September 1994
Dear Oppenheimer Global Environment Shareholder:
In July, I sent a letter to let you know about an important change
being proposed for your Fund. A shareholder meeting has been scheduled
for November 11th, and all shareholders of record on September 8th are
being asked to vote either in person or by proxy. You'll find a notice
of the meeting and a proxy statement detailing the proposal enclosed for
your review.
What is being proposed?
On June 16th, your Board of trustees, who represent you in matters
regarding your Fund, recommended approval of a proposal to reorganize your
Fund into Oppenheimer Global Emerging Growth (formerly Oppenheimer Global
Bio-Tech Fund), a fund that emphasizes investment in emerging growth
companies worldwide.
We proposed this reorganization because we believe small companies
that do business globally are well-positioned to take advantage of the
shifts in world markets today -- and as these markets mature, the
investment opportunities should be very attractive. In addition, some of
the risks associated with sector fund investing may be reduced by
diversifying the Fund's investments across different sectors
If the proposal is approved, we expect that in mid-November the
assets of your Fund will be transferred into -- and you'll become
shareholders of -- Oppenheimer Global Emerging Growth Fund.
How do you vote?
No matter how large or small your investment, your vote is important,
so please review the proxy statement carefully. To cast your vote, simply
mark, sign and date the enclosed proxy ballot and return it in the
postage-paid envelope today.
If you have questions, please contact your financial advisor or call
us at 1-800-525-7048.
Sincerely
(JSF signature)
P.S. Casting your vote is quick and easy, so please take a moment to
complete the proxy ballot.
<PAGE>
OPPENHEIMER GLOBAL ENVIRONMENT FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 11, 1994
To the Shareholders of Oppenheimer Global Environment Fund:
Notice is hereby given that a Special Meeting of the Shareholders of
Oppenheimer Global Environment Fund (the "Fund"), a registered management
investment company, will be held at 3410 South Galena Street, Denver,
Colorado 80231, at 10:00 A.M., Denver time, on November 11, 1994, or any
adjournments thereof (the "Meeting"), for the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization
between the Fund and Oppenheimer Global Emerging Growth Fund (formerly,
Oppenheimer Global Bio-Tech Fund)("Emerging Growth Fund"), and the
transactions contemplated thereby, including the transfer of substantially
all the assets of the Fund in exchange for shares of Emerging Growth Fund,
the distribution of such shares to the shareholders of the Fund in
complete liquidation of the Fund, the de-registration of the Fund as an
investment company under the Investment Company Act of 1940, as amended,
and the cancellation of the outstanding shares of the Fund (The Proposal);
and
2.To act upon such other matters as may properly come before the Meeting.
Shareholders of record at the close of business on September 8, 1994 are
entitled to notice of, and to vote at, the Meeting. The Proposal is more
fully discussed in the accompanying Proxy Statement and Prospectus.
Please read it carefully before telling us, through your proxy or in
person, how you wish your shares to be voted. The Fund's Board of
Trustees recommends a vote in favor of the Proposal. WE URGE YOU TO SIGN,
DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
September 19, 1994
_______________________________________________________________________
Shareholders who do not expect to attend the Meeting are requested to
indicate voting instructions on the enclosed proxy and to date, sign and
return it in the accompanying postage-paid envelope. To avoid unnecessary
duplicate mailings, we ask your cooperation in promptly mailing your proxy
no matter how large or small your holdings may be.
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(Formerly, Oppenheimer Global Bio-Tech Fund)
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
This Proxy Statement of Oppenheimer Global Environment Fund (the "Fund")
relating to the Agreement and Plan of Reorganization (the "Reorganization
Agreement") between the Fund and Oppenheimer Global Emerging Growth Fund
(formerly, Oppenheimer Global Bio-Tech Fund) ("Emerging Growth Fund") and
the transactions contemplated thereby (the "Reorganization") also
constitutes a Prospectus of Emerging Growth Fund included in a
Registration Statement on Form N-14 filed by Emerging Growth Fund with the
Securities and Exchange Commission (the "SEC"). Such Registration
Statement relates to the registration of shares of Emerging Growth Fund
to be offered to the shareholders of the Fund pursuant to the
Reorganization Agreement. The Fund is located at Two World Trade Center,
New York, New York 10048-0203 (telephone 1-800-525-7048). Emerging
Growth Fund is a mutual fund with the investment objective of aggressively
seeking capital appreciation through investment in emerging growth
companies located worldwide.
This Proxy Statement and Prospectus sets forth concisely information about
Emerging Growth Fund that shareholders of the Fund should know before
voting on the Reorganization. A copy of the Prospectus for Emerging
Growth Fund, dated September 19, 1994, is enclosed, and is incorporated
herein by reference. The following documents have been filed with the SEC
and are available without charge upon written request to Oppenheimer
Shareholder Services ("OSS"), the transfer and shareholder servicing agent
for Emerging Growth Fund and the Fund, at P.O. Box 5270, Denver, Colorado
80217, or by calling the toll-free number shown above: (i) a Prospectus
for the Fund, dated February 1, 1994, supplemented June 24, 1994 and
further supplemented July 5, 1994; (ii) a Statement of Additional
Information about the Fund, dated February 1, 1994; and (iii) a Statement
of Additional Information about Emerging Growth Fund, dated September 19,
1994 (the "Emerging Growth Fund Additional Statement"). The Emerging
Growth Fund Additional Statement, which is incorporated herein by
reference, contains more detailed information about Emerging Growth Fund
and its management. A Statement of Additional Information relating to the
Reorganization, dated September 19, 1994, has been filed with the SEC as
part of the Emerging Growth Fund Registration Statement on Form N-14 and
is incorporated by reference herein, and is available by written request
to OSS at the same address immediately above or by calling the toll-free
number shown above.
Investors are advised to read and retain this Proxy Statement and
Prospectus for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated September 19, 1994.
<PAGE>
TABLE OF CONTENTS
TO PROXY STATEMENT AND PROSPECTUS
Page
Introduction4
General4
Record Date; Vote Required; Share Information5
Proxies5
Costs of the Solicitation and the Reorganization6
Synopsis6
Parties to the Reorganization6
The Reorganization7
Reasons for the Reorganization7
Tax Consequences of the Reorganization8
Investment Objectives and Policies8
Investment Advisory and Service Plan Fees10
Purchases, Exchanges and Redemptions11
Principal Risk Factors12
Approval or Disapproval of the Reorganization (The Proposal)16
Reasons for the Reorganization16
The Reorganization17
Tax Aspects of the Reorganization18
Capitalization Table (Unaudited)20
Comparison Between the Fund and Emerging Growth Fund21
Investment Objectives and Policies21
Special Investment Methods23
Investment Restrictions25
Portfolio Turnover27
Brokerage Practices27
Expense Ratios and Performance29
Shareholder Services29
Rights of Shareholders30
Management and Distribution Arrangements30
Purchase of Additional Shares32
Method of Carrying Out the Reorganization 33
Miscellaneous35
Additional Information - Emerging Growth Fund Performance35
Financial Information36
Public Information37
Other Business38
Annex A - Agreement and Plan of Reorganization by and between
Oppenheimer Global Environment Fund and Oppenheimer Global Emerging
Growth Fund A-1
The Prospectus for Oppenheimer Global Emerging Growth Fund, dated
September 19, 1994, accompanies this Proxy Statement and Prospectus.
<PAGE>
OPPENHEIMER GLOBAL ENVIRONMENT FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Special Meeting of Shareholders
to be held November 11, 1994
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the shareholders
of Oppenheimer Global Environment Fund (the "Fund"), a registered
management investment company, in connection with the solicitation by the
Fund's Board of Trustees (the "Board") of proxies to be used at the
Special Meeting of Shareholders of the Fund to be held at 3410 South
Galena Street, Denver, Colorado 80231, at 10:00 A.M., Denver time, on
November 11, 1994, or any adjournments thereof (the "Meeting"). It is
expected that the mailing of this Proxy Statement and Prospectus will
commence on or about September 21, 1994.
At the Meeting, shareholders of the Fund will be asked to approve or
disapprove an Agreement and Plan of Reorganization (the "Reorganization
Agreement") between the Fund and Oppenheimer Global Emerging Growth Fund
(formerly, Oppenheimer Global Bio-Tech Fund)("Emerging Growth Fund"), and
the transactions contemplated thereby (the "Reorganization"), including
the transfer of substantially all the assets of the Fund in exchange for
shares of Emerging Growth Fund, the distribution of such shares to the
shareholders of the Fund in complete liquidation of the Fund, the
deregistration of the Fund as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
cancellation of the outstanding shares of the Fund. Emerging Growth Fund
currently offers shares with a sales charge imposed at the time of
purchase (certain purchases aggregating $1.0 million or more are not
subject to a sales charge, but may be subject to a contingent deferred
sales charge). The shares to be issued by Emerging Growth Fund pursuant
to the Reorganization will be issued at net asset value without a sales
charge. Emerging Growth Fund, formerly known as Oppenheimer Global Bio-
Tech Fund ("Bio-Tech Fund"), changed its name and certain of its
fundamental investment policies effective September 19, 1994.
Accordingly, with respect to periods prior to September 19, 1994, all
references herein to Emerging Growth Fund shall be deemed to refer to Bio-
Tech Fund. Additional information with respect to these changes to
Emerging Growth Fund is set forth herein, in the Prospectus of Emerging
Growth Fund accompanying this Proxy Statement and Prospectus and in the
Emerging Growth Fund Additional Statement which is incorporated herein by
reference.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on September 8, 1994 as the
record date (the "Record Date") for the determination of shareholders
entitled to notice of, and to vote at, the Meeting. An affirmative vote
of the holders of a majority of the outstanding shares of the Fund
entitled to vote at the Meeting is required for approval of the Proposal.
Each shareholder will be entitled to one vote for each share and a
fractional vote for each fractional share held of record at the close of
business on the Record Date. Only shareholders of the Fund will vote on
the Reorganization. The vote of shareholders of Emerging Growth Fund is
not being solicited.
At the close of business on the Record Date, there were approximately
2,982,234 shares of the Fund issued and outstanding. The presence in
person or by proxy of the holders of a majority of such shares constitutes
a quorum for the transaction of business at the Meeting. To the knowledge
of the Fund, as of the Record Date, no person owned of record or
beneficially 5% or more of its outstanding shares except for Merrill
Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch"), P.O. Box 30561, New
Brunswick, New Jersey 08989, which owned of record 196,768 shares of the
Fund (6.60% of the outstanding shares of the Fund as of such date). As
of the Record Date, to the knowledge of Emerging Growth Fund, no person
owned of record or beneficially 5% or more of its outstanding shares
except for Merrill Lynch, which owned of record approximately 669,342
shares of Emerging Growth Fund (7.66% of the outstanding shares of
Emerging Growth Fund as of such date).
Proxies
The enclosed form of proxy, if properly executed and returned, will be
voted (or counted as an abstention or withheld from voting) in accordance
with the choices specified thereon, and will be included in determining
whether there is a quorum to conduct the Meeting. The proxy will be voted
in favor of the Proposal unless a choice is indicated to vote against or
to abstain from voting on the Proposal.
Shares owned of record by broker-dealers for the benefit of their
customers ("street account shares") will be voted by the broker-dealer
based on instructions received from its customers. If no instructions are
received, the broker-dealer may (if permitted under applicable stock
exchange rules), as record holder, vote such shares on the Proposal in the
same proportion as that broker-dealer votes street account shares for
which voting instructions were received in time to be voted. If a
shareholder executes and returns a proxy but fails to indicate how the
votes should be cast, the proxy will be voted in favor of the Proposal.
The proxy may be revoked at any time prior to the voting thereof by: (i)
writing to the Secretary of the Fund at Two World Trade Center, 34th
Floor, New York, New York 10048-0203; (ii) attending the Meeting and
voting in person; or (iii) signing and returning a new proxy (if returned
and received in time to be voted).
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing and
mailing this Proxy Statement and Prospectus, will be borne by the Fund.
Any documents such as existing prospectuses or annual reports that are
included in that mailing will be a cost of the fund issuing the document.
In addition to the solicitation of proxies by mail, proxies may be
solicited by officers of the Fund or officers and employees of OSS,
personally or by telephone or telegraph. Any expenses so incurred will
be borne by OSS. Brokerage houses, banks and other fiduciaries may be
requested to forward soliciting material to the beneficial owners of
shares of the Fund and to obtain authorization for the execution of
proxies. For those services, if any, they will be reimbursed by the Fund
for their reasonable out-of-pocket expenses.
With respect to the Reorganization, the Fund and Emerging Growth Fund will
bear the cost of their respective tax opinion. Any other out-of-pocket
expenses of the Fund and Emerging Growth Fund associated with the
Reorganization, including legal, accounting and transfer agent expenses,
will be borne by the Fund and Emerging Growth Fund, respectively, in the
amounts so incurred by each.
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus and
presents key considerations for shareholders of the Fund to assist them
in determining whether to approve the Reorganization. This synopsis is
only a summary and is qualified in its entirety by the more detailed
information contained in or incorporated by reference in this Proxy
Statement and Prospectus and the Annex hereto. Shareholders should
carefully review this Proxy Statement and Prospectus and the Annex hereto
in their entirety and, in particular, the current Prospectus of Emerging
Growth Fund which accompanies this Proxy Statement and Prospectus and is
incorporated by reference herein.
