Registration No. 33-23223
File No. 811-5582
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [ ]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 17 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]
Amendment No. 16 [X]
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OPPENHEIMER CASH RESERVES
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(Exact Name of Registrant as Specified in Charter)
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6803 South Tucson Way, Englewood, Colorado 80112
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(Address of Principal Executive Offices) (Zip Code)
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(303) 768-3200
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(Registrant's Telephone Number, including Area Code)
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Andrew J. Donohue, Esq.
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OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b) [X] On November 26, 1999
pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On _______________ pursuant to paragraph (a)(1) [ ] 75 days after filing
pursuant to paragraph (a)(2) [ ] On _______________ pursuant to paragraph (a)(2)
of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
Oppenheimer
Cash Reserves
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Prospectus dated November 26, 1999
Oppenheimer Cash Reserves is a
money market mutual fund. Its goal is
to seek the maximum current income that
is consistent with stability of
principal. The Fund invests in
short-term, high-quality "money market"
investments.
This Prospectus contains important
information about the Fund's
objective, its investment policies,
strategies and risks. It also
As with all mutual funds, the contains important information about Securities
and Exchange Commission has how to buy and sell shares of the Fund not approved
or disapproved the Fund's and other account features. Please securities nor has
it determined that read this Prospectus carefully before this Prospectus is
accurate or you invest and keep it for future complete. It is a criminal offense
to reference about your account.
represent otherwise.
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(logo) OppenheimerFunds
The Right Way to Invest
<PAGE>
CONTENTS
A B O U T T H E F U N D
The Fund's Investment Objective and Strategies
Main Risks of Investing in the Fund
The Fund's Past Performance
Fees and Expenses of the Fund
About the Fund's Investments
How the Fund is Managed
A B O U T Y O U R A C C O U N T
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Web Site
Retirement Plans
How to Sell Shares
By Mail
By Telephone
By Wire
By Checkwriting
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends and Taxes
Financial Highlights
<PAGE>
38
A B O U T T H E F U N D
The Fund's Investment Objective and Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks the maximum current
income that is consistent with stability of principal.
WHAT DOES THE FUND INVEST IN? The Fund invests in a variety of high-quality
money market investments to seek current income. Money market instruments are
short-term, U.S dollar-denominated debt instruments issued by the U.S.
government, domestic and foreign corporations and financial institutions and
other entities. They include, for example, bank obligations, repurchase
agreements, commercial paper, other corporate debt obligations and government
debt obligations.
"High-quality" instruments generally they must be rated in one of the two
highest credit-quality categories for short-term securities by
nationally-recognized rating services. If unrated, they must be determined by
the Fund's investment Manager, OppenheimerFunds, Inc., to be of comparable
quality to rated securities.
WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors who want to
earn income at current money market rates while seeking to preserve the value of
their investment. The Fund tries to keep its share price stable at $1.00. Income
on money market instruments tends to be lower than income on longer term debt
securities, so the Fund's yield will likely be lower than the yield on
longer-term fixed income funds. The Fund also offers easy access to your money
through checkwriting and wire redemption privileges. The Fund does not invest to
seek capital appreciation and is not a complete investment program.
Main Risks of Investing in the Fund
All investments have risks to some degree. Funds that invest in debt obligations
for income may be subject to credit risks and interest rate risks. However, the
Fund's investments must meet strict standards set by its Board of Trustees
following special rules for money market funds under federal law. Those
standards include requirements for maintaining high credit quality in the Fund's
portfolio, a short average portfolio maturity to reduce the effects of changes
in prevailing interest rates on the value of the Fund's securities and
diversifying the Fund's investments among issuers to reduce the effects of a
default by any one issuer on the Fund's overall portfolio and the value of the
Fund's shares.
Even so, there are risks that any of the Fund's holdings could have its
credit rating downgraded, or the issuer could default, or that interest rates
could rise sharply, causing the value of the Fund's investments (and its share
price) to fall. As a result, there is a risk that the Fund's shares could fall
below $1.00 per share. If there is a high redemption demand for the Fund's
shares that was not anticipated, portfolio securities might have to be sold
prior to their maturity at a loss. Also, there is the risk that the value of
your investment could be eroded over time by the effects of inflation, and that
poor security selection could cause the Fund to underperform other funds that
have a similar objective.
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An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
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The Fund's Past Performance
The bar chart and table below show how the Fund's returns may vary over time, by
showing changes in the Fund's performance (for its Class A shares) from year to
year for the last ten calendar years and its average annual total returns for
the 1-, 5- and 10- year periods. Variability of returns is one measure of the
risks of investing in a money market fund. The Fund's past investment
performance does not predict how the Fund will perform in the future.
Annual Total Returns (as of 12/31 each year)
[See appendix to prospectus for annual total return data for bar chart.]
For the period from 1/1/99 through 9/30/99, the cumulative total return (not
annualized) for Class A shares was 3.17%. During the period shown in the bar
chart, the highest return (not annualized) for a calendar quarter was 1.87% (4th
Q '90) and the lowest return (not annualized) for a calendar quarter was 0.48%
(2nd Q '93).
10 Years
Average Annual Total Returns (or life of
for the periods ending December 1 Year 5 Years class,
31, 1998 if less)
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Class A Shares (inception 1/3/89) 4.57% 4.32% 4.83%
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Class B Shares (inception: 8/17/93) 3.95% 3.71% 3.56%
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Class C Shares (inception: 12/1/93) 3.95% 3.70% 3.67%
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The Fund's average annual total returns include the applicable sales charge: for
Class B, the contingent deferred sales charges of 5% (1-year), 2% (5-years), 1%
(life-of-class) and for Class C, the contingent deferred sales charges of 1% for
the 1-year period. The returns measure the performance of a hypothetical account
and assume that all distributions have been reinvested in additional shares.
The total returns are not the Fund's current yield. The Fund's yield more
closely reflects the Fund's current earnings. To obtain the Fund's current 7-day
yield information, please call the Transfer Agent toll-free at 1.800.525.7048.
Fees and Expenses of the Fund
The Fund pays a variety of expenses directly for investment management,
administration and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset value per share. All shareholders
therefore pay those expenses indirectly. The following tables are meant to help
you understand the fees and expenses you may pay if you buy and hold shares of
the Fund. The numbers below are based upon the Fund's expenses during its fiscal
year ended July 31, 1999.
Shareholder Fees (charges paid directly from your investment):
Class A Shares Class B Shares Class C Shares
Maximum Sales Charge on
purchases (as % of None None None
offering price)
Maximum Deferred Sales
Charge (as % of the
lower of the original None1 5%2 1%3
offering price or
redemption proceeds)
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1. A contingent deferred sales charge may apply if you redeem Class A shares of
the Fund that were purchased by exchanging Class A shares of another
Oppenheimer fund that were purchased subject to a contingent deferred sales
charge, as described in "How to Sell Shares."
2. Applies to redemptions in the first year after purchase. The contingent
deferred sales charge declines to 1% in the sixth year and is eliminated
after that.
3. Applies to shares redeemed within 12 months of purchase.
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
Class A Shares Class B Shares Class C Shares
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Management Fees 0.49% 0.49% 0.49%
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Distribution and/or 0.20% 0.75% 0.75%
Service (12b-1) Fees
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Other Expenses 0.41% 0.41% 0.41%
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Total Annual Operating 1.10% 1.65% 1.65%
Expenses
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Expenses may vary in future years. "Other expenses" include transfer agent fees,
custodial expenses, and accounting and legal expenses the Fund pays.
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EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and then reinvest your dividends and distributions
The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower, because expenses will vary over time. Based on these assumptions your
expenses would be as follows:
If shares are redeemed 1 Year 3 Years 5 Years 10 Years
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Class A Shares $112 $350 $606 $1,340
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Class B Shares $668 $820 $1,097 $1,674
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Class C Shares $268 $520 $897 $1,955
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If shares are not redeemed 1 Year 3 Years 5 Years 10 Years1
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Class A Shares $112 $350 $606 $1,340
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Class B Shares $168 $520 $897 $1,674
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Class C Shares $168 $520 $897 $1,955
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In the first example, expenses include the applicable Class B or Class C
contingent deferred sales charges. In the second example, Class B and Class C
expenses do not include the contingent deferred sales charges. 1. Class B
expenses for years 7 through 10 are based on Class A expenses, since
Class B shares automatically convert to Class A after 6 years.
About the Fund's Investments
THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of the Fund's portfolio
among different types of investments will vary over time based upon the
Manager's evaluation of economic and market trends. The Fund's portfolio might
not always include all of the different types of investments described below.
The Statement of Additional Information contains more detailed information about
the Fund's investment policies and risks.
The Fund invests in short-term money market instruments that must meet
quality, maturity and diversification standards established by its Board of
Trustees as well as rules that apply to money market funds under the Investment
Company Act. The Fund's Manager tries to reduce risks by diversifying
investments and by carefully researching investments before the Fund buys them.
The rate of the Fund's income will vary from day to day, generally reflecting
changes in overall short-term interest rates. There is no assurance that the
Fund will achieve its investment objective.
What Does the Fund Invest In? Money market instruments are high-quality,
short-term debt instruments. They may have fixed, variable or floating
interest rates. Below is a brief description of the types of money market
instruments the Fund invests in.
o U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities. Some are direct obligations of the U.S. Treasury and are
supported by the full faith and credit of the United States. Other U.S.
government securities issued by some agencies and instrumentalities of the
government are also supported by the full faith and credit of the U.S.
government. Some U.S. government securities issued by agencies or
instrumentalities of the U.S. government are supported by the right of the
issuer to borrow from the U.S. Treasury. Others may be supported only by
the credit of the instrumentality.
o Bank Obligations. The Fund can buy time deposits, certificates of deposit
and bankers' acceptances. These obligations must be denominated in U.S.
dollars, even if issued by a foreign bank.
o Commercial Paper. Commercial paper is a short-term, unsecured promissory
note of a domestic or foreign company or other financial firm. The Fund
may buy commercial paper only if it matures in nine months or less from
the date of purchase.
o Corporate Debt Obligations. The Fund can invest in other short-term
corporate debt obligations, besides commercial paper, including debt
obligations that either mature within one year of the date of purchase or
that are subject to a repurchase agreement that calls for delivery in one
year or less.
o Other Money Market Instruments. The Fund may invest in money market
obligations other than those listed above if they are subject to
repurchase agreements or guaranteed as to their principal and interest by
a domestic bank or a corporation whose commercial paper may be purchased
by the Fund. A bank whose money market instruments the Fund buys must meet
credit criteria set by the Fund's Board of Trustees.
Additionally, the Fund may buy other money market instruments that its
Board of Trustees approves from time to time. They must be U.S.
dollar-denominated short-term investments that are determined to have
minimal credit risks.
The Board has approved the Fund's purchase of dollar-denominated
obligations of foreign banks payable in the U.S. or in London, England,
floating or variable rate demand notes, asset-backed securities, and bank
loan participation agreements. Their purchase may be subject to
restrictions adopted by the Board from time to time.
What Credit Quality and Maturity Standards Apply to the Fund's Investments? The
Fund may buy only those investments that meet standards set by the Board
of Trustees and standards prescribed by the Investment Company Act for
money market funds. The Fund's Board has adopted evaluation procedures for
the Fund's portfolio investments, and the Manager has the responsibility
to implement those procedures when selecting investments for the Fund.
In general, the Fund buys only high-quality investments that the Manager
believes present minimal credit risk at the time of purchase.
"High-quality" investments are:
o rated in one of the two highest short-term rating categories of two
national rating organizations, or
o rated by one rating organization in one of its two highest rating
categories (if only one rating organization has rated the investment), or
o unrated investments that the Manager determines are comparable in quality
to instrument rated in the two highest rating categories.
The procedures also limit the amount of the Fund's assets that can be
invested in the securities of any one issuer (other than the U.S.
government, its agencies and instrumentalities), to spread the Fund's
investment risks. Some of the Fund's investment restrictions are more
restrictive than the standards that apply to all money market funds. For
example, as a fundamental policy, the Fund may not invest in any debt
instrument having a maturity in excess of one year from the date of the
investment unless it is subject to a demand feature not exceeding one year
that requires payment on not more than 30 days notice. Finally, the Fund
must maintain a dollar-weighted average portfolio maturity of not more
than 90 days, to reduce interest rate risks.
CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's Board of
Trustees can change non-fundamental policies without shareholder approval,
although significant changes will be described in amendments to this Prospectus.
Fundamental policies cannot be changed without the approval of a majority of the
Fund's outstanding voting shares. The Fund's investment objective is a
fundamental policy. Some investment restrictions that are fundamental policies
are listed in the Statement of Additional Information. An investment policy is
not fundamental unless this Prospectus or the Statement of Additional
Information says that it is.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund can use the
investment techniques and strategies described below. The Fund might not always
use all of them. These techniques involve risks. The Statement of Additional
Information contains more information about some of these practices, including
limitations on their use that are designed to reduce some of the risks.
Floating Rate/Variable Rate Notes. The Fund can purchase notes with floating or
variable interest rates. Variable rates are adjustable at stated periodic
intervals. Floating rates are adjusted automatically according to a
specified market rate or benchmark, such as the prime rate of a bank.
Obligations of Foreign Banks and Foreign Branches of U.S. Banks. The Fund can
invest in U.S. dollar-denominated money market instruments of foreign banks
that are payable in the U.S. or in London, England. It can also buy
dollar-denominated securities of foreign branches of U.S. banks. These
instruments have investment risks different from obligations of domestic
branches of U.S. banks. Some of the risks that may effect a foreign bank's
ability to pay its debt include:
o political and economic developments in the country in which the bank or
branch is located,
o imposition of withholding taxes on interest income payable on the
securities,
o seizure or nationalization of foreign deposits,
o the establishment of exchange control regulations and
o the adoption of other governmental restrictions that might affect the
payment of principal and interest on those securities.
Additionally, not all of the U.S. and state banking laws and regulations
that apply to domestic banks and that are designed to protect depositors
and investors apply to foreign branches of domestic banks. None of those
U.S. and state regulations apply to foreign banks.
Bank Loan Participation Agreements. The Fund can invest in bank loan
participation agreements. They provide the Fund an undivided interest in a
loan made by the issuing bank in the proportion the Fund's interest bears
to the total principal amount of the loan. In evaluating the risk of these
investments, the Fund looks to the creditworthiness of the borrower that
is obligated to make principal and interest payments on the loan.
Asset-Backed Securities. The Fund can invest in asset-backed money market
instruments. These are fractional interests in pools of consumer loans and
other trade receivables, which are the obligations of a number of
different parties. The income from the underlying pool is passed through
to investors, such as the Fund.
These investments might be supported by a credit enhancement, such as a
letter of credit, a guarantee or a preference right. However, the credit
enhancement typically applies only to a fraction of the security's value.
If the issuer of the security has no security interest in the related
collateral, there is the risk that the Fund could lose money if the issuer
defaults.
Repurchase Agreements. The Fund may enter into repurchase agreements. In a
repurchase transaction, the Fund buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements must
be fully collateralized. However, if the vendor fails to pay the resale
price on the delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability
to do so. The Fund will not enter into a repurchase agreement that will
cause more than 10% of its net assets to be subject to repurchase
agreements maturing in more than 7 days. There is no limit on the amount
of the Fund's net assets that may be subject to repurchase agreements of 7
days or less.
Illiquid and Restricted Securities. Investments may be illiquid because they do
not have an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is
one that has a contractual limit on resale or which cannot be sold
publicly until it is registered under federal securities laws. The Fund
will not invest more than 10% of its net assets in illiquid or restricted
securities. That limit does not apply to certain restricted securities
that are eligible for resale to qualified institutional purchasers. The
Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
Difficulty in selling a security may result in a loss to the Fund or
additional costs.
How the Fund is Managed
THE MANAGER. The Fund's investment Manager, OppenheimerFunds, Inc., chooses the
Fund's investments and handles its day-to-day business. The Manager carries out
its duties, subject to the policies established by the Fund's Board of Trustees,
under an investment advisory agreement which states the Manager's
responsibilities. The agreement sets the fees the Fund pays to the Manager and
describes the expenses that the Fund is responsible to pay to conduct its
business.
The Manager has operated as an investment advisor since 1960. The Manager
(including subsidiaries) managed assets of more than $110 billion as of
September 30, 1999, including other Oppenheimer funds with more than 5 million
shareholder accounts. The Manager is located at Two World Trade Center, 34th
Floor, New York, New York 10048-0203.
Portfolio Managers. The portfolio managers of the Fund are Carol E. Wolf and
Arthur J. Zimmer. They are the persons principally responsible for the
day-to-day management of the Fund's portfolio. Ms. Wolf has had this
responsibility since June 15, 1998, and Mr. Zimmer since August 5, 1998.
Ms. Wolf is a Vice President and Mr. Zimmer a Senior Vice President of the
Manager, and each is a Vice President of the Fund and officer and portfolio
manager of other Oppenheimer funds.
Advisory Fees. Under the investment advisory agreement, the Fund pays the
Manager an advisory fee at an annual rate that declines as the Fund's
assets grow: 0.500% of the first $250 million of average annual net
assets, 0.475% of the next $250 million, 0.450% of the next $250 million,
0.425% of net assets of the next $250 million, and 0.400% of net assets in
excess of $1 billion. The Fund's management fee for the fiscal year ended
July 31, 1999 was 0.49% of the Fund's average annual net assets for each
class of shares.
YEAR 2000 ISSUES. Because many computer software systems in use today cannot
distinguish the year 2000 from the year 1900, the markets for securities in
which the Fund invests could be detrimentally affected by computer failures
beginning January 1, 2000. Failure of computer systems used for securities
trading could result in settlement and liquidity problems for the Fund and other
investors. That failure could have a negative impact on the handling of
securities trades, pricing and accounting services. Data processing errors by
government issuers of securities could result in economic uncertainties. Issuers
may incur substantial costs in attempting to prevent or fix such errors, all of
which could have a negative effect on the Fund's investments and returns.
The Manager, the Distributor and the Transfer Agent have been working on
necessary changes to their computer systems to deal with the year 2000 and
expect that their systems will be adapted in time for that event, although there
cannot be assurance of success. Additionally, the services they provide depend
on the interaction of their computer systems with those of brokers, information
services, the Fund's custodian bank and other parties. Therefore, any failure of
the computer systems of those parties to deal with the year 2000 may also have a
negative effect on the services they provide to the Fund. The extent of that
risk cannot be ascertained at this time.
A B O U T Y O U R A C C O U N T
How to Buy Shares
HOW DO YOU BUY SHARES? You can buy shares several ways, as described below. The
Fund's Distributor, OppenheimerFunds Distributor, Inc., may appoint servicing
agents to accept purchase (and redemption) orders. The Distributor, in its sole
discretion, may reject any purchase order for the Fund's shares.
BuyingShares Through Your Dealer. You can buy shares through any dealer, broker
or financial institution that has a sales agreement with the Distributor.
Your dealer will place your order with the Distributor on your behalf.
o Guaranteed Payment Procedures. Some broker-dealers may have arrangements
with the Distributor to enable them to place purchase orders for shares on
a regular business day with a guarantee that the Fund's custodian bank
will receive Federal Funds to pay for the shares by 2:00 P.M. on the next
regular business day. The shares will start to accrue dividends starting
on the day the Federal Funds are received by 2:00 P.M.
BuyingShares Through the Distributor. Complete an OppenheimerFunds New Account
Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. Your
check must be in U.S. dollars and drawn on a U.S. bank. If you don't list
a dealer on the application, the Distributor will act as your agent in
buying the shares. However, we recommend that you discuss your investment
with a financial advisor before you make a purchase to be sure that the
Fund is appropriate for you.
Paying by Federal Funds Wire. Shares purchased through the Distributor may be
paid for by Federal Funds wire. The minimum investment is $2,500. Before
sending a wire, call the Distributor's Wire Department at 1.800.525.7048
to notify the Distributor of the wire and to receive further instructions.
o Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you
pay for shares by payments made directly from your bank account. Shares are
purchased for your account on the regular business day the Distributor is
instructed by you to initiate the Automated Clearing House (ACH) electronic
funds transfer to buy shares. You can provide those instructions
automatically, under an Asset Builder Plan, described below, or by
telephone instructions using OppenheimerFunds PhoneLink, also described
below. Please refer to "AccountLink," below for more details. Dividends
begin to accrue on shares purchased this way on the business day after the
Fund receives the ACH payment from your bank.
o Buying Shares Through Asset Builder Plans. You may purchase shares of the
Fund (and up to four other Oppenheimer funds) automatically each month
from your account at a bank or other financial institution under an Asset
Builder Plan with AccountLink. Details are in the Asset Builder
Application and the Statement of Additional Information.
How Much Must You Invest? You can buy Fund shares with a minimum initial
investment of $1,000 and make additional investments at any time with as little
as $25. There are reduced minimum investments under special investment plans.
o With Asset Builder Plans, 403(b) plans, Automatic Exchange Plans and
military allotment plans, you can make initial investments for as little
as $25. You can make additional purchases of at least $25 by telephone
through AccountLink.
o Under retirement plans, such as IRAs, pension and profit-sharing plans and
401(k) plans, you can start your account with as little as $250. If your
IRA is started under an Asset Builder Plan, the $25 minimum applies.
Additional purchases may be as little as $25.
o The minimum investment requirement does not apply to reinvesting dividends
from the Fund or other Oppenheimer funds (a list of them appears in the
Statement of Additional Information, or you can ask your dealer or call
the Transfer Agent), or reinvesting distributions from unit investment
trusts that have made arrangements with the Distributor.
AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price, which is
the net asset value per share without any initial sales charge. The net asset
value per share will normally remain fixed at $1.00 per share. However, there is
no guarantee that the Fund will maintain a stable net asset value of $1.00 per
share.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the Distributor
receives the purchase order at its offices in Denver, Colorado, or after any
agent appointed by the Distributor receives the order and sends it to the
Distributor.
o Net Asset Value. The Fund calculates the net asset value of each class of
shares as of the close of The New York Stock Exchange, on each day the
Exchange is open for trading (referred to in this Prospectus as a "regular
business day"). The Exchange normally closes at 4:00 P.M., New York time,
but may close earlier on some days. All references to time in this
Prospectus mean "New York time".
The net asset value per share is determined by dividing the value of the
Fund's net assets attributable to a class by the number of shares of that
class that are outstanding. Under a policy adopted by the Fund's Board of
Trustees, the Fund uses the amortized cost method to value its securities
to determine net asset value.
o The Offering Price. To receive the offering price for a particular day, in
most cases the Distributor or its designated agent must receive your order
by the time of day The New York Stock Exchange closes that day. If your
order is received on a day when the Exchange is closed, or after it has
closed, the order will receive the next offering price that is determined
after your order is received.
o Buying Through a Dealer. If you buy shares through a dealer, your dealer
must receive the order by the close of The New York Stock Exchange and
transmit it to the Distributor so that it is received before the
Distributor's close of business on a regular business day (normally 5:00
P.M.) to receive that day's offering price. Otherwise, the order will
receive the next offering price that is determined.
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WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors three
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject to
different expenses. When you buy shares, be sure to specify the class of shares.
If you do not choose a class, your investment will be made in Class A shares.
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Class A Shares. If you buy Class A shares there is no initial sales charge
on your purchase.
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Class B Shares. If you buy Class B shares, you pay no sales charge at the time
of
purchase, but you will pay an annual asset-based sales charge. If you sell
your shares within six years of buying them, you will normally pay a
contingent deferred sales charge. That contingent deferred sales charge
varies depending on how long you own your shares, as described in "How Can
You Buy Class B Shares?" below.
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Class C Shares. If you buy Class C shares, you pay no sales charge at the time
of
purchase, but you will pay an annual asset-based sales charge. If you sell
your shares within 12 months of buying them, you will normally pay a
contingent deferred sales charge of 1%, as described in "How Can You Buy
Class C Shares?" below.
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WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is best
suited to your needs depends on a number of factors that you should discuss with
your financial advisor. If your goals and objectives change over time and you
plan to purchase additional shares, you should re-evaluate those factors to see
if you should consider another class of shares. The Fund's operating costs that
apply to a class of shares and the effect of the different types of sales
charges on your investment will vary your investment results over time.
The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are different.
You should review these factors with your financial advisor.
Are There Differences in Account Features That Matter to You? Some account
features may not be available to Class B or Class C shareholders. Other
features may not be advisable (because of the effect of the contingent
deferred sales charge) for Class B or Class C shareholders. Therefore, you
should carefully review how you plan to use your investment account before
deciding which class of shares to buy.
Additionally, the dividends payable to Class B and Class C shareholders
will be reduced by the additional expenses borne by those classes that are
not borne by Class A shares, such as the Class B and Class C asset-based
sales charge described below and in the Statement of Additional
Information. Share certificates are not available for Class B and Class C
shares, and if you are considering using your shares as collateral for a
loan, that may be a factor to consider. Also, checkwriting is not
available on accounts subject to a contingent deferred sales charge.
How Does It Affect Payments to My Broker? A salesperson, such as a broker, may
receive different compensation for selling one class of shares than for
selling another class. The Distributor may pay additional compensation
from its own resources to securities dealers or financial institutions
based upon the value of shares of the Fund owned by the dealer or
financial institution for its own account or for its customers.
Special Sales Charge Arrangements and Waivers. Appendix C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified retirement
plan arrangements or in other special types of transactions. To receive a waiver
or special sales charge rate, you must advise the Distributor when purchasing
shares or the Transfer Agent when redeeming shares that the special conditions
apply.
HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering price,
which is the net asset value per share without any initial sales charge.
Will You Pay a Sales Charge When You Sell Class A Shares? The Fund does not
charge a fee when you redeem Class A shares of this Fund that you bought
either directly or by reinvesting dividends or distributions from another
Oppenheimer fund. Generally, you will not pay a fee when you redeem Class A
shares of this Fund you bought by exchange of Class A shares of another
Oppenheimer fund. However,
o if you bought shares of this Fund by exchanging Class A shares of another
Oppenheimer fund that were subject to the Class A contingent deferred
sales charge of that fund, and
o if those shares remain subject to that Class A contingent deferred sales
charge when you exchange them into this Fund,
o then, you will pay the contingent deferred sales charge if you redeem
those shares from this Fund within 18 months of the purchase date of the
shares of the fund you exchanged.
HOW CAN YOU BUY CLASS B SHARES? You can acquire Class B shares exchanging Class
B shares of other Oppenheimer funds. Direct purchases are permitted only in
certain cases:
o by plan administrators or plan sponsors on behalf of plan participants in
qualified retirement plans.
o by investors who establish an Asset Builder Plan. Purchases of Class B
shares through an Asset Builder Plan are subject to certain requirements
and conditions which are described in the Statement of Additional
Information. You may open a Class B Asset Builder Plan account with
minimum initial investment of $5,000.
