As filed with the Securities and Exchange Commission on August 16, 1994
Registration No. ________
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.
/ /
OPPENHEIMER GLOBAL BIO-TECH FUND
(to be named, Oppenheimer Global Emerging Growth 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)
As soon as practicable after the Registration Statement becomes effective.
(Approximate Date of Proposed Public Offering)
It is proposed that this filing will become effective on September 19,
1994, pursuant to Rule 488.
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 of the Reorganization; Comparison between
the
Fund and Emerging Growth Fund; Method of Carrying Out the
Reorganization; Miscellaneous Information
(b) Approval 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 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
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:
/ x / Preliminary proxy statement
/ / 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.
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 __, 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 __, 1994, or any
adjournments thereof (the "Meeting"), for the following purposes:
1.To approve 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 __, 1994 are
entitled to notice of, and to vote at, the Meeting. The Proposal is more
fully discussed in the Proxy Statement and Prospectus. Please read it
carefully before telling us, through your proxy or in person, how you wish
your shares to be voted. The 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 __, 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
Oppenheimer Global Emerging Growth Fund (formerly, Oppenheimer Global Bio-
Tech Fund)("Emerging Growth Fund") has filed with the Securities and
Exchange Commission (the "SEC") a Registration Statement on Form N-14
relating to the registration of shares of Emerging Growth Fund to be
offered to the shareholders of Oppenheimer Global Environment Fund (the
"Fund"), located at Two World Trade Center, New York, New York 10048-0203
(telephone 1-800-525-7048), pursuant to an Agreement and Plan of
Reorganization (the "Reorganization Agreement") between Emerging Growth
Fund and the Fund. This Proxy Statement of the Fund relating to the
Reorganization Agreement and the transactions contemplated thereby (the
"Reorganization") also constitutes a Prospectus of Emerging Growth Fund
filed as part of such Registration Statement. 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 __, 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 __, 1994.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
Page
Introduction
General
Record Date; Vote Required; Share Information
Proxies
Costs of the Solicitation and the Reorganization
Synopsis
Parties to the Reorganization
The Reorganization
Reasons for the Reorganization
Tax Consequences of the Reorganization
Investment Objectives and Policies
Investment Advisory and Service Plan Fees
Purchases, Exchanges and Redemptions
Principal Risk Factors
Approval of the Reorganization (The Proposal)
Reasons for the Reorganization
The Reorganization
Tax Aspects of the Reorganization
Capitalization Table (Unaudited)
Comparison Between the Fund and Emerging Growth Fund
Investment Objectives and Policies
Special Investment Methods
Investment Restrictions
Portfolio Turnover
Brokerage Practices
Expense Ratios and Performance
Shareholder Services
Rights of Shareholders
Management and Distribution Arrangements
Purchase of Additional Shares
Method of Carrying Out the Reorganization
Miscellaneous
Additional Information - Emerging Growth Fund Performance
Financial Information
Public Information
Other Business
Annex A - Agreement and Plan of Reorganization, dated ______________,
1994, by and between
Oppenheimer Global Environment Fund and Oppenheimer Global Emerging
Growth Fund A-1
<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 __, 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 __, 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 __, 1994.
At the Meeting, shareholders of the Fund will be asked to approve 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"), 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. 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 __, 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
_____________ 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 ___________ shares of
the Fund (___% 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 ___________ shares of
Emerging Growth Fund (___% 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 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, the
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 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
hereafter 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 "The Reorganization - Reasons for the
Reorganization," the Board, including the trustees who are not "interested
persons" of the Fund (the "Independent Trustees'), as that term is defined
in the Investment Company Act, 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 discussed with the Board a change to the Fund's fundamental
investment policy of concentrating investments in Environmental Companies
in light of Fund performance, 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), the market for investments in Environmental Companies and the
long-term growth opportunities that could be available to Fund
shareholders if the Fund were not required to invest at least 65% of its
assets in securities of Environmental Companies. The Board considered
that the Fund's shareholders would be better served by expanding the
Fund's investment policies to allow broader investments in domestic and
foreign high-potential, emerging growth companies. The Board also
considered and approved the same change in fundamental investment policy
for the Oppenheimer Global Bio-Tech Fund whereby, subject to shareholder
approval, the requirement that Bio-Tech invest at least 65% of its total
assets in biotech companies would be eliminated, and its investment
policies broadened to emphasize investments in emerging growth companies
worldwide. At a meeting held on September 19, 1994, the shareholders of
Bio-Tech approved the change and the name of that fund was changed to
"Oppenheimer Global Emerging Growth Fund."
The Board determined that to achieve the proposed change to the Fund's
fundamental investment policy, a reorganization of the Fund with and into
Emerging Growth Fund, subject to shareholder approval, would be desirable.
By reorganizing into Emerging Growth Fund, shareholders of the Fund would
become shareholders in a much larger fund and should benefit from the
economies of scale available to a larger fund. These economies of scale
should result in lower costs per account for each shareholder through
lower operating expenses and transfer agency expenses even though, on a
percentage basis, the investment management fee rate currently paid by the
Fund is lower than that paid by Emerging Growth Fund.
Tax Consequences of the Reorganization
In the opinion of KPMG Peat Marwick ("Peat Marwick"), tax counsel 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 of the Reorganization - Tax Aspects" below.
Investment Objectives and Policies
As its investment objective, each of the Fund and Emerging Growth Fund
seeks capital appreciation 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 (as hereinafter defined)
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 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). 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, securities 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".
Emerging growth companies are characterized as small companies in terms
of sales, assets or capitalization that tend to respond more quickly (and
tend to exhibit greater volatility in price and performance) than larger
companies to market changes; consequently, their expansion can occur
faster. 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 expand Emerging Growth Fund's investment policies
to emphasize investments in emerging growth companies worldwide, and to
eliminate the fundamental investment policy that Emerging Growth Fund
generally invest at least 65% of its total assets in biotechnology
companies. As of the date of this Proxy Statement and Prospectus,
Emerging Growth Fund may have 25% or more of its total assets invested in
securities of biotechnology companies and thereby be deemed to concentrate
its investments (invest 25% or more of total assets) in such companies.
Although Emerging Growth Fund previously concentrated its investments in
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
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 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.
The management fee rate schedule for the Fund is lower than the management
fee rate schedule for Emerging Growth Fund with respect to net assets less
than $400 million. The net assets of Emerging Growth Fund as at March 31,
1994 (unaudited) were $187,262,178 and, assuming the Reorganization is
effectuated, the pro forma net assets of Emerging Growth Fund as at such
date will be $223,308,123. 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 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 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.
Investment in Environmental Companies
The Fund invests primarily in the securities of Environmental Companies.
To a limited extent, the 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 25% of the 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.