Parties to the Reorganization
The Fund is a diversified, open-end, management investment company
organized on November 9, 1989 as a Massachusetts business trust. Emerging
Growth Fund is a diversified, open-end, management investment company
organized on October 30, 1987 as a Massachusetts business trust named
"Oppenheimer Global Bio-Tech Fund." Effective September 19, 1994,
Emerging Growth Fund was re-named "Oppenheimer Global Emerging Growth
Fund" and certain of its fundamental investment policies were changed as
described herein. The Fund and Emerging Growth Fund are each located at
Two World Trade Center, New York, New York 10048-0203. The members of
the Board of the Fund and of the Board of Trustees of Emerging Growth Fund
are the same. Oppenheimer Management Corporation (the "Manager") acts as
investment adviser to the Fund and Emerging Growth Fund (collectively
referred to herein as the "funds"). Additional information about the
parties is set forth below.
The Reorganization
The Reorganization Agreement provides for the transfer of substantially
all the assets of the Fund to Emerging Growth Fund in exchange for shares
of Emerging Growth Fund. The net asset value of Emerging Growth Fund
shares issued in the exchange will equal the value of the assets of the
Fund received by Emerging Growth Fund. Following the Closing Date (as
hereinafter defined) scheduled for the Reorganization, the Fund will
distribute the shares of Emerging Growth Fund received by the Fund on the
Closing Date to holders of Fund shares issued and outstanding as of the
Valuation Date (as hereinafter defined) in complete liquidation of the
Fund and the Fund will thereafter be dissolved and deregistered under the
Investment Company Act. As a result of the Reorganization, each Fund
shareholder will receive that number of full and fractional Emerging
Growth Fund shares equal in value to such shareholder's pro rata interest
in the assets transferred to Emerging Growth Fund as of the Valuation
Date. The Board has determined that the interests of existing Fund
shareholders will not be diluted as a result of the Reorganization. For
the reasons set forth below under "Approval or Disapproval of the
Reorganization - Reasons for the Reorganization," the Board, including the
trustees who are not "interested persons" (the "Independent Trustees"),
as that term is defined in the Investment Company Act, of the Fund, has
concluded that the Reorganization is in the best interests of the Fund and
its shareholders and recommends approval of the Reorganization by Fund
shareholders. If the Reorganization is not approved, the Fund will
continue in existence and the Board will determine whether to pursue
alternative actions.
Reasons for the Reorganization
The Manager proposed to the Board a reorganization of the Fund with
Emerging Growth Fund in order to obtain for the Fund's shareholders the
benefits that could be realized from a broader base of investments. The
Manager discussed with the Board the proposal and the investment policies
of Emerging Growth Fund, as well as certain considerations relating to the
Fund, including the Fund's historical performance and future prospects,
changing economic and market conditions, the increased risk of stock price
volatility generally associated with emphasizing investments in only one
sector (such as the environmental sector) and issues pertaining to
Environmental Companies (as defined below). The Board considered that,
in light of the foregoing considerations, the Fund's shareholders would
be better served by ownership in Emerging Growth Fund and its ability to
emphasize investments in emerging growth companies worldwide.
The Board also considered that by reorganizing the Fund with and into
Emerging Growth Fund, shareholders of the Fund would become shareholders
in a considerably larger fund and may benefit from the economies of scale
available to a larger fund, such as lower costs per shareholder account
through lower operating expenses even though, as a percentage of net
assets, the investment management fee rate currently paid by the Fund is
lower than that paid by Emerging Growth Fund. For the fiscal year ended
September 30, 1993, the expense ratio of the Fund and Emerging Growth Fund
was 1.65% and 1.59%, respectively, of that fund's average annual net
assets, although for the six-month period ended March 31, 1994
(unaudited), the expense ratio of the Fund and Emerging Growth Fund was
1.32% (annualized) and 1.73% (annualized), respectively, of that fund's
average annual net assets. For the fiscal year ended September 30, 1993
and the six-month period ended March 31, 1994 (unaudited), on a pro forma
basis giving effect to the Reorganization, the expense ratio of Emerging
Growth Fund, as a percentage of average annual net assets, would be 1.50%
and 1.55%, respectively.
Tax Consequences of the Reorganization
In the opinion of KPMG Peat Marwick LLP ("Peat Marwick"), tax adviser to
the Fund, the Reorganization will qualify as a tax-free reorganization for
Federal income tax purposes. As a result, no gain or loss will be
recognized by the Fund, Emerging Growth Fund, or the shareholders of the
Fund for Federal income tax purposes as a result of the Reorganization.
For further information about the tax consequences of the Reorganization,
see "Approval or Disapproval of the Reorganization - Tax Aspects" below.
Investment Objectives and Policies
As its investment objective, the Fund seeks capital appreciation and
Emerging Growth Fund aggressively seeks capital appreciation, in each case
in the value of its shares.
In seeking its investment objective, as a fundamental investment policy,
the Fund will normally invest at least 65% of its total assets in common
stocks of a variety of Environmental Companies traded in markets in at
least four countries, including the United States. Environmental
Companies are companies that offer products, services or processes that
contribute to a cleaner and healthier environment. These companies have
operations or products relating to pollution control, solid waste
management, hazardous waste treatment and disposal, pulp and paper
recycling, waste-to-energy conversion, asbestos and nuclear waste removal,
the development of energy alternatives, biodegradable products,
biotechnology, related engineering and construction, and the achievement
of cleaner and healthier air, groundwater and foods. To be considered
Environmental Companies for the purpose of the Fund's investment
objective, these companies must invest at least 50% of their research and
development expenditures in, or derive at least 50% of their revenues
from, one or more of the environmental activities identified above. The
Fund normally will invest that portion of its assets not invested in
Environmental Companies in a manner consistent with its objective of
capital appreciation. Such investments are limited to common and
preferred stocks, bonds (required to be rated at least "A" by Standard &
Poor's Corporation ("Standard & Poor's") or Moody's Investors Service,
Inc. ("Moody's") or, if unrated, will be of equivalent quality as
determined by the Manager), warrants and rights, convertible debt (which
may be rated as low as "C" by Moody's or "D" by Standard & Poor's), or
hedging instruments. The Fund is required to have at least one
investment in securities of a U.S. company and may invest without limit
in "foreign securities" (as described below under "Principal Risk
Factors"). No more than 25% of the Fund's total assets, at the time of
purchase, will be invested in securities of issuers organized under the
laws of any one foreign country.
In seeking its investment objective, as a non-fundamental investment
policy, under normal market conditions Emerging Growth Fund will invest
at least 65% of its total assets in common stocks and other equity
securities, including convertible securities, as well as warrants and
rights, of emerging growth companies located in the United States and at
least three foreign countries. As with the Fund, Emerging Growth Fund is
required to have at least one investment in securities of a U.S. company
and may invest without limit in "foreign securities". The Manager will
emphasize investments in aggressive growth opportunities in their earliest
stages that offer the potential for accelerated earnings or revenues
growth. Emerging growth companies tend to be smaller companies that are
developing new products or services or are expanding into new markets for
their products. Emerging growth companies can be any size and can be in
any industry. While they may have what the Manager believes to be
favorable prospects for the long-term, they normally retain a large part
of their earnings for research, development and investment in capital
assets. Therefore, they tend not to emphasize the payment of dividends.
Emerging Growth Fund previously emphasized investments in biotechnology
companies, and was named "Oppenheimer Global Bio-Tech Fund".
At a meeting held September 19, 1994, Emerging Growth Fund's shareholders
approved a proposal to eliminate the fundamental investment policy that
Emerging Growth Fund generally invest at least 65% of its total assets in
biotechnology companies. Effective with such shareholder approval,
Emerging Growth Fund adopted a non-fundamental investment policy of
emphasizing investments in emerging growth companies worldwide. As of the
date of this Proxy Statement and Prospectus, Emerging Growth Fund may be
deemed to concentrate its investments (that is, invest 25% or more of its
total assets) in securities of biotechnology companies. Emerging Growth
Fund intends to concentrate its investments in biotechnology companies for
only an interim period to permit the orderly disposition of certain of
these assets. Except for the foregoing, the Manager does not intend to
concentrate Emerging Growth Fund's investments in any industry.
Under normal circumstances, the funds may hold a portion of their assets
in cash or cash equivalents (commercial paper, Treasury bills and U.S.
Government securities maturing in one year or less) for liquidity
purposes. Under unusual market or economic conditions (including drastic
market fluctuations), for temporary defensive purposes, the funds may
generally invest up to 100% of their assets in (i) obligations issued or
guaranteed by the U.S. Government, its instrumentalities or agencies, (ii)
certificates of deposit, (iii) certain bankers' acceptances, time
deposits, and letters of credit, (iv) commercial paper rated in the three
highest categories by Standard & Poor's or Moody's, and/or (v) short-term
debt securities (maturing in one year or less from the date of purchase).
Investment Advisory and Distribution Plan Fees
The funds obtain investment management services from the Manager. The
management fee is payable monthly and computed on the net asset value of
each fund as of the close of business each day. The Fund pays a
management fee at the annual rate of 0.75% of the first $200 million of
net assets, 0.72% of the next $200 million, 0.69% of the next $200 million
and 0.66% of average net assets in excess of $600 million. Emerging
Growth Fund pays a management fee at the annual rate of 1.0% of the first
$50 million of net assets, 0.75% of the next $150 million, 0.72% of the
next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million and 0.60% of average net assets over $800 million. Both the Fund
and Emerging Growth Fund have service plans pursuant to Rule 12b-1 under
the Investment Company Act under which each fund reimburses Oppenheimer
Funds Distributor, Inc. (the "Distributor"), the distributor of each
fund's shares, quarterly for all or a portion of the Distributor's costs
incurred in connection with the personal service and maintenance of
shareholder accounts that hold the fund's shares. The current maximum
annual fee payable by the funds pursuant to their service plans is 0.25%
of the average of the aggregate net asset value of fund shares held in
these shareholder accounts, computed as of the close of each business day.
As a percentage of net assets, the management fee rate currently paid by
the Fund is lower than that paid by Emerging Growth Fund. See "Comparison
Between the Fund and Emerging Growth Fund - Expense Ratios and
Performance" below.
Purchases, Exchanges and Redemptions
The Fund and Emerging Growth Fund are part of the OppenheimerFunds complex
of mutual funds. The procedures for purchases, exchanges and redemptions
of shares of the funds are the same.
The maximum sales charge on shares of the Fund and Emerging Growth Fund
is 5.75%, and is reduced for purchases of $25,000 or more. For certain
purchases of $1 million or more, the funds do not charge a front-end sales
charge but impose a contingent deferred sales charge of a maximum of 1%
on shares redeemed within 18 months of the end of the calendar month of
their purchase. Shares of Emerging Growth Fund received in the
Reorganization will be issued at net asset value, without a sales charge.
Shareholders of the funds may exchange their shares at net asset value for
shares of any of over 30 equity, fixed-income and money market funds for
which the Distributor or an affiliate acts as the distributor. Shares of
any money market fund purchased without a sales charge may be exchanged
for shares of a fund offered with a sales charge upon payment of the sales
charge. Exchanges are subject to a $5 fee. Shareholders of the funds may
redeem their shares by written request or by telephone request in an
amount up to $50,000 in any seven-day period, or they may arrange to have
share redemption proceeds wired to a pre-designated account at a U.S. bank
or other financial institution that is an ACH member ("AccountLink
redemption"). Shareholders of the funds may reinvest redemption proceeds
within six months of a redemption at net asset value in shares of the
funds or any of numerous "Eligible Funds" within the OppenheimerFunds
complex. The Fund and Emerging Growth Fund may redeem accounts valued at
less than $200 if the account has fallen below such stated amount for
reasons other than market value fluctuations. Both funds offer Automatic
Withdrawal and Exchange Plans.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in Emerging
Growth Fund, shareholders should carefully consider the following risk
factors, which is a summary only, relating to both Emerging Growth Fund
and the Fund, in addition to the other information set forth in this Proxy
Statement and Prospectus and the more complete description of risk factors
set forth in the documents incorporated by reference herein, including the
Prospectuses of the funds and their respective Statements of Additional
Information. As stated in their respective Prospectuses, as a general
matter, each of the Fund and Emerging Growth Fund is intended for
investors seeking capital appreciation over the long term and who are
willing to accept greater risks of loss in the hopes of greater gains.
There is no assurance that either the Fund or Emerging Growth Fund will
achieve its investment objective.
Investment by Emerging Growth Fund in Emerging Growth Companies
Emerging Growth Fund may invest without limit in emerging growth companies
in a variety of industries. Although the Fund may invest up to 25% of its
total assets in emerging growth Environmental Companies, its current
intent is to limit investments in such companies to no more than 5% of its
total assets and to invest a portion of the balance of its portfolio in
well-established Environmental Companies. Emerging growth companies, or
start-up companies, have a limited operating history, with products and
management personnel that have not been thoroughly tested by time or the
marketplace, and their financial resources may not be as substantial as
those of more established companies. Emerging growth companies may be
thinly capitalized and, as a result, may be more susceptible to changes
implemented by the company and general market fluctuations than companies
with larger capitalization. Further, due to the transition period from
development to production for a particular product or project, the revenue
flow of such companies may be erratic and the results of operations may
fluctuate widely from quarter to quarter, which may thereby contribute to
greater stock price volatility. The securities of emerging growth
companies may be of limited liquidity which could cause undesirable delays
in selling such securities at prices representing their fair value.
Concentration by Emerging Growth Fund in Biotechnology Companies
Prior to September 19, 1994, as Bio-Tech Fund, Emerging Growth Fund was
required to invest at least 65% of its total assets in biotechnology
companies. Although this requirement was eliminated by a shareholder
vote, Emerging Growth Fund intends to concentrate its investments (that
is, invest 25% or more of its total assets) in biotechnology companies
located in the United States and at least three foreign countries for only
an interim period to permit the orderly disposition of certain of these
assets. There are several risks particular to concentrating investments
in the biotechnology industry, and certain of which also relate to
emerging growth companies. That industry consists primarily of small,
start-up companies whose fortunes to date have risen mainly on the
strength of expectations about future products, not actual products.
