<PAGE>
As filed with the Securities and Exchange Commission on September 29, 1995
Registration No. 33-34720
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [ ]
----
POST-EFFECTIVE AMENDMENT NO. 16 [X]
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and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 19
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QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
(Exact Name of Registrant as Specified in Charter)
ONE WORLD FINANCIAL CENTER, NEW YORK, NY 10281
(Address of Principal Executive Offices)
(212) 667-7495
(Registrant's Telephone Number)
Thomas E. Duggan, Esq.
One World Financial Center
New York, NY 10281
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[ ] On March 1, 1994 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[X] pursuant to paragraph (a) of Rule 485 or 486
Registrant has registered an indefinite number of shares
under the Securities Act of 1933 pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940 and has
filed its report pursuant to that Rule for the fiscal year ended
November 30, 1994 on January 17, 1995.
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Form N-1A
Item
Part A Caption Prospectus
- ------ ------- ----------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Financial Highlights
Information
4. General Investment Objectives of the
Description of Funds; Investment Restrictions
Registrant and Techniques; Additional
Information
5. Management of the Fund Investment Management
Agreement; Additional
Information
6. Capital Stock and Other Dividends and Distributions;
Securities Additional Information
7. Purchase of Securities How to Buy Shares; Additional
Information
8. Redemption or Repurchase How to Redeem Shares; How to
Exchange Shares; Additional
Information
9. Legal Proceedings N/A
Part B Caption Statement of Additional Information
- ------ ------- -----------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and N/A
History
13. Investment Objectives and Investment of the Fund's
Policies Assets; Investment
Restrictions; Risk Factors and
Special Considerations
14. Management of the Fund Directors and Officers
15. Control Persons and Directors and Officers
Principal
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Holders of Securities
16. Investment Advisory and Investment Management and
Other Services Other Services; Distribution
Expense Plan; Additional
Information
17. Brokerage Allocation Investment Management and
Other Services
18. Capital Stock and Other Additional Information
Securities
19. Purchase, Redemption and Determination of Net Asset Value
Pricing of Securities
20. Tax Status Additional Information
21. Underwriters Additional Information
22. Calculations of Performance Information
Performance Data
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
THE FUNDS COVERED BY THIS PROSPECTUS ARE:
Equity: Quest for Value Fund, Inc.
Small Capitalization Fund
Growth and Income Fund
Flexible: Opportunity Fund
Global Equity: Quest for Value Global Equity Fund, Inc.
This Prospectus sets forth basic information about the Funds,
including applicable sales and distribution fees, that you should
understand before investing. You should read it carefully and
retain it for future reference. Statements of Additional
Information dated November 23,, 1995 for each of the Quest for
Value Global Equity Fund, Inc., Quest for Value Family of Funds
and Quest for Value Fund, Inc. (the "SAIs"), have been filed with
the Securities and Exchange Commission and are incorporated by
reference in this Prospectus. You can obtain a copy of the SAIs
without charge by contacting Shareholder Services, Inc., at the
address or telephone number listed on the back cover. SHARES IN
THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK AND THE SHARES OF THE FUNDS ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
INVESTED.
The Funds offer three separate classes of shares: Class A, B and
C shares. Shares of each Class represent an identical interest in
the investment portfolio of a Fund, and generally have the same
rights, but are offered under different sales charge and
distribution fee arrangements. The offering of Class A, B and C
shares presents the investor with the opportunity to choose the
sales charge and distribution fee arrangement which is most
beneficial, depending on the amount of purchase, the length of
time the investor expects to hold the shares, and other
circumstances.
Shares of each Class are offered at the net asset value next
determined after receipt of your purchase order plus an initial
("front-end") sales charge for purchases of Class A shares, or a
deferred sales charge for purchases of Class B or Class C shares.
(See "How to Buy Shares," p. _) Class B and C shares bear a
higher ongoing distribution fee than Class A shares, and
investors should understand that over time the accumulated
distribution charges on Class B and C shares may exceed the
amount of the initial sales charge and ongoing distribution fee
on Class A shares.
NOVEMBER , 1995
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
QUEST FOR VALUE is a registered service mark of Oppenheimer
Capital
1
<PAGE>
The following table sets forth the fees and expenses estimated to have been
incurred if the new Investment Advisory Agreement with Oppenheimer Management
Corporation, the new Distribution Plans with Oppenheimer Funds Distributor and
other agreements entered into pursuant to the recent acquisition by OMC of
certain assets of Quest for Value Advisors had been in effect throughout the
periods shown:
SUMMARY OF FUND EXPENSES
Period: Fiscal Year Ended October 31, 1994 with respect to Quest for Value Fund,
Inc., Small Capitalization, Opportunity and Growth and Income Funds and Fiscal
Year Ended November 30, 1994 with respect to the Global Equity Fund.
<TABLE>
<CAPTION>
QUEST FOR GROWTH AND SMALL
VALUE FUND INCOME OPPORTUNITY CAPITALIZATION GLOBAL EQUITY
----------------- ----------------- ----------------- ----------------- -----------------------------
CLASS OF SHARES: A B C A B C A B C A B C A B C
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER
TRANSACTION
EXPENSES
Maximum Initial
Sales Load
Imposed on
Purchase (as a
% of offering
price). . . . 5.75% none none 5.75% none none 5.75% none none 5.75% none none 5.75% none none
Maximum
Deferred
Sales
Load(1) . . . none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00%
Maximum Sales
Load
Imposed On
Reinvested
Dividends . . none none none none none none none none none none none none none none none
Redemption
Fee . . . . . none none none none none none none none none none none none none none none
Exchange Fee . none none none none none none none none none none none none none none none
ANNUAL FUND
OPERATING
EXPENSES
(AS A % OF
AVERAGE
NET ASSETS)
Management Fee
(2) . . . . . 1.00% 1.00% 1.00% .85% .85% .85% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .75% .75% .75%
12b-1 Fee
(including
service fees
of .25%). . . .50% 1.00% 1.00% .40% 1.00% 1.00% .50% 1.00% 1.00% .50% 1.00% 1.00% .50% 1.00% 1.00%
Other
Expenses. . . .21% .24% .28% 1.07% 1.08% 1.25% .28% .34% .35% .38% .48% .59% .68% (3) .76% (3) .91% (3)
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL FUND
OPERATING
EXPENSES. . . 1.71% 2.24% 2.28% 2.32% 2.93% 3.10% 1.78% 2.34% 2.35% 1.88% 2.48% 2.59% 1.93% 2.51% 2.66%
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
EXAMPLE 1: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge, (b) a 5% annual return, and (c) retention of shares at the end of the time period. 10-year
figures for Class B shares assume conversion to Class A shares after six years.
1 Year . . . . $ 74 $ 23 $ 23 $ 80 $ 30 $ 31 $ 75 $ 24 $ 24 $ 76 $ 25 $ 26 $ 76 $ 25 $ 27
3 Years. . . . 108 70 71 126 91 96 110 73 73 113 77 81 115 78 83
5 Years. . . . 145 120 122 174 154 163 148 125 126 153 132 138 156 134 141
10 Years . . . 248 232 262 308 298 341 255 241 269 265 253 292 270 257 299
EXAMPLE 2: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge, (b) a 5% annual return, and (c) redemption at the end of the time period. 10-year figures
for Class B shares assume conversion to Class A shares after six years.
1 Year . . . . $ 74 $ 73 $ 33 $ 80 $ 80 $ 41 $ 75 $ 74 $ 34 $ 76 $ 75 $ 36 $ 76 $ 75 $ 37
3 Years. . . . 108 100 71 126 121 96 110 103 73 113 107 81 115 108 83
5 Years. . . . 145 140 122 174 174 163 148 145 126 153 152 138 156 154 141
10 Years . . . 248 232 262 308 298 341 255 241 269 265 253 292 270 257 299
<FN>
THE EXAMPLES SHOULD NOT BE CONSIDERED INDICATIONS OF PAST OR FUTURE EXPENSES OR
PERFORMANCE, AND ACTUAL EXPENSES OR PERFORMANCE MAY VARY FROM THOSE SHOWN.
Investors should be aware that over time, Class B and C shareholders may pay
more than the equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers Rules of Fair Practice.
(1) Purchases of Class A shares of $1 million or more will not be subject to
front-end sales charges but a contingent deferred sales charge of 1% will
be imposed if the shares are redeemed within the first 18 months after the
end of the calendar month of their purchase.
(2) The management fee (with respect to the Global Equity Fund, the management
fee combined with the administration fee) is higher than that paid by most
other investment companies.
(3) Includes administration fee of .25% of average net assets.
</TABLE>
2
<PAGE>
FINANCIAL HIGHLIGHTS
The financial information for the fiscal years set forth below for the Small
Capitalization, Opportunity, Growth and Income and Global Equity Funds has been
audited by Price Waterhouse LLP, independent accountants, whose unqualified
reports thereon appear in the Statements of Additional Information ("SAI(s)").
The financial information for the fiscal years set forth below for Quest for
Value Fund has been audited by KPMG Peat Marwick LLP, independent auditors,
whose unqualified report thereon appears in the SAI. The financial information
for the six month period ended April 30, 1995 for the Quest for Value Fund,
Opportunity, Growth and Income and Small Capitalization Funds and for the six
month period ended May 31, 1995 for the Global Equity Fund is unaudited. All
the following information should be read in conjunction with the financial
statements and related notes thereto appearing in the SAIs. Further information
regarding the performance of each Fund is available in each Fund's Annual
Report. Annual Reports may be obtained without charge by calling the Fund at
(800) 232-FUND.
<TABLE>
<CAPTION>
NAV Net Net realized Total from Dividends Distribution Total
Start of Investment and unrealized Investment from Net from net Dividends
period Income gain (loss) Operations Investment realized and
(loss) on investments Income gain on Distributions
investments
<S> <C> <C> <C> <C> <C> <C> <C>
QUEST FOR VALUE - CLASS A
Six months ended 4/30/95 (11) $12.59 $.06 $1.00 $1.06 $(.08) $(.83) $(.91)
Year ended 10/31/94. . . . . . 12.51 .09 .50 .59 (.04) (.47) (.51)
...10/31/93. . . . . . . . . . 11.71 .05 1.34 1.39 (.05) (.54) (.59)
...10/31/92. . . . . . . . . . 10.61 .04 1.77 1.81 (.07) (.64) (.71)
...10/31/91. . . . . . . . . . 7.84 .09 2.84 2.93 (.16) -- (.16)
...10/31/90 (9). . . . . . . . 9.85 .18 (1.38) (1.20) (.26) (.55) (.81)
...10/31/89 (9). . . . . . . . 8.99 .24 1.09 1.33 (.10) (.37) (.47)
...10/31/88 (9). . . . . . . . 7.94 .09 1.38 1.47 (.05) (.37) (.42)
5/1/87-10/31/87 (9,10) . . . . 9.44 .03 (1.14) (1.11) (.09) (.30) (.39)
Year ended 4/30/87 (9) . . . . 9.47 .09 .81 .90 (.07) (.86) (.93)
...4/30/86 (9) . . . . . . . . 7.40 .06 2.33 2.39 (.09) (.23) (.32)
...4/30/85 (9) . . . . . . . . 7.69 .10 .99 1.09 (.11) (1.27) (1.38)
...4/30/84 (9) . . . . . . . . 8.90 .10 .48 .58 (.17) (1.62) (1.79)
QUEST FOR VALUE - CLASS B
Six months ended 4/30/95 (11) 12.53 .03 .99 1.02 (.07) (.83) (.90)
Year ended 10/31/94. . . . . . 12.51 .02 .50 .52 (.03) (.47) (.50)
9/2/93(4) - 10/31/93 . . . . . 12.66(3) (.01) (.14) (.15) -- -- --
QUEST FOR VALUE - CLASS C
Six months ended 4/30/95 (11) 12.52 .03 1.00 1.03 (.08) (.83) (.91)
Year ended 10/31/94. . . . . . 12.50 .01 .51 .52 (.03) (.47) (.50)
9/2/93(4) - 10/31/93 . . . . . 12.66(3) (.01) (.15) (.16) -- -- --
SMALL CAPITALIZATION - CLASS A
Six months ended 4/30/95 (11) 16.33 .05 .22 .27 -- (.42) (.42)
Year ended 10/31/94. . . . . . 17.68 (.03) .01 (.02) -- (1.33) (1.33)
...10/31/93. . . . . . . . . . 14.60 (.04) 4.26 4.22 -- (1.14) (1.14)
...10/31/92. . . . . . . . . . 13.52 .00 1.50 1.50 -- (.42) (.42)
...10/31/91. . . . . . . . . . 8.80 (.05) 4.85 4.80 (.08) -- (.08)
...10/31/90. . . . . . . . . . 10.91 .07 (2.04) (1.97) (.08) (.06) (.14)
...1/1/89(7)-10/31/89. . . . . 10.00(3) .08 .83 .91 -- -- --
SMALL CAPITALIZATION - CLASS B
Six months ended 4/30/95 (11) 16.24 (.01) .22 .21 -- (.42) (.42)
Year ended 10/31/94. . . . . . 17.66 (.11) .02 (.09) -- (1.33) (1.33)
9/2/93(4)-10/31/93 . . . . . . 17.19(3) (.02) .49 .47 -- -- --
SMALL CAPITALIZATION - CLASS C
Six months ended 4/30/95 (11) 16.23 .00 .22 .22 -- (.42) (42)
Year ended 10/31/94. . . . . . 17.67 (.13) .02 (.11) -- (1.33) (1.33)
...9/2/93(4) - 10/31/93. . . . 17.19(3) (.02) .50 .48 -- -- --
OPPORTUNITY - CLASS A
Six months ended 4/30/95 (11) 19.69 .12 2.25 2.37 (.12) (.61) (.73)
Year ended 10/31/94. . . . . . 18.71 .18 1.35 1.53 (.33) (.22) (.55)
...10/31/93. . . . . . . . . . 16.73 .35 2.02 2.37 (.07) (.32) (.39)
...10/31/92. . . . . . . . . . 14.29 .09 2.93 3.02 (.03) (.55) (.58)
...10/31/91. . . . . . . . . . 9.74 .03 4.78 4.81 (.23) (.03) (.26)
...10/31/90. . . . . . . . . . 11.59 .25 (1.64) (1.39) (.22) (.24) (.46)
1/1/89(7)-10/31/89 . . . . . . 10.00(3) .17 1.42 1.59 -- -- --
OPPORTUNITY - CLASS B
Six months ended 4/30/95 (11) 19.59 .07 2.23 2.30 (.12) (.61) (.73)
Year ended 10/31/94. . . . . . 18.70 .08 1.34 1.42 (.31) (.22) (.53)
...9/2/93(4)-10/31/93. . . . . 18.73(3) .02 (.05) (.03) -- -- --
OPPORTUNITY - CLASS C
Six months ended 4/30/95 (11) 19.58 .07 2.23 2.30 (.12) (.61) (.73)
Year ended 10/31/94. . . . . . 18.70 .08 1.33 1.41 (.31) (.22) (.53)
...9/2/93(4)-10/31/93. . . . . 18.73(3) .02 (.05) (.03) -- -- --
GLOBAL EQUITY - CLASS A
Six months ended 5/31/95(11) 14.16 .07 1.26(8) 1.33 -- (1.23) (1.23)
Year ended 11/30/94. . . . . . 13.54 .01 1.10(8) 1.11 -- (.49) (.49)
...11/30/93. . . . . . . . . . 12.30 -- 2.26(8) 2.26 (.12) (.90) (1.02)
...11/30/92. . . . . . . . . . 11.25 .12 .93(8) 1.05 -- -- --
...11/30/91. . . . . . . . . . 10.57 (.04) .85(8) .81 (.05) (.08)(8) (.13)
7/2/90(7)-11/30/90 . . . . . . 12.05(3) .05 (1.53)(8) (1.48) -- -- --
GLOBAL EQUITY - CLASS B
Six months ended 5/31/95(11) 14.07 .04 1.24(8) 1.28 -- (1.23) (1.23)
Year ended 11/30/94. . . . . . 13.52 (.06) 1.10(8) 1.04 -- (.49) (.49)
9/2/93(4)-11/30/93 . . . . . . 13.75(3) (.02) (.21)(8) (.23) -- -- --
GLOBAL EQUITY - CLASS C
Six months ended 5/31/95(11) 14.06 .03 1.23(8) 1.26 -- (1.23) (1.23)
Year ended 11/30/94. . . . . . 13.52 (.08) 1.11(8) 1.03 -- (.49) (.49)
9/2/93(4)-11/30/93 . . . . . . 13.75(3) (.02) (.21)(8) (.23) -- -- --
GROWTH AND INCOME - CLASS A
Six months ended 4/30/95 (11) 10.09 .18 .67 .85 (.18) (.42) (.60)
Year ended 10/31/94. . . . . . 11.24 .32 .55 .87 (.32) (1.70) (2.02)
...10/31/93. . . . . . . . . . 10.80 .30 .73 1.03 (.26) (.33) (.59)
11/4/91(7) - 10/31/92. . . . . 10.00(3) .28 .80 1.08 (.28) -- (.28)
GROWTH AND INCOME - CLASS B
Six months ended 4/30/95 (11) 10.07 .16 .66 .82 (.16) (.42) (.58)
