capital gains distributions are reinvested in additional
shares. The cumulative total return measures the change in value over the
entire period (for example, ten years). An average annual total return
shows the average rate of return for each year in a period that would
produce the cumulative total return over the entire period. However,
average annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted, they reflect the payment of the
maximum initial sales charge. Total returns may also be quoted "at net
asset value," without considering the effect of the sales charge, and
those returns would be reduced if sales charges were deducted. They may
also be shown based on the change in net asset value, without considering
the effect of the contingent deferred sales charge.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended September 30, 1993,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the Fund's fiscal
year ended September 30, 1993, the Manager sought to maintain a balance
between established and emerging bio-tech companies, focusing on
diversification and stock selection. With interest rates abroad
declining, the Fund expanded its European holdings. The Fund also added
five equity private placements and two convertible issues to its
portfolio, which the Manager believes tend to resist sharp declines during
market retreats while offering possible strong returns in rising markets.
- Comparing the Fund's Performance to the Market. The chart below
shows the performance of a hypothetical $10,000 investment in shares of
the Fund held until September 30, 1993 from the inception of the Fund
(December 30, 1987), with all dividends and capital gains distributions
reinvested in additional shares. The graph reflects the deduction of the
5.75% maximum initial sales charge on the Fund's shares.
The Fund's performance is compared to the performance of the S&P 500
Index, a broad-based index of equity securities widely regarded as a
general measurement of the performance of the U.S. equity securities
market. Index performance reflects the reinvestment of dividends but does
not consider the effect of capital gains or transaction costs, and none
of the data below shows the effect of taxes. Also, the Fund's performance
reflects the effect of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited
to the securities in the S&P 500 index, which tend to be securities of
larger, well-capitalized companies, as contrasted to the smaller growth-
type companies in which the Fund principally invests. Moreover, the index
data does not reflect any assessment of the risk of the investments
included in the index.
Oppenheimer Global Emerging Growth Fund
(formerly "Oppenheimer Global Bio-Tech Fund")
Comparison of Change in Value
of $10,000 Hypothetical Investment to the
S&P 500 Index
(Graph)
Past performance is not predictive of future performance.
Oppenheimer Global Emerging Growth Fund
(formerly "Oppenheimer Global Bio-Tech Fund")
Average Annual Total Returns at 9/30/93
1-Year 5-Year Life*
1.59% 14.42% 13.63%
________________________
*The Fund began operations on 12/30/87.
ABOUT YOUR ACCOUNT
How to Buy Shares
When you buy shares of the Fund, you pay an initial sales charge (on
investments up to $1 million). If you purchase shares as part of an
investment of at least $1 million in shares of one or more
OppenheimerFunds, and you sell any of those shares within 18 months after
your purchase, you will pay a contingent deferred sales charge, which will
vary depending on the amount you invested.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250
(if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or you
can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements with
the Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service.
- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member, to transmit funds electronically to purchase shares, to send
redemption proceeds, and to transmit dividends and distributions. Shares
are purchased for your account on the regular business day the Distributor
is instructed by you to initiate the ACH transfer to buy shares. You can
provide those instructions automatically, under an Asset Builder Plan,
described below, or by telephone instructions using OppenheimerFunds
PhoneLink, also described below. You must request AccountLink privileges
on the application or dealer settlement instructions used to establish
your account. Please refer to "AccountLink" below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other OppenheimerFunds) automatically each month from your account
at a bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of
Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value that is next determined after
the Distributor receives the purchase order in Denver. In most cases, to
enable you to receive that day's offering price, the Distributor must
receive your order by 4:00 P.M., New York time (all references to time in
this Prospectus mean "New York time"). The net asset value is determined
as of that time on each day The New York Stock Exchange is open (which is
a "regular business day"). If you buy shares through a dealer, the dealer
must receive your order by 4:00 P.M., on a regular business day and
transmit it to the Distributor so that it is received before the
Distributor's close of business that day, which is normally 5:00 P.M. The
Distributor may reject any purchase order for the Fund's shares, in its
sole discretion.
Shares are sold at their offering price, which is normally net asset
value plus an initial sales charge. However, in some cases, described
below, where purchases are not subject to an initial sales charge, the
offering price may be net asset value. In some cases, reduced sales
charges may be available, as described below. Out of the amount you
invest, the Fund receives the net asset value to invest for your account.
The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor and
allocated to your dealer. The current sales charge rates and commissions
paid to dealers and brokers are as follows:
- -------------------------------------------------------------------------
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
- -------------------------------------------------------------------------
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
- -------------------------------------------------------------------------
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
- -------------------------------------------------------------------------
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
- -------------------------------------------------------------------------
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
- -------------------------------------------------------------------------
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
- -------------------------------------------------------------------------
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
- Contingent Deferred Sales Charge. There is no initial sales
charge on purchases of Class A shares of any one or more OppenheimerFunds
aggregating $1 million or more. However, the Distributor pays dealers of
record commissions on such purchases in an amount equal to the sum of 1.0%
of the first $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
of share purchases over $5 million. However, that commission will be paid
only on the amount of those purchases in excess of $1 million that were
not previously subject to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge will
be deducted from the redemption proceeds. That sales charge will be equal
to 1.0% of the aggregate net asset value of either (1) the redeemed shares
(not including shares purchased by reinvestment of dividends or capital
gain distributions) or (2) the original cost of the shares, whichever is
less. However, the contingent deferred sales charge will not exceed the
aggregate commissions the Distributor paid to your dealer on all Class A
shares of all OppenheimerFunds you purchased subject to the contingent
deferred sales charge. In determining whether a contingent deferred sales
charge is payable, the Fund will first redeem shares that are not subject
to the sales charge, including shares purchased by reinvestment of
dividends and capital gains, and then will redeem other shares in the
order that you purchased them. The contingent deferred sales charge is
waived in certain cases described in "Waivers of Sales Charges" below.
No contingent deferred sales charge is charged on exchanges of shares
under the Fund's Exchange Privilege (described below). However, if the
shares acquired by exchange are redeemed within 18 months of the end of
the calendar month of the purchase of the exchanged shares, the sales
charge will apply.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges for Share Purchases. You may be eligible to buy
shares at reduced sales charge rates in one or more of the following ways:
- Right of Accumulation. You and your spouse can accumulate shares
you purchase for your own accounts, or jointly, or on behalf of your
children who are minors, under trust or custodial accounts. A fiduciary
can cumulate shares purchased for a trust, estate or other fiduciary
account (including one or more employee benefit plans of the same
employer) that has multiple accounts.
Additionally, you can cumulate current purchases of shares of the
Fund and Class A shares of other OppenheimerFunds with Class A shares of
OppenheimerFunds you previously purchased subject to a sales charge,
provided that you still hold your investment in one of the
OppenheimerFunds. The value of those shares will be based on the greater
of the amount you paid for the shares or their current value (at offering
price). The OppenheimerFunds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Transfer Agent. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, you may purchase
shares of the Fund and Class A shares of other OppenheimerFunds during a
13-month period at the reduced sales charge rate that applies to the
aggregate amount of the intended purchases, including purchases made up
to 90 days before the date of the Letter. More information is contained
in the Application and in "Reduced Sales Charges" in the Statement of
Additional Information.
- Waivers of Sales Charges. No sales charge is imposed on sales of
shares to the following investors: (1) the Manager or its affiliates; (2)
present or former officers, directors, trustees and employees (and their
"immediate families" as defined in "Reduced Sales Charges" in the
Statement of Additional Information) of the Fund, the Manager and its
affiliates, and retirement plans established by them for their employees;
(3) registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor for that purpose; (4) dealers or brokers that have a sales
agreement with the Distributor, if they purchase shares for their own
accounts or for retirement plans for their employees; (5) employees and
registered representatives (and their spouses) of dealers or brokers
described above or financial institutions that have entered into sales
arrangements with such dealers or brokers (and are identified to the
Distributor) or with the Distributor; the purchaser must certify to the
Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's spouse or
minor children); or (6) dealers, brokers or registered investment advisers
that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment
products made available to their clients.
Additionally, no sales charge is imposed on shares that are (a)
issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, or (c) purchased by
the reinvestment of dividends or other distributions reinvested from the
Fund or other OppenheimerFunds (other than the Cash Reserves Funds) or
unit investment trusts for which reinvestment arrangements have been made
with the Distributor. There is a further discussion of this policy in
"Reduced Sales Charges" in the Statement of Additional Information.
The contingent deferred sales charge is also waived if shares are
redeemed in the following cases: (1) retirement distributions or loans to
participants or beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans ("Retirement Plans"),
(2) returns of excess contributions made to Retirement Plans, (3)
Automatic Withdrawal Plan payments that are limited to no more than 12%
of the original account value annually, and (4) involuntary redemptions
of shares by operation of law or under the procedures set forth in the
Fund's Declaration of Trust or adopted by the Board of Trustees.
- Service Plan. The Fund has adopted a Service Plan for shares of
the Fund to reimburse the Distributor for a portion of its costs incurred
in connection with the personal service and maintenance of shareholder
accounts. Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net assets of shares of the Fund. The
Distributor uses all of those fees to compensate dealers, brokers, banks
and other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold shares and to
reimburse itself (if the Fund's Board of Trustees authorizes such
reimbursements, which it has not yet done) for its other expenditures
under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of shares held in accounts
of the dealer or its customers. The payments under the Plan increase the
annual expenses of shares. For more details, please refer to "Service
Plan" in the Statement of Additional Information.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions, including purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges on signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each shareholder
listed in the registration on your account as well as to your dealer
representative of record unless and until the Transfer Agent receives
written instructions terminating or changing those privileges. After you
establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the
Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be
used on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive payments
of at least $50 on a monthly, quarterly, semi-annual or annual basis. The
checks may be sent to you or sent automatically to your bank account on
AccountLink. You may even set up certain types of withdrawals of up to
$1,500 per month by telephone. You should consult the Application and
Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange an amount you establish in advance automatically for shares of
up to five other OppenheimerFunds on a monthly, quarterly, semi-annual or
annual basis under an Automatic Exchange Plan. The minimum purchase for
each other OppenheimerFunds account is $25. These exchanges are subject
to the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in shares of the Fund or Class A shares of other OppenheimerFunds without
paying sales charge. This privilege applies to shares of the Fund that
you sell. You must be sure to ask the Distributor for this privilege when
you send your payment. Please consult the Statement of Additional
Information for more details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment
- Pension and Profit-Sharing Plans for self-employed persons and
small business owners
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing or by telephone. You can
also set up Automatic Withdrawal Plans to redeem shares on a regular
basis, as described above. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special
situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525-7048, for
assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive
a check
- The check is not payable to all shareholders listed on the account
statement
- The check is not sent to the address of record on your statement
- Shares are being transferred to a Fund account with a different
owner or name
- Shares are redeemed by someone other than the owners (such as an
Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing as a fiduciary or on behalf of a corporation, partnership or
other business, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling, and
- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell shares.
Use the following address for requests by mail:
Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record
may also sell your shares by telephone. To receive the redemption price
on a regular business day, your call must be received by the Transfer
Agent by 4:00 P.M. You may not redeem shares held in an OppenheimerFunds
retirement plan or under a share certificate by telephone.
- To redeem shares through a service representative, call 1-800-852-
8457
- To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address
on the account, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds wired to that account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed
by telephone, once in each 7-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account. This service is not available within 30 days of changing the
address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges between already established
accounts on PhoneLink described below. To exchange shares, you must meet
several conditions:
- Shares of the fund selected for exchange must be available for
sale in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other OppenheimerFunds. For example, you can exchange
shares of this Fund only for Class A shares of another fund. At present,
not all of the OppenheimerFunds offer the same classes of shares. If a
fund has only one class of shares that does not have a class designation,
they are "Class A" shares for exchange purposes. In some cases, sales
charges may be imposed on exchange transactions. Certain OppenheimerFunds
offer Class A shares and either Class B or Class C shares, and a list can
be obtained by calling the Distributor at 1-800-525-7048. Please refer
to "How to Exchange Shares" in the Statement of Additional Information for
more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or by calling the
Transfer Agent at 1-800-525-7048. Exchanges of shares involve a redemption
of the shares of the fund you own and a purchase of shares of the other
fund.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request by 4:00 P.M. that
is in proper form, but either fund may delay the purchase of shares of the
fund you are exchanging into if it determines it would be disadvantaged
by a same-day transfer of the proceeds to buy shares. For example, the
receipt of multiple exchange requests from a dealer in a "market-timing"
strategy might require the disposition of securities at a time or price
disadvantageous to the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege
at any time. Although the Fund will attempt to provide you notice
whenever it is reasonably able to do so, it may impose these changes at
any time.
- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
The Distributor has entered into agreements with certain dealers and
investment advisers permitting them to exchange their clients' shares by
telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a
result, those exchanges may be subject to notice requirements, delays and
other limitations that do not apply to shareholders who exchange their
shares directly by calling or writing to the Transfer Agent.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined as of 4:00 P.M. each day
The New York Stock Exchange is open by dividing the value of the Fund's
net assets by the number of shares that are outstanding. The Fund's Board
of Trustees has established procedures to value the Fund's securities to
determine net asset value. In general, securities values are based on
market value. There are special procedures for valuing illiquid and
restricted securities, obligations for which market values cannot be
readily obtained, and call options and hedging instruments. These
procedures are described more completely in the Statement of Additional
Information.
- The offering of shares may be suspended during any period in which
the determination of net asset value is suspended, and the offering may
be suspended by the Board of Trustees at any time the Board believes it
is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise it will not be liable for losses or expenses
arising out of telephone instructions reasonably believed to be genuine.
If you are unable to reach the Transfer Agent during periods of unusual
market activity, you may not be able to complete a telephone transaction
and should consider placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously.
- The redemption price for shares will vary from day to day because
the value of the securities in the Fund's portfolio fluctuates. Therefore,
the redemption value of your shares may be more or less than their
original cost.
- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. The Transfer Agent may
delay forwarding a check or processing a payment via AccountLink for
recently purchased shares, but only until the purchase payment has
cleared. That delay may be as much as 15 days from the date the shares
were purchased. That delay may be avoided if you purchase shares by
certified check or arrange with your bank to provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $200 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
- Under unusual circumstances, shares of the fund may be redeemed
"in kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to the Statement of
Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or taxpayer identification number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of dividends.
- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described in "How To Buy Shares," you may be
subject to a contingent deferred sales charges when redeeming certain
shares.
- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report and
updated prospectus to shareholders having the same surname and address on
the Fund's records. However, each shareholder may call the Transfer Agent
at 1-800-525-7048 to ask that copies of those materials be sent personally
to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends from net investment income on an
annual basis and normally pays those dividends to shareholders in
December, but the Board of Trustees can change that date. Because the
Fund does not have an objective of seeking current income, the amounts of
dividends it pays, if any, will likely be small.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains. Long-term capital gains
will be separately identified in the tax information the Fund sends you
after the end of the calendar year. Short-term capital gains are treated
as dividends for tax purposes. There can be no assurances that the Fund
will pay any capital gains distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or have
them sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds Account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. Dividends paid from short-term capital gains
and net investment income are taxable as ordinary income. Distributions
are subject to federal income tax and may be subject to state or local
taxes. Your distributions are taxable when paid, whether you reinvest
them in additional shares or take them in cash. Every year the Fund will
send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share price
is reduced by the amount of the distribution. If you buy shares on or
just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. A capital gain or loss
is the difference between the price you paid for the shares and the price
you received when you sold them.