Although numerous biotechnology products are in the research stage by many
companies, only a handful have reached the point of approval by the U.S.
Food & Drug Administration (the "FDA"), the Environmental Protection
Agency (the "EPA"), the U.S. Department of Agriculture (the "USDA") or the
foreign equivalents thereof, and subsequent commercial production and
distribution. While much public attention has been focused on advances
in the areas of cancer, AIDS and cardiovascular research, product testing
remains in the early stages for many products. It is thus uncertain
whether expected results will be achieved. Since few investors have the
capability to evaluate scientific research and development, any news about
a product under development can suddenly cause a company's share value to
soar or to plunge. Biotechnology stocks may advance on the strength of
new product filings with governmental authorities and research progress,
but may also drop sharply in the face of news of regulatory and research
setbacks. In addition, public perception of the industry is varied.
Although the industry is subject to the regulatory scrutiny of the FDA,
the EPA, the USDA or their foreign counterparts and state and local
governments, some fear that potentially harmful organisms and bacteria
may be released into the environment. Ethical questions may be raised by
possible uses of some biotechnology products. The revenue flow of start-
up biotechnology companies may be erratic, and the companies may suffer
continuing losses during a project's transition from development to
production. Patent protection is another source of uncertainty. The
industry is one of intense competition, and small start-up companies are
often burdened with a continuing need to raise capital. All such factors,
when considered in conjunction with the small size of the majority of
biotechnology companies, cause the industry and individual companies to
be highly volatile.
Concentration by the Fund in Environmental Companies
The Fund invests primarily in the securities of Environmental Companies.
To a limited extent, Emerging Growth Fund may invest in the securities of
emerging growth Environmental Companies (and, for a period of time, if the
Reorganization is approved, will maintain the investments of the Fund in
Environmental Companies as of the closing date of the Reorganization,
which is expected to constitute less than 10% of Emerging Growth Fund's
portfolio). The operations of Environmental Companies are subject to
extensive federal, state, local and foreign regulation. Environmental
Companies may be insulated from certain conventional economic forces
because their products and services are required by government
regulations. However, any relaxation of environmental protection laws or
the degree of their enforcement could cause a decline in the demand for
the products and services of these companies. Further, confusion over new
government regulations can inhibit a company's performance, and it could
take years to translate environmental legislation into sales and profits.
Losses may result from large product development or expansion costs,
unprotected marketing or distribution systems, erratic revenue flows and
low profit margins. Additional problems facing Environmental Companies
include difficulty in financing the high costs of technological
development, uncertainties in developing technology, high capital costs,
increased competition due to low barriers to entry (once technology has
been developed and is in place), and difficulty in finding experienced
employees in this young industry.
Foreign Securities
The funds may invest without limit (subject to the requirement to also
invest in the United States) in "foreign securities," which are securities
issued by companies organized under the laws of countries other than the
United Sates that are traded on foreign securities or exchanges or in
foreign over the counter markets. Investment in foreign securities
involves considerations and risks not associated with investment in
securities of U.S. issuers. For example, foreign issuers are not required
to use accounting methods that correspond to generally-accepted accounting
principles. If foreign securities are not registered under the Securities
Act of 1933, as amended (the "Securities Act"), the issuer may not have
to comply with the disclosure requirements of the Securities Exchange Act
of 1934, as amended. The values of foreign securities investments will
be affected by a variety of factors including, among others, incomplete
or inaccurate information available as to foreign issuers, changes in
relative currency rates, exchange control regulations or currency
blockage, expropriation or nationalization of assets, application of
foreign tax laws (including withholding taxes), changes in governmental
administration or economic or monetary policy in the U.S. or abroad, or
changed circumstances in dealings between nations. In addition, it is
generally more difficult to obtain and enforce court judgments outside the
U.S. Additional costs may be incurred in connection with investments in
foreign securities because of generally higher foreign commissions and the
additional custodial costs associated with monitoring foreign securities.
Foreign securities markets may be less liquid, more volatile and less
subject to governmental regulation than in the U.S.
Borrowing for Leverage
The funds may borrow up to 10% of the value of their respective total
assets from banks on an unsecured basis to buy securities. This is a
speculative investment method known as "leverage." Leveraging may subject
an investment in the fund to greater risks and costs than funds that do
not borrow. These risks may include the possible reduction of income and
increased fluctuation in the fund's net asset value per share, since the
fund pays interest on borrowings.
Convertible Securities
The funds may invest in convertible securities. In making its investments
on behalf of the funds in convertible debt, the Manager looks primarily
to the conversion feature and treats such convertible securities as equity
securities. The funds may invest in convertible debt rated as low as "C"
by Moody's or "D" by Standard & Poor's. Such ratings indicate that the
obligations are speculative to a high degree and may be in default. Risks
of lower-rated securities include (i) limited liquidity and secondary
market support, (ii) the possibility that earnings of the issuer may be
insufficient to meet its debt service, and (iii) the issuer's low
creditworthiness and potential for insolvency during periods of rising
interest rates and economic downturn.
Risks of Options and Futures Trading
The funds may write covered call options and engage in hedging
transactions, including the purchase of "relative performance call
options," as described below in "Comparison Between the Fund and Emerging
Growth Fund - Special Investment Methods". Subject to their respective
investment restrictions and the limitations that may be set by the Board
of Trustees from time to time, the funds could utilize additional
derivative investments. There are certain risks in writing calls. If a
call written by the fund is exercised, the fund forgoes any profit from
any increase in the market price above the call price of the underlying
investment on which the call was written. In addition, the fund could
experience capital losses which might cause previously distributed short-
term capital gains to be re-characterized as a non-taxable return of
capital to shareholders. In writing puts, there is the risk that the fund
may be required to buy the underlying security at a disadvantageous price.
The principal risks of trading futures are (i) possible imperfect
correlation between the prices of the futures and the market value of the
debt securities in the fund's portfolio, (ii) possible lack of a liquid
secondary market for closing out a futures position, (iii) the need for
additional skills and techniques beyond those required for normal
portfolio management and (iv) losses on futures resulting from interest
rate movements not anticipated by the Manager. Relative performance call
options are subject to the risk that the value of the option may decline
because of adverse movement in the market indices.
APPROVAL OR DISAPPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
At a meeting of the Board held on June 16, 1994 the Board, including the
Independent Trustees, determined that the Reorganization is advisable, is
in the best interests of Fund shareholders and that no Fund shareholder's
interest will be diluted as a result of the Reorganization. The Board
unanimously adopted and recommended to the shareholders of the Fund that
they approve the Reorganization, including the Reorganization Agreement.
At the meeting of the Board, the Manager proposed to the Board a
reorganization of the Fund with Emerging Growth Fund in order to obtain
for the Fund's shareholders the benefits that could be realized from a
broader base of investments. The Manager discussed with the Board the
proposal and the investment policies of Emerging Growth Fund, as well as
certain considerations relating to the Fund, including the Fund's
historical performance and future prospects, changing economic and market
conditions, the increased risk of stock price volatility generally
associated with emphasizing investments in only one sector (such as the
environmental sector) and issues pertaining to Environmental Companies (as
defined below). The Board considered that, in light of the foregoing
considerations, the Fund's shareholders would be better served by
ownership in Emerging Growth Fund and its ability to emphasize investments
in emerging growth companies worldwide. The global "theme oriented
approach" used by the Manager in managing Emerging Growth Fund seeks to
capitalize on important global trends that are believed to offer the most
promising long-term growth opportunities. This would provide the
flexibility to pursue growth opportunities in a variety of industries,
including the environmental sector. These sectors could change from time
to time as the Manager reviewed important global trends. The risk of
volatility generally associated with emphasizing investments in only one
sector (for example, the environmental sector) should be greatly reduced,
although emerging growth companies may be more volatile than mature
companies. The Manager stated its belief that this change to the Fund
would be consistent with the Manager's overall philosophy to provide
shareholders with the most responsible portfolio management.
The Board also considered that by reorganizing the Fund with and into
Emerging Growth Fund, shareholders of the Fund would become shareholders
in a considerably larger fund and may benefit from the economies of scale
available to a larger fund, such as lower costs per shareholder account
through lower operating expenses even though, as a percentage of net
assets, the investment management fee rate currently paid by the Fund is
lower than that paid by Emerging Growth Fund. For the fiscal year ended
September 30, 1993, the expense ratio of the Fund and Emerging Growth Fund
was 1.65% and 1.59%, respectively, of that fund's average annual net
assets, although for the six-month period ended March 31, 1994
(unaudited), the expense ratio of the Fund and Emerging Growth Fund was
1.32% (annualized) and 1.73% (annualized), respectively, of that fund's
average annual net assets. For the fiscal year ended September 30, 1993
and the six-month period ended March 31, 1994 (unaudited), on a pro forma
basis giving effect to the Reorganization, the expense ratio of Emerging
Growth Fund, as a percentage of average annual net assets, would be 1.50%
and 1.55%, respectively.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full as
Annex A to this Proxy Statement and Prospectus) contemplates a
reorganization under which (i) all of the assets of the Fund (other than
the cash reserve described below (the "Cash Reserve")) would be
transferred to Emerging Growth Fund in exchange for shares of Emerging
Growth Fund, (ii) these shares would be distributed among the shareholders
of the Fund in complete liquidation of the Fund, (iii) the Fund would be
deregistered as an investment company under the Investment Company Act and
(iv) the outstanding shares of the Fund would be cancelled. Emerging
Growth Fund will not assume any of the Fund's liabilities except for
portfolio securities purchased which have not settled and outstanding
shareholder redemption and dividend checks.
The result of effectuating the Reorganization would be that: (i) Emerging
Growth Fund would add to its gross assets all of the assets (net of any
liability for portfolio securities purchased but not settled and
outstanding shareholder redemption and dividend checks) of the Fund other
than its Cash Reserve; and (ii) the shareholders of the Fund as of the
close of business on the Closing Date would become shareholders of
Emerging Growth Fund.
The effect of the Reorganization will be that shareholders of the Fund who
vote their shares in favor of the Reorganization will be electing to
achieve the equivalent of redeeming their shares of the Fund (at net asset
value on the Valuation Date referred to below under "Method of Carrying
Out the Reorganization Plan," calculated after subtracting the Cash
Reserve) and reinvest the proceeds in shares of Emerging Growth Fund at
net asset value without sales charge and without recognition of taxable
gain or loss for Federal income tax purposes (see "Tax Aspects of the
Reorganization" below). The Cash Reserve is that amount retained by the
Fund which is sufficient in the discretion of the Board for the payment
of: (a) the Fund's expenses of liquidation, and (b) its liabilities,
other than those assumed by Emerging Growth Fund. The Fund and Emerging
Growth Fund will bear all of their respective expenses associated with the
Reorganization, as set forth under "Costs of the Solicitation and the
Reorganization" above. Management estimates that such expenses associated
with the Reorganization to be borne by the Fund will not exceed $_____.
Liabilities as of the date of the transfer of assets will consist
primarily of accrued but unpaid normal operating expenses of the Fund,
excluding the cost of any portfolio securities purchased but not yet
settled and outstanding shareholder redemption and dividend checks. See
"Method of Carrying Out the Reorganization Plan" below.
The Reorganization Agreement provides for coordination between the funds
as to their respective portfolios so that, after the closing, Emerging
Growth Fund will be in compliance with all of its investment policies and
restrictions. The Fund will recognize capital gain or loss on any sales
made pursuant to this paragraph. As noted in "Tax Aspects of the
Reorganization" below, if the Fund realizes net gain from the sale of
securities in 1994, such gain, to the extent not offset by capital loss
carry-forwards, will be distributed to shareholders prior to the Closing
Date and will be taxable to shareholders as capital gain.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the Reorganization
Agreement, the Fund will pay a dividend or dividends which, together with
all previous such dividends, will have the effect of distributing to the
Fund's shareholders all of the Fund's investment company taxable income
for taxable years ending on or prior to the Closing Date (computed without
regard to any deduction for dividends paid) and all of its net capital
gain, if any, realized in taxable years ending on or prior to the Closing
Date (after reduction for any available capital loss carry-forward). Such
dividends will be included in the taxable income of the Fund's
shareholders as ordinary income and capital gain, respectively.
The exchange of the assets of the Fund for shares of Emerging Growth Fund
and the assumption by Emerging Growth Fund of certain liabilities of the
Fund is intended to qualify for Federal income tax purposes as a tax-free
reorganization under Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund has represented to Peat Marwick,
tax adviser to the Fund, that there is no plan or intention by any Fund
shareholder who owns 5% or more of the Fund's outstanding shares, and, to
the Fund's best knowledge, there is no plan or intention on the part of
the remaining Fund shareholders, to redeem, sell, exchange or otherwise
dispose of a number of Emerging Growth Fund shares received in the
transaction that would reduce the Fund shareholders' ownership of Emerging
Growth Fund shares to a number of shares having a value, as of the Closing
Date, of less than 50% of the value of all the formerly outstanding Fund
shares as of the same date. The Fund and Emerging Growth Fund have each
further represented to Peat Marwick that, as of the Closing Date, the Fund
and Emerging Growth Fund will qualify as regulated investment companies
or will meet the diversification test of Section 368(a)(2)(F)(ii) of the
Code.
As a condition to the closing of the Reorganization, Emerging Growth Fund
and the Fund will receive the opinion of Peat Marwick to the effect that,
based on the Reorganization Agreement, the above representations and other
representations made by the funds to Peat Marwick, existing provisions of
the Code, Treasury Regulations issued thereunder, current Revenue Rulings,
Revenue Procedures and court decisions, for Federal income tax purposes:
1. The transactions contemplated by the Reorganization Agreement will
qualify as a tax-free "reorganization" within the meaning of Section
368(a)(1) of the Code.
2. The Fund and Emerging Growth Fund will each qualify as "a party to
a reorganization" within the meaning of Section 368(b)(2) of the
Code.