Year ended 10/31/94. . . . . . 11.23 .25 .56 .81 (.27) (1.70) (1.97)
9/2/93(4) - 10/31/93 . . . . . 11.21(3) .04 .05 .09 (.07) -- (.07)
GROWTH AND INCOME - CLASS C
Six months ended 4/30/95 (11) 10.07 .14 .67 .81 (.14) (.42) (.56)
Year ended 10/31/94. . . . . . 11.23 .24 .56 .80 (.26) (1.70) (1.96)
9/2/93(4) - 10/31/93 . . . . . 11.21(3) .04 .05 .09 (.07) -- (.07)
3
<PAGE>
<CAPTION>
NAV Total Return Net Assets Ratio of net Ratio of net Portfolio
End for period(1) at end of operating investment turnover
of period (000) expenses to income (loss)
period average net to average net
assets assets
QUEST FOR VALUE - CLASS A
Six months ended 4/30/95 (11) $12.74 9.52% $251,821 1.69%(2) .97%(2) 17%
Year ended 10/31/94. . . . . . 12.59 5.01% 238,085 1.71% .72% 49%
...10/31/93. . . . . . . . . . 12.51 12.27% 245,320 1.75% .40% 27%
...10/31/92. . . . . . . . . . 11.71 18.45% 142,939 1.75% .53% 41%
...10/31/91. . . . . . . . . . 10.61 37.94% 79,914 1.83% 1.06% 48%
...10/31/90 (9). . . . . . . . 7.84 (13.43%) 49,740 1.82% 1.71% 51%
...10/31/89 (9). . . . . . . . 9.85 15.68% 77,205 1.81% 2.31% 30%
...10/31/88 (9). . . . . . . . 8.99 19.54% 83,228 2.21% .94% 15%
5/1/87-10/31/87 (9,10) . . . . 7.94 (12.19%) 91,255 2.24%(2) .76%(2) 21%
Year ended 4/30/87 (9) . . . . 9.44 10.25% 104,538 2.17% 1.23% 34%
...4/30/86 (9) . . . . . . . . 9.47 33.66% 64,331 2.18% 1.18% 68%
...4/30/85 (9) . . . . . . . . 7.40 17.86% 28,055 2.34% 1.90% 42%
...4/30/84 (9) . . . . . . . . 7.69 7.45% 13,388 2.29% 1.68% 74%
QUEST FOR VALUE - CLASS B
Six months ended 4/30/95 (11) 12.65 9.23% 23,805 2.21%(2) .45%(2) 17%
Year ended 10/31/94. . . . . . 12.53 4.43% 14,373 2.24% .14% 49%
9/2/93(4) - 10/31/93 . . . . . 12.51 (1.19%) 2,015 2.27%(2) (1.19%)(2) 27%
QUEST FOR VALUE - CLASS C
Six months ended 4/30/95 (11) 12.64 9.31% 6,375 2.24%(2) .43%(2) 17%
Year ended 10/31/94. . . . . . 12.52 4.45% 3,581 2.28% .09% 49%
9/2/93(4) - 10/31/93 . . . . . 12.50 (1.26%) 221 2.27%(2) (.90%)(2) 27%
SMALL CAPITALIZATION - CLASS A
Six months ended 4/30/95 (11) 16.18 1.71% 118,909 1.80%(2) .56%(2) 29%
Year ended 10/31/94. . . . . . 16.33 .04% 120,102 1.88% (.14%) 67%
...10/31/93. . . . . . . . . . 17.68 30.21% 104,898 1.89% (.36%) 74%
...10/31/92. . . . . . . . . . 14.60 11.60% 39,693 2.11% (.04%) 95%
...10/31/91. . . . . . . . . . 13.52 55.01% 20,686 2.25%(5) (.41%)(5) 103%
...10/31/90. . . . . . . . . . 8.80 (18.33%) 1,880 2.00%(5) .71%(5) 18%
...1/1/89(7)-10/31/89. . . . . 10.91 9.10% 2,085 1.74%(5) 1.34%(5) 32%
SMALL CAPITALIZATION - CLASS B
Six months ended 4/30/95 (11) 16.03 1.35% 19,564 2.37%(2) (.01%)(2) 29%
Year ended 10/31/94. . . . . . 16.24 (.39%) 16,144 2.48% (.70%) 67%
9/2/93(4)-10/31/93 . . . . . . 17.66 2.73% 1,754 2.57%(2) (1.15%)(2) 74%
SMALL CAPITALIZATION - CLASS C
Six months ended 4/30/95 (11) 16.03 1.41% 5,670 2.35%(2) (.01%)(2) 29%
Year ended 10/31/94. . . . . . 16.23 (.51%) 3,344 2.59% (.81%) 67%
...9/2/93(4) - 10/31/93. . . . 17.67 2.79% 235 2.57%(2) (1.20%)(2) 74%
OPPORTUNITY - CLASS A
Six months ended 4/30/95 (11) 21.33 12.66% 231,881 1.71%(2) 1.25%(2) 10%
Year ended 10/31/94. . . . . . 19.69 8.41% 163,340 1.78% .96% 42%
...10/31/93. . . . . . . . . . 18.71 14.34% 127,225 1.83%2 .69% 24%
...10/31/92. . . . . . . . . . 16.73 21.93% 40,563 2.27% .72% 32%
...10/31/91. . . . . . . . . . 14.29 50.44% 8,446 2.35%(5) .30%(5) 88%
...10/31/90. . . . . . . . . . 9.74 (12.62%) 4,570 2.00%(5) 2.30%(5) 206%
1/1/89(7)-10/31/89 . . . . . . 11.59 15.90% 3,868 1.84%(2,5) 3.75%(2,5) 103%
OPPORTUNITY - CLASS B
Six months ended 4/30/95 (11) 21.16 12.36% 102,353 2.24%(2) .75%(2) 10%
Year ended 10/31/94. . . . . . 19.59 7.84% 43,317 2.34% .43% 42%
...9/2/93(4)-10/31/93. . . . . 18.70 (.16%) 2,115 2.52%(2) 1.32%(2) 24%
OPPORTUNITY - CLASS C
Six months ended 4/30/95 (11) 21.15 12.37% 20,091 2.26%(2) .73%(2) 10%
Year ended 10/31/94. . . . . . 19.58 7.78% 7,289 2.35% .43% 42%
...9/2/93(4)-10/31/93. . . . . 18.70 (.16%) 313 2.52%(2) 1.13%(2) 24%
GLOBAL EQUITY - CLASS A
Six months ended 5/31/95(11) 14.26 10.24% 155,369 1.87%(2) 1.07%(2) 34%
Year ended 11/30/94. . . . . . 14.16 8.37% 148,044 1.92%(6) .05%(6) 70%
...11/30/93. . . . . . . . . . 13.54 19.72% 135,616 1.76%(6) .04%(6) 46%
...11/30/92. . . . . . . . . . 12.30 9.33% 111,207 1.76%(6) .72%(6) 62%
...11/30/91. . . . . . . . . . 11.25 7.72% 46,937 2.09% (.27%) 41%
7/2/90(7)-11/30/90 . . . . . . 10.57 (12.28%) 58,087 2.11%(2) .92%(2) 2%
GLOBAL EQUITY - CLASS B
Six months ended 5/31/95(11) 14.12 9.93% 14,107 2.44%(2) .58%(2) 34%
Year ended 11/30/94. . . . . . 14.07 7.84% 10,268 2.50%(6) (.44%)(6) 70%
9/2/93(4)-11/30/93 . . . . . . 13.52 (1.67%) 1,676 2.26%(2,6) (.76%)(2,6) 46%
GLOBAL EQUITY - CLASS C
Six months ended 5/31/95(11) 14.09 9.78% 3,841 2.53%(2) (.54%)(2) 34%
Year ended 11/30/94. . . . . . 14.06 7.77% 2,415 2.66%(6) (.59%)(6) 70%
9/2/93(4)-11/30/93 . . . . . . 13.52 (1.67%) 244 2.26%(2,6) (.69%)(2,6) 46%
GROWTH AND INCOME - CLASS A
Six months ended 4/30/95 (11) 10.34 9.11% 32,969 1.92%(2,6) 3.78%(2,6) 63%
Year ended 10/31/94. . . . . . 10.09 8.64% 30,576 1.86%(6) 3.16%(6) 113%
...10/31/93. . . . . . . . . . 11.24 9.93% 28,466 1.90%(6) 2.66%(6) 192%
11/4/91(7) - 10/31/92. . . . . 10.80 10.84% 8,057 2.23%(2,6) 2.73%(2,6) 77%
GROWTH AND INCOME - CLASS B
Six months ended 4/30/95 (11) 10.31 8.79% 4,231 2.49%(2,6) 3.25%(2,6) 63%
Year ended 10/31/94. . . . . . 10.07 7.96% 2,928 2.47(6) 2.53%(6) 113%
9/2/93(4) - 10/31/93 . . . . . 11.23 .81% 319 2.49%(2,6) 1.83%(2,6) 192%
GROWTH AND INCOME - CLASS C
Six months ended 4/30/95 (11) 10.32 8.67% 897 2.77%(2,6) 3.00%(2,6) 63%
Year ended 10/31/94. . . . . . 10.07 7.91% 455 2.62%(6) 2.39%(6) 113%
9/2/93(4) - 10/31/93 . . . . . 11.23 .81% 102 2.49%(2,6) 2.18%(2,6) 192%
<FN>
- -----------
(1) Total return shown assumes reinvestment of all dividends and distributions
but does not reflect deductions for sales charges. Aggregate (not
annualized) total return is shown for any period shorter than one year.
(2) Annualized
(3) Offering Price
(4) Initial offering of Class B and C shares
(5) During the periods the Funds' former adviser voluntarily waived all or a
portion of its fees and assumed some operating expenses of the Funds.
Without such waivers and assumptions, the ratios of net operating expenses
to average net assets and the ratios of net investment income to average
net assets would have been, respectively: Small Capitalization Fund:
Class A shares - 3.27% and (1.43%) for the year ended 10/31/91, 5.82% and
(3.11%) for the year ended 10/31/90, and 6.27% and (3.19%) (annualized) for
the period 1/1/89 (commencement of operations) to 10/31/89; Opportunity
Fund: Class A shares - 3.33% and (.68%) for the year ended 10/31/91, 3.69%
and .61% for the year ended 10/31/90, and 5.32% and .27% (annualized) for
the period 1/1/89 (commencement of operations) to 10/31/89.
(6) During the periods the Funds' former adviser voluntarily waived a portion
of its fees. Without such waiver, the ratios of operating expenses to
average net assets and the ratios of net investment income to average net
assets would have been, respectively: Growth and Income Fund: Class A
shares - 2.17% and 3.53%, annualized, for the six month period ended April
30, 1995,. 2.32% and 2.70% for the year ended October 31, 1994, 2.18% and
2.38% for the year ended 10/31/93, and 2.98% and 1.98% (annualized) for the
period 11/4/91 (commencement of operations) to 10/31/92, Class B shares -
2.73% and 3.01% annualized, for the six month period ended April 30, 1995.
2.93% and 2.07% for the year ended October 31, 1994 and 2.88% and 1.44%
(annualized) for the period September 2, 1993 (initial offering) to
October 31, 1993 and Class C shares - 3.00% and 2.77%, annulized, for the
six month period ended April 30, 1995. 3.10% and 1.91% for the year ended
October 31, 1994 and 2.87% and 1.80% (annualized) for the period 9/2/93
(initial offering) to 10/31/93; Global Equity Fund: Class A shares - 1.93%
and .04% for the year ended 11/30/94, 1.91% and (.11%) for the year ended
11/30/93 and 1.84% and .64% for the year ended 11/30/92, Class B shares -
2.51% and (.45%) for the year ended 11/30/94 and 2.32% and (.82%)
(annualized) for the period 9/2/93 (initial offering) to 11/30/93 and
Class C shares - 2.66% and (.59%) for the year ended 11/30/94 and 2.35% and
(.78%) (annualized) for the period 9/2/93 (initial offering) to 11/30/93.
(7) Commencement of Operations
(8) Includes net gains (losses) on foreign currency transactions
(9) Per share data has been retroactively restated to reflect a 200% stock
dividend as of July 1, 1991.
(10) Quest for Value Fund, Inc. changed its fiscal year end to October 31 in
1987.
(11) Unaudited
</TABLE>
4
<PAGE>
A BRIEF OVERVIEW OF THE FUNDS
Some of the important facts about the Funds are summarized below, with
references to the section of this Prospectus where more complete information can
be found. You should carefully read the entire Prospectus before making a
decision about investing in the Fund. Keep the Prospectus for reference after
you invest, particularly for information about your account, such as how to sell
or exchange shares.
/ / WHAT IS EACH FUND'S INVESTMENT OBJECTIVE? The investment objective of
the Quest for Value Fund is capital appreciation through investment in
securities (primarily equity securities) of companies believed to be
undervalued.
The investment objective of the Small Capitalization Fund is capital
appreciation through investment in a diversified portfolio which under normal
conditions will have at least 65% of its assets invested in equity securities of
companies with market capitalizations under $1 billion.
The investment objective of the Global Equity Fund is long-term capital
appreciation through pursuit of global investment strategy primarily involving
equity securities.
The investment objective of the Growth and Income Fund is a combination of
growth of capital and investment income with growth of capital as the primary
objective.
The investment objective of the Opportunity Fund is growth of capital over
time through investments in a diversified portfolio of common stocks, bonds and
cash equivalents.
/ / WHO MANAGES THE FUNDS? The Funds' investment adviser (the "Manager")
is Oppenheimer Management Corporation, which (including a subsidiary) manages
investment companies currently having over $35 billion in assets. The Manager
is paid an advisory fee by each Fund, based on its net assets. The Funds'
subadvisor is OpCap Advisors, a subsidiary of Oppenheimer Capital, which is paid
a fee by the Manager. The Funds' portfolio managers are employed by OpCap
Advisors and are primarily responsible for the selection of the Funds'
securities. The Funds' Board of Trustees, elected by shareholders, oversees
the investment adviser, the subadvisor and the portfolio managers. Please
refer to "Investment Management Agreement," starting on page ___ for more
information about the Manager and its fees.
/ / HOW CAN I BUY SHARES? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic Investment
Plan under AccountLink. Please refer to "How To Buy Shares" on page ___ for
more details.
/ / WILL I PAY A SALES CHARGE TO BUY SHARES? Each Fund has three classes
of shares. All classes have the same investment portfolio but different
expenses. Class A shares are offered with a front-end sales charge, starting at
5.75%, and reduced for larger purchases. Purchases of $1 million or more of
Class A shares have no initial sales charge but are subject to a contingent
deferred sales charge of 1% if held for less than 18 months. Class B shares are
offered without a front-end sales charge, but if you sell your shares within six
years of buying them, you will normally pay a contingent deferred sales charge
that varies depending on how long you owned your shares. Class C shares are
offered without a front-end sales charge, but may be subject to a contingent
deferred sales charge of 1% if redeemed within one year of buying them. There
is also an annual asset-based sales charge on each class of shares. Please
review "How To Buy Shares" starting on page ___ for more details, including a
discussion about factors you and your financial advisor should consider in
determining which class may be appropriate for you.
/ / HOW CAN I SELL MY SHARES? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How To Sell Shares" on page ___. The Fund also offers
exchange privileges with other OppenheimerFunds, described in "How To Exchange
Shares" on page __.
/ / HOW HAS EACH FUND PERFORMED? Each Fund measures performance by
quoting its average annual total return and cumulative total return, which
measure historical performance. Those returns can be compared to the returns
(over similar periods) of other funds. Of course, other funds may have
different objectives, investments, and levels of risk. Please remember that
past performance does not guarantee future results.
5
<PAGE>
INVESTMENT OBJECTIVES OF THE FUNDS
OpCap Advisors, (formerly known as Quest for Value Advisors) manage
the portfolios of the Funds in accordance with their investment objectives
described below pursuant to a Subadvisory Agreement with the Manager. OpCap
Advisors' equity investment policy is overseen by George Long, Managing Director
and Chief Investment Officer for Oppenheimer Capital, the parent of OpCap
Advisors. Mr. Long has been with Oppenheimer Capital since 1982.
QUEST FOR VALUE FUND seeks capital appreciation through investment in securities
(primarily equity securities) of companies believed by OpCap Advisors to be
undervalued in the marketplace in relation to factors such as the companies'
assets, earnings, growth potential and cash flows. For the purposes of this
Prospectus the term equity securities is defined as common stocks and preferred
stocks; bonds, debentures and notes convertible into common stocks; and
depository receipts for such securities. Investments of the Quest for Value Fund
are managed by Eileen Rominger, Managing Director of Oppenheimer Capital. She
has been portfolio manager of this Fund since 1989. Ms. Rominger has been an
analyst and portfolio manager at Oppenheimer Capital since 1981.
SMALL CAPITALIZATION FUND seeks capital appreciation through investments in a
diversified portfolio which under normal conditions will have at least 65% of
its assets invested in equity securities of companies with market
capitalizations under $1 billion. The Fund's investment approach will attempt to
identify securities of companies whose prices are favorable in relation to their
book values and/or sales and securities of companies which have limited
operating leverage (relatively stable business with below average sensitivity to
changes in the general economy) and/or limited financial leverage (a ratio of
debt to assets, or cost of debt service to income, which is meaningfully below
those of their competitors). The Small Capitalization Fund is managed by Jenny
Beth Jones, Senior Vice President of Oppenheimer Capital, and Louis Goldstein,
Vice President of Oppenheimer Capital . Ms. Jones has been portfolio manager of
this Fund since 1990. Previously Ms. Jones was a portfolio manager and analyst
with Mutual of America. Mr. Goldstein has been portfolio manager of the Fund
since January 3, 1995. He has been a security analyst with Oppenheimer Capital
since 1991. From 1988 to 1991 he was a security analyst with David J. Greene &
Co.