Investment in Biotechnology Companies
Prior to September 19, 1994, as the Oppenheimer Global 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
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 ("EPA"), the U.S. Department of
Agriculture ("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 the industry
may unleash potentially harmful organisms and bacteria 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 to be highly volatile.
Investment in Foreign Securities
Both the Fund and Emerging Growth Fund may invest without limit (subject
to the requirement to also invest in the United States) in "foreign
securities," that is 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 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 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 Fund and Emerging Growth Fund 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.
Investment in Convertible Securities
The funds may invest in convertible securities. In making its investments
on behalf of the Fund in convertible debt, the Manager looks primarily to
the conversion feature and treats such convertible securities as equity
securities. The Fund 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 as described below in "Comparison Between the Fund and
Emerging Growth Fund - Special Investment Methods". 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 an
the market value of the dept 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.
APPROVAL 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 discussed a change to the Fund's
fundamental investment policy of concentrating investments in
Environmental Companies in light of Fund performance, 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), the market for investments in Environmental
Companies and the long-term growth opportunities that could be available
to Fund shareholders if the Fund were not required to invest at least 65%
of its assets in securities of Environmental Companies. The Board
considered that the Fund's shareholders would be better served by
expanding the Fund's investment policies to allow broader investments in
domestic and foreign high-potential, emerging growth companies. This
would give the Fund the flexibility to pursue growth opportunities in a
variety of industries, including the environmental sector. 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 a broadening of the Fund's
investment policies would be consistent with its overall philosophy to
prove shareholders with the most responsible portfolio management. At the
meeting the Board also considered and approved the same change in
fundamental investment policy for the Oppenheimer Global Bio-Tech Fund
whereby, subject to shareholder approval, the requirement that Bio-Tech
invest at least 65% of its total assets in biotech companies would be
eliminated, and its investment policies broadened to emphasize investments
in emerging growth companies worldwide. At a meeting held on September
19, 1994, the shareholders of Bio-Tech approved the change and the name
of that fund was changed to "Oppenheimer Global Emerging Growth Fund."
The Board determined that to achieve the proposed change to the Fund's
fundamental investment policy, a reorganization of the Fund with and into
Emerging Growth Fund, subject to shareholder approval, would be desirable.
By reorganizing into Emerging Growth Fund, shareholders of the Fund would
become shareholders in a much larger fund and should benefit from the
economies of scale available to a larger fund. These economies of scale
should result in lower costs per account for each shareholder through
lower operating expenses and transfer agency expenses even though, on a
percentage basis, the investment management fee rate currently paid by the
Fund is lower than that paid by Emerging Growth Fund. The Fund's expense
ratios for the fiscal year ended September 30, 1993 and the six month
period ended March 31, 1994 (unaudited) were 1.65% and 1.32% (annualized),
respectively, of the Fund's average annual net assets. Emerging Growth
Fund's expense ratios for the fiscal year ended September 30, 1993 and the
six month period ended March 31, 1994 (unaudited) were 1.59% and 1.73%
(annualized), respectively, of Emerging Growth Fund's average annual net
assets.
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
redeem 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 forward, 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 counsel 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, 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 advisors 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
March 31, 1994 as if the Reorganization had occurred on that date.
<TABLE>
<CAPTION> Net Asset
Shares Value
Net Assets Outstanding Per Share
<S> <C> <C> <C>
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
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.
</TABLE>
The pro forma ratio of expenses to average annual net assets of the
combined funds at March 31, 1994 would have been 1.55%.
COMPARISON BETWEEN THE FUND AND EMERGING GROWTH FUND
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 documents that may
be obtained upon request of OSS and upon review at the offices of the SEC.
See "Miscellaneous - Public Information."
Investment Objectives and Policies
As its investment objective, each of the Fund and Emerging Growth Fund
seeks capital appreciation 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 (as hereinafter defined)
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 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, securities 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".
Emerging growth companies are characterized as small companies in terms
of sales, assets or capitalization that tend to respond more quickly (and
tend to exhibit greater volatility in price and performance) than larger
companies to market changes; consequently, their expansion can occur
faster. However, emerging growth companies can be any size and can be in
any industry. 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 expand Emerging Growth Fund's investment policies
to emphasize investments in emerging growth companies worldwide, and to
eliminate the fundamental investment policy that Emerging Growth Fund
generally invest at least 65% of its total assets in biotechnology
companies. As of the date of this Proxy Statement and Prospectus,
Emerging Growth Fund may have 25% or more of its total assets invested in
securities of biotechnology companies and thereby be deemed to concentrate
its investments (invest 25% or more of total assets) in such companies.
Although Emerging Growth Fund previously concentrated its investments in
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
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 and other bank
obligations, (iv) commercial paper rated in the highest category by an
established rating agency, 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. 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.
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"). The Fund may also
purchase puts and calls on securities to seek capital appreciation.
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 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.
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 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 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 will 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 Fund 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, 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 thereupon 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 (those Trustees of the Fund and Emerging Growth Fund who are
not "interested persons" as defined in the Investment Company Act, and who
have no direct or indirect financial interest in the operation of the
investment advisory agreements described below or the service plans
described above), 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 internal allocation procedures described
above.
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 (at net
asset value) for the 1-year period ended March 31, 1994 and since
inception of the Fund (March 2, 1990) were 4.18% and (2.01)%,
respectively. Emerging Growth Fund's average annual total returns (at net
asset value) 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 10.13%, 14.19% and 13.05%, 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 as to Emerging Growth Fund, as
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 rights 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 because
the acquisition of the Manager by Oppenheimer Acquisition Corporation
("OAC") on October 22, 1990 terminated the previous investment advisory
agreement. 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, 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 Fund Advisory Agreement contains no expense limitation.
However, independently of the agreement, the Manager has undertaken that
the total expenses of the 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 Fund. 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 Emerging Growth Fund Advisory
Agreement also contains the foregoing expense limitation. 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 OAC, 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 $28.7 billion as of June 30, 1994,
with more than 2.8 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 investment 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 receipt of the other opinions and
certificates set forth in Sections 10 and 11 of the Reorganization
Agreement and the occurrence of the events described in those Sections.
Under the Reorganization Agreement, all the assets of 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, 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, 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, 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
believes tend to resist sharp declines during market retreats while
offering possible strong returns in rising markets.
Emerging Growth Fund does not maintain a fixed dividend rate and there can
be no assurance as to the payment of any dividends or the realization of
any capital gains.
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 as net asset value on the reinvestment date, without sales charge.
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. The
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
receiving Emerging Growth Fund shares in the Reorganization will not pay
a sales charge on Emerging Growth Fund shares.
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
(Period Ended) Emerging Growth Fund S&P 500 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 Additional Statement. 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 included in the Additional Statement.
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 be obtained by calling the toll-free number on the
cover of this Proxy Statement and Prospectus.