3. No gain or loss will be recognized by the shareholders of the Fund
upon the distribution of shares of beneficial interest in Emerging
Growth Fund to the shareholders of the Fund pursuant to Section 354
of the Code.
4. Under Section 361(a) of the Code no gain or loss will be recognized
by the Fund by reason of the transfer of its assets solely in
exchange for shares of Emerging Growth Fund.
5. Under Section 1032 of the Code no gain or loss will be recognized by
Emerging Growth Fund by reason of the transfer of the Fund's assets
solely in exchange for shares of Emerging Growth Fund.
6. The shareholders of the Fund will have the same tax basis and
holding period for the shares of beneficial interest in Emerging
Growth Fund that they receive as they had for the Fund stock that
they previously held, pursuant to Sections 358(a) and 1223(1) of the
Code, respectively.
7. The securities transferred by the Fund to Emerging Growth Fund will
have the same tax basis and holding period in the hands of Emerging
Growth Fund as they had for the Fund, pursuant to Sections 362(b)
and 1223(1) of the Code, respectively.
Shareholders of the Fund should consult their tax advisers regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the Federal
income tax consequences of the Reorganization, shareholders of the Fund
should also consult their tax advisers as to state and local tax
consequences, if any, of the Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of the Fund and Emerging
Growth Fund and indicates the pro forma combined capitalization as of
September 30, 1993 and March 31, 1994 as if the Reorganization had
occurred on such dates.
<TABLE>
<CAPTION>
Net Asset
September 30, 1993 Shares Value
Net Assets Outstanding Per Share
<S> <C> <C> <C>
Oppenheimer Global Emerging $199,696,617 9,226,406 $21.64
Growth Fund
Oppenheimer Global $ 43,271,541 4,119,629 $10.50
Environment Fund
Surviving Fund (Oppenheimer
Global Emerging Growth Fund) $242,968,158 11,226,016* $21.64
____________________
* Reflects issuance of 1,999,610 shares of Emerging Growth Fund in a tax-free
exchange for the net assets of the Fund, aggregating $43,271,541.
</TABLE>
<TABLE>
<CAPTION>
March 31, 1994
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
Surviving Fund (Oppenheimer
Global Emerging Growth Fund) $223,308,123 10,679,790* $20.91
____________________
* Reflects issuance of 1,723,860 shares of Emerging Growth Fund in a tax-free
exchange for the net assets of the Fund, aggregating $36,045,945.
</TABLE>
The pro forma ratio of expenses to average annual net assets of the
combined funds at September 30, 1993 and March 31, 1994 would have been
1.50% and 1.55%, respectively.
COMPARISON BETWEEN THE FUND AND EMERGING GROWTH FUND
Certain comparative information about the Fund and Emerging Growth Fund
is presented below. Additional information about Emerging Growth Fund is
set forth in its Prospectus, accompanying this Proxy Statement and
Prospectus, and additional information about both funds is set forth in
the Statement of Additional Information relating to the Reorganization and
other documents that may be obtained upon request to OSS or are available
for review at the offices of the SEC. See "Miscellaneous - Public
Information."
Investment Objectives and Policies
As its investment objective, the Fund seeks capital appreciation and
Emerging Growth Fund aggressively seeks capital appreciation, in each case
in the value of its shares. Current income is not an objective of either
fund. In seeking their investment objectives, the Fund and Emerging
Growth Fund employ different investment policies as described in detail
below. The Manager is the investment adviser to both the Fund and
Emerging Growth Fund.
The Fund
In seeking its investment objective, as a fundamental investment policy,
the Fund will normally invest at least 65% of its total assets in common
stocks of a variety of Environmental Companies traded in markets in at
least four countries, including the United States.
The Fund normally will invest that portion of its assets not invested in
Environmental Companies in a manner consistent with its objective of
capital appreciation. Such investments are limited to common and
preferred stocks, bonds (required to be rated at least "A" by Standard &
Poor's or Moody's or, if unrated, will be of equivalent quality as
determined by the Manager), warrants and rights, convertible debt (which
may be rated as low as "C" by Moody's or "D" by Standard & Poor's), or
hedging instruments. The Fund is required to have at least one
investment in securities of a U.S. company and may invest without limit
in "foreign securities," which include securities issued by companies
organized under the laws of countries other than the United States that
are traded on foreign securities exchanges or in foreign over-the-counter
markets. No more than 25% of the Fund's total assets, at the time of
purchase, will be invested in securities of issuers organized under the
laws of any one foreign country.
Under normal circumstances, the Fund may hold a portion of its assets in
cash equivalents (commercial paper, Treasury bills and U.S. Government
securities maturing in one year or less) for liquidity purposes. Under
unusual market or economic conditions (including drastic market
fluctuations), for temporary defensive purposes, the Fund may invest up
to 100% of its assets in (i) obligations issued or guaranteed by the U.S.
Government, its instrumentalities or agencies, (ii) certificates of
deposit, (iii) bankers' acceptances, time deposits, and letters of credit
if they are payable in the U.S. or London, England and are issued or
guaranteed by a domestic or foreign bank having total assets in excess of
$1 billion, (iv) commercial paper rated in the three highest categories
by Standard & Poor's or Moody's, and/or (v) short-term debt securities
(i.e., those maturing in one year or less from the date of purchase),
including rated or unrated bonds, debentures and preferred stocks.
Emerging Growth Fund
In seeking its investment objective, as a non-fundamental investment
policy, under normal market conditions Emerging Growth Fund will invest
at least 65% of its total assets in common stocks and other equity
securities, including convertible securities, as well as warrants and
rights, of emerging growth companies located in the United States and at
least three foreign countries. As with the Fund, Emerging Growth Fund is
required to have at least one investment in securities of a U.S. company
and may invest without limit in "foreign securities" generally. The
Manager will emphasize investments in aggressive growth opportunities in
their earliest stages that offer the potential for accelerated earnings
or revenues growth. Emerging growth companies tend to be smaller
companies that are developing new products or services or are expanding
into new markets for their products. Emerging growth companies can be any
size and can be in any industry. While they may have what the Manager
believes to be favorable prospects for the long-term, they normally retain
a large part of their earnings for research, development and investment
in capital assets. Therefore, they tend not to emphasize the payment of
dividends. Emerging Growth Fund previously emphasized investments in
biotechnology companies, and was named "Oppenheimer Global Bio-Tech Fund".
At a meeting held September 19, 1994, Emerging Growth Fund's shareholders
approved a proposal to eliminate the fundamental investment policy that
Emerging Growth Fund generally invest at least 65% of its total assets in
biotechnology companies. Effective with such shareholder approval,
Emerging Growth Fund adopted a non-fundamental investment policy of
emphasizing investments in emerging growth companies worldwide. As of the
date of this Proxy Statement and Prospectus, Emerging Growth Fund may be
deemed to concentrate its investments (that is, invest 25% or more of its
total assets) in securities of biotechnology companies. Emerging Growth
Fund intends to concentrate its investments in biotechnology companies for
only an interim period to permit the orderly disposition of certain of
these assets. Except for the foregoing, the Manager does not intend to
concentrate Emerging Growth Fund's investments in any industry.
As a global emerging growth fund, Emerging Growth Fund pursues growth
opportunities in their early stages as it looks for the most promising
areas, both in the U.S. and abroad, for accelerated growth of earnings or
revenues. Emerging Growth Fund employs a global "theme oriented approach"
that seeks to capitalize on important global trends that the Manager
believes offer promising areas for long-term growth. Examples of some
current themes include telecommunications, infrastructure, developing
capital markets, technology, energy, emerging consumer markets,
healthcare/biotechnology, corporate restructuring and the environment.
The Manager further believes that certain non-U.S. stocks will continue
to outperform U.S. stocks due to rebounding economies overseas and
earnings growth rates that the Manager anticipates will be significantly
higher than those of domestic markets.
When investing Emerging Growth Fund's assets, the Manager considers many
factors, including general economic conditions abroad relative to the U.S.
and the trends in foreign and domestic stock markets. Emerging Growth Fund
may try to hedge against losses in the value of its portfolio of
securities by using hedging strategies described below. When market
conditions are unstable, Emerging Growth Fund may invest substantial
amounts of its assets in debt securities, such as money market instruments
or government securities.
To maintain liquidity for investment purposes or meet redemption and
exchange requests, Emerging Growth Fund may hold cash or cash equivalents
(commercial paper, Treasury bills and U.S. Government securities maturing
in one year or less). Under unusual market or economic conditions
(including drastic market fluctuations), for temporary defensive purposes
Emerging Growth Fund may invest up to 100% of its assets in: (i)
obligations issued or guaranteed by the U.S. Government, its
instrumentalities or agencies, (ii) certificates of deposit, (iii)
bankers' acceptances and other bank obligations (that, unlike with the
Fund, are not required to be payable in the U.S. or London, England nor
issued or guaranteed by a domestic or foreign bank having total assets in
excess of $1 billion), (iv) commercial paper rated in the highest category
by an established rating agency (as to the Fund, commercial paper must be
rated in the three highest categories by Standard & Poor's or Moody's),
or (v) short-term debt securities (i.e. those maturing in one year or less
from the date of purchase), including rated or unrated bonds and
debentures, and preferred stocks.
Special Investment Methods
Each of the Fund and Emerging Growth Fund uses the special investment
methods summarized below.
Borrowing. From time to time, each of the Fund and Emerging Growth Fund
may increase its ownership of securities by borrowing up to 10% of the
value of its total assets from banks on an unsecured basis and investing
the borrowed funds (on which the fund will pay interest), subject to the
300% asset coverage requirement of the Investment Company Act. Purchasing
securities with borrowed funds is a speculative investment method known
as leverage. There are risks associated with leveraging purchases of
portfolio securities by borrowing, including a possible reduction of
income and increased fluctuation of net asset value per share.
Short Sales Against-the-Box. The funds may not sell securities short
except in transactions referred to as "short sales against-the-box." No
more than 15% of the fund's net assets will be held as collateral for such
short sales at any one time.
Covered Calls and Puts. To generate additional income or, as to Emerging
Growth Fund, for defensive purposes, the funds may write (i.e., sell) call
options on securities ("calls") if (i) the calls are "covered" (i.e., the
fund owns the securities or futures subject to the call or other
securities acceptable for applicable escrow arrangements); (ii) as to
Emerging Growth Fund, after any sale not more than 25% of its total assets
are subject to calls; and (iii) the calls are listed on a domestic (and,
as to the Fund, foreign) securities exchange, quoted on the Automated
Quotation System of the National Association of Securities Dealers, Inc.
or traded in the over the counter market. The Fund may also purchase puts
and calls on securities to seek capital appreciation.
Hedging. For hedging purposes as a temporary defensive maneuver, each
fund may purchase and sell certain Stock Index Futures (defined below),
foreign currency futures, foreign currency exchange contracts, and call
and put options on securities, Stock Index Futures, broadly-based stock
or securities indices and foreign currencies as hereinafter described
(collectively referred to as "Hedging Instruments"). Emerging Growth Fund
may also enter into interest rate swaps, but only as to security positions
held by Emerging Growth Fund and not with respect to more than 50% of its
total assets. The funds may write put options only if they are covered
by segregated liquid assets with not more than 50% of the fund's total
assets segregated to cover puts at the time of investment and, as to the
Fund, the put is traded on a domestic or foreign securities exchange or
over-the-counter market. The funds may purchase calls or puts only if,
after such purchase, the value of all put and call options held by the
fund would not exceed 5% of the fund's total assets. The foregoing
percentage limitations are not fundamental investment policies. The funds
may buy and sell futures contracts only if they relate to broadly-based
stock indices ("Stock Index Futures"). The funds may purchase and write
puts and calls on foreign currencies that are traded on a securities or
commodities exchange or over-the-counter market or quoted by major
recognized dealers in such options. The Funds may purchase "relative
performance call options," which are call options that have a cash
settlement based on the difference between the returns on two market
indices.
Illiquid and Restricted Securities. The Fund will not purchase or
otherwise acquire any securities that may be illiquid by virtue of the
absence of a readily-available market or because their disposition would
be subject to legal restrictions ("restricted securities") if, as a
result, more than 15% of the Fund's net assets would be invested in
securities that are illiquid (including repurchase agreements maturing in
more than seven days). This policy does not limit the acquisition of
restricted securities eligible for resale to qualified institutional
buyers pursuant to Rule 144A under the Securities Act that are determined
to be liquid by the Fund's Board of Trustees or by the Manager under
Board-approved guidelines. Such guidelines take into account, among other
factors, trading activity for such securities and the availability of
reliable pricing information. If there is a lack of trading interest in
particular Rule 144A securities, the Fund's holdings of those securities
may be illiquid. There may be undesirable delays in selling such
securities at prices representing their fair value. The Fund currently
intends to invest no more than 10% of its net assets in illiquid or
restricted securities, excluding securities eligible for resale pursuant
to Rule 144A. Emerging Growth Fund has an identical policy with respect
to investment in restricted and illiquid securities.
Loans of Portfolio Securities. To attempt to increase income for
liquidity purposes, each fund may lend its portfolio securities (other
than in repurchase transactions) to brokers, dealers and other financial
institutions meeting specified credit conditions if the loan is
collateralized in accordance with applicable regulatory requirements and
if, after any loan, the value of the securities loaned does not exceed 25%
of the value of that fund's total assets. Each fund did not lend any
securities in the past year and presently does not intend that the value
of securities loaned in the current fiscal year will exceed 5% of the
value of its total assets.