OPPORTUNITY FUND seeks growth of capital over time through investments in a
diversified portfolio of common stocks, bonds and cash equivalents, the
proportions of which will vary based upon management's assessment of the
relative values of each investment under prevailing market conditions. The
Fund's portfolio will normally be invested primarily in common stocks and
securities convertible into common stock. During periods when common stocks
appear to be overvalued and when value differentials are such that fixed-income
obligations appear to present meaningful capital growth opportunities relative
to common stocks or pending investment in securities with capital growth
opportunities, up to 50% or more of the Fund's assets may be invested in bonds
and other fixed-income obligations. This may include cash equivalents which do
not generate capital appreciation. The bonds in which the Fund invests will be
limited to U.S. government obligations, mortgage-backed securities,
investment-grade corporate debt obligations and unrated obligations, including
those of foreign issuers, which management believes to be of comparable quality.
The investments of the Opportunity Fund are managed by Richard J. Glasebrook II,
Managing Director of Oppenheimer Capital. Mr. Glasebrook has been portfolio
manager of this Fund since 1991. Previously, he was a Partner with Delafield
Asset Management where he served as a portfolio manager and analyst.
GROWTH AND INCOME FUND seeks to achieve a combination of growth of capital and
investment income with growth of capital as the primary objective, by investing
in securities that are believed by OpCap Advisors to be undervalued in the
marketplace and to offer the possibility of increased value. The Fund invests in
marketable securities traded on national securities exchanges and in the
over-the-counter market. Ordinarily, the Fund invests its assets in common
stocks (with emphasis on dividend paying stocks), preferred stocks, securities
convertible into common stock, and debt securities. The Fund may invest in
lower-quality, high-yielding convertible debt securities and other debt
securities and currently intends to limit its investments in these securities to
up to 25% of its assets. See "Risk Factors." By focusing its purchases of equity
securities on those issued by mature companies which it believes to be
under-valued, the Fund seeks to achieve both its objectives of obtaining capital
appreciation as well as income from dividends. The Fund's purchases of
convertible securities similarly affords it the potential of capital growth
through the conversion option and greater investment income prior to conversion.
The Fund's purchases of debt securities furthers the objective of investment
income and offers potential for capital appreciation in an economic environment
of declining interest rates or as a result of improved issuer credit
6
<PAGE>
quality. It is anticipated that the Fund, as a result of its investment
approach, will be less volatile than the market in general. The Growth and
Income Fund is managed by Colin Glinsman, Vice President of Oppenheimer Capital.
Mr. Glinsman has been portfolio manager of this Fund since 1992. Since 1991,
Mr. Glinsman has assisted with the management of the Quest for Value Dual
Purpose Fund, Inc., a closed-end fund managed by OpCap Advisors, and has been a
securities analyst with Oppenheimer Capital since 1989. He was previously an
investment banker with Prudential Securities and Morgan Grenfell, and qualified
as a certified public accountant while with Coopers & Lybrand.
GLOBAL EQUITY FUND seeks long-term capital appreciation through pursuit of a
global investment strategy primarily involving equity securities. The Fund may
invest anywhere in the world with no requirement that any specific percentage of
its assets be committed to any given country. Under normal circumstances, at
least 65% of the Fund's total assets will be invested in equity securities in at
least three different countries, one of which may be the United States.
Opportunities for capital appreciation may also be presented by debt securities.
The Fund may invest up to 35% of its total assets in debt obligations with
remaining maturities of one year or more of U.S. or foreign corporate,
governmental or bank issuers. It is the present intention of the Fund, although
not a fundamental policy, not to invest more than 5% of its total assets in debt
securities rated below investment-grade. Domestic investments of this Fund are
managed by Richard J. Glasebrook II, Managing Director of Oppenheimer Capital.
Mr. Glasebrook has been portfolio manager of this Fund since 1991. The Fund's
investments in foreign securities are managed by Pierre Daviron, President and
Chief Investment Officer of Oppenheimer Capital International, a division of
Oppenheimer Capital created in 1993. Mr. Daviron was named portfolio manager of
this Fund in 1993. Previously, he was Chairman and Chief Executive Officer at
Indosuez Gartmore Asset Management, a division of Banque Indosuez, Paris,
France. Prior thereto he was a Managing Director in Mergers and Acquisitions at
J.P. Morgan.
----------------------------------------------
To provide liquidity for the purchase of new instruments and to effect
redemptions of shares, the Funds typically invest a part of their assets in
various types of U.S. government securities and high quality, short-term debt
securities with remaining maturities of one year or less such as government
obligations, certificates of deposit, bankers' acceptances, commercial paper,
short-term corporate securities and repurchase agreements ("money market
instruments"). For temporary defensive purposes, the Funds may invest up to 100%
of their assets in such securities and, in the case of the Growth and Income
Fund, preferred stock. At any time that a Fund for temporary defensive purposes
invests in such securities, to the extent of such investments, it is not
pursuing its investment objectives. In the case of the Global Equity Fund, such
money market instruments may be issued by entities organized in the U.S. or any
foreign country, denominated in dollars or in the currency of any foreign
country.
Except as indicated, the investment objectives and policies described above
are fundamental and may not be changed without a vote of the shareholders. It is
anticipated that the Funds each will have an annual turnover rate (excluding
turnover of securities having a maturity of one year or less) of 100% or less.
For the year ended October 31, 1994, the annual turnover rate of the Growth and
Income Fund was 113%, which was higher than anticipated, as a result of asset
allocation shifts made in reaction to interest rate changes and the overall
market outlook. To the extent that higher portfolio turnover increases capital
gains, more taxes will be payable.
RISK FACTORS
The value of the Funds' shares will fluctuate and on redemption the
value of your shares may be more or less than your investment.
There are two types of risk generally associated with owning equity
securities: market risk and financial risk. Market risk is the risk associated
with the movement of the stock market in general. Financial risk is associated
with the financial condition and profitability of the underlying company.
Smaller capitalization companies may experience higher growth rates and higher
failure rates than do larger capitalization companies. The trading volume of
securities of smaller capitalization companies is normally less than that of
larger capitalization companies and, therefore, may disproportionately affect
their market price, tending to make them rise more in response to buying demand
and fall more in response to selling pressure than is the case with larger
capitalization companies.
7
<PAGE>
There are two types of risk associated with owning debt securities: interest
rate risk and credit risk. Interest rate risk relates to fluctuations in market
value arising from changes in interest rates. If interest rates rise, the value
of debt securities will normally decline and if interest rates fall, the value
of debt securities will normally increase. All debt securities, including U.S.
government securities, which are generally considered to be the most
creditworthy of all debt obligations, are subject to interest rate risk.
Securities with longer maturities generally will have a more pronounced reaction
to interest rate changes than shorter term securities.
Credit risk relates to the ability of the issuer to make periodic interest
payments and ultimately repay principal at maturity. Bonds rated Baa3 by Moody's
Investors Services, Inc. ("Moody's") or BBB- by Standard & Poor's Corporation
("S&P") which the Quest for Value, Small Capitalization, Opportunity, Growth and
Income and Global Equity Funds may acquire, are described by those rating
agencies as having speculative elements. If a debt security is rated below
investment grade by one rating agency and as investment grade by a different
rating agency, OpCap Advisors will make a determination as to the debt
security's investment grade quality. It is the present intention of the Quest
for Value, Small Capitalization and Global Equity Funds to invest no more than
5% of their respective assets in bonds rated below Baa3 by Moody's or BBB- by
S&P (commonly known as "high yield" or "junk bonds"). In the event that any of
those Funds intends in the future to invest more than 5% of its assets in such
bonds, appropriate disclosures will be made to existing and prospective
shareholders. The Growth and Income Fund may invest up to 25% of the value of
its net assets in convertible debt and other debt securities rated not lower
than Caa by Moody's or CCC by S&P, Fitch Investors Service, Inc. ("Fitch") or
Duff & Phelps, Inc. ("Duff") or, if unrated, deemed to be of comparable quality
by OpCap Advisors. Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as well assured and
often the protection of interest and principal payments may be very moderate.
Securities rated BB by S&P, Fitch or Duff are regarded as having predominantly
speculative characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face major
ongoing uncertainties or exposure to adverse business, financial or economic
conditions which could lead to inadequate capacity to meet timely interest and
principal payment. Securities rated Caa by Moody's or CCC by S&P, Fitch and Duff
are considered to have predominantly speculative characteristics with respect to
capacity to pay interest and repay principal and to be of poor standing.
Securities rated Ca by Moody's are speculative to a high degree; such issues are
often in default or have other marked shortcomings. A security rated C by
Moody's has extremely poor prospects of ever attaining any real investment
standing. Securities rated CI by S&P are income bonds on which no interest is
being paid, and securities rated D by S&P are in payment default. Debt
obligations of issuers outside the United States and its territories are rated
on substantially the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the issuer but do not take into account
potential actions by the government controlling the currency of denomination
which might have a negative effect on exchange rates. The Growth and Income Fund
does not intend to hold such lower-rated securities unless the opportunities for
capital appreciation and income, combined, remain attractive. See the Appendix
in the SAI for a more complete general description of Moody's, S&P, Fitch and
Duff ratings. The ratings of Moody's, S&P, Fitch and Duff represent their
opinions as to the quality of the obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market risk of these securities.
Therefore, although these ratings may be an initial criterion for selection of
such investments, OpCap Advisors also will evaluate these securities and the
ability of the issuers of such securities to pay interest and principal. The
Growth and Income Fund's ability to achieve its investment objectives may be
more dependent on OpCap Advisors' credit analysis than might be the case for a
fund that invested in higher rated securities. Once the rating of a security has
been changed, the Growth and Income Fund will consider all circumstances deemed
relevant in determining whether to continue to hold the security. The market
price and yield of securities rated Ba or lower by Moody's and BB or lower by
S&P, Fitch or Duff are more volatile than those of higher rated securities.
Factors adversely affecting the market price and yield of these securities will
adversely affect the Growth and Income Fund's net asset value. In addition, the
retail secondary market for these securities may be less liquid than that of
higher rated securities; adverse market conditions could make it difficult at
times for the Growth and Income Fund to sell certain securities. The market
values of certain lower rated debt securities tend to reflect individual
corporate developments to a greater extent than do higher rated securities,
which react primarily to fluctuations in the general level of interest rates,
and tend to be more sensitive to economic conditions than higher rated
securities. Companies that issue such securities are often highly leveraged and
may not have available to them more traditional methods of financing.
Consequently, the risk associated with acquiring the securities of such issuers
is greater than with higher rated securities. The Funds are not obliged to
dispose of securities due to changes by
8
<PAGE>
the rating agencies. Although there is no minimum rating for the investments of
the Quest for Value, Small Capitalization, Global Equity, or Growth and Income
Funds, the Funds do not intend to invest in bonds which are in default. To the
extent the Funds invest in mortgage-backed securities, they will be subject to
prepayment risks. Prepayments of mortgage principal reduce the stream of future
payments and generate cash which must be reinvested. Prepayments tend to
increase following declines in interest rates, resulting in reinvestment in a
lower interest rate environment.
The nature and degree of market and financial risk affecting an investment in
each of the Opportunity Fund and Growth and Income Fund will depend on the
relative amounts of the Fund's assets committed to equity, longer-term debt or
money market securities at any particular time.
Higher portfolio turnover can be expected to result in a higher incidence of
short-term capital gains upon which taxes will be payable and will also result
in correspondingly higher transaction costs. Certain of the Funds may have
turnover rates of up to 250%.
Additional Risks of Foreign Securities: All Funds may purchase foreign
securities that are listed on a domestic or foreign securities exchange, traded
in domestic or foreign over-the counter markets or represented by American
Depository Receipts. There is no limit to the amount of such foreign securities
the Funds may acquire. It will be the general practice of the Global Equity Fund
to invest in foreign equity securities. Certain factors and risks are presented
by investment in foreign securities which are in addition to the usual risks
inherent in domestic securities. Foreign companies are not necessarily subject
to uniform accounting, auditing and financial reporting standards or other
regulatory requirements comparable to those applicable to U.S. companies. Thus,
there may be less available information concerning non-U.S. issuers of
securities held by a Fund than is available concerning U.S. companies. In
addition, with respect to some foreign countries, there is the possibility of
nationalization, expropriation or confiscatory taxation; income earned in the
foreign nation being subject to taxation, including withholding taxes on
interest and dividends (see "Tax Status"), or other taxes imposed with respect
to investments in the foreign nation; limitations on the removal of securities,
property or other assets of a fund; difficulties in pursuing legal remedies and
obtaining judgments in foreign courts, or political or social instability or
diplomatic developments which could affect U.S. investments in those countries.
For a description of the risks of possible losses through holding of securities
in foreign custodian banks and depositories, see "Risk Factors and Special
Considerations" in the SAI.
Securities of many non-U.S. companies may be less liquid and their prices more
volatile than securities of comparable U.S. companies. Non-U.S. stock exchanges
and brokers are generally subject to less governmental supervision and
regulation than in the U.S. and commissions on foreign stock exchanges are
generally higher than negotiated commissions on U.S. transactions. In addition,
there may in certain instances be delays in the settlement of non-U.S. stock
exchange transactions. Certain countries restrict foreign investments in their
securities markets. These restrictions may limit or preclude investment in
certain countries, industries or market sectors, or may increase the cost of
investing in securities of particular companies. Purchasing the shares of
investment companies which invest in securities of a given country may be the
only or the most efficient way to invest in that country. This may require the
payment of a premium above the net asset value of such investment companies and
the return will be reduced by the operating expenses of those investment
companies.
A decline in the value of the U.S. dollar against the value of any particular
currency will cause an increase in the U.S. dollar value of a Fund's holdings
denominated in such currency. Conversely, a decline in the value of any
particular currency against the U.S. dollar will cause a decline in the U.S.
dollar value of the Fund's holdings of securities denominated in such currency.
Some foreign currency values may be volatile and there is the possibility of
governmental controls on currency exchange or governmental intervention in
currency markets which could adversely affect a Fund. The Funds do not intend to
speculate in foreign currency in connection with the purchase or sale of
securities on a foreign securities exchange but may enter into foreign currency
contracts to hedge their foreign currency exposure. While those transactions may
minimize the impact of currency appreciation and depreciation, the Funds will
bear a cost for entering into the transaction and such transactions do not
protect against a decline in the security's value relative to other securities
denominated in that currency.
9
<PAGE>
The Global Equity Fund may invest its assets in American Depository Receipts
("ADRs"), European Depository Receipts ("EDRs") or Global Depository Receipts
("GDRs") which are U.S. dollar-denominated receipts that represent and may be
converted into the underlying foreign security. ADRs, GDRs or EDRs are issued by
persons other than the underlying issuer, typically a domestic bank or trust
company. Issuers of the stock of ADRs, EDRs or GDRs sponsored by banks or trust
companies are not obligated to disclose material information in the United
States and therefore, there may not be a correlation between such information
and the market value of such ADRs, GDRs or EDRs.
EMERGING MARKET COUNTRIES: Certain developing countries may have relatively
unstable governments, economies based on only a few industries that are
dependent upon international trade and reduced secondary market liquidity.
Foreign investment in certain emerging market countries is restricted or
controlled in varying degrees. In the past, securities in these countries have
experienced greater price movement, both positive and negative, than securities
of companies located in developed countries. Lower-rated high-yielding emerging
market securities may be considered to have speculative elements.
SOVEREIGN DEBT OBLIGATIONS: The Global Equity Fund may purchase sovereign debt
instruments issued or guaranteed by foreign governments or their agencies,
including those located in emerging market countries. Sovereign debt may be in
the form of conventional securities or other types of debt instruments such as
loans or loan participations. Sovereign debt of emerging market countries may
involve a high degree of risk and may be in default or present the risk of
default. Certain emerging market countries have historically experienced, and
may continue to experience, high inflation and interest rates, large
fluctuations in exchange rates, large amounts of external debt, trade
difficulties and extreme poverty and unemployment. Governmental entities
responsible for repayment of the debt may be unable or unwilling to repay
principal and interest when due. In the event of a default, the Funds may have
limited legal recourse against the issuer or guarantor. Remedies must in some
cases be pursued in the courts of the defaulting party itself and the ability of
holders of foreign government debt securities to obtain recourse may depend on
the political climate in the relevant country. No assurance can be given that
the holders of commercial bank debt will not contest payments to holders of
other sovereign debt obligations in the event of a default under their
commercial bank loan agreements.
EASTERN EUROPE: The Global Equity Fund presently intends not to invest more than
5% of its net assets in companies located in Eastern European countries, but may
invest in companies located outside of such countries which conduct business in
such countries.