- Returns of Capital: In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders.
This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(formerly "Oppenheimer Global Bio-Tech Fund")
Graphic material included in Prospectus of Oppenheimer Global
Emerging Growth Fund: "Comparison of Total Return of Oppenheimer Global
Emerging Growth Fund with the S&P 500 Index - Change in Value of a $10,000
Hypothetical Investment"
A linear graph will be included in the Prospectus of Oppenheimer
Global Emerging Growth Fund (the "Fund") depicting the initial account
value and subsequent account value of a hypothetical $10,000 investment
in the Fund. That graph will cover the period from 12/30/87 (inception
of the Fund) through 9/30/93. The graph will compare such values with
hypothetical $10,000 investments over the same time periods in the S&P 500
Index. Set forth below are the relevant data points that will appear on
the linear graph. Additional information with respect to the foregoing,
including a description of the S&P 500 Index, is set forth in the
Prospectus under "Performance of the Fund - Comparing the Fund's
Performance to the Market."
Oppenheimer
Fiscal Year Global Emerging S&P $10,000
(Period Ended) Growth Fund 500 Index Investment
12/30/87 $ 9,425 $10,000
9/30/88 $10,019 13.08% $11,308
9/30/89 $11,542 32.95% $15,034
9/30/90 $11,275 -9.24% $13,645
9/30/91 $25,681 31.09% $17,887
9/30/92 $19,339 11.04% $19,862
9/30/93 $20,846 12.97% $22,438
<PAGE>
Oppenheimer Global Emerging Growth Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent OPPENHEIMER
Oppenheimer Shareholder Services Global Emerging Growth Fund
P.O. Box 5270 (formerly "Oppenheimer Global
Denver, Colorado 80217 Bio-Tech Fund")
1-800-525-7048 Prospectus
Effective September 19, 1994
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street OppenheimerFunds
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement and, if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Additional Statement and, if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(formerly, Oppenheimer Global Bio-Tech Fund)
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
September 19, 1994
This Statement of Additional Information of
Oppenheimer Global Emerging Growth Fund (formerly, Oppenheimer Global Bio-
Tech Fund)("Emerging Growth Fund") consists of this cover page and the
following documents:
1. Emerging Growth Fund's Statement of Additional Information dated
September 19, 1994, which has been previously filed and is incorporated
herein by reference.
2. Emerging Growth Fund's Annual Report as of September 30, 1993, which
has been previously filed and is incorporated herein by reference.
3. Emerging Growth Fund's Semi-Annual Report as of March 31, 1994, which
has been previously filed and is incorporated herein by reference.
4. Prospectus of Oppenheimer Global Environment Fund ("Global Environment
Fund") dated February 1, 1994, supplemented June 24, 1994 and further
supplemented July 5, 1994, which has been previously filed and is
incorporated herein by reference.
5. Statement of Additional Information of Global Environment Fund dated
February 1, 1994, which has been previously filed and is incorporated
herein by reference.
6. Global Environment Fund's Annual Report as of September 30, 1993, which
has been previously filed and is incorporated herein by reference.
7. Global Environment Fund's Semi-Annual Report as of March 31, 1994,
which has been previously filed and is incorporated herein by reference.
8. Pro Forma Financial Statements
This Statement of Additional Information (the "Additional Statement")
is not a Prospectus. This Additional Statement should be read in
conjunction with the Proxy Statement and Prospectus of Emerging Growth
Fund dated September 19, 1994, which may be obtained by written request
to Oppenheimer Shareholder Services ("OSS"), P.O. Box 5270, Denver,
Colorado 80217, or by calling OSS at the toll-free number shown above.
<PAGE>
Statement of Investments September 30, 1993
</TABLE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <S> <C> <C>
Repurchase Agreements -- 6.2%
Repurchase agreement with Morgan
Guaranty Trust Co., 3.25%, dated 9/30/93
and maturing 10/1/93, collateralized by
U.S. Treasury Bills, 3.27%, 6/30/94,
with a value of $12,665,137 (Cost
$12,400,000) $12,400,000 $12,400,000
Corporate Bonds and Notes -- 1.7%
Elan International Finance Ltd., 0% Sub.
Liq.Yld. Opt. Nts., 10/16/12 3,800,000 1,529,500
Glycomed, Inc., 7.50% Cv. Sub. Debs.,
1/1/03 2,000,000 1,735,000
Total Corporate Bonds and Notes (Cost
$3,461,730) 3,264,500
Units
Rights and Warrants -- .8%
Biota Holdings Ltd. Wts., Exp. 9/94 225,000 755,082
Genzyme Corp. Wts.:
Exp. 12/94 20,000 305,000
Exp. 12/96 50,000 500,000
Protein Polymer Technologies, Inc. Wts.,
Exp.1/97 100,000 25,000
Xoma Corp. Wts., Exp. 6/95 7,706 3,853
Total Rights and Warrants (Cost
$1,310,470) 1,588,935
Shares
Preferred Stocks -- 2.2%
Cambridge Antibody Technology Ltd., Cv.*
(2) 100,000 2,866,283
Synaptic Pharmaceutical Corp., Cv.
Series 3* (2) 500,000 1,609,253
Total Preferred Stocks (Cost $5,300,000) 4,475,536
Common Stocks -- 88.7%
Consumer Non-Cyclicals -- 87.0%
Agriculture
Biotechnology -- 6.2%
biosys* 140,000 945,000
Calgene, Inc.* 100,000 1,387,500
DNA Plant Technology Corp.* 150,000 843,750
EcoScience Corp.* 175,000 1,771,875
Mogen International* 150,000 580,334
Pioneer Hi-Bred International, Inc. 60,000 1,995,000
Plant Genetics Systems International NV*
(2) 213,944 3,472,187
Syntro Corp.* 400,000 1,300,000
12,295,646
Anti-sense/
Nucleic Acids -- 4.9%
Genetics Institute, Inc.* 100,000 4,125,000
Genzyme Transgenics Corp.* 75,000 525,000
Gilead Sciences, Inc.* 205,000 2,972,500
Isis Pharmaceuticals, Inc.* 350,000 2,187,500
9,810,000
Cardiovascular/Blood --3.9%
Aramed, Inc., Units* 110,000 4,152,500
COR Therapeutics, Inc.* 123,500 1,698,125
Corvas International, Inc.* 135,000 556,875
Gensia Pharmaceuticals, Inc.* 50,000 1,325,000
Protein Polymer Technologies, Inc.* 100,000 68,750
7,801,250
<PAGE>
Market Value
Shares See Note 1
Common Stocks (continued)
Consumer Non-Cyclicals (continued)
Chemicals/Industrial Biotechnology -- 2.9%
Celgene Corp.* 240,000 $ 2,280,000
PerSeptive Biosystems, Inc.* 100,000 2,200,000
PerSeptive Technology Corp., Units* (2) 1,000 1,218,100
5,698,100
Drugs -- 7.1%
Allergan, Inc. 50,000 1,100,000
Astra AB, Series A Free Shares 105,000 2,161,667
Elan Corp. PLC, Units* 13,108 304,761
Merck & Co., Inc. 50,000 1,537,500
Roche Holdings AG 600 2,250,103
Sandoz AG 1,200 2,711,878
Takeda Chemical Industries 132,000 1,704,630
Telor Ophthalmic Pharmaceuticals, Inc.* 148,000 777,000
Zeneca GR 150,000 1,607,241
14,154,780
Drug Delivery -- 3.3%
Cygnus Therapeutic Systems* 150,000 918,750
Elan Corp. PLC, ADR* 50,000 1,537,500
Liposome Technology, Inc.* 225,000 2,306,250
Matrix Pharmaceutical, Inc.* 187,000 1,776,500
6,539,000
Drug Design -- 5.4%
Biota Holdings Ltd. 400,000 2,194,282
Protein Design Labs, Inc.* 300,000 4,237,500
Vertex Pharmaceuticals. Inc.* 350,000 4,462,500
10,894,282
Endocrine/
Metabolism -- 1.2%
Amylin Pharmaceuticals, Inc.* 200,000 2,400,000
Gene Therapy -- 6.0%
CellPro, Inc.* 225,300 5,350,875
Genetic Therapy, Inc.* 300,500 5,484,125
Somatix Therapy Corp.* 90,000 675,000
Vical, Inc. 60,000 510,000
12,020,000
Healthcare-
Diversified -- 2.5%
American Cyanamid Co. 25,000 1,378,125
Johnson & Johnson 30,000 1,177,500
Schering AG 4,000 2,416,572
4,972,197
Healthcare -
Miscellaneous -- 6.0%
Biochem Pharmaceuticals, Inc.* 100,000 987,500
Magainin Pharmaceuticals, Inc.* 400,000 4,600,000
Medco Containment Services, Inc. 45,000 1,603,125
Peptide Technology Ltd. (1) 2,829,280 3,743,202
Quintiles Transnational Corp. (2) 28,950 519,653
Skandigen AB 125,700 612,090
12,065,570
<PAGE>
Market Value
Shares See Note 1
Statement of Investments (continued)
Common Stocks (continued)
Consumer Non-Cyclicals (continued)
Imaging -- .8%
Molecular Biosystems, Inc.* 60,000 $ 1,545,000
Immunology -- 5.4%
AutoImmune, Inc.* 113,000 1,017,000
Cantab Pharmaceuticals PLC, Sponsored
ADR* 99,000 717,750
CytoRad, Inc./Cytogen Corp., Units* 150,000 806,250
ImmuLogic Pharmaceutical Corp.* 147,500 1,438,125
ImmunoGen, Inc.* 100,000 750,000
Immunomedics, Inc.* 105,000 695,625
Medimmune, Inc.* 146,000 3,212,000
T Cell Sciences, Inc.* 223,000 1,421,625
Univax Biologics, Inc.* 103,000 811,125
10,869,500
Inflammation -- 3.2%
Alpha Beta Technology, Inc.* 145,000 3,915,000
Cortech, Inc.* 64,000 1,008,000
Glycomed, Inc.* 114,000 969,000
ICOS Corp.* 100,000 550,000
6,442,000
Labs/Diagnostics -- 2.0%
Agen Ltd. 1,415,000 429,208
DNX Corp. 100,000 500,000
Genelabs Technologies, Inc.* 75,000 318,750
IG Laboratories, Inc.* 322,500 2,660,625
3,908,583
Major Biotechnology -- 18.3%
ALZA Corp., Cl. A* 125,001 2,765,646
Amgen, Inc.* 150,000 5,793,750
Biogen, Inc.* 100,000 3,687,500
Chiron Corp.* (3) 100,500 7,524,938
Genentech, Inc.* 193,400 8,292,025
Genzyme Corp.* 200,435 6,714,572
Immunex Corp.* 50,000 925,000
Neozyme Corp. 20,000 300,000
Neozyme II Corp., Units* 20,000 520,000
Therapeutic Discovery Corp., Units* 10,000 51,250
36,574,681
Medical Products -- 2.5%
Applied Immune Sciences, Inc.* 232,000 3,248,000
Molecular Dynamics, Inc.* 102,500 1,806,562
5,054,562
Neuroscience -- 2.4%
Athena Neurosciences, Inc.* 200,000 1,500,000
Cambridge Neuroscience, Inc.* 100,000 937,500
Cephalon, Inc.* 115,000 1,725,000
CoCensys, Inc.* 100,000 725,000
4,887,500
<PAGE>
Market Value
Shares See Note 1
Common Stocks (continued)
Consumer Non-Cyclicals (continued)
Wound Healing -- 3.0%
Advanced Tissue Sciences, Inc., Cl. A* 355,000 $ 3,061,875
BioSurface Technology, Inc.* 73,000 310,250
Celtrix Pharmaceuticals, Inc.* 350,000 2,525,938
5,898,063
Technology -- 1.7%
Electronics- IDEXX Laboratories, Inc.* 50,000 2,450,000
Instrumentation
-- 1.7% Oxford GlycoSystems Group PLC* (2) 515,132 911,679
3,361,679
Total Common Stocks (Cost $166,413,122) 177,192,393
Total Investments, at Value (Cost $188,885,322) 99.6% 198,921,364
Other Assets Net of Liabilities .4% 775,253
Net Assets 100.0% $199,696,617
</TABLE>
* Non-Income producing security
(1) Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the year ended September 30,
1993. Transactions during the period in which the issuer was an affiliate
are as follows:
<TABLE>
<CAPTION>
Balance Balance
September 30, 1992 Gross Additions Gross Reductions September 30, 1993
Shares Cost Shares Cost Shares Cost Shares Cost
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peptide Technology Ltd.+ 6,581,080 $ 3,965,009 -- $ --- 3,751,800 $1,994,973 2,829,280 $1,970,036
Univax Biologics, Inc.+ 43,000 516,000 60,000 680,615 -- -- 103,000 1,196,615
$4,481,009 $680,615 $1,994,973 $3,166,651
</TABLE>
+ Not an affiliate as of September 30, 1993.
(2) Restricted security-See Note 6 of notes to financial statements.