Repurchase Agreements. Each fund may acquire securities subject to
repurchase agreements to generate income on funds held for liquidity
purposes to meet anticipated redemptions, or pending the investment of
proceeds from sales of fund shares or settlement of purchases of portfolio
investments. If the vendor fails to pay the agreed-upon resale price on
the delivery date, the fund's risks may include any costs of disposing of
such collateral, and any loss from any delay in foreclosing on the
collateral. Each fund's repurchase agreements are intended to be fully
collateralized. There is no limit on the amount of the fund's net assets
that may be subject to repurchase agreements having a maturity of seven
days or less. Neither fund will enter into a repurchase agreement which
will cause more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days.
Investment Restrictions
Each of the Fund and Emerging Growth Fund has certain investment
restrictions that, together with its investment objectives, are
fundamental policies changeable only by shareholder approval. Set forth
below is a summary of these investment restrictions, which summary is
qualified in its entirety by the investment policies and restrictions of
the funds contained in their respective Prospectuses and Statements of
Additional Information.
The Fund and Emerging Growth Fund cannot: purchase securities of any one
issuer (other than the U.S. Government or its agencies or
instrumentalities) if, as to the Fund, the Fund would own more than 10%
of that issuer's voting securities or, as to Emerging Growth Fund, more
than 5% of Emerging Growth Fund's assets would be invested in securities
of that issuer; with respect to 75% of total assets, purchase securities
of any one issuer (other than the U.S. Government or its agencies or
instrumentalities) if, as to the Fund, more than 5% of the Fund's total
assets would be invested in securities of that issuer or, as to Emerging
Growth Fund, it would then own more than 10% of the voting securities or
10% of any class of securities of that issuer (all debt and all preferred
stock of an issuer are respectively considered single classes for this
purpose); invest in companies for the purpose of acquiring control or
management thereof; invest in interests in oil or gas exploration or
development programs or mineral related programs; purchase securities on
margin except the funds may make margin deposits in connection with the
use of permitted Hedging Instruments; underwrite securities except to the
extent the fund may be deemed to be an underwriter in connection with the
sale of securities held in its portfolio; purchase real estate or
interests therein and, as to the Fund, sell real estate, however the Fund
may purchase debt securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts, which
invest in real estate or interests therein and Emerging Growth Fund may
purchase readily marketable securities of companies holding real estate
or interests therein; purchase or hold securities of any issuer if
officers, trustees and directors of the Manager or the fund who own
individually more than .5% of the securities of such issuer together own
beneficially more than 5% of the securities of such issuer; borrow money
in excess of 10% of the value of total assets; deviate from the percentage
restrictions set forth in their respective Prospectuses with respect to
warrants and rights, loans of portfolio securities and short sales-
against-the box, the type of foreign securities that may be purchased and,
as to the Fund, the types of options that may be purchased or sold; invest
in (and, as to the Fund, sell) commodities or commodity contracts,
however, the funds may buy and sell permitted Hedging Instruments whether
or not considered a commodity or commodity contract; lend money, however
the funds may enter into repurchase agreements and the funds may purchase
all or a portion of an issue of bonds, debentures, commercial paper or
other similar corporate obligations of the types that are usually
purchased by institutions, whether or not publicly distributed (provided
that as to the Fund such obligations which are not publicly distributed
will be subject to the percentage limits applicable to illiquid and
restricted securities); mortgage or pledge any of its assets, however this
does not prohibit the escrow arrangements contemplated in the use of
Hedging Instruments and, in addition, as to the Fund, does not prohibit
the Fund from pledging its assets for collateral arrangements; and, except
in a merger, consolidation, reorganization or acquisition of assets,
invest, as to the Fund, more than 5% of total assets through open market
purchases in other investment companies and, as to Emerging Growth Fund,
invest more than 10% of its assets through open market purchases in
closed-end investment companies, including small business investment
companies, nor make any such investments at commission rates in excess of
normal brokerage commissions. In addition to the foregoing, the Fund may
not concentrate investments to the extent that more than 25% of the value
of its total assets is invested in securities of issuers in the same
industry (other than securities of the U.S. Government, its agencies or
instrumentalities and securities of Environmental Companies in which the
Fund will normally invest at least 65% of its total assets).
Portfolio Turnover
Generally, the Fund and Emerging Growth Fund will not trade in securities
for short-term profits. However, when circumstances warrant, to take
advantage of differences in securities prices and yields or of
fluctuations in interest rates consistent with their investment
objectives, the Fund and Emerging Growth Fund may sell securities without
regard to the length of time held. It is expected that Emerging Growth
Fund may engage more frequently than the Fund in short-term trading and
as a result, Emerging Growth Fund's portfolio turnover may be higher than
other mutual funds, although it is not expected to be more than 150% each
year. The degree of portfolio activity will affect brokerage costs of the
funds. If a fund derives 30% or more of its gross income from the sale
of securities held less than three months, the fund may fail to qualify
under the Code as a regulated investment company and would lose certain
beneficial tax treatment of its income.
For the fiscal year ended September 30, 1993, the portfolio turnover rates
for the Fund and Emerging Growth Fund were 141.6% and 41.0%, respectively.
For the six months ended March 31, 1994 (unaudited), the portfolio
turnover rates for the Fund and Emerging Growth Fund were 47.4% and 30.2%,
respectively.
Description of Brokerage Practices
Brokerage practices for the Fund and Emerging Growth Fund are the same.
Subject to the provisions of the Fund's and Emerging Growth Fund's
respective investment advisory agreements with the Manager, allocations
of brokerage are made by portfolio managers under the supervision of the
Manager's executive officers. Transactions in securities other than those
for which an exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid primarily for
effecting transactions in listed securities and otherwise only if it
appears likely that a better price or execution can be obtained. When the
fund engages in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transactions in the
securities to which the option relates. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager or it affiliates are combined. Transactions
effected pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed
for each account. Option commissions may be relatively higher than those
which would apply to direct purchases and sales of portfolio securities.
The research services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and its affiliates,
and investment research received for the commissions of those other
accounts may be useful both to the fund and one or more of such other
accounts. Such research, which may be supplied by a third party at the
instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid for in
commission dollars. The research services provided by brokers broaden the
scope and supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and enabling
the Manager to obtain market information for the valuation of securities
held in the fund's portfolio or being considered for purchase. The Board
of Trustees, including the Independent Trustees of the Fund and Emerging
Growth Fund, annually reviews information furnished by the Manager
relative to the commissions paid to brokers furnishing such services in
an effort to ascertain that the amount of such commissions was reasonably
related to the value or the benefit of such services.
During the Fund's fiscal years ended September 30, 1991, 1992 and 1993,
total brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were $135,193,
$247,261 and $416,080, respectively. During the fiscal years ended
September 30, 1993, $158,802 was paid to brokers as commissions in return
for research services (including special research, statistical information
and execution); the aggregate dollar amount of those transactions was
$42,756,378. The transactions giving rise to those commissions were
allocated in accordance with the Manager's internal allocation procedures.
During Emerging Growth Fund's fiscal years ended September 30, 1991, 1992,
and 1993, total brokerage commissions paid by the Fund (not including
spreads or concessions on principal transactions on a net trade basis)
were $15,139, $19,803 and $414,002, respectively. During the fiscal year
ended September 30, 1993, $36,731 was paid to brokers as commissions in
return for research services (including special research, statistical
information and execution); the aggregate dollar amount of those
transactions was $19,817,816. The transactions giving rise to those
commissions were allocated in accordance with the Manager's internal
allocation procedures.
Expense Ratios and Performance
The ratio of expenses to average net assets for the Fund for the fiscal
year ended September 30, 1993 and the six months ended March 31, 1994
(unaudited) were 1.65% and 1.32% (annualized), respectively. The ratio
of expenses to average net assets for Emerging Growth Fund for the fiscal
year ended September 30, 1993 and the six months ended March 31, 1994
(unaudited) were 1.59% and 1.73% (annualized), respectively. Further
details are set forth under "Fund Expenses" and "Financial Highlights" in
Emerging Growth Fund's Prospectus dated September 19, 1994, which
accompanies this Proxy Statement and Prospectus, and in the Fund's Annual
Report as of September 30, 1993 and Semi-Annual Report as of March 31,
1994, and Emerging Growth Fund's Annual Report as of September 30, 1993
and Semi-Annual Report as of March 31, 1994, which are included in the
Additional Statement. The Fund's average annual total returns for the 1-
year period ended March 31, 1994 and since inception of the Fund (March
2, 1990) were (1.81)% and (2.01)%, respectively. Under its prior
investment policy of emphasizing investment in securities of biotechnology
companies, Emerging Growth Fund's average annual total returns for the 1-
and 5- year periods ended March 31, 1994 and from inception of Emerging
Growth Fund (December 30, 1987) to March 31, 1994 were 3.80%, 12.84% and
11.98%, respectively.
Shareholder Services
The policies of the Fund and Emerging Growth Fund with respect to minimum
initial investments and subsequent investments by its shareholders are the
same. Both the Fund and Emerging Growth Fund offer the following
privileges: (i) Rights of Accumulation, (ii) Letters of Intent, (iii)
reinvestment of dividends and distributions at net asset value, (iv) net
asset value purchases by certain individuals and entities, (v) Asset
Builder (automatic investment) Plans, (vi) Automatic Withdrawal and
Exchange Plans for shareholders who own shares of the fund valued at
$5,000 or more, (vii) reinvestment of net redemption proceeds at net asset
value within six months of a redemption, (viii) AccountLink and PhoneLink
arrangements, (ix) exchanges of shares for shares of certain other funds
at net asset value, and (x) telephone redemption and exchange privileges.
Rights of Shareholders
Shares of the Fund and Emerging Growth Fund are redeemable at their net
asset value. The shares of each such fund entitle the holder to one vote
per share on the election of trustees and all other matters submitted to
shareholders of the fund. Shares of the Fund and the shares of Emerging
Growth Fund which Fund shareholders will receive in the Reorganization
participate equally in the fund's dividends and distributions and in the
fund's net assets on liquidation. All shares of each, when issued, are
fully paid and non-assessable (except to the extent described below) and
have no preference, preemptive or conversion rights. It is not
contemplated that either the Fund or Emerging Growth Fund will hold
regular annual meetings of shareholders. Under the Investment Company
Act, shareholders of the Fund do not have rights of appraisal as a result
of the transactions contemplated by the Reorganization Agreement.
However, they have the right at any time prior to the consummation of such
transaction to redeem their shares at net asset value. Shareholders of
the Fund and Emerging Growth Fund have the right, under certain
circumstances, to remove a Trustee and will be assisted in communicating
with other shareholders for such purpose.
The Fund and Emerging Growth Fund, organized as Massachusetts Business
Trusts, are governed principally by their Declaration of Trust and by-
laws. The shareholders of the Fund and Emerging Growth Fund have certain
rights to call a meeting of shareholders as described in their respective
Statements of Additional Information. Amendments to the Declaration of
Trust require the approval of a "majority" (as defined in the Investment
Company Act) of the fund's shareholders. Under certain circumstances,
shareholders of the fund may be held personally liable as partners for the
fund's obligations, and under the Declaration of Trust such a shareholder
is entitled to indemnification by the fund; the risk of a shareholder
incurring any such loss is limited to the remote circumstances in which
the fund is unable to meet its obligations.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York 10048-
0203, acts as the investment adviser for the Fund pursuant to an
investment advisory agreement with the Fund dated October 22, 1990 (the
"Fund Advisory Agreement") and acts as the investment adviser to Emerging
Growth Fund pursuant to an investment advisory agreement with Emerging
Growth Fund dated June 1, 1992 (the "Emerging Growth Fund Advisory
Agreement"). The Fund Advisory Agreement was submitted to and approved
by the shareholders of the Fund at a meeting held October 1, 1990. The
Emerging Growth Fund Advisory Agreement was submitted to and approved by
the shareholders of Emerging Growth Fund at a meeting held on May 15,
1992. The monthly management fee payable to the Manager by each fund and
the 12b-1 service plan fee paid by each fund to the Distributor is set
forth above under "Synopsis - Investment Advisory and Service Plan Fees."
Pursuant to the Fund Advisory Agreement and the Emerging Growth Fund
Advisory Agreement (collectively, the "Advisory Agreements"), the Manager
supervises the investment operations of the funds and the composition of
their portfolios and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
The Manager also provides the Fund and Emerging Growth Fund with adequate
office space, facilities and equipment and provides, and supervises the
activities of, all administrative and clerical personnel required to
provide effective administration, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of each fund.
For the fiscal year ended September 30, 1993 and the six months ended
March 31, 1994 (unaudited), the management fees paid by the Fund were
$352,886 and $155,149, respectively. For the fiscal year ended September
30, 1993 and the six months ended March 31, 1994 (unaudited), the
management fees paid by Emerging Growth Fund were $1,580,012 and $864,226,
respectively. The Advisory Agreements contain no expense limitation.
However, independently of the agreements, the Manager has undertaken that
the total expenses of the Fund and Emerging Growth Fund in any fiscal year
(including the management fee but exclusive of taxes, interest, brokerage
commissions, distribution plan payments and any extraordinary non-
recurring expenses, including litigation) shall not exceed the most
stringent state regulatory limitation on fund expenses applicable to the
funds. At present, that limitation is imposed by California and limits
expenses (with specified exclusions) to 2.5% of the first $30 million of
average annual net assets, 2% of the next $70 million and 1.5% of average
annual net assets in excess of $100 million. The Manager reserves the
right to change or eliminate the expense limitation at any time and there
can be no assurance as to the duration of the expense limitation.
The Manager is controlled by Oppenheimer Acquisition Corporation, a
holding company owned in part by senior management of the Manager and
ultimately controlled by Massachusetts Mutual Life Insurance Company, a
mutual life insurance company that also advises pension plans and
investment companies. The Manager has operated as an investment company
adviser since 1959. The Manager and its affiliates currently advise
investment companies with combined net assets aggregating over $28 billion
as of June 30, 1994, with more than 1.8 million shareholder accounts.