Options and Futures: Different uses of futures and options have different risk
and return characteristics. Generally, selling futures contracts, purchasing put
options and writing call options are strategies designed to protect against
falling security prices and can limit potential gains if prices rise. Purchasing
futures contracts, purchasing call options and writing put options are
strategies whose returns tend to rise and fall together with securities prices
and can cause losses if prices fall. If securities prices remain unchanged over
time, option writing strategies tend to be profitable while option buying
strategies tend to be unprofitable. THE GLOBAL EQUITY, GROWTH AND INCOME, SMALL
CAPITALIZATION AND QUEST FOR VALUE FUNDS INTEND TO ENGAGE ONLY IN FUTURES
CONTRACTS, OPTIONS ON FUTURES CONTRACTS OR OPTIONS ON STOCK INDEXES FOR BONA
FIDE HEDGING OR OTHER NON-SPECULATIVE PURPOSES. The Small Capitalization Fund
may write covered call options on individual securities. The Funds will not
enter into any leveraged futures transactions.
Repurchase Agreements: All Funds may acquire securities subject to repurchase
agreements. Repurchase agreements involve certain risks.
For a further description of options and futures, repurchase agreements and
reverse repurchase agreements and other investment techniques used by the Funds,
see "Investment Restrictions and Techniques," below.
INVESTMENT RESTRICTIONS AND TECHNIQUES
The Funds are subject to certain investment restrictions which are
fundamental policies changeable only by shareholder vote. The restrictions in a,
b and c below do not apply to U.S. government securities. The restrictions apply
to each Fund unless otherwise noted. A Fund may not : (a) Purchase more than 10%
of the voting securities of any one issuer (for Global Equity and Growth and
Income only with respect to 75% of its total assets; (b) Purchase more than 10%
of any class of security of any issuer, with all outstanding debt securities and
all preferred stock of an issuer each being
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considered as one class (all Funds except Global Equity and Growth and Income);
(c) Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, a Fund may invest up to 25%
of its total assets (valued at the time of investment) in any one industry
classification used by the Fund for investment purposes (for this purpose, a
foreign government is considered an industry). Concentration of investment in
securities of one issuer may tend to increase a Fund's financial risk (See "Risk
Factors," p. _); (d) Borrow money in excess of: 10% of the value of the Fund's
total assets in the case of the Small Capitalization and Opportunity Funds;
33 1/3% of the value of the Fund's total assets in the case of the Quest for
Value, Global Equity and Growth and Income Funds; each Fund (except for Quest
for Value Fund) may borrow only from banks and only as a temporary measure for
extraordinary or emergency purposes and will make no additional investments
while such borrowings exceed 5% of the total assets; Quest for Value Fund may,
but has no present intention to, borrow for leveraging purposes; (e) Invest more
than 10% of the Fund's total assets in illiquid securities (15% for Quest for
Value Fund,and the Global Equity Fund), including securities for which there is
no readily available market, repurchase agreements which have a maturity of
longer than seven days, securities subject to legal or contractual restrictions
and certain over-the-counter options (it is the opinion of the Wisconsin
Securities Commission that investments in restricted securities in excess of 5%
of a Fund's total assets may be considered a speculative activity and therefore
involve greater risk and increase the Fund's expenses; to comply with
Wisconsin's securities laws, all Funds have agreed to limit investments in
restricted securities to 5% of their respective total assets, although the
restriction is not a fundamental policy of such Funds); and (f) Invest more than
5% (15% for Quest for Value Fund) of the Fund's total assets in securities of
issuers having a record, together with predecessors, of less than three years of
continuous operation. (This restriction is not a fundamental policy of each of
the Global Equity or Growth and Income Funds, but was adopted to comply with a
state's securities laws). Notwithstanding investment restriction (e) above, the
Funds each may purchase securities which are not registered under the Securities
Act of 1933 ("1933 Act") but which can be sold to "qualified institutional
buyers" in accordance with Rule 144A under the 1933 Act. Any such security will
not be considered illiquid so long as it is determined by the Board of Directors
or OpCap Advisors, acting under guidelines approved and monitored by the Board,
which has the ultimate responsibility for any determination regarding liquidity,
that an adequate trading market exists for that security. This investment
practice could have the effect of increasing the level of illiquidity in each of
the Funds during any period that qualified institutional buyers become
uninterested in purchasing these restricted securities. The ability to sell to
qualified institutional buyers under Rule 144A is a relatively recent
development and it is not possible to predict how this market will develop. The
Board will carefully monitor any investments by each of the Funds in these
securities. Other investment restrictions are described in the SAIs.
The investment techniques or instruments described below are used for
investment programs of the Funds.
Repurchase Agreements: All Funds may acquire securities subject to repurchase
agreements. Under a typical repurchase agreement, a Fund acquires a debt
security for a relatively short period (usually for one day and very seldom for
more than one week) subject to an obligation of the seller to repurchase (and
the Fund's obligation to resell) the security at an agreed-upon higher price,
thereby establishing a fixed investment return during the holding period.
Pending such repurchase, the seller of the instrument maintains securities as
collateral equal in market value to the repurchase price.
In the event a seller defaulted on its repurchase obligation, a Fund might
suffer a loss to the extent that the proceeds from the sale of the collateral
were less than the repurchase price. In the event of a seller's bankruptcy, a
Fund might be delayed in, or prevented from, selling the collateral for the
Fund's benefit. Each Fund's Board of Directors/Trustees has established
procedures, which are periodically reviewed by the Board, pursuant to which
OpCap Advisors will monitor the creditworthiness of the dealers and banks with
which the Funds enter into repurchase agreement transactions.
Loans of Portfolio Securities: All Funds may lend portfolio securities if
collateral (cash, U.S. Government or agency obligations or letters of credit)
securing such loans is maintained daily in an amount at least equal to the
market value of the securities loaned and if the Funds do not incur any fees
(except transaction fees of the custodian bank) in connection with such loans. A
Fund may call the loan at any time on five days' notice and reacquire the loaned
securities. The Fund would receive the cash equivalent of the interest or
dividends paid by the issuer on the securities loan and would have the right to
receive the interest on investment of the cash collateral in short-term debt
instruments. A portion of either or both kinds of such interest may be paid to
the borrower of such securities. The Fund would continue to retain any voting
rights with respect to the securities. The value of the securities loaned, if
any, is not expected to exceed 10% of the value of the total assets of Quest for
Value, Small Capitalization or Opportunity Funds and 33 1/3% of the value of the
total assets of
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Global Equity or Growth and Income Funds. There is a risk that the borrower of
the securities may default and the Funds may have difficulty in reacquiring the
loaned securities.
Brady Bonds. The Global Equity Fund may purchase Brady Bonds and other sovereign
debt of countries that have restructured or are in the process of restructuring
their sovereign debt. Brady Bonds are debt securities issued under the Brady
Plan, a mechanism whereby debtor nations can restructure their indebtedness by
negotiating with lenders and exchanging existing commercial bank debt for Brady
Bonds. Brady Bonds may also be issued in respect of new money being advanced by
existing lenders in connection with the debt restructuring. The Brady Plan only
sets forth general guidelines for economic reform and debt reduction,
emphasizing that solutions must be negotiated on a case-by-case basis between
debtor nations and their creditors. Brady Bonds have been issued only recently
and consequently do not have a long payment history. The principal of certain
Brady Bonds has been collateralized by Treasury zero coupon bonds with
maturities equal to the final maturity of such Brady Bonds. In addition, the
first two or three interest payments on certain Brady Bonds may be
collateralized by cash or securities agreed upon by creditors. See "Risk Factors
and Special Considerations" in the SAI for a more complete description of Brady
Bonds.
Mortgage-Backed Securities: The Opportunity and Growth and Income Funds may
invest in a type of mortgage-backed security known as modified pass-through
certificates. Each certificate evidences an interest in a specific pool of
mortgages that have been grouped together for sale and provides investors with
payments of interest and principal. The issuer of modified pass-through
certificates guarantees the payment of the principal and interest whether or not
the issuer has collected such amounts on the underlying mortgage.
The average life of these securities varies with the maturities of the
underlying mortgage instruments (generally up to 30 years) and with the extent
of prepayments or the mortgages themselves. Any such prepayments are passed
through to the certificate holder, reducing the stream of future payments.
Prepayments tend to rise in periods of falling interest rates, decreasing the
average life of the certificate and generating cash which must be invested in a
lower interest rate environment. This could also limit the appreciation
potential of the certificates when compared to similar debt obligations which
may not be paid down at will, and could cause losses on certificates purchased
at a premium or gains on certificates purchased at a discount. Government
National Mortgage Association ("Ginnie Mae") certificates represent pools of
mortgages insured by the Federal Housing Administration or the Farmers Home
Administration or guaranteed by the Veteran's Administration. The guarantee of
payments under these certificates is backed by the full faith and credit of the
United States. Federal National Mortgage Association ("Fannie Mae") is a
government-sponsored corporation owned entirely by private stockholders. The
guarantee of payments under these instruments is that of Fannie Mae only. They
are not backed by the full faith and credit of the United States but the U.S.
Treasury may extend credit to Fannie Mae through discretionary purchases of its
securities. The U.S. Government has no obligation to assume the liabilities of
Fannie Mae. Federal Home Loan Mortgage Corp. ("Freddie Mac") is a corporate
instrumentality of the United States government whose stock is owned by the
Federal Home Loan Banks. Certificates issued by Freddie Mac represent interest
in mortgages from its portfolio. Freddie Mac guarantees payments under its
certificates but this guarantee is not backed by the full faith and credit of
the United States and Freddie Mac does not have authority to borrow from the
U.S. Treasury.
The coupon rate of these instruments is lower than the interest rate on the
underlying mortgages by the amount of fees paid to the issuing agencies, usually
approximately 1/2 of 1%. It is not anticipated that the Funds' investments will
have any particular maturity. Mortgage-backed securities, due to the scheduled
periodic repayment of principal, and the possibility of accelerated repayment of
underlying mortgage obligations, fluctuate in value in a different manner than
other, non-redeemable debt securities. The Opportunity and Growth and Income
Funds also may invest in "collateralized mortgage obligations" ("CMO's") which
are debt obligations secured by mortgage-backed securities where the investor
looks only to the issuer of the security for payment of principal and interest.
Options and Futures: The Global Equity Fund may purchase and sell financial
futures contracts (including bond futures contracts and index futures
contracts), foreign currency forward contracts, foreign currency futures
contracts, options on futures contracts and options on currencies The Quest for
Value, Small Capitalization and Growth and Income Funds may buy and sell options
on stock indexes, futures contracts and options on futures to hedge their
investments against changes in value or as a temporary substitute for purchases
or sales of actual securities. The Small Capitalization Fund may write covered
call options on individual securities. When each such Fund anticipates a
significant market or market sector
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advance, the purchase of a futures contract affords a hedge against not
participating in the advance at a time when the Fund is not fully invested
("anticipatory hedge"). Such a purchase of a futures contract would serve as a
temporary substitute for the purchase of individual securities, which may be
purchased in an orderly fashion once the market has stabilized. As individual
securities are purchased, an equivalent amount of futures contracts could be
terminated by offsetting sales. A Fund may sell futures contracts in
anticipation of or in a general market or market sector decline or increase in
interest rates that may adversely affect the market value of the Fund's
securities ("defensive hedge"). To the extent that a Fund's portfolio of
securities changes in value in correlation with the underlying security or
index, the sale of futures contracts would substantially reduce the risk to the
Fund of a market decline and by so doing, provide an alternative to the
liquidation of securities positions in the Fund with attendant transaction
costs. All options purchased or sold by a Fund will be traded on a U.S. or
foreign commodities exchange or will result from separate, privately negotiated
transactions with a primary government securities dealer recognized by the Board
of Governors of the Federal Reserve System or with other broker-dealers approved
by the Fund's Board. Options on securities, futures contracts and options on
futures contracts that are traded on foreign exchanges are subject to the risk
of governmental action affecting trading in or the prices of foreign currencies
or securities. The value of such positions also could be adversely affected by
(i) other complex foreign political and economic factors, (ii) lesser
availability than in the United States of data on which to make trading
decisions (iii) delays in a Fund's ability to act upon economic events occurring
in foreign markets during nonbusiness hours in the United States, (iv) the
imposition of different exercise and settlement terms and procedures and margin
requirements than in the United States, (v) lesser trading volume and (vi) in
certain circumstances, currency fluctuations. In addition, the Small
Capitalization Fund may write covered call options on individual securities.
So long as Commodities Futures Trading Commission rules so require, a Fund
will not enter into any financial futures or options contract unless such
transactions are for bona-fide hedging purposes or for other purposes only if
the aggregate initial margins and premiums required to establish such
non-hedging positions would not exceed 5% of the liquidation value of the Fund's
total assets. A call option written by a Fund is "covered" if the Fund owns the
underlying security covered by the call or has an absolute and immediate right
to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option is also covered if the Fund holds a call on the same security and in the
same principal amount as the call written where the exercise price of the call
held (a) is equal to or less than the exercise price of the call written or
(b) is greater than the exercise price of the call written if the difference is
maintained by the Fund in cash, U.S. Government Securities or other liquid
high-grade debt securities in a segregated account with its custodian. A put
option written by a Fund is "covered" if the Fund maintains cash, U.S.
Government securities or other liquid high-grade debt securities with a value
equal to the exercise price in a segregated account with its custodian, or else
holds a put on the same security and in the same principal amount as the put
written where the exercise price of the put held is equal to or greater than the
exercise price of the put written. As a result, the Fund forgoes the opportunity
of trading the segregated assets or writing calls against those assets. There
may not be a complete correlation between the price of options or futures and
the market prices of the underlying securities. The Fund may lose the ability to
profit from an increase in the market value of the underlying securities or may
lose its premium payment. If due to a lack of a market the Fund could not effect
a closing purchase transaction with respect to an OTC option, it would have to
hold the callable securities until the call lapsed or was exercised.
When-Issued and Delayed Delivery Securities and Firm Commitments: All Funds may
purchase securities on a "when-issued" or "delayed delivery" basis or may either
purchase or sell securities on a "firm commitment basis", whereby the price is
fixed at the time of commitment but delivery and payment may be as much as a
month or more later. The underlying securities are subject to market
fluctuations and no interest accrues prior to delivery of the securities.
Rights and Warrants (Global Equity and Growth and Income Funds): Each of these
Funds may invest up to 5% of its total assets in rights or warrants which
entitle the holder to buy equity securities at a specific price for a specific
period of time. The 5% limitation is not a fundamental policy for the Global
Equity and Growth and Income Funds.
INVESTMENT MANAGEMENT AGREEMENT
The Fund is managed by the Manager, Oppenheimer Management
Corporation, which supervises each Fund's investment program and handles its
day-to-day business. The Manager carries out its duties, subject to the
policies
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established by the Board of Trustees, under an Investment Advisory Agreement
with each Fund which states the Manager's responsibilities. The agreement sets
forth the fees paid by the Fund to the Manager and describes the expenses that
the Fund pays to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager (including a subsidiary) currently manages investment companies,
including other OppenheimerFunds, with assets of more than $35 billion as of
June 30, 1995, and with more than 2.6 million shareholder accounts. The Manager
is owned by Oppenheimer Acquisition Corp., a holding company that is owned in
part by senior officers of the Manager and controlled by Massachusetts Mutual
Life Insurance Company.
For its services under the Investment Advisory Agreement, the Funds
pay the Manager the following annual fees based on each Fund's daily net assets:
Growth and Income - .85%; Quest for Value Fund, Opportunity and Small
Capitalization Funds - 1.00% of the first $400 million of net assets. .90% of
the next $400 million of net assets and .85% of net assets over $800 million.
Global Equity Fund - .75% of the first $400 million of net assets, .70% of the
next $400 million of net assets and .65% of net assets over $800 million. Each
of the Funds except the Quest for Value and Global Equity Funds also reimburses
the Manager for bookkeeping and accounting services performed on behalf of each
Fund.
The Manager has retained OpCap Advisors to provide day-to-day
management of the Fund. OpCap Advisors is a majority-owned subsidiary of
Oppenheimer Capital, a registered investment advisor, whose employees perform
all investment advisory services provided to the Funds by OpCap Advisors. The
Manager will pay OpCap Advisors an annual fee based on the average daily net
assets of each Fund equal to 40% of the advisory fee (and administration fee in
the case of the Global Equity Fund) collected by the Manager based on the total
net assets of the Fund as of November , 1995 (the "Base Amount") plus 30% of
the investment advisory fee (and administration fee in the case of the Global
Equity Fund) collected by the Manager based on the total net assets of the Fund
that exceed the base amount. Oppenheimer Financial Corp., a holding company
holds a 33% interest in Oppenheimer Capital, a registered investment advisor,
and Oppenheimer Capital, L.P., a Delaware limited partnership whose units are
traded on the New York Stock Exchange and of which Oppenheimer Financial Corp.
is the sole general partner, owns the remaining 67% interest. Oppenheimer
Capital has operated as an investment advisor since 1968.
OpCap Advisors may select its affiliate Oppenheimer & Co., Inc.
("Opco"), a registered broker-dealer to execute transactions for the Funds,
provided that the commissions, fees or other remuneration received by Opco are
reasonable and fair compared to those paid to other brokers in connection with
comparable transactions. When selecting broker-dealers other than Opco, OpCap
Advisors may consider their record of sales of shares of the Funds.
Pursuant to an Administration Agreement with the Global Equity Fund, the
Manager provides administrative services and manages the business affairs of
each Fund. Such services include maintenance of the Fund's books and records,
monitoring the activities of entities providing services to the Fund, furnishing
office space, facilities, equipment, clerical help and bookkeeping and legal
services required in the conduct of the Fund's business, including the
preparation of proxy statements and reports filed with federal and state
securities commissions (except to the extent that the participation of
independent accountants and attorneys is, in the opinion of the Manager,
necessary or desirable). The Manager bears the cost of telephone service,
heat, light, power and other utilities provided to the Fund. For these services,
the Global Equity Fund pays the Manager a fee at the annual rate of .25% of
average daily net assets of the Fund.