Class B shares are sold at net asset value per share without an initial
sales charge. However, if Class B shares are redeemed within 6 years of their
purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. The Class B contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.
The contingent deferred sales charge will be based on the lesser of the
net asset value of the redeemed shares at the time of redemption or the original
net asset value. The contingent deferred sales charge is not imposed on:
o the amount of your account value represented by an increase in net asset
value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital gains
distributions, or
o shares redeemed in the special circumstances described in Appendix C to
the Statement of Additional Information.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
1. shares acquired by reinvestment of dividends and capital gains
distributions,
2. shares held for over 6 years, and
3. shares held the longest during the 6-year period.
The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
<PAGE>
Contingent Deferred Sales Charge on
Years Since Beginning of Month in Redemptions in That Year
Which (As % of Amount Subject to Charge)
Purchase Order was Accepted
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0 - 1 5.0%
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1 - 2 4.0%
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2 - 3 3.0%
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3 - 4 3.0%
- -------------------------------------------------------------------------------
4 - 5 2.0%
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5 - 6 1.0%
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6 and following None
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In the table, a "year" is a 12-month period. In applying the sales charge, all
purchases are considered to have been made on the first regular business day of
the month in which the purchase was made.
Automatic Conversion of Class B Shares. Class B shares automatically convert to
Class A shares 72 months after you purchase them. This conversion feature
relieves Class B shareholders of the asset-based sales charge that applies
to Class B shares under the Class B Distribution and Service Plan,
described below. The conversion is based on the relative net asset value
of the two classes, and no sales load or other charge is imposed. When any
Class B shares you hold convert, any other Class B shares that were
acquired by reinvesting dividends and distributions on the converted
shares will also convert to Class A shares. The conversion feature is
subject to the continued availability of a tax ruling described in the
Statement of Additional Information.
HOW CAN YOU BUY CLASS C SHARES? Class C shares may be acquired at net asset
value per share only by exchange of Class C shares of other Oppenheimer funds,
except that direct purchases are permitted by plan administrators or plan
sponsors on behalf of participants in qualified retirement plans. If Class C
shares are redeemed within 12 months of their purchase, a contingent deferred
sales charge of 1.0% will be deducted from the redemption proceeds. The Class C
contingent deferred sales charge is paid to compensate the Distributor for its
expenses of providing distribution-related services to the Fund in connection
with the sale of Class C shares.
The contingent deferred sales charge will be based on the lesser of the
net asset value of the redeemed shares at the time of redemption or the original
net asset value. The contingent deferred sales charge is not imposed on:
o the amount of your account value represented by the increase in net asset
value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital gains
distributions, or
o shares redeemed in the special circumstances described in Appendix C to
the Statement of Additional Information.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
1. shares acquired by reinvestment of dividends and capital gains
distributions,
2. shares held for over 12 months, and
3. shares held the longest during the 12-month period.
Distribution and Service (12b-1) Plans
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred
for services provided to accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate of up to 0.20% of the average annual
net assets of Class A shares of the Fund. The Distributor currently uses
all of those fees to pay dealers, brokers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares.
Distribution and Service Plans for Class B and Class C Shares. The Fund has
adopted Distribution and Service Plans for Class B and Class C shares to
pay the Distributor for its services in distributing Class B and Class C
shares and servicing accounts. Under the plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% per year on Class
B shares and on Class C shares. The Distributor is entitled to receive a
service fee of 0.25% per year under each plan, but the Board of Trustees
has not authorized the Fund to pay the service fees at this time.
The asset-based sales charge increases Class B and Class C expenses by
0.75% of the net assets per year of the respective class. Because these fees are
paid out of the Fund's assets on an on-going basis, over time these fees will
increase the cost of your investment and may cost you more than other types of
sales charges.
If the service fees were paid, the Distributor would use them to pay
dealers for providing personal services for accounts that hold Class B or
Class C shares.
The Distributor currently pays a sales commission of 4.00% of the purchase
price of Class B shares to dealers from its own resources at the time of
sale. The Distributor retains the Class B asset-based sales charge.
The Distributor currently pays a sales commission of 1.00% of the purchase
price of Class C shares to dealers from its own resources at the time of
sale. The Distributor pays the asset-based sales charge as an ongoing
commission to the dealer on Class C shares that have been outstanding for
a year or more.
Special Investor Services
ACCOUNTLINK. You can use our AccountLink feature to link your Fund account with
an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
o transmit funds electronically to purchase shares by telephone (through a
service representative or by PhoneLink) or automatically under Asset
Builder Plans, or
o have the Transfer Agent send redemption proceeds or transmit dividends and
distributions directly to your bank account. Please call the Transfer
Agent for more information.
You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.852.8457. The purchase payment
will be debited from your bank account.
AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer. After
your account is established, you can request AccountLink privileges by sending
signature-guaranteed instructions to the Transfer Agent. AccountLink privileges
will apply to each shareholder listed in the registration on your account as
well as to your dealer representative of record unless and until the Transfer
Agent receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the Transfer
Agent signed by all shareholders who own the account.
PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions automatically
using a touch-tone phone. PhoneLink may be used on already-established Fund
accounts after you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number, 1.800.533.3310.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by phone,
by calling 1.800.533.3310. You must have established AccountLink
privileges to link your bank account with the Fund to pay for these
purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
below, you can exchange shares automatically by phone from your Fund
account to another Oppenheimer fund account you have already established
by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling the
PhoneLink number and the Fund will send the proceeds directly to your
AccountLink bank account. Please refer to "How to Sell Shares," below for
details.
CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier). Please
call 1.800.525.7048 for information about which transactions may be handled this
way. Transaction requests submitted by fax are subject to the same rules and
restrictions as written and telephone requests described in this Prospectus.
OPPENHEIMERFUNDS INTERNET WEB SITE. You can obtain information about the Fund,
as well as your account balance, on the OppenheimerFunds Internet web site, at
http://www.oppenheimerfunds.com. Additionally, shareholders listed in the
account registration (and the dealer of record) may request certain account
transactions through a special section of that web site. To perform account
transactions, you must first obtain a personal identification number (PIN) by
calling the Transfer Agent at 1.800.533.3310. If you do not want to have
Internet account transaction capability for your account, please call the
Transfer Agent at 1.800.525.7048.
AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that enable
you to sell shares automatically or exchange them to another Oppenheimer fund
account on a regular basis. Please call the Transfer Agent or consult the
Statement of Additional Information for details.
REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of the Fund that were purchased by reinvesting dividends or distributions
from another Oppenheimer fund or by exchanging shares from another Oppenheimer
fund on which you paid a sales charge, you have up to 6 months to reinvest all
or part of the redemption proceeds in Class A shares of other Oppenheimer funds
without paying a sales charge. This privilege does not apply to Class C shares.
You must be sure to ask the Distributor for this privilege when you send your
payment.
RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that individuals
and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
SIMPLE IRAs, rollover IRAs and Education IRAs.
SEP-IRAs. These are Simplified Employee Pensions Plan IRAs for small business
owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and
charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
self-employed individuals.
Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.
How to Sell Shares
You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent. The Fund lets you sell
your shares by writing a letter, by using the Fund's checkwriting privilege or
by telephone. You can also set up Automatic Withdrawal Plans to redeem shares on
a regular basis. If you have questions about any of these procedures, and
especially if you are redeeming shares in a special situation, such as due to
the death of the owner or from a retirement plan account, please call the
Transfer Agent first, at 1.800.525.7048, for assistance.
Certain Requests Require a Signature Guarantee. To protect you and the Fund from
fraud, the following redemption requests must be in writing and must
include a signature guarantee (although there may be other situations that
also require a signature guarantee):
o You wish to redeem $100,000 or more and receive a check
o The redemption check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your account
statement
o Shares are being transferred to a Fund account with a different owner or
name o Shares are being redeemed by someone (such as an Executor) other than
the
owners listed in the account registration
Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept a
guarantee of your signature by a number of financial institutions,
including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities or
government securities, or
o a U.S. national securities exchange, a registered securities association
or a clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the
signature.
Retirement Plan Accounts. There are special procedures to sell shares in an
OppenheimerFunds retirement plan account. Call the Transfer Agent for a
distribution request form. Special income tax withholding requirements
apply to distributions from retirement plans. You must submit a
withholding form with your redemption request to avoid delay in getting
your money and if you do not want tax withheld. If your employer holds
your retirement plan account for you in the name of the plan, you must ask
the plan trustee or administrator to request the sale of the Fund shares
in your plan account.
Sending Redemption Proceeds by Wire. While the Fund normally sends your money by
check, you can arrange to have the proceeds of the shares you sell sent by
Federal Funds wire to a bank account you designate. It must be a
commercial bank that is a member of the Federal Reserve wire system. The
minimum redemption you can have sent by wire is $2,500. There is a $10 fee
for each wire. To find out how to set up this feature on your account or
to arrange a wire, call the Transfer Agent at 1.800.852.8457.
HOW DO YOU SELL SHARES BY MAIL? Write a "letter of instructions" that includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement) o The dollar amount
or number of shares to be redeemed o Any special payment instructions o Any
share certificates for the shares you are selling
o The signatures of all registered owners exactly as the account is
registered, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.
- -----------------------------------------
- ---------------------------------------- Send courier or express mail
Use the following address for requests to:
- ---------------------------------------- OppenheimerFunds Services
Requests by mail: 10200 E. Girard Avenue, Building D
OppenheimerFunds Services Denver, Colorado 80231
P.O. Box 5270
Denver, Colorado 80217-5270
- -----------------------------------------
HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, the Transfer Agent must receive
your call by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M., but may be earlier on some days. You may not redeem shares
held in an OppenheimerFunds retirement plan account or under a share certificate
by telephone.
o To redeem shares through a service representative, call 1.800.852.8457 o To
redeem shares automatically on PhoneLink, call 1.800.533.3310
Whichever method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds sent to that bank account.
Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by telephone
in any 7-day period. The check must be payable to all owners of record of
the shares and must be sent to the address on the account statement. This
service is not available within 30 days of changing the address on an
account.
Telephone Redemptions Through AccountLink. There are no dollar limits on
telephone redemption proceeds sent to a bank account designated when you
establish AccountLink. Normally the ACH transfer to your bank is initiated
on the business day after the redemption. You do not receive dividends on
the proceeds of the shares you redeemed while they are waiting to be
transferred.
CHECKWRITING? To write checks against your Fund account, request that privilege
on your account application, or contact the Transfer Agent for signature cards.
They must be signed (with a signature guarantee) by all owners of the account
and returned to the Transfer Agent so that checks can be sent to you to use.
Shareholders with joint accounts can elect in writing to have checks paid over
the signature of one owner. If you previously signed a signature card to
establish checkwriting in another Oppenheimer fund, simply call 1.800.525.7048
to request checkwriting for an account in this Fund with the same registration
as the other account.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Fund's custodian
bank.
o Checkwriting privileges are not available for accounts holding shares that
are subject to a contingent deferred sales charge.
o Checks must be written for at least $100.
o Checks cannot be paid if they are written for more than your account value.
o You may not write a check that would require the Fund to redeem shares that
were purchased by check or Asset Builder Plan payments within the prior 10
days.
o Don't use your checks if you changed your Fund account number, until you
receive new checks.
CAN YOU SELL SHARES THROUGH YOUR DEALER? The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. If your shares are held in the
name of your dealer, you must redeem them through your dealer.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of the same class of certain
Oppenheimer funds. To exchange shares, you must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of this Fund and the fund whose shares you want to buy
must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them. After the account is open 7
days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares
you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of the Fund may be exchanged only for shares
of the same class in the other Oppenheimer funds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund.
You may pay a sales charge when you exchange Class A shares of this Fund.
Because Class A shares of this Fund are sold without sales charge, in some cases
you may pay a sales charge when you exchange Class A shares of this Fund for
shares of other Oppenheimer funds that are sold subject to a sales charge. You
will not pay a sales charge when you exchange shares of this Fund purchased by
reinvesting dividends or distributions from other Oppenheimer funds, or shares
of this Fund purchased by exchange of shares on which you paid a sales charge.
For tax purposes, exchanges of shares involve a sale of the shares of the
fund you own and a purchase of the shares of the other fund, which may result in
a capital gain or loss. Since shares of this Fund normally maintain a $1.00 net
asset value, in most cases you should not realize a capital gain or loss when
you sell or exchange your shares. Please refer to "How to Exchange Shares" in
the Statement of Additional Information for more details. You can find a list of
Oppenheimer funds currently available for exchanges in the Statement of
Additional Information or obtain one by calling a service representative at
1.800.525.7048.
That list can change from time to time.
HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or by
telephone:
Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
signed by all owners of the account. Send it to the Transfer Agent at the
address on the back cover. Exchanges of shares held under certificates
cannot be processed unless the Transfer Agent receives the certificates
with the request.
Telephone Exchange Requests. Telephone exchange requests may be made either by
calling a service representative at 1.800.852.8457, or by using PhoneLink
for automated exchanges by calling 1.800.533.3310. Telephone exchanges may
be made only between accounts that are registered with the same name(s)
and address. Shares held under certificates may not be exchanged by
telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which
the Transfer Agent receives an exchange request that conforms to the
policies described above. It must be received by the close of The New York
Stock Exchange that day, which is normally 4:00 P.M. but may be earlier on
some days. However, either fund may delay the purchase of shares of the
fund you are exchanging into up to seven days if it determines it would be
disadvantaged by a same-day exchange. For example, the receipt of multiple
exchange requests from a "market timer" might require the Fund to sell
securities at a disadvantageous time and/or price.
o Because excessive trading can hurt fund performance and harm shareholders,
the Fund reserves the right to refuse any exchange request that it
believes will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. The Fund will provide you notice whenever it is required to do so,
by applicable law, but it may impose changes at any time for emergency
purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.
Shareholder Account Rules and Policies
More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
The Offering of Shares may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be
suspended by the Board of Trustees at any time the Board believes it is in
the Fund's best interest to do so.
Telephone Transaction Privileges for purchases, redemptions or exchanges may be
modified, suspended or terminated by the Fund at any time. If an account
has more than one owner, the Fund and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each owner of
the account and the dealer representative of record for the account unless
the Transfer Agent receives cancellation instructions from an owner of the
account.
The Transfer Agent will Record any Telephone Calls to verify data concerning
transactions and has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. The Transfer Agent and the Fund
will not be liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine.
Redemption or Transfer Requests will not be Honored until the Transfer Agent
Receives All Required Documents in Proper Form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
Dealers that can Perform Account Transactions for their Clients by Participating
in NETWORKING through the National Securities Clearing Corporation are
responsible for obtaining their clients' permission to perform those
transactions, and are responsible to their clients who are shareholders of
the Fund if the dealer performs any transaction erroneously or improperly.
Payment for Redeemed Shares ordinarily is made in cash. It is forwarded by check
or through AccountLink or by Federal Funds wire (as elected by the
shareholder) within seven days after the Transfer Agent receives
redemption instructions in proper form. However, under unusual
circumstances determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the name
of a broker-dealer, payment will normally be forwarded within three
business days after redemption.
The Transfer Agent May Delay Forwarding a Check or processing a payment via
AccountLink or Federal Funds wire for recently purchased shares, but only
until the purchase payment has cleared. That delay may be as much as 10
days from the date the shares were purchased. That delay may be avoided if
you purchase shares by Federal Funds wire or certified check, or arrange
with your bank to provide telephone or written assurance to the Transfer
Agent that your purchase payment has cleared.
Involuntary Redemptions of Small Accounts may be made by the Fund if the account
value has fallen below $200 for reasons other than the fact that the
market value of shares has dropped. In some cases involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of
share purchase orders.
SharesMay Be "Redeemed In Kind" under unusual circumstances (such as a lack of
liquidity in the Fund's portfolio to meet redemptions). This means that
the redemption proceeds will be paid with securities from the Fund's
portfolio.
"Backup Withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges) if
you fail to furnish the Fund your correct, certified Social Security or
Employer Identification Number when you sign your application, or if you
under-report your income to the Internal Revenue Service.
To Avoid Sending Duplicate Copies of Materials to Households, the Fund will
mail only one copy of each annual and semi-annual report to shareholders
having the same last name and address on the Fund's records. However, each
shareholder may call the Transfer Agent at 1.800.525.7048 to ask that
copies of those materials be sent personally to that shareholder.
Dividends and Taxes
DIVIDENDS. The Fund intends to declare dividends from net investment income each
regular business day and to pay those dividends to shareholders monthly on a
date selected by the Board of Trustees. To maintain a net asset value of $1.00
per share, the Fund might withhold dividends or make distributions from capital
or capital gains.
The Fund intends to be as fully invested as possible to maximize its
yield. Therefore, newly-purchased shares normally will begin to accrue dividends
after the Distributor accepts your purchase order, starting on the business day
after the Fund receives Federal Funds from your purchase payment.
CAPITAL GAINS. The Fund normally holds its securities to maturity and therefore
will not usually pay capital gains. Although the Fund does not seek capital
gains, it could realize capital gains on the sale of portfolio securities. If it
does, it may make distributions out of any net short-term or long-term capital
gains in December of each year. The Fund may make supplemental distributions of
dividends and capital gains following the end of its fiscal year.
WHAT ARE YOUR CHOICES FOR RECEIVING DISTRIBUTIONS? When you open your account,
specify on your application how you want to receive your dividends and
distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all dividends
and capital gains distributions in additional shares of the Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the Fund while receiving other types of
distributions by check or having them sent to your bank account through
AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
dividends and capital gains distributions or have them sent to your bank
through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
reinvest all distributions in the same class of shares of another
Oppenheimer fund account you have established.
TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Dividends paid from net investment income and short-term capital gains are
taxable as ordinary income. Long-term capital gains are taxable as long-term
capital gains when distributed to shareholders, and may be taxable at different
rates depending on how long the Fund holds the asset. It does not matter how
long you have held your shares. Whether you reinvest your distributions in
additional shares or take them in cash, the tax treatment is the same.
Every year the Fund will send you and the IRS a statement showing the
amount of each taxable distribution you received in the previous year. Any
long-term capital gains distributions will be separately identified in the tax
information the Fund sends you after the end of the calendar year.
Returns of Capital Can Occur. In certain cases, distributions made by the Fund
may be considered a non-taxable return of capital to shareholders. If that
occurs, it will be identified in notices to shareholders.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.
<PAGE>
Financial Highlights
The Financial Highlights Table is presented to help you understand the Fund's
financial performance for the past 6 fiscal periods. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP, the
Fund's independent auditors, whose report, along with the Fund's financial
statements, is included in the Statement of Additional Information, which is
available on request.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR| YEAR|
ENDED| ENDED|
JULY 31,| DEC. 31,|
CLASS A 1999 1998 1997
1996(1)| 1995 1994|
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
<S> <C> <C> <C>
<C> <C> <C>
Net asset value, beginning
of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income and
net realized gain .04 .04
.04 .03 .05 .03
Dividends and distributions
to shareholders (.04) (.04) (.04)
(.03) (.05) (.03)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
----- ----- -----
- ----- ----- -----
----- ----- -----
- ----- ----- -----
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 4.30% 4.61% 4.41%
2.68% 4.84% 3.22%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $264,632 $210,477 $172,970
$170,031 $148,529 $99,361
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $245,622 $186,795 $179,948
$149,889 $105,349 $87,908
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.22% 4.48% 4.33%
4.47% 4.71% 3.25%
Expenses 1.10% 1.28%(4) 1.29%(4)
1.06%(4) 1.36%(4) 1.32%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31. 2. Assumes a $1,000 hypothetical initial
investment on the business day before the first day of the fiscal period (or
inception of offering), with all dividends reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods of less than one full year. Total returns reflect changes in net
investment income only.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
Oppenheimer Cash Reserves
<PAGE>
<TABLE>
<CAPTION>
YEAR| YEAR|
ENDED| ENDED|
JULY 31,| DEC. 31,|
CLASS B 1999 1998 1997
1996(1)| 1995 1994|
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
<S> <C> <C> <C>
<C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income and
net realized gain .04 .04
.04 .02 .04 .03
Dividends and distributions
to shareholders (.04) (.04) (.04)
(.02) (.04) (.03)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
----- ----- -----
- ----- ----- -----
----- ----- -----
- ----- ----- -----
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 3.72% 3.98% 3.82%
2.35% 4.26% 2.54%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $204,081 $80,005 $54,009
$85,573 $37,378 $46,803
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $170,068 $73,003 $67,333
$49,226 $35,360 $21,262
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 3.67% 3.93% 3.78%
3.91% 4.15% 3.05%
Expenses 1.65% 1.83%(4) 1.84%(4)
1.61%(4) 1.92%(4) 1.89%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31. 2. Assumes a $1,000 hypothetical initial
investment on the business day before the first day of the fiscal period (or
inception of offering), with all dividends reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods of less than one full year. Total returns reflect changes in net
investment income only.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
Oppenheimer Cash Reserves
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR| YEAR|
ENDED| ENDED|
JULY 31,| DEC. 31,|
CLASS C 1999 1998 1997
1996(1)| 1995 1994|
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
<S> <C> <C> <C>
<C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income and
net realized gain .04 .04
.04 .02 .04 .02
Dividends and distributions
to shareholders (.04) (.04) (.04)
(.02) (.04) (.02)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
----- ----- -----
- ----- ----- -----
----- ----- -----
- ----- ----- -----
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 3.73% 3.99% 3.84%
2.35% 4.21% 2.51%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $49,607 $18,101 $9,125
$11,717 $5,024 $5,604
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $37,244 $15,297 $10,930
$6,333 $6,040 $2,107
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 3.67% 3.94% 3.78%
3.91% 4.12% 3.19%
Expenses 1.65% 1.83%(4) 1.85%(4)
1.61%(4) 1.97%(4) 1.90%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31. 2. Assumes a $1,000 hypothetical initial
investment on the business day before the first day of the fiscal period (or
inception of offering), with all dividends reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods of less than one full year. Total returns reflect changes in net
investment income only.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
Oppenheimer Cash Reserves
<PAGE>
INFORMATION AND SERVICES
For More Information On Oppenheimer Cash Reserves:
The following additional information about the Fund is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes additional
information about the Fund's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, and other information about the Fund or your account:
- --------------------------------------------------------------------------------
By Telephone: Call OppenheimerFunds Services
toll-free: 1.800.525.7048
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
By Mail: Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
On the Internet: You can read or down-load documents on
the OppenheimerFunds web site:
http://www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
You can also obtain copies of the Statement of Additional Information and other
Fund documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1.800.SEC.0330) or the SEC's Internet web site at
http://www.sec.gov. Copies may be obtained upon payment of a duplicating fee by
writing to the SEC's Public Reference Section, Washington, D.C. 20549-6009.
No one has been authorized to provide any information about the Fund or to make
any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Fund's shares are distributed
by:
SEC File No. 811-5582 (logo)OppenheimerFunds Distributor,
Inc.
PR0760.001.1199
Printed on recycled paper
<PAGE>
79
- -79-
APPENDIX TO THE PROSPECTUS OF
OPPENHEIMER CASH RESERVES
Graphic material included in Prospectus of Oppenheimer Cash Reserves (the
"Fund") under the heading: "Annual Total Returns (as of 12/31 each year)."
Bar chart will be included in the Prospectus of the Fund depicting the
annual total returns of a hypothetical investment in Class A shares of the Fund
for each of the nine most recent calendar years without deducting sales charges.
Set forth below are the relevant data points that will appear on the bar chart.
- --------------------------------------------------------------------
Calendar Year Ended: Annual Total Returns
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/90 7.60%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/91 5.67%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/92 3.07%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/93 2.05%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/94 3.22%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/95 4.84%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/96 4.51%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/97 4.48%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/98 4.57%
- --------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-7048
Statement of Additional Information dated November 26, 1999
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated November 26, 1999. It should be read
together with the Prospectus, which may be obtained by writing to the Fund's
Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado
80217, by calling the Transfer Agent at the toll-free number shown above, or by
downloading it from the OppenheimerFunds Internet web site at
www.oppenheimerfunds.com.
Contents
Page
About the Fund
Additional Information about the Fund's Investment Policies and Risks.........
The Fund's Investment Policies...........................................
Other Investment Strategies..............................................
Investment Restrictions..................................................
How the Fund is Managed.......................................................
Organization and History.................................................
Trustees and Officers of the Fund........................................
The Manager..............................................................
Distribution and Service Plans................................................
Performance of the Fund.......................................................
About Your Account
How To Buy Shares.............................................................
How To Sell Shares............................................................
How To Exchange Shares........................................................
Dividends and Taxes...........................................................
Additional Information About the Fund.........................................
Financial Information About the Fund
Independent Auditors' Report..................................................
Financial Statements..........................................................
Appendix A: Securities Ratings.............................................A-1
Appendix B: Industry Classifications.......................................B-1
Appendix C: Special Sales Charge Arrangements and Waivers..................C-1
- --------------------------------------------------------------------------------
<PAGE>
A B O U T T H E F U N D
- --------------------------------------------------------------------------------
Additional Information About the Fund's Investment Policies and Risks
The investment objective and the principal investment policies of the Fund are
described in the Prospectus. This Statement of Additional Information contains
supplemental information about those policies and the types of securities that
the Fund's investment Manager, OppenheimerFunds, Inc. will select for the Fund.
Additional explanations are also provided about the strategies the Fund may use
to try to achieve its objective.
The Fund's Investment Policies. The Fund's objective is to seek the maximum
current income that is consistent with stability of principal. The Fund will not
make investments with the objective of seeking capital growth. However, the
value of the securities held by the Fund may be affected by changes in general
interest rates. Because the current value of debt securities varies inversely
with changes in prevailing interest rates, if interest rates increase after a
security is purchased, that security would normally decline in value.
Conversely, if interest rates decrease after a security is purchased, its value
would rise. However, those fluctuations in value will not generally result in
realized gains or losses to the Fund since the Fund does not usually intend to
dispose of securities prior to their maturity. A debt security held to maturity
is redeemable by its issuer at full principal value plus accrued interest.
The Fund may sell securities prior to their maturity, to attempt to take
advantage of short-term market variations, or because of a revised credit
evaluation of the issuer or other considerations. The Fund may also do so to
generate cash to satisfy redemptions of Fund shares. In such cases, the Fund may
realize a capital gain or loss on the security.
O Ratings of Securities -- Portfolio Quality, Maturity and
Diversification. Under Rule 2a-7 of the Investment Company Act, the Fund uses
the amortized cost method to value its portfolio securities to determine the
Fund's net asset value per share. Rule 2a-7 places restrictions on a money
market fund's investments. Under that Rule, the Fund may purchase only those
securities that the Manager, under Board-approved procedures, has determined
have minimal credit risks and are "Eligible Securities." The rating restrictions
described in the Prospectus and this Statement of Additional Information do not
apply to banks in which the Fund's cash is kept.