OSS, a division of the Manager, acts as transfer and shareholder servicing
agent on an at-cost basis for the Fund and Emerging Growth Fund and for
certain other open-end funds managed by the Manager and its affiliates.
The Distributor, a wholly-owned subsidiary of the Manager, acts as the
general distributor of each fund's shares under a General Distributor's
Agreement for each fund dated December 10, 1992. The General
Distributor's Agreement is subject to the same annual renewal requirements
and termination provisions as the Advisory Agreements. For the fiscal
year ended September 30, 1993, selling charges on the Fund's shares
amounted to $279,673, of which the Distributor and an affiliated broker-
dealer retained $61,218 in the aggregate. For the fiscal year ended
September 30, 1993, selling charges on Emerging Growth Fund's shares
amounted to $4,353,366, of which the Distributor and an affiliated broker-
dealer retained $940,768 in the aggregate.
Purchase of Additional Shares
Shares of the Fund and Emerging Growth Fund are sold at net asset value
plus a maximum sales charge of 5.75% of the offering price. The sales
charge is reduced for purchases of either fund's shares of $25,000 or
more. On certain purchases of shares of $1 million or more, a contingent
deferred sales charge of 1% is imposed when such shares are redeemed
within 18 months of the end of the calendar month of their purchase,
subject to certain conditions.
The sales charge on shares of Emerging Growth Fund will only affect
shareholders of the Fund to the extent that they desire to make additional
purchases of shares of Emerging Growth Fund in addition to the shares
which they will receive as a result of the Reorganization. The shares to
be issued under the Reorganization Agreement will be issued by Emerging
Growth Fund at net asset value without a sales charge. Future dividends
and capital gain distributions of Emerging Growth Fund, if any, may be
reinvested without sales charge. Any Fund shareholder who is entitled to
a reduced sales charge on additional purchases by reason of a Letter of
Intent or Rights of Accumulation based upon holdings of shares of the Fund
will continue to be entitled to a reduced sales charge on any future
purchase of shares of Emerging Growth Fund.
METHOD OF CARRYING OUT THE REORGANIZATION
The consummation of the transactions contemplated by the Reorganization
Agreement is contingent upon the approval of the Reorganization by the
shareholders of the Fund and the satisfaction of the other conditions and
the receipt of the opinions and certificates set forth in Sections 10 and
11 of the Reorganization Agreement. Under the Reorganization Agreement,
all the assets of the Fund, excluding the Cash Reserve, will be delivered
to Emerging Growth Fund in exchange for shares of Emerging Growth Fund.
The Cash Reserve to be retained by the Fund will be sufficient in the
discretion of the Board for the payment of the Fund's liabilities, and the
Fund's expenses of liquidation.
Assuming the shareholders of the Fund approve the Reorganization at the
Meeting, the actual exchange of assets is expected to take place as soon
thereafter as is practicable (the "Closing Date") on the basis of net
asset values as of the close of business on the business day preceding the
Closing Date (the "Valuation Date"). Under the Reorganization Agreement,
all redemptions of shares of the Fund shall be permanently suspended on
the Valuation Date; only redemption requests received in proper form on
or prior to the close of business on that date shall be fulfilled by it;
redemption requests received by the Fund after that date will be treated
as requests for redemptions of the shares of Emerging Growth Fund to be
distributed to the shareholders requesting redemption. The exchange of
assets for shares will be done on the basis of the per share net asset
value of the shares of Emerging Growth Fund, and the value of the assets
of the Fund to be transferred as of the close of business on the Valuation
Date, in the manner used by Emerging Growth Fund in the valuation of
assets. Emerging Growth Fund is not assuming any of the liabilities of
the Fund, except for portfolio securities purchased which have not settled
and outstanding shareholder redemption and dividend checks.
The net asset value of the shares transferred by Emerging Growth Fund to
the Fund will be the same as the value of the assets of the portfolio
received by Emerging Growth Fund. For example, if, on the Valuation Date,
the Fund were to have securities with a market value of $95,000 and cash
in the amount of $10,000 (of which $5,000 was to be retained by it as the
Cash Reserve), the value of the assets which would be transferred to
Emerging Growth Fund would be $100,000. If the net asset value per share
of Emerging Growth Fund were $10 per share at the close of business on the
Valuation Date, the number of shares to be issued would be 10,000
($100,000 divided by $10). These 10,000 shares of Emerging Growth Fund
would be distributed to the former shareholders of the Fund. This example
is given for illustration purposes only and does not bear any relationship
to the dollar amounts or shares expected to be involved in the
Reorganization.
After the Closing Date, the Fund will distribute on a pro rata basis to
its shareholders of record on the Valuation Date the shares of Emerging
Growth Fund received by the Fund at the closing, in liquidation of the
outstanding shares of the Fund, and the outstanding shares of the Fund
will be cancelled. To assist the Fund in this distribution, Emerging
Growth Fund will, in accordance with a shareholder list supplied by the
Fund, cause its transfer agent to credit and confirm an appropriate number
of shares of Emerging Growth Fund to each shareholder of the Fund.
Certificates for shares of Emerging Growth Fund will be issued upon
written request of a former shareholder of the Fund but only for whole
shares with fractional shares credited to the name of the shareholder on
the books of Emerging Growth Fund. Former shareholders of the Fund who
wish certificates representing their shares of Emerging Growth Fund must,
after receipt of their confirmations, make a written request to OSS, at
P.O. Box 5270, Denver, Colorado 80217. Shareholders of the Fund holding
certificates representing their shares will not be required to surrender
their certificates to anyone in connection with the Reorganization. After
the Reorganization, however, it will be necessary for such shareholders
to surrender such certificates in order to redeem, transfer or exchange
any shares of Emerging Growth Fund.
Under the Reorganization Agreement, within one year after the Closing
Date, the Fund shall: (a) either pay or make provision for all of its
debts and taxes; and (b) either (i) transfer any remaining amount of the
Cash Reserve to Emerging Growth Fund, if such remaining amount is not
material (as defined below) or (ii) distribute such remaining amount to
the shareholders of the Fund who were such on the Valuation Date. Such
remaining amount shall be deemed to be material if the amount to be
distributed, after deducting the estimated expenses of the distribution,
equals or exceeds one cent per share of the number of Fund shares
outstanding on the Valuation Date. Within one year after the Closing
Date, the Fund will complete its liquidation.
Under the Reorganization Agreement, either the Fund or Emerging Growth
Fund may abandon and terminate the Reorganization Agreement without
liability if the other party breaches any material provision of the
Reorganization Agreement or, if prior to the closing, any legal,
administrative or other proceeding shall be instituted or threatened (i)
seeking to restrain or otherwise prohibit the transactions contemplated
by the Reorganization Agreement and/or (ii) asserting a material liability
of either party, which proceeding or liability has not been terminated or
the threat thereto removed prior to the Closing Date.
In the event that the Reorganization Agreement is not consummated for any
reason, the Board will consider and may submit to the shareholders other
alternatives.
MISCELLANEOUS
Additional Information - Emerging Growth Fund Performance
During Emerging Growth Fund's fiscal year ended September 30, 1993, as the
Bio-Tech Fund, the Manager sought to maintain a balance between
established and emerging bio-tech companies, focusing on diversification
and stock selection. With interest rates abroad declining, Emerging
Growth Fund expanded its European holdings. Emerging Growth Fund also
added five equity private placements and two convertible issues to its
portfolio, which the Manager believed would tend to resist sharp declines
during market retreats while offering possible strong returns in rising
markets. Emerging Growth Fund did not maintain a policy or practice as
to the maintenance of a specified level of distributions to shareholders.
The performance graph set forth below depicts the performance of a
hypothetical investment of $10,000 in shares of Emerging Growth Fund on
December 30, 1987 (commencement of operations) at the offering price,
including the sales charge in effect on that date, held through September
30, 1993, with all dividends and distributions reinvested in additional
shares at net asset value on the reinvestment date, without sales charge.
The Bio-Tech Fund became Emerging Growth Fund effective on September 19,
1994; accordingly, the performance graph set forth below makes reference
to "Oppenheimer Global Bio-Tech Fund" only. The graph compares the
average annual total return of Emerging Growth Fund's shares over that
period with the performance of the Standard & Poor's ("S&P") 500 Index,
an unmanaged index of common stocks widely used as a measure of general
stock market performance. The performance of the S&P 500 Index includes
a factor for the reinvestment of dividend income but does not reflect
reinvestment of capital gains or take into account sales charges or other
initial or ongoing expenses of such stocks. Emerging Growth Fund's total
return reflects the deduction of the current maximum sales charge of 5.75%
and includes reinvestment of all dividends and capital gains
distributions, but does not consider taxes. Fund shareholders will not
pay a sales charge on Emerging Growth Fund shares received in the
Reorganization.
Comparison of Change
In Value of $10,000
Hypothetical Investment in
Oppenheimer Global Emerging Growth Fund
S&P 500 Index
Average Annual Total Return of Emerging Growth Fund at 9/30/93
1 Year 5 Year Life*
1.59% 14.42% 13.63%
Oppenheimer
Fiscal Year Global S&P 500
(Period Ended) Emerging Growth Fund Index
12/30/87* $ 9,425 $10,000
9/30/88 $10,019 $11,308
9/30/89 $11,542 $15,034
9/30/90 $11,275 $13,645
9/30/91 $25,681 $17,887
9/30/92 $19,339 $19,862
9/30/93 $20,846 $22,438
Past performance is not predictive of future performance.
*Emerging Growth Fund began operations on 12/30/87 as "Oppenheimer Global
Bio-Tech Fund." The fund's name and certain of its fundamental investment
policies were changed effective September 19, 1994.
Financial Information
The Reorganization will be accounted for by the surviving fund in its
financial statements similar to a pooling. Further financial information
as to the Fund is contained in its current Prospectus, which is available
without charge from OSS, P.O. Box 5270, Denver, Colorado 80217, and is
incorporated herein, and in its audited financial statements as of
September 30, 1993, and unaudited financial statements as of March 31,
1994, which are included in the Statement of Additional Information
relating to the Reorganization. Financial information for Emerging Growth
Fund is contained in its current Prospectus accompanying this Proxy
Statement and Prospectus and incorporated herein, and in its audited
financial statements as of September 30, 1993 and unaudited financial
statements as of March 31, 1994, which are also included in the Statement
of Additional Information relating to the Reorganization.
Public Information
Additional information about the Fund and Emerging Growth Fund is
available, as applicable, in the following documents which are
incorporated herein by reference: (i) Emerging Growth Fund's Prospectus
dated September 19, 1994, accompanying this Proxy Statement and Prospectus
and incorporated herein; (ii) the Fund's Prospectus dated February 1,
1994, supplemented June 24, 1994 and further supplemented July 5, 1994,
which may be obtained without charge by writing to OSS, P.O. Box 5270,
Denver, Colorado 80217; (iii) Emerging Growth Fund's Annual Report as of
September 30, 1993 and Semi-Annual Report as of March 31, 1994, which may
be obtained without charge by writing to OSS at the address indicated
above; and (iv) the Fund's Annual Report as of September 30, 1993 and
Semi-Annual Report as of March 31, 1994, which may be obtained without
charge by writing to OSS at the address indicated above. All of the
foregoing documents may also be obtained by calling the toll-free number
on the cover of this Proxy Statement and Prospectus.
Additional information about the following matters is contained in the
Statement of Additional Information relating to the Reorganization, which
incorporates by reference the Emerging Growth Fund Additional Statement,
and the Fund's Prospectus dated February 1, 1994, supplemented June 24,
1994 and further supplemented July 5, 1994 and Statement of Additional
Information dated February 1, 1994: the organization and operation of
Emerging Growth Fund and the Fund; more information on investment
policies, practices and risks; information about the Fund's and Emerging
Growth Fund's respective Boards of Trustees and their responsibilities;
a further description of the services provided by Emerging Growth Fund's
and the Fund's investment adviser, distributor, and transfer and
shareholder servicing agent; dividend policies; tax matters; an
explanation of the method of determining the offering price of the shares
of Emerging Growth Fund and the Fund; purchase, redemption and exchange
programs; and distribution arrangements.
The Fund and Emerging Growth Fund are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith, file reports and other information with the SEC.
Proxy material, reports and other information about the Fund and Emerging
Growth Fund which are of public record can be inspected and copied at
public reference facilities maintained by the SEC in Washington, D.C. and
certain of its regional offices, and copies of such materials can be
obtained at prescribed rates from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549.
OTHER BUSINESS
Management of the Fund knows of no business other than the matters
specified above which will be presented at the Meeting. Since matters not
known at the time of the solicitation may come before the Meeting, the
proxy as solicited confers discretionary authority with respect to such
matters as properly come before the Meeting, including any adjournment or
adjournments thereof, and it is the intention of the persons named as
attorneys-in-fact in the proxy to vote this proxy in accordance with their
judgment on such matters.
By Order of the Board of Directors
Andrew J. Donohue, Secretary
September 19, 1994250
<PAGE>
ANNEX A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
September 19, 1994 by and between Oppenheimer Global Environment Fund (the
"Fund"), a Massachusetts business trust, and Oppenheimer Global Emerging
Growth Fund ("Emerging Growth Fund"), a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type; and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), of the Fund through the acquisition by Emerging
Growth Fund of substantially all of the assets of the Fund in exchange for
the voting shares of beneficial interest ("shares") of Emerging Growth
Fund and the assumption by Emerging Growth Fund of certain liabilities of
the Fund, which shares of Emerging Growth Fund are thereafter to be
distributed by the Fund pro rata to its shareholders in complete
liquidation of the Fund and complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. The parties hereto hereby adopt a Plan of Reorganization pursuant
to Section 368(a)(1) of the Code as follows: The reorganization will be
comprised of the acquisition by Emerging Growth Fund of substantially all
of the properties and assets of the Fund in exchange for shares of
Emerging Growth Fund and the assumption by Emerging Growth Fund of certain
liabilities of the Fund, followed by the distribution of such Emerging
Growth Fund shares to the shareholders of the Fund in exchange for their
shares of the Fund, all upon and subject to the terms of the Agreement
hereinafter set forth.