Each Fund is responsible for bearing certain expenses attributable to the Fund
but not to a particular class ("Fund Expenses"), including deferred organization
expenses; taxes; registration fees; typesetting of prospectuses and financial
reports required for distribution to shareholders; brokerage commissions; fees
and related expenses of trustees or directors who are not interested persons;
legal, accounting and audit expenses; custodian fees; insurance premiums; and
trade association dues. Fund Expenses will be allocated based on the total net
assets of each class. Each class of shares of each Fund will also be
responsible for certain expenses attributable only to that class ("Class
Expenses"). These Class Expenses may include distribution and service fees,
transfer and shareholder servicing agent fees, professional fees, printing and
postage expenses for materials distributed to current shareholders, state
registration fees and shareholder meeting expenses. Such items are considered
Class Expenses provided such fees and expenses relate solely to such Class. A
portion of
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printing expenses, such as typesetting costs, will be divided equally among the
Funds, while other printing expenses, such as the number of copies printed, will
be considered Class Expenses.
HOW TO BUY SHARES
CLASSES OF SHARES. The Fund offers investors three different classes of shares.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices.
/ / CLASS A SHARES. If you buy Class A shares, you may pay an initial
sales charge on investments up to $1 million (up to $500,000 for purchases by
OppenheimerFunds prototype 401(k) plans). If you purchase Class A shares as
part of an investment of at least $1 million ($500,000 for OppenheimerFunds
prototype 401(k) plans) in shares of one or more OppenheimerFunds or former
Quest Funds, you will not pay an initial sales charge, but if you sell any of
those shares within 18 months of buying them, you may pay a contingent deferred
sales charge. The amount of that sales charge will vary depending on the amount
you invested. Sales charges are described in "Buying Class A Shares" below.
/ / CLASS B SHARES. If you buy Class B shares, you pay no sales charge
at the time of purchase, but if you sell your shares within six years you will
normally pay a contingent deferred sales charge that varies, depending on how
long you have owned your shares. It is described in "Buying Class B Shares"
below.
/ / CLASS C SHARES. When you buy Class C shares, you pay no sales charge
at the time of purchase, but if you sell your shares within 12 months of buying
them, you will normally pay a contingent deferred sales charge of 1%. It is
described in "Buying Class C Shares" below.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that a Fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial advisor. 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 most important
factors are how much you plan to invest, how long you plan to hold your
investment, and whether you anticipate exchanging your shares for shares of
other OppenheimerFunds (not all of which currently offer Class B and Class C
shares). 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.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We used the sales
charge rates that apply to each class, and considered the effect of the asset-
based sales charges on Class B and Class C expenses (which will affect your
investment return). For the sake of comparison, we have assumed that there is a
10% rate of appreciation in the investment each year. Of course, the actual
performance of your investment cannot be predicted and will vary, based on the
Fund's actual investment returns and the operating expenses borne by each class
of shares, and which class you invest in.
The factors discussed below are not intended to be investment advice or
recommendations, because each investor's financial considerations are different.
The discussion below of the factors to consider in purchasing a particular class
of shares assumes that you will purchase only ONE class of shares and not a
combination of shares of different classes.
/ / HOW LONG DO YOU EXPECT TO HOLD YOUR INVESTMENT? While future
financial needs cannot be predicted with certainty, knowing how long you expect
to hold your investment will assist you in selecting the appropriate class of
shares. Because of the effect of class-based expenses, your choice will also
depend on how much you plan to invest. For example, the reduced sales charges
available for larger purchases of Class A shares may, over time, offset the
effect of paying an initial sales charge on your investment (which reduces the
amount of your investment dollars used to buy shares for your account), compared
to the effect over time of higher class-based expenses on Class B or C shares
for which no initial sales charge is paid.
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INVESTING FOR THE SHORT TERM. If you have a short-term investment horizon
(that is, you plan to hold your shares for not more than six years), you should
probably consider purchasing Class A or Class C shares rather than Class B
shares, because of the effect of the Class B contingent deferred sales charge if
you redeem within 6 years, as well as the effect of the Class B asset-based
sales charge on the investment return for that class in the short-term. Class C
shares might be the appropriate choice (especially for investments of less than
$100,000), because there is no initial sales charge on Class C Shares, and the
contingent deferred sales charge does not apply to amounts you sell after
holding them one year.
However, if you plan to invest more than $100,000 for the shorter term, then the
more you invest and the more your investment horizon increases toward six years,
Class C shares might not be as advantageous as Class A shares. That is because
the annual asset-based sales charge on Class C shares will have a greater impact
on your account over the longer term than the reduced front-end sales charge
available for larger purchases of Class A shares. For example, Class A might be
more advantageous than Class C (as well as Class B) for investments of more than
$100,000 expected to be held for 5 or 6 years (or more). For investments over
$250,000 expected to be held 4 to 6 years (or more), Class A shares may become
more advantageous than Class C (and B). If investing $500,000 or more, Class A
may be more advantageous as your investment horizon approaches 3 years or more.
And for most investors who invest $1 million or more, in most cases Class A
shares will be the most advantageous choice, no matter how long you intend to
hold your shares. For that reason, the Distributor normally will not accept
purchase orders of $500,000 or $1 million or more of Class B or C shares
respectively from a single investor. Of course, these examples are based on
approximations of the effect of current sales charges and expenses on a
hypothetical investment over time, using the assumed annual performance return
stated above, and therefore should not be relied on as rigid guidelines.
INVESTING FOR THE LONGER TERM. If you are investing for the longer term,
for example, for retirement, and do not expect to need access to your money for
seven years or more, Class B shares may be an appropriate consideration, if you
plan to invest less than $100,000. If you plan to invest more than $100,000
over the long term, Class A shares will likely be more advantageous than Class B
shares or C shares, as discussed above, because of the effect of the expected
lower expenses for class A shares and the reduced initial sales charges
available for larger investments in Class A shares under the Funds' Right of
Accumulation.
/ / ARE THERE DIFFERENCES IN ACCOUNT FEATURES THAT MATTER TO YOU?
Because some account features may not be available for Class B or Class C
shareholders, you should carefully review how you plan to use your investment
account before deciding which class of shares is better for you. For example,
share certificates are not available for Class B or Class C shares, and if you
are considering using your shares as collateral for a loan, that may be a factor
to consider. Additionally, dividends payable to Class B and Class C
shareholders will be reduced by the additional expenses borne solely by those
classes, such as the asset-based sales charges described below and in the
Statement of Additional Information.
/ / HOW DOES IT AFFECT PAYMENTS TO MY BROKER? A salesperson, such as a
broker, or any other person who is entitled to receive compensation for selling
Fund shares may receive different compensation for selling one class rather than
another class. It is important that investors understand that the purpose of
the contingent deferred sales charges and asset-based sales charges for Class B
and Class C shares are the same as the purpose of the front-end sales charge on
sales of Class A shares: to compensate the Distributor for commissions it pays
to dealers and financial institutions for selling shares.
HOW MUCH MUST YOU INVEST? You can open a Fund account with a minimum initial
investment of $1,000 and make additional investments at any time with as little
as $25. There are reduced minimum investments under special investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of at least
$25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250 (if
your IRA is established under an Asset Builder Plan, the $25 minimum applies),
and subsequent investments may be as little as $25.
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There is no minimum investment requirement if you are buying shares
by reinvesting dividends from the Fund or other OppenheimerFunds (a list of them
appears in the Statement of Additional Information, or you can ask your dealer
or call the Transfer Agent), or by reinvesting distributions from unit
investment trusts that have made arrangements with the Distributor.
/ / HOW ARE SHARES PURCHASED? You can buy shares several ways: through
any dealer, broker or financial institution that has a sales agreement with the
Distributor, directly through the Distributor, or automatically from your bank
account through an Asset Builder Plan under the OppenheimerFunds AccountLink
service. WHEN YOU BUY SHARES, BE SURE TO SPECIFY CLASS A, CLASS B OR CLASS C
SHARES. IF YOU DO NOT CHOOSE, YOUR INVESTMENT WILL BE MADE IN CLASS A SHARES.
/ / BUYING SHARES THROUGH YOUR DEALER. Your dealer will place your order
with the Distributor on your behalf.
/ / BUYING SHARES THROUGH THE DISTRIBUTOR. Complete an OppenheimerFunds
New Account Application and return it with a check payable to "Oppenheimer Funds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If you
don't list a dealer on the application, the Distributor will act as your agent
in buying the shares. However, we recommend that you discuss your investment
first with a financial advisor, to be sure it is appropriate for you.
/ / BUYING SHARES THROUGH OPPENHEIMERFUNDS ACCOUNTLINK. You can use
AccountLink to link your Fund account with an account at a U.S. bank or other
financial institution that is an Automated Clearing House (ACH) member, to
transmit funds electronically to PURCHASE SHARES, to have the Transfer Agent
SEND REDEMPTION PROCEEDS, or to TRANSMIT DIVIDENDS AND DISTRIBUTIONS.
Shares are purchased for your account on the regular business day the
Distributor is instructed by you to initiate the ACH transfer to buy shares.
You can provide those instructions automatically, under an Asset Builder Plan,
described below, or by telephone instructions using OppenheimerFunds PhoneLink,
also described below. You should request AccountLink privileges on the
application or dealer settlement instructions used to establish your account.
Please refer to "AccountLink" below for more details.
/ / ASSET BUILDER PLANS. You may purchase shares of the Fund (and up to
four other OppenheimerFunds) automatically each month from your account at a
bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of Additional
Information.
/ / AT WHAT PRICE ARE SHARES SOLD? Shares are sold at the public offering
price based on the net asset value (and any initial sales charge that applies)
that is next determined after the Distributor receives the purchase order in
Denver. In most cases, to enable you to receive that day's offering price, the
Distributor must receive your order by the time of day the New York Stock
Exchange closes, which is normally 4:00 P.M., New York time, but may be earlier
on some days (all references to time in this Prospectus mean "New York time").
The net asset value of each class of shares is determined as of that time on
each day the New York Stock Exchange is open (which is a "regular business
day").
If you buy shares through a dealer, the dealer must receive your order by
the regular close of business of the New York Stock Exchange on a regular
business day and transmit it to the Distributor so that it is received before
the Distributor's close of business that day, which is normally 5:00 P.M. THE
DISTRIBUTOR MAY REJECT ANY PURCHASE ORDER FOR THE FUND'S SHARES, IN ITS SOLE
DISCRETION.
BUYING CLASS A SHARES. Class A shares are sold at their offering price, which
is normally net asset value plus an initial sales charge. However, in some
cases, described below, where purchases are not subject to an initial sales
charge, the offering price may be net asset value. In some cases, reduced sales
charges may be available, as described below. Out of the amount you invest, the
Fund receives the net asset value to invest for your account. The sales charge
varies depending on the amount of your purchase. A portion of the sales charge
may be retained by the Distributor and allocated to your dealer as commission.
The current sales charge rates and commissions paid to dealers and brokers are
as follows:
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<TABLE>
<CAPTION>
______________________________________________________________________________________
FRONT-END SALES CHARGE FRONT-END SALES CHARGE COMMISSION AS
AS A PERCENTAGE OF AS A PERCENTAGE OF PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
______________________________________________________________________________________
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
______________________________________________________________________________________
</TABLE>
The Distributor reserves the right to reallow the entire commission to dealers.
If that occurs, the dealer may be considered an "underwriter" under Federal
securities laws.
/ / CLASS A CONTINGENT DEFERRED SALES CHARGE. There is no initial sales
charge on purchases of Class A shares of any one or more of the OppenheimerFunds
in the following cases:
/ / Purchases aggregating $1 million or more, or
/ / Purchases by an OppenheimerFunds prototype 401(k) plan that: (1)
buys shares costing $500,000 or more, or (2) has, at the time of purchase, 100
or more eligible participants, or (3) certifies that it projects to have annual
plan purchases of $200,00 or more.
Shares of any of the OppenheimerFunds that offer only one class of shares
that has no designation are considered "Class A shares" for this purpose. The
Distributor pays dealers of record commissions on those purchases in an amount
equal to the sum of 1.0% of the first $2.5 million, plus 0.50% of the next $2.5
million, plus 0.25% of purchases over $5 million. That commission will be paid
only on the amount of those purchases in excess of $1 million ($500,000 for
purchases by OppenheimerFunds 401(k) prototype plans) that were not previously
subject to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge (called the
"Class A contingent deferred sales charge") will be deducted from the redemption
proceeds. That sales charge will be equal to 1.0% of (1) the aggregate net asset
value of the redeemed shares (not including shares purchased by reinvestment of
dividends or capital gain distributions) or (2) the original cost of the shares,
whichever is less. Shares purchased prior to July 1, 1994 are subject to a
contingent deferred sales charge if they are redeemed within 24 months of the
end of the calendar month in which they were purchased in an amount equal to 1%
if the redemption occurs within the first 12 months and equal to .5 of 1% if the
redemption occurs in the next 12 months. Shares purchased on or after July 1,
1994 but prior to the date of this prospectus are subject to a contingent
deferred sales charge if they are redeemed within 12 months of the end of the
calendar month of their purchase in an amount equal to 1%. However, the
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<PAGE>
Class A contingent deferred sales charge will not exceed the aggregate
commissions the Distributor paid to your dealer on all Class A shares of all
OppenheimerFunds you purchased subject to the Class A contingent deferred sales
charge.
In determining whether a contingent deferred sales charge is payable, the
Fund will first redeem shares that are not subject to the sales charge,
including shares purchased by reinvestment of dividends and capital gains, and
then will redeem other shares in the order that you purchased them. The Class A
contingent deferred sales charge is waived in certain cases described in
"Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges of
shares under the Fund's exchange privilege (described below). However, if the
shares acquired by exchange are redeemed within 18 months of the end of the
calendar month of the purchase of the exchanged shares, the sales charge will
apply.
/ / SPECIAL ARRANGEMENTS WITH DEALERS. The Distributor may advance up to
13 months' commissions to dealers that have established special arrangements
with the Distributor for Asset Builder Plans for their clients. Dealers whose
sales of Class A shares of OppenheimerFunds (other than money market funds)
under OppenheimerFunds-sponsored 403(b)(7) custodial plans exceed $5 million per
year (calculated per quarter), will receive monthly one-half of the
Distributor's retained commissions on those sales, and if those sales exceed $10
million per year, those dealers will receive the Distributor's entire retained
commission on those sales.
REDUCED SALES CHARGES FOR CLASS A SHARE PURCHASES. You may be eligible to buy
Class A shares at reduced sales charge rates in one or more of the following
ways:
/ / RIGHT OF ACCUMULATION. To qualify for the lower sales charge rates
that apply to larger purchases of Class A shares, you and your spouse can add
together Class A and Class B shares you purchase for your individual accounts,
or jointly, or for trust or custodial accounts on behalf of your children who
are minors. A fiduciary can cumulate shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit plans of the
same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and Class B
shares of the Fund and other OppenheimerFunds to reduce the sales charge rate
that applies to current purchases of Class A shares. You can also count Class A
and Class B shares of OppenheimerFunds you previously purchased subject to an
initial or contingent deferred sales charge to reduce the sales charge rate for
current purchases of Class A shares, provided that you still hold that
investment in one of the OppenheimerFunds. The value of those shares will be
based on the greater of the amount you paid for the shares or their current
value (at offering price). The OppenheimerFunds are listed in "Reduced Sales
Charges" in the Statement of Additional Information, or a list can be obtained
from the Transfer Agent. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
/ / LETTER OF INTENT. Under a Letter of Intent, if you purchase Class A
shares or Class A and Class B shares of the Fund and other OppenheimerFunds
during a 13-month period, you can reduce the sales charge rate that applies to
your purchases of Class A shares. The total amount of your intended purchases
of both Class A and Class B shares will determine the reduced sales charge rate
for the Class A shares purchased during that period. This can include purchases
made up to 90 days before the date of the Letter. More information is contained
in the Application and in "Reduced Sales Charges" in the Statement of Additional
Information.
/ / GROUP AND ASSOCIATION PURCHASES AND PURCHASES BY CERTAIN QUALIFIED
RETIREMENT PLANS. The following table sets forth the applicable sales charge for
purchases of Class A shares made through a single broker or dealer by qualified
retirement plans including 401(k), 403(b) plans, SEP/IRA and IRA plans of a
single employer, and by members of associations formed for any purpose other
than the purchase of securities that purchased shares of any former Quest Fund
or that received a proposal from OpCap Distributors prior to the date of this
prospectus:
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<PAGE>
NUMBER OF AS A % AS A % PERCENT OF
ELIGIBLE EMPLOYEES OR MEMBERS OF OF OFFERING
OFFERING NET PRICE
PRICE ASSET RE-ALLOWED TO
VALUE SELLING
PER DEALERS
SHARE
9 or less . . . . . . . . . . . . . . . . . 3.00% 3.09% 2.60%
Between 10 & 49 . . . . . . . . . . . . . . 2.00% 2.04% 1.65%
50 or more . . . . . . . . . . . . . . . . 0.00% see "Class A Contingent
Deferred Sales Charge,"
p.