An "Eligible Security" is one that has been rated in one of the two
highest short-term rating categories by any two "nationally-recognized
statistical rating organizations." That term is defined in Rule 2a-7 and they
are referred to as "Rating Organizations" in this Statement of Additional
Information. If only one Rating Organization has rated that security, it must
have been rated in one of the two highest rating categories by that Rating
Organization. An unrated security that is judged by the Manager to be of
comparable quality to Eligible Securities rated by Rating Organizations may also
be an "Eligible Security."
Rule 2a-7 permits the Fund to purchase any number of "First Tier
Securities." These are Eligible Securities that have been rated in the highest
rating category for short-term debt obligations by at least two Rating
Organizations. If only one Rating Organization has rated a particular security,
it must have been rated in the highest rating category by that Rating
Organization. Comparable unrated securities may also be First Tier Securities.
Under Rule 2a-7, the Fund may invest only up to 5% of its total assets in
"Second Tier Securities." Those are Eligible Securities that are not "First Tier
Securities." In addition, the Fund may not invest more than: 5% of its total
assets in the securities of any one issuer (other than the U.S. government, its
agencies or instrumentalities) or 1% of its total assets or $1 million
(whichever is greater) in Second Tier Securities of any one issuer.
Under Rule 2a-7, the Fund must maintain a dollar-weighted average
portfolio maturity of not more than 90 days, and the maturity of any single
portfolio investment may not exceed 397 days. As a fundamental policy, the Fund
will not invest in debt securities having a maturity in excess of one year from
the date of purchase, unless subject to a demand feature not exceeding one year
that requires payment on not more than 30 day's notice. The Board regularly
reviews reports from the Manager to show the Manager's compliance with the
Fund's procedures and with the Rule.
If a security's rating is downgraded, the Manager and/or the Board may
have to reassess the security's credit risk. If a security has ceased to be a
First Tier Security, the Manager will promptly reassess whether the security
continues to present minimal credit risk. If the Manager becomes aware that any
Rating Organization has downgraded its rating of a Second Tier Security or rated
an unrated security below its second highest rating category, the Fund's Board
of Trustees shall promptly reassess whether the security presents minimal credit
risk and whether it is in the best interests of the Fund to dispose of it. If
the Fund disposes of the security within five days of the Manager learning of
the downgrade, the Manager will provide the Board with subsequent notice of such
downgrade. If a security is in default, or ceases to be an Eligible Security, or
is determined no longer to present minimal credit risks, the Board must
determine whether it would be in the best interests of the Fund to dispose of
the security.
The Rating Organizations currently designated as nationally-recognized
statistical rating organizations by the Securities and Exchange Commission are
Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch IBCA,
Inc., Duff and Phelps, Inc., and Thomson BankWatch, Inc. Appendix A to this
Statement of Additional Information contains descriptions of the rating
categories of those Rating Organizations. Ratings at the time of purchase will
determine whether securities may be acquired under the restrictions described
above.
O U.S. Government Securities. U.S. government securities are obligations
issued or guaranteed by the U.S. government or its agencies or
instrumentalities. They include Treasury Bills (which mature within one year of
the date they are issued) and Treasury Notes and Bonds (which are issued with
longer maturities). All Treasury securities are backed by the full faith and
credit of the United States.
U.S. government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States, Small
Business Administration, Government National Mortgage Association, General
Services Administration, Bank for Cooperatives, Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land
Banks, Maritime Administration, the Tennessee Valley Authority and the District
of Columbia Armory Board.
Securities issued or guaranteed by U.S. government agencies and
instrumentalities are not always backed by the full faith and credit of the
United States. Some, such as securities issued by the Federal National Mortgage
Association ("Fannie Mae"), are backed by the right of the agency or
instrumentality to borrow from the Treasury. Others, such as securities issued
by the Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported
only by the credit of the instrumentality and not by the Treasury. If the
securities are not backed by the full faith and credit of the United States, the
purchaser must look principally to the agency issuing the obligation for
repayment and may not be able to assert a claim against the United States if the
issuing agency or instrumentality does not meet its commitment.
Among the U.S. government securities that may be purchased by the Fund are
"mortgage-backed securities" of Fannie Mae, Government National Mortgage
Association ("Ginnie Mae") and Freddie Mac. Timely payment of principal and
interest on Ginnie Mae pass-throughs is guaranteed by the full faith and credit
of the United States. These mortgage-backed securities include "pass-through"
securities and "participation certificates." Both types of securities are
similar, in that they represent pools of mortgages that are assembled by a
vendor who sells interests in the pool. Payments of principal and interest by
individual mortgagors are "passed through" to the holders of the interests in
the pool. Another type of mortgage-backed security is the "collateralized
mortgage obligation." It is similar to a conventional bond and is secured by
groups of individual mortgages.
O Time Deposits and Other Bank Obligations. The types of "banks" whose
securities the Fund may buy include commercial banks, savings banks, and savings
and loan associations, which may or may not be members of the Federal Deposit
Insurance Corporation. The Fund may also buy securities of "foreign banks" that
are:
foreign branches of U.S. banks ( which may be issuers of "Eurodollar" money
market instruments), U.S. branches and agencies of foreign banks (which may be
issuers of "Yankee dollar" instruments), or foreign branches of foreign banks.
The Fund may invest in fixed time deposits. These are non-negotiable
deposits in a bank for a specified period of time at a stated interest rate.
They may or may not be subject to withdrawal penalties. However, the Fund's
investments in time deposits that are subject to penalties (other than time
deposits maturing in less than 7 days) are subject to the 10% investment
limitation for investing in illiquid securities, set forth in "Illiquid and
Restricted Securities" in the Prospectus. The Fund will buy bank obligations
only from a domestic bank with total assets of at least $2.0 billion or from a
foreign bank with total assets of at least $30.0 billion. Those asset
requirements apply only at the time the obligations are acquired.
O Insured Bank Obligations. The Federal Deposit Insurance Corporation
insures the deposits of banks and savings and loan associations up to $100,000
per investor. Within the limits set forth in the Prospectus, the Fund may
purchase bank obligations that are fully insured as to principal by the FDIC. To
remain fully insured as to principal, these investments must currently be
limited to $100,000 per bank. If the principal amount and accrued interest
together exceed $100,000, then the accrued interest in excess of that $100,000
will not be insured.
O Bank Loan Participation Agreements. The Fund may invest in bank loan
participation agreements, subject to the investment limitation set forth in the
Prospectus as to investments in illiquid securities. Participation agreements
provide an undivided interest in a loan made by the bank issuing the
participation interest in the proportion that the buyer's investment bears to
the total principal amount of the loan. Under this type of arrangement, the
issuing bank may have no obligation to the buyer other than to pay principal and
interest on the loan if and when received by the bank. Thus, the Fund must look
to the creditworthiness of the borrower, which is obligated to make payments of
principal and interest on the loan. If the borrower fails to pay scheduled
principal or interest payments, the Fund may experience a reduction in income.
O Asset-Backed Securities. These securities, issued by trusts and special
purpose corporations, are backed by pools of assets, primarily automobile and
credit-card receivables and home equity loans. They pass through the payments on
the underlying obligations to the security holders (less servicing fees paid to
the originator or fees for any credit enhancement). The value of an asset-backed
security is affected by changes in the market's perception of the asset backing
the security, the creditworthiness of the servicing agent for the loan pool, the
originator of the loans, or the financial institution providing any credit
enhancement.
Payments of principal and interest passed through to holders of
asset-backed securities are typically supported by some form of credit
enhancement, such as a letter of credit, surety bond, limited guarantee by
another entity or having a priority to certain of the borrower's other
securities. The degree of credit enhancement varies, and generally applies to
only a fraction of the asset-backed security's par value until exhausted. If the
credit enhancement of an asset-backed security held by the Fund has been
exhausted, and if any required payments of principal and interest are not made
with respect to the underlying loans, the Fund may experience losses or delays
in receiving payment.
The risks of investing in asset-backed securities are ultimately dependent
upon payment of consumer loans by the individual borrowers. As a purchaser of an
asset-backed security, the Fund would generally have no recourse to the entity
that originated the loans in the event of default by a borrower. The underlying
loans are subject to prepayments, which shorten the weighted average life of
asset-backed securities and may lower their return, in the same manner as for
prepayments of a pool of mortgage loans underlying mortgage-backed securities.
However, asset-backed securities do not have the benefit of the same security
interest in the underlying collateral as do mortgage-backed securities.
O Repurchase Agreements. In a repurchase transaction, the Fund acquires a
security from, and simultaneously resells it to, an approved vendor for delivery
on an agreed-upon future date. The resale price exceeds the purchase price by an
amount that reflects an agreed-upon interest rate effective for the period
during which the repurchase agreement is in effect. An "approved vendor" may be
a U.S. commercial bank, the U.S. branch of a foreign bank, or a broker-dealer
which has been designated a primary dealer in government securities. These
entities must meet the credit requirements set forth by the Fund's Board of
Trustees from time to time.
The majority of these transactions run from day to day, and delivery
pursuant to the resale typically will occur within one to five days of the
purchase. The Fund will not enter into a repurchase agreement that will cause
more than 10% of its net assets to be subject to repurchase agreements maturing
in more than seven days.
Repurchase agreements are considered "loans" under the Investment Company
Act, collateralized by the underlying security. The Fund's repurchase agreements
require that at all times while the repurchase agreement is in effect, the
collateral's value must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Manager will monitor
the vendor's creditworthiness to confirm that the vendor is financially sound
and will continuously monitor the collateral's value. However, if the vendor
fails to pay the resale price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so.
Other Investment Strategies
O Floating Rate/Variable Rate Obligations. The Fund may invest in
instruments with floating or variable interest rates. The interest rate on a
floating rate obligation is based on a stated prevailing market rate, such as a
bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate of return on
commercial paper or bank certificates of deposit, or some other standard. The
rate on the investment is adjusted automatically each time the market rate is
adjusted. The interest rate on a variable rate obligation is also based on a
stated prevailing market rate but is adjusted automatically at a specified
interval of not less than one year. Some variable rate or floating rate
obligations in which the Fund may invest have a demand feature entitling the
holder to demand payment of an amount approximately equal to the amortized cost
of the instrument or the principal amount of the instrument plus accrued
interest at any time, or at specified intervals not exceeding one year. These
notes may or may not be backed by bank letters of credit.
Variable rate demand notes may include master demand notes, which are
obligations that permit the Fund to invest fluctuating amounts in a note. The
amount may change daily without penalty, pursuant to direct arrangements between
the Fund, as the note purchaser, and the issuer of the note. The interest rates
on these notes fluctuate from time to time. The issuer of this type of
obligation normally has a corresponding right in its discretion, after a given
period, to prepay the outstanding principal amount of the obligation plus
accrued interest. The issuer must give a specified number of days' notice to the
holders of those obligations. Generally, the changes in the interest rate on
those securities reduce the fluctuation in their market value. As interest rates
decrease or increase, the potential for capital appreciation or depreciation is
less than that for fixed-rate obligations having the same maturity.
Because these types of obligations are direct lending arrangements between
the note purchaser and issuer of the note, these instruments generally will not
be traded. Generally, there is no established secondary market for these types
of obligations, although they are redeemable from the issuer at face value.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem them is dependent
on the ability of the note issuer to pay principal and interest on demand. These
types of obligations usually are not rated by credit rating agencies. The Fund
may invest in obligations that are not rated only if the Manager determines at
the time of investment that the obligations are of comparable quality to the
other obligations in which the Fund may invest. The Manager, on behalf of the
Fund, will monitor the creditworthiness of the issuers of the floating and
variable rate obligations in the Fund's portfolio on an ongoing basis.
O Loans of Portfolio Securities. To attempt to increase its income, the
Fund may lend its portfolio securities to brokers, dealers and other financial
institutions. These loans are limited to not more than 25% of the value of the
Fund's total assets and are subject to other conditions described below. There
are some risks in lending securities. The Fund could experience a delay in
receiving additional collateral to secure a loan, or a delay in recovering the
loaned securities. The Fund presently does not intend to lend its securities,
but if it does, the value of securities loaned is not expected to exceed 5% of
the value of the Fund's total assets.
The Fund must receive collateral for a loan. Under current applicable
regulatory requirements (which are subject to change), on each business day the
loan collateral must be at least equal to the market value of the loaned
securities. The collateral must consist of cash, bank letters of credit, U.S.
government securities or other cash equivalents in which the Fund is permitted
to invest. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund.
When it lends securities, the Fund receives from the borrower an amount
equal to the interest paid or the dividends declared on the loaned securities
during the term of the loan. It may also receive negotiated loan fees and the
interest on the collateral securities, less any finders', custodian bank,
administrative or other fees the Fund pays in connection with the loan. The Fund
may share the interest it receives on the collateral securities with the
borrower as long as it realizes at least a minimum amount of interest required
by the lending guidelines established by its Board of Trustees.
The Fund will not lend its portfolio securities to any officer, Trustee,
employee or affiliate of the Fund or its Manager. The terms of the Fund's loans
must meet certain tests under the Internal Revenue Code and permit the Fund to
reacquire loaned securities on five business days notice or in time to vote on
any important matter.
O Illiquid and Restricted Securities. Under the policies and procedures
established by the Fund's Board of Trustees, the Manager determines the
liquidity of certain of the Fund's investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933.
Illiquid securities the Fund can buy include issues that may be redeemed
only by the issuer upon more than seven days notice or at maturity, repurchase
agreements maturing in more than seven days, fixed time deposits subject to
withdrawal penalties which mature in more than seven days, and other securities
that cannot be sold freely due to legal or contractual restrictions on resale.
Contractual restrictions on the resale of illiquid securities might prevent or
delay their sale by the Fund at a time when such sale would be desirable.
Illiquid securities include repurchase agreements maturing in more than 7 days,
or certain participation interests other than those with puts exercisable within
7 days.
There are restricted securities that are not illiquid that the Fund can
buy. They include certain master demand notes redeemable on demand, and
short-term corporate debt instruments that are not related to current
transactions of the issuer and therefore are not exempt from registration as
commercial paper.
Investment Restrictions
O What Are "Fundamental Policies?" Fundamental policies are those policies
that the Fund has adopted to govern its investments that can be changed only by
the vote of a "majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, a "majority" vote is defined as the vote of the holders
of the lesser of:
67%or more of the shares present or represented by proxy at a shareholder
meeting, if the holders of more than 50% of the outstanding shares are
present or represented by proxy, or
more than 50% of the outstanding shares.
The Fund's investment objective is a fundamental policy. Other policies
described in the Prospectus or this Statement of Additional Information are
"fundamental" only if they are identified as such. The Fund's Board of Trustees
can change non-fundamental policies without shareholder approval. However,
significant changes to investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional Information, as
appropriate. The Fund's most significant investment policies are described in
the Prospectus.
O Does the Fund Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Fund:
TheFund cannot invest in commodities or commodity contracts, or invest in
interests in oil, gas, or other mineral exploration or development
programs;
TheFund cannot invest in real estate; however, the Fund may purchase debt
securities issued by companies which invest in real estate or interests
therein;
The Fund cannot purchase securities on margin or make short sales of
securities;
TheFund cannot invest in or hold securities of any issuer if those officers
and trustees or directors of the Fund or its Manager who beneficially own
individually more than 1/2 of 1% of the securities of such issuer together
own more than 5% of the securities of such issuer;
TheFund cannot underwrite securities of other companies except insofar as
the Fund may be deemed an underwriter under the Securities Act of 1933 in
connection with the disposition of portfolio securities;
TheFund cannot invest more than 5% of its total assets in securities of
companies that have operated less than three years, including the
operations of predecessors;
TheFund cannot purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
TheFund cannot issue "senior securities," but this does not prohibit certain
investment activities for which assets of the Fund are designated as
segregated, or margin, collateral or escrow arrangements are established,
to cover the related obligations;
o The Fund cannot invest in any debt instrument having a maturity in excess
of one year from the date of purchase, unless purchased subject to a
demand feature which may not exceed one year and requires payment on not
more than 30 days' notice;
o The Fund cannot enter into a repurchase agreement or purchase a security
subject to a call for redemption if the scheduled repurchase or redemption
date is greater than one year,
o With respect to 75% of its assets, the Fund cannot purchase securities
issued or guaranteed by any one issuer (except the U.S. Government or its
agencies or instrumentalities), if more than 5% of the Fund's total assets
would be invested in securities of that issuer or Fund would then own more
than 10% of that issuer's voting securities;
o The Fund cannot concentrate investments to the extent of 25% of its assets
in any industry; except for obligations of foreign banks or foreign
branches of domestic banks, the instruments set forth in "Bank Obligations
and Instruments Secured Thereby" and U.S. Government Securities" under
"Investment Objective and Policies" are not subject to this limitation;
o The Fund cannot make loans, except that the Fund may purchase debt
instruments described in "Investment Objective Policies" and repurchase
agreements, and the Fund may lend its portfolio securities as described
under "Loans of Portfolio Securities" in the Statement of Additional
Information; or
o The Fund cannot borrow money in excess of 10% of the value of its total
assets or make any investment when borrowings exceed 5% of the value of
its total assets; it may borrow only as a temporary measure for
extraordinary or emergency purposes; no assets of the Fund may be pledged,
mortgaged or assigned to secure a debt.
Unless the Prospectus or this Statement of Additional Information states
that a percentage restriction applies on an ongoing basis, it applies only at
the time the Fund makes an investment. The Fund need not sell securities to meet
the percentage limits if the value of the investment increases in proportion to
the size of the Fund.
For purposes of the Fund's policy not to concentrate its investments in
securities of issuers, the Fund has adopted the industry classifications set
forth in Appendix B to this Statement of Additional Information. This is not a
fundamental policy.
How the Fund Is Managed
Organization and History. The Fund is an open-end diversified management company
organized as a Massachusetts business trust in 1988, with an unlimited number of
authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
meet periodically throughout the year to oversee the Fund's activities, review
its performance, and review the actions of the Manager.
O Classes of Shares. The Board of Trustees has the power, without
shareholder approval, to divide unissued shares of the Fund into two or more
classes. The Board has done so, and the Fund currently has three classes of
shares: Class A, Class B and Class C shares. All classes invest in the same
investment portfolio. Each class of shares: o has its own dividends and
distributions, o pays certain expenses which may be different for the different
classes,
o may have separate voting rights on matters in which interests of one
class are different from interests of another class, and
o votes as a class on matters that affect that class alone.
Shares of each class are freely transferable. Each share has one vote at
shareholder meetings, with fractional shares voting proportionally on matters
submitted to a vote of shareholders. There are no preemptive or conversion
rights and shares participate equally in the assets of the Fund upon
liquidation.
The Trustees are authorized to create new series and classes of shares.
The Trustees may reclassify unissued shares of the Fund's series or classes into
additional series or classes of shares. The Trustees also may divide or combine
the shares of a class into a greater or lesser number of shares without changing
the proportionate beneficial interest of a shareholder in the Fund. Shares do
not have cumulative voting rights or preemptive or subscription rights. Shares
may be voted in person or by proxy at shareholder meetings.
|_| Meetings of Shareholders. As a Massachusetts business trust, the Fund
is not required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law, or when a shareholder meeting is
called by the Trustees or upon proper request of the shareholders.
The Trustees will call a meeting of shareholders to vote on the removal of
a Trustee upon the written request of the record holders of 10% of its
outstanding shares. If the Trustees receive a request from at least 10
shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the
Fund's shareholder list available to the applicants or mail their communication
to all other shareholders at the applicants' expense. The shareholders making
the request must have been shareholders for at least six months and must hold
shares of the Fund valued at $25,000 or more or constituting at least 1% of the
Fund's outstanding shares, whichever is less, The Trustees may take such other
action as is permitted under the Investment Company Act.
|X| Shareholder and Trustee Liability. The Trust's Declaration of Trust
contains an express disclaimer of shareholder or Trustee liability for the
Fund's or the Trust's obligations. It also provides for indemnification and
reimbursement of expenses out of the Trust's property for any shareholder held
personally liable for its obligations. The Declaration of Trust also states that
upon request, the Trust shall assume the defense of any claim made against a
shareholder for any act or obligation of the Trust and shall satisfy any
judgment on that claim. Massachusetts law permits a shareholder of a business
trust (such as the Trust) to be held personally liable as a "partner" under
certain circumstances. However, the risk that a Fund shareholder will incur
financial loss from being held liable as a "partner" of the Fund's parent Trust
is limited to the relatively remote circumstances in which the Trust would be
unable to meet its obligations.
The Fund's contractual arrangements state that any person doing business
with the Fund (and each shareholder of the Fund) agrees under the Declaration of
Trust to look solely to the assets of the Fund for satisfaction of any claim or
demand that may arise out of any dealings with the Fund. The Trustees shall have
no personal liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and their
principal occupations and business affiliations during the past five years are
listed below. Trustees denoted with an asterisk (*) below are deemed to be
"interested persons" of the Fund under the Investment Company Act. All of the
Trustees are trustees or directors of the following Denver-based Oppenheimer
funds1:
Oppenheimer Cash Reserves Oppenheimer Senior Floating Rate Fund
Oppenheimer Champion Income Fund Oppenheimer Strategic Income Fund
Oppenheimer Capital Income Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer High Yield Fund Oppenheimer Variable Account Funds
Oppenheimer International Bond Fund Panorama Series Fund, Inc.
Oppenheimer Integrity Funds Centennial America Fund, L. P.
Oppenheimer Limited-Term Government
Fund Centennial California Tax Exempt Trust
Oppenheimer Main Street Funds, Inc. Centennial Government Trust
Oppenheimer Main Street Small Cap
Fund Centennial Money Market Trust
Oppenheimer Municipal Fund Centennial New York Tax Exempt Trust
Ms. Macaskill and Messrs. Bishop, Donohue, Farrar, Wixted and Zack, who
are officers of the Fund, respectively hold the same offices with the other
Denver-based Oppenheimer funds as with the Fund. As of November 15, 1999, the
Trustees and officers of the Fund as a group owned less than 1% of the
outstanding shares of the Fund. The foregoing statement does not reflect
ownership of shares held of record by an employee benefit plan for employees of
the Manager, other than the shares beneficially owned under that plan by the
officers of the Fund listed below. Ms. Macaskill and Mr. Donohue, are trustees
of that plan.
1 Ms. Macaskill and Mr. Bowen are not Trustees or Directors of Oppenheimer
Integrity Funds, Oppenheimer Strategic Income Fund, Panorama Series Fund, Inc.
or Oppenheimer Variable Account Funds. Mr. Fossel and Mr. Bowen are not Trustees
of Centennial New York Tax Exempt Trust or Managing General Partners of
Centennial America Fund, L.P.
Robert G. Avis*, Trustee, Age: 68
One North Jefferson Ave., St. Louis,
Missouri 63103
Chairman, President and Chief Executive Officer of A.G. Edwards Capital, Inc.
(general partnership of private equity funds), Director of A.G. Edwards & Sons,
Inc. (a broker-dealer) and Director of A.G. Edwards Trust Companies (trust
companies), formerly, Vice Chairman of A.G. Edwards & Sons, Inc. and A.G.
Edwards, Inc. (its parent holding company) and Chairman of A.G.E. Asset
Management (an investment advisor).
William A. Baker, Trustee, Age: 84
197 Desert Lakes Drive, Palm
Springs, California 92264
Management Consultant.
George C. Bowen, Trustee, Age: 63
9224 Bauer Court, Lone Tree, Colorado 80124
Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice
President (since September 1987) and Treasurer (since March 1985) of the
Manager; Vice President (since June 1983) and Treasurer (since March 1985) of
the Distributor; Vice President (since October 1989) and Treasurer (since April
1986) of HarbourView Asset Management Corporation; Senior Vice President (since
February 1992), Treasurer (since July 1991) Assistant Secretary and a director
(since December 1991) of Centennial Asset Management Corporation; President,
Treasurer and a director of Centennial Capital Corporation (since June 1989);
Vice President and Treasurer (since August 1978) and Secretary (since April
1981) of Shareholder Services, Inc.; Vice President, Treasurer and Secretary of
Shareholder Financial Services, Inc. (since November 1989); Assistant Treasurer
of Oppenheimer Acquisition Corp. (since March 1998); Treasurer of Oppenheimer
Partnership Holdings, Inc. (since November 1989); Vice President and Treasurer
of Oppenheimer Real Asset Management, Inc. (since July 1996); Treasurer of
OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (since
October 1997).
Jon S. Fossel, Trustee, Age: 57
P.O. Box 44, Mead Street, Waccabuc,
New York 10597
Formerly Chairman and a director of the Manager, President and a director of
Oppenheimer Acquisition Corp., the Manager's parent holding company, and
Shareholder Services, Inc. and Shareholder Financial Services, Inc., transfer
agent subsidiaries of the Manager.
Sam Freedman, Trustee, Age: 59
4975 Lakeshore Drive, Littleton,
Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief Executive Officer and a director of Shareholder Services, Inc.,
Chairman, Chief Executive Officer and director of Shareholder Financial
Services, Inc., Vice President and director of Oppenheimer Acquisition Corp. and
a director of OppenheimerFunds, Inc.
Raymond J. Kalinowski, Trustee, Age:
70 44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products training
company), self-employed consultant (securities matters).
C. Howard Kast, Trustee, Age: 77
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
Robert M. Kirchner, Trustee, Age: 78
7500 E. Arapahoe Road, Englewood,
Colorado 80112
President of The Kirchner Company (management consultants).
Bridget A. Macaskill*, President and
Trustee, Age: 51
Two World Trade Center, New York,
New York 10048-0203 President (since June 1991), Chief Executive Officer (since
September 1995) and a Director (since December 1994) of the Manager; President
and director (since June 1991) of HarbourView Asset Management Corporation, an
investment adviser subsidiary of the Manager; Chairman and a director of
Shareholder Services, Inc. (since August 1994) and Shareholder Financial
Services, Inc. (since September 1995), transfer agent subsidiaries of the
Manager; President (since September 1995) and a director (since October 1990) of
Oppenheimer Acquisition Corp., the Manager's parent holding company; President
(since September 1995) and a director (since November 1989) of Oppenheimer
Partnership Holdings, Inc., a holding company subsidiary of the Manager; a
director of Oppenheimer Real Asset Management, Inc. (since July 1996); President
and a director (since October 1997) of OppenheimerFunds International Ltd., an
offshore fund management subsidiary of the Manager and of Oppenheimer Millennium
Funds plc; President and a director of other Oppenheimer funds; a director of
Prudential Corporation plc (a U.K. financial service company).
Ned M. Steel, Trustee, Age: 84
3416 South Race Street, Englewood,
Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado.
James C. Swain*, Chairman, Chief
Executive Officer and Trustee, Age:
66
6803 South Tucson Way, Englewood, Colorado 80112 Vice Chairman of the Manager
(since September 1988); formerly President and a director of Centennial Asset
Management Corporation, an investment adviser subsidiary of the Manager and
Chairman of the Board of Shareholder Services, Inc.