(3) Securities with an aggregate market value of $3,743,750 are held in escrow
to cover outstanding call options, as follows:
<TABLE>
<CAPTION>
Shares Subject Expiration Exercise Premium Market Value
to Call Date Price Received See Note 1
<S> <C> <C> <C> <C> <C>
Chiron Corp. 50,000 1/94 $65.00 $232,867 $643,750
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statement of Assets and Liabilities September 30, 1993
<TABLE>
<S> <C> <C>
Assets Investments, at value (cost $188,885,322) - see accompanying statement $198,921,364
Cash 49,947
Receivables:
Investments sold 2,477,499
Shares of beneficial interest sold 728,878
Dividends and interest 103,439
Other 19,540
Total assets 202,300,667
Liabilities Options written, at value (premiums received $232,867) -
see accompanying statement - Note 4 643,750
Payables and other liabilities:
Shares of beneficial interest redeemed 918,958
Investments purchased 754,200
Distribution assistance - Note 5 119,097
Other 168,045
Total liabilities 2,604,050
Net Assets $199,696,617
Composition of Net Paid-in capital $195,369,199
Assets
Accumulated net investment loss (2,926,679)
Distributions in excess of net realized gain from investment
and written option transactions (2,370,466)
Net unrealized appreciation on investments, options written and
translation of assets and liabilities in foreign currencies - Note 3 9,624,563
Net Assets -- Applicable to 9,226,406 shares of beneficial interest outstanding $199,696,617
Net Asset Value and Redemption Price Per Share $21.64
Maximum Offering Price Per Share (net asset value plus sales charge of 5.75% of offering price) $22.96
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statement of Operations For the Year Ended September 30, 1993
<TABLE>
<S> <C> <C>
Investment Income Interest $ 861,045
Dividends (including $103,372 from foreign securities less $15,506 of foreign 665,624
tax withheld at source)
Total income 1,526,669
Expenses Management fees - Note 5 1,580,012
Transfer and shareholder servicing agent fees - Note 5 650,147
Distribution assistance - Note 5 464,072
Shareholder reports 136,817
Trustees' fees and expenses 80,788
Custodian fees and expenses 62,985
Legal and auditing fees 35,054
Registration and filing fees 34,838
Other 20,609
Total expenses 3,065,322
Net Investment Loss (1,538,653)
Realized and Net realized gain (loss) on investments:
Unrealized Gain (Loss) Unaffiliated companies (6,594,919)
on Investments, Affiliated companies 6,019,697
Options Written and Net realized loss on investments (575,222)
Translation of Assets Net realized loss on closing of option contracts written - Note 4 (105,457)
and Liabilities in Net realized loss (680,679)
Foreign Currencies Net change in unrealized appreciation (depreciation) on investments,
options written and translation of assets and liabilities in foreign currencies:
Beginning of year (3,823,657)
End of year - Note 3 9,624,563
Net change 13,448,220
Net Realized and Unrealized Gain on Investments, Options Written and
Translation of Assets and Liabilities in Foreign Currencies 12,767,541
Net Increase in Net Assets Resulting from Operations $11,228,888
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended September 30,
1993 1992
<S> <C> <C> <C>
Operations Net investment loss $ (1,538,653) $ (1,181,561)
Net realized gain (loss) on investments and options written (680,679) 590,388
Net change in unrealized appreciation or depreciation
on investments, options written and translation of assets
and liabilities in foreign currencies 13,448,220 (44,464,262)
Net increase (decrease) in net assets resulting from 11,228,888 (45,055,435)
operations
Dividends and Dividends from net investment income ($.01 per share) -- (64,575)
Distributions to Distributions from net realized gain on investments
Shareholders ($.202 per share) (1,873,746) --
Beneficial Interest Net increase in net assets resulting from beneficial
Transactions interest
transactions - Note 2 60,707,523 71,401,564
Net Assets Total increase 70,062,665 26,281,554
Beginning of year 129,633,952 103,352,398
End of year (including accumulated net investment losses
of $2,926,679 and $1,388,026, respectively) $199,696,617 $129,633,952
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Year Ended September 30,
1993 1992 1991+ 1990 1989 1988++
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 20.25 $ 26.90 $ 11.81 $ 12.09 $ 10.63 $ 10.00
Income (loss) from investment operations:
Net investment income (loss) (.10) (.17) (.03) (.02) (.10) .14
Net realized and unrealized gain (loss)
on investments, options written
and translation of assets and
liabilities in foreign currencies 1.69 (6.47) 15.12 (.26) 1.69 .49
Total income (loss) from
investment operations 1.59 (6.64) 15.09 (.28) 1.59 .63
Dividends and distributions to shareholders:
Dividends from net investment income -- (.01) -- -- (.10) --
Distributions from net realized
gain on investments (.20) -- -- -- (.03) --
Total dividends and
distributions to shareholders (.20) (.01) -- -- (.13) --
Net asset value, end of period $ 21.64 $ 20.25 $ 26.90 $ 11.81 $ 12.09 $ 10.63
Total Return,
at Net Asset Value** 7.79% (24.70)% 127.78% (2.32)% 15.21% 6.30%
Ratios/Supplemental Data:
Net assets, end of
period (in thousands) $199,697 $129,634 $103,352 $16,217 $3,872 $1,921
Average net assets
(in thousands) $194,184 $166,144 $ 50,989 $ 8,716 $2,343 $1,394
Number of shares outstanding
at end of period (in thousands) 9,226 6,400 3,841 1,373 320 181
Ratios to average net assets:
Net investment income (loss) (.80)% (.71)% (.18)% (.37)% (.70)% 1.41%*
Expenses 1.59% 1.39% 1.50% 1.78% 2.40% 2.06%*
Portfolio turnover rate*** 41.0% 2.6% 11.2% 16.6% 17.1% 1.7%
</TABLE>
* Annualized.
** Assumes a hypothetical initial investment on the business day before
the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at
the net asset value calculated on the last business day of the fiscal
period.
Sales charges are not reflected in the total returns.
*** 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 year ended September 30, 1993 were $119,628,848 and $70,050,079,
respectively.
+ Per share amounts calculated based on the weighted average number of
shares
outstanding during the period.
++ For the period from December 30, 1987 (commencement of operations) to
September 30, 1988. Per share amounts calculated based on the weighted
average
number of shares outstanding during the period.
See accompanying notes to financial statements.
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Oppenheimer Global Bio-Tech Fund (the Fund) is registered under the
Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment adviser is Oppenheimer
Management
Corporation (the Manager). The following is a summary of significant
accounting policies consistently followed by the Fund.
Investment Valuation -- Portfolio securities are valued at 4:00 p.m. (New
York
time) 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 debt securities
are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities.
Short-term
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. Securities for which market quotes are not
readily
available are valued under procedures established by the Board of Trustees
to
determine fair value in good faith. A call option is valued based upon the
last sales price on the principal exchange on which the option is traded
or,
in the absence of any transactions that day, the value is based upon the
last
sale on the prior trading date if it is within the spread between the
closing
bid and asked prices. If the last sale price is outside the spread, the
closing bid or asked price closest to the last reported sale price is
used.
Foreign Currency Translation -- The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in non-U.S.
currencies are translated into U.S. dollars at the closing rates of
exchange.
Amounts related to the purchase and sale of securities and investment
income
are translated at the rates of exchange prevailing on the respective dates
of
such transactions.
The Fund generally enters into forward currency exchange contracts as a
hedge,
upon the purchase or sale of a security denominated in a foreign currency.
Risks may arise from the potential inability of the counterparty to meet
the
terms of the contract and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates is not separately
identified in the Fund's results of operations. Gains and losses on
foreign
currency transactions are accounted for with the transactions that gave
rise
to the exchange gain or loss.
Repurchase Agreements -- The Fund requires the custodian to take
possession,
to have legally segregated in the Federal Reserve Book Entry System or to
have
segregated within the custodian's vault, all securities held as collateral
for
repurchase agreements. If the seller of the agreement defaults and the
value
of the collateral declines, or if the seller enters an insolvency
proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
Call Options Written -- The Fund may write covered call options. When an
option is written, the Fund receives a premium and becomes obligated to
sell
the underlying security at a fixed price, upon exercise of the option. In
writing an option, the Fund bears the market risk of an unfavorable change
in
the price of the security underlying the written option. Exercise of an
option
written by the Fund could result in the Fund selling a security at a price
different from the current market value. All securities covering call
options
written are held in escrow by the custodian bank.
<PAGE>
Federal Income 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 tax provision is required.
Trustees' Fees and Expenses -- The Fund has adopted a nonfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During
the
year ended September 30, 1993, a provision of $44,988 was made for the
Fund's
projected benefit obligations, resulting in an accumulated liability of
$63,821 at September 30, 1993. No payments have been made under the plan.
Distributions to Shareholders -- Dividends and distributions to
shareholders
are recorded on the ex-dividend date.
Other -- Investment transactions are accounted for on the date the
investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the
life
of the respective securities, in accordance with federal income tax
requirements. 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.
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were
as
follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1993 Year Ended September 30, 1992
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Sold 5,810,447 $123,150,808 4,540,515 $124,706,623
Dividends and distributions reinvested 72,297 1,686,679 2,049 58,089
Redeemed (3,056,478) (64,129,964) (1,983,809) (53,363,148)
Net increase 2,826,266 $ 60,707,523 2,558,755 $ 71,401,564
</TABLE>
3. Unrealized Gains and Losses on Investments and Options Written
At September 30, 1993, net unrealized appreciation of investments and
options written of $9,625,159 was composed of gross appreciation of
$31,347,803, and gross depreciation of $21,722,644.
4. Call Option Activity
Call option activity for the year ended September 30, 1993 was as follows:
<TABLE>
<CAPTION>
Number of Amount of
Options Premiums
<S> <C> <C>
Options outstanding at September 30, 1992 -- $ --
Options written 1,455 528,994
Options cancelled in closing purchase transactions (955) (296,127)
Options outstanding at September 30, 1993 500 $ 232,867
</TABLE>
The cost of cancelling options in closing purchase transactions was
$401,584,
resulting in a net short-term capital loss of $105,457.
<PAGE>
Notes to Financial Statements (continued)
5. 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 an annual fee of 1%
on the
first $50 million of net assets, .75% on the next $150 million with a
reduction of .03% on each $200 million thereafter to $800 million, and
.60% on
net assets in excess of $800 million. The Manager has agreed to reimburse
the
Fund if aggregate expenses (with specified exceptions) exceed the most
stringent applicable regulatory limit on Fund expenses.
For the year ended September 30, 1993, commissions (sales charges paid by
investors) on sales of Fund shares totaled $4,353,366, of which $960,768
was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of
the
Manager, as general distributor, and by an affiliated broker-dealer.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of providing such
services
are allocated ratably to these companies.
Under an approved plan of distribution, the Fund may expend up to .25% of
its
net assets annually to reimburse OFDI for costs incurred in distributing
shares of the Fund, including amounts paid to brokers, dealers, banks and
other financial institutions. During the year ended September 30, 1993,
OFDI
paid $16,371 to an affiliated broker-dealer as reimbursement for
distribution-related expenses.
6. Restricted Securities
The Fund owns securities purchased in private placement transactions,
without
registration under the Securities Act of 1933 (the Act). The securities
are
valued under methods approved by the Board of Trustees as reflecting fair
value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid
securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act
that
are determined to be liquid by the Board of Trustees or by the Manager
under
Board-approved guidelines. Restricted and illiquid securities amount to
$9,685,475, or 4.9% of the Fund's net assets, at September 30, 1993.
<TABLE>
<CAPTION>
Valuation
Per Share as of
Security Acquisition Date Cost Per Unit September 30, 1993
<S> <C> <C> <C>
Cambridge Antibody Technology
Ltd., Cv. 2/5/93 $ 33.00 $ 28.66
Oxford GlycoSystems Group PLC+ 5/21/93 $ 1.94 $ 1.77
PerSeptive Technology Corp. 12/16/92 $ 1,000.00 $ 1,218.10
Plant Genetics Systems
International NV 5/27/92 $ 11.18 $ 16.23
Quintiles Transnational Corp. 8/2/93 $ 17.27 $ 17.95
Synaptic Pharmaceutical
Corp., Cv. Series 3 1/20/93 $ 4.00 $ 3.22
</TABLE>
+ Transferable under Rule 144A of the Act.
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders of Oppenheimer Global Bio-Tech
Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Global Bio-Tech Fund as of September 30, 1993,
and
the related statement of operations for the year then ended, the
statements of
changes in net assets for each of the years in the two-year period then
ended
and the financial highlights for each of the years in the five-year period
then ended and the period from December 30, 1987 (commencement of
operations)
to September 30, 1988. 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 and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 1993, by
correspondence
with the custodian and brokers; and where confirmations were not received
from
brokers, we performed other auditing procedures. 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, the financial statements and financial highlights referred
to
above present fairly, in all material respects, the financial position of
Oppenheimer Global Bio-Tech Fund as of September 30, 1993, the results of
its
operations for the year then ended, the changes in its net assets for each
of
the years in the two-year period then ended, and the financial highlights
for
each of the years in the five-year period then ended and the period from
December 30, 1987 (commencement of operations) to September 30, 1988, in
conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Denver, Colorado
October 21, 1993
<PAGE>
Statement of Investments March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
- ------------
Repurchase Agreements--13.2%
- ------------
Repurchase agreement with J.P. Morgan Securities, Inc., 3.53%, dated
3/31/94, to be repurchased at $24,809,727 on 4/4/94, collateralized
by U.S. Treasury Nts., 4.25%--8.875%, 5/15/95--10/15/96, with a value
of $25,396,708 (Cost $24,800,000) $24,800,000 $24,800,000
- ------------
Corporate Bonds and Notes--3.0%
- ------------
Chiron Corp., 1.90% Cv. Sub. Nts., 11/17/00(3) 2,500,000 2,037,500
- ------------
Elan International Finance Ltd., 0% Sub. Liq. Yld. Opt. Nts., 10/16/12 5,000,000 1,975,000
- ------------
Glycomed, Inc., 7.50% Cv. Sub. Debs., 1/1/03 2,000,000 1,540,000
- ------------
Total Corporate Bonds and Notes (Cost $6,159,193) 5,552,500
Units
-----
- ------------
Rights and Warrants--1.4%
- ------------
Biota Holdings Ltd. Wts., Exp. 9/94 225,000 741,325
- ------------
Gensia Pharmaceuticals, Inc. Wts., 12/96 110,000 632,500
- ------------
Genzyme Corp. Wts.:
Exp. 12/94 20,000 185,000
Exp. 12/96 50,000 331,250
- ------------
PerSeptive Technology Corp. Wts., Exp. 12/97 1,000 683,939
- ------------
Protein Polymer Technologies, Inc. Wts., Exp. 1/97 100,000 31,250
- ------------
Xoma Corp. Wts., Exp. 6/95 7,706 3,853
- ------------
Total Rights and Warrants (Cost $2,864,434) 2,609,117
Shares
------
- ------------
Preferred Stocks--2.1%
- ------------
Cambridge Antibody Technology Ltd., Cv.(1)(3) 100,000 2,474,013
- ------------
Synaptic Pharmaceutical Corp., Cv. Series 3(1)(2)(3) 500,000 1,541,461
------------
Total Preferred Stocks (Cost $5,300,000) 4,015,474
- ------------
Common Stocks--79.8%
- ------------
Basic Materials--0.3%
- ------------
Chemicals--0.3% Ringer Corp. 150,000 487,500
- ------------
Consumer Non-Cyclicals--74.4%
- ------------
Agriculture Biotechnology--5.4% biosys(1) 160,000 760,000
- ------------
Delta and Pine Land Co. 70,000 962,500
- ------------
DNA Plant Technology Corp.(1) 200,000 975,000
- ------------
EcoScience Corp.(1) 175,000 1,225,000
- ------------
Mogen International(1) 150,000 351,675
- ------------
Pioneer Hi-Bred International, Inc.(1) 50,000 1,637,500