Purchases made under the Group Purchase provision will qualify for the lower
of the sales charge computed according to the table based on the number of
eligible employees in a plan or members of an association or the sales charge
level under the Rights of Accumulation described above. Purchases by retirement
plans covering 50 or more eligible employees or by associations or groups with
50 or more members shall be entitled to the sales charge waiver applicable to
purchases of $1 million or more described above. In addition, purchases by
401(k) plans can qualify for this sales charge waiver if, in the opinion of
Quest Distributors, the initial purchase plus projected contributions to be
invested in the plan for the following 12 months will exceed $1,000,000.
Individuals who qualify for reduced sales charges as members of
associations,groups or eligible employees in plans as set forth in the above
table also may purchase shares for their individual or custodial accounts at the
same sales charge level.
/ / WAIVERS OF CLASS A SALES CHARGES. The Class A sales charges are not
imposed in the circumstances described below. There is an explanation of this
policy in "Reduced Sales Charges" in the Statement of Additional Information.
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:
/ / the Manager or its affiliates;
/ / present or former officers, directors, trustees and employees (and
their "immediate families" as defined in "Reduced Sales Charges" in the
Statement of Additional Information) of the Fund, the Manager and its
affiliates, and retirement plans established by them for their employees;
/ / registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the Distributor for
that purpose;
/ / 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;
/ / employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have entered
into sales arrangements with such dealers or brokers (and are identified to the
Distributor) or with the Distributor; the purchaser must certify to the
Distributor at the time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor children);
/ / dealers, brokers or registered investment advisers that have entered
into an agreement with the Distributor providing specifically for the use of
shares of the Fund in particular investment products made available to their
clients; and
/ / dealers, brokers or registered investment advisers that have entered
into an agreement with the Distributor to sell shares of defined contribution
employee retirement plans for which the dealer, broker or investment adviser
provides administrative services.
/ / 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 for any of them.
/ / accounts advised by Oppenheimer Capital or persons who are directors
or trustees of such accounts.
20
<PAGE>
/ / purchases made with the proceeds of maturing principal of any
Qualified Unit Investment Liquid Trust Series.
/ / Shareholders of the AMA Family of Funds who acquired shares of any of
the former Quest for Value Funds pursuant to a combination of a Quest Fund with
a portfolio of the AMA Family of Funds who were shareholders of the AMA Family
of Funds on February 28, 1991, provided they continuously own shares of a former
Quest Fund.
/ / Shareholders who acquired shares of any Quest Fund pursuant to the
combination of certain Quest Funds with portfolios of the Unified Funds,
provided they continuously own shares of a former Quest Fund.
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 Class A sales charges:
/ / shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party,
/ / shares purchased by the reinvestment of loan repayments by a
participant in a retirement plan for which the Manager or its affiliates acts as
sponsor,
/ / shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other OppenheimerFunds (other than
Oppenheimer Cash Reserves) or unit investment trusts for which reinvestment
arrangements have been made with the Distributor, or
/ / shares purchased and paid for with the proceeds of shares redeemed in
the prior 12 months 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 your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver.
WAIVERS OF THE CLASS A CONTINGENT DEFERRED SALES CHARGE FOR CERTAIN
REDEMPTIONS. The Class A contingent deferred sales charge does not apply to
purchases of Class A shares at net asset value without sales charge as described
in the two sections above. It is also waived if shares that would otherwise be
subject to the contingent deferred sales charge are redeemed in the following
cases:
/ / for retirement distributions or loans to participants or beneficiaries
from qualified retirement plans, deferred compensation plans or other employee
benefit plans, including OppenheimerFunds prototype 401(k) plans (these are all
referred to as "Retirement Plans:); or
/ / to return excess contributions made to Retirement Plans; or
/ / to make Automatic Withdrawal Plan payments that are limited annually
to no more than 12% of the original account value; or
/ / involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and Policies,"
below); or
/ / if, at the time a purchase order is placed for Class A shares that
would otherwise be subject to the Class A contingent deferred sales charge, the
dealer agrees to accept the dealer's portion of the commission payable on the
sale in installments of 1/18th of the commission per month (and no further
commission will be payable if the shares are redeemed within 18 months of
purchase); or
/ / for distributions from OppenheimerFunds prototype 401(k) plans for any
of the following cases or purposes: (1) following the death or disability (as
defined in the Internal Revenue Code) of the participant or beneficiary (the
death or
21
<PAGE>
disability must occur after the participant's account was established); (2)
hardship withdrawals, as defined in the plan; (3) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (4) to meet the
minimum distribution requirements of the Internal Revenue Code; (5) to
establish "substantially equal periodic payments" as described in Section 72(t)
of the Internal Revenue Code, or (6) separation from service.
/ / DISTRIBUTION AND SERVICE PLAN FOR CLASS A SHARES. Each Fund has
adopted a Distribution and Service Plan for Class A shares to compensate the
Distributor for distributing Class A shares and servicing accounts. Under the
Plan the Fund pays the Distributor an annual distribution fee of .15% per year
on Class A shares of the Growth and Income Fund and .25% per year on Class A
shares of the Quest for Value Fund, Opportunity, Small Capitalization and Global
Equity Funds. The Distributor also receives a service fee of .25% per year with
respect to all the Funds. Both fees are computed on the average annual net
assets of Class A shares, determined as of the close of each regular business
day. The distribution fee is used by the Distributor to compensate dealers that
sell Class A shares. The Distributor uses all of the service fees to compensate
dealers, brokers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. Services to be provided include, among others, answering customer
inquiries about a 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 payments under the
Plan increase the annual expenses of Class A shares. For more details, please
refer to "Distribution and Service Plans" in the Statement of Additional
Information.
BUYING CLASS B SHARES. 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. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains distributions. The
charge will be assessed on the lesser of the net asset value of the shares at
the time of redemption or the original purchase price. The contingent deferred
sales charge is not imposed on the amount of your account value represented by
the increase in net asset value over the initial purchase price (including
increases due to the reinvestment of dividends and capital gains distributions).
The Class B contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the Fund in
connection with the sale of Class B shares.
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:
YEARS SINCE CONTINGENT DEFERRED SALES CHARGE
BEGINNING OF MONTH IN WHICH ON REDEMPTIONS IN THAT YEAR
PURCHASE ORDER WAS ACCEPTED (AS % OF AMOUNT SUBJECT TO CHARGE)
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases are considered to
have been made on the first regular business day of the month in which the
purchase was made.
22
<PAGE>
/ / AUTOMATIC CONVERSION OF CLASS B SHARES. Six years after you purchase
Class B shares, those shares will automatically convert to Class A shares.
Class B shares purchased prior to the date of this Prospectus will convert to
Class A shares after eight years. This conversion feature relieves Class B
shareholders of the asset-based sales charge that applies to Class B shares
under the Class B Distribution 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 Class B shares convert, any other Class B shares that
were acquired by the reinvestment of 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 "Alternative
Sales Arrangements - Class A, Class B and Class C Shares" in the Statement of
Additional Information.
/ / DISTRIBUTION AND SERVICE PLAN FOR CLASS B SHARES. The Fund has adopted
a Distribution and Service Plan for Class B shares to compensate the Distributor
for distributing Class B shares and servicing accounts. Under the Plan, the Fund
pays the Distributor an annual "asset-based sales charge" of 0.75% per year on
Class B shares that are outstanding for 6 years or less. The Distributor also
receives a service fee of 0.25% per year. Both fees are computed on the average
annual net assets of Class B shares, determined as of the close of each regular
business day. The asset-based sales charge allows investors to buy Class B
shares without a front-end sales charge while allowing the Distributor to
compensate dealers that sell Class B shares.
The Distributor uses the service fee to compensate dealers for providing
personal services for accounts that hold Class B shares. Those services are
similar to those provided under the Class A Service Plan, described above. The
asset-based sales charge and service fee increase Class B expenses by 1.00% of
average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for the
first year after Class B shares have been sold by the dealer. After the shares
have been held for a year, the Distributor pays the fee on a quarterly basis.
The Distributor pays sales commissions of 3.75% of the purchase price to dealers
from its own resources at the time of sale.
The Fund pays the asset-based sales charge to the Distributor for its
services rendered in connection with the distribution of Class B shares. Those
payments, retained by the Distributor, are at a fixed rate which is not related
to the Distributor's expenses. The services rendered by the Distributor include
paying and financing the payment of sales commissions, service fees, and other
costs of distributing and selling Class B shares. If the Plan is terminated by
the Fund, the Board of Trustees may allow the Fund to continue payments of the
service fee and/or asset-based sales charge to the Distributor for distributing
Class B shares before the Plan was terminated.
BUYING CLASS C SHARES. Class C shares are sold at net asset value per share
without an initial sales charge. However, 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. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The charge will be assessed on the lesser of the net asset value
of the shares at the time of redemption or the original purchase price. The
contingent deferred sales charge is not imposed on the amount of your account
value represented by the increase in net asset value over the initial purchase
price (including increases due to the reinvestment of dividends and capital
gains distributions). The Class C contingent deferred sales charge is paid to
the Distributor to reimburse its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.
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 PLAN FOR CLASS C SHARES. The Fund has adopted
a Distribution and Service Plan for Class C shares to compensate the Distributor
for distributing Class C shares and servicing accounts. Under the Plan, the Fund
pays the Distributor an annual "asset-based sales charge" of 0.75% per year on
Class C shares. The Distributor also receives a service fee of 0.25% per year.
Both fees are computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. The asset-based sales
charge allows investors to buy Class C shares without a front-end sales charge
while allowing the Distributor to compensate dealers that sell Class C shares.
23
<PAGE>
The Distributor uses the service fee to compensate dealers for providing
personal services for accounts that hold Class C shares. Those services are
similar to those provided under the Class A Service Plan, described above. The
asset-based sales charge and service fees increase Class C expenses by 1.00% of
average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for the
first year after Class C shares have been sold by the dealer. After the shares
have been held for a year, the Distributor pays the fee on a quarterly basis.
The Distributor pays sales commissions of 0.75% of the purchase price to dealers
from its own resources at the time of sale. The total up-front commission paid
by the Distributor to the dealer at the time of sale of Class C shares is 1.00%
of the purchase price. The Distributor plans to pay 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.
The Fund pays the asset-based sales charge to the Distributor for its
services rendered in connection with the distribution of Class C shares. Those
payments are at a fixed rate which is not related to the Distributor's expenses.
The services rendered by the Distributor include paying and financing the
payment of sales commissions, service fees, and other costs of distributing and
selling Class C shares, including compensation of personnel of the Distributor
who support distribution of Class C shares. If the Plan is terminated by the
Fund, the Board of Trustees may allow the Fund to continue payments of the
service fee and/or asset-based sales charge to the Distributor for distributing
Class C shares before the plan was terminated.
/ / WAIVERS OF CLASS B AND CLASS C SALES CHARGES. The Class B and Class C
contingent deferred sales charges will not be applied to shares purchased in
certain types of transactions nor will it apply to shares redeemed in certain
circumstances as described below. The reasons for this policy are in "Reduced
Sales Charges" in the Statement of Additional Information.
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:
/ / distributions to participants or beneficiaries from Retirement Plans, if
the distributions are made (a) under an Automatic Withdrawal Plan after the
participant reaches age 59-1/2, as long as the payments are no more than 10% of
the account value annually (measured from the date the Transfer Agent received
the request), or (b) following the death or disability (as defined in the
Internal Revenue Code ("IRC")) of the participant or beneficiary (the death or
disability must have occurred after the account was established);
/ / redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder (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);
/ / returns of excess contributions to Retirement Plans;
/ / distributions from IRAs (including SEP-IRAs and SAR/SEP accounts) before
the participant is age 59-1/2, and distributions from 403(b)(7) custodial plans
or pension or profit sharing plans before the participant is age 59-1/2 but only
after the participant has separated from service, if the distributions are made
in substantially equal periodic payments over the life (or life expectancy) of
the participant or the joint lives (or joint life and last survivor expectancy)
of the participant and the participant's designated beneficiary (and the
distributions must comply with other requirements for such distributions under
the IRC and may not exceed 10% of the account value annually, measured from the
date the Transfer Agent received the request);
/ / shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies," below; or
/ / distributions from OppenheimerFunds prototype 401(k) plans: (1) for
hardship withdrawals; (2) under a Qualified Domestic Relations Order, as
defined in the IRC; (3) to meet minimum distribution requirements as defined in
the IRC; (4) to make "substantially equal periodic payments" as described in
Section 72(t) of the IRC; (5) for separation from service.
24
<PAGE>
WAIVERS FOR REDEMPTIONS WITH RESPECT TO PURCHASES PRIOR TO MARCH 6, 1995. The
CDSC will be waived in the case of redemptions of Class A, B or C shares
purchased prior to March 6, 1995 in connection with (i) distributions to
participants or beneficiaries of plans qualified under Section 401(a) of the
Internal Revenue Code ("IRC") or from custodial accounts under IRC
Section 403(b)(7), individual retirement accounts under IRC Section 408(a),
deferred compensation plans under IRC section 457 and other employee benefit
plans ("plans"), and returns of excess contributions made to these plans,
(ii) withdrawals under an automatic withdrawal plan where the annual withdrawal
does not exceed 10% of the opening value of the account (only for Class B and C
shares); and (iii) liquidation of a shareholder's account if the aggregate net
asset value of shares held in the account is less than the required minimum.
WAIVERS FOR REDEMPTION WITH RESPECT TO PURCHASES ON OR AFTER MARCH 6, 1995 BUT
PRIOR TO DATE OF THE PROSPECTUS. The CDSC will be waived in the case of
redemptions of Class A, B or C shares purchased on or after March 6, 1995, but
prior to the date of this Prospectus in connection with 1) distributions to
participants or beneficiaries from individual retirement accounts under
Section 408(a) of the and retirement plans under Section 401(a), 401(k),
403(b) and 457 of the IRC, which distributions are made either (a) to an
individual participant as a result of separation from service or (b) following
the death or disability (as defined in the IRC) of the participant or
beneficiary; 2) returns of excess contributions to such retirement plans;
3) redemptions other than from retirement plans following the death or
disability of the shareholder(s) (as evidenced by a determination of total
disability by the U.S. Social Security Administration); [4) withdrawals under an
automatic withdrawal plan where the annual withdrawals do not exceed 10% of the
opening value of the account (only for Class B and C shares)]; and
5) liquidation of a shareholder's account if the aggregate net asset value of
shares held in the account is less than the required minimum. A shareholder will
be credited with any CDSC paid in connection with the redemption of any Class A,
B or C shares if within 90 days after such redemption, the proceeds are invested
in the same Class of shares in the same and/or another Fund.
SPECIAL FIDUCIARY RELATIONSHIPS. The CDSC will not apply with respect to
purchases of Class A shares for which the selling dealer is not permitted to
receive a sales load or redemption fee imposed on a shareholder with whom such
dealer has a fiduciary relationship in accordance with provisions of the
Employee Retirement Income Security Act and regulations thereunder. If such
dealer agrees to the reimbursement provision described below, no sales charge
will be imposed on sales of $1,000,000 or more and the Distributor will pay to
the selling dealer a commission described above in, "Class A Contingent Deferred
Sales Charge".
For the period of 13 months from the date of the sales referred to in the
above paragraph, the distribution fee payable by a Fund to the Distributor
pursuant to the Fund's Distribution Plan in connection with such shares will be
retained by the Distributor. In the event of a redemption of any such shares
within 24 months of purchase, the selling dealer will reimburse the Distributor
for the amount of commission paid less the amount of the distribution fee with
respect to such shares.
PURCHASES BY STRATEGIC ALLIANCES. The CDSC will not apply with respect to
purchases of Class A shares by participants in qualified retirement plans that
are part of strategic alliances. No sales charge will be imposed on such
purchases and the Distributor will pay to the selling dealer a commission
described above in "Class A Contingent Deferred Sales Charge." For the period of
13 months from the date of such sales, the distribution fee payable by a Fund to
the Distributor pursuant to the Fund's Distribution and Services Plan in
connection with such shares will be retained by the Distributor.
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:
/ / shares sold to the Manager or its affiliates;
/ / 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; or
/ / shares issued in plans or reorganization to which the Fund is a party.
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SPECIAL INVESTOR SERVICES
ACCOUNTLINK. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send money
electronically between those accounts to perform a number of types of account
transactions. These include purchases of shares by telephone (either through a
service representative or by PhoneLink, described below), automatic investments
under Asset Builder Plans, and sending dividends and distributions or Automatic
Withdrawal Plan payments directly to your bank account. Please refer to the
Application for details or call the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you use to buy
shares, or on your dealer's settlement instructions if you buy your shares
through your dealer. After your account is established, you can request
AccountLink privileges on signature-guaranteed instructions to the Transfer
Agent. AccountLink privileges will apply to each shareholder listed in the
registration on your account as well as to your dealer representative of record
unless and until the Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders who own the
account.
/ / USING ACCOUNTLINK TO BUY SHARES. Purchases may be made by telephone
only after your account has been established. To purchase shares in amounts up
to $250,000 through a telephone representative, call the Distributor at 1-800-
852-8457. The purchase payment will be debited from your bank account.
/ / PHONELINK. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on already-
established Fund accounts after you obtain a Personal Identification Number
(PIN), by calling the special PhoneLink number: 1-800-533-3310.