Carol E. Wolf, Vice President and
Portfolio Manager, Age: 47
Two World Trade Center, New York,
New York 10048-0203 Vice President of the Manager and Centennial Asset
Management Corporation (since June 1990); an officer of other Oppenheimer funds.
Arthur J. Zimmer, Vice President and
Portfolio Manager, Age: 53
Two World Trade Center, New York,
New York 10048-0203 Senior Vice President of the Manager (since June 1997); Vice
President of Centennial Asset Management Corporation (since June 1997); an
officer of other Oppenheimer funds; formerly Vice President of the Manager
(October 1990 - June 1997).
Andrew J. Donohue, Vice President
and Secretary, Age: 49
Two World Trade Center, New York, New York 10048-0203 Executive Vice President
(since January 1993), General Counsel (since October 1991) and a Director (since
September 1995) of the Manager; Executive Vice President and General Counsel
(since September 1993) and a director (since January 1992) of the Distributor;
Executive Vice President, General Counsel and a director of HarbourView Asset
Management Corporation, Shareholder Services, Inc., Shareholder Financial
Services, Inc. and (since September 1995) Oppenheimer Partnership Holdings,
Inc.; President and a director of Centennial Asset Management Corporation (since
September 1995); President, General Counsel and a director of Oppenheimer Real
Asset Management, Inc. (since July 1996); General Counsel (since May 1996) and
Secretary (since April 1997) of Oppenheimer Acquisition Corp.; Vice President
and a director of OppenheimerFunds International Ltd. and Oppenheimer Millennium
Funds plc (since October 1997); an officer of other Oppenheimer funds.
Robert J. Bishop, Assistant
Treasurer, Age: 41
6803 South Tucson Way, Englewood,
Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Scott T. Farrar, Assistant
Treasurer, Age: 34
6803 South Tucson Way, Englewood,
Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Brian W. Wixted, Treasurer, Age: 40
6803 South Tucson Way, Englewood,
Colorado 80112
Senior Vice President and Treasurer (since April 1999) of the Manager; Treasurer
of HarbourView Asset Management Corporation, Shareholder Services, Inc.,
Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc.
(since April 1999); Assistant Treasurer of Oppenheimer Acquisition Corp. (since
April 1999); Assistant Secretary of Centennial Asset Management Corporation
(since April 1999); formerly Principal and Chief Operating Officer, Bankers
Trust Company - Mutual Fund Services Division (March 1995 - March 1999); Vice
President and Chief Financial Officer of CS First Boston Investment Management
Corp. (September 1991 - March 1995); and Vice President and Accounting Manager,
Merrill Lynch Asset Management (November 1987 - September 1991).
Robert G. Zack, Assistant Secretary,
Age: 51
Two World Trade Center, New York, New York 10048-0203
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of Shareholder Services, Inc. (since
May 1985), and Shareholder Financial Services, Inc. (since November 1989);
Assistant Secretary of OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer
funds.
[_] Remuneration of Trustees. The officers of the Fund and two of the
Trustee of the Fund (Ms. Macaskill and Mr. Swain) are affiliated with the
Manager and receive no salary or fee from the Fund. The remaining Trustees of
the Fund received the compensation shown below. The compensation from the Fund
was paid during its fiscal year ended July 31, 1999. The compensation from all
of the Denver-based Oppenheimer funds includes the Fund and is compensation
received as a director, trustee or member of a committee of the Board during the
calendar year 1998.
<PAGE>
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Aggregate Total Compensation
Trustee's Name Compensation from all Denver-Based
and Other Positions from Trust Oppenheimer Funds1
-----------------------------------------------------------------------------
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Robert G. Avis $239 $67,998
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William A. Baker $245 $69,998
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George C. Bowen $40 $None2
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Jon S. Fossel $241 $67,496
Review Committee Member
------------------------------------------------
-----------------------------------------------------------------------------
Sam Freedman $260 $73,998
Review Committee Member
------------------------------------------------
-----------------------------------------------------------------------------
Raymond J. Kalinowski $257 $73,998
Audit Committee Member
------------------------------------------------
-----------------------------------------------------------------------------
C. Howard Kast $274 $76,998
Audit and Review
Committee Chairman
-----------------------------------------------------------------------------
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Robert M. Kirchner $241 $67,998
Audit Committee Member
------------------------------------------------
-----------------------------------------------------------------------------
Ned M. Steel $239 $67,998
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1. For the 1998 calendar year.
2. Mr. Bowen did not receive compensation during the 1998 calendar year as he
was affiliated with the Manager during that period.
[_] Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested Trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they are
entitled to receive from the Fund. Under the plan, the compensation deferred by
a Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under this plan will be determined based upon the
performance of the selected funds.
Deferral of Trustees' fees under this plan will not materially affect the
Fund's assets, liabilities or net income per share. This plan will not obligate
the Fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the Securities and
Exchange Commission, the Fund may invest in the funds selected by the Trustee
under this plan without shareholder approval for the limited purpose of
determining the value of the Trustees' deferred fee accounts.
O Major Shareholders. As of November 15, 1999 the no person owned of
record or was known by the Fund to own beneficially 5% or more of any class of
the Fund's outstanding shares.
The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company. The
Manager and the Fund have a Code of Ethics. It is designed to detect and prevent
improper personal trading by certain employees, including portfolio managers,
that would compete with or take advantage of the Fund's portfolio transactions.
Compliance with the Code of Ethics is carefully monitored and enforced by the
Manager.
The portfolio managers of the Fund are principally responsible for the
day-to-day management of the Fund's investment portfolio. Other members of the
Manager's fixed-income portfolio department, particularly security analysts,
traders and other portfolio managers, have broad experience with fixed-income
securities. They provide the Fund's portfolio managers with research and support
in managing the Fund's investments.
O The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and the Fund. The Manager selects securities for
the Fund's portfolio and handles its day-to-day business. The agreement requires
the Manager, at its expense, to provide the Fund with adequate office space,
facilities and equipment. It also requires the Manager to provide and supervise
the activities of all administrative and clerical personnel required to provide
effective administration for the Fund. Those responsibilities include 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 the Fund.
Expenses not expressly assumed by the Manager under the investment
advisory agreement are paid by the Fund. The investment advisory agreement lists
examples of expenses paid by the Fund. The major categories relate to interest,
taxes, fees to unaffiliated Trustees, legal and audit expenses, custodian bank
and transfer agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation costs. The
management fees paid by the Fund to the Manager are calculated at the rates
described in the Prospectus.
-----------------------------------------------------------------------------
Fiscal Year ended 7/31 Management Fee Paid to OppenheimerFunds, Inc.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
1997 $1,286,675
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1998 $1,368,194
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1999 $2,211,132
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The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund sustains for any
investment, adoption of any investment policy, or the purchase, sale or
retention of any security.
The agreement permits the Manager to act as investment advisor for any
other person, firm or corporation and to use the name "Oppenheimer" in
connection with other investment companies for which it may act as investment
advisor or general distributor. If the Manager shall no longer act as investment
advisor to the Fund, the Manager may withdraw the right of the Fund to use the
name "Oppenheimer" as part of its name.
O The Distributor. Under its General Distributor's Agreement with the
Fund, OppenheimerFunds Distributor, Inc., a subsidiary of the Manager, acts as
the Fund's principal underwriter and Distributor in the continuous public
offering of the Fund's shares. The Distributor is not obligated to sell a
specific number of shares. The Distributor bears the expenses normally
attributable to sales, including advertising and the cost of printing and
mailing prospectuses, other than those furnished to existing shareholders.
Portfolio Transactions. Portfolio decisions are based upon recommendations and
judgment of the Manager subject to the overall authority of the Board of
Trustees. Most purchases made by the Fund are principal transactions at net
prices, so the Fund incurs little or no brokerage costs. The Fund deals directly
with the selling or purchasing principal or market maker without incurring
charges for the services of a broker on its behalf unless the Manager determines
that a better price or execution may be obtained by using the services of a
broker. Purchases of portfolio securities from underwriters include a commission
or concession paid by the issuer to the underwriter, and purchases from dealers
include a spread between the bid and asked prices.
The Fund seeks to obtain prompt execution of orders at the most favorable
net price. If dealers are used for portfolio transactions, transactions may be
directed to dealers for their execution and research services. 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. 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. Investment research services may be
supplied to the Manager by a third party at the instance of a broker through
which trades are placed. It may include 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 in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager. That research provides additional views
and comparisons for consideration, and helps the Manager obtain market
information for the valuation of securities held in the Fund's portfolio or
being considered for purchase.
Subject to applicable rules covering the Manager's activities in this
area, sales of shares of the Fund and/or the other investment companies managed
by the Manager or distributed by the Distributor may also be considered as a
factor in the direction of transactions to dealers. That must be done in
conformity with the price, execution and other considerations and practices
discussed above. Those other investment companies may also give similar
consideration relating to the sale of the Fund's shares. No portfolio
transactions will be handled by any securities dealer affiliated with the
Manager.
The Fund's policy of investing in short-term debt securities with maturity
of less than one year results in high portfolio turnover and may increase the
Fund's transaction costs. However, since brokerage commissions, if any, are
small, high turnover does not have an appreciable adverse effect upon the income
of the Fund.
Distribution and Service Plans
The Distributor. Under its General Distributor's Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund. The Distributor is not
obligated to sell a specific number of shares. Expenses normally attributable to
sales are borne by the Distributor.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares during the Fund's three most recent fiscal
years is shown in the table below.
<PAGE>
- -------------------------------------------------------------------------------
Fiscal
Year Commissions on Class B Shares Commissions on Class C Shares
Ended Advanced by Distributor1 Advanced by Distributor1
7/31:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1997 $61,806 $5,635
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1998 $457,869 $9,700
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1999 $808,752 $35,422
- -------------------------------------------------------------------------------
1. The Distributor advances commission payments to dealers for sales of Class B
and Class C shares from its own resources at the time of sale.
- -------------------------------------------------------------------------------
Class A Contingent Class B Contingent
Fiscal Deferred Sales Deferred Sales Class C Contingent
Year Charges Retained by Charges Retained by Deferred Sales Charges
Ended 7/31 Distributor Distributor Retained by Distributor
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1999 $3,205 $7,093 $7,759
- -------------------------------------------------------------------------------
Distribution and Service Plans. The Fund has adopted a Service Plan for Class A
shares and Distribution and Service Plans for Class B and Class C shares under
Rule 12b-1 of the Investment Company Act. Under those plans the Fund pays the
Distributor for all or a portion of its costs incurred in connection with the
distribution and/or servicing of the shares of the particular class
Each plan has been approved by a vote of the Board of Trustees, including
a majority of the Independent Trustees2, cast in person at a meeting called for
the purpose of voting on that plan.
2. In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund (or its parent
corporation) and who do not have any direct or indirect financial interest in
the operation of the distribution plan or any agreement under the plan.
Under the plans, the Manager and the Distributor may make payments to
affiliates and, in their sole discretion, from time to time, may use their own
resources (at no direct cost to the Fund) to make payments to brokers, dealers
or other financial institutions for distribution and administrative services
they perform. The Manager may use its profits from the advisory fee it receives
from the Fund. In their sole discretion, the Distributor and the Manager may
increase or decrease the amount of payments they make from their own resources
to plan recipients.
Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of that class.
The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by shareholders of the class
affected by the amendment. Because Class B shares of the Fund automatically
convert into Class A shares after six years, the Fund must obtain the approval
of both Class A and Class B shareholders for a proposed material amendment to
the Class A plan that would materially increase payments under the plan. That
approval must be by a "majority" (as defined in the Investment Company Act) of
the shares of each class, voting separately by class.
While the plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The Reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees.
Each plan states that while it is in effect, the selection and nomination
of those Trustees of the Fund who are not "interested persons" of the Fund is
committed to the discretion of the Independent Trustees. This does not prevent
the involvement of others in the selection and nomination process as long as the
final decision as to selection or nomination is approved by a majority of the
Independent Trustees.
Under the plans for a class, no payment will be made to any recipient in
any quarter in which the aggregate net asset value of all Fund shares of that
class held by the recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time by a majority of the
Independent Trustees. The Board of Trustees has set no minimum amount of assets
to qualify for payments under the plans.
O Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as "recipients")
for personal services and account maintenance services they provide for their
customers who hold Class A shares. The services include, among others, answering
customer inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and providing
other services at the request of the Fund or the Distributor. The Class A
service plan permits reimbursements to the Distributor at a rate of up to 0.20%
of average annual net assets of Class A shares. While the plan permits the Board
to authorize payments to the Distributor to reimburse itself for services under
the plan, the Board has not yet done so. The Distributor makes payments to plan
recipients quarterly at an annual rate not to exceed 0.20% of the average annual
net assets consisting of Class A shares held in the accounts of the recipients
or their customers.
For the fiscal year ended July 31, 1999 payments under the Class A Plan
totaled $483,594, all of which was paid by the Distributor to recipients. That
included $105,867 paid to an affiliate of the Distributor's parent company. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years. The Distributor may not
use payments received under the Class A Plan to pay any of its interest
expenses, carrying charges, or other financial costs, or allocation of overhead.
O Class B and Class C Service and Distribution Plan Fees. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate for its services, whether
its costs in distributing Class B and Class C shares and servicing accounts are
more or less than the amounts paid by the Fund under the plan for the period for
which the fee is paid. The types of services that recipients provide are similar
to the services provided under the Class A service plan, described above.
The Class B and the Class C Plans permit the Distributor to retain both
the asset-based sales charges and the service fees or to pay recipients the
service fee on a quarterly basis, without payment in advance. Currently, the
Board of Trustees has not authorized the payment of the service fee.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. It pays the asset-based sales charge as
an ongoing commission to the recipient on Class C shares outstanding for a year
or more. If a dealer has a special agreement with the Distributor, the
Distributor will pay the Class B and/or Class C asset-based sales charge to the
dealer quarterly in lieu of paying the sales commissions in advance at the time
of purchase.
The asset-based sales charges on Class B and Class C shares allow
investors to buy shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares. The Fund pays the
asset-based sales charges to the Distributor for its services rendered in
distributing Class B and Class C shares. The payments are made to the
Distributor in recognition that the Distributor: o pays sales commissions to
authorized brokers and dealers at the time of sale
and pays service fees as described above,
o may finance payment of sales commissions and/or the advance of the
service fee payment to recipients under the plans, or may provide such
financing from its own resources or from the resources of an affiliate,
o employs personnel to support distribution of Class B and Class C shares,
and
o bears the costs of sales literature, advertising and prospectuses (other
than those furnished to current shareholders) and state "blue sky"
registration fees and certain other distribution expenses.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the plan was terminated. All
payments under the Class B and the Class C plans are subject to the limitations
imposed by the Conduct Rules of the National Association of Securities Dealers,
Inc. on payments of asset-based sales charges and service fees.
- --------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor for the Year Ended 7/31/99
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distributor's
Distributor's Unreimbursed
Total Amount Aggregate Expenses as %
Payments Retained by Unreimbursed of Net Assets
Class: Under Plan Distributor Expenses Under Plan of Class
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Plan $1,273,035 $1,272,990 $0 NONE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Plan $278,656 $278,567 $0 NONE
- --------------------------------------------------------------------------------
1. Includes $0 paid to an affiliate of the Distributor's parent company. 2.
Includes $0 paid to an affiliate of the Distributor's parent company.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses a variety of terms to
illustrate its performance. These terms include "yield," "compounded effective
yield" and "average annual total return." An explanation of how yields and total
returns are calculated is set forth below. The charts below show the Fund's
performance as of the Fund's most recent fiscal year end. You can obtain current
performance information by calling the Fund's Transfer Agent at 1-800-525-7048
or by visiting the OppenheimerFunds Internet web site at
http://www.oppenheimerfunds.com.
The Fund's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. If the fund shows total returns in addition to its yields, the
returns must be for the 1-, 5- and 10-year periods ending as of the most recent
calendar quarter prior to the publication of the advertisement (or its
submission for publication).
Use of standardized performance calculations enables an investor to
compare the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Fund's performance information as a basis for comparisons with other
investments:
Yields and total returns measure the performance of a hypothetical account in
the Fund over various periods and do not show the performance of each
shareholder's account. Your account's performance will vary from the model
performance data if your dividends are received in cash, or you buy or
sell shares during the period, or you bought your shares at a different
time than the shares used in the model.
An investment in the Fund is not insured by the FDIC or any other government
agency.
The Fund's yield is not fixed or guaranteed and will fluctuate. Yields and
total returns for any given past period represent historical performance
information and are not, and should not be considered, a prediction of
future yields or returns.
O Yields. The Fund's current yield is calculated for a seven-day period of
time as follows. First, a base period return is calculated for the seven-day
period by determining the net change in the value of a hypothetical pre-existing
account having one share at the beginning of the seven-day period. The change
includes dividends declared on the original share and dividends declared on any
shares purchased with dividends on that share, but such dividends are adjusted
to exclude any realized or unrealized capital gains or losses affecting the
dividends declared. Next, the base period return is multiplied by 365/7 to
obtain the current yield to the nearest hundredth of one percent.
The compounded effective yield for a seven-day period is calculated by (1)
adding 1 to the base period return (obtained as described
above),
(2) raising the sum to a power equal to 365 divided by 7, and
(3) subtracting 1 from the result.
The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent. The calculation of yield under either
procedure described above does not take into consideration any realized or
unrealized gains or losses on the Fund's portfolio securities which may affect
dividends. Therefore, the return on dividends declared during a period may not
be the same on an annualized basis as the yield for that period.
[_] Total Return Information. There are different types of "total
returns" to measure the Fund's performance. Total return is the change in value
of a hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Fund uses standardized calculations for its total
returns as prescribed by the SEC. The methodology is discussed below.
|_| Average Annual Total Return. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n") to achieve an Ending Redeemable Value ("ERV" in the
formula) of that investment, according to the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
|_| Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis.
Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
- --------------------------------------------------------------------------------
Yield Compounded Average Annual Total Returns (at
(7 days Effective Yield 7/31/99)
ended (7 days ended
7/31/99) 7/31/99)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10 Years
1-Year 5 Years -------------
(or life of
the class,
if less)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A Shares 4.16% 4.25% 4.30% 4.51% 4.57%1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares 3.59% 3.65% 3.72% 3.90% 3.56%2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares 3.61% 3.67% 3.73% 3.93% 3.66%3
- --------------------------------------------------------------------------------
1. Inception of Class A shares: 1/3/89. Performance is for 10 years.
2. Inception of Class B shares: 8/17/93
3. Inception of Class C shares: 12/1/93
O Other Performance Comparisons. Yield information may be useful to investors in
reviewing the Fund's performance. The Fund may make comparisons between its
yield and that of other investments, by citing various indices such as The Bank
Rate Monitor National Index (provided by Bank Rate MonitorJ) which measures the
average rate paid on bank money market accounts, NOW accounts and certificates
of deposits by the 100 largest banks and thrifts in the top ten metro areas.
When comparing the Fund's yield with that of other investments, investors should
understand that certain other investment alternatives such as certificates of
deposit, U.S. government securities, money market instruments or bank accounts
may provide fixed yields and may be insured or guaranteed.
From time to time, the Fund may include in its advertisements and sales
literature performance information about the Fund cited in other newspapers and
periodicals, such as The New York Times, which may include performance
quotations from other sources.
From time to time, the Fund's Manager may publish rankings or ratings of
the Manager (or the Transfer Agent) or the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of investor/shareholder
services by third parties may compare the services of the Oppenheimer funds to
those of other mutual fund families selected by the rating or ranking services.
They may be based on the opinions of the rating or ranking service itself, based
on its research or judgment, or based on surveys of investors, brokers,
shareholders or others.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Additional information is presented below about the methods that can be used to
buy shares of the Fund. Appendix C contains more information about the special
sales charge arrangements offered by the Fund, and the circumstances in which
sales charges may be reduced or waived for certain classes of investors.
AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25.00. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House ("ACH")
transfer to buy shares. Dividends will begin to accrue on shares purchased by
the proceeds of ACH transfers on the business day the Fund receives Federal
Funds for the purchase through the ACH system before the close of The New York
Stock Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier
on certain days. If Federal Funds are received on a business day after the close
of the Exchange, the shares will be purchased and dividends will begin to accrue
on the next regular business day. The proceeds of ACH transfers are normally
received by the Fund 3 days after the transfers are initiated. The Distributor
and the Fund are not responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Asset Builder Plans. To establish an Asset Builder Plan to buy shares directly
from a bank account, you must enclose a check (the minimum is $25) for the
initial purchase with your application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption restrictions for
recent purchases described in the Prospectus. Asset Builder Plans are available
only if your bank is an ACH member. Asset Builder Plans may not be used to buy
shares for OppenheimerFunds employee-sponsored qualified retirement accounts.
Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use
their account in that fund to make monthly automatic purchases of shares of up
to four other Oppenheimer funds.
If you make payments from your bank account to purchase shares of the
Fund, your bank account will be debited automatically. Normally the debit will
be made two business days prior to the investment dates you selected on your
Application. Neither the Distributor, the Transfer Agent nor the Fund shall be
responsible for any delays in purchasing shares that result from delays in ACH
transmissions.
Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder
payment or your can terminate these automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions to implement them.
The Fund reserves the right to amend, suspend, or discontinue offering Asset
Builder plans at any time without prior notice.
O The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for
which the Distributor acts as the distributor or the sub-Distributor and include
the following:
Oppenheimer Main Street California
Oppenheimer Bond Fund Municipal Fund
Oppenheimer Main Street Growth & Income
Oppenheimer Capital Appreciation Fund Fund
Oppenheimer Capital Preservation Fund Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund Oppenheimer MidCap Fund
Oppenheimer Champion Income Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Convertible Securities Fund Oppenheimer Municipal Bond Fund
Oppenheimer Developing Markets Fund Oppenheimer New York Municipal Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Disciplined Value Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Discovery Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund,
Oppenheimer Enterprise Fund Inc.
Oppenheimer Quest Global Value Fund,
Oppenheimer Capital Income Fund Inc.
Oppenheimer Europe Fund Oppenheimer Quest Opportunity Value Fund Oppenheimer
Florida Municipal Fund Oppenheimer Quest Small Cap Value Fund Oppenheimer Global
Fund Oppenheimer Quest Value Fund, Inc. Oppenheimer Global Growth & Income Fund
Oppenheimer Real Asset Fund Oppenheimer Gold & Special Minerals Fund Oppenheimer
Senior Floating Rate Fund Oppenheimer Growth Fund Oppenheimer Strategic Income
Fund Oppenheimer High Yield Fund Oppenheimer Total Return Fund, Inc. Oppenheimer
Insured Municipal Fund Oppenheimer Trinity Core Fund Oppenheimer Intermediate
Municipal Fund Oppenheimer Trinity Growth Fund Oppenheimer International Bond
Fund Oppenheimer Trinity Value Fund Oppenheimer International Growth Fund
Oppenheimer U.S. Government Trust Oppenheimer International Small Company Fund
Oppenheimer World Bond Fund Oppenheimer Large Cap Growth Fund Limited-Term New
York Municipal Fund Oppenheimer Limited-Term Government Fund Rochester Fund
Municipals
and the following money market funds:
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of each
of the Oppenheimer funds described above except the Fund and the money market
funds. Under certain circumstances described in this Statement of Additional
Information, redemption proceeds of certain money market fund shares may be
subject to a contingent deferred sales charge.
Classes of Shares. Each class of shares of the Fund represents an interest in
the same portfolio of investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class B or
Class C shares and the dividends payable on Class B or Class C shares will be
reduced by incremental expenses borne solely by that class. Those expenses
include the asset-based sales charges to which Class B and Class C are subject.
The Distributor will not accept any order in the amount of $500,000 or
more for Class B shares or $1 million or more for Class C shares on behalf of a
single investor (not including dealer "street name" or omnibus accounts). That
is because generally it will be more advantageous for that investor to purchase
Class A shares of the Fund.
|_| Class B Conversion. The conversion of Class B shares to Class A shares
after six years is subject to the continuing availability of a private letter
ruling from the Internal Revenue Service, or an opinion of counsel or a tax
adviser, to the effect that the conversion of Class B shares does not constitute
a taxable event for the shareholder under federal income tax law. If such a
revenue ruling or opinion is no longer available, the automatic conversion
feature may be suspended, in which event no further conversions of Class B
shares would occur while that suspension remained in effect. Although Class B
shares could then be exchanged for Class A shares on the basis of relative net
asset value of the two classes, without the imposition of a sales charge or fee,
such exchange could constitute a taxable event for the shareholder, and absent
an exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.
|_| Allocation of Expenses. The Fund pays expenses related to its daily
operations, such as custodian bank fees, Trustees' fees, transfer agency fees,
legal fees and auditing costs. Those expenses are paid out of the Fund's assets
and are not paid directly by shareholders. However, those expenses reduce the
net asset value of shares, and therefore are indirectly borne by shareholders
through their investment.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's share classes recognizes two types of expenses.
General expenses that do not pertain specifically to any one class are allocated
pro rata to the shares of all classes. The allocation is based on the percentage
of the Fund's total assets that is represented by the assets of each class, and
then equally to each outstanding share within a given class. Such general
expenses include management fees, legal, bookkeeping and audit fees, printing
and mailing costs of shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current shareholders, fees to unaffiliated
Trustees, custodian bank expenses, share issuance costs, organization and
start-up costs, interest, taxes and brokerage commissions, and non-recurring
expenses, such as litigation costs.
Other expenses that are directly attributable to a particular class are
allocated equally to each outstanding share within that class. Examples of such
expenses include distribution and service plan fees, transfer and shareholder
servicing agent fees and expenses and shareholder meeting expenses (to the
extent that such expenses pertain only to a specific class).
Determination of Net Asset Value Per Share. The net asset value per share of the
Fund is determined as of the close of business of The New York Stock Exchange
(the "Exchange") on each day that the Exchange is open, by dividing the value of
the Fund's net assets by the total number of shares outstanding. The Exchange
normally closes at 4:00 P.M., New York time, but may close earlier on some days
(for example, in case of weather emergencies or on days falling before a
holiday). The Exchange's most recent annual announcement (which is subject to
change) states that it will close on New Year's Day, Martin Luther King Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. It may also close on other days.
The Fund's Board of Trustees has adopted the amortized cost method to
value the Fund's portfolio securities. Under the amortized cost method, a
security is valued initially at its cost and its valuation assumes a constant
amortization of any premium or accretion of any discount, regardless of the
impact of fluctuating interest rates on the market value of the security. This
method does not take into consideration any unrealized capital gains or losses
on securities. While this method provides certainty in valuing securities, in
certain periods the value of a security determined by amortized cost may be
higher or lower than the price the Fund would receive if it sold the security.
The Fund's Board of Trustees has established procedures reasonably designed
to stabilize the Fund's net asset value at $1.00 per share. Those procedures
include a review of the Fund's portfolio holdings by the Board of Trustees, at
intervals it deems appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations deviates from $1.00 per share
based on amortized cost.