Additional information about the following matters is contained in the
Additional Statement, which incorporates by reference the 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, SEC, 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 __, 1994250
<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 __, 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 __,
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
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 ___, 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 ___, 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>
[Cover]
Oppenheimer Global Bio-Tech Fund
Annual Report September 30, 1993
[Oppenheimer Funds Logo]
[Cover Photo: Woman Running]
"With all the talk about healthcare, the biotech sector looks better than
ever.
"Sure, it's venturesome. But the long-range rewards look good."
<PAGE>
Fund Facts
In this report:
Answers to three timely questions you should ask your Fund's managers.
* What is the outlook for the biotech sector?
* Why were private placements and convertible securities added to the
portfolio?
* Will the Clinton Administration's healthcare reform plan have an impact
on
the biotechnology sector?
<TABLE>
<CAPTION>
Six Facts Every Shareholder Should Know About
Oppenheimer Global Bio-Tech Fund
<S> <C>
1 The Fund aggressively seeks capital appreciation from a portfolio
of
stocks issued by companies that derive at least half their revenues
from or invest at least half their R&D expenditures in
biotechnology.
2 The Fund is designed for the more aggressive investor who is
willing
to accept greater risk of loss in anticipation of greater gains.
While there are special risks associated with investing in foreign
and restricted securities, described in the Fund's prospectus,
active professional management can help reduce those risks.
3 The Fund's total return at net asset value was 7.79% for the 12
months ended September 30, 1993.1
4 The Fund's long-term performance has been strong, with an average
annual total return at net asset value of 15.78% for the five-year
period ended September 30, 1993.1
5 The top five holdings at September 30, 1993 were:3
1. Genentech, Inc.--one of the largest companies worldwide that
makes pharmaceuticals used in biotechnology.
2. Chiron Corp.--the current leader in the biotech sector, with a
diversified product line that includes diagnostics and vaccines.
3. Genzyme Corp.--an emerging firm that has brought promising
products to market, most recently a patented treatment for
Gaucher's disease.
4. Amgen, Inc.--one of the sector's blue-chip firms.
5. Genetic Therapy, Inc.--a promising, fast-growing company engaged
in the development and marketing of biotech-based diagnostics
and
treatments.
6 "We pursue a pure biotech investment strategy--an approach that
translates into both above-average short-term risks and, we
believe,
above-average long-term returns for our shareholders. The sharp
correction in the price of biotechnology stocks that started in
late
1992 produced some advantages for the Fund. Specifically, the
fall-off created exceptional buying opportunities in the shares of
both established and emerging biotech companies."
Portfolio Manager, Sandra Panem, September 30, 1993
</TABLE>
<PAGE>
Report to Shareholders:
Oppenheimer Global Bio-Tech Fund's total return at net asset value was 7.79%
for the year ended September 30, 1993.1
As the accompanying chart shows, the Fund outperformed the Lipper
health/biotechnology funds average, which raises an interesting question: How
did the Fund's managers maintain full exposure to biotech stocks and at the
same time limit risks?
The answer is straightforward: the Fund's managers maintained a strategic
balance between proven companies whose products command their markets and
biotechnology's most promising pioneers--well managed, well-financed firms
with products within several years of anticipated Food & Drug Administration
(FDA) approval.
During the year, we focused closely on diversification and careful stock
selection. We used market rallies to sell stocks in companies whose values
appeared to have peaked, such as Cytogen, Ecogen and Alliance Pharmaceutical.
When the market pulled back, we took advantage of lower prices to add to
strong positions.
For example, we added to our positions in established human biotechnology
companies such as Genentech and Genzyme; agricultural biotechnology companies,
including IDEXX and Syntro; and newer firms such as Magainin Pharmaceuticals
and Protein Design Labs, whose products could revolutionize our approaches to
the diagnosis and treatment of disease.
With interest rates abroad on the decline and many offshore economies poised
for a pickup, we expanded our European holdings. We also added five private
equity placements and two convertible issues to the portfolio. Both types of
securities tend to resist sharp declines during market retreats, while
offering strong returns in rising markets.
The biotech rebound, we believe, is likely to begin sooner rather than later.
The sector's fundamentals have shown steady improvement recently. The number
of products in the FDA approval pipeline has grown significantly over the past
year.
More importantly, the Clinton Administration has focused America's attention
on combating the healthcare cost crisis. We believe that biotechnology will
provide the breakthroughs in the prevention, detection and treatment of
disease that are clearly part of any long-term solution to the nation's
healthcare crisis.
Together, these positives suggest that, while the last 18 months demonstrated
the risks of biotech investing, the months ahead may begin to produce rewards.
We appreciate your confidence in Oppenheimer Global Bio-Tech Fund. We look
forward to continuing to help you meet your investment goals in the future.
[Donald W. Spiro Signature]
Donald W. Spiro
President
Oppenheimer Global Bio-Tech Fund
October 21, 1993
[Tabular Representation of Bar Chart]
Performance in Perspective
Total return for 1-year
period ended 9/30/93
<TABLE>
<S> <C>
Oppenheimer Global Bio-Tech Fund (at net asset value)1 7.79%
Lipper health/ biotechnology funds average2 4.69%
</TABLE>
3 Oppenheimer Global Bio-Tech Fund
<PAGE>
<PAGE>
Biotechnology: A fast-growing opportunity
[Tabular Representation of Line Graph]
<TABLE>
<CAPTION>
Number of Products in FDA Approval Pipeline
<S> <C>
1980 10
1981 15
1982 25
1983 40
1984 60
1985 80
1986 100
1987 140
1988 115
1989 190
1990 245
1991 290
1992 325
</TABLE>
As the rapid growth of biotech products in the Food and Drug Administration's
product-approval pipeline shows, companies around the world are fast
translating biotech dreams into product realities--and creating outstanding
opportunities for investors willing to accept the volatility of venturesome
investments.5
The companies producing such products are representative of the biotech stocks
the Fund currently holds, however, the Fund's portfolio is subject to change.
[Photo: Man sitting on edge of desk listening to woman in front of
computer monitor]
4 Oppenheimer Global Bio-Tech Fund
<PAGE>
<PAGE>
Long-term Performance
[Tabular Representation of Mountain Graph]
<TABLE>
<CAPTION>
Oppenheimer Global Bio-Tech Fund6
<S> <C>
12/31/87 $ 9,425
12/31/88 9,547
12/31/89 11,782
12/31/90 13,269
12/31/91 29,342
12/31/92 22,630
9/30/93 20,680
</TABLE>
Oppenheimer Global Bio-Tech Fund is designed for investors who are willing to
accept greater risks in anticipation of larger returns. Despite major
short-term corrections in biotechnology stocks in 1992 and in early 1993,
Oppenheimer Global Biotech Fund has rewarded shareholders with strong,
longer-term performance. The chart shows how a hypothetical $10,000 investment
in the Fund on 12/31/87 grew to $20,680 by 9/30/93.