The share transfer books of the Fund will be permanently closed at the
close of business on the Valuation Date (as hereinafter defined) and only
redemption requests received in proper form on or prior to the close of
business on the Valuation Date shall be fulfilled by the Fund; redemption
requests received by the Fund after that date shall be treated as requests
for the redemption of the shares of Emerging Growth Fund to be distributed
to the shareholder in question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the
assets of the Fund on that date, excluding a cash reserve (the "Cash
Reserve") to be retained by the Fund sufficient in its discretion for the
payment of the expenses of the Fund's dissolution and its liabilities, but
not in excess of the amount contemplated by Section 10E, shall be
delivered as provided in Section 8 to Emerging Growth Fund, in exchange
for and against delivery to the Fund on the Closing Date of a number of
shares of Emerging Growth Fund having an aggregate net asset value equal
to the value of the assets of the Fund so transferred and delivered.
3. The net asset value of shares of Emerging Growth Fund and the
value of the assets of the Fund to be transferred shall in each case be
determined as of the close of business of the New York Stock Exchange on
the Valuation Date. The computation of the net asset value of the shares
of Emerging Growth Fund and the Fund shall be done in the manner used by
Emerging Growth Fund and the Fund, respectively, in the computation of
such net asset value per share as set forth in their respective
prospectuses. The methods used by Emerging Growth Fund in such
computation shall be applied to the valuation of the assets of the Fund
to be transferred to Emerging Growth Fund.
The Fund shall declare and pay, immediately prior to the Valuation
Date, a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the Fund's
shareholders all of the Fund's investment company taxable income for
taxable years ending on or prior to the Closing Date (computed without
regard to any dividends paid) and all of its net capital gain, if any,
realized in taxable years ending on or prior to the Closing Date (after
reduction for any capital loss carry-forward).
4. The closing (the "Closing") shall be at the office of
Oppenheimer Management Corporation (the "Agent"), Two World Trade Center,
Suite 3400, New York, New York 10048, at 4:00 P.M. New York time on
November 18, 1994, or at such other time or place as the parties may
designate or as provided below (the "Closing Date"). The business day
preceding the Closing Date is herein referred to as the "Valuation Date."
In the event that on the Valuation Date either party has, pursuant to
the Investment Company Act of 1940, as amended (the "Act"), or any rule,
regulation or order thereunder, suspended the redemption of its shares or
postponed payment therefor, the Closing Date shall be postponed until the
first business day after the date when both parties have ceased such
suspension or postponement; provided, however, that if such suspension
shall continue for a period of 60 days beyond the Valuation Date, then the
other party to the Agreement shall be permitted to terminate the Agreement
without liability to either party for such termination.
5. As soon as practicable after the Closing, the Fund shall
distribute on a pro rata basis to the shareholders of the Fund on the
Valuation Date the shares of Emerging Growth Fund received by the Fund on
the Closing Date in exchange for the assets of the Fund in complete
liquidation of the Fund; for the purpose of the distribution by the Fund
of such shares of Emerging Growth Fund to its shareholders, Emerging
Growth Fund will promptly cause its transfer agent to: (a) credit an
appropriate number of shares of Emerging Growth Fund on the books of
Emerging Growth Fund to each shareholder of the Fund in accordance with
a list (the "Shareholder List") of its shareholders received from the
Fund; and (b) confirm an appropriate number of shares of Emerging Growth
Fund to each shareholder of the Fund; certificates for shares of Emerging
Growth Fund will be issued upon written request of a former shareholder
of the Fund but only for whole shares with fractional shares credited to
the name of the shareholder on the books of Emerging Growth Fund.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of the Fund,
indicating his or her share balance. The Fund agrees to supply the
Shareholder List to Emerging Growth Fund not later than the Closing Date.
Shareholders of the Fund holding certificates representing their shares
shall not be required to surrender their certificates to anyone in
connection with the reorganization. After the Closing Date, however, it
will be necessary for such shareholders to surrender their certificates
in order to redeem, transfer or pledge the shares of Emerging Growth Fund
which they received.
6. Within one year after the Closing Date, the Fund shall (a)
either pay or make provision for payment of all of its liabilities and
taxes, and (b) either (i) transfer any remaining amount of the Cash
Reserve to Emerging Growth Fund, if such remaining amount (as reduced by
the estimated cost of distributing it to shareholders) is not material (as
defined below) or (ii) distribute such remaining amount to the
shareholders of the Fund on the Valuation Date. Such remaining amount
shall be deemed to be material if the amount to be distributed, after
deduction of the estimated expenses of the distribution, equals or exceeds
one cent per share of the Fund outstanding on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination between
the parties as to their respective portfolios so that, after the closing,
Emerging Growth Fund will be in compliance with all of its investment
policies and restrictions. At the Closing, the Fund shall deliver to
Emerging Growth Fund two copies of a list setting forth the securities
then owned by the Fund. Promptly after the Closing, the Fund shall
provide Emerging Growth Fund a list setting forth the respective federal
income tax bases thereof.
8. Portfolio securities or written evidence acceptable to
Emerging Growth Fund of record ownership thereof by The Depository Trust
Company or through the Federal Reserve Book Entry System or any other
depository approved by the Fund pursuant to Rule 17f-4 under the Act shall
be endorsed and delivered, or transferred by appropriate transfer or
assignment documents, by the Fund on the Closing Date to Emerging Growth
Fund, or at its direction, to its custodian bank, in proper form for
transfer in such condition as to constitute good delivery thereof in
accordance with the custom of brokers and shall be accompanied by all
necessary state transfer stamps, if any. The cash delivered shall be in
the form of certified or bank cashiers' checks or by bank wire or intra-
bank transfer payable to the order of Emerging Growth Fund for the account
of Emerging Growth Fund. Shares of Emerging Growth Fund representing the
number of shares of Emerging Growth Fund being delivered against the
assets of the Fund, registered in the name of the Fund, shall be
transferred to the Fund on the Closing Date. Such shares shall thereupon
be assigned by the Fund to its shareholders so that the shares of Emerging
Growth Fund may be distributed as provided in Section 5.
If, at the Closing Date, the Fund is unable to make delivery under this
Section 8 to Emerging Growth Fund of any of its portfolio securities or
cash for the reason that any of such securities purchased by the Fund, or
the cash proceeds of a sale of portfolio securities, prior to the Closing
Date have not yet been delivered to it or the Fund's custodian, then the
delivery requirements of this Section 8 with respect to said undelivered
securities or cash will be waived and the Fund will deliver to Emerging
Growth Fund by or on the Closing Date and with respect to said undelivered
securities or cash executed copies of an agreement or agreements of
assignment in a form reasonably satisfactory to Emerging Growth Fund,
together with such other documents, including a due bill or due bills and
brokers' confirmation slips as may reasonably be required by Emerging
Growth Fund.
9. Emerging Growth Fund shall not assume the liabilities (except
for portfolio securities purchased which have not settled and for
shareholder redemption and dividend checks outstanding) of the Fund, but
the Fund will, nevertheless, use its best efforts to discharge all known
liabilities, so far as may be possible, prior to the Closing Date. The
cost of printing and mailing the proxies and proxy statements will be
borne by the Fund. The Fund and Emerging Growth Fund will bear the cost
of their respective tax opinion. Any documents such as existing
prospectuses or annual reports that are included in that mailing will be
a cost of the fund issuing the document. Any other out-of-pocket expenses
of Emerging Growth Fund and the Fund associated with this reorganization,
including legal, accounting and transfer agent expenses, will be borne by
the Fund and Emerging Growth Fund, respectively, in the amounts so
incurred by each.
10. The obligations of Emerging Growth Fund hereunder shall be subject
to the following conditions:
A. The Board of Trustees of the Fund shall have authorized the
execution of the Agreement, and the shareholders of the Fund shall have
approved the Agreement and the transactions contemplated hereby, and the
Fund shall have furnished to Emerging Growth Fund copies of resolutions
to that effect certified by the Secretary or an Assistant Secretary of the
Fund; such shareholder approval shall have been by the affirmative vote
of "a majority of the outstanding voting securities" (as defined in the
Act) of the Fund at a meeting for which proxies have been solicited by the
Proxy Statement and Prospectus (as hereinafter defined).
B. Emerging Growth Fund shall have received an opinion dated the
Closing Date of counsel to the Fund, to the effect that (i) the Fund is
a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts with full powers to
carry on its business as then being conducted and to enter into and
perform the Agreement; and (ii) that all action necessary to make the
Agreement, according to its terms, valid, binding and enforceable on the
Fund and to authorize effectively the transactions contemplated by the
Agreement have been taken by the Fund.
C. The representations and warranties of the Fund contained herein
shall be true and correct at and as of the Closing Date, and Emerging
Growth Fund shall have been furnished with a certificate of the President,
or a Vice President, or the Secretary or the Assistant Secretary or the
Treasurer of the Fund, dated the Closing Date, to that effect.
D. On the Closing Date, the Fund shall have furnished to Emerging
Growth Fund a certificate of the Treasurer or Assistant Treasurer of the
Fund as to the amount of the capital loss carry-over and net unrealized
appreciation or depreciation, if any, with respect to the Fund as of the
Closing Date.
E. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of the Fund at the close of
business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Emerging Growth
Fund under the Securities Act of 1933, as amended (the "1933 Act"),
containing a preliminary form of the Proxy Statement and Prospectus, shall
have become effective under the 1933 Act not later than December 1, 1994.
G. On the Closing Date, Emerging Growth Fund shall have received a
letter of Andrew J. Donohue or other senior executive officer of
Oppenheimer Management Corporation acceptable to Emerging Growth Fund,
stating that nothing has come to his or her attention which in his or her
judgment would indicate that as of the Closing Date there were any
material actual or contingent liabilities of the Fund arising out of
litigation brought against the Fund or claims asserted against it, or
pending or to the best of his or her knowledge threatened claims or
litigation not reflected in or apparent from the most recent audited
financial statements and footnotes thereto of the Fund delivered to
Emerging Growth Fund. Such letter may also include such additional
statements relating to the scope of the review conducted by such person
and his or her responsibilities and liabilities as are not unreasonable
under the circumstances.
H. Emerging Growth Fund shall have received an opinion, dated the
Closing Date, of KPMG Peat Marwick LLP, to the same effect as the opinion
contemplated by Section 11.E. of the Agreement.
I. Emerging Growth Fund shall have received at the closing all of
the assets of the Fund to be conveyed hereunder, which assets shall be
free and clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever.
11. The obligations of the Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of Emerging Growth Fund shall have
authorized the execution of the Agreement, and the transactions
contemplated hereby, and Emerging Growth Fund shall have furnished to the
Fund copies of resolutions to that effect certified by the Secretary or
an Assistant Secretary of Emerging Growth Fund.
B. The Fund's shareholders shall have approved the Agreement and the
transactions contemplated hereby, by an affirmative vote of "a majority
of the outstanding voting securities" (as defined in the Act) of the Fund,
and the Fund shall have furnished Emerging Growth Fund copies of
resolutions to that effect certified by the Secretary or an Assistant
Secretary of the Fund.
C. The Fund shall have received an opinion dated the Closing Date
of counsel to Emerging Growth Fund, to the effect that (i) Emerging Growth
Fund is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with full
powers to carry on its business as then being conducted and to enter into
and perform the Agreement; (ii) all action necessary to make the
Agreement, according to its terms, valid, binding and enforceable upon
Emerging Growth Fund and to authorize effectively the transactions
contemplated by the Agreement have been taken by Emerging Growth Fund, and
(iii) the shares of Emerging Growth Fund to be issued hereunder are duly
authorized and when issued will be validly issued, fully-paid and non-
assessable, except as set forth in Emerging Growth Fund's then current
Prospectus and Statement of Additional Information.
D. The representations and warranties of Emerging Growth Fund
contained herein shall be true and correct at and as of the Closing Date,
and the Fund shall have been furnished with a certificate of the
President, a Vice President or the Secretary or an Assistant Secretary or
the Treasurer of Emerging Growth Fund to that effect dated the Closing
Date.
E. The Fund shall have received an opinion of KPMG Peat Marwick LLP
to the effect that the Federal tax consequences of the transaction, if
carried out in the manner outlined in this Plan of Reorganization and in
accordance with (i) the Fund's representation that there is no plan or
intention by any Fund shareholder who owns 5% or more of the Fund's
outstanding shares, and, to the Fund's best knowledge, there is no plan
or intention on the part of the remaining Fund shareholders, to redeem,
sell, exchange or otherwise dispose of a number of Emerging Growth Fund
shares received in the transaction that would reduce the Fund
shareholders' ownership of Emerging Growth Fund shares to a number of
shares having a value, as of the Closing Date, of less than 50% of the
value of all of the formerly outstanding Fund shares as of the same date,
(ii) the representation by each of the Fund and Emerging Growth Fund that,
as of the Closing Date, the Fund and Emerging Growth Fund will qualify as
regulated investment companies or will meet the diversification test of
Section 368(a)(2)(F)(ii) of the Code, and (iii) the other representations
by each of the Fund and Emerging Growth Fund made to KPMG Peat Marwick LLP
and set forth in the opinion, will generally be as follows:
1. The transactions contemplated by the Agreement will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1) of
the Code, and under the regulations promulgated thereunder.
2. The Fund and Emerging Growth Fund will each qualify as a
"party to a reorganization" within the meaning of Section 368(b)(2) of the
Code.