The Board of Trustees will examine the extent of any deviation between the
Fund's net asset value based upon available market quotations and amortized
cost. If the Fund's net asset value were to deviate from $1.00 by more than
0.5%, Rule 2a-7 requires the Board of Trustees to consider what action, if any,
should be taken. If they find that the extent of the deviation may cause a
material dilution or other unfair effects on shareholders, the Board of Trustees
will take whatever steps it considers appropriate to eliminate or reduce the
dilution, including, among others, withholding or reducing dividends, paying
dividends from capital or capital gains, selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten the average maturity
of the portfolio, or calculating net asset value per share by using available
market quotations.
During periods of declining interest rates, the daily yield on shares of
the Fund may tend to be lower (and net investment income and dividends higher)
than those of a fund holding the identical investments as the Fund but which
used a method of portfolio valuation based on market prices or estimates of
market prices. During periods of rising interest rates, the daily yield of the
Fund would tend to be higher and its aggregate value lower than that of an
identical portfolio using market price valuation.
How to Sell Shares
The information below supplements the terms and conditions for redeeming shares
set forth in the Prospectus.
Checkwriting. When a check is presented to the bank for clearance, the bank will
ask the Fund to redeem a sufficient number of full and fractional shares in the
shareholder's account to cover the amount of the check. This enables the
shareholder to continue receiving dividends on those shares until the check is
presented to the Fund. Checks may not be presented for payment at the offices of
the bank or the Fund's custodian bank. This limitation does not affect the use
of checks for the payment of bills or to obtain cash at other banks. The Fund
reserves the right to amend, suspend or discontinue offering checkwriting
privileges at any time without prior notice.
In choosing to take advantage of the checkwriting privilege, by signing
the account application or by completing a checkwriting card, each individual
who signs: (1) for individual accounts, represents that they are the registered
owner(s) of
the shares of the Fund in that account;
(2) for accounts for corporations, partnerships, trusts and other entities,
represents that they are an officer, general partner, trustee or other
fiduciary or agent, as applicable, duly authorized to act on behalf of the
registered owner(s);
(3) authorizes the Fund, its Transfer Agent and any bank through which the
Fund's drafts (checks) are payable to pay all checks drawn on the Fund
account of such person(s) and to redeem a sufficient amount of shares from
that account to cover payment of each check;
(4) specifically acknowledges that if they choose to permit checks to be
honored if there is a single signature on checks drawn against joint
accounts, or accounts for corporations, partnerships, trusts or other
entities, the signature of any one signatory on a check will be sufficient
to authorize payment of that check and redemption from the account, even
if that account is registered in the names of more than one person or more
than one authorized signature appears on the checkwriting card or the
application, as applicable;
(5) understands that the checkwriting privilege may be terminated or amended
at any time by the Fund and/or the Fund's bank; and
(6) acknowledges and agrees that neither the Fund nor its bank shall incur any
liability for that amendment or termination of checkwriting privileges or
for redeeming shares to pay checks reasonably believed by them to be
genuine, or for returning or not paying checks that have not been accepted
for any reason.
Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of Class A shares that were
purchased by exchange of Class A shares of another Oppenheimer fund on which an
initial sales charge was paid or Class A or Class B shares on which a contingent
deferred sales charge was paid.
The reinvestment may be made without sales charge only in Class A shares
of any of the other Oppenheimer funds into which shares of the Fund are
exchangeable as described in "How to Exchange Shares" below. Reinvestment will
be at the net asset value next computed after the Transfer Agent receives the
reinvestment order. The shareholder must ask the Transfer Agent for that
privilege at the time of reinvestment. This privilege does not apply to Class C
shares. The Fund may amend, suspend or cease offering this reinvestment
privilege at any time as to shares redeemed after the date of such amendment,
suspension or cessation.
Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable on that
gain. If there has been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption proceeds of
Fund shares on which a sales charge was paid are reinvested of another of the
Oppenheimer funds within 90 days of payment of the sales charge, the
shareholder's basis in the shares of the Fund that were redeemed may not include
the amount of the sales charge paid. That would reduce the loss or increase the
gain recognized from the redemption. However, in that case the sales charge
would be added to the basis of the shares acquired by the reinvestment of the
redemption proceeds.
Transfers of Shares. A transfer of shares to a different registration is not an
event that triggers the payment of sales charges. Therefore, shares are not
subject to the payment of a contingent deferred sales charge of any class at the
time of transfer to the name of another person or entity. It does not matter
whether the transfer occurs by absolute assignment, gift or bequest, as long as
it does not involve, directly or indirectly, a public sale of the shares. When
shares subject to a contingent deferred sales charge are transferred, the
transferred shares will remain subject to the contingent deferred sales charge.
It will be calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the transferring
shareholder.
If less than all shares held in an account are transferred, and some but
not all shares in the account would be subject to a contingent deferred sales
charge if redeemed at the time of transfer, the priorities described in the
Prospectus under "How to Buy Shares" for the imposition of the Class B or Class
C contingent deferred sales charge will be followed in determining the order in
which shares are transferred.
Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemptions proceeds may be delayed if the Fund's custodian bank is not open for
business on a day when the Fund would normally authorize the wire to be made,
which is usually the Fund's next regular business day following the redemption.
In those circumstances, the wire will not be transmitted until the next bank
business day on which the Fund is open for business. No dividends will be paid
on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans or
pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address listed
in "How To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must (1) state the reason for the
distribution; (2) state the owner's awareness of tax penalties if the
distribution is
premature; and
(3) conform to the requirements of the plan and the Fund's other redemption
requirements.
Participants (other than self-employed persons) in
OppenheimerFunds-sponsored pension or profit-sharing plans with shares of the
Fund held in the name of the plan or its fiduciary may not directly request
redemption of their accounts. The plan administrator or fiduciary must sign the
request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed and submitted to the Transfer Agent
before the distribution may be made. Distributions from retirement plans are
subject to withholding requirements under the Internal Revenue Code, and IRS
Form W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed. Unless
the shareholder has provided the Transfer Agent with a certified tax
identification number, the Internal Revenue Code requires that tax be withheld
from any distribution even if the shareholder elects not to have tax withheld.
The Fund, the Manager, the Distributor, and the Transfer Agent assume no
responsibility to determine whether a distribution satisfies the conditions of
applicable tax laws and will not be responsible for any tax penalties assessed
in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is the Fund's agent to repurchase its shares from authorized dealers
or brokers on behalf of their customers. Shareholders should contact their
broker or dealer to arrange this type of redemption. The repurchase price per
share will be the net asset value next computed after the Distributor receives
the order placed by the dealer or broker. However, if the Distributor receives a
repurchase order from a dealer or broker after the close of The New York Stock
Exchange on a regular business day, it will be processed at that day's net asset
value if the order was received by the dealer or broker from its customers prior
to the time the Exchange closes. Normally the Exchange closes at 4:00 P.M.
Additionally, the order must have been transmitted to and received by the
Distributor prior to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been
redeemed upon the Distributor's receipt of the required redemption documents in
proper form. The signature(s) of the registered owner(s) on the redemption
document must be guaranteed as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(having a value of at least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the shareholder for
receipt of the payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable to all
shareholders of record. Payments must also be sent to the address of record for
the account and the address must not have been changed within the prior 30 days.
Required minimum distributions from OppenheimerFunds-sponsored retirement plans
may not be arranged on this basis.
Payments are normally made by check, but shareholders having AccountLink
privileges may arrange to have Automatic Withdrawal Plan payments transferred to
the bank account designated on the account application or signature-guaranteed
instructions sent to the Transfer Agent. Shares are normally redeemed pursuant
to an Automatic Withdrawal Plan three business days before the payment
transmittal date you select in the account application. If a contingent deferred
sales charge applies to the redemption, the amount of the check or payment will
be reduced accordingly. The Fund cannot guarantee receipt of a payment on the
date requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice.
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans as stated below.
These provisions may be amended from time to time by the Fund and/or the
Distributor. When adopted, any amendments will automatically apply to existing
Plans.
O Automatic Exchange Plans. Shareholders can authorize the Transfer Agent
to exchange a pre-determined amount of shares of the Fund for shares (of the
same class) of other Oppenheimer funds automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount
that may be exchanged to each other fund account is $25. Instructions should be
provided on the account application or signature-guaranteed instructions.
Exchanges made under these plans are subject to the restrictions that apply to
exchanges as set forth in "How to Exchange Shares" in the Prospectus and below
in this Statement of Additional Information.
O Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to
meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first. Shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales
charge, to the extent necessary to make withdrawal payments. Depending upon the
amount withdrawn, the investor's principal may be depleted. Payments made under
withdrawal plans should not be considered as a yield or income on your
investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent. Neither the
Transfer Agent nor the Fund shall incur any liability to the Planholder for any
action taken or not taken by the Transfer Agent in good faith to administer the
Plan. Share certificates will not be issued for shares of the Fund purchased for
and held under the Plan, but the Transfer Agent will credit all such shares to
the account of the Planholder on the records of the Fund. Any share certificates
held by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the account
may be paid in cash or reinvested.
Shares will be redeemed to make withdrawal payments at the net asset value
per share determined on the redemption date. Checks or AccountLink payments of
the proceeds of Plan withdrawals will normally be transmitted three business
days prior to the date selected for receipt of the payment according to the
choice specified in writing by the Planholder. Receipt of payment on the date
selected cannot be guaranteed.
The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time in mailing such notification
for the requested change to be put in effect. The Planholder may, at any time,
instruct the Transfer Agent by written notice (in proper form in accordance with
the requirements of the then-current Prospectus of the Fund) to redeem all, or
any part of, the shares held under the Plan. In that case, the Transfer Agent
will redeem the number of shares requested at the net asset value per share in
effect in accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Planholder may terminate a Plan at any time by writing to the Transfer
Agent. The Fund may also give directions to the Transfer Agent to terminate a
Plan. The Transfer Agent will also terminate a Plan upon its receipt of evidence
satisfactory to it that the Planholder has died or is legally incapacitated.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that have
not been redeemed from the account will be held in uncertificated form in the
name of the Planholder. The account will continue as a dividend-reinvestment,
uncertificated account unless and until proper instructions are received from
the Planholder, his or her executor or guardian, or another authorized person.
To use shares held under the Plan as collateral for a debt, the Planholder
may request issuance of a portion of the shares in certificated form. Upon
written request from the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued without causing the
withdrawal checks to stop. However, should such uncertificated shares become
exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act
as agent in administering the Plan.
How to Exchange Shares
As stated in the Prospectus, shares of a particular class of Oppenheimer funds
having more than one class of shares may be exchanged only for shares of the
same class of other Oppenheimer funds. Shares of Oppenheimer Money Market Fund,
Inc. are deemed to be "Class A Shares" for this purpose. You can obtain a
current list of funds showing which funds offer which classes by calling the
Distributor at 1-800-525-7048.
Allof the Oppenheimer funds currently offer Class A, B and C shares except
Oppenheimer Money Market Fund, Inc., Centennial Money Market Trust,
Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New
York Tax Exempt Trust, Centennial California Tax Exempt Trust, and
Centennial America Fund, L.P., which only offer Class A shares.
Oppenheimer Main Street California Municipal Fund currently offers only Class A
and Class B shares.
Class B and Class C shares of Oppenheimer Cash Reserves are generally
available only by exchange from the same class of shares of other
Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
Only certain Oppenheimer funds currently offer Class Y shares. Class Y shares
of Oppenheimer Real Asset Fund may not be exchanged for shares of any
other fund.
o Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
only for Class A shares of other Oppenheimer funds. They may not be
acquired by exchange of shares of any class of any other Oppenheimer funds
except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.
o Class A shares of Senior Floating Rate Fund are not available by exchange
of Class A shares of other Oppenheimer funds. Class A shares of Senior
Floating Rate Fund that are exchanged for shares of the other Oppenheimer
funds may not be exchanged back for Class A shares of Senior Floating Rate
Fund.
o Class X shares of Limited Term New York Municipal Fund can be exchanged
only for Class B shares of other Oppenheimer funds and no exchanges may be
made to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may not be exchanged for
shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves
or Oppenheimer Limited-Term Government Fund. Only participants in certain
retirement plans may purchase shares of Oppenheimer Capital Preservation
Fund, and only those participants may exchange shares of other Oppenheimer
funds for shares of Oppenheimer Capital Preservation Fund.
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. Shares of any
money market fund purchased without a sales charge may be exchanged for shares
of Oppenheimer funds offered with a sales charge upon payment of the sales
charge. They may also be used to purchase shares of Oppenheimer funds subject to
an early withdrawal charge or contingent deferred sales charge.
Shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds managed by
the Manager or its subsidiaries) redeemed within the 30 days prior to that
purchase may subsequently be exchanged for shares of other Oppenheimer funds
without being subject to an initial sales charge or contingent deferred sales
charge. To qualify for that privilege, the investor or the investor's dealer
must notify the Distributor of eligibility for this privilege at the time the
shares of Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
must supply proof of entitlement to this privilege.
Shares of the Fund acquired by reinvestment of dividends or distributions
from any of the other Oppenheimer funds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may be
exchanged at net asset value for shares of any of the Oppenheimer funds.
The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by applicable
law. It may be required to provide 60 days notice prior to materially amending
or terminating the exchange privilege. That 60 day notice is not required in
extraordinary circumstances.
|_| How Exchanges Affect Contingent Deferred Sales Charges. No contingent
deferred sales charge is imposed on exchanges of shares of any class purchased
subject to a contingent deferred sales charge. However, when Class A shares of
this Fund acquired by exchange of Class A shares of other Oppenheimer funds
purchased subject to a Class A contingent deferred sales charge are redeemed
within 18 months of the end of the calendar month of the initial purchase of the
exchanged Class A shares, the Class A contingent deferred sales charge is
imposed on the redeemed shares. The Class B contingent deferred sales charge is
imposed on Class B shares acquired by exchange if they are redeemed within 6
years of the initial purchase of the exchanged Class B shares. The Class C
contingent deferred sales charge is imposed on Class C shares acquired by
exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares.
When Class B or Class C shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the imposition
of the Class B or the Class C contingent deferred sales charge will be followed
in determining the order in which the shares are exchanged. Before exchanging
shares, shareholders should take into account how the exchange may affect any
contingent deferred sales charge that might be imposed in the subsequent
redemption of remaining shares. Shareholders owning shares of more than one
class must specify which class of shares they wish to exchange.
|_| Limits on Multiple Exchange Orders. The Fund reserves the right to
reject telephone or written exchange requests submitted in bulk by anyone on
behalf of more than one account. The Fund may accept requests for exchanges of
up to 50 accounts per day from representatives of authorized dealers that
qualify for this privilege.
|_| Telephone Exchange Requests. When exchanging shares by telephone, a
shareholder must have an existing account in the fund to which the exchange is
to be made. Otherwise, the investor must obtain a prospectus of that fund before
the exchange request may be submitted. If all telephone lines are busy (which
might occur, for example, during periods of substantial market fluctuations),
shareholders might not be able to request exchanges by telephone and would have
to submit written exchange requests.
|_| Processing Exchange Requests. Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The Fund
reserves the right, in its discretion, to refuse any exchange request that may
disadvantage it (for example, if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price that might be disadvantageous to the Fund). When you exchange some or all
of your shares from one fund to another, any special account features such as an
Asset Builder Plan or an Automatic Withdrawal Plan, will be switched to the new
account unless you tell the Transfer Agent not to do so. However, special
redemption and exchange features cannot be switched to an account in Oppenheimer
Senior Floating Rate Fund.
In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered by a share
certificate that is not tendered with the request. In those cases, only the
shares available for exchange without restriction will be exchanged.
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that the
fund selected is appropriate for his or her investment and should be aware of
the tax consequences of an exchange. For federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. The Fund, the Distributor, and the Transfer Agent
are unable to provide investment, tax or legal advice to a shareholder in
connection with an exchange request or any other investment transaction.
Dividends and Taxes
The Fund has no fixed dividend rate for Class A, Class B or Class C shares there
can be no assurance as to the payment of any dividends or the realization of any
capital gains. The dividends and distributions paid by a class of shares will
vary from time to time depending on market conditions, the composition of the
Fund's portfolio, and expenses borne by the Fund or borne separately by a class.
Dividends are calculated in the same manner, at the same time, and on the same
day for each class of shares. However, dividends on Class B and Class C shares
are expected to be lower than dividends on Class A shares. That is because of
the effect of the asset-based sales charge on Class B and Class C shares.
Dividends, distributions and proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund, Inc.
Reinvestment will be made as promptly as possible after the return of such
checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and the Fund and the Transfer Agent will not be liable to shareholders or
their representatives for compliance with those laws in good faith.
Tax Status of the Fund's Dividends and Distributions. The federal tax treatment
of the Fund's dividends and capital gains distributions is explained in the
Prospectus under the caption "Dividends and Taxes." Under the Internal Revenue
Code, by December 31 each year, the Fund must distribute 98% of its taxable
investment income earned from January 1 through December 31 of that year and 98%
of its capital gains realized in the period from November 1 of the prior year
through October 31 of the current year. It if does not, the Fund must pay an
excise tax on the amounts not distributed. It is presently anticipated that the
Fund will meet those requirements. However, the Fund's Board of Trustees and the
Manager might determine in a particular year that it would be in the best
interest of shareholders for the Fund not to make distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would reduce
the amount of income or capital gains available for distribution to
shareholders. The Fund's dividends will not be eligible for the
dividends-received deduction for corporations.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income taxes on amounts
paid by it as dividends and distributions. That qualification enables the Fund
to "pass through" its income and realized capital gains to shareholders without
having to pay tax on them. The Fund qualified as a regulated investment company
in its last fiscal year and intends to qualify in future years, but reserves the
right not to qualify. The Internal Revenue Code contains a number of complex
tests to determine whether the Fund qualifies. The Fund might not meet those
tests in a particular year. If it does not qualify, the Fund will be treated for
tax purposes as an ordinary corporation and will receive no tax deduction for
payments of dividends and distributions made to shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in the same class of
any of the other Oppenheimer funds listed above. Reinvestment for Class B and
Class C will be made at net asset value without sales charge. Reinvestment for
Class A shares will be subject to the initial sales charge of the fund selected.
To elect this option, the shareholder must notify the Transfer Agent in writing
and must have an existing account in the fund selected for reinvestment.
Otherwise, the shareholder first must obtain a prospectus for that fund and an
application from the Distributor to establish an account. The investment will be
made at net asset value in effect at the close of business on the payable date
of the dividend or distribution. Dividends and/or distributions from shares of
certain other Oppenheimer funds may be invested in shares of this Fund on the
same basis.
Additional Information About the Fund
The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is a
division of the Manager. It is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders of the Fund. It also handles
shareholder servicing and administrative functions. It is paid on a "at-cost"
basis.
The Custodian. Citibank, N.A. is the custodian bank of the Fund's assets. The
custodian bank's responsibilities include safeguarding and controlling the
Fund's portfolio securities and handling the delivery of such securities to and
from the Fund. It will be the practice of the Fund to deal with the custodian
bank in a manner uninfluenced by any banking relationship the custodian bank may
have with the Manager and its affiliates. The Fund's cash balances with the
custodian bank in excess of $100,000 are not protected by federal deposit
insurance. Those uninsured balances at times may be substantial.
Independent Auditors. Deloitte & Touche LLP are the independent auditors of the
Fund. They audit the Fund's financial statements and perform other related audit
services. They also act as auditors for certain other funds advised by the
Manager and its affiliates.
<PAGE>
A-32
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Cash Reserves:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Cash Reserves as of July 31, 1999,
the related statement of operations for the year then ended, the statements of
changes in net assets for the years ended July 31, 1999 and 1998 and the
financial highlights for the period January 1, 1994, to July 31, 1999. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1999, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
Cash Reserves as of July 31, 1999, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
August 20, 1999
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS July 31, 1999
- --------------------------------------------------------------------------------
FACE VALUE
AMOUNT SEE
NOTE 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS--4.3%
- --------------------------------------------------------------------------------
Credit Suisse First Boston, 4.83%, 9/8/99(1) $ 7,500,000 $
7,461,762
- -------------------------------------------------------------------------------
FCC National Bank, 4.94%, 11/1/99 10,000,000
10,000,000
- --------------------------------------------------------------------------------
Morgan Guaranty Trust Co. of New York, 5.126%, 8/27/99(2) 5,000,000
4,999,621
- -----------
Total Direct Bank Obligations
22,461,383
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LETTERS OF CREDIT--8.1%
- --------------------------------------------------------------------------------
Barclays Bank plc, guaranteeing commercial paper of Nacional
Financiera SNC:
4.84%, 8/16/99 6,500,000
6,486,892
4.97%, 11/18/99 10,000,000
9,849,519
- --------------------------------------------------------------------------------
Barclays Bank plc, guaranteeing commercial paper of United
Mexican States, 4.97%, 11/17/99 7,000,000
6,894,370
- --------------------------------------------------------------------------------
Credit Suisse First Boston, guaranteeing commercial paper of
Credit Suisse First Boston International (Guernsey) Ltd.,
4.87%, 9/16/99 7,000,000
6,956,441
- --------------------------------------------------------------------------------
Credit Suisse First Boston, guaranteeing commercial paper of
Daewoo International (America) Corp., 4.98%, 9/23/99 7,000,000
6,948,678
- -------------------------------------------------------------------------------
First Chicago NBD Corp., guaranteeing commercial paper of
First Chicago Financial Corp., 4.85%, 9/16/99 5,000,000
4,969,014
- -----------
Total Letters of Credit
42,104,914
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT-TERM NOTES--85.8%
- --------------------------------------------------------------------------------
ASSET-BACKED--24.3%
Asset Backed Capital Finance, Inc.:
4.88%, 8/25/99(1) 5,000,000
4,983,733
5.14%, 9/8/99(1) 10,000,000
9,945,744
- --------------------------------------------------------------------------------
Asset Securitization Cooperative, 5.25%, 8/27/99(1) 10,000,000
9,962,083
- --------------------------------------------------------------------------------
Atlantis One Funding Corp., 4.93%, 11/18/99(1) 10,000,000
9,850,730
- --------------------------------------------------------------------------------
Beta Finance, Inc.:
4.83%, 10/8/99(1) 6,000,000
5,945,260
4.84%, 8/17/99(1) 6,500,000
6,486,018
4.87%, 8/24/99(1) 2,000,000
1,993,777
- --------------------------------------------------------------------------------
Cooperative Assn. of Tractor Dealers, Inc.:
Series A, 4.87%, 9/22/99 6,000,000
5,957,793
Series B, 4.88%, 9/20/99 4,100,000
4,072,211
Series B, 5.17%, 8/6/99 6,000,000
5,995,692
- --------------------------------------------------------------------------------
Corporate Asset Funding Co., Inc., 5.11%, 9/20/99(1) 10,000,000
9,929,028
- --------------------------------------------------------------------------------
Eureka Securitization, Inc., 5.15%, 9/20/99(1) 10,000,000
9,928,472
- --------------------------------------------------------------------------------
Moat Funding LLC, 5%, 8/30/99(1) 12,500,000
12,449,653
10 Oppenheimer Cash Reserves
FACE VALUE
AMOUNT SEE
NOTE 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED (CONTINUED)
New Center Asset Trust, 5.17%, 10/28/99 $ 9,000,000 $
8,886,260
- --------------------------------------------------------------------------------
Park Avenue Receivables Corp., 5.33%, 9/9/99(1) 5,000,000
4,971,129
- --------------------------------------------------------------------------------
Preferred Receivables Funding Corp., 5.17%, 10/13/99(1) 10,135,000
10,028,749
- --------------------------------------------------------------------------------
Sigma Finance, Inc., 4.77%, 8/2/99(1) 4,500,000
4,499,404
- -----------
125,885,736
- --------------------------------------------------------------------------------
BANK HOLDING COMPANIES--2.2%
Bank One Corp., 5.18%, 11/12/99 8,000,000
7,881,436
- --------------------------------------------------------------------------------
Bankers Trust Co., New York, 4.97%, 11/10/99 3,700,000
3,648,409
- -----------
11,529,845
- --------------------------------------------------------------------------------
BEVERAGES--3.3%
Coca-Cola Enterprises, Inc.:
5.18%, 10/4/99(1) 10,000,000
9,907,911
5.47%, 1/28/00(1) 7,500,000
7,294,875
- -----------
17,202,786
- --------------------------------------------------------------------------------
BROKER/DEALERS--8.0%
Bear Stearns Cos., Inc.:
5.24%, 8/18/99(2) 3,000,000
3,000,000
5.284%, 8/5/99(2) 6,000,000
6,003,089
- --------------------------------------------------------------------------------
Goldman Sachs Group LP, 5.364%, 9/28/99(1)(2) 10,000,000
10,003,859
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co., 5.125%, 9/13/99(2) 7,300,000
7,300,000
- --------------------------------------------------------------------------------
NationsBanc Montgomery Securities LLC, 5.325%, 8/2/99(2) 15,000,000
15,000,000
- -----------
41,306,948
- --------------------------------------------------------------------------------
CHEMICALS--1.0%
Henkel Corp., 4.88%, 8/27/99(1) 5,000,000
4,982,378
- --------------------------------------------------------------------------------
COMMERCIAL FINANCE--9.3%
Countrywide Home Loans, 5.042%, 8/30/99(2) 10,000,000
10,000,000
- --------------------------------------------------------------------------------
FINOVA Capital Corp.:
4.91%, 9/22/99 4,000,000
3,971,631
4.98%, 9/9/99 1,000,000
994,605
5.55%, 2/3/00 6,000,000
5,827,950
6.06%, 10/8/99 3,500,000
3,504,959
- --------------------------------------------------------------------------------
Heller Financial, Inc.:
4.90%, 8/12/99 5,000,000
4,992,468
5.149%, 9/9/99(2) 5,000,000
5,000,000
5.271%, 9/1/99(2) 5,000,000
5,003,425
6.51%, 9/20/99 4,700,000
4,706,564
- --------------------------------------------------------------------------------
Safeco Credit Co., 5.16%, 9/17/99 4,000,000
3,973,053
- -----------
47,974,655
11 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Continued)
- --------------------------------------------------------------------------------
FACE VALUE
AMOUNT SEE
NOTE 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER FINANCE--1.9%
Sears Roebuck Acceptance Corp., 5.16%, 10/21/99 $10,000,000 $
9,883,900
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--6.0%
Associates Corp. of North America, 7.90%, 10/26/99 7,500,000
7,549,484
- --------------------------------------------------------------------------------
General Electric Capital Corp., 5.13%, 8/2/99 23,500,000
23,496,651
- -----------
31,046,135
- --------------------------------------------------------------------------------
DIVERSIFIED MEDIA--2.9%
Omnicom Finance, Inc.:
5.14%, 8/17/99(1) 5,000,000
4,988,578
5.15%, 8/9/99(1) 10,000,000
9,988,555
- -----------
14,977,133
- --------------------------------------------------------------------------------
INDUSTRIAL SERVICES--1.0%
Atlas Copco AB, 4.98%, 11/1/99(1) 5,000,000
4,936,367
- --------------------------------------------------------------------------------
INSURANCE--14.2%
Aegon Funding Corp.:
5.17%, 11/3/99 7,000,000
6,905,504
5.19%, 11/22/99 10,000,000
9,837,092
- --------------------------------------------------------------------------------
AIG Life Insurance Co., 5.22%, 8/2/99(2)(3) 7,000,000
7,000,000
- --------------------------------------------------------------------------------
General American Life Insurance Co., 5.24%, 8/2/99(2)(3) 15,000,000
15,000,000
- --------------------------------------------------------------------------------
Pacific Mutual Life Insurance Co., 5.099%, 8/2/99(2)(3) 5,000,000
5,000,000
- --------------------------------------------------------------------------------
Protective Life Insurance Co.:
5.25%, 8/2/99(2) 5,000,000
5,000,000
5.27%, 8/2/99(2) 10,000,000
10,000,000
5.27%, 8/2/99(2) 5,000,000
5,000,000
- --------------------------------------------------------------------------------
Security Benefit Life Insurance Co., 5.27%, 8/2/99 10,000,000
10,000,000
- -----------
73,742,596
- --------------------------------------------------------------------------------
LEASING & FACTORING--1.3%
American Honda Finance Corp., 5.288%, 10/25/99(2) 7,000,000
6,998,337
- --------------------------------------------------------------------------------
MANUFACTURING--2.3%
Eaton Corp., 4.99%, 9/17/99 12,000,000
11,921,823
- --------------------------------------------------------------------------------
SPECIAL PURPOSE FINANCIAL--5.6% Intrepid Funding Corp.:
4.85%, 8/5/99(1) 6,334,000
6,330,587
4.85%, 11/12/99(1) 8,000,000
7,888,989
- --------------------------------------------------------------------------------
KZH-KMS Corp., 5.20%, 10/7/99(1) 10,000,000
9,903,222
- --------------------------------------------------------------------------------
RACERS, Series 1998-MM-3-5, 5.226%, 8/2/99(2)(3) 5,000,000
5,000,000
- -----------
29,122,798
12 Oppenheimer Cash Reserves
FACE VALUE
AMOUNT SEE
NOTE 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS: TECHNOLOGY--2.5%
GTE Corp., 5.135%, 9/13/99(2) $13,000,000 $
12,992,775
- ------------
Total Short-Term Notes
444,504,212
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE 98.2%
509,070,509
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.8
9,250,341
-----------
- ------------
NET ASSETS 100.0%
$518,320,850
-----------
- ------------
-----------
- ------------
Short-term notes, direct bank obligations and letters of credit are generally
traded on a discount basis; the interest rate is the discount rate received by
the Fund at the time of purchase. Other securities normally bear interest at the
rates shown.
1. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $184,660,863, or 35.63% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees. 2. Floating or variable rate obligation. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on July 31,
1999. This instrument may also have a demand feature which allows, on up to 30
days' notice, the recovery of principal at any time, or at specified intervals
not exceeding one year. Maturity date shown represents effective maturity based
on variable rate and, if applicable, demand feature. 3. Represents a restricted
security which is considered illiquid, by virtue of the absence of a readily
available market or because of legal or contractual restrictions on resale. Such
securities amount to $32,000,000 or 6.17% of the Fund's net assets. The Fund may
not invest more than 10% of its net assets (determined at the time of purchase)
in illiquid securities.
See accompanying Notes to Financial Statements.
13 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES July 31, 1999
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ASSETS
Investments, at value--see accompanying statement $509,070,509
- -------------------------------------------------------------------------------
Cash 278,602
- -------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 13,306,542
Interest 1,248,724
Other 69,720
------------
Total assets 523,974,097
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Shares of beneficial interest redeemed 4,660,992
Dividends 674,633
Transfer and shareholder servicing agent fees 150,437
Shareholder reports 75,249
Distribution and service plan fees 45,141
Other 46,795
------------
Total liabilities 5,653,247
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS $518,320,850
------------
------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $518,320,459
- -------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 391
------------
Net assets $518,320,850
------------
------------
14 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value, redemption price and offering price
per share (based on net assets of $264,631,915 and
264,690,190 shares of beneficial interest outstanding) $1.00
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $204,081,474 and
204,078,414 shares of beneficial interest outstanding) $1.00
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $49,607,461and
49,606,525 shares of beneficial interest outstanding) $1.00
See accompanying Notes to Financial Statements.
15 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended July 31, 1999
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 24,075,156
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
EXPENSES
Management fees--Note 3 2,211,132
- ------------------------------------------------------------------------------
Distribution and service plan fees--Note 3:
Class A 483,594
Class B 1,273,035
Class C 278,656
- ------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 3 1,416,706
- ------------------------------------------------------------------------------
Shareholder reports 203,350
- ------------------------------------------------------------------------------
Registration and filing fees 171,727
- ------------------------------------------------------------------------------
Custodian fees and expenses 21,530
- ------------------------------------------------------------------------------
Legal, auditing and other professional fees 13,934
- ------------------------------------------------------------------------------
Insurance expenses 4,578
- ------------------------------------------------------------------------------
Trustees' compensation 2,236
- ------------------------------------------------------------------------------
Other 34,787
------------
Total expenses 6,115,265
Less expenses paid indirectly--Note 1 (11,553)
------------
Net expenses 6,103,712
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NET INVESTMENT INCOME 17,971,444
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 5,386
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,976,830
------------
------------
See accompanying Notes to Financial Statements.
16 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED JULY 31,
1999 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPERATIONS
Net investment income $
17,971,444 $ 11,848,711
- -------------------------------------------------------------------------------
Net realized gain
5,386 522
- ------------- -------------
Net increase in net assets resulting from operations
17,976,830 11,849,233
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Class A
(10,360,549) (8,374,810)
Class B
(6,243,315) (2,871,927)
Class C
(1,367,580) (601,974)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A
54,152,037 37,506,804
Class B
124,074,884 25,995,434
Class C
31,505,887 8,976,542
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
Total increase
209,738,194 72,479,302
- --------------------------------------------------------------------------------
Beginning of period
308,582,656 236,103,354
- ------------- -------------
End of period $
518,320,850 $ 308,582,656
- ------------- -------------
- ------------- -------------
See accompanying Notes to Financial Statements.
17 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A
- -------------------------------------------------------------------------------
YEAR ENDED
YEAR ENDED JULY
31, DECEMBER 31,
1999 1998 1997
1996(1) 1995 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning
of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income and
net realized gain .04 .04
.04 .03 .05 .03
Dividends and distributions
to shareholders (.04) (.04) (.04)
(.03) (.05) (.03)
- --------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
----- ----- -----
- ----- ----- -----
----- ----- -----
- ----- ----- -----
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN(2) 4.30% 4.61% 4.41%
2.68% 4.84% 3.22%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $264,632 $210,477 $172,970
$170,031 $148,529 $99,361
- --------------------------------------------------------------------------------
Average net assets (in thousands) $245,622 $186,795 $179,948
$149,889 $105,349 $87,908
- --------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.22% 4.48% 4.33%
4.47% 4.71% 3.25%
Expenses 1.10% 1.28%(4) 1.29%(4)
1.06%(4) 1.36%(4) 1.32%
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31. 2. Assumes a $1,000 hypothetical initial
investment on the business day before the first day of the fiscal period (or
inception of offering), with all dividends reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods of less than one full year. Total returns reflect changes in net
investment income only.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
18 Oppenheimer Cash Reserves
CLASS B
- -------------------------------------------------------------------------------
YEAR ENDED
YEAR ENDED JULY
31, DECEMBER 31,
1999 1998 1997
1996(1) 1995 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income and
net realized gain .04 .04
.04 .02 .04 .03
Dividends and distributions
to shareholders (.04) (.04) (.04)
(.02) (.04) (.03)
- --------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
----- ----- -----
- ----- ----- -----
----- ----- -----
- ----- ----- -----
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN(2) 3.72% 3.98% 3.82%
2.35% 4.26% 2.54%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $204,081 $80,005 $54,009
$85,573 $37,378 $46,803
- --------------------------------------------------------------------------------
Average net assets (in thousands) $170,068 $73,003 $67,333
$49,226 $35,360 $21,262
- --------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 3.67% 3.93% 3.78%
3.91% 4.15% 3.05%
Expenses 1.65% 1.83%(4) 1.84%(4)
1.61%(4) 1.92%(4) 1.89%
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31. 2. Assumes a $1,000 hypothetical initial
investment on the business day before the first day of the fiscal period (or
inception of offering), with all dividends reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods of less than one full year. Total returns reflect changes in net
investment income only.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
19 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (Continued)
- --------------------------------------------------------------------------------
CLASS C
- -------------------------------------------------------------------------------
YEAR ENDED
YEAR ENDED JULY
31, DECEMBER 31,
1999 1998 1997
1996(1) 1995 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
- -------------------------------------------------------------------------------
Income from investment operations:
Net investment income and
net realized gain .04 .04
.04 .02 .04 .02
Dividends and distributions
to shareholders (.04) (.04) (.04)
(.02) (.04) (.02)
- --------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
$1.00 $1.00 $1.00
----- ----- -----
- ----- ----- -----
----- ----- -----
- ----- ----- -----
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN(2) 3.73% 3.99% 3.84%
2.35% 4.21% 2.51%
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $49,607 $18,101 $9,125
$11,717 $5,024 $5,604
- --------------------------------------------------------------------------------
Average net assets (in thousands) $37,244 $15,297 $10,930
$6,333 $6,040 $2,107
- -------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 3.67% 3.94% 3.78%
3.91% 4.12% 3.19%
Expenses 1.65% 1.83%(4) 1.85%(4)
1.61%(4) 1.97%(4) 1.90%
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31. 2. Assumes a $1,000 hypothetical initial
investment on the business day before the first day of the fiscal period (or
inception of offering), with all dividends reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods of less than one full year. Total returns reflect changes in net
investment income only.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
See accompanying Notes to Financial Statements.
20 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Cash Reserves (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund's investment objective is to seek the maximum current income
that is consistent with stability of principal. The Fund seeks to achieve this
objective by investing in money market securities meeting specified quality
standards. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B and Class C shares. Class B and Class
C shares may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable to
that class and exclusive voting rights with respect to matters affecting that
class. Classes A, B and C have separate distribution and/or service plans. Class
B shares will automatically convert to Class A shares six years after the date
of purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
- -------------------------------------------------------------------------------
SECURITIES VALUATION. Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- -------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- -------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
- -------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
21 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS(Continued)
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- -------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date. Realized
gains and losses on investments are determined on an identified cost basis,
which is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
YEAR ENDED JULY 31, 1999 YEAR ENDED JULY 31,
1998
-----------------------------
- -----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------
Class A:
Sold 815,693,381 $ 815,693,381 724,810,258 $
724,810,258
Dividends and/or
distributions reinvested 9,563,996 9,563,996 7,669,695
7,669,695
Redeemed (771,105,340) (771,105,340) (694,973,149)
(694,973,149)
------------ ------------- ------------
- -------------
Net increase 54,152,037 $ 54,152,037 37,506,804 $
37,506,804
------------ ------------- ------------
- -------------
------------ ------------- ------------
- -------------
- ------------------------------------------------------------------------------
Class B:
Sold 621,748,556 $ 621,748,556 298,115,568 $
298,115,568
Dividends and/or
distributions reinvested 5,154,276 5,154,276 2,362,655
2,362,655
Redeemed (502,827,948) (502,827,948) (274,482,789)
(274,482,789)
------------ ------------- ------------
- -------------
Net increase 124,074,884 $ 124,074,884 25,995,434 $
25,995,434
------------ ------------- ------------
- -------------
------------ ------------- ------------
- -------------
- -------------------------------------------------------------------------------
Class C:
Sold 342,809,992 $ 342,809,992 166,744,272 $
166,744,272
Dividends and/or
distributions reinvested 1,147,452 1,147,452 490,146
490,146
Redeemed (312,451,557) (312,451,557) (158,257,876)
(158,257,876)
------------ ------------- ------------
- -------------
Net increase 31,505,887 $ 31,505,887 8,976,542 $
8,976,542
------------ ------------- ------------
- -------------
------------ ------------- ------------
- -------------
22 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.50% of
the first $250 million of average annual net assets, 0.475% of the next $250
million, 0.45% of the next $250 million, 0.425% of the next $250 million and
0.40% of average annual net assets in excess of $1 billion. The Fund's
management fee for the year ended July 31, 1999 was 0.49% of the average annual
net assets for each class of shares.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
COMMISSIONS COMMISSIONS COMMISSIONS
ON CLASS A ON CLASS B ON CLASS C
SHARES SHARES SHARES
ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED DISTRIBUTOR(1) DISTRIBUTOR(1)
DISTRIBUTOR(1)
- --------------------------------------------------------------------------------
July 31, 1999 $-- $808,752
$35,422
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED
CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES
CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED
BY DISTRIBUTOR
- --------------------------------------------------------------------------------
July 31, 1999 $3,205 $7,093
$7,759
23 Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) The Fund
has adopted a Service Plan for Class A shares and Distribution and Service Plans
for Class B and Class C shares under Rule 12b-1 of the Investment Company Act.
Under those plans the Fund pays the Distributor for all or a portion of its
costs incurred in connection with the distribution and/or servicing of the
shares of the particular class.
- --------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.20% of average annual net assets of Class A
shares. The Distributor makes payments to plan recipients quarterly at an annual
rate not to exceed 0.20% of the average annual net assets consisting of Class A
shares of the Fund. For the fiscal year ended July 31, 1999, payments under the
Class A Plan totaled $483,594, all of which was paid by the Distributor to
recipients. That included $105,867 paid to an affiliate of the Distributor's
parent company. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent years.
- -------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid. At present the service fee
paid on Class B and Class C shares by the Fund to the Distributor and by the
Distributor to dealers is set at zero.
The Distributor retains the asset-based sales charge on Class B
shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. The asset-based sales charges
on Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
24 Oppenheimer Cash Reserves
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Distributor's actual expenses in selling Class B and Class C shares may be
more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the plans. If either the
Class B or the Class C plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended July 31, 1999, were
as follows:
DISTRIBUTOR'S
AGGREGATE
UNREIMBURSED
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES
CLASS UNDER PLAN BY DISTRIBUTOR UNDER PLAN
- --------------------------------------------------------------------------------
Class B Plan $1,273,035 $1,272,990 $--
- --------------------------------------------------------------------------------
Class C Plan $ 278,656 $ 278,567 $--
25 Oppenheimer Cash Reserves
Appendix A
Description of Securities Ratings
Below is a description of the two highest rating categories for Short Term Debt
and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on behalf of
the Fund. The ratings descriptions are based on information supplied by the
ratings organizations to subscribers.
Short Term Debt Ratings.
Moody's Investor Services, Inc. ("Moody's"): The following rating designations
for commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are judged by Moody's to be
investment grade, and indicate the relative repayment capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will
normally be evidenced by the following characteristics: (a)
leveling market positions in well-established industries;
(b) high rates of return on funds employed; (c) conservative
capitalization structures with moderate reliance on debt and
ample asset protection; (d) broad margins in earning
coverage of fixed financial charges and high internal cash
generation; and (e) well established access to a range of
financial markets and assured sources of alternate
liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced
by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
Moody's ratings for state and municipal short-term obligations are designated
"Moody's Investment Grade" ("MIG"). Short-term notes which have demand features
may also be designated as "VMIG". These rating categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by
established cash flows, superior liquidity support or
demonstrated broadbased access to the market for
refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample
although not so large as in the preceding group.
Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of no more
than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to
possess extremely strong safety characteristics are denoted
with a plus sign (+) designation.
A-2: Satisfactory capacity for timely payment. However, the
relative degree of safety is not as high as for issues
designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand or
double feature as part of their provisions. The first rating addresses the
likelihood of repayment of principal and interest as due, and the second rating
addresses only the demand feature. With short-term demand debt, S&P's note
rating symbols are used with the commercial paper symbols (for example,
"SP-1+/A-1+").
Fitch IBCA, Inc. ("Fitch"): Fitch assigns the following short-term ratings to
debt obligations that are payable on demand or have original maturities of
generally up to three years, including commercial paper, certificates of
deposit, medium-term notes, and municipal and investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree of
assurance for timely payment.
F-1: Very strong credit quality; assurance of timely payment is
only slightly less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for
timely payment, but the margin of safety is not as great as
for issues assigned "F-1+" or "F-1" ratings.
Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial
paper (defined by Duff & Phelps as obligations with maturities, when issued, of
under one year), asset-backed commercial paper, and certificates of deposit (the
ratings cover all obligations of the institution with maturities, when issued,
of under one year, including bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors
are excellent and supported by good fundamental protection
factors.
Risk factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
Duff 2: Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs
may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to
commercial paper, certificates of deposit, unsecured notes, and other securities
having a maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety regarding
timely repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for
issues rated "TBW-1".
Long Term Debt Ratings.
These ratings are relevant for securities purchased by the Fund with a remaining
maturity of 397 days or less, or for rating issuers of short-term obligations.
Moody's: Bonds (including municipal bonds) are rated as follows:
Aaa: Judged to be the best quality. They carry the smallest degree
of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an
exceptionally stable margin, and principal is secure. While
the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong positions of such issues.
Aa: Judged to be of high quality by all standards. Together with
the "Aaa" group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in "Aaa"
securities or fluctuations of protective elements may be of
greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in "Aaa"
securities.
Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the security ranks in the higher
end of its generic rating category; the modifier "2" indicates a mid-range
ranking; and the modifier "3" indicates that the issue ranks in the lower end of
its generic rating category.
Standard & Poor's: Bonds (including municipal bonds) are rated as follows:
AAA: The highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.
AA: A strong capacity to pay interest and repay principal and differ from
"AAA" rated issues only in small degree.
Fitch IBCA, Inc.:
AAA: Considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA: Considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as
bonds rated "AAA". Plus (+) and minus (-) signs are used in
the "AA" category to indicate the relative position of a
credit within that category.
Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated "F-1+".
Duff & Phelps:
AAA: The highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury debt.
AA: High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of
economic conditions. Plus (+) and minus (-) signs are used in
the "AA" category to indicate the relative position of a credit
within that category.
TBW: TBW issues the following ratings for companies. These ratings assess the
likelihood of receiving payment of principal and interest on a timely basis and
incorporate TBW's opinion as to the vulnerability of the company to adverse
developments, which may impact the market's perception of the company, thereby
affecting the marketability of its securities.
A: Possesses an exceptionally strong balance sheet and earnings
record, translating into an excellent reputation and
unquestioned access to its natural money markets. If weakness
or vulnerability exists in any aspect of the company's
business, it is entirely mitigated by the strengths of the
organization.
A/B: The company is financially very solid with a favorable track
record and no readily apparent weakness. Its overall risk
profile, while low, is not quite as favorable as for companies
in the highest rating category.
<PAGE>
B-1
Appendix B
- --------------------------------------------------------------------------------
Industry Classifications
- --------------------------------------------------------------------------------
Aerospace/Defense Food and Drug Retailers
Air Transportation Gas Utilities
Asset-Backed Health Care/Drugs
Auto Parts and Equipment Health Care/Supplies & Services
Automotive Homebuilders/Real Estate
Bank Holding Companies Hotel/Gaming
Banks Industrial Services
Beverages Information Technology
Broadcasting Insurance
Broker-Dealers Leasing & Factoring
Building Materials Leisure
Cable Television Manufacturing
Chemicals Metals/Mining
Commercial Finance Nondurable Household Goods
Communication Equipment Office Equipment
Computer Hardware Oil - Domestic
Computer Software Oil - International
Conglomerates Paper
Consumer Finance Photography
Consumer Services Publishing
Containers Railroads & Truckers
Convenience Stores Restaurants
Department Stores Savings & Loans
Diversified Financial Shipping
Diversified Media Special Purpose Financial
Drug Wholesalers Specialty Printing
Durable Household Goods Specialty Retailing
Education Steel
Electric Utilities Telecommunications - Long Distance
Electrical Equipment Telephone - Utility
Electronics Textile, Apparel & Home Furnishings
Energy Services Tobacco
Entertainment/Film Trucks and Parts
Environmental Wireless Services
Food
<PAGE>
3
<PAGE>
C-11
Appendix C
OppenheimerFunds Special Sales Charge Arrangements and Waivers
In certain cases, the initial sales charge that applies to purchases of Class A
shares1 of the Oppenheimer funds or the contingent deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.2 That is because
of the economies of sales efforts realized by OppenheimerFunds Distributor,
Inc., (referred to in this document as the "Distributor"), or by dealers or
other financial institutions that offer those shares to certain classes of
investors.
Not all waivers apply to all funds. For example, waivers relating to Retirement
Plans do not apply to Oppenheimer municipal funds, because shares of those funds
are not available for purchase by or on behalf of retirement plans. Other
waivers apply only to shareholders of certain funds.
For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term "Retirement Plan" refers to the following types of plans: (1) plans
qualified under Sections 401(a) or 401(k) of the Internal Revenue
Code,
(2) non-qualified deferred compensation plans, (3) employee benefit plans3 (4)
Group Retirement Plans4 (5) 403(b)(7) custodial plan accounts (6) Individual
Retirement Accounts ("IRAs"), including traditional IRAs, Roth
IRAs, SEP-IRAs, SARSEPs or SIMPLE plans
The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the "Transfer
Agent") of the particular Oppenheimer fund. These waivers and special
arrangements may be amended or terminated at any time by a particular fund, the
Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the
"Manager"). Waivers that apply at the time shares are redeemed must be requested
by the shareholder and/or dealer in the redemption request.
- --------------
1. Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2. In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered
closed-end fund, references to contingent deferred sales charges mean the
Fund's Early Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
3. An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class A shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
4. The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase Class A shares of an Oppenheimer fund or funds through a single
investment dealer, broker or other financial institution designated by the
group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and
403(b) plans other than plans for public school employees. The term "Group
Retirement Plan" also includes qualified retirement plans and non-qualified
deferred compensation plans and IRAs that purchase Class A shares of an
Oppenheimer fund or funds through a single investment dealer, broker or other
financial institution that has made special arrangements with the Distributor
enabling those plans to purchase Class A shares at net asset value but
subject to the Class A contingent deferred sales charge.
I. Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial
Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge
(unless a waiver applies).
There is no initial sales charge on purchases of Class A shares of any of
the Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent deferred sales charge if redeemed within 18
months of the end of the calendar month of their purchase, as described in the
Prospectus (unless a waiver described elsewhere in this Appendix applies to the
redemption). Additionally, on shares purchased under these waivers that are
subject to the Class A contingent deferred sales charge, the Distributor will
pay the applicable commission described in the Prospectus under "Class A
Contingent Deferred Sales Charge."3 This waiver provision applies to:
3 However, that commission will not be paid on purchases of shares in amounts of
$1 million or more (including any right of accumulation) by a Retirement Plan
that pays for the purchase with the redemption proceeds of Class C shares of one
or more Oppenheimer funds held by the Plan for more than one year.
o Purchases of Class A shares aggregating $1 million or more.
o Purchases by a Retirement Plan (other than an IRA or 403(b)(7) custodial plan)
that:
(1) buys shares costing $500,000 or more, or
(2) has, at the time of purchase, 100 or more eligible employees or
total plan assets of $500,000 or more, or
(3) certifies to the Distributor that it projects to have annual plan
purchases of $200,000 or more.
o Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases
are made:
(1) through a broker, dealer, bank or registered investment adviser that
has made special arrangements with the Distributor for those
purchases, or
(2) by a direct rollover of a distribution from a qualified Retirement
Plan if the administrator of that Plan has made special arrangements
with the Distributor for those purchases.
o Purchases of Class A shares by Retirement Plans that have any of the
following record-keeping arrangements:
(1) The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc.
("Merrill Lynch") on a daily valuation basis for the Retirement Plan.
On the date the plan sponsor signs the record-keeping service
agreement with Merrill Lynch, the Plan must have $3 million or more of
its assets invested in (a) mutual funds, other than those advised or
managed by Merrill Lynch Asset Management, L.P. ("MLAM"), that are
made available under a Service Agreement between Merrill Lynch and the
mutual fund's principal underwriter or distributor, and (b) funds
advised or managed by MLAM (the funds described in (a) and (b) are
referred to as "Applicable Investments").
(2) The record keeping for the Retirement Plan is performed on a daily valuation
basis by a record keeper whose services are provided under a contract
or arrangement between the Retirement Plan and Merrill Lynch. On the
date the plan sponsor signs the record keeping service agreement with
Merrill Lynch, the Plan must have $3 million or more of its assets
(excluding assets invested in money market funds) invested in
Applicable Investments. (3) The record keeping for a Retirement Plan
is handled under a service agreement with Merrill Lynch and on the
date the plan sponsor signs that agreement, the Plan has 500 or more
eligible employees (as determined by the Merrill Lynch plan conversion
manager). o Purchases by a Retirement Plan whose record keeper had a
cost-allocation agreement with the Transfer Agent on or before May 1,
1999.
<PAGE>
II. Waivers of Class A Sales Charges of Oppenheimer Funds
A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.