Notes
1. Based on the change in net asset value per share from 9/30/92 to 9/30/93.
The Fund's average annual total returns, after deducting the current maximum
sales charge of 5.75%, for the 1-, 3- and 5-year periods ended 9/30/93 were
1.59%, 20.34% and 14.42%, respectively. All total return figures assume
reinvestment of dividends and capital gains distributions.
2. Source of data: Lipper Analytical Services. The Lipper average annual total
returns for health/biotechnology funds for the 1- and 5-year periods ended
September 30, 1993, were 4.69% and 20.20%, respectively. These figures include
reinvestment of dividends and capital gains distributions and are shown for
comparative purposes only. Oppenheimer Global Bio-Tech Fund is characterized
by Lipper as a health/biotechnology fund. Lipper performance does not take
sales charges into consideration. The Fund ranked 5 and 7 out of 13 and 8
health/biotechnology funds ranked by Lipper for the 1- and 5-year periods
ended 9/30/93, respectively.
3. The Fund's portfolio is subject to change.
4. The Standard & Poor's 500 Index is an unmanaged index of common stocks that
is widely recognized as an indicator of overall market performance. During the
1-, 3-, and 5-year periods ended 9/30/93, the average annual total returns for
the S&P 500 Index were 12.97%, 18.03% and 14.69%, respectively. The S&P 500
Index includes dividend reinvestment.
5. Source of data: G. Steven Burrill and Kenneth Lee, Jr., BioTech '94: Long
Term Value, Short Term Hurdles, 1993, p. 39.
6. Based on a hypothetical $10,000 investment in the Fund made on 12/31/87,
after deducting the current maximum sales charge of 5.75%, and with all
dividends and capital gains distributions reinvested.
Past performance does not guarantee future results. The principal value and
return of an investment in the Fund will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than the original cost.
[Caption with arrow pointing to page 4]
Photo (left to right) Jon Fossel, Oppenheimer Management Corporation Chairman
and CEO speaks with Vice President, Sandra Panem, your Fund's portfolio
manager.
5 Oppenheimer Global Bio-Tech Fund
<PAGE>
<PAGE>
Statement of Investments September 30, 1993
<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
6 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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
7 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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
8 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
9 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
10 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
11 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
12 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
13 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
14 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
15 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
16 Oppenheimer Global Bio-Tech Fund
<PAGE>
<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.
KPMG Peat Marwick
Denver, Colorado
October 21, 1993
17 Oppenheimer Global Bio-Tech Fund
<PAGE>
<PAGE>
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.
None of the dividends paid by the Fund during the fiscal year ended
September
30, 1993 are 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.
18 Oppenheimer Global Bio-Tech Fund
<PAGE>
<PAGE>
Oppenheimer Global Bio-Tech Fund
Officers and Trustees Leon Levy, Chairman of the Board of
Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Sandra Panem, Vice President
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Adviser Oppenheimer Management Corporation
Distributor Oppenheimer Funds Distributor, Inc.
Transfer and Oppenheimer Shareholder Services
Shareholder
Servicing Agent
Custodian of The Bank of New York
Portfolio Securities
Independent Auditors KPMG Peat Marwick
Legal Counsel Gordon Altman Butowsky Weitzen Shalov &
Wein
This is a copy of a report to shareholders of Oppenheimer Global Bio-Tech
Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Global Bio-Tech Fund. For material information concerning the
Fund, see the Prospectus.
19 Oppenheimer Global Bio-Tech Fund
<PAGE>
<PAGE>
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<PAGE>
OPPENHEIMER GLOBAL BIO-TECH FUND
SEMI-ANNUAL REPORT MARCH 31, 1994
[Logo]
"WITH ALL THE TALK ABOUT HEALTHCARE,
THE BIOTECH SECTOR CAN PROVIDE
SOME EXCITING INVESTMENT
OPPORTUNITIES.
"SURE, IT'S VENTURESOME.
BUT THE LONG-RANGE REWARDS
LOOK GOOD."
<PAGE>
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
FUND FACTS
- -----------------------------------------------------------------------
SIX FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER GLOBAL BIO-TECH FUND
- -----------------------------------------------------------------------
1 The Fund aggressively seeks capital appreciation from a portfolio
of stocks issued by companies that derive at least half their
revenues
from or invest at least half their R&D budgets in biotechnology.
- -----------------------------------------------------------------
2 The Fund is designed for more aggressive investors who are willing
to accept greater risk of loss in the short term in anticipation
of
greater long-term gains. The Fund's net asset value may be
adversely
affected by the high degree of volatility of biotechnology
stocks.(1)
- -----------------------------------------------------------------------
- --------
3 Total return at net asset value was -2.65% for the six months
ended
March 31, 1994 and 10.13% for the 12 months ended on that date.(2)
- -----------------------------------------------------------------------
- --------
4 The Fund has provided long-term shareholders with attractive
returns.
Its average annual total returns for the 1- and 5-year periods
ended
March 31, 1994 and from inception of the Fund on December 30, 1987
were
3.80%, 12.84%, and 11.98%, respectively.(3)
- -----------------------------------------------------------------------
- --------
5 The five largest holdings in the Fund's portfolio at March 31
were:(4)
AMGEN, INC. One of the sector's blue-chip firms.
GENENTECH, INC. One of the largest companies worldwide that makes
biotechnology pharmaceuticals.
PROTEIN DESIGN LABS, INC. An emerging leader in drug design.
GENZYME CORP. An emerging firm that has brought promising products
to
market, most recently a patented treatment for Gaucher's Disease.
PERSEPTIVE BIOSYSTEMS, INC. A leader in the manufacture of
instruments
and media for bioseparations.
- -----------------------------------------------------------------------
- --------
6 "Five years ago, biotech investors were buying into a vision.
Today,
they're investing in a reality, and as the field evolves, the
traditional models for success are giving way to new models.
Today,
some of the best growth opportunities are offered by companies
that
serve specific market niches, firms that are forging strategic
partnerships with other enterprises, and companies that support
the
commercialization of promising biotech products."
PORTFOLIO MANAGER SANDRA PANEM, MARCH 31, 1994
IN THIS REPORT:
ANSWERS TO THREE TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
/ / HOW HAS THE RECENT VOLATILITY IN THE U.S. STOCK MARKET AFFECTED THE
FUND?
/ / WHAT KINDS OF BIOTECH COMPANIES DO YOU THINK WILL BE MOST SUCCESSFUL
IN THE
YEARS AHEAD?
/ / WHAT EMERGING OPPORTUNITIES DO YOU SEE IN THE BIOTECHNOLOGY SECTOR?
1. The special risks involved in investing in biotechnology stocks are
described
in greater detail in the Fund's prospectus.
2. Based on the change in net asset value per share from 9/30/93 and
3/31/93 to
3/31/94, without considering a sales charge. All total return figures
assume
reinvestment of capital gains distributions.