/ / PURCHASING SHARES. You may purchase shares in amounts up to $100,000
by phone, by calling 1-800-533-3310. You must have established AccountLink
privileges to link your bank account with the Fund, to pay for these purchases.
/ / EXCHANGING SHARES. With the OppenheimerFunds exchange privilege,
described below, you can exchange shares automatically by phone from your Fund
account to another OppenheimerFunds account you have already established by
calling the special PhoneLink number. Please refer to "How to Exchange Shares,"
below, for details.
/ / SELLING SHARES. You can redeem shares by telephone automatically by
calling the PhoneLink number and the Fund will send the proceeds directly to
your AccountLink bank account. Please refer to "How to Sell Shares," below, for
details.
AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. Each Fund has several plans that enable
you to sell shares automatically or exchange them to another OppenheimerFunds
account on a regular basis:
/ / AUTOMATIC WITHDRAWAL PLANS. If your Fund account is $5,000 or more, you
can establish an Automatic Withdrawal Plan to receive payments of at least $50
on a monthly, quarterly, semi-annual or annual basis. The checks may be sent to
you or sent automatically to your bank account on AccountLink. You may even set
up certain types of withdrawals of up to $1,500 per month by telephone. You
should consult the Application and Statement of Additional Information for more
details.
/ / AUTOMATIC EXCHANGE PLANS. You can authorize the Transfer Agent to
exchange an amount you establish in advance automatically for shares of up to
five other OppenheimerFunds on a monthly, quarterly, semi-annual or annual basis
under an Automatic Exchange Plan. The minimum purchase for each other
OppenheimerFunds account is $25. These exchanges are subject to the terms of
the Exchange Privilege, described below.
REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A shares, you
have up to 6 months to reinvest all or part of the redemption proceeds in Class
A shares of a Fund or other OppenheimerFunds without paying a sales charge.
This
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privilege applies to Class A shares that you purchased subject to an initial
sales charge and to Class A shares on which you paid a contingent deferred sales
charge when you redeemed them. It does not apply to Class C shares. Please
consult the Statement of Additional Information for more details.
RETIREMENT PLANS. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer, the
plan trustee or administrator must make the purchase of shares for your
retirement plan account. The Distributor offers a number of different retirement
plans that can be used by individuals and employers:
/ / INDIVIDUAL RETIREMENT ACCOUNTS including rollover IRAs, for
individuals and their spouses
/ / 403(b)(7) CUSTODIAL PLANS for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
/ / SEP-IRAS (Simplified Employee Pension Plans) for small business owners
or people with income from self-employment, including SAR/SEP IRAs
/ / PENSION AND PROFIT-SHARING PLANS for self-employed persons and small
business owners
/ / 401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents, which
contain important information and applications.
HOW TO SELL SHARES
You can arrange to take money out of your account on any regular business
day by selling (redeeming) some or all of your shares. Your shares will be sold
at the next net asset value calculated after your order is received and accepted
by the Transfer Agent. The Fund offers you a number of ways to sell your
shares: in writing or by telephone. You can also set up Automatic Withdrawal
Plans to redeem shares on a regular basis, as described above. IF YOU HAVE
QUESTIONS ABOUT ANY OF THESE PROCEDURES, AND ESPECIALLY IF YOU ARE REDEEMING
SHARES IN A SPECIAL SITUATION, SUCH AS DUE TO THE DEATH OF THE OWNER, OR FROM A
RETIREMENT PLAN, PLEASE CALL THE TRANSFER AGENT FIRST, AT 1-800-525-7048, FOR
ASSISTANCE.
/ / RETIREMENT ACCOUNTS. To sell shares in an OppenheimerFunds retirement
account in your name, call the Transfer Agent for a distribution request form.
There are special income tax withholding requirements for distributions from
retirement plans and you must submit a withholding form with your request to
avoid delay. If your retirement plan account is held for you by your employer,
you must arrange for the distribution request to be sent by the plan
administrator or trustee. There are additional details in the Statement of
Additional Information.
/ / CERTAIN REQUESTS REQUIRE A SIGNATURE GUARANTEE. To protect you and
each Fund from fraud, certain redemption requests must be in writing and must
include a signature guarantee in the following situations (there may be other
situations also requiring a signature guarantee):
/ / You wish to redeem more than $50,000 worth of shares and receive a
check
/ / The redemption check is not payable to all shareholders listed on the
account statement
/ / The redemption check is not sent to the address of record on your
statement
/ / Shares are being transferred to a Fund account with a different owner
or name
/ / Shares are redeemed by someone other than the owners (such as an
Executor)
/ / WHERE CAN I HAVE MY SIGNATURE GUARANTEED? The Transfer Agent will
accept a guarantee of your signature by a number of financial institutions,
including: a U.S. bank, trust company, credit union or savings association, or
by a foreign bank that has a U.S. correspondent bank, or by a U.S. registered
dealer or broker in securities, municipal securities or government securities,
or by a U.S. national securities exchange, a registered securities association
or a clearing agency.
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IF YOU ARE SIGNING AS A FIDUCIARY OR ON BEHALF OF A CORPORATION, PARTNERSHIP OR
OTHER BUSINESS, YOU MUST ALSO INCLUDE YOUR TITLE IN THE SIGNATURE.
SELLING SHARES BY MAIL. Write a "letter of instructions" that includes:
-- Your name
-- The Fund's name
-- Your Fund account number (from your account statement)
-- The dollar amount or number of shares to be redeemed
-- Any special payment instructions
-- Any share certificates for the shares you are selling,
-- The signatures of all registered owners exactly as the account is
registered, and
-- Any special requirements or documents requested by the Transfer Agent
to assure proper authorization of the person asking to sell shares.
USE THE FOLLOWING ADDRESS FOR REQUESTS SEND COURIER OR EXPRESS MAIL
BY MAIL: REQUESTS TO:
Shareholder Services, Inc. Shareholder Services, Inc.
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231
SELLING SHARES BY TELEPHONE. You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price on a regular
business day, your call must be received by the Transfer Agent by the close of
The New York Stock Exchange that day, which is normally 4:00 P.M. but may be
earlier on some days. SHARES HELD IN AN OPPENHEIMERFUNDS RETIREMENT PLAN OR
UNDER A SHARE CERTIFICATE MAY NOT BE REDEEMED BY TELEPHONE.
/ / To redeem shares through a service representative, call 1-800-852-8457
/ / To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds wired to that bank account.
/ / TELEPHONE REDEMPTIONS PAID BY CHECK. Up to $50,000 may be redeemed by
telephone, once in each 7-day period. The check must be payable to all owners
of record of the shares and must be sent to the address on the account. This
service is not available within 30 days of changing the address on an account.
/ / TELEPHONE REDEMPTIONS THROUGH ACCOUNTLINK. There are no dollar limits
on telephone redemption proceeds sent to a bank account designated when you
establish AccountLink. Normally the ACH wire to your bank is initiated on the
business day after the redemption. You do not receive dividends on the proceeds
of the shares you redeemed while they are waiting to be wired.
SELLING 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. Please refer to "Special
Arrangements for Repurchase of Shares from Dealers and Brokers" in the Statement
of Additional Information for more details.
HOW TO EXCHANGE SHARES
Shares of the Funds may be exchanged for shares of certain OppenheimerFunds
at net asset value per share at the time of exchange, without sales charge. To
exchange shares, you must meet several conditions:
/ / Shares of the fund selected for exchange must be available for sale in
your state of residence
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/ / The prospectuses of this Fund and the fund whose shares you want to
buy must offer the exchange privilege
/ / You must hold the shares you buy when you establish your account for
at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
/ / You must meet the minimum purchase requirements for the fund you
purchase by exchange
/ / BEFORE EXCHANGING INTO A FUND, YOU SHOULD OBTAIN AND READ ITS
PROSPECTUS
SHARES OF A PARTICULAR CLASS MAY BE EXCHANGED ONLY FOR SHARES OF THE SAME
CLASS IN THE OTHER OPPENHEIMERFUNDS. For example, you can exchange Class A
shares of this Fund only for Class A shares of another fund. At present, not
all of the OppenheimerFunds offer the same classes of shares. If a fund has only
one class of shares that does not have a class designation, they are "Class A"
shares for exchange purposes. Certain OppenheimerFunds offer Class A, Class B
and/or Class C shares, and a list can be obtained by calling the Distributor at
1-800-525-7048. In some cases, sales charges may be imposed on exchange
transactions. Please refer to "How to Exchange Shares" in the Statement of
Additional Information for more details.
Exchanges may be requested in writing or by telephone:
/ / WRITTEN EXCHANGE REQUESTS. Submit an OppenheimerFunds Exchange Request
form, signed by all owners of the account. Send it to the Transfer Agent at the
addresses listed in "How to Sell Shares."
/ / TELEPHONE EXCHANGE REQUESTS. Telephone exchange requests may be made
either by calling a service representative at 1-800-852-8457 or by using
PhoneLink for automated exchanges, by calling 1-800-533-3310. Telephone
exchanges may be made only between accounts that are registered with the same
name(s) and address. Shares held under certificates may not be exchanged by
telephone.
You can find a list of OppenheimerFunds currently available for exchanges in
the Statement of Additional Information or by calling a service representative
at 1-800-525-7048. Exchanges of shares involve a redemption of the shares of the
fund you own and a purchase of shares of the other fund.
There are certain exchange policies you should be aware of:
/ / Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that is in proper form 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 if it determines it would be disadvantaged by a
same-day transfer of the proceeds to buy shares. For example, the receipt of
multiple exchange requests from a dealer in a "market-timing" strategy might
require the disposition of securities at a time or price disadvantageous to the
Fund.
/ / Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request that
will disadvantage it, or to refuse multiple exchange requests submitted by a
shareholder or dealer.
/ / The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund will attempt to provide you notice whenever it is
reasonably able to do so, it may impose these changes at any time.
/ / If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for exchange will
be exchanged.
The Distributor has entered into agreements with certain dealers and
investment advisers permitting them to exchange their clients' shares by
telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a result,
those exchanges may be subject to notice requirements, delays and other
limitations that do not apply to shareholders who exchange their shares directly
by calling or writing to the Transfer Agent.
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<PAGE>
SHAREHOLDER ACCOUNT RULES AND POLICIES
/ / NET ASSET VALUE PER SHARE is determined for each class of shares as of
the close of the New York Stock Exchange, which is normally 4:00 P.M. but may be
earlier on some days, on each day the Exchange is open by dividing the value of
each Fund's net assets attributable to a class by the number of shares of that
class that are outstanding. The Fund's Board of Trustees has established
procedures to value each Fund's securities to determine net asset value. In
general, securities values are based on market value. There are special
procedures for valuing illiquid and restricted securities, obligations for which
market values cannot be readily obtained, and call options and hedging
instruments. Generally, trading in foreign securities is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of a Fund's shares are
determined as of such times. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. If events materially affecting the
value of such securities and exchange rates occur between the time of such
determination and/or the close of the NYSE, then these securities will be valued
at their fair value as determined in good faith under procedures established by
and under the supervision of the Fund's Board. These procedures are described
more completely in the Statement of Additional Information.
/ / THE OFFERING OF SHARES may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be suspended
by the Board of Trustees at any time the Board believes it is in the Fund's best
interest to do so.
/ / TELEPHONE TRANSACTION PRIVILEGES for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Funds at any time. If
an account has more than one owner, the Fund and the Transfer Agent may rely on
the instructions of any one owner. Telephone privileges apply to each owner of
the account and the dealer representative of record for the account unless and
until the Transfer Agent receives cancellation instructions from an owner of the
account.
/ / THE TRANSFER AGENT WILL RECORD ANY TELEPHONE CALLS to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not use
reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither it nor a Fund will be liable for losses or
expenses arising out of telephone instructions reasonably believed to be
genuine. If you are unable to reach the Transfer Agent during periods of
unusual market activity, you may not be able to complete a telephone transaction
and should consider placing your order by mail.
/ / REDEMPTION OR TRANSFER REQUESTS WILL NOT BE HONORED UNTIL THE TRANSFER
AGENT RECEIVES ALL REQUIRED DOCUMENTS IN PROPER FORM. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
/ / DEALERS THAT CAN PERFORM ACCOUNT TRANSACTIONS FOR THEIR CLIENTS BY
PARTICIPATING IN NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to perform
those transactions and are responsible to their clients who are shareholders of
the Fund if the dealer performs any transaction erroneously.
/ / THE REDEMPTION PRICE FOR SHARES WILL VARY from day to day because the
value of the securities in each Fund's portfolio fluctuates, and the redemption
price, which is the net asset value per share, will normally be different for
Class A, Class B and Class C shares. Therefore, the redemption value of your
shares may be more or less than their original cost.
/ / PAYMENT FOR REDEEMED SHARES is made ordinarily in cash and forwarded by
check or through AccountLink (as elected by the shareholder under the redemption
procedures described above) within 7 days after the Transfer Agent receives
redemption instructions in proper form, except under unusual circumstances
determined by the Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer, payment will
be forwarded within 3 business days. THE TRANSFER AGENT MAY DELAY FORWARDING A
CHECK OR PROCESSING A PAYMENT VIA ACCOUNTLINK FOR RECENTLY PURCHASED SHARES, BUT
ONLY UNTIL THE PURCHASE PAYMENT HAS CLEARED. THAT DELAY MAY BE AS MUCH AS 10
DAYS FROM THE DATE THE SHARES WERE PURCHASED. THAT DELAY MAY BE AVOIDED IF YOU
PURCHASE SHARES
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BY CERTIFIED CHECK OR ARRANGE WITH YOUR BANK TO PROVIDE TELEPHONE OR WRITTEN
ASSURANCE TO THE TRANSFER AGENT THAT YOUR PURCHASE PAYMENT HAS CLEARED.
/ / INVOLUNTARY REDEMPTIONS OF SMALL ACCOUNTS may be made by the Fund if
the account value has fallen below $200 for reasons other than the fact that the
market value of shares has dropped, and in some cases involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of share
purchase orders.
/ / UNDER UNUSUAL CIRCUMSTANCES, shares of a Fund may be redeemed "in
kind", which means that the redemption proceeds will be paid with securities
from the Fund's portfolio. Please refer to the Statement of Additional
Information for more details.
/ / "BACKUP WITHHOLDING" of Federal income tax may be applied at the rate
of 31% from dividends, distributions and redemption proceeds (including
exchanges) if you fail to furnish the Fund a certified Social Security or
taxpayer identification number when you sign your application, or if you violate
Internal Revenue Service regulations on tax reporting of dividends.
/ / THE FUND DOES NOT CHARGE A REDEMPTION FEE, but if your dealer or broker
handles your redemption, they may charge a fee. That fee can be avoided by
redeeming your Fund shares directly through the Transfer Agent. Under the
circumstances described in "How To Buy Shares," you may be subject to a
contingent deferred sales charges when redeeming certain Class A, Class B and
Class C shares.
/ / TO AVOID SENDING DUPLICATE COPIES OF MATERIALS TO HOUSEHOLDS, each Fund
will mail only one copy of each annual and semi-annual report and updated
prospectus 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 DISTRIBUTIONS
Dividends from net investment income are declared and paid quarterly
for the Growth and Income Fund. The Quest for Value, Small Capitalization,
Opportunity and Global Equity Funds declare and pay dividends from net
investment income on an annual basis following the end of their fiscal years
(October 31, except for the Global Equity Fund, which is November 30). The Funds
may at times make payments from sources other than income or net capital gains.
Payments from such sources would, in effect, represent a return of each
shareholder's investment. All or a portion of such payments would not be taxable
to shareholders.
Distributions from net long-term capital gains, if any, for all Funds normally
are declared and paid annually, subsequent to the end of their respective fiscal
years. Distributions from net short-term capital gains, if any, for the U.S.
Government Income Fund will be made quarterly and for all other Funds will be
made annually. Short-term capital gains include the gains from the disposition
of securities held less than one year, a portion of the premiums from expired
put and call options written by a Fund and net gains from closing transactions
with respect to such options. If required by tax laws to avoid excise or other
taxes, dividends and/or capital gains distributions may be made more frequently.
Dividends paid by any Fund with respect to Class A, B and C shares, to the
extent any dividends are paid, will be calculated in the same manner at the same
time on the same day, with each class bearing its own distribution and other
class-related expenses. Accordingly, the higher distribution fees paid by
Class B and C shares and the higher resulting expense ratio will cause such
shares to be paid lower per share dividends than those paid on Class A shares.
However, a Class B or C shareholder will receive more shares at the time of
purchase than a Class A shareholder investing the same dollar amount since no
sales charge is deducted from the amount invested in Class B or C shares.
Reinvestment Options: You can receive your dividends and capital gains
distributions either in cash or in additional Fund shares without a sales
charge. You will be subject to tax on such distributions. See the SAI for a
description of how to change your election.
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DISTRIBUTION OPTIONS. When you open your account, specify on your application
how you want to receive your distributions. For OppenheimerFunds retirement
accounts, all distributions are reinvested. For other accounts, you have four
options:
/ / REINVEST ALL DISTRIBUTIONS IN THE FUND. You can elect to reinvest all
dividends and long-term capital gains distributions in additional shares of the
Fund.
/ / REINVEST CAPITAL GAINS ONLY. You can elect to reinvest long-term
capital gains in the Fund while receiving dividends by check or sent to your
bank account on AccountLink.
/ / RECEIVE ALL DISTRIBUTIONS IN CASH. You can elect to receive a check
for all dividends and long-term capital gains distributions or have them sent to
your bank on AccountLink.