Class A shares purchased by the following investors are not subject to any Class
A sales charges (and no commissions are paid by the Distributor on such
purchases):
o The Manager or its affiliates.
o Present or former officers, directors, trustees and employees (and
their "immediate families") of the Fund, the Manager and its
affiliates, and retirement plans established by them for their
employees. The term "immediate family" refers to one's spouse,
children, grandchildren, grandparents, parents, parents-in-law,
brothers and sisters, sons- and daughters-in-law, a sibling's spouse,
a spouse's siblings, aunts, uncles, nieces and nephews; relatives by
virtue of a remarriage (step-children, step-parents, etc.) are
included.
o Registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor for that purpose.
o Dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for
their employees.
o Employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered
into sales arrangements with such dealers or brokers (and which are
identified as such to the Distributor) or with the Distributor. The
purchaser must certify to the Distributor at the time of purchase that
the purchase is for the purchaser's own account (or for the benefit of
such employee's spouse or minor children).
o Dealers, brokers, banks or registered investment advisors that have
entered into an agreement with the Distributor providing specifically
for the use of shares of the Fund in particular investment products
made available to their clients. Those clients may be charged a
transaction fee by their dealer, broker, bank or advisor for the
purchase or sale of Fund shares.
o Investment advisors and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an
advisory, consulting or other fee for their services and buy shares for
their own accounts or the accounts of their clients.
o "Rabbi trusts" that buy shares for their own accounts, if the purchases
are made through a broker or agent or other financial intermediary that
has made special arrangements with the Distributor for those purchases.
o Clients of investment advisors or financial planners (that have
entered into an agreement for this purpose with the Distributor) who
buy shares for their own accounts may also purchase shares without
sales charge but only if their accounts are linked to a master account
of their investment advisor or financial planner on the books and
records of the broker, agent or financial intermediary with which the
Distributor has made such special arrangements . Each of these
investors may be charged a fee by the broker, agent or financial
intermediary for purchasing shares.
o Directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit
sharing or other benefit plan which beneficially owns shares for those
persons.
o Accounts for which Oppenheimer Capital (or its successor) is the
investment advisor (the Distributor must be advised of this
arrangement) and persons who are directors or trustees of the company
or trust which is the beneficial owner of such accounts.
o A unit investment trust that has entered into an appropriate agreement
with the Distributor.
o Dealers, brokers, banks, or registered investment advisers that have
entered into an agreement with the Distributor to sell shares to
defined contribution employee retirement plans for which the dealer,
broker or investment adviser provides administration services.
o Retirement Plans and deferred compensation plans and trusts used to
fund those plans (including, for example, plans qualified or created
under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
Code), in each case if those purchases are made through a broker, agent
or other financial intermediary that has made special arrangements with
the Distributor for those purchases.
o A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
Advisors) whose Class B or Class C shares of a Former Quest for Value
Fund were exchanged for Class A shares of that Fund due to the
termination of the Class B and Class C TRAC-2000 program on November
24, 1995.
o A qualified Retirement Plan that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for Value
Funds at net asset value, with such shares to be held through
DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
arrangement was consummated and share purchases commenced by December
31, 1996.
B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.
Class A shares issued or purchased in the following transactions are not subject
to sales charges (and no commissions are paid by the Distributor on such
purchases): o Shares issued in plans of reorganization, such as mergers, asset
acquisitions
and exchange offers, to which the Fund is a party.
o Shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds
(other than Oppenheimer Cash Reserves) or unit investment trusts for
which reinvestment arrangements have been made with the Distributor.
o Shares purchased through a broker-dealer that has entered into a
special agreement with the Distributor to allow the broker's customers
to purchase and pay for shares of Oppenheimer funds using the proceeds
of shares redeemed in the prior 30 days from a mutual fund (other than
a fund managed by the Manager or any of its subsidiaries) on which an
initial sales charge or contingent deferred sales charge was paid.
This waiver also applies to shares purchased by exchange of shares of
Oppenheimer Money Market Fund, Inc. that were purchased and paid for
in this manner. This waiver must be requested when the purchase order
is placed for shares of the Fund, and the Distributor may require
evidence of qualification for this waiver.
o Shares purchased with the proceeds of maturing principal units of any
Qualified Unit Investment Liquid Trust Series.
o Shares purchased by the reinvestment of loan repayments by a
participant in a Retirement Plan for which the Manager or an affiliate
acts as sponsor.
C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.
The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases: o To make Automatic Withdrawal Plan payments that are limited
annually to no
more than 12% of the account value measured at the time the Plan is
established, adjusted annually.
o Involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (please refer to "Shareholder Account
Rules and Policies," in the applicable fund Prospectus).
o For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes:
(1) Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established.
(2) To return excess contributions.
(3) To return contributions made due to a mistake of fact.
(4) Hardship withdrawals, as defined in the plan.4
4 This provision does not apply to IRAs.
(5) Under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code, or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.
(6) To meet the minimum distribution requirements of the Internal Revenue Code.
(7) To make "substantially equal periodic payments" as described in Section
72(t)
of the Internal Revenue Code.
(8) For loans to participants or beneficiaries.
(9) Separation from service.5
5 This provision does not apply to 403(b)(7) custodial plans if the participant
is less than age 55, nor to IRAs.
(10)Participant-directed redemptions to purchase shares of a mutual
fund (other than a fund managed by the Manager or a subsidiary of the
Manager) if the plan has made special arrangements with the
Distributor.
(11) Plan termination or "in-service distributions," if
the redemption proceeds are rolled over directly to an
OppenheimerFunds-sponsored IRA.
o For distributions from Retirement Plans having 500 or more eligible
employees, except distributions due to termination of all of the
Oppenheimer funds as an investment option under the Plan.
o For distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing
this waiver.
III. Waivers of Class B and Class C Sales Charges of Oppenheimer Funds
The Class B and Class C contingent deferred sales charges will not be applied to
shares purchased in certain types of transactions or redeemed in certain
circumstances described below.
A. Waivers for Redemptions in Certain Cases.
The Class B and Class C contingent deferred sales charges will be waived for
redemptions of shares in the following cases: o Shares redeemed involuntarily,
as described in "Shareholder Account Rules and
Policies," in the applicable Prospectus.
o Redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder, including a
trustee of a grantor trust or revocable living trust for which the
trustee is also the sole beneficiary. The death or disability must have
occurred after the account was established, and for disability you must
provide evidence of a determination of disability by the Social
Security Administration.
o Distributions from accounts for which the broker-dealer of record has
entered into a special agreement with the Distributor allowing this
waiver.
o Redemptions of Class B shares held by Retirement Plans whose records
are maintained on a daily valuation basis by Merrill Lynch or an
independent record keeper under a contract with Merrill Lynch.
o Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
accounts of clients of financial institutions that have entered into a
special arrangement with the Distributor for this purpose.
o Redemptions requested in writing by a Retirement Plan sponsor of Class
C shares of an Oppenheimer fund in amounts of $1 million or more held
by the Retirement Plan for more than one year, if the redemption
proceeds are invested in Class A shares of one or more Oppenheimer
funds.
o Distributions from Retirement Plans or other employee benefit plans for
any of the following purposes:
(1) Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established in an Oppenheimer fund.
(2) To return excess contributions made to a participant's account.
(3) To return contributions made due to a mistake of fact.
(4) To make hardship withdrawals, as defined in the plan.6
6 This provision does not apply to IRAs.
(5) To make distributions required under a Qualified Domestic Relations Order
or, in the case of an IRA, a divorce or separation agreement described in
Section 71(b) of the Internal Revenue Code.
(6) To meet the minimum distribution requirements of the Internal Revenue Code.
(7) To make "substantially equal periodic payments" as described in Section
72(t)
of the Internal Revenue Code.
(8) For loans to participants or beneficiaries.7
7 This provision does not apply to loans from 403(b)(7) custodial plans.
(9) On account of the participant's separation from service.8
8 This provision does not apply to 403(b)(7) custodial plans if the participant
is less than age 55, nor to IRAs.
(10) Participant-directed redemptions to purchase shares of a mutual
fund (other than a fund managed by the Manager or a subsidiary
of the Manager) offered as an investment option in a Retirement
Plan if the plan has made special arrangements with the
Distributor.
(11) Distributions made on account of a plan termination or
"in-service" distributions," if the redemption proceeds are
rolled over directly to an OppenheimerFunds-sponsored IRA.
(12) Distributions from Retirement Plans having 500 or more eligible
employees, but excluding distributions made because of the
Plan's elimination as investment options under the Plan of all
of the Oppenheimer funds that had been offered.
(13) For distributions from a participant's account under an
Automatic Withdrawal Plan after the participant reaches age
59 1/2, as long as the aggregate value of the distributions
does not exceed 10% of the account's value annually (measured
from the establishment of the Automatic Withdrawal Plan).
|_|Redemptions of Class B shares or Class C shares under an Automatic
Withdrawal Plan from an account other than a Retirement Plan if the
aggregate value of the redeemed shares does not exceed 10% of the
account's value annually.
B. Waivers for Shares Sold or Issued in Certain Transactions.
The contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
o Shares sold to the Manager or its affiliates.
o Shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager or
the Distributor for that purpose.
o Shares issued in plans of reorganization to which the Fund is a party.
o Shares sold to present or former officers, directors, trustees or
employees (and their "immediate families" as defined above in Section I.A.)
of the Fund, the Manager and its affiliates and retirement plans
established by them for their employees.
IV. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
Funds Who Were Shareholders of Former Quest for Value Funds
The initial and contingent deferred sales charge rates and waivers for Class A,
Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described below
for certain persons who were shareholders of the former Quest for Value Funds.
To be eligible, those persons must have been shareholders on November 24, 1995,
when OppenheimerFunds, Inc. became the investment advisor to those former Quest
for Value Funds. Those funds include:
<PAGE>
Oppenheimer Quest Value Fund, Inc. Oppenheimer Quest Small Cap
Value Fund
Oppenheimer Quest Balanced Value Fund Oppenheimer Quest Global Value
Fund
Oppenheimer Quest Opportunity Value
Fund
These arrangements also apply to shareholders of the following funds when
they merged (were reorganized) into various Oppenheimer funds on November 24,
1995:
Quest for Value U.S. Government Quest for Value New York Tax-Exempt
Income Fund Fund
Quest for Value Investment Quality Quest for Value National Tax-Exempt
Income Fund Fund
Quest for Value Global Income Fund Quest for Value California Tax-Exempt
Fund
All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds." The waivers of initial and contingent deferred
sales charges described in this Appendix apply to shares of an Oppenheimer fund
that are either: o acquired by such shareholder pursuant to an exchange of
shares of an
Oppenheimer fund that was one of the Former Quest for Value Funds or
o purchased by such shareholder by exchange of shares of another Oppenheimer
fund that were acquired pursuant to the merger of any of the Former Quest for
Value Funds into that other Oppenheimer fund on November 24, 1995.
A. Reductions or Waivers of Class A Sales Charges.
|X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest for
Value Funds Shareholders.
Purchases by Groups and Associations. The following table sets forth the initial
sales charge rates for Class A shares purchased by members of "Associations"
formed for any purpose other than the purchase of securities. The rates in the
table apply if that Association purchased shares of any of the Former Quest for
Value Funds or received a proposal to purchase such shares from OCC Distributors
prior to November 24, 1995.
- --------------------------------------------------------------------------------
Initial Sales Initial Sales
Number of Eligible Charge as a % of Charge as a % of Commission as %
Employees or Members Offering Price Net Amount Invested of Offering Price
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 or Fewer 2.50% 2.56% 2.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At least 10 but not 2.00% 2.04% 1.60%
more than 49
- --------------------------------------------------------------------------------
For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but
those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.
Purchases made under this arrangement qualify for the lower of either the
sales charge rate in the table based on the number of members of an Association,
or the sales charge rate that applies under the Right of Accumulation described
in the applicable fund's Prospectus and Statement of Additional Information.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations also may purchase shares for their individual or
custodial accounts at these reduced sales charge rates, upon request to the
Distributor.
|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A
shares purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges: o Shareholders who were
shareholders of the AMA Family of Funds on February 28,
1991 and who acquired shares of any of the Former Quest for Value Funds
by merger of a portfolio of the AMA Family of Funds.
o Shareholders who acquired shares of any Former Quest for Value Fund by
merger of any of the portfolios of the Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:
Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.
B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.
|X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In
the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with: o withdrawals under an
automatic withdrawal plan holding only either Class B or
Class C shares if the annual withdrawal does not exceed 10% of the
initial value of the account, and
o liquidation of a shareholder's account if the aggregate net asset value
of shares held in the account is less than the required minimum value
of such accounts.
|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent deferred
sales charge will be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been acquired by the merger
of a Former Quest for Value Fund into the fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995: o redemptions following the
death or disability of the shareholder(s) (as
evidenced by a determination of total disability by the U.S. Social Security
Administration);
o withdrawals under an automatic withdrawal plan (but only for Class B or
Class C shares) where the annual withdrawals do not exceed 10% of the
initial value of the account; and
o liquidation of a shareholder's account if the aggregate net asset value
of shares held in the account is less than the required minimum account
value.
A shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Oppenheimer fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Oppenheimer fund
within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc.
The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix) of
the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
o Oppenheimer U. S. Government Trust,
o Oppenheimer Bond Fund,
o Oppenheimer Disciplined Value Fund and
o Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account Connecticut Mutual Total Return
Account
Connecticut Mutual Government Securities CMIA LifeSpan Capital Appreciation
Account Account
Connecticut Mutual Income Account CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account CMIA Diversified Income Account
A. Prior Class A CDSC and Class A Sales Charge Waivers.
|_| Class A Contingent Deferred Sales Charge. Certain shareholders of a
Fund and the other Former Connecticut Mutual Funds are entitled to continue to
make additional purchases of Class A shares at net asset value without a Class A
initial sales charge, but subject to the Class A contingent deferred sales
charge that was in effect prior to March 18, 1996 (the "prior Class A CDSC").
Under the prior Class A CDSC, if any of those shares are redeemed within one
year of purchase, they will be assessed a 1% contingent deferred sales charge on
an amount equal to the current market value or the original purchase price of
the shares sold, whichever is smaller (in such redemptions, any shares not
subject to the prior Class A CDSC will be redeemed first).
Those shareholders who are eligible for the prior Class A CDSC are: (1)
persons whose purchases of Class A shares of a Fund and other Former
Connecticut Mutual Funds were $500,000 prior to March 18, 1996, as a
result of direct purchases or purchases pursuant to the Fund's policies
on Combined Purchases or Rights of Accumulation, who still hold those
shares in that Fund or other Former Connecticut Mutual Funds, and
(2) persons whose intended purchases under a Statement of Intention entered
into prior to March 18, 1996, with the former general distributor of
the Former Connecticut Mutual Funds to purchase shares valued at
$500,000 or more over a 13-month period entitled those persons to
purchase shares at net asset value without being subject to the Class A
initial sales charge.
Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18,
1996, remain subject to the prior Class A CDSC, or if any additional
shares are purchased by those shareholders at net asset value pursuant to
this arrangement they will be subject to the prior Class A CDSC.
|_| Class A Sales Charge Waivers. Additional Class A shares of a Fund may
be purchased without a sales charge, by a person who was in one (or more) of the
categories below and acquired Class A shares prior to March 18, 1996, and still
holds Class A shares: any purchaser, provided the total initial amount invested
in the Fund or any one or more of the Former Connecticut Mutual Funds totaled
$500,000 or more, including investments made pursuant to the Combined Purchases,
Statement of Intention and Rights of Accumulation features available at the time
of the initial purchase and such investment is still held in one or more of the
Former Connecticut Mutual Funds or a Fund into which such Fund merged; (1) any
participant in a qualified plan, provided that the total initial amount
invested by the plan in the Fund or any one or more of the Former
Connecticut Mutual Funds totaled $500,000 or more;
(2) Directors of the Fund or any one or more of the Former Connecticut
Mutual Funds and members of their immediate families;
(3) employee benefit plans sponsored by Connecticut Mutual Financial
Services, L.L.C. ("CMFS"), the prior distributor of the Former
Connecticut Mutual Funds, and its affiliated companies;
(4) one or more members of a group of at least 1,000 persons (and persons
who are retirees from such group) engaged in a common business,
profession, civic or charitable endeavor or other activity, and the
spouses and minor dependent children of such persons, pursuant to a
marketing program between CMFS and such group; and
(5) an institution acting as a fiduciary on behalf of an individual or
individuals, if such institution was directly compensated by the
individual(s) for recommending the purchase of the shares of the Fund
or any one or more of the Former Connecticut Mutual Funds, provided the
institution had an agreement with CMFS.
Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.
Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the Panorama Separate Account
which is beyond the applicable surrender charge period and which was used to
fund a qualified plan, if that holder exchanges the variable annuity contract
proceeds to buy Class A shares of the Fund.
B. Class A and Class B Contingent Deferred Sales Charge Waivers.
In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B shares
of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund
provided that the Class A or Class B shares of the Fund to be redeemed or
exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund.
Additionally, the shares of such Former Connecticut Mutual Fund must have been
purchased prior to March 18, 1996:
(1) by the estate of a deceased shareholder;
(2) upon the disability of a shareholder, as defined in Section
72(m)(7) of the Internal Revenue Code;
(3) for retirement distributions (or loans) to participants or
beneficiaries from retirement plans qualified under Sections 401(a) or
403(b)(7)of the Code, or from IRAs, deferred compensation plans created
under Section 457 of the Code, or other employee benefit plans;
(4) as tax-free returns of excess contributions to such retirement or
employee benefit plans;
(5) in whole or in part, in connection with shares sold to any state,
county, or city, or any instrumentality, department, authority, or
agency thereof, that is prohibited by applicable investment laws from
paying a sales charge or commission in connection with the purchase of
shares of any registered investment management company;
(6) in connection with the redemption of shares of the Fund due to a
combination with another investment company by virtue of a merger,
acquisition or similar reorganization transaction;
(7) in connection with the Fund's right to involuntarily redeem or
liquidate the Fund;
(8) in connection with automatic redemptions of Class A shares and Class B
shares in certain retirement plan accounts pursuant to an Automatic
Withdrawal Plan but limited to no more than 12% of the original value
annually; or
(9) as involuntary redemptions of shares by operation of law, or under
procedures set forth in the Fund's Articles of Incorporation, or as
adopted by the Board of Directors of the Fund.
VI. Special Reduced Sales Charge for Former Shareholders of
Advance America Funds, Inc.
Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Equity Income Fund who
acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those Oppenheimer
funds on October 18, 1991, and who held shares of Advance America Funds, Inc. on
March 30, 1990, may purchase Class A shares of those four Oppenheimer funds at a
maximum sales charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares of
Oppenheimer Convertible Securities Fund
Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to purchase
those shares at net asset value without sales charge:
the Manager and its affiliates,
o present or former officers, directors, trustees and employees (and
their "immediate families" as defined in the Fund's Statement of
Additional Information) of the Fund, the Manager and its affiliates,
and retirement plans established by them or the prior investment
advisor of the Fund for their employees,
o registered management investment companies or separate accounts of
insurance companies that had an agreement with the Fund's prior
investment advisor or distributor for that purpose,
o dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for
their employees,
o employees and registered representatives (and their spouses) of dealers
or brokers described in the preceding section or financial institutions
that have entered into sales arrangements with those dealers or brokers
(and whose identity is made known to the Distributor) or with the
Distributor, but only if the purchaser certifies to the Distributor at
the time of purchase that the purchaser meets these qualifications,
o dealers, brokers, or registered investment advisors that had entered
into an agreement with the Distributor or the prior distributor of the
Fund specifically providing for the use of Class M shares of the Fund
in specific investment products made available to their clients, and
[_] dealers, brokers or registered investment advisors that had entered into
an agreement with the Distributor or prior distributor of the Fund's shares
to sell shares to defined contribution employee retirement plans for which
the dealer, broker, or investment advisor provides administrative services.
o
<PAGE>
C-44
- --------------------------------------------------------------------------------
Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
Internet Web Site:
www.oppenheimerfunds.com
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian Bank
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street, Suite 3600
Denver, Colorado 80202-3942
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
67890
PX0760.001.1199
<PAGE>
OPPENHEIMER CASH RESERVES
FORM N-1A
PART C
OTHER INFORMATION
Item 23. Exhibits
(a) Amended and Restated Declaration of Trust dated January 20, 1995: Previously
filed with Registrant's Post-Effective Amendment No. 10 (4/25/95), and
incorporated herein by reference.
(b) By-Laws, as amended through June 26, 1990: Previously filed with
Registrant's Post-Effective Amendment No. 5 (4/29/92), and refiled with
Registrant's Post Effective Amendment No. 10 (4/25/95), pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(c) (i) Specimen Share Certificate for Class A shares: Filed with Registrant's
Post Effective Amendment No. 15 (9/27/99).
(ii) Specimen Share Certificate for Class B shares: Filed with Registrant's
Post Effective Amendment No. 15 (9/27/99).
(ii) Specimen Share Certificate for Class C shares: Filed with Registrant's
Post Effective Amendment No. 15 (9/27/99).
(d) Investment Advisory Agreement dated October 22, 1990: Previously filed with
Registrant's Post Effective Amendment No. 3 (2/28/91) and refiled with
Registrant's Post-Effective Amendment No. 10 (4/25/95), pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(e) (i) General Distributor's Agreement dated October 13, 1992: Previously
filed with Registrant's Post Effective Amendment No. 10 (4/25/95), and
incorporated herein by reference.
(ii) Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Pre-Effective Amendment No. 2 to the Registration
Statement of Oppenheimer Trinity Value Fund (Reg. No. 333-79707),
(8/25/99), and incorporated herein by reference.
(iii) Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Pre-Effective Amendment No. 2 to the Registration
Statement of Oppenheimer Trinity Value Fund (Reg. No. 333-79707),
(8/25/99), and incorporated herein by reference.
(iv) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Pre-Effective Amendment No. 2 to the Registration
Statement of Oppenheimer Trinity Value Fund (Reg. No. 333-79707),
(8/25/99), and incorporated herein by reference.
(v) Broker Agreement between OppenheimerFunds Distributor, Inc. and
Newbridge Securities dated October 1, 1986: Previously filed with
Post-Effective Amendment No. 25 of Oppenheimer Growth Fund (Reg. No.
2-45272), (11/1/86), and refiled with Post-Effective Amendment No. 45 of
Oppenheimer Growth fund (Reg. No. 2-45272), (8/22/94), pursuant to Item 102
of Regulation S-T and incorporated herein by reference.
(f) Form of Deferred Compensation Agreement for Disinterested
Trustees/Directors: Filed with Post-Effective Amendment No. 40 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
(10/27/98), and incorporated herein by reference.
(g) (i) Custodian Agreement between Registrant and Citibank, N.A. dated December
22, 1988: Previously filed with Registrant's Post-Effective Amendment No. 5
(4/29/92), refiled with Registrant's Post-Effective Amendment No. 10 (4/25/95),
pursuant to Item 102 of Regulation S-T and incorporated
herein by reference.
(ii) Foreign Custody Manager Agreement between Registrant and The Bank of
New York: Previously filed with Pre-Effective Amendment No. 2 to the
Registration Statement of Oppenheimer World Bond Fund (Reg. 333-48973),
(4/23/98), and incorporated herein by reference.
(h) Not applicable.
(i) (i) Opinion and Consent of Counsel dated November 24, 1999: Filed herewith.
(j) Independent Auditors' Consent: Filed herewith.
(k) Not applicable.
(l) Not applicable.
(m) (i) Amended Service Plan for Class A shares dated June 24, 1993: Previously
filed with Registrant's Post-Effective Amendment No. 14, (11/17/97), pursuant
to Rule 12b-1 under the Investment Company Act of 1940 and incorporated
herein by reference.
(ii) Amended and Restated Distribution and Service Plan for Class B shares
dated February 24, 1998: Previously filed with Registrant's Post-Effective
Amendment No. 15, (11/26/98), pursuant to Rule 12b-1 under the Investment
Company Act of 1940 and incorporated herein by reference.
(iii) Amended and Restated Distribution and Service Plan for Class C shares
dated February 24, 1998: Previously filed with Registrant's Post-Effective
Amendment No. 15, (11/26/98), pursuant to Rule 12b-1 under the Investment
Company Act of 1940 and incorporated herein by reference.
(iv) Prototype Supplemental Distribution Assistance Agreement: Previously
filed with Registrant's Post-Effective Amendment No. 5, (4/30/92), refiled
with Registrant's Post-Effective Amendment No. 10, (4/25/95), pursuant to
Item 102 of Regulation S-T, and incorporated herein by reference.
(n) Oppenheimer Funds Multiple Class Plan under Rule 18f-3 as updated through
August 24, 1999: Previously filed with Pre-Effective Amendment No. 1 to the
Registration Statement of Oppenheimer Senior Floating Rate Fund (Reg. No.
333-82579), (8/27/99), and incorporated herein by reference.
- -- Powers of Attorney for all Trustees/Directors: Previously filed with
Post-Effective Amendment No. 41 to the Registration Statement of Oppenheimer
High Yield Fund (Re. No. 2-62978), (8/26/99), and incorporated herein by
reference.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Reference is made to the provisions of Article Seven of Registrant's
Amended and Restated Declaration of Trust filed as Exhibit 23(a) to this
Registration Statement, and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person, Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<TABLE>
<CAPTION>
Name and Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
<S> <C>
Charles E. Albers,
Senior Vice President An officer and/or portfolio manager of certain
Oppenheimer funds (since April 1998); a
Chartered Financial Analyst; formerly, a Vice
President and portfolio manager for Guardian
Investor Services, the investment management
subsidiary of The Guardian Life Insurance
Company (since 1972).
Edward Amberger,
Assistant Vice President Formerly Assistant Vice President, Securities
Analyst for Morgan Stanley Dean Witter (May
1997 - April 1998); and Research Analyst (July
1996 - May 1997), Portfolio Manager (February
1992 - July 1996) and Department Manager (June
1988 to February 1992) for The Bank of New York.
Peter M. Antos,
Senior Vice President An officer and/or portfolio manager of certain
Oppenheimer funds; a Chartered Financial
Analyst; Senior Vice President of HarbourView
Asset Management Corporation; prior to March
1996 he was the senior equity portfolio manager
for the Panorama Series Fund, Inc. (the
"Company") and other mutual funds and pension
funds managed by G.R. Phelps & Co. Inc. ("G.R.
Phelps"), the Company's former investment
adviser, which was a subsidiary of Connecticut
Mutual Life Insurance Company; he was also
responsible for managing the common stock
department and common stock investments of
Connecticut Mutual Life Insurance Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Formerly, a Vice President and Senior
Portfolio Manager at First of America
Investment Corp.
George Batejan,
Executive Vice President,
Chief Information Officer Formerly Senior Vice President, Group
Executive, and Senior Systems Officer for
American International Group (October 1994 -
May 1998).
John R. Blomfield,
Vice President Formerly Senior Product Manager (November 1995
- August 1997) of International Home Foods and
American Home Products (March 1994 - October
1996).
Connie Bechtolt,
Assistant Vice President None.
Kathleen Beichert,
Vice President None.
Rajeev Bhaman,
Vice President Formerly, Vice President (January 1992 -
February, 1996) of Asian Equities for Barclays
de Zoete Wedd, Inc.
Robert J. Bishop,
Vice President Vice President of Mutual Fund Accounting (since
May 1996); an officer of other Oppenheimer
funds; formerly, an Assistant Vice President of
OppenheimerFunds, Inc./Mutual Fund Accounting
(April 1994 - May 1996), and a Fund Controller
for OppenheimerFunds, Inc.
Chad Boll,
Assistant Vice President None
Scott Brooks,
Vice President None.
Kevin Brosmith,
Vice President None.
Adele Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division Formerly, Assistant Vice President of Rochester
Fund Services, Inc.
Michael Carbuto,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial Asset Management
Corporation.
John Cardillo,
Assistant Vice President None.
Mark Curry,
Assistant Vice President None.
H.C. Digby Clements,
Vice President:
Rochester Division None.
O. Leonard Darling,
Executive Vice President
and Chief Investment
Officer Chief Investment Officer (since 6/99); Chief
Executive Officer and Senior Manager of
HarbourView Asset Management Corporation;
Trustee (1993 - present) of Awhtolia College
- Greece; formerly Chief Executive Officer
(1993-June 1999).