3. Average annual total returns are for a hypothetical investment held
until
3/31/94, after deducting the maximum initial sales charge of 5.75%.All
total
return figures assume reinvestment of dividends and capital gains
distributions.
4. The Fund's portfolio is subject to change.
Past performance does not guarantee future results. The principal value
and
return of an investment in the Fund will fluctuate so that an investor's
shares,
when redeemed, may be worth more or less than the original cost.
2 Oppenheimer Global Bio-Tech Fund
<PAGE>
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
REPORT TO SHAREHOLDERS
- -----------------------------------------------------------------------
The six months covered in this report spanned one of the most volatile
periods
the stock market has seen in several years. For the six months ended March
31,
1994, Oppenheimer Global Bio-Tech Fund's total return at net asset value
was
- -2.65%.(5)
The Fund's returns were affected by the general decline in
stock
prices that followed two increases in interest rates by the Federal
Reserve
Board in February and March. Throughout the period, however, your
management
team held to a steady course, focusing on biotechnology companies, and
maintaining a sound investment balance between established companies and
the
innovative smaller firms that are developing the products of the future.
Over the last six months, your managers continued to
concentrate
on diversification and careful stock selection. We used market rallies to
take
profits in several large, liquid, "core" stocks such as Genentech,
Genzyme,
Chiron, and Amgen, and used the proceeds to build positions in smaller,
high-
potential companies.
For example, we added to holdings in several companies with
strong positions in fast-growing markets, such as Cephalon in neuroscience
and
COR Therapeutics in cardiovascular research. We also expanded positions
in
several gene therapy companies, and added shares of several companies that
provide the technology needed to track clinical trials and bring new
products to
market. In our view, medical information companies, such as ClinTrials,
Quintiles Transnational, Cerner, and Pyxis, represent a major investment
opportunity.
Despite some recent interest-rate driven setbacks, economies
across Europe are beginning to improve, and we added to the portfolio's
foreign-stock holdings, concentrating on larger pharmaceutical companies
with a
strong biotech bias, such as Sandoz and Schering AG. We also maintained
a
position in Roche Holdings.
Although biotech stocks are inherently more volatile than
the
stock market as a whole, we believe that the outlook for the sector is
bright.
While some major drug companies have been cutting their research budgets,
several smaller firms have been pushing ahead, as shown by the growing
number of
products in the FDA approval pipeline.
While the Clinton Administration's focus on controlling
healthcare
costs will continue to impact the biotech market in the short-term,
aggressive
biotech research and product development remain clear keys to any
long-range
healthcare solution and, we believe, to long-term investment gains.
We appreciate your confidence in Oppenheimer Global Bio-Tech
Fund,
and we look forward to helping you meet your investment goals in the
future.
/s/ Donald W. Spiro
Donald W. Spiro
President, Oppenheimer Global Bio-Tech Fund
April 25, 1994
5. See footnote 2, page 2.
3 Oppenheimer Global Bio-Tech Fund
<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>
4 Oppenheimer Global Bio-Tech Fund
<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
5 Oppenheimer Global Bio-Tech Fund
<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>
6 Oppenheimer Global Bio-Tech Fund
<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.
7 Oppenheimer Global Bio-Tech Fund
<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.
8 Oppenheimer Global Bio-Tech Fund
<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.
9 Oppenheimer Global Bio-Tech Fund
<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.
10 Oppenheimer Global Bio-Tech Fund
<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.
11 Oppenheimer Global Bio-Tech Fund
<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.
12 Oppenheimer Global Bio-Tech Fund
<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.
13 Oppenheimer Global Bio-Tech Fund
<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.
</TABLE>
14 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Oppenheimer Global Bio-Tech Fund
- ------------
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Sandra Panem, Vice President
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- ------------
Investment Advisor Oppenheimer Management Corporation
- ------------
Distributor Oppenheimer Funds Distributor, Inc.
- ------------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- ------------
Custodian of
Portfolio Securities
The Bank of New York
- ------------
Independent Auditors KPMG Peat Marwick
- ------------
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records
of the
Fund without examination by the independent auditors. This is a copy of
a report
to shareholders of Oppenheimer Global Bio-Tech Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer Global Bio-Tech
Fund. For
material information concerning the Fund, see the Prospectus.
15 Oppenheimer Global Bio-Tech Fund
<PAGE>
- ------------
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- ------------
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require help, we're only a toll-free phone call away.
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[Cover]
Oppenheimer Global Environment Fund
Annual Report September 30, 1993
[Oppenheimer Logo]
[cover photo: couple in canoe]
"This Fund gives us the potential for long-term growth, as well as a
chance to
help the environment."
<PAGE>
[Inside Front Cover]
Fund Facts
In this report:
Answers to three timely questions you should ask your Fund's managers.
* Are there any signs of increasing demand for environmental services?
* What are the areas of opportunity in the environmental sector?
* How is the Fund managing risk?
<TABLE>
<CAPTION>
<S> <C>
Five Facts Every Shareholder Should Know About
Oppenheimer Global Environment Fund
1 The Fund seeks long-term capital appreciation through investment
principally in companies offering products, services, or processes
that contribute to a cleaner and healthier environment. The Fund
invests at least 65% of its assets in common stocks of environmental
companies. In addition to companies located in the U.S., the Fund
invests in the shares of companies in at least three foreign
countries.(1)
2 The Fund's total return was 8.36% for the 12 months ended 9/30/93.(2)
3 Fully 82% of the Fund's portfolio remains committed to environmental
stocks. However, to control risk and enhance returns your managers
have also been diversifying outside the environmental sector into
financial and consumer stocks with strong earnings and good growth
potential. We expect to increase the Fund's position in
environmental issues when the sector begins to rebound.
4 The top five stock holdings in the portfolio at September 30 were:(4)
1. Sita--France's largest solid-waste disposal company.
2. Omega Environmental, Inc.--an emerging leader in underground-tank
management and removal.
3. Kirby Corp.--a leading U.S. building and construction company.
4. Tetra Tech, Inc.--a leader in specialized engineering,
consulting, and pollution control services for oil and drilling
companies.
5. Thermedics, Inc.--a fast-growing instrumentation company.
5 "With tougher environmental regulations and improving economies
worldwide, the outlook for environmental stocks is improving,
especially for companies that help other firms reduce or avoid
pollution or reclaim waste. Those are the stocks in which the Fund
is particularly well-positioned."
Portfolio Manager, John Wallace, September 30, 1993
<FN>
Notes
1. The special risks of investing in foreign securities are disclosed in
the
Fund's prospectus.
2. Based on the change in net asset value per share from 9/30/92 to
9/30/93.
The Fund's average annual total returns, after deducting the current
maximum
sales charge of 5.75%, for the 1-year period to 9/30/93 and from inception
on
3/2/90 to 9/30/93 were 2.13% and -3.65%, respectively. All performance
figures
assume reinvestment of dividends and capital gains distributions.