- ------------
Plant Genetics Systems International NV(1)(3) 213,944 3,290,420
- ------------
Syntro Corp.(1) 400,000 950,000
------------
10,152,095
- ------------
Anti-sense/Nucleic Acids--2.4%
Gilead Sciences, Inc.(1) 215,000 2,311,250
- ------------
Isis Pharmaceuticals, Inc.(1) 300,000 2,137,500
------------
4,448,750
</TABLE>
<PAGE>
------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
------ ------------
<S> <C> <C>
- ------------
Cardiovascular/Blood--2.6% Aramed, Inc.(1) 90,000 $2,092,500
- ------------
COR Therapeutics, Inc.(1) 175,000 2,078,125
- ------------
Corvas International, Inc.(1) 135,000 506,250
- ------------
Protein Polymer Technologies, Inc.(1) 100,000 131,250
- ------------
4,808,125
------------
Chemicals/Industrial
Biotechnology--4.2%
Celgene Corp.(1) 200,000 1,350,000
- ------------
PerSeptive Biosystems, Inc.(1) 154,079 4,468,291
- ------------
PerSeptive Technology II Corp., Units(1) 70,000 1,995,000
------------
7,813,291
- ------------
Drugs--5.0% Astra AB, Series A Free Shares 150,000 2,935,863
- ------------
CytoTherapeutics, Inc. 20,000 207,500
- ------------
Roche Holdings AG 125 621,955
- ------------
Sandoz AG 1,475 3,999,321
- ------------
Watson Pharmaceutical, Inc. 90,000 1,372,500
- ------------
Yuhan Corp. 6,526 263,588
------------
9,400,727
- ------------
Drug Delivery--4.9% Cygnus Therapeutic Systems(1) 150,000 1,425,000
- ------------
Elan Corp. PLC, ADR(1) 50,000 1,662,500
- ------------
Elan Corp. PLC, Units(1) 13,108 368,663
- ------------
Ethical Holdings Ltd., Sponsored ADR(1) 100,000 950,000
- ------------
Liposome Technology, Inc.(1) 225,000 1,743,750
- ------------
Matrix Pharmaceutical, Inc.(1) 280,000 3,115,000
------------
9,264,913
- ------------
Drug Design--6.4% Biota Holdings Ltd. 400,000 2,276,882
- ------------
Protein Design Labs, Inc.(1) 260,000 5,720,000
- ------------
Vertex Pharmaceuticals, Inc.(1) 300,000 4,012,500
------------
12,009,382
- ------------
Endocrine/Metabolism--1.4% Amylin Pharmaceuticals, Inc.(1) 250,000 2,687,500
- ------------
Gene Therapy--1.8% Applied Immune Sciences, Inc. 200,000 1,750,000
- ------------
Viagene, Inc. 100,000 887,500
- ------------
Vical, Inc. 60,000 705,000
3,342,500
------------
<PAGE>
------------
Statement of Investments (Unaudited) (Continued)
<CAPTION>
Market Value
Shares See Note 1
------ ------------
<S> <C> <C>
Healthcare: Diversified--2.1%
Schering AG 6,120 $3,874,780
- ------------
Healthcare:
Miscellaneous--6.1%
Biochem Pharmaceuticals, Inc.(1) 140,000 1,400,000
- ------------
ClinTrials, Inc. 60,000 705,000
- ------------
Genzyme Transgenics Corp. 75,000 543,750
- ------------
Magainin Pharmaceuticals, Inc.(1) 225,000 2,981,250
- ------------
Martek Biosciences Corp.(1) 145,000 1,341,250
- ------------
Penederm, Inc. 80,000 1,140,000
- ------------
Quintiles Transnational Corp.(3) 28,950 580,459
- ------------
Shaman Pharmaceuticals, Inc. 150,000 1,462,500
- ------------
Syncor International Corp. 60,000 1,215,000
------------
11,369,209
- ------------
Immunology--4.9% Ares-Serono Group, Cl. B 2,885 1,621,817
- ------------
AutoImmune, Inc.(1) 170,000 1,232,500
- ------------
Cantab Pharmaceuticals PLC, Sponsored ADR(1) 99,000 569,250
- ------------
ImmuLogic Pharmaceutical Corp.(1) 147,500 1,548,750
- ------------
Medimmune, Inc.(1) 100,000 1,025,000
- ------------
Sangstat Medical Corp. 100,000 762,500
- ------------
T Cell Sciences, Inc.(1) 371,000 1,505,625
- ------------
Univax Biologics, Inc.(1) 130,000 991,250
------------
9,256,692
- ------------
Inflammation--1.5% Alpha Beta Technology, Inc.(1) 50,000 1,075,000
- ------------
Cortech, Inc.(1) 89,000 734,250
- ------------
Glycomed, Inc.(1) 114,000 541,500
- ------------
ICOS Corp.(1) 100,000 500,000
------------
2,850,750
- ------------
Labs/Diagnostics--1.7% DNX Corp. 200,000 912,500
- ------------
Genelabs Technologies, Inc.(1) 75,000 234,375
- ------------
IG Laboratories, Inc.(1) 325,000 2,112,500
------------
3,259,375
- ------------
Major Biotechnology--18.2% ALZA Corp., Cl. A(1) 75,001 1,706,273
- ------------
Amgen, Inc.(1) 210,000 8,032,500
- ------------
Chiron Corp.(1)(4) 63,000 4,142,250
- ------------
Genentech, Inc.(1) 150,000 6,600,000
- ------------
Genetic Therapy, Inc.(1) 250,500 3,131,250
- ------------
Genetics Institute, Inc. 100,000 4,225,000
- ------------
Genzyme Corp.(1) 200,435 5,361,636
- ------------
Neozyme II Corp., Units(1) 20,000 740,000
- ------------
Therapeutic Discovery Corp., Units(1) 10,000 57,500
------------
33,996,409
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
------ ------------
<S> <C> <C>
- ------------
Neuroscience--2.9% Athena Neurosciences, Inc.(1) 300,000 $2,212,500
- ------------
Cambridge Neuroscience, Inc.(1) 100,000 725,000
- ------------
Cephalon, Inc.(1) 138,000 1,880,250
- ------------
CoCensys, Inc.(1) 122,500 581,875
------------
5,399,625
- ------------
Wound Healing--2.9% Advanced Tissue Sciences, Inc., Cl. A(1) 200,000 1,550,000
- ------------
Celtrix Pharmaceuticals, Inc.(1) 300,000 2,157,188
- ------------
Creative BioMolecules, Inc. 200,000 1,700,000
------------
5,407,188
- ------------
Industrial--0.2%
- ------------
Pollution Control--0.2% EnSys Environmental Products, Inc. 55,000 412,500
- ------------
Technology--4.9%
- ------------
Computer Software
And Services--1.5%
Cerner Corp. 30,000 1,245,000
- ------------
Pyxis Corp.(1) 60,000 1,575,000
------------
2,820,000
- ------------
Electronics:
Instrumentation--3.4%
IDEXX Laboratories, Inc.(1) 100,000 2,700,000
- ------------
Igen, Inc. 100,000 1,000,000
- ------------
Molecular Dynamics, Inc. 177,500 1,775,000
- ------------
Oxford GlycoSystems Group PLC(1)(3) 515,132 915,158
------------
6,390,158
------------
Total Common Stocks (Cost $153,422,107) 149,451,469
- ------------
Total Investments, at Value (Cost $192,545,734) 99.5% 186,428,560
- ------------
Other Assets Net of Liabilities .5 833,618
------------ ------------
Net Assets 100.0% $187,262,178
------------ ------------
------------ ------------
<FN>
1. Non-income producing security.
2. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended March 31, 1994.
3. Restricted security--See Note 6 of Notes to Financial Statements.
4. Securities with an aggregate market value of $2,301,250
are held in escrow to cover outstanding call options, as follows:
Shares
Subject Expiration Exercise Premium Market Value
to Call Date Price Received See Note 1
------------
Chiron Corp. 15,000 4/94 $90.00 $ 67,048 $1,875
------------
Chiron Corp. 20,000 7/94 $90.00 94,897 16,250
-------- -------
$161,945 $18,125
-------- -------
-------- -------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Statement of Assets and Liabilities March 31, 1994 (Unaudited)
<TABLE>
<S> <C>
- ------------
Assets Investments, at value (cost $192,545,734)--see accompanying statement $186,428,560
- ------------
Cash 154,428
- ------------
Receivables:
Investments sold 6,907,239
Shares of beneficial interest sold 193,736
Dividends and interest 99,220
- ------------
Other 20,803
- ------------
Total assets 193,803,986
- ------------
Liabilities Options written, at value (premiums received $161,945)--
see accompanying statement--Note 4 18,125
- ------------
Payables and other liabilities:
Investments purchased 3,293,125
Shares of beneficial interest redeemed 2,768,375
Service plan fees--Note 5 127,075
Other 335,108
------------
Total liabilities 6,541,808
- ------------
Net Assets $187,262,178
------------
------------
- ------------
Composition of Net Assets
Paid-in capital $189,589,871
- ------------
Accumulated net investment loss (4,278,219)
- ------------
Accumulated net realized gain from investment, written option and foreign
currency transactions 7,906,485
- ------------
Net unrealized depreciation on investments, options written and translation of assets and
liabilities denominated in foreign currencies (5,955,959)
------------
Net assets--applicable to 8,955,930 shares of beneficial interest outstanding $187,262,178
------------
------------
- ------------
Net Asset Value and Redemption Price Per Share $20.91
- ------------
Maximum Offering Price Per Share (net asset value plus sales charge of 5.75% of offering
price) $22.19
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
- ------------
Statement of Operations For the Six Months Ended March 31, 1994 (Unaudited)
<TABLE>
<S> <C>
- ------------
Investment Income Interest $388,027
- ------------
Dividends (net of withholding taxes of $6,931) 94,109
------------
Total income 482,136
- ------------
Expenses Management fees--Note 5 864,226
- ------------
Transfer and shareholder servicing agent fees--Note 5 500,323
- ------------
Service plan fees--Note 5 276,698
- ------------
Trustees' fees and expenses 64,215
- ------------
Shareholder reports 45,606
- ------------
Legal and auditing fees 19,001
- ------------
Custodian fees and expenses 6,596
- ------------
Other 57,011
------------
Total expenses 1,833,676
- ------------
Net Investment Loss (1,351,540)
- ------------
Realized and Unrealized Gain (Loss) On Investments, Options Written and
Foreign Currency Transactions Net realized gain (loss) from:
Investments 12,528,634
Closing of option contracts written (675,507)
Foreign currency transactions (14,893)
------------
Net realized gain 11,838,234
------------
Net change in unrealized appreciation or depreciation on:
Investments (15,457,484)
Translation of assets and liabilities denominated in foreign currencies (123,038)
------------
Net change (15,580,522)
------------
Net realized and unrealized loss on investments, options written and foreign
currency transactions (3,742,288)
------------
Net Decrease in Net Assets Resulting From Operations $(5,093,828)
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
(Unaudited) 1993
---------------- -------------
<S> <C> <C>
- ------------
Operations Net investment loss $(1,351,540) $(1,538,653)
- ------------
Net realized gain (loss) on investments, options written and foreign
currency transactions 11,838,234 (680,679)
- ------------
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies (15,580,522) 13,448,220
------------ ------------
Net increase (decrease) in net assets resulting from operations (5,093,828) 11,228,888
- ------------
Dividends and Distributions to Shareholders
Distributions from net realized gain on investments, options written and
foreign currency transactions ($.169 and $.202 per share, respectively) (1,561,283) (1,873,746)
- ------------
Beneficial Interest
Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions--Note 2 (5,779,328) 60,707,523
- ------------
Net Assets Total increase (decrease) (12,434,439) 70,062,665
- ------------
Beginning of period 199,696,617 129,633,952
------------ ------------
End of period (including accumulated net investment losses of
$4,278,219 and $2,926,679, respectively) $187,262,178 $199,696,617
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
---------------- ------------------------------------------------------
(Unaudited) 1993 1992 1991(1) 1990 1989
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
- ------------
Per Share Operating Data
Net asset value, beginning
of period $21.64 $20.25 $26.90 $11.81 $12.09 $10.63
- ------------
Income (loss) from
investment operations:
Net investment loss (.16) (.10) (.17) (.03) (.02) (.10)
Net realized and unrealized gain
(loss) on investments,
options written and foreign
currency transactions (.40) 1.69 (6.47) 15.12 (.26) 1.69
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations (.56) 1.59 (6.64) 15.09 (.28) 1.59
- ------------
Dividends and distributions
to shareholders:
Dividends from net
investment income -- -- (.01) -- -- (.10)
Distributions from net realized
gain on investments,
options written and foreign
currency transactions (.17) (.20) -- -- -- (.03)
--------- --------- --------- --------- --------- ---------
Total dividends and
distributions to shareholders (.17) (.20) (.01) -- -- (.13)
- ------------
Net asset value, end of period $20.91 $21.64 $20.25 $26.90 $11.81 $12.09
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------
Total Return, at Net Asset Value(2) (2.65)% 7.79% (24.70)% 127.78% (2.32)% 15.21%
- ------------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $187,262 $199,697 $129,634 $103,352 $16,217 $3,872
- ------------
Average net assets
(in thousands) $212,204 $194,184 $166,144 $50,989 $8,716 $2,343
- ------------
Number of shares outstanding
at end of period (in thousands) 8,956 9,226 6,400 3,841 1,373 320
- ------------
Ratios to average net assets:
Net investment loss (1.28)%(3) (.80)% (.71)% (.18)% (.37)% (.70)%
Expenses 1.73%(3) 1.59% 1.39% 1.50% 1.78% 2.40%
- ------------
Portfolio turnover rate(4) 30.2% 41.0% 2.6% 11.2% 16.6% 17.1%
<FN>
1. Per share amounts calculated based on the weighted average number of
shares outstanding during the period.
2. Assumes a hypothetical initial investment on the business day before
the
first day of the fiscal period, with all dividends and distributions
reinvested
in additional shares on the reinvestment date, and redemption at the net
asset
value calculated on the last business day of the fiscal period. Sales
charges
are not reflected in the total returns.
3. Annualized.
4. 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
six
months ended March 31, 1994 were $59,163,268 and $67,607,516,
respectively.
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Notes to Financial Statements (Unaudited)
- ------------
1. Significant Accounting Policies
Oppenheimer Global Bio-Tech Fund (the Fund) is registered under the
Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment advisor is Oppenheimer
Management
Corporation (the Manager). The following is a summary of significant
accounting
policies consistently followed by the Fund.
- ------------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New
York
time) 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 debt securities
are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities.
Short-term 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. Securities for which market quotes
are not
readily available are valued under procedures established by the Board of
Trustees to determine fair value in good faith. A call option is valued
based
upon the last sales price on the principal exchange on which the option
is
traded or, in the absence of any transactions that day, the value is based
upon
the last sale on the prior trading date if it is within the spread between
the
closing bid and asked prices. If the last sale price is outside the
spread, the
closing bid or asked price closest to the last reported sale price is
used.
- ------------
Foreign Currency Translation. The accounting records of the Fund are
maintained
in U.S. dollars. Prices of securities denominated in foreign currencies
are
translated into U.S. dollars at the closing rates of exchange. Amounts
related
to the purchase and sale of securities and investment income are
translated at
the rates of exchange prevailing on the respective dates of such
transactions.
The Fund generally enters into forward currency exchange contracts as a
hedge,
upon the purchase or sale of a security denominated in a foreign currency.
Risks
may arise from the potential inability of the counterparty to meet the
terms of
the contract and from unanticipated movements in the value of a foreign
currency
relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates on investments
is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency
gains and
losses in the Fund's results of operations.
- ------------
Repurchase Agreements. The Fund requires the custodian to take possession,
to
have legally segregated in the Federal Reserve Book Entry System or to
have
segregated within the custodian's vault, all securities held as collateral
for
repurchase agreements. If the seller of the agreement defaults and the
value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
- ------------
Call Options Written. The Fund may write covered call options. When an
option is
written, the Fund receives a premium and becomes obligated to sell the
underlying security at a fixed price, upon exercise of the option. In
writing an
option, the Fund bears the market risk of an unfavorable change in the
price of
the security underlying the written option. Exercise of an option written
by the
Fund could result in the Fund selling a security at a price different from
the
current market value. All securities covering call options written are
held in
escrow by the custodian bank.
- ------------
Federal Income 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 tax provision is required.
- ------------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement
plan
for the Fund's independent trustees. Benefits are based on years of
service and
fees paid to each trustee during the years of service. During the six
months
ended March 31, 1994, a provision of $44,299 was made for the Fund's
projected
benefit obligations, resulting in an accumulated liability of $108,120 at
March
31, 1994. No payments have been made under the plan.
<PAGE>
- ------------
1. Significant Accounting Policies (continued)
Distributions to Shareholders. Dividends and distributions to shareholders
are
recorded on the ex-dividend date.
- ------------
Other. Investment transactions are accounted for on the date the
investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the
life of
the respective securities, in accordance with federal income tax
requirements.
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.