William DeJianne, None.
Assistant Vice President
Robert A. Densen,
Senior Vice President None.
Sheri Devereux,
Vice President None.
Craig P. Dinsell
Executive Vice President Formerly, Senior Vice President of Human
Resources for Fidelity Investments-Retail
Division (January 1995 - January 1996),
Fidelity Investments FMR Co. (January 1996 -
June 1997) and Fidelity Investments FTPG (June
1997 - January 1998).
John Doney,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Executive Vice President (since September
1993), and a director (since January 1992) of
the Distributor; Executive Vice President,
General Counsel and a director of HarbourView
Asset Management Corporation Shareholder
Services, Inc., Shareholder Financial Services,
Inc. and Oppenheimer Partnership Holdings, Inc.
since (September 1995); President and a
director of Centennial Asset Management
Corporation (since September 1995); President
and a director of Oppenheimer Real Asset
Management, Inc (since July 1996); General
Counsel (since May 1996) and Secretary (since
April 1997) of Oppenheimer Acquisition Corp.;
Vice President and Director of OppenheimerFunds
International, Ltd. and Oppenheimer Millennium
Funds plc (since October 1997); an officer of
other Oppenheimer funds.
Patrick Dougherty, None.
Assistant Vice President
Bruce Dunbar, None.
Vice President
Daniel Engstrom,
Assistant Vice President None.
George Evans,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Edward Everett,
Assistant Vice President None.
George Fahey,
Vice President None.
Scott Farrar,
Vice President Assistant Treasurer of Oppenheimer Millennium
Funds plc (since October 1997); an officer of
other Oppenheimer funds; formerly an Assistant
Vice President of OppenheimerFunds, Inc./Mutual
Fund Accounting (April 1994 - May 1996), and a
Fund Controller for OppenheimerFunds, Inc.
Leslie A. Falconio,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds (since
6/99).
Katherine P. Feld,
Vice President and Secretary Vice President and
Secretary of the Distributor; Secretary of
HarbourView Asset Management Corporation,
and Centennial Asset Management Corporation;
Secretary, Vice President and Director of
Centennial Capital Corporation; Vice
President and Secretary of Oppenheimer Real
Asset Management, Inc.
Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division An officer, Director and/or portfolio manager
of certain Oppenheimer funds; Presently he
holds the following other positions: Director
(since 1995) of ICI Mutual Insurance Company;
Governor (since 1994) of St. John's College;
Director (since 1994 - present) of
International Museum of Photography at George
Eastman House. Formerly, he held the following
positions: formerly, Chairman of the Board and
Director of Rochester Fund Distributors, Inc.
("RFD"); President and Director of Fielding
Management Company, Inc. ("FMC"); President and
Director of Rochester Capital Advisors, Inc.
("RCAI"); Managing Partner of Rochester Capital
Advisors, L.P., President and Director of
Rochester Fund Services, Inc. ("RFS");
President and Director of Rochester Tax Managed
Fund, Inc.; Director (1993 - 1997) of VehiCare
Corp.; Director (1993 - 1996) of VoiceMode.
David Foxhoven,
Assistant Vice President Formerly Manager, Banking Operations Department
(July 1996 - November 1998).
Jennifer Foxson,
Vice President None.
Erin Gardiner,
Assistant Vice President None.
Alan Gilston,
Vice President Formerly, Vice President (1987 - 1997) for
Schroder Capital Management International.
Jill Glazerman,
Vice President None.
Robyn Goldstein-Liebler
Assistant Vice President None.
Mikhail Goldverg
Assistant Vice President None.
Jeremy Griffiths,
Executive Vice President,
Chief Financial Officer and Chief Financial Officer and Treasurer (since
March
Director 1998) of Oppenheimer Acquisition Corp.; a
Member and Fellow of the Institute of
Chartered Accountants; formerly, an
accountant for Arthur Young (London, U.K.).
Robert Grill,
Senior Vice President Formerly, Marketing Vice
President for Bankers Trust Company (1993 -
1996); Steering Committee Member,
Subcommittee Chairman for American Savings
Education Council (1995 - 1996).
Elaine T. Hamann,
Vice President Formerly, Vice President (September 1989 -
January 1997) of Bankers Trust Company.
Robert Haley
Assistant Vice President Formerly, Vice President of Information
Services for Bankers Trust Company (January
1991 - November 1997).
Thomas B. Hayes,
Vice President None.
Barbara Hennigar,
Executive Vice President and
Chief Executive Officer of
OppenheimerFunds Services,
a division of the Manager President and Director of Shareholder Financial
Services, Inc.; President and Chief Executive
Officer of Shareholder Services, Inc.
Dorothy Hirshman, None.
Assistant Vice President
Merryl Hoffman,
Vice President and None.
Senior Counsel
Scott T. Huebl,
Vice President None.
James Hyland,
Assistant Vice President Formerly Manager of Customer Research for
Prudential Investments (February 1998 - July
1999).
Richard Hymes,
Vice President None.
Kathleen T. Ives,
Vice President None.
Christopher Jacobs,
Assistant Vice President None.
William Jaume,
Vice President None.
Frank Jennings,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Susan Katz,
Vice President None.
Thomas W. Keffer,
Senior Vice President None.
Erica Klein,
Assistant Vice President None.
Avram Kornberg,
Vice President None.
Jimmy Kourkoulakos,
Assistant Vice President. None.
John Kowalik,
Senior Vice President An officer and/or portfolio
manager for certain OppenheimerFunds;
formerly, Managing Director and Senior
Portfolio Manager at Prudential Global
Advisors (1989 - 1998).
Joseph Krist,
Assistant Vice President None.
Michael Levine,
Vice President None.
Shanquan Li,
Vice President None.
Stephen F. Libera,
Vice President An officer and/or portfolio manager for certain
Oppenheimer funds; a Chartered Financial
Analyst; a Vice President of HarbourView Asset
Management Corporation; prior to March 1996,
the senior bond portfolio manager for Panorama
Series Fund Inc., other mutual funds and
pension accounts managed by G.R. Phelps; also
responsible for managing the public
fixed-income securities department at
Connecticut Mutual Life Insurance Co.
Mitchell J. Lindauer,
Vice President None.
Dan Loughran,
Assistant Vice President:
Rochester Division None.
David Mabry,
Vice President None.
Steve Macchia,
Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director Chief Executive Officer (since September 1995);
President and director (since June 1991) of
HarbourView Asset Management Corporation; and a
director of Shareholder Services, Inc. (since
August 1994), and Shareholder Financial
Services, Inc. (September 1995); President
(since September 1995) and a director (since
October 1990) of Oppenheimer Acquisition Corp.;
President (since September 1995) and a director
(since November 1989) of Oppenheimer
Partnership Holdings, Inc., a holding company
subsidiary of OppenheimerFunds, Inc.; a
director of Oppenheimer Real Asset Management,
Inc. (since July 1996); President and a
director (since October 1997) of
OppenheimerFunds International Ltd., an
offshore fund manager subsidiary of
OppenheimerFunds, Inc. and Oppenheimer
Millennium Funds plc (since October 1997);
President and a director of other Oppenheimer
funds; a director of Hillsdown Holdings plc (a
U.K. food company); formerly, an Executive Vice
President of OFI.
Philip T. Masterson,
Vice President Formerly an Associate at Davis,
Graham, & Stubbs (January 1998 - July 1998);
Associate; Myer, Swanson, Adams & Wolf, P.C.
(May 1996 - June 1998).
Loretta McCarthy,
Executive Vice President None.
Beth Michnowski,
Assistant Vice President Formerly Senior Marketing
Manager (May 1996 - June 1997) and Director
of Product Marketing (August 1992 - May
1996) with Fidelity Investments.
Lisa Migan,
Assistant Vice President None.
Andrew J. Mika
Senior Vice President Formerly a Second Vice
President for Guardian Investments (June
1990 - October 1999).
Denis R. Molleur,
Vice President and
Senior Counsel None.
Nikolaos Monoyios,
Vice President A Vice President and/or portfolio manager of
certain Oppenheimer funds (since April 1998); a
Certified Financial Analyst; formerly, a Vice
President and portfolio manager for Guardian
Investor Services, the management subsidiary of
The Guardian Life Insurance Company (since
1979).
Linda Moore,
Vice President Formerly, Marketing Manager (July 1995
-November 1996) for Chase Investment Services
Corp.
Kenneth Nadler,
Vice President None.
David Negri,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Ray Olson,
Assistant Vice President None.
Richard M. O'Shaugnessy,
Assistant Vice President:
Rochester Division None.
Gina M. Palmieri,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds (since
6/99).
Robert E. Patterson,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
James Phillips
Assistant Vice President None.
Stephen Puckett,
Vice President None.
Jane Putnam,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Michael Quinn,
Assistant Vice President Formerly, Assistant Vice
President (April 1995 - January 1998) of Van
Kampen American Capital.
Julie Radtke,
Vice President Formerly Assistant Vice President and Business
Analyst for Pershing, Jersey City (August 1997
-November 1997); Senior Business Consultant,
American International Group (January 1996 -
July 1997).
Russell Read,
Senior Vice President Vice President of Oppenheimer Real Asset
Management, Inc. (since March 1995).
Thomas Reedy,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for the
Manager.
John Reinhardt,
Vice President: Rochester Division None
Ruxandra Risko,
Vice President None.
Michael S. Rosen,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Lawrence Rudnick,
Assistant Vice President None.
James Ruff,
Executive Vice President & Director None.
Andrew Ruotolo
Executive Vice President Formerly Chief Operations Officer for American
International Group (since 1997).
Rohit Sah,
Assistant Vice President None.
Valerie Sanders,
Vice President None.
Jeff Schneider,
Vice President Director, Personal Decisions International.
Ellen Schoenfeld,
Assistant Vice President None.
David Schultz,
Senior Vice President
and Chief Executive Officer Senior Managing Director, President (since
April 1999) and Chief Executive Officer of
HarbourView Asset Management Corporation (since
June 1999).
Stephanie Seminara,
Vice President None.
Martha Shapiro,
Assistant Vice President None.
Michelle Simone,
Assistant Vice President None.
Christian D. Smith
Senior Vice President Formerly Co-head of the
Municipal Portfolio Management Team,
Portfolio Manager for Prudential Global
Asset Management (January 1990 - September
1999).
Connie Song,
Assistant Vice President None.
Richard Soper,
Vice President None.
Keith Spencer Equity trader.
Vice President
Cathleen Stahl,
Vice President Assistant Vice President & Manager of Women &
Investing Program
Richard A. Stein,
Vice President: Rochester Division Assistant Vice President (since 1995) of
Rochester Capitol Advisors, L.P.
Arthur Steinmetz,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
John Stoma,
Senior Vice President None.
Michael C. Strathearn,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; a
Chartered Financial Analyst; a Vice
President of HarbourView Asset Management
Corporation.
Wayne Strauss,
Assistant Vice President: Rochester
Division Formerly Senior Editor, West Publishing Company
(January 1997 - March 1997).
James C. Swain,
Vice Chairman of the Board Chairman, CEO and
Trustee, Director or Managing Partner of the
Denver-based Oppenheimer Funds; formerly,
President and Director of Centennial Asset
Management Corporation and Chairman of the
Board of Shareholder Services, Inc.
Susan Switzer,
Assistant Vice President None.
Anthony A. Tanner,
Vice President: Rochester Division None.
Jay Tracey,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
James Turner,
Assistant Vice President None.
Angela Uttaro,
Assistant Vice President None.
Maureen VanNorstrand,
Assistant Vice President None.
Annette Von Brandis,
Assistant Vice President None.
Teresa Ward,
Assistant Vice President None.
Jerry Webman,
Senior Vice President Director of New York-based tax-exempt fixed
income Oppenheimer funds.
Christine Wells,
Vice President None.
Joseph Welsh,
Assistant Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; a
Chartered Financial Analyst; Vice President
of HarbourView Asset Management Corporation.
William L. Wilby,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of HarbourView Asset Management
Corporation.
Donna Winn, Senior Vice President/Distribution Marketing.
Senior Vice President
Brian W. Wixted, Formerly Principal and Chief Operating Officer, Senior Vice
President and Bankers Trust Company - Mutual Fund Services Treasurer Division
(March 1995 - March 1999); Vice President and Chief Financial Officer of CS
First Boston Investment Management Corp. (September 1991 - March 1995); and Vice
President and Accounting Manager, Merrill Lynch Asset Management (November 1987
- - September 1991).
Carol Wolf,
Vice President An officer and/or portfolio manager of certain
Oppenheimer funds; Vice President of Centennial
Asset Management Corporation; Vice President,
Finance and Accounting; Point of Contact:
Finance Supporters of Children; Member of the
Oncology Advisory Board of the Childrens
Hospital.
Caleb Wong,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds (since
6/99) .
Robert G. Zack,
Senior Vice President and
Assistant Secretary, Associate
General Counsel Assistant Secretary of Shareholder Services,
Inc. (since May 1985), Shareholder Financial
Services, Inc. (since November 1989),
OppenheimerFunds International Ltd. (since
1998), Oppenheimer Millennium Funds plc (since
October 1997); an officer of other Oppenheimer
funds.
Jill Zachman,
Assistant Vice President:
Rochester Division None.
Arthur J. Zimmer,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial Asset Management
Corporation.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer Funds, the
Denver-based Oppenheimer Funds and the Oppenheimer Quest /Rochester Funds, as
set forth below:
New York-based Oppenheimer Funds
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Large Cap Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer Trinity Core Fund
Oppenheimer Trinity Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Quest/Rochester Funds
Limited Term New York Municipal Fund
Oppenheimer Convertible Securities Fund
Oppenheimer MidCap Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
Denver-based Oppenheimer Funds
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Capital Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The address of OppenheimerFunds, Inc., the New York-based Oppenheimer Funds, the
Quest Funds, OppenheimerFunds Distributor, Inc., HarbourView Asset Management
Corp., Oppenheimer Partnership Holdings, Inc., and Oppenheimer Acquisition Corp.
is Two World Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp., and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood,
Colorado 80112.
The address of the Rochester-based funds is 350 Linden Oaks, Rochester, New York
14625-2807.
Item 27. Principal Underwriter
(a) OppenheimerFunds Distributor, Inc. is the Distributor of the Registrant's
shares. It is also the Distributor of each of the other registered open-end
investment companies for which OppenheimerFunds, Inc. is the investment adviser,
as described in Part A and B of this Registration Statement and listed in Item
26(b) above (except Oppenheimer Multi-Sector Income Trust and Panorama Series
Fund, Inc.)
and for MassMutual Institutional Funds.
(b) The directors and officers of the Registrant's principal underwriter are:
Name & Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
Jason Bach Vice President None
31 Racquel Drive
Marietta, GA 30064
Peter Beebe Vice President None
876 Foxdale Avenue
Winnetka, IL 60093
Douglas S. Blankenship Vice President None
17011 Woodbank
Spring, TX 77379
Peter W. Brennan Vice President None
8826 Amberton Lane
Charlotte, NC 28226
Kevin Brosmith Vice President None
856 West Fullerton
Chicago, IL 60614
Susan Burton(2) Vice President None
Erin Cawley(2) Assistant Vice President None
Robert Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
William Coughlin Vice President None
1730 N. Clark Street
#3203
Chicago, IL 60614
Mary Crooks(1)
Daniel Deckman Vice President None
12252 Rockledge Circle
Boca Raton, FL 33428
Christopher DeSimone Vice President None
5105 Aldrich Avenue South
Minneapolis, MN 55419
Joseph DiMauro Vice President None
244 McKinley Avenue
Grosse Pointe Farms, MI 48236
Rhonda Dixon-Gunner(1) Assistant Vice President None
Andrew John Donohue(2) Executive Vice Secretary of the
President, Director Oppenheimer funds.
and General Counsel
John Donovan Vice President None
868 Washington Road
Woodbury, CT 06798
Kenneth Dorris Vice President None
4104 Harlanwood Drive
Fort Worth, TX 76109
G. Patrick Dougherty, Jr. Vice President None
780 Watchung Road
Bound Brook, NJ 08805
Eric Edstrom(2) Vice President None
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
35 Crown Terrace
Yardley, PA 19067
George Fahey Vice President None
141 Breon Lane
Elkton, MD 21921
Eric Fallon Vice President None
10 Worth Circle
Newton, MA 02158
Katherine P. Feld(2) Vice President None
& Secretary & Senior Counsel
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding(3) Vice President None
John ("J") Fortuna(2) Vice President None
Ronald R. Foster Senior Vice President None
11339 Avant Lane
Cincinnati, OH 45249
Patricia Gadecki-Wells Vice President None
4734 Highland Place Center
Lakeland, FL 33813
Luiggino Galleto Vice President None
10302 Reisling Court
Charlotte, NC 28277
Michelle Gans Vice President None
8327 Kimball Drive
Eden Prairie, MN 55347
L. Daniel Garrity Vice President None
27 Covington Road
Avondale, GA 30002
Lucio Giliberti Vice President None
78 Metro Vista Drive
Hawthorne, NJ 07506
Ralph Grant(2) Vice President/National None
Sales Manager
Jeremy Griffiths Director None
Michael Guman Vice President None
3913 Pleasent Avenue
Allentown, PA 18103
Linda Harding Vice President/FID None
6229 Love Drive
#413
Irving, TX 75039
Webb Heidinger Vice President None
138 Gates Street
Portsmouth, NH 03801
Phillip Hemery Vice President None
184 Park Avenue
Rochester, NY 14607
Tammy Hospodar Vice President None
30864 Paloma Court
Westlake Village, CA 91362
Edward Hrybenko (2) Vice President None
Richard L. Hymes (2) Vice President None
Byron Ingram(1) Assistant Vice President None
Kathleen T. Ives(1) Vice President None
Lynn Jensen Vice President None
5120 Patterson Street
Long Beach, CA 90815
Eric K. Johnson Vice President None
3665 Clay Street
San Francisco, CA 94118
Mark D. Johnson Vice President None
409 Sundowner Ridge Court
Wildwood, MO 63011
Elyse Jurman Vice President None
1194 Hillsboro Mile, #51
Hillsboro Beach, FL 33062
Michael Keogh(2) Vice President None
Brian Kelly Vice President None
60 Larkspur Road
Fairfield, CT 06430
Richard Klein Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409
Brent Krantz Vice President None
2609 SW 149th Place
Seattle, WA 98166
Oren Lane Vice President None
5286 Timber Bend Drive
Brighton, MI 48116
Todd Lawson Vice President None
10687 East Ida Avenue
Englewood, CO 80111
Dawn Lind Vice President None
7 Maize Court
Melville, NY 11747
James Loehle Vice President None
30 Wesley Hill Lane
Warwick, NY 10990
Steve Manns Vice President None
1941 W. Wolfram Street
Chicago, IL 60657
Todd Marion Vice President None
3 St. Marks Place
Cold Spring Harbor, NY 11724
LuAnn Mascia(2) Assistant Vice President None
Marie Masters Vice President None
8384 Glen Eagle Drive
Manlius, NY 13104
Theresa-Marie Maynier Vice President None
2421 Charlotte Drive
Charlotte, NC 28203
Anthony Mazzariello Vice President None
704 Beaver Road
Leetsdale, PA 15056
John McDonough Vice President None
3812 Leland Street
Chevy Chase, MD 20815
Kent McGowan Vice President None
18424 12th Avenue West
Lynnwood, WA 98037
Tanya Mrva(2) Assistant Vice President None
Laura Mulhall(2) Senior Vice President None
Charles Murray Vice President None
18 Spring Lake Drive
Far Hills, NJ 07931
Wendy Murray Vice President None
32 Carolin Road
Upper Montclair, NJ 07043
Denise-Marie Nakamura Vice President None
4111 Colony Plaza
Newport, CA 92660
John Nesnay Vice President None
3410 East County Line
#17
Highlands Ranch, CO 80126
Chad V. Noel Vice President None
2408 Eagleridge Drive
Henderson, NV 89014
Joseph Norton Vice President None
2518 Fillmore Street
San Francisco, CA 94115
Kevin Parchinski Vice President None
8409 West 116th Terrace
Overland Park, KS 66210
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Drive
Pittsford, NY 14534
Bill Presutti Vice President None
130 E. 63rd Street, #10E
New York, NY 10021
Steve Puckett Vice President None
5297 Soledad Mountain Road
San Diego, CA 92109
Elaine Puleo(2) Senior Vice President None
Christopher L. Quinson (2) Vice President/ None
Variable Annuities
Minnie Ra Vice President None
100 Delores Street, #203
Carmel, CA 93923
Dustin Raring Vice President None
378 Elm Street
Denver, CO 80220
Michael Raso Vice President None
16 N. Chatsworth Ave.
Apt. 301
Larchmont, NY 10538
Sean Reardon Vice President None
10915 NE 123rd Place
#B207
Kirkland, WA 98034
John C. Reinhardt(3) Vice President None
Douglas Rentschler Vice President None
677 Middlesex Road
Grosse Pointe Park, MI 48230
Ruxandra Risko(2) Vice President None
Michael S. Rosen(2) Vice President None
Kenneth Rosenson Vice President None
3505 Malibu Country Drive
Malibu, CA 90265
James Ruff(2) President & Director None
Alfredo Scalzo Vice President None
19401 Via Del Mar, #303
Tampa, FL 33647
Timothy Schoeffler Vice President None
1717 Fox Hall Road
Washington, DC 77479
Michael Sciortino Vice President None
785 Beau Chene Drive
Mandeville, LA 70471
Eric Sharp Vice President None
862 McNeill Circle
Woodland, CA 95695
Michelle Simone(2) Assistant Vice President None
Stuart Speckman(2) Vice President None
Timothy J. Stegner Vice President None
794 Jackson Street
Denver, CO 80206
Marlo Stil Vice President None
8579 Prestwick Drive
La Jolla, CA 92037
Peter Sullivan Vice President None
21445 S. E 35th Street
Issaquah, WA 98029
David Sturgis Vice President None
81 Surrey Lane
Boxford, MA 01921
Scott Such(1) Senior Vice President None
Brian Summe Vice President None
239 N. Colony Drive
Edgewood, KY 41017
George Sweeney Vice President None
5 Smokehouse Lane
Hummelstown, PA 17036
Andrew Sweeny Vice President None
5967 Bayberry Drive
Cincinnati, OH 45242
Scott McGregor Tatum Vice President None
704 Inwood
Southlake, TX 76092
David G. Thomas Vice President None
2200 North Wilson Blvd.
Suite 102-176
Arlington, VA 22201
Sarah Turpin Vice President None
3517 Milton Avenue
Dallas, TX 75205
Mark Vandehey(1) Vice President None
Brian Villec (2) Vice President None
Andrea Walsh(1) Vice President None
Suzanne Walters(1) Assistant Vice President None
James Wiaduck Vice President None
935 Wood Run Court
South Lyon, MI 48178
Michael Weigner Vice President None
5722 Harborside Drive
Tampa, FL 33615
Donn Weise Vice President None
3249 Earlmar Drive
Los Angeles, CA 90064
Marjorie Williams Vice President None
6930 East Ranch Road
Cave Creek, AZ 85331
Brian W. Wixted (1) Vice President Vice President and
and Treasurer Treasurer of the
Oppenheimer funds.
(1) 6803 South Tucson Way, Englewood, CO 80112
(2) Two World Trade Center, New York, NY 10048
(3) 350 Linden Oaks, Rochester, NY 14623
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
County of Arapahoe and State of Colorado on the 24th day of November, 1999.
OPPENHEIMER CASH RESERVES
By: /s/ James C.
Swain *
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:
Signatures Title Date
/s/ James C. Swain* Chairman of the November 24, 1999
- ------------------------------------- Board of Trustees
James C. Swain Principal Executive
Officer and Trustee
/s/ George C. Bowen* Trustee November 24, 1999
- -------------------------------------
George C. Bowen
/s/ Bridget A. Macaskill* President and November 24, 1999
- ------------------------------------- Trustee
Bridget A. Macaskill
/s/ William L. Armstrong* Trustee November 24, 1999
- -------------------------------------
William L. Armstrong
/s/ Robert G. Avis* Trustee November 24, 1999
- -------------------------------------
Robert G. Avis
/s/ William A. Baker* Trustee November 24, 1999
- -------------------------------------
William A. Baker
/s/ Jon S. Fossel Trustee November 24, 1999
- -------------------------------------
Jon S. Fossel
/s/ Sam Freedman* Trustee November 24, 1999
- -------------------------------------
Sam Freedman
/s/ Raymond J. Kalinowski* Trustee November 24, 1999
- -------------------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee November 24, 1999
- -------------------------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee November 24, 1999
- -------------------------------------
Robert M. Kirchner
/s/ Ned M. Steel* Trustee November 24, 1999
- -------------------------------------
Ned M. Steel
/s/ Brian W. Wixted* Treasurer November 24, 1999
- -------------------------------------
Brian W. Wixted
*By: /s/ Robert G. Zack
- ---------------------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER CASH RESERVES
EXHIBIT INDEX
Exhibit No. Description
23(i) Opinion and Consent of Counsel
23(j) Independent Auditors' Consent
November 24, 1999
Oppenheimer Cash Reserves
6803 S. Tucson Way
Englewood, CO 80112
Dear Ladies and Gentlemen:
This opinion is being furnished to Oppenheimer Cash Reserves, a
Massachusetts business trust (the "Fund"), in connection with the post-effective
amendment no. 17 to the Registration Statement on Form N-1A under the Securities
Act of 1933, as amended (the "1933 Act") and the post-effective amendment no. 16
under the Investment Company Act (the "Registration Statement"), filed by the
Fund. As counsel for the Fund, we have examined such statutes, regulations,
corporate records and other documents and reviewed such questions of law that we
deemed necessary or appropriate for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Class A, Class B
and Class C shares to be issued as described in the Registration Statement have
been duly authorized and, assuming receipt of the consideration to be paid
therefor, upon delivery as provided in the Registration Statement, will be
legally and validly issued, fully paid and non-assessable (except for the
potential liability of shareholders described in the Fund's Statement of
Additional Information under the caption "Shareholder and Trustee Liability"
under "How the Fund is Managed Organization and History").
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the Registration Statement.
We do not thereby admit that we are within the category of persons whose consent
is required under Section 7 of the 1933 Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
This opinion is effective on the above date.
Sincerely,
/s/ Allan B. Adams
Allan B. Adams
Myer, Swanson, Adams & Wolf, P.C.
Exhibit 23(j)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 17 to Registration
Statement No. 33-23223 of Oppenheimer Cash Reserves on Form N-1A of our report
dated August 20, 1999, appearing in the Statement of Additional Information,
which is a part of such Registration Statement, and to the reference to us under
the headings "Independent Auditors" in the Statement of Additional Information
and "Financial Highlights" in the Prospectus, which is also a part of such
Registration Statement.
/s/ Deloitte & Touche LLP
- ------------------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
November 23, 1999