3. Source of data: Lipper Analytical Services, an independent monitor of
mutual funds, 9/30/93. The Lipper total return average for the 1-year
period
to 9/30/93 was for 8 environmental funds. This figure includes
reinvestment of
dividends and capital gains distributions, and is shown for comparative
purposes only. Oppenheimer Global Environment Fund is characterized by
Lipper
as an environmental fund. Lipper performance does not take sales charges
into
consideration.
4. The Fund's portfolio is subject to change.
Past performance does not
guarantee future results. The principal value and return of an investment
in
the Fund will fluctuate so that an investor's shares, when redeemed, may
be
worth more or less than the original cost.
</TABLE>
<PAGE>
<PAGE>
Report to Shareholders:
We are pleased to report Oppenheimer Global Environment Fund's total
return at
net asset value for the 1-year period ended September 30, 1993, was
8.36%,(2)
outperforming Lipper Analytical Services' environmental funds average.(3)
The past two years have been challenging for environmental stocks. The
slowdown of the world's industrialized economies negatively affected this
market. Although the Fund's assets are still firmly committed to
environmental
issues and the percentage of investments in these securities is well
within
the normal parameters as stated in the prospectus, the Fund has been
diversifying outside of the sector, consistent with the Fund's investment
policy, in order to seek better returns.
Our diversification strategy paid off and is reflected in your Fund's
performance, as some of the non-environmental stocks in the portfolio
appreciated. Some of the Fund's European environmental holdings have
increased
in value, too.
While we don't expect a rapid turnaround of environmental securities, the
outlook for these companies and your Fund seems to be brightening
somewhat, as
the result of three factors.
First, the North American economies--notably Mexico's--now seem to be
strengthening, suggesting that demand for environmental services will pick
up
over time. Second, environmental stocks in the U.S. and offshore are
trading
at historically low values relative to earnings growth. In our view, real
value can be found in the stocks of well-financed, well-managed firms.
Third--and most important--the long-term outlook for the sector and the
Fund
remains positive, given the pro-environment stance of the Clinton
Administration and gradual toughening of pollution standards worldwide.
Areas of opportunity, however, are shifting, and are reflected in your
Fund's
portfolio. Your managers have reduced the portfolio's exposure to
companies
involved in traditional waste treatment, disposal and remediation. For
example, we sold stocks of Waste Management and Wheelabrator, and reduced
our
position in Browning-Ferris.
We added to positions in companies that help inhibit the creation of
pollution
and waste. Reflecting tightening European clean-water regulations, we
bought
Compagnie Generale des Eaux, one of France's largest water utilities.(4)
We
also added several U.S. companies whose services or products help prevent
pollution, or create valuable products from waste materials.
Going forward, we will continue to search out the best opportunities in
the
environmental sector, while maintaining a prudent level of
diversification. We
appreciate the confidence you have placed in the Fund and look forward to
continuing to help you reach your investment goals.
[Donald W. Spiro signature]
Donald W. Spiro
President
Oppenheimer Global Environment Fund
October 21, 1993
Performance in
Perspective
<TABLE>
<CAPTION>
Total return for the year
ended 9/30/93
<S> <C>
Oppenheimer 8.36%
Global Environment
Fund
(at net asset value)(2)
Lipper environmental 7.64%
funds average(3)
</TABLE>
3 Oppenheimer Global Environment Fund
<PAGE>
Statement of Investments September 30, 1993
<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
4 Oppenheimer Global Environment Fund
<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
5 Oppenheimer Global Environment Fund
<PAGE>
<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.
6 Oppenheimer Global Environment Fund
<PAGE>
<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.
7 Oppenheimer Global Environment Fund
<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.
8 Oppenheimer Global Environment Fund
<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.
9 Oppenheimer Global Environment Fund
<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.
10 Oppenheimer Global Environment Fund
<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.
11 Oppenheimer Global Environment Fund
<PAGE>
<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.
12 Oppenheimer Global Environment Fund
<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.
13 Oppenheimer Global Environment Fund
<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.
KPMG Peat Marwick
Denver, Colorado
October 21, 1993
14 Oppenheimer Global Environment Fund
<PAGE>
<PAGE>
Oppenheimer Global Environment Fund
<TABLE>
<CAPTION>
<S> <C>
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
John L. Wallace, Jr., Vice President
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Adviser Oppenheimer Management Corporation
Distributor Oppenheimer Funds Distributor, Inc.
Transfer and Oppenheimer Shareholder Services
Shareholder
Servicing Agent
Custodian of The Bank of New York
Portfolio Securities
Independent Auditors KPMG Peat Marwick
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
</TABLE>
This is a copy of a report to shareholders of Oppenheimer Global
Environment
Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Global Environment Fund. For material information concerning
the
Fund, see the Prospectus.
15 Oppenheimer Global Environment Fund
<PAGE>
<PAGE>
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<PAGE>
OPPENHEIMER GLOBAL ENVIRONMENT FUND
SEMI-ANNUAL REPORT MARCH 31, 1994
OPPENHEIMER FUNDS.
"THIS FUND GIVES US THE POTENTIAL FOR LONG-TERM GROWTH, AS WELL AS A
CHANCE TO
HELP THE ENVIRONMENT.
<PAGE>
FUND FACTS
FIVE FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT OPPENHEIMER GLOBAL
ENVIRONMENT
FUND
1 The Fund seeks long-term capital appreciation through investment
principally in companies offering products, services or processes
that
contribute to a cleaner and healthier environment. The Fund invests
at
least 65% of its assets in common stocks of environmental companies.
In
addition to companies located in the U.S., the Fund invests in the
shares
of companies in at least three foreign countries.(1)
2 The Fund's total return at net asset value was -0.88% for the six
months
ended March 31, 1994 and 4.18% for the 12 months ended on that
date.(2)
3 The five largest holdings in the portfolio at March 31 were:(3)
WHEELABRATOR TECHNOLOGIES, INC. A leader in the development of
alternative
energy systems.
SITA. France's largest solid-waste disposal company.
SCHWEIZERISCHE INDUSTRIE GMBH. Switzerland's leading manufacturer of
thermal and pollution control machinery.
OMEGA ENVIRONMENTAL, INC. An emerging leader in underground-tank
management
and removal.
TETRA TECH, INC. A leader in specialized engineering, consulting, and
pollution control services for oil and drilling companies.
4 Average annual total returns for the 1-year period ended March 31,
1994 and
since inception on March 2, 1990 were -1.81% and -3.42%.(4)
5 "The outlook for the environmental sector is better today than it has
been
for some time. Earnings have generally improved along with the U.S.
economy, economies across Europe are poised for a pickup, and the
deadline
for compliance with the Clean Air and Water Act in the U.S. is
getting
closer. The Fund's portfolio is positioned to benefit from all these
developments."