- ------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial
interest.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended March 31, 1994 Year Ended September 30, 1993
------------------------------- -----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 1,433,919 $33,597,662 5,810,447 $123,150,808
Distributions reinvested 63,095 1,414,298 72,297 1,686,679
Redeemed (1,767,490) (40,791,288) (3,056,478) (64,129,964)
------------ ------------ ------------ ------------
Net increase (decrease) (270,476) $(5,779,328) 2,826,266 $60,707,523
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
- ------------
3. Unrealized Gains and Losses on Investments And Options Written
At March 31, 1994, net unrealized depreciation of investments and
options
written of $5,973,354 was composed of gross appreciation of $22,168,978,
and
gross depreciation of $28,142,332.
- ------------
4. Call Option Activity Call option activity for the six months ended
March 31,
1994 was as follows:
<TABLE>
<CAPTION>
Number Amount
of Options of Premiums
---------- -----------
<S> <C> <C>
- ------------
Options outstanding at September 30, 1993 500 $232,867
- ------------
Options written 1,000 227,556
- ------------
Options cancelled in closing purchase transactions (1,150) (298,478)
------------ ------------
Options outstanding at March 31, 1994 350 $161,945
------------ ------------
------------ ------------
</TABLE>
- ------------
5. 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 an annual
fee of
1% on the first $50 million of net assets, .75% on the next $150 million
with a
reduction of .03% on each $200 million thereafter to $800 million, and
.60% on
net assets in excess of $800 million. The Manager has agreed to reimburse
the
Fund if aggregate expenses (with specified exceptions) exceed the most
stringent
applicable regulatory limit on Fund expenses.
For the six months ended March 31, 1994, commissions (sales charges paid
by
investors) on sales of Fund shares totaled $731,051, of which $180,448 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of
the
Manager, as general distributor, and by an affiliated broker/dealer.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered
investment companies. OSS's total costs of providing such services are
allocated
ratably to these companies.
Under an approved service plan, the Fund may expend up to .25%
of its
net assets annually to reimburse OFDI for costs incurred in connection
with the
personal service and maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other financial
institutions. During the six months ended March 31, 1994, OFDI paid $9,754
to an
affiliated broker/dealer as reimbursement for personal service and
maintenance
expenses.
<PAGE>
------------
Notes to Financial Statements (Unaudited) (Continued)
- ------------
6. Restricted Securities
The Fund owns securities purchased in private placement transactions,
without
registration under the Securities Act of 1933 (the Act). The securities
are
valued under methods approved by the Board of Trustees as reflecting fair
value.
The Fund intends to invest no more than 10% of its net assets (determined
at the
time of purchase) in restricted and illiquid securities, excluding
securities
eligible for resale pursuant to Rule 144A of the Act that are determined
to be
liquid by the Board of Trustees or by the Manager under Board-approved
guidelines. Restricted and illiquid securities amount to $8,801,511, or
4.7% of
the Fund's net assets, at March 31, 1994.
<TABLE>
<CAPTION>
Valuation Per Unit
Security Acquisition Date Cost Per Unit as of March 31, 1994
- ------------ ---------------- ------------- --------------------
<S> <C> <C> <C>
Cambridge Antibody Technology Ltd., Cv. 2/5/93 $33.00 $24.74
- ------------
Chiron Corp., 1.90% Cv. Sub. Nts., 11/17/00(1) 11/19/93 $85.00 $81.50
- ------------
Oxford GlycoSystems Group PLC 5/21/93 $1.94 $1.78
- ------------
Plant Genetics Systems International NV 5/27/92 $11.18 $15.38
- ------------
Quintiles Transnational Corp. 8/2/93 $17.27 $20.05
- ------------
Synaptic Pharmaceutical Corp., Cv. Series 3 1/20/93 $4.00 $3.08
<FN>
1. Transferable under Rule 144A of the Act.
<PAGE>
Statement of Investments September 30, 1993
</TABLE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C> <C>
Repurchase Agreements -- 2.8%
Repurchase agreement with Morgan Guaranty Trust Co.,
3.30%, dated 9/30/93 and maturing 10/1/93, collateralized
by U.S. Treasury Bills, 2.92%, 12/30/93, with a value of
$1,230,847 (Cost $1,200,000) $1,200,000 $1,200,000
Convertible Corporate Bonds
and Notes -- 10.8%
Air & Water Technologies Corp., 8% Cv. Sub. Debs., 5/15/15 700,000 684,250
HIH Capital Ltd., 7.50% Gtd. Cv. Sub. Capital Bonds, 9/25/06 500,000 432,500
(1)
OHM Corp., 8% Cv. Sub. Debs., 10/1/06 1,000,000 950,000
Thermo Electron Corp., 4.625% Cv. Sr. Debs., 8/1/97 (1) 1,000,000 1,430,000
USA Waste Services, Inc., 8.50% Cv. Sub. Debs., 10/15/02 1,000,000 1,172,500
Total Convertible Corporate Bonds and Notes (Cost 4,669,250
$3,856,410)
Units
Rights, Warrants and
Certificates -- .0%
Degremont Wts., Exp. 7/95 (Cost $6,362) 325 9,124
Shares
Common Stocks -- 83.7%
Basic Materials -- 1.2%
Gold -- 1.2% Minerals Technologies, Inc. 17,500 503,125
Consumer Cyclicals -- 11.1%
Airlines -- 1.6% Atlantic Southeast Airlines, Inc. 25,000 700,000
Hotels/Motels -- 1.7% Promus Cos., Inc. (The)* 10,000 755,000
Household Furnishings Battery Technologies, Inc.* 95,000 568,983
and Appliances -- 2.3% Maytag Corp. 25,000 418,750
987,733
Publishing -- 2.5% American Greetings Corp., Cl. A 20,000 625,000
Marvel Entertainment Group, Inc. 10,000 442,500
1,067,500
Retail Stores - Department Dollar General Corp. 12,500 381,250
Stores -- .9%
Retail - Specialty -- 1.5% CML Group, Inc. 22,500 649,688
Toys -- .6% Mattel, Inc. 10,000 276,250
Consumer Non-Cyclicals --
5.8%
Food Processing -- 2.5% Pioneer Hi-Bred International, Inc. 20,000 665,000
Wholesome & Hearty Foods 35,000 437,500
1,102,500
Healthcare - Genentech, Inc.* 10,000 428,750
Miscellaneous -- 1.0%
Medical Products -- 2.3% Thermedics, Inc.* 40,000 975,000
Energy -- 2.7%
Oil and Gas Drilling -- .1% Noble Drilling Corp. 5,000 45,625
<PAGE>
<PAGE>
Market Value
Shares See Note 1
Common Stocks (continued)
Energy (continued)
Oil Well Services and Matrix Service Co.* 55,000 $ 563,750
Equipment -- 2.6% McDermott International, Inc. 20,000 565,000
1,128,750
Financial -- 3.6%
Financial Services - Home State Holdings, Inc.* 25,000 425,000
Miscellaneous -- 1.0%
Major Banks - Central Fidelity Banks, Inc. 15,000 461,250
Regional -- 2.6% Gateway Financial Corp.* 70,000 682,500
1,143,750
Industrial -- 21.0%
Commercial Services -- 2.7% Ogden Corp. 20,000 502,500
Patterson Dental Co.* 20,000 655,000
1,157,500
Conglomerates -- 1.3% Compagnie Generale des Eaux 1,270 574,460
Engineering and Destec Energy, Inc.* 30,000 510,000
Construction -- 4.1% Foster Wheeler Corp. 15,000 468,750
IHC Caland NV 20,000 399,967
Rust International, Inc.* 20,000 410,000
1,788,717
Machinery - Powerscreen International PLC 75,000 415,279
Diversified -- 3.9% Schweizerische Industrie GmbH 450 692,662
Thermo Power Corp.* 55,000 563,750
1,671,691
Manufacturing - Diversified Duriron Co., Inc. 20,000 467,500
Industrials -- 6.5% Harsco Corp. 10,000 433,750
Safety 1st, Inc.* 30,000 607,500
Stewart & Stevenson Services, Inc. 10,000 467,500
Trinity Industries, Inc. 22,500 835,313
2,811,563
Transportation - Kirby Corp.* 50,000 1,087,500
Miscellaneous -- 2.5%
Pollution Control -- 33.5%
Air Pollution -- 1.4% BHA Group, Inc., Cl. A 30,000 420,000
Fuel-Tech, Inc. NV 20,000 170,000
590,000
Alternative Energies -- 2.8% Kenetech Corp.* 25,000 375,000
Wheelabrator Technologies, Inc. 25,000 440,626
Zurn Industries, Inc. 12,500 401,562
1,217,188
<PAGE>
Statement of Investments (continued)
Market Value
Shares See Note 1
Common Stocks (continued)
Pollution Control
(continued)
Engineering and Geraghty & Miller, Inc. 40,000 $ 455,000
Consulting -- 4.9% TETRA Tech, Inc.* 55,000 1,072,500
TRC Cos., Inc. 75,000 581,250
2,108,750
Hazardous Waste -- 7.2% Chemical Waste Management 40,000 340,000
Clean Harbors, Inc.* 90,000 742,500
Envirosource, Inc.* 100,000 300,000
GNI Group, Inc.* 57,000 406,125
Mid-American Waste Systems, Inc. 40,000 355,000
Rollins Environmental Services, Inc. 90,000 540,000
Sanifill, Inc.* 25,000 415,625
3,099,250
Recycling -- 1.0% Molten Metal Technology, Inc.* 20,000 450,000
Solid Waste -- 8.8% Attwoods PLC ADR 65,000 650,000
Browning-Ferris Industries, Inc. 20,000 460,000
SITA 10,800 1,241,191
Waste Management International PLC, Sponsored ADR* 30,000 528,750
WMX Technology, Inc. 30,000 915,000
3,794,941
Water Pollution -- 1.8% Degremont 9,000 797,457
Other Pollution GEA AG Preference 2,800 760,577
Control -- 5.6% Omega Environmental, Inc.* 140,000 1,120,000
TETRA Technologies, Inc.* 75,000 525,000
2,405,577
Technology -- 4.2%
Computer Software and SHL Systemhouse, Inc.* 75,000 721,875
Services -- 1.7%
Electronics - Aurora Electronics, Inc.* 60,000 457,500
Instrumentation -- 2.5% Thermo Instrument Systems, Inc.* 22,500 635,625
1,093,125
Utilities -- .6%
Electric Companies -- .6% Sithe Energies, Inc. 20,000 265,000
Total Common Stocks (Cost $31,000,690) 36,204,515
Total Investments, at Value (Cost $36,063,462) 97.3% 42,082,889
Other Assets Net of Liabilities 2.7 1,188,652
Net Assets 100.0% $43,271,541
<FN>
*Non-income producing security.
(1) Restricted security -- See Note 5 of notes to financial statements.
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
Statement of Assets and Liabilities September 30, 1993
<TABLE>
<S> <C> <C>
Assets Investments, at value (cost $36,063,462) - see accompanying statement $ 42,082,889
Receivables:
Investments sold 3,382,477
Dividends and interest 161,347
Shares of beneficial interest sold 75,184
Deferred organization costs 3,939
Other 8,438
Total assets 45,714,274
Liabilities Bank overdraft 48,440
Payables and other liabilities:
Investments purchased 1,915,450
Shares of beneficial interest redeemed 347,098
Distribution assistance - Note 4 27,537
Other 104,208
Total liabilities 2,442,733
Net Assets $ 43,271,541
Composition of Net Assets Paid-in capital $ 52,524,448
Accumulated net investment loss (50,066)
Accumulated net realized loss from investment transactions (15,222,268)
Net unrealized appreciation of investments - Note 3 6,019,427
Net Assets -- Applicable to 4,119,629 shares of beneficial interest outstanding $ 43,271,541
Net Asset Value and Redemption Price Per Share $ 10.50
Maximum Offering Price Per Share (net asset value plus sales charge of 5.75% of offering price) $ 11.14
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
Statement of Operations For the Year Ended September 30, 1993
<TABLE>
<S> <C> <C>
Investment Income Interest $ 449,257
Dividends (including $172,762 from foreign securities less $29,170
of foreign tax withheld at source) 396,608
Total income 845,865
Expenses Management fees - Note 4 352,886
Transfer and shareholder servicing agent fees - Note 4 167,925
Distribution assistance - Note 4 114,385
Shareholder reports 50,471
Custodian fees and expenses 26,044
Legal and auditing fees 23,550
Trustees' fees and expenses 5,606
Other 33,614
Total expenses 774,481
Net Investment Income 71,384
Realized and Net realized loss on investments (1,132,242)
Unrealized Gain (Loss) Net change in unrealized appreciation of investments:
on Investments Beginning of year 1,341,686
End of year - Note 3 6,019,427
Net change 4,677,741
Net Realized and Unrealized Gain on Investments 3,545,499
Net Increase in Net Assets Resulting From Operations $ 3,616,883
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended September 30,
1993 1992
<S> <C> <C> <C>
Operations Net investment income (loss) $ 71,384 $ (129,801)
Net realized loss on investments (1,132,242) (10,556,184)
Net change in unrealized appreciation or depreciation of investments 4,677,741 1,837,770
Net increase (decrease) in net assets resulting from operations 3,616,883 (8,848,215)
Dividends to Dividends from net investment income
Shareholders ($.022 per share) -- (115,357)
Beneficial Interest Net decrease in net assets resulting from beneficial
Transactions interest transactions - Note 2 (10,355,967) (3,633,244)
Net Assets Total decrease (6,739,084) (12,596,816)
Beginning of year 50,010,625 62,607,441
End of year (including accumulated net investment losses
of $50,066 and $121,450, respectively) $ 43,271,541 $ 50,010,625
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Year Ended September 30,
1993 1992 1991 1990+
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 9.69 $ 11.35 $ 10.40 $ 11.43
Income (loss) from investment operations:
Net investment income (loss) .01 (.03) .06 .04
Net realized and unrealized
gain (loss) on investments .80 (1.61) .99 (1.07)
Total income (loss) from
investment operations .81 (1.64) 1.05 (1.03)
Dividends and distributions to shareholders:
Dividends from net investment income -- (.02) (.08) --
Distributions from net realized gain
on investments -- -- (.02) --
Total dividends and
distributions to shareholders -- (.02) (.10) --
Net asset value, end of period $ 10.50 $ 9.69 $ 11.35 $ 10.40
Total Return,
at Net Asset Value** 8.36% (14.44)% 10.10% (9.01)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $43,272 $50,011 $62,607 $45,050
Average net assets (in thousands) $47,040 $57,224 $58,025 $26,638
Number of shares outstanding
at end of period (in thousands) 4,120 5,161 5,514 4,332
Ratios to average net assets:
Net investment income (loss) .15% (.23)% .57% 1.18%*
Expenses 1.65% 1.68)% 1.57% 1.89%*
Portfolio turnover rate*** 141.6% 134.7)% 33.4% 7.9%
<FN>
+ For the period from March 2, 1990 (commencement of operations) to
September 30, 1990.
* Annualized.
** Assumes a hypothetical initial investment on the business day before
the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at
the net asset value calculated on the last business day of the fiscal
period.
Sales charges are not reflected in the total returns.
*** 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 year ended September 30, 1993 were $64,504,041 and $74,339,309,
respectively.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Oppenheimer Global Environment Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment adviser is
Oppenheimer
Management Corporation (the Manager). The following is a summary of
significant accounting policies consistently followed by the Fund.
Investment Valuation -- Portfolio securities are valued at 4:00 p.m. (New
York
time) 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 debt securities
are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities.
Short-term
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. Securities for which market quotes are not
readily
available are valued under procedures established by the Board of Trustees
to
determine fair value in good faith.
Foreign Currency Translation -- The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in non-U.S.
currencies are translated into U.S. dollars at the closing rates of
exchange.