3. No gain or loss will be recognized by the shareholders of
the Fund upon the distribution of shares of beneficial interest in
Emerging Growth Fund to the shareholders of the Fund pursuant to Section
354 of the Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by the Fund by reason of the transfer of substantially all its
assets in exchange for shares of Emerging Growth Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Emerging Growth Fund by reason of the transfer of
substantially all the Fund's assets in exchange for shares of Emerging
Growth Fund and Emerging Growth Fund's assumption of certain liabilities
of the Fund.
6. The shareholders of the Fund will have the same tax basis
and holding period for the shares of beneficial interest in Emerging
Growth Fund that they receive as they had for the Fund shares that they
previously held, pursuant to Section 358(a) and 1223(1), respectively, of
the Code.
7. The securities transferred by the Fund to Emerging Growth
Fund will have the same tax basis and holding period in the hands of
Emerging Growth Fund as they had for the Fund, pursuant to Section 362(b)
and 1223(1), respectively, of the Code.
F. The Cash Reserve shall not exceed 10% of the value of the net
assets, nor 30% in value of the gross assets, of the Fund at the close of
business on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Emerging Growth
Fund under the 1933 Act, containing a preliminary form of the Proxy
Statement and Prospectus, shall have become effective under the 1933 Act
not later than December 1, 1994.
H. On the Closing Date, the Fund shall have received a letter of
Andrew J. Donohue or other senior executive officer of Oppenheimer
Management Corporation acceptable to the Fund, stating that nothing has
come to his or her attention which in his or her judgment would indicate
that as of the Closing Date there were any material actual or contingent
liabilities of Emerging Growth Fund arising out of litigation brought
against Emerging Growth Fund or claims asserted against it, or pending or,
to the best of his or her knowledge, threatened claims or litigation not
reflected in or apparent by the most recent audited financial statements
and footnotes thereto of Emerging Growth Fund delivered to the Fund. Such
letter may also include such additional statements relating to the scope
of the review conducted by such person and his or her responsibilities and
liabilities as are not unreasonable under the circumstances.
I. The Fund shall acknowledge receipt of the shares of Emerging
Growth Fund.
12. The Fund hereby represents and warrants that:
A. The financial statements of the Fund as at September 30, 1993
(audited) and March 31, 1994 (unaudited) heretofore furnished to Emerging
Growth Fund, present fairly the financial position, results of operations,
and changes in net assets of the Fund as of that date, in conformity with
generally accepted accounting principles applied on a basis consistent
with the preceding year; and that from September 30, 1993 through the date
hereof there has not been, and through the Closing Date there will not be,
any material adverse change in the business or financial condition of the
Fund, it being agreed that a decrease in the size of the Fund due to a
diminution in the value of its portfolio and/or redemption of its shares
shall not be considered a material adverse change;
B. Contingent upon approval of the Agreement and the transactions
contemplated hereby by the Fund's shareholders, the Fund has authority to
transfer all of the assets of the Fund to be conveyed hereunder free and
clear of all liens, encumbrances, security interests, restrictions and
limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in the
Fund's Registration Statement under the 1933 Act, as amended, is true,
correct and complete, conforms to the requirements of the 1933 Act and
does not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
D. There is no material contingent liability of the Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of the Fund, threatened against the Fund, not
reflected in such Prospectus;
E. There are no material contracts outstanding to which the Fund is
a party other than those ordinary in the conduct of its business;
F. The Fund is a business trust duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts; and
has all necessary and material Federal and state authorizations to own all
of its assets and to carry on its business as now being conducted; and the
Fund is duly registered under the Act and such registration has not been
rescinded or revoked and is in full force and effect;
G. All Federal and other tax returns and reports of the Fund
required by law to be filed have been filed, and all Federal and other
taxes shown due on said returns and reports have been paid or provision
shall have been made for the payment thereof and to the best of the
knowledge of the Fund no such return is currently under audit and no
assessment has been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of the Fund ended
September 30, 1993 have not been filed, such returns will be filed when
required and the amount of tax shown as due thereon shall be paid when
due; and
H. The Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, the Fund has met the
requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and the Fund intends to meet such
requirements with respect to its current taxable year.
13. Emerging Growth Fund hereby represents and warrants that:
A. The financial statements of Emerging Growth Fund as at September
30, 1993 (audited) and March 31, 1994 (unaudited) heretofore furnished to
the Fund, present fairly the financial position, results of operations,
and changes in net assets of Emerging Growth Fund, as of that date, in
conformity with generally accepted accounting principles applied on a
basis consistent with the preceding year; and that from September 30, 1993
through the date hereof there has not been, and through the Closing Date
there will not be, any material adverse change in the business or
financial condition of Emerging Growth Fund, it being understood that a
decrease in the size of Emerging Growth Fund due to a diminution in the
value of its portfolio and/or redemption of its shares shall not be
considered a material or adverse change;
B. The Prospectus, as amended and supplemented, contained in
Emerging Growth Fund's Registration Statement under the 1933 Act, is true,
correct and complete, conforms to the requirements of the 1933 Act and
does not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the requirements of
the 1933 Act and did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
C. There is no material contingent liability of Emerging Growth Fund
and no material claim and no material legal, administrative or other
proceedings pending or, to the knowledge of Emerging Growth Fund,
threatened against Emerging Growth Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which Emerging
Growth Fund is a party other than those ordinary in the conduct of its
business;
E. Emerging Growth Fund is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts; has all necessary and material Federal and state
authorizations to own all its properties and assets and to carry on its
business as now being conducted; the shares of Emerging Growth Fund which
it issues to the Fund pursuant to the Agreement will be duly authorized,
validly issued, fully-paid and non-assessable, except as otherwise set
forth in Emerging Growth Fund's Registration Statement; and will conform
to the description thereof contained in Emerging Growth Fund's
Registration Statement, will be duly registered under the 1933 Act and in
the states where registration is required; and Emerging Growth Fund is
duly registered under the Act and such registration has not been revoked
or rescinded and is in full force and effect;
F. All Federal and other tax returns and reports of Emerging Growth
Fund required by law to be filed have been filed, and all Federal and
other taxes shown due on said returns and reports have been paid or
provision shall have been made for the payment thereof and to the best of
the knowledge of Emerging Growth Fund no such return is currently under
audit and no assessment has been asserted with respect to such returns and
to the extent such tax returns with respect to the taxable year of
Emerging Growth Fund ended September 30, 1993 have not been filed, such
returns will be filed when required and the amount of tax shown as due
thereon shall be paid when due;
G. Emerging Growth Fund has elected to be treated as a regulated
investment company and, for each fiscal year of its operations, Emerging
Growth Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and Emerging
Growth Fund intends to meet such requirements with respect to its current
taxable year;
H. Emerging Growth Fund has no plan or intention (i) to dispose of
any of the assets transferred by the Fund, other than in the ordinary
course of business, or (ii) to redeem or reacquire any of the shares
issued by it in the reorganization other than pursuant to valid requests
of shareholders; and
I. After consummation of the transactions contemplated by the
Agreement, Emerging Growth Fund intends to operate its business in a
substantially unchanged manner.
14. Each party hereby represents to the other that no broker or finder
has been employed by it with respect to the Agreement or the transactions
contemplated hereby. Each party also represents and warrants to the other
that the information concerning it in the Proxy Statement and Prospectus
will not as of its date contain any untrue statement of a material fact
or omit to state a fact necessary to make the statements concerning it
therein not misleading and that the financial statements concerning it
will present the information shown fairly in accordance with generally
accepted accounting principles applied on a basis consistent with the
preceding year. Each party also represents and warrants to the other that
the Agreement is valid, binding and enforceable in accordance with its
terms and that the execution, delivery and performance of the Agreement
will not result in any violation of, or be in conflict with, any provision
of any charter, by-laws, contract, agreement, judgment, decree or order
to which it is subject or to which it is a party. Emerging Growth Fund
hereby represents to and covenants with the Fund that, if the
reorganization becomes effective, Emerging Growth Fund will treat each
shareholder of the Fund who received any of Emerging Growth Fund's shares
as a result of the reorganization as having made the minimum initial
purchase of shares of Emerging Growth Fund received by such shareholder
for the purpose of making additional investments in shares of Emerging
Growth Fund, regardless of the value of the shares of Emerging Growth Fund
received.
15. Emerging Growth Fund agrees that it will prepare and file a
Registration Statement on Form N-14 under the 1933 Act which shall contain
a preliminary form of proxy statement and prospectus contemplated by Rule
145 under the 1933 Act. The final form of such proxy statement and
prospectus is referred to in the Agreement as the "Proxy Statement and
Prospectus." Each party agrees that it will use its best efforts to have
such Registration Statement declared effective and to supply such
information concerning itself for inclusion in the Proxy Statement and
Prospectus as may be necessary or desirable in this connection. Emerging
Growth Fund covenants and agrees to deregister as an investment company
under the Investment Company Act of 1940, as amended, as soon as
practicable and, thereafter, to cause the cancellation of its outstanding
shares.
16. The obligations of the parties under the Agreement shall be
subject to the right of either party to abandon and terminate the
Agreement without liability if the other party breaches any material
provision of the Agreement or if any material legal, administrative or
other proceeding shall be instituted or threatened between the date of the
Agreement and the Closing Date (i) seeking to restrain or otherwise
prohibit the transactions contemplated hereby and/or (ii) asserting a
material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. The Agreement may be executed in counterpart, each of which shall
be deemed an original, but taken together shall constitute one Agreement.
The rights and obligations of each party pursuant to the Agreement shall
not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into the Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written acknowledgement of such waiver.
19. The Fund understands that the obligations of Emerging Growth Fund
under the Agreement are not binding upon any Trustee or shareholder of
Emerging Growth Fund personally, but bind only Emerging Growth Fund and
Emerging Growth Fund's property. The Fund represents that it has notice
of the provisions of the Declaration of Trust of Emerging Growth Fund
disclaiming shareholder and Trustee liability for acts or obligations of
Emerging Growth Fund.
20. Emerging Growth Fund understands that the obligations of the Fund
under the Agreement are not binding upon any Trustee or shareholder of the
Fund personally, but bind only the Fund and the Fund's property. Emerging
Growth Fund represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to be
executed and attested by its officers thereunto duly authorized on the
date first set forth above.
Attest: OPPENHEIMER GLOBAL ENVIRONMENT FUND
/s/ Robert G. Zack By: /s/ Andrew J. Donohue
Robert G. Zack Andrew J. Donohue
Assistant Secretary Vice President
Attest: OPPENHEIMER GLOBAL EMERGING GROWTH
FUND
/s/ Robert G. Zack By: /s/ Andrew J. Donohue
Robert G. Zack Andrew J. Donohue
Assistant Secretary Vice President
<PAGE>
OPPENHEIMER GLOBAL ENVIRONMENT FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD NOVEMBER 11, 1994
The undersigned shareholder of Oppenheimer Global Environment Fund (the
"Fund"), does hereby appoint George C. Bowen, Andrew J. Donohue, Robert
Bishop and Scott Farrar, and each of them, as attorneys-in-fact and
proxies of the undersigned, with full power of substitution, to attend the
Special Meeting of Shareholders of the Fund to be held on November 11,
1994, at 3410 South Galena Street, Denver, Colorado at 10:00 A.M., Denver
time, and at all adjournments thereof, and to vote the shares held in the
name of the undersigned on the record date for said meeting on the
Proposal specified on the reverse side. Said attorneys-in-fact shall vote
in accordance with their best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO RECOMMENDS A VOTE
FOR THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL
BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO CHOICE IS
INDICATED.
Please mark your proxy, date and sign it on the reverse side and return
it promptly in the accompanying envelope, which requires no postage if
mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between the Fund
and Oppenheimer Global Emerging Growth Fund, and the transactions
contemplated thereby, including the transfer of substantially all the
assets of the Fund in exchange for shares of Oppenheimer Global
Emerging Growth Fund, the distribution of such shares to the
shareholders of the Fund in complete liquidation of the Fund, the
deregistration of the Fund as an investment company under the
Investment Company Act of 1940, as amended, and the cancellation of
the outstanding shares of the Fund.
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1994
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give his or her title.
250
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
(formerly, Oppenheimer Global Bio-Tech Fund)
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
September 19, 1994
___________________________________
This Statement of Additional Information of Oppenheimer Global
Emerging Growth Fund (formerly, Oppenheimer Global Bio-Tech
Fund)("Emerging Growth Fund") consists of this cover page and the
following documents:
1. Emerging Growth Fund's Statement of Additional Information dated
September 19, 1994, which has been previously filed and is incorporated
herein by reference.
2. Emerging Growth Fund's Annual Report as of September 30, 1993, which
has been previously filed and is incorporated herein by reference.
3. Emerging Growth Fund's Semi-Annual Report as of March 31, 1994, which
has been previously filed and is incorporated herein by reference.
4. Prospectus of Oppenheimer Global Environment Fund ("Global Environment
Fund") dated February 1, 1994, supplemented June 24, 1994 and further
supplemented July 5, 1994, which has been previously filed and is
incorporated herein by reference.
5. Statement of Additional Information of Global Environment Fund dated
February 1, 1994, which has been previously filed and is incorporated
herein by reference.
6. Global Environment Fund's Annual Report as of September 30, 1993, which
has been previously filed and is incorporated herein by reference.
7. Global Environment Fund's Semi-Annual Report as of March 31, 1994,
which has been previously filed and is incorporated herein by reference.
8. Pro Forma Financial Statements
This Statement of Additional Information (the "Additional Statement")
is not a Prospectus. This Additional Statement should be read in
conjunction with the Proxy Statement and Prospectus of Emerging Growth
Fund dated September 19, 1994, which may be obtained by written request
to Oppenheimer Shareholder Services ("OSS"), P.O. Box 5270, Denver,
Colorado 80217, or by calling OSS at the toll-free number shown above.