PORTFOLIO MANAGER JOHN WALLACE, MARCH
31, 1994
IN THIS REPORT:
ANSWERS TO THREE TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
- - HAS THE IMPROVING U.S. ECONOMY AFFECTED ENVIRONMENTAL STOCKS AND THE
FUND'S
INVESTMENT STRATEGY?
- - ARE YOU FINDING ANY GROWTH OPPORTUNITIES OUTSIDE THE U.S.?
- - ARE THERE ANY ENVIRONMENTAL SECTORS YOU'RE CAUTIOUS ABOUT?
(1) Global investment risks, such as currency exchange fluctuations,
political
developments and difficulties in trading in foreign markets, can
increase
the possibility of share price fluctuation. The special risks of
investing
in foreign securities are described in greater detail in the Fund's
prospectus.
(2) Based on the change in net asset value per share from 9/30/93 and
3/31/93
to 3/31/94, without considering the sales charge. All performance
figures
assume reinvestment of dividends.
(3) The Fund's portfolio is subject to change.
(4) Average annual total returns are for a hypothetical investment held
until
3/31/94, after deducting the maximum initial sales charge of 5.75%.
Performance figures assume reinvestment of dividends and capital
gains
distributions.
Past performance does not guarantee future results. The principal
value and
return of an investment in the Fund will fluctuate so that an
investor's
shares, when redeemed, may be worth more or less than the original
cost.
2 Oppenheimer Global Environment Fund
<PAGE>
REPORT TO SHAREHOLDERS
The outlook for the environmental sector continued to improve somewhat
over the
past six months. While the stock market overall declined broadly on the
heels of
two moves by the Federal Reserve Board to raise interest rates in February
and
March, your Fund's net asset value did not decline significantly, and it
posted
a total return at net asset value of -0.88% for the six months ended March
31,
1994 and 4.18% for the twelve months ended on that date.(5)
While your management team doesn't expect a rapid rise in the
value of
environmental stocks from current levels, several factors suggest that the
sector will benefit from gradual gains in the months ahead.
Most important, business earnings are improving as the U.S.
economy
strengthens and, as a result, companies are increasing spending on
environmental
projects postponed during the recession. As the deadline for compliance
with the
Clean Air and Water Act draws nearer, this spending should rise even
further,
and should help boost the profits and stock prices of well-managed
environmental
companies.
Environmental stocks worldwide also continue to trade at low
prices
relative to their earnings growth. We believe that value can be found in
the
stocks of well-financed environmental firms both in European markets,
which seem
ready to rebound from their recessions, and in fast-developing Asian
markets.
To capitalize on these developments, your Fund's managers took
profits
in the non-environmental stocks into which we had diversified during the
economic downturn, using the proceeds to build positions in high-potential
environmental areas.
We added to positions in companies expected to benefit
immediately
from improving corporate earnings, emphasizing engineering and
construction
companies, and equipment manufacturers. We also expanded positions in
pollution
control companies, as well as in independent energy producers in the U.S.
and
offshore, such as Magma Power and Deutsche Babcock.
Overseas, we continued to focus on large, market-leading
environmental
companies, such as Atwoods PLC in the U.K. and Compagnie Generale des Eaux
in
France.
Our optimism about the sector is tempered somewhat by earnings
disappointments in areas such as hazardous and solid waste
management--areas
which we continue to approach cautiously--as well as by the Clinton
Administration's preoccupation with issues other than the environment. On
balance, however, we see growth opportunities in carefully selected
environmental stocks.
We appreciate your confidence in Oppenheimer Global Environment
Fund,
and look forward to continuing to help you meet your investment goals.
/s/ Donald W. Spiro
Donald W. Spiro
President
Oppenheimer Global Environment Fund
April 25, 1994
(5) See footnote 2, page 2.
3 Oppenheimer Global Environment Fund
<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
4 Oppenheimer Global Environment Fund
<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
5 Oppenheimer Global Environment Fund
<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.
6 Oppenheimer Global Environment Fund
<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.
7 Oppenheimer Global Environment Fund
<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.
8 Oppenheimer Global Environment Fund
<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.
9 Oppenheimer Global Environment Fund
<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.
10 Oppenheimer Global Environment Fund
<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.
11 Oppenheimer Global Environment Fund
<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.
</TABLE>
12 Oppenheimer Global Environment Fund
<PAGE>
------------
Oppenheimer Global Environment Fund
- ------------
Officers and Trustees Leon Levy, Chairman of the Board of
Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
John L. Wallace, Jr., Vice President
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- ------------
Investment Advisor Oppenheimer Management Corporation
- ------------
Distributor Oppenheimer Funds Distributor, Inc.
- ------------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- ------------
Custodian of
Portfolio Securities
The Bank of New York
- ------------
Independent Auditors KPMG Peat Marwick
- ------------
Legal Counsel Gordon Altman Butowsky Weitzen Shalov
& Wein
The financial statements included herein have been taken from the records
of the
Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Global
Environment
Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer
Global Environment Fund. For material information concerning the Fund, see
the
Prospectus.
13 Oppenheimer Global Environment Fund
<PAGE>
- ------------
The Family of OppenheimerFunds
- ------------
OppenheimerFunds offers over 35 funds designed to fit virtually every
investment
goal. Whether you're investing for retirement, your children's education,
or
tax-free income, we have the funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable
knowing
that you are investing with a respected financial institution with over
30 years
of experience in helping people just like you reach their financial goals.
And
you're investing with a leader in global, growth stock, and flexible fixed
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As an OppenheimerFunds shareholder, you can easily exchange shares
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your financial advisor or call us at 1-800-525-7048 for a prospectus. You
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also write us at the address shown on the back cover. As always, please
read the
prospectus carefully before you invest.
- ------------
Specialty Stock Funds
Global Bio-Tech Fund
Global Environment Fund
Gold & Special Minerals Fund
- ------------
Stock Funds
Discovery Fund
Time Fund
Target Fund
Special Fund
Global Fund
Oppenheimer Fund
Value Stock Fund
- ------------
Stock and Bond Funds
Main Street Income & Growth Fund
Total Return Fund
Global Growth & Income Fund
Equity Income Fund
Asset Allocation Fund
- ------------
Bond Funds
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Champion High Yield Fund
Strategic Income & Growth Fund
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Strategic Diversified Income Fund
Strategic Investment Grade Bond Fund
Strategic Short-Term Income Fund
Investment Grade Bond Fund
Mortgage Income Fund
U.S. Government Trust
Limited-Term Government(2)
- ------------
Tax-Exempt Funds
New York Tax-Exempt Fund(3)
California Tax-Exempt Fund(3)
Pennsylvania Tax-Exempt Fund(3)
Florida Tax-Exempt Fund(3)
New Jersey Tax-Exempt Fund(3)
Tax-Free Bond Fund
Insured Tax-Exempt Bond Fund
Intermediate Tax-Exempt Bond Fund
- ------------
Money Market Funds
Money Market Fund
Cash Reserves
Tax-Exempt Cash Reserves
1. The fee is waived for PhoneLink exchanges between existing accounts.
Exchange privileges are subject to change or termination.