Amounts related to the purchase and sale of securities and investment
income
are translated at the rates of exchange prevailing on the respective dates
of
such transactions.
The Fund generally enters into forward currency exchange contracts as a
hedge,
upon the purchase or sale of a security denominated in a foreign currency.
Risks may arise from the potential inability of the counterparty to meet
the
terms of the contract and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates is not separately
identified in the Fund's results of operations. Gains and losses on
foreign
currency transactions are accounted for with the transactions that gave
rise
to the exchange gain or loss.
Repurchase Agreements -- The Fund requires the custodian to take
possession,
to have legally segregated in the Federal Reserve Book Entry System or to
have
segregated within the custodian's vault, all securities held as collateral
for
repurchase agreements. If the seller of the agreement defaults and the
value
of the collateral declines, or if the seller enters an insolvency
proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
Federal Income 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 tax provision is required. At September 30, 1993, the Fund
had
available for federal income tax purposes an unused capital loss carryover
of
approximately $13,568,000, $3,512,000 of which will expire in 2000 and
$10,056,000 in 2001.
Trustees' Fees and Expenses -- The Fund has adopted a nonfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. The
accumulated liability for the Fund's projected benefit obligations was
$27,807
at September 30, 1993. No payments have been made under the plan.
<PAGE>
Notes to Financial Statements (continued)
Organization Costs -- The Manager advanced $13,603 for organization and
start-up costs of the Fund. Such expenses are being amortized over a
five-year
period from the date operations commenced. In the event that all or part
of
the Manager's initial investment in shares of the Fund is withdrawn during
the
amortization period, the redemption proceeds will be reduced to reimburse
the
Fund for any unamortized expenses, in the same ratio as the number of
shares
redeemed bears to the number of initial shares outstanding at the time of
such
redemption.
Distributions to Shareholders -- Dividends and distributions to
shareholders
are recorded on the ex-dividend date.
Other -- Investment transactions are accounted for on the date the
investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the
life
of the respective securities, in accordance with federal income tax
requirements. 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.
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were
as
follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1993 Year Ended September 30, 1992
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Sold 728,378 $ 7,206,866 1,644,994 $ 18,225,707
Distributions reinvested -- -- 10,327 107,726
Redeemed (1,770,153) (17,562,833) (2,007,952) (21,966,677)
Net decrease (1,041,775) $(10,355,967) (352,631) $ (3,633,244)
</TABLE>
3. Unrealized Gains and Losses on Investments
At September 30, 1993, net unrealized appreciation of investments of
$6,019,427 was composed of gross appreciation of $7,066,767, and gross
depreciation of $1,047,340.
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 an annual fee of .75%
on the first $200 million of net assets with a reduction of .03% on each
$200
million thereafter, to .66% on net assets in excess of $600 million.
The Manager has agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable regulatory
limit on Fund expenses.
For the year ended September 30, 1993, commissions (sales charges paid by
investors) on sales of Fund shares totaled $279,673, of which $61,218 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of
the
Manager, as general distributor, and by an affiliated broker-dealer.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of providing such
services
are allocated ratably to these companies.
Under an approved plan of distribution, the Fund may expend up to .25% of
its
net assets annually to reimburse OFDI for costs incurred in distributing
shares of the Fund, including amounts paid to brokers, dealers, banks and
other institutions. During the year ended September 30, 1993, OFDI paid
$2,296
to an affiliated broker-dealer as reimbursement for distribution-related
expenses.
<PAGE>
<PAGE>
5. Restricted Securities
The Fund owns securities purchased in private placement transactions,
without
registration under the Securities Act of 1933 (the Act). The securities
are
valued under methods approved by the Board of Trustees as reflecting fair
value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid
securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act
that
are determined to be liquid by the Board of Trustees or by the Manager
under
Board-approved guidelines.
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit September 30, 1993
<S> <C> <C> <C>
HIH Capital Ltd.,
7.50% Gtd. Cv. Sub.
Capital Bonds, 9/25/06+ 1/28/93-2/3/93 $ 92.00 $ 86.50
Thermo Electron Corp.,
4.625% Cv. Sr. Debs., 8/1/97+ 7/15/92-8/25/92 $ 100.00 $ 143.00
<FN>
+Transferable under Rule 144A of the Act.
</TABLE>
Federal Income Tax Information (Unaudited)
In early 1994, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1993.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended September 30, 1993
which are not designated as capital gain distributions should be multiplied
by
100% to arrive at the net amount eligible for the corporate
dividend-received
deduction.
At September 30, 1993, less than 50% of the Fund's total assets were
invested
in securities of foreign corporations. Accordingly, the Fund will not elect
the application of Section 853 of the Internal Revenue Code which permits
shareholders to take a federal income tax credit or deduction, at their
option, for foreign income taxes paid by the Fund during the fiscal year.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service.
Because
of the complexity of the federal regulations which may affect your
individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax adviser for specific guidance.
<PAGE>
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders of Oppenheimer Global Environment
Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Global Environment Fund as of September 30, 1993,
and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in
the
three-year period then ended and the period from March 2, 1990 (commencement
of operations) to September 30, 1990. 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 and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 1993, by correspondence
with the custodian and brokers; and where confirmations were not received
from
brokers, we performed other auditing procedures. 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, the financial statements and financial highlights referred
to
above present fairly, in all material respects, the financial position of
Oppenheimer Global Environment Fund as of September 30, 1993, the results
of
its operations for the year then ended, the changes in its net assets for
each
of the years in the two-year period then ended, and the financial highlights
for each of the years in the three-year period then ended and the period
from
March 2, 1990 (commencement of operations) to September 30, 1990, in
conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Denver, Colorado
October 21, 1993
<PAGE>
Statement of Investments March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
Repurchase Agreements--1.9%
- ------------
Repurchase agreement with J.P. Morgan Securities, Inc.,
3.35%, dated 3/31/94, to be repurchased at $700,275 on 4/4/94,
collateralized by U.S. Treasury Nts., 4.25%--8.875%,
5/15/95--10/15/96, with a value of $716,843 (Cost $700,000) $700,000 $700,000
- ------------
Corporate Bonds and Notes--11.9%
- ------------
Air & Water Technologies Corp., 8% Cv. Sub. Debs., 5/15/15 700,000 641,375
- ------------
OHM Corp., 8% Cv. Sub. Debs., 10/1/06 500,000 490,000
- ------------
Thermo Electron Corp., 4.625% Cv. Sr. Debs., 8/1/97(2) 1,000,000 1,365,000
- ------------
United States Filter Corp., 5% Cv. Sub. Debs., 10/15/00(2) 750,000 690,000
- ------------
USA Waste Services, Inc., 8.50% Cv. Sub. Debs., 10/15/02 1,000,000 1,107,500
------------
Total Corporate Bonds and Notes (Cost $3,772,794) 4,293,875
<CAPTION>
Shares
<S> <C> <C>
- ------------
Common Stocks--86.0%
- ------------
Basic Materials--8.3%
- ------------
Chemicals--2.9% Calgon Carbon Corp. 50,000 643,750
- ------------
Methanex Corp. 40,000 400,000
------------
1,043,750
------------
Gold--2.8% Engelhard Corp. 20,000 555,000
- ------------
Minerals Technologies, Inc. 17,500 455,000
------------
1,010,000
------------
Paper and Forest Products--1.5% Louisiana-Pacific Corp. 15,000 541,875
- ------------
Steel--1.1% Huntco, Inc., Cl. A 15,000 378,750
- ------------
Consumer Cyclicals--1.1%
- ------------
Household Furnishings
And Appliances--1.1%
Battery Technologies, Inc.(1) 95,000 386,520
- ------------
Consumer Non-Cyclicals--1.0%
- ------------
Food Processing--1.0% Archer-Daniels-Midland Co. 15,000 360,000
- ------------
Energy--3.6%
- ------------
Oil and Gas Drilling--1.0% Petroleum Geo-Services AS 20,000 368,951
- ------------
Oil Well Services and
Equipment--2.6%
Matrix Service Co.(1) 50,000 537,500
- ------------
McDermott International, Inc. 20,000 405,000
------------
942,500
------------
Industrial--30.7%
- ------------
Building Materials Group--1.8% Lafarge Corp. 30,000 645,000
- ------------
Commercial Services--2.0% Ogden Corp. 20,000 445,000
- ------------
Safety-Kleen Corp. 20,000 280,000
------------
725,000
------------
Conglomerates--1.5% Compagnie Generale des Eaux 1,200 547,253
- ------------
Containers--0.9% UFP Technologies, Inc. 75,000 337,500
<PAGE>
Market Value
Shares See Note 1
------ ------------
Engineering
And Construction--7.6%
CRSS, Inc. 35,000 $385,000
- ------------
Destec Energy, Inc.(1) 30,000 382,500
- ------------
Deutsche Babcock AG 2,500 415,550
- ------------
Foster Wheeler Corp. 15,000 600,000
- ------------
IHC Caland NV 20,000 432,667
- ------------
Rust International, Inc.(1) 30,000 547,500
------------
2,763,217
------------
Machinery:
Diversified--4.8%
Powerscreen International PLC 100,000 414,203
- ------------
Schweizerische Industrie GmbH 400 887,240
- ------------
Thermo Power Corp.(1) 55,000 426,250
------------
1,727,693
------------
Manufacturing:
Diversified Industrials--10.0%
Duriron Co., Inc. 30,000 517,500
- ------------
Fisher Scientific International 12,000 399,000
- ------------
Harsco Corp. 10,000 446,250
- ------------
Safety 1st, Inc.(1) 25,000 587,500
- ------------
Stimsonite Corp. 45,000 495,000
- ------------
Total Containment, Inc. 40,000 460,000
- ------------
Trinity Industries, Inc. 18,000 684,000
------------
3,589,250
------------
Transportation:
Miscellaneous--2.1%
Kirby Corp.(1) 35,000 743,750
- ------------
Pollution Control--33.7%
- ------------
Air Pollution--1.7% BHA Group, Inc., Cl. A 35,000 376,250
- ------------
Fuel-Tech, Inc. NV 20,000 225,000
------------
601,250
------------
Alternative Energies--4.2% Kenetech Corp.(1) 25,000 581,250
- ------------
Wheelabrator Technologies, Inc. 50,000 956,250
------------
1,537,500
------------
Engineering
And Consulting--5.5%
Heidemij NV 43,000 494,500
- ------------
TETRA Tech, Inc.(1) 40,000 720,000
- ------------
TRC Cos., Inc. 75,000 768,750
------------
1,983,250
------------
Hazardous Waste--5.3% Clean Harbors, Inc.(1) 90,000 675,000
- ------------
N-Viro International Corp. 60,000 420,000
- ------------
Purus, Inc. 25,000 281,250
- ------------
Sanifill, Inc.(1) 25,000 537,500
------------
1,913,750
<PAGE>
------------
Statement of Investments (Unaudited) (Continued)
Market Value
Shares See Note 1
------ ------------
Solid Waste--10.0% Attwoods PLC, ADR 45,000 $393,750
- ------------
Browning-Ferris Industries, Inc. 12,500 315,625
- ------------
SITA 7,000 944,188
- ------------
United Waste Systems, Inc. 35,000 647,500
- ------------
WMX Technologies, Inc. 15,000 356,250
- ------------
Waste Management International PLC, Sponsored ADR(1) 25,000 406,250
- ------------
Western Waste Industries 40,000 555,000
------------
3,618,563
------------
Water Pollution Control--2.2% Degremont 8,000 784,396
- ------------
Other Pollution Control--4.8% Envirotest Systems Corp., Cl. A 15,000 333,750
- ------------
Omega Environmental, Inc.(1) 85,000 839,375
- ------------
TETRA Technologies, Inc.(1) 75,000 543,750
------------
1,716,875
------------
Technology--5.1%
- ------------
Aerospace/Defense--0.9% TAT Technologies Ltd. 60,000 307,500
- ------------
Electronics:
Instrumentation--4.2%
Aurora Electronics, Inc.(1) 70,000 560,000
- ------------
Thermo Instrument Systems, Inc.(1) 20,000 582,500
- ------------
Thermotrex Corp. 25,000 365,625
------------
1,508,125
------------
Utilities--2.5%
- ------------
Electric Companies--2.5% AES China Generating Co. Ltd., Cl. A 15,000 189,375
- ------------
Magma Power Co. 12,000 387,000
- ------------
Sithe Energies, Inc. 25,000 315,625
------------
892,000
------------
Total Common Stocks (Cost $28,517,321) 30,974,218
------------
Total Investments, at Value (Cost $32,990,115) 99.8% 35,968,093
- ------------
Other Assets Net of Liabilities .2 77,852
------------ ------------
Net Assets 100.0% $36,045,945
------------ ------------
------------ ------------
<FN>
1. Non-income producing security.
2. Restricted security--See Note 5 of Notes to Financial Statements.
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Statement of Assets and Liabilities March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
- ------------
<S> <C>
Assets Investments, at value (cost $32,990,115)--see accompanying statement $35,968,093
- ------------
Cash 64,867
- ------------
Receivables:
Investments sold 421,875
Dividends and interest 146,657
Shares of beneficial interest sold 40,342
- ------------
Deferred organization costs 2,544
- ------------
Other 5,781
------------
Total assets 36,650,159
- ------------
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed 522,593
Service plan fees--Note 4 26,112
Other 55,509
------------
Total liabilities 604,214
- ------------
Net Assets $36,045,945
------------
------------
- ------------
Composition of
Net Assets
Paid-in capital $45,441,705
- ------------
Accumulated net investment loss (174,677)
- ------------
Accumulated net realized loss from investment and foreign currency transactions (12,199,061)
- ------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies--Note 3 2,977,978
------------
Net assets--applicable to 3,470,011 shares of beneficial interest outstanding $36,045,945
------------
------------
- ------------
Net Asset Value and Redemption Price Per Share $10.39
- ------------
Maximum Offering Price Per Share
(net asset value plus sales charge of 5.75% of offering price) $11.02
See accompanying Notes to Financial Statements.