2. Formerly Government Securities Fund.
3. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc.,
Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1994 Oppenheimer Management Corporation. All rights
reserved.
14 Oppenheimer Global Environment Fund
<PAGE>
- ------------
"How may I help you?"
- ------------
"Just as OppenheimerFunds offers over 35 different mutual funds designed
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meet virtually every investment need, Oppenheimer Shareholder Services
offers a
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we're only a toll-free phone call away.
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"When you invest in OppenheimerFunds, you know you'll receive a high
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for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
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Chief Executive Officer
Oppenheimer Shareholder Services
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Talk to a Customer Service Representative.
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Make account transactions with a Customer Service Representative. Monday
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Get automated information or make automated transactions. 24 hours a day,
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- ------------
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PAID
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- ------------
<PAGE>
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES 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>
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.
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 6/1/92:
Previously filed with Registrant's Post-Effective
Amendment No. 9, 2/1/93, and incorporated herein by
reference.
(2) By-Laws adopted 12/3/87: Previously filed with
Registrant's Pre-Effective Amendment No. 1, 12/15/87, 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: Filed with Registrant's Post-Effective Amendment
No. 12, 7/__/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: To be filed
by amendment.
(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: Filed
herewith.
Item 17. Undertakings
(1) Not applicable.
(2) Not applicable.
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 12th day of August, 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
- ----------- ----------------- --------------
Leon Levy Chairman of the Board August 12, 1994
- ---------------------- of Trustees
Leon Levy
Donald W. Spiro President, Principal August 12, 1994
- ---------------------- Executive Officer and
Donald W. Spiro Trustee
George Bowen Treasurer and August 12, 1994
- ---------------------- Principal Financial
George Bowen and Accounting Officer
Leo Cherne Trustee August 12, 1994
- ----------------------
Leo Cherne
Trustee
- ----------------------
Edmund T. Delaney
Trustee
- ----------------------
Robert G. Galli
Benjamin Lipstein Trustee August 12, 1994
- ----------------------
Benjamin Lipstein
Kenneth A. Randall
- ---------------------- Trustee August 12, 1994
Kenneth A. Randall
Sidney M. Robbins Trustee August 12, 1994
- ----------------------
Sidney M. Robbins
Russell S. Reynolds, Jr. Trustee August 12, 1994
- -------------------------
Russell S. Reynolds, Jr.
Pauline Trigere Trustee August 12, 1994
- -----------------------
Pauline Trigere
Trustee
- ----------------------
Elizabeth B. Moynihan
Clayton K. Yeutter Trustee August 12, 1994
- -----------------------
Clayton K. Yeutter
Trustee
- ----------------------
Edward V. Regan
OPPENHEIMER GLOBAL BIO-TECH FUND
Exhibit Index
-------------
Form N-14
Item No. Description
- --------- -----------
16(14) Consent of KPMG Peat Marwick
17 Declaration of Registrant Under Rule 24f-2
merge\750N-14.IND
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 of the Reorganization (The Proposal) - Tax
Aspects of the Reorganization."
KPMG Peat Marwick
Denver, Colorado
August 11, 1994
<PAGE>
Rule 24f-2 Notice for Oppenheimer Global Bio-Tech Fund
Two World Trade Center, New York, New York 10048-0203
(Registration No. 33-18285, File No. 811-5381)
NOTICE IS HEREBY GIVEN that Oppenheimer Global Bio-Tech Fund having
previously filed in its registration statement a declaration that an
indefinite number of its shares of beneficial interest were being
registered pursuant to Rule 24f-2 of the Investment Company Act of 1940,
now elects to continue such indefinite registration.
(i) This Notice is being filed for the fiscal year ended September
30, 1993.
(ii) No shares which had been registered other than pursuant to
this Rule remained unsold at the beginning of the above fiscal
period.
(iii) No shares were registered other than pursuant to this Rule
during the above fiscal period.
(iv) The number of shares sold during the above fiscal period was
5,810,447 (1).
(v) 5,810,447 shares were sold during the above fiscal year in
reliance upon registration pursuant to this Rule.
Pursuant to the requirements of the Investment Company Act of 1940,
the undersigned registrant has caused this Notice to be signed on its
behalf this 17th day of November, 1993.
Oppenheimer Global Bio-Tech Fund
By /s/ Andrew J. Donohue
---------------------------------
Andrew J. Donohue, Secretary
_____________
[FN]
(1) The calculation of the aggregate sales price is made pursuant to Rule
24f-2 of the Investment Company Act of 1940. Based upon an actual
aggregate sales price for which such securities were sold during the
previous fiscal year $127,504,174, reduced by an actual redemption price
of securities of the issuer redeemed during such previous fiscal year of
$64,129,964, a filing fee of $21,853 is payable.
<PAGE>
GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN
114 West 47th StreetNew York, N.Y. 10036
Telephone: (212) 626-0800Telecopier (212) 626-0799
November 16, 1993
Oppenheimer Global Bio-Tech Fund
Two World Trade Center
New York, New York 10048-0203
Ladies and Gentlemen:
In connection with the public offering of shares of beneficial
interest, no par value, of Oppenheimer Global Bio-Tech Fund (the "Fund"),
we have examined such records and documents and have made such further
investigation and examination as we deemed necessary for the purpose of
this opinion.
It is our opinion that the shares the registration of which is
made definite by the accompanying Rule 24f-2 Notice of the Fund were
legally issued, fully paid and non-assessable by the Fund to the extent
set forth in its Prospectus forming part of its Registration Statement
under the Securities Act of 1933, as amended.
We hereby consent to the filing of this opinion with said Notice.
Very truly yours,
/s/ GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
September __, 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 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
__________________, 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 thereby, 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, 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 thereby, 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 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,
and (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, will be as follows:
1. The transactions contemplated by the Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1) of
the Code, and under the regulations promulgated thereunder.
2. 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 have 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 thereby 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 have not been, and through the Closing Date
there will not be, any material adverse changes 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 several counterparts, each of
which shall be deemed an original, but all taken together shall constitute
one Agreement. The rights and obligations of each party pursuant to the
Agreement shall not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into the Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written 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
______________________________ By:_____________________________________
Robert G. Zack George C. Bowen
Assistant Secretary Treasurer
Attest: OPPENHEIMER GLOBAL EMERGING GROWTH
FUND
______________________________ By:______________________________________
Robert G. Zack Andrew J. Donohue
Assistant Secretary Vice President
MERGE/agrmt.glo