<PAGE>
------------
Statement of Operations For the Six Months Ended March 31, 1994 (Unaudited)
- ------------
Investment Income Interest $ 165,117
- ------------
Dividends (net of withholding taxes of $537) 91,936
------------
Total income 257,053
- ------------
Expenses Management fees--Note 4 155,149
- ------------
Transfer and shareholder servicing agent fees--Note 4 51,356
- ------------
Service plan fees--Note 4 50,743
- ------------
Shareholder reports 16,833
- ------------
Custodian fees and expenses 13,518
- ------------
Legal and auditing fees 8,037
- ------------
Trustees' fees and expenses 6,956
- ------------
Other 10,344
------------
Total expenses 312,936
- ------------
Net Investment Loss (55,883)
- ------------
Realized and Unrealized
Gain (Loss) on Investments
And Foreign Currency
Transactions
Net realized gain from:
Investments 2,954,219
Foreign currency transactions 68,988
------------
Net realized gain 3,023,207
- ------------
Net change in unrealized appreciation or depreciation on:
Investments (3,005,592)
Translation of assets and liabilities denominated in foreign currencies (35,857)
------------
Net change (3,041,449)
------------
Net realized and unrealized loss on investments and foreign currency transactions (18,242)
- ------------
Net Decrease in Net Assets Resulting From Operations $(74,125)
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
(Unaudited) 1993
---------------- -------------
<S> <C> <C>
- ------------
Operations Net investment income (loss) $(55,883) $ 71,384
- ------------
Net realized gain (loss) on investments and foreign currency transactions 3,023,207 (1,132,242)
------------
Net change in unrealized appreciation or depreciation on investments and
translation of assets and liabilities denominated in foreign currencies (3,041,449) 4,677,741
------------ ------------
Net increase (decrease) in net assets resulting from operations (74,125) 3,616,883
- ------------
Dividends and Distributions
To Shareholders
Dividends from net investment income ($.018 per share) (68,728)
- ------------
Beneficial Interest
Transactions
Net decrease in net assets resulting from beneficial interest
transactions--Note 2 (7,082,743) (10,355,967)
- ------------
Net Assets Total decrease (7,225,596) (6,739,084)
- ------------
Beginning of period 43,271,541 50,010,625
------------ ------------
End of period (including accumulated net investment losses of $174,677
and $50,066, respectively) $36,045,945 $43,271,541
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1994 Year Ended September 30,
(Unaudited) 1993 1992 1991 1990(1)
<S> <C> <C> <C> <C> <C>
- ------------
Per Share Operating Data:
Net asset value, beginning of period $10.50 $9.69 $11.35 $10.40 $11.43
- ------------
Income (loss) from investment operations:
Net investment income (loss) (.04) .01 (.03) .06 .04
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (.05) .80 (1.61) .99 (1.07)
------------ ------------ ------------ ------------ ------------
Total income (loss) from
investment operations (.09) .81 (1.64) 1.05 (1.03)
- ------------
Dividends and distributions to shareholders:
Dividends from net investment income (.02) -- (.02) (.08) --
Distributions from net realized gain
on investments and foreign currency
transactions -- -- -- (.02) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions
to shareholders (.02) -- (.02) (.10) --
- ------------
Net asset value, end of period $10.39 $10.50 $9.69 $11.35 $10.40
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
- ------------
Total Return, at Net Asset Value(2) (.88)% 8.36% (14.44)% 10.10% (9.01)%
- ------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $36,046 $43,272 $50,011 $62,607 $45,050
- ------------
Average net assets (in thousands) $47,712 $47,040 $57,224 $58,025 $26,638
- ------------
Number of shares outstanding at end of
period (in thousands) 3,470 4,120 5,161 5,514 4,332
- ------------
Ratios to average net assets:
Net investment income (loss) (.24)%(3) .15% (.23)% .57% 1.18%(3)
Expenses 1.32%(3) 1.65% 1.68% 1.57% 1.89%(3)
- ------------
Portfolio turnover rate(4) 47.4% 141.6% 134.7% 33.4% 7.9%
<FN>
1. For the period from March 2, 1990 (commencement of operations) to
September 30, 1990.
2. Assumes a hypothetical initial investment on the business day before
the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and
redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
3. Annualized.
4. 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 six months ended March 31, 1994 were
$18,379,698 and $23,864,316, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
------------
Notes to Financial Statements (Unaudited)
- ------------
1. Significant Accounting Policies
Oppenheimer Global Environment Fund (the Fund) is registered under
the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The following is a summary of
significant
accounting policies consistently followed by the Fund.
- ------------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New
York
time) 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 debt securities
are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities. Short-term
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. Securities for which market quotes are not readily
available are valued under procedures established by the Board of Trustees
to
determine fair value in good faith.
- ------------
Foreign Currency Translation. The accounting records of the Fund are
maintained
in U.S. dollars. Prices of securities denominated in foreign currencies
are
translated into U.S. dollars at the closing rates of exchange. Amounts
related
to the purchase and sale of securities and investment income are translated
at
the rates of exchange prevailing on the respective dates of such
transactions.
The Fund generally enters into forward currency exchange contracts
as a
hedge, upon the purchase or sale of a security denominated in a foreign
currency. Risks may arise from the potential inability of the counterparty
to
meet the terms of the contract and from unanticipated movements in the value
of
a foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates on investments
is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and
losses in the Fund's results of operations.
- ------------
Repurchase Agreements. The Fund requires the custodian to take possession,
to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral
for
repurchase agreements. If the seller of the agreement defaults and the value
of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
- ------------
Federal Income 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 tax provision is required. At March 31, 1994, the Fund had
available for federal income tax purposes an unused capital loss carryover
of
approximately $13,568,000, $3,512,000 of which will expire in 2000 and
$10,056,000 in 2001.
<PAGE>
- ------------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement
plan
for the Fund's independent trustees. Benefits are based on years of service
and
fees paid to each trustee during the years of service. The accumulated
liability
for the Fund's projected benefit obligations was $27,807 at March 31, 1994.
No
payments have been made under the plan.
- ------------
Organization Costs. The Manager advanced $13,603 for organization and
start-up
costs of the Fund. Such expenses are being amortized over a five-year period
from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse
the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of
such
redemption.
<PAGE>
------------
Note to Financial Statements (Unaudited) (Continued)
- ------------
1. Significant Accounting Policies (continued)
Distributions to Shareholders. Dividends and distributions to
shareholders
are recorded on the ex-dividend date.
- ------------
Other. Investment transactions are accounted for on the date the investments
are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the
life of
the respective securities, in accordance with federal income tax
requirements.
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.
- ------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares
of
beneficial interest. Transactions in shares of beneficial interest were
as
follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30, 1993
------------------ ------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
------------
Sold 280,445 $3,089,608 728,378 $7,206,866
Dividends reinvested 6,008 64,223 -- --
Redeemed (936,071) (10,236,574) (1,770,153) (17,562,833)
----------- ------------ ------------ ------------
Net decrease (649,618) $(7,082,743) (1,041,775) $(10,355,967)
----------- ------------ ------------ ------------
----------- ------------ ------------ ------------
</TABLE>
- ------------
3. Unrealized Gains and Losses on Investments
At March 31, 1994, net unrealized appreciation of investments of $2,977,978
was
composed of gross appreciation of $5,015,747, and gross depreciation of
$2,037,769.
- ------------
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 an annual fee of .75%
on the
first $200 million of net assets with a reduction of .03% on each $200
million
thereafter, to .66% on net assets in excess of $600 million. The Manager
has
agreed to reimburse the Fund if aggregate expenses (with specified
exceptions)
exceed the most stringent applicable regulatory limit on Fund expenses.
For the six months ended March 31, 1994, commissions (sales charges paid
by
investors) on sales of Fund shares totaled $69,822, of which $17,571 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of
the
Manager, as general distributor, and by an affiliated broker/dealer.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered
investment companies. OSS's total costs of providing such services are
allocated
ratably to these companies.
Under an approved service plan, the Fund may expend up to .25% of its net
assets
annually to reimburse OFDI for costs incurred in connection with the
personal
service and maintenance of accounts that hold shares of the Fund, including
amounts paid to brokers, dealers, banks and other institutions. During the
six
months ended March 31, 1994, OFDI paid $1,266 to an affiliated broker/dealer
as
reimbursement for personal service and maintenance expenses.
- ------------
5. Restricted Securities
The Fund owns securities purchased in private placement transactions,
without registration under the Securities Act of 1933 (the Act). The
securities
are valued under methods approved by the Board of Trustees as reflecting
fair
value. The Fund intends to invest no more than 10% of its net assets
(determined
at the time of purchase) in restricted and illiquid securities, excluding
securities eligible for resale pursuant to Rule 144A of the Act that are
determined to be liquid by the Board of Trustees or by the Manager under
Board-approved guidelines.
<TABLE>
<CAPTION>
Valuation Per Unit
Security Acquisition Date Cost Per Unit as of March 31, 1994
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thermo Electron Corp., 4.625% Cv. Sr. Debs., 8/1/97(1) 7/15/92--8/25/92 $100.00 $136.50
-----------------------------------------------------------------------------------------------------------------------------
United States Filter Corp., 5% Cv. Sub. Debs., 10/15/00(1) 10/13/93--10/14/93 $100.00 $92.00
<FN>
1. Transferable under Rule 144A of the Act.
<PAGE>
<PAGE>
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1994
Oppenheimer Global Bio-Tech Fund and Oppenheimer Global Environment Fund
</TABLE>
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
GLOBAL GLOBAL PRO GLOBAL
BIO-TECH ENVIRONMENT FORMA BIO-TECH
FUND FUND ADJUSTMENTS FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value* $188,428,560 $35,968,093 $222,396,653
Cash 154,428 64,867 2,544 (1) 221,839
Receivables:
Investments sold 6,907,239 421,875 7,329,114
Shares of beneficial interest sold 193,736 40,342 234,078
Dividends and interest 99,220 146,657 245,877
Deferred organization costs 2,544 (2,544) (1) -
Other 20,803 5,781 26,584
------------ ----------- ------------
Total assets 193,803,986 36,650,159 230,454,145
------------ ----------- ------------
LIABILITIES:
Options written, at value (premiums
received $161,945) 18,125 18,125
Payables and other liabilities:
Investments purchased 3,293,125 3,293,125
Shares of beneficial interest
redeemed 2,768,375 522,593 3,290,968
Service plan fees 127,075 26,112 153,187
Other 335,108 55,509 390,617
------------ ----------- ------------
Total liabilities 6,541,808 604,214 7,146,022
------------ ----------- ------------
NET ASSETS $187,262,178 $36,045,945 $223,308,123
============ =========== ============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 8,955,930 3,470,011 10,679,790
============ =========== ============
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE $20.91 $10.39 $20.91
====== ====== ======
*Cost $192,545,734 $32,990,115 $225,535,849
============ =========== ============
<FN>
(1)Unamortized deferred organization costs to be reimbursed by Oppenheimer
Management Corp.
</TABLE>
<PAGE>
PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH
31, 1994
Oppenheimer Global Bio-Tech Fund and Oppenheimer Global Environment Fund
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
GLOBAL GLOBAL PRO GLOBAL
BIO-TECH ENVIRONMENT FORMA BIO-TECH
FUND FUND ADJUSTMENTS FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 388,027 $ 165,117 $ 53,144
Dividends (net of withholding taxes
of $6,931 and $537 respectively) 94,109 91,936 186,045
------------- ------------ ------------
Total income 482,136 257,053 739,189
------------- ------------ ------------
EXPENSES:
Management fees 864,226 155,149 (12,059) (1) 1,007,316
Transfer and shareholder servicing
agent fees 500,323 51,356 (43,448) (2) 508,231
Service Plan Fees 276,698 50,743 - 327,441
Trustees' fees and expenses 64,215 6,956 (6,956) (2) 64,215
Shareholder reports 45,606 16,833 (18,431) (2) 44,008
Legal and auditing fees 19,001 8,037 (5,000) (2) 22,038
Custodian fees and expenses 6,596 13,518 - 20,114
Other 57,011 10,344 - 67,355
------------- ------------ -------- ------------
Total expenses 1,833,676 312,936 (85,894) 2,060,718
------------- ------------ -------- ------------
NET INVESTMENT INCOME (LOSS) (1,351,540) (55,883) 85,894 (1,321,529)
------------- ------------ -------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, OPTIONS WRITTEN
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments 12,528,634 2,954,219 - 15,482,853
Closing of option contracts written (675,507) - - (675,507)
Foreign currency transactions (14,893) 68,988 - 54,095
------------- ------------ -------- ------------
Net realized gain 11,838,234 3,023,207 - 14,861,441
------------- ------------ -------- ------------
Net change in unrealized appreciation
or depreciation on:
Investments (15,457,484) (3,005,592) - (18,463,076)
Translation of assets and liabilities
denominated in foreign currencies (123,038) (35,857) - (158,895)
------------- ------------ -------- ------------
Net change (15,580,522) (3,041,449) - (18,621,971)
------------- ------------ -------- ------------
Net realized and unrealized loss on
investments, options written and
foreign currency transactions (3,742,288) (18,242) - (3,760,530)
------------- ------------ -------- ------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ($5,093,828) ($74,125) $85,894 ($5,082,059)
============= ============ ======== ============
</TABLE>
[FN]
(1) Calculated in accordance with the proposed investment advisory agreement
of Oppenheimer Global Bio-Tech Fund (1.00% on the first $50 million of net
assets, .75% on the next $150 million with a reduction of .03% on each $200
million thereafter to $800 million, and .60% on net assets in excess of
$800 million).
(2) Estimated fee for similar size Funds.
<PAGE>
PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER
30, 1993
Oppenheimer Global Bio-Tech Fund and Oppenheimer Global Environment Fund
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
GLOBAL GLOBAL PRO GLOBAL
BIO-TECH ENVIRONMENT FORMA BIO-TECH
FUND FUND ADJUSTMENTS FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 861,045 $ 449,257 $ 1,310,302
Dividends (net of withholding taxes of
$15,506 and $29,170 respectively) 665,624 396,608 1,062,232
------------ ----------- ------------
Total income 1,526,669 845,865 2,372,534
------------ ----------- ------------
EXPENSES:
Management fees 1,580,012 352,886 (11,085) (1) 1,921,813
Transfer and shareholder servicing
agent fees 650,147 167,925 (22,033) (2) 796,039
Distribution assistance 464,072 114,385 - 578,457
Shareholder reports 136,817 50,471 (42,554) (2) 144,734
Trustees' fees and expenses 80,788 5,606 (5,606) (2) 80,788
Custodian fees and expenses 62,985 26,044 - 89,029
Legal and auditing fees 35,054 23,550 (10,359) (2) 48,245
Registration and filing fees 34,838 - - 34,838
Other 20,609 33,614 - 54,223
------------ ----------- -------- ------------
Total expenses 3,065,322 774,481 (91,637) 3,748,166
------------ ----------- -------- ------------
NET INVESTMENT INCOME (LOSS) (1,538,653) 71,384 91,637 (1,375,632)
------------ ----------- -------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND OPTIONS:
Net realized loss on investments (575,222) (1,132,242) (1,707,464)
Net realized loss on closing option
contracts written (105,457) - - (105,457)
------------ ----------- -------- ------------
Net realized loss (680,679) (1,132,242) - (1,812,921)
------------ ----------- -------- ------------
Net change in unrealized appreciation
(depreciation) of investments, options
written and translation of assets and
liabilities in foreign currencies:
Beginning of year (3,823,657) 1,341,686 - (2,481,971)
End of year 9,624,563 6,019,427 - 15,643,990
------------ ----------- -------- -------------
Net change 13,448,220 4,677,741 - 18,125,961
------------ ----------- -------- -------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, OPTIONS WRITTEN AND
TRANSLATION OF ASSETS AND LIABILITIES
IN FOREIGN CURRENCIES 12,767,541 3,545,499 - 16,313,040
------------ ----------- -------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $11,228,888 $3,616,883 $91,637 $14,937,408
============ =========== ========= =============
</TABLE>
(1) Calculated in accordance with the proposed investment advisory agreement
of Oppenheimer Global Bio-Tech Fund (1.00% on the first $50 million of net
assets, .75% on the next $150 million with a reduction of .03% on each $200
million thereafter to $800 million, and .60% on net assets in excess of
$800 million).
(2) Estimated fee for similar size Funds.
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(Formerly, Oppenheimer Global Bio-Tech Fund)
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VIII of Registrant's Agreement and
Declaration of Trust filed as Exhibit 24(b)(1) to Registrant's
Registration Statement and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of
such issue.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust dated 9/19/94:
Previously filed with Registrant's Post-Effective Amendment
No. 13, 9/19/94, and incorporated herein by reference.
(2) By-Laws adopted 12/3/87 and amended as of 9/19/94:
Previously filed with Registrant's Post-Effective Amendment
No. 13, 9/19/94, and incorporated herein by reference.
(3) Not applicable.
(4) Agreement and Plan of Reorganization: See Exhibit A to
Part A of this Registration Statement.
(5) Specimen Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 11, 1/27/94, and
incorporated herein by reference.
(6) Investment Advisory Agreement dated 6/1/92: Previously
filed with Registrant's Post-Effective Amendment No. 8,
12/2/92, and incorporated herein by reference.
(7) (i) General Distributor's Agreement dated 12/10/92:
Previously filed with Registrant's Post-Effective
Amendment No. 9, 2/1/93, and incorporated herein
by reference.
(ii) Prototype Oppenheimer Fund Management, Inc. Dealer
Agreement: Previously filed with Post-Effective
Amendment No. 12 to the Registration Statement of
Oppenheimer Government Securities Fund (Reg. No.
33-02769), 12/2/92, and incorporated herein by
reference.
(iii) Prototype Oppenheimer Fund Management, Inc. Broker
Agreement: Previously filed with Post-Effective
Amendment No. 12 of Oppenheimer Government
Securities Fund (Reg. No. 33-02769), 12/2/92, and
incorporated herein by reference.
(iv) Prototype Oppenheimer Fund Management, Inc. Agency
Agreement: Previously filed with Post-Effective
Amendment No. 12 of Oppenheimer Government
Securities Fund (Reg. No. 33-02769), 12/2/92, and
incorporated herein by reference.
(v) Broker Agreement between Oppenheimer Fund
Management, Inc. and Newbridge Securities, dated
10/1/86: Previously filed with Post-Effective
Amendment No. 25 of Oppenheimer Special Fund (Reg.
No. 2-45272), 11/1/86, and incorporated herein by
reference.
(8) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant - 6/7/90): Previously filed with
Post-Effective Amendment No. 97 of Oppenheimer Fund (Reg.
No. 2-14586), 8/30/90, and incorporated herein by
reference.
(9) Custody Agreement dated November 12, 1992 between
Registrant and The Bank of New York: Previously filed with
Registrant's Post-Effective Amendment No. 9, 2/1/93, and
incorporated herein by reference.
(10) Service Plan and Agreement dated 6/10/93 under Rule 12b-1
of the Investment Company Acto of 1940 for Class A shares:
Previously filed with Registrant's Post-Effective Amendment
No. 12, 7/18/94, and incorporated herein by reference.
(11) Opinion and Consent of Counsel dated December 11, 1987:
Previously filed with Registrant's Pre-Effective Amendment
No. 1, 12/15/87, and incorporated herein by reference.
(12) Tax Opinion Relating to the Reorganization: Filed
herewith.
(13) Not applicable.
(14) Consent of KPMG Peat Marwick: Filed herewith.
(15) Not applicable.
(16) Not applicable
(17) Declaration of Registrant under Rule 24f-2: Previously
filed with Registrant's Registration Statement on Form N-
14, 8/16/94, and incorporated herein by reference.
Item 17. Undertakings
(1) Not applicable.
(2) Not applicable.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the registrant, in the City of New York and State
of New York, on the 14th day of September, 1994.
OPPENHEIMER GLOBAL BIO-TECH FUND
Donald W. Spiro
by: --------------------------
Donald W. Spiro, President
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated:
Signatures: Title Date
- ----------- ----------------- --------------
/s/ Leon Levy Chairman of the Board September 14, 1994
- ---------------------- of Trustees
Leon Levy
/s/ Donald W. Spiro President, Principal September 14, 1994
- ---------------------- Executive Officer and
Donald W. Spiro Trustee
/s/ George Bowen Treasurer and September 14, 1994
- ---------------------- Principal Financial
George Bowen and Accounting Officer
/s/ Leo Cherne Trustee September 14, 1994
- ----------------------
Leo Cherne
Trustee
- ----------------------
Edmund T. Delaney
Trustee
- ----------------------
Robert G. Galli
/s/ Benjamin Lipstein Trustee September 14, 1994
- ----------------------
Benjamin Lipstein
Trustee
- ----------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall
- ---------------------- Trustee September 14, 1994
Kenneth A. Randall
<PAGE>
Trustee
- ----------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr. Trustee September 14, 1994
- -------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins Trustee September 14, 1994
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere Trustee September 14, 1994
- -----------------------
Pauline Trigere
/s/ Clayton K. Yeutter Trustee September 14, 1994
- -----------------------
Clayton K. Yeutter
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Exhibit Index
-------------
Form N-14
Item No. Description
- --------- -----------
16(12) Tax Opinion Relating to the Reorganization
16(14) Consent of KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
707 Seventeenth Street
Suite 2300
Denver, CO 80202
September 19, 1994
Oppenheimer Global Environment Fund
Two World Trade Center, 34th Floor
New York, New York 10048-0203
Oppenheimer Global Emerging Growth Fund
Two World Trade Center, 34th Floor
New York, New York 10048-0203
Dear Sirs:
You have requested our opinion as to certain federal income tax
consequences in connection with the Agreement and Plan of Reorganization
(the "Plan") by and between Oppenheimer Global Emerging Growth Fund
("Emerging Growth Fund") or ("Acquiring") (formerly known as Oppenheimer
Global Bio-Tech Fund) and Oppenheimer Global Environment Fund
("Environment Fund") or ("Target") pursuant to which i) Environment Fund
will transfer substantially all of its assets to Emerging Growth Fund
solely in exchange for voting stock of Emerging Growth Fund; ii) Emerging
Growth Fund will assume certain liabilities of Environment Fund; iii)
Environment Fund will distribute to its shareholders the voting stock
received from Emerging Growth Fund; and iv) Environment Fund will be
liquidated (collectively the "Reorganization").
In connection with the rendering of this opinion we have reviewed i) the
Registration Statement on Form N-14 filed by Oppenheimer Global Bio-Tech
Fund; ii) the Proxy Statement and Prospectus for Environment Fund included
within the Registration Statement; iii) the Prospectus for Emerging Growth
Fund; and iv) the Plan. In addition, we have reviewed and relied upon the
representations made by Environment Fund and Emerging Growth Fund in their
Representation Letter (the "Representations") dated August 22, 1994.
FACTS
Emerging Growth Fund is a diversified, open-end, management investment
company organized on October 30, 1987 as a Massachusetts Business Trust
originally named Oppenheimer Global Bio-Tech Fund. Effective September
19, 1994 this Fund was renamed Oppenheimer Global Emerging Growth Fund and
certain of its investment policies will be changed. Emerging Growth Fund
has authorized and issued only one class of stock, voting common stock,
which is continuously offered for sale to the public. Similarly,
Environment Fund is a diversified, open-end, management investment company
organized on November 9, 1989 as a Massachusetts Business Trust.
Environment Fund has authorized and issued only one class of stock, voting
common stock, which is continuously offered for sale to the public. Both
Emerging Growth Fund and Environment Fund are Regulated Investment
Companies ("RIC") within the meaning of Section 851 of the Internal
Revenue Code of 1986, as amended (the "Code"), for the current year and
all prior years. It is intended that Emerging Growth Fund, as the
survivor, will continue to qualify as a RIC for all subsequent years.
The reasons for the reorganization are set forth in the Proxy Statement
and Prospectus under "Approval of the Reorganization - Reasons for the
Reorganization."
As set forth in the Plan, Target will transfer substantially all its
assets to Acquiring in exchange for voting stock of Acquiring and the
assumption by Acquiring of certain liabilities of Target incurred in the
ordinary course of Target's business. The shares of Acquiring received
by Target will be promptly immediately distributed, on a pro-rata basis,
to the shareholders of Target in complete liquidation of Target. It is
anticipated that the Reorganization will be approved by a vote of the
shareholders of Target on November 11, 1994.
REPRESENTATIONS
The following representations have been made in connection with the
transaction:
1. Each shareholder of Target Fund who exchanges his shares pursuant to
the Reorganization will receive solely voting stock of Acquiring Fund
in exchange therefor;
2. Target Fund will transfer substantially all of its assets to
Acquiring Fund on the closing date for the Reorganization in exchange
for voting shares of Acquiring Fund; the disposition of assets by
Target Fund during the year preceding such closing date were made in
the ordinary course of Target Fund's business;
3. The shares of Acquiring Fund will be distributed to the shareholders
of Target Fund as of the close of business of the business day
immediately preceding the closing of the Reorganization; Target Fund
will be liquidated pursuant to the Reorganization;
4. It is Acquiring Fund's intent to invest at least 65% of its assets
in common stocks;
5. Other than as may result from redemptions of Target Fund shares in
the ordinary course of its business, there has not been a significant
change in the ownership of Target Fund prior to the Reorganization;
6. For a period of at least one year following the Reorganization,
Acquiring Fund will maintain and not sell, except for dispositions
made in the ordinary course of business, at least 33% of Target
Fund's investments as of the date of the Reorganization;
7. The fair market value of the shares of Acquiring Fund received by
each shareholder of Target Fund will be approximately equal to the
fair market value of the shares of Target Fund exchanged therefor;
8. There is no plan or intention by the shareholders of Target Fund who
own 5 percent or more of the Target Fund stock, and to the best of
the knowledge of the management of Target Fund, there is no plan or
intention on the part of the remaining shareholders of Target Fund,
to sell, exchange, or otherwise dispose of a number of shares of
Acquiring Fund stock received in the Reorganization that would reduce
the Target Fund shareholders' ownership of Acquiring Fund stock to
a number of shares having a value, as of the date of the
Reorganization, of less than 50 percent of the value of all of the
formerly outstanding shares of Target Fund as of the same date;
9. Acquiring Fund will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market
value of the gross assets held by Target Fund immediately prior to
the Reorganization. For purposes of this representation, amounts
used by Target Fund to pay its Reorganization expenses, amounts, if
any, paid by Target Fund to shareholders and all redemptions and
distributions (except for distributions and redemptions occurring in
the ordinary course of Target Fund's business as an open-end
investment company) made by Target Fund immediately preceding the
transfer will be included as assets of Target Fund held immediately
prior to the Reorganization;
10. Acquiring Fund has no plan or intention to reacquire any of its
shares to be issued pursuant to the Reorganization, except that
Acquiring Fund, as an open-end investment company, will redeem any
of its shares presented to it for redemption in the ordinary course
of business;
11. Acquiring Fund will assume only Target Fund's liability for the
purchase price of portfolio securities purchased which have not been
settled and for shareholder redemption and dividend checks
outstanding; such liabilities were or will have been incurred by
Target Fund in the ordinary course of its business. Except for the
immediately preceding sentence, Acquiring Fund will not assume any
of Target Fund's liabilities, nor will any of Target Fund's assets
transferred to Acquiring Fund be subject to any liabilities;
12. Target Fund and Acquiring Fund will each pay their own expenses
incurred in connection with the Reorganization. Acquiring Fund will
not pay cash in lieu of fractional shares, if any;
13. There is no intercorporate indebtedness existing between Acquiring
Fund and Target Fund that was issued, acquired or will be settled at
a discount;
14. Target Fund and Acquiring Fund are regulated investment companies
within the meaning of Section 851 of the Code. For each fiscal year
of their operations they have meet the requirements of Subchapter M
of the Code for qualification and treatment as regulated investment
companies, intend to meet such requirements with respect to current
taxable years, and will meet the diversification test set forth under
Section 368(a)(2)(F)(i) and (iii) of the Code immediately prior to
the Reorganization.
15. Acquiring Fund does not own, directly or indirectly, nor has it owned
within the past five years, directly or indirectly, any stock of
Target Fund; and
16. Target Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the
Code.
CONCLUSIONS
Based upon the facts as set forth above and the representations as set
forth above, it is our opinion that:
1. The Reorganization will qualify as a tax-free reorganization within
the meaning of Section 368(a)(1)(C) of the Code. Additionally,
Acquiring and Target will each be a party to the reorganization
within the meaning of Section 368(b) of the Code;
2. Target will recognize no gain or loss on its transfer of
substantially all of its assets to Acquiring in exchange solely for
Acquiring voting stock and the assumption by Acquiring of certain
Target liabilities pursuant to Sections 357(a) and 361(a) of the
Code;
3. Acquiring will recognize no gain or loss on its receipt of
substantially all of the assets of Target in exchange solely for
Acquiring voting stock pursuant to Section 1032(a) of the Code;
4. Acquiring's basis in the assets of Target received in the
reorganization will equal Target's basis in the assets immediately
before the transfer pursuant to 362(b) of the Code;
5. Acquiring's holding period in the assets received in the
reorganization will include the period during which Target held the
assets pursuant to Section 1223(2) of the Code;
6. Target shareholders will recognize no gain or loss on their receipt
of Acquiring voting stock in exchange for their Target stock pursuant
to Section 354(a)(1) of the Code;
7. The basis of stock of Acquiring received by Target shareholders in
the reorganization will equal the basis of the Target shares
surrendered in exchange therefor pursuant to Section 358(a)(1) of the
Code;
8. The holding period of Acquiring stock received by Target shareholders
in the reorganization will include the period that the shareholder
held the Target stock exchanged therefor, provided that the
shareholder held such stock as a capital asset on the date of the
exchange pursuant to Section 1223(1) of the Code; and
9. Acquiring will succeed to and take into account the items of Target
described in Section 381(c) of the Code, including the earnings and
profits, or deficit in earnings and profits, of Target as of the date
of the transaction. Acquiring will take these items into account
subject to the conditions and limitations specified in Sections 381,
382, 383 and 384 of the Code and applicable regulations thereunder.
Except to the extent specifically provided herein, no opinion is expressed
or implied concerning the federal income tax consequences of the Plan.
The opinions expressed herein are for the exclusive benefit of Environment
Fund and Emerging Growth Fund with respect to the Reorganization and may
not be relied upon by them for any other purpose, or used, circulated,
quoted or relied upon by any other person or entity for any purpose
without our prior consent. We consent to the filing of this letter, or
a letter in substantially the same form, within or as an exhibit to the
Registration statement for Emerging Growth Fund.
Our opinion is based upon the facts and representations as set forth in
this letter. If any fact or representation is not complete or accurate,
it is imperative that we be informed immediately as to the nature of the
omission or inaccuracy since such omission or inaccuracy may have a
material effect on our conclusions and opinion. In rendering our opinion,
we have relied upon the relevant provisions of the Internal Revenue Code,
the regulations thereunder, and judicial and administrative
interpretations thereof, all of which are subject to change or
modification by subsequent legislative, regulatory, administrative, or
judicial decisions. Any such changes could have an effect on the validity
of our opinion. We assume no duty to inform you of any changes in our
opinion hereafter due to any change in law or fact which may subsequently
occur or come to our attention.
Our opinion is effective as of the date hereof.
The summary of the Federal income tax consequences of the Reorganization
as set forth in the Registration Statement fully and fairly address the
material federal income tax consequences to Emerging Growth Fund and its
shareholders, as well as, Environment Fund and its shareholders.
KPMG PEAT MARWICK LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Oppenheimer Global Bio-Tech Fund on Form N-14 of our report
dated October 21, 1993 appearing in the 1993 Annual Report of Oppenheimer
Global Bio-Tech Fund and our report dated October 21, 1993 appearing in
the 1993 Annual Report of Oppenheimer Global Environment Fund. We also
consent to the references to us under "Synopsis - Tax Consequences of the
Reorganization" and "Approval or Disapproval of the Reorganization (The
Proposal) - Tax Aspects of the Reorganization."
/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
September 14, 1994
merge\750n-14.con