/ / REINVEST YOUR DISTRIBUTIONS IN ANOTHER OPPENHEIMERFUNDS ACCOUNT. You
can reinvest all distributions in another OppenheimerFunds account you have
established.
TAXES. If your account is not a tax-deferred retirement account, you should be
aware of the following tax implications of investing in a Fund. Long-term
capital gains are taxable as long-term capital gains when distributed to
shareholders. It does not matter how long you held your shares. Dividends paid
from short-term capital gains and net investment income are taxable as ordinary
income. Distributions are subject to federal income tax and may be subject to
state or local taxes. Your distributions are taxable when paid, whether you
reinvest them in additional shares or take them in cash. Every year each Fund
will send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year.
/ / "BUYING A DIVIDEND": When a Fund goes ex-dividend, its share price is
reduced by the amount of the distribution. If you buy shares on or just before
the ex-dividend date, or just before the Fund declares a capital gains
distribution, you will pay the full price for the shares and then receive a
portion of the price back as a taxable dividend or capital gain.
/ / TAXES ON TRANSACTIONS: Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. A capital gain or loss is the
difference between the price you paid for the shares and the price you received
when you sold them.
/ / RETURNS OF CAPITAL: In certain cases distributions made by a Fund may
be considered a non-taxable return of capital to shareholders. If that occurs,
it will be identified in notices to shareholders. A non-taxable return of
capital may reduce your tax basis in your Fund shares.
Dividends, interest and gains on foreign securities may give rise to
withholding and other taxes imposed by foreign countries, reducing the amount
distributable to you. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes. The Global EquityFund may qualify to
make an election to allow you either to claim United States foreign tax credits
with respect to such foreign taxes withheld or paid, or to deduct such amounts
as an itemized deduction on your tax return. This would increase your taxable
income (in addition to income you actually received) by the amount of such taxes
and the Fund would not be able to deduct such taxes in computing its taxable
income.
This information is only a summary of certain federal tax information about
your investment. More information is contained in the Statement of Additional
Information, and in addition you should consult with your tax adviser about the
effect of an investment in a Fund on your particular tax situation.
ADDITIONAL INFORMATION
ORGANIZATION OF THE FUNDS. The Small Capitalization, Opportunity and
Growth and Income Funds are portfolios of Quest for Value Family of Funds (the
"Trust"), an open-end management investment company organized as a Massachusetts
business trust on April 17, 1987. The Trust's other portfolio is the Officers
Fund. The Trust may establish
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additional portfolios which may have different investment objectives from those
stated in this prospectus. Quest for Value Fund, Inc. and Quest for Value Global
Equity Fund, Inc. are each open-end diversified management investment companies
organized as Maryland corporations.
None of the Funds is required to hold annual shareholder meetings, although
special meetings may be called for a specific Fund or group of Funds as a whole
as required by applicable law or as requested in writing by holders of 10% or
more of the outstanding shares of the Fund for the purpose of voting upon the
question of removal of a director or trustee. Each Fund will assist shareholders
in communicating with one another in connection with such a meeting. For matters
affecting only one portfolio of Quest for Value Family of Funds, only the
shareholders of that portfolio are entitled to vote. For matters affecting all
the portfolios, but affecting them differently, separate votes by portfolio are
required. Stock certificates for Class B charts or Class C shares will not be
issued. No stock certificates will be issued for Class A shares unless
specifically requested in writing.
Under Massachusetts law shareholders of the Trust could, in certain
circumstances, be held personally liable as partners for obligations of the
Trust. The Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust and its portfolios and requires
that notice of such disclaimer be given in each instrument entered into or
executed by the Trust on behalf of its portfolios. The Declaration of Trust also
provides indemnification out of the Trust's property for any shareholder held
personally liable for any of the obligations of the Trust. Thus, the risk of
loss to a shareholder from being held personally liable for the obligations of
the Trust is limited to the unlikely circumstance in which the Trust would be
unable to meet its obligations. There is a remote possibility that one Fund
might become liable for a misstatement in this Prospectus about another Fund.
Each class of shares represents identical interests in the applicable Fund's
investment portfolio. As such, they have the same rights, privileges and
preferences, except with respect to the: (a) designation of each class,
(b) effect of the respective sales charges, if any, for each class,
(c) distribution fees borne by each class, (d) expenses allocable exclusively to
each class, (e) voting rights on matters exclusively affecting a single class
and (f) exchange privilege of each class.
PERFORMANCE INFORMATION: From time to time the Funds may advertise yield and
total return figures, based on historical earnings. The figures are not intended
to indicate future performance. "Yield" is calculated by dividing the net
investment income for the stated period (exclusive of gains, if any, from
options and financial futures transactions) by the value, at maximum offering
price on the last day of the period, of the average number of shares entitled to
receive dividends during the period. The yield formula assumes that net
investment income is earned at a constant rate and reinvested semi-annually.
"Total Return" refers to the average annual compounded rates of return over some
representative period that would equate an initial amount invested at the
beginning of a stated period to the ending redeemable value of the investment,
after giving effect to the reinvestment of all dividends and distributions and
deductions of expenses during the period. A Fund also may advertise its total
return over different periods of time by means of aggregate, average, year by
year or other types of total return figures. In addition, reference in
advertisements may be made to ratings and rankings among similar funds by
independent evaluators such as Lipper Analytical Services, Inc. or Morningstar
and the performance of the Funds may be compared to recognized indices of market
performance. Performance data will be computed separately for each Class of
shares in accordance with formulas specified by the SEC.
POSSIBLE CONFLICTS OF INTEREST BETWEEN CLASSES. The Boards of the Funds have
determined that currently no conflict of interest exists between Class A, B
and/or C shares of any Fund. On an ongoing basis, the Boards shall monitor the
Funds for the existence of any material conflicts between the interests of the
classes of outstanding shares. The Boards shall take such action as is
reasonably necessary to eliminate any such conflicts that may develop, up to and
including establishing a new Fund.
CUSTODIAN. The custodian of the assets, transfer agent and shareholder servicing
agent for the Funds is State Street Bank and Trust Company, whose principal
business address is P.O. Box 8505, Boston., MA 02266-8505. Cash balances of the
Funds with the Custodian in excess of $100,000 are unprotected by Federal
deposit insurance. Such uninsured balances may at times be substantial.
33
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TRANSFER AGENT AND SHAREHOLDER SERVICING AGENT. The transfer agent and
shareholder servicing agent is Shareholder Services, Inc., a subsidiary of the
Manager, whose address is P.O. Box 5270, Denver, Colorado 80217.
SHAREHOLDER REPORTS. To reduce expenses, only one copy of financial reports will
be mailed to your household, even if you have more than one account in the
particular fund. If you wish to receive additional copies of financial reports,
please call 1-800-525-7048.
SHAREHOLDER SERVICING AGENT FOR CERTAIN SHAREHOLDERS. Unified Management
Corporation (1-800-346-4601) is the shareholder servicing agent for former
shareholders of the AMA Family of Funds and clients of AMA Investment
Advisers, L.P. who acquire shares of any Fund, and for former shareholders of
the Unified Funds and Liquid Green Trusts, accounts which participated or
participate in a retirement plan for which Unified Investment Advisers, Inc. or
an affiliate acts as custodian or trustee, accounts which have a Money Manager
brokerage account, and other accounts for which Unified Management Corporation
is the dealer of record.
34
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APPENDIX
The average distribution of investments in bonds by ratings as a percentage of
average net assets for the Growth and Income Fund for the fiscal year ended
October 31, 1994 calculated monthly on a dollar-weighted basis was as follows:
RATED BONDS
MOODY'S INVESTORS SERVICE, INC. STANDARD & POOR'S CORPORATION PERCENTAGE
- ----------------------------- ----------------------------- -----------
Aaa AAA --
Aa AA --
A A --
Baa BBB 6.2%
Ba BB --
B B 6.8%
Caa CCC 4.4%
UNRATED BONDS DEEMED COMPARABLE TO THE INDICATED RATING
MOODY'S INVESTORS SERVICE, INC. STANDARD & POOR'S CORPORATION PERCENTAGE
- ----------------------------- ----------------------------- -----------
Aaa AAA 0%
Aa AA 0%
A A 0%
Baa BBB 0%
Ba BB 0%
B B 0%
Caa CCC 0%
The actual distribution of a Fund's corporate bond investments by rating will
vary on any given date. The distribution of a Fund's investments by rating as
set forth above should not be considered representative of the future
composition of the Fund's portfolio.
35
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TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
Table of Contents
Summary of Fund Expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . .
A Brief Overview of the Funds . . . . . . . . . . . . . . . . . . . . . . .
Investment Objectives of the Funds . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Restrictions and Techniques . . . . . . . . . . . . . . . . . .
Investment Management Agreement . . . . . . . . . . . . . . . . . . . . . .
How to Buy Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Investor Services . . . . . . . . . . . . . . . . . . . . . . . . .
How to Sell Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How to Exchange Shares . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholder Account Rules and Policies . . . . . . . . . . . . . . . . . .
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, NY 10048
Subadvisor
OpCapAdvisors
One World Financial Center
New York, New York 10281
Transfer Agent:
Shareholder Services, Inc.
P.O. Box 5270
Denver, Colorado 80217
(800) 525-7048
36
<PAGE>
General Distributor:
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, NY 10048
/ / GROWTH AND INCOME FUND
/ / OPPORTUNITY FUND
/ / SMALL CAPITALIZATION FUND
/ / QUEST FOR VALUE FUND, INC.
/ / QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
November __, 1995
PROSPECTUS
<PAGE>
Statement of Additional Information
QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
Two World Trade Center
New York, New York 10048
(800) 525-7048
This Statement of Additional Information (the "Additional
Statement") is not a Prospectus. Investors should understand
that this Additional Statement should be read in conjunction with
the Prospectus dated November , 1995 (the "Prospectus") of the
Quest for Value Global Equity Fund, Inc. (the "Fund") which may
be obtained by written request to Shareholder Services, Inc.
("SSI"), P.O. Box 5270 Denver, Colorado 80217 or by calling SSI
at (800) 525-7048.
The date of this Additional Statement is November , 1995.
QUEST FOR VALUE is a registered service mark of Oppenheimer Capital
1
<PAGE>
TABLE OF CONTENTS
Page
----
INVESTMENT OF THE FUND'S ASSETS............................ 3
OTHER RISK FACTORS AND SPECIAL CONSIDERATIONS.............. 15
INVESTMENT RESTRICTIONS.................................... 19
DIRECTORS AND OFFICERS..................................... 21
INVESTMENT MANAGEMENT AND OTHER SERVICES................... 25
DETERMINATION OF NET ASSET VALUE........................... 30
PERFORMANCE INFORMATION.................................... 31
DISTRIBUTION AND SERVICE PLANS............................. 37
ADDITIONAL INFORMATION..................................... 39
Appendix A -- Ratings...................................... A-1
Financial Statements....................................... B-1
2
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INVESTMENT OF THE FUND'S ASSETS
The investment objective and policies of the Fund are
described in the Prospectus. A further description of the Funds'
investments and investment methods appears below.
TYPE OF SECURITIES IN WHICH THE FUNDS MAY INVEST. As
discussed in the Prospectus, the Fund seeks to achieve its
investment objective through investment primarily in equity
securities. In addition to investing directly in equity
securities, the Fund may invest in American Depository Receipts
("ADRs") and European Depository Receipts ("EDRs"). Generally,
ADRs in registered form are U.S. dollar denominated securities
designed for use in the U.S. securities markets, which represent
and may be converted into the underlying foreign security. EDRs
are typically issued in bearer form and are designed for use in
the European securities markets. No more than 5% of the Fund's
assets will be invested in ADRs or EDRs sponsored by persons
other than the underlying issuers. Issuers of the stock of such
unsponsored ADRs are not obligated to disclose material
information in the United States and, therefore, there may not be
a correlation between such information and the market value of
such ADRs. The Fund also may purchase shares of investment
companies or trusts which invest principally in securities in
which the Fund is authorized to invest. The return on a Fund's
investments in investment companies will be reduced by the
operating expenses, including investment advisory and
administrative fees, of such companies. The Fund's investment in
an investment company may require the payment of a premium above
the net asset value of the investment company's shares, and the
market price of the investment company thereafter may decline
without any change in the value of the investment company's
assets. The Fund will not invest in any investment company or
trust unless it is believed that the potential benefits of such
investment are sufficient to warrant the payment of any such
premium. Under the Investment Company Act of 1940, the Fund may
not invest more than 10% of its assets in investment companies or
more than 5% of its total assets in the securities of any one
investment company, nor may it own more than 3% of the
outstanding voting securities of any such company. To the extent
the Fund invests in securities in bearer form it may be more
difficult to recover securities in the event such securities are
lost or stolen.
If the Fund invests in an entity which is classified as a
"passive foreign investment company" ("PFIC") for U.S. tax
purposes, the application of certain technical tax provisions
applying to such companies could result in the imposition of
federal income tax with respect to such investments at the Fund
level which could not be eliminated by distributions to
shareholders. The U.S. Treasury has issued proposed regulations
which establish a mark-to-market regime that allows a regulated
investment company ("RIC") to avoid most, if not all, of the
difficulties posed by the PFIC rules. In any event, it is not
anticipated that any taxes on the Fund with respect to
investments in PFIC's would be significant.
PRIVATE PLACEMENTS. The Fund may invest in securities which
are subject to restriction on resale because they have not been
registered under the Securities Act of 1933, or which are
otherwise not readily marketable. These securities are generally
referred to as private placements or restricted securities.
Limitations on the resale of such securities may have an adverse
effect on their marketability, and may prevent the Fund from
disposing of them promptly at reasonable prices. The Fund may
have to bear the expense of registering such securities for
resale and risk the substantive
3
<PAGE>
delays in effecting such registration. However, as described in
the Prospectus, the Fund may avail themselves of recently adopted
regulatory changes to the Securities Act of 1933 ("Rule 144A")
which permit the Fund to purchase securities which have been
privately placed and resell such securities to certain qualified
institutional buyers without restriction. Since it is not
possible to predict with assurance exactly how this market for
restricted securities sold and offered under Rule 144A will
develop, the Boards of Directors will carefully monitor the
Fund's investments in these securities, focusing on such
important factors, among others, as valuation, liquidity and
availability of information. This investment practice could
have the effect of increasing the level of illiquidity in the
Fund to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these restricted
securities.
Securities of foreign issuers often have not been registered
in the U.S. Accordingly, if the Fund wishes to sell unregistered
foreign securities in the U.S. it will avail itself of Rule 144A.
CONVERTIBLE SECURITIES. The Fund may invest in fixed-income
securities which are convertible into common stock. Convertible
securities rank senior to common stocks in a corporation's
capital structure and, therefore, entail less risk than the
corporation's common stock. The value of a convertible security
is a function of its "investment value" (its value as if it did
not have a conversion privilege), and its "conversion value" (the
security's worth if it were to be exchanged for the underlying
security, at market value, pursuant to its conversion privilege).
To the extent that a convertible security's investment value
is greater than its conversion value, its price will be primarily
a reflection of such investment value and its price will be
likely to increase when interest rates fall and decrease when
interest rates rise, as with a fixed-income security (the credit
standing of the issuer and other factors may also have an effect
on the convertible security's value). If the conversion value
exceeds the investment value, the price of the convertible
security will rise above its investment value and, in addition,
will sell at some premium over its conversion value. (This
premium represents the price investors are willing to pay for the
privilege of purchasing a fixed-income security with a
possibility of capital appreciation due to the conversion
privilege.) At such times the price of the convertible security
will tend to fluctuate directly with the price of the underlying
equity security. Convertible securities may be purchased by the
Fund at varying price levels above their investment values and/or
their conversion values in keeping with the Fund's objectives.
FOREIGN CURRENCY TRANSACTIONS. When the Fund agrees to
purchase or sell a security in a foreign market it will generally
be obligated to pay or entitled to receive a specified amount of
foreign currency and will then generally convert dollars to that
currency in the case of a purchase or that currency to dollars in
the case of a sale. The Fund will conduct its foreign currency
exchange transactions either on a spot basis (i.e., cash) at the
spot rate prevailing in the foreign currency exchange market, or
through entering into forward foreign currency contracts
("forward contracts") to purchase or sell foreign currencies. The
Fund may enter into forward contracts in order to lock in the
U.S. dollar amount it must pay or expects to receive for a
security it has agreed to buy or sell. The Fund may also enter
into forward currency contracts with respect to the Fund's
portfolio positions when it believes that a particular currency
may change unfavorably compared to the U.S. dollar. A forward
contract involves an obligation to purchase or sell a specific
currency at a future date, which
4
<PAGE>
may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market
conducted directly between currency traders (usually large,
commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are
charged at any stage for trades.
The Fund's custodian bank will place cash, U.S. Government
securities or debt securities in a separate account of the Fund
in an amount equal to the value of the Fund's total assets
committed to the consummation of any such contract in such
account and if the value of the securities placed in the separate
account declines, additional cash or securities will be placed in
the account on a daily basis so that the value of the account
will equal the amount of the Fund's commitments with respect to
such forward contracts. If, rather than cash, portfolio
securities are used to secure such a forward contract, on the
settlement of the forward contract for delivery by the Fund of a
foreign currency, the Fund may either sell the portfolio security
and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract
obligating it to purchase, on the same settlement date, the same
amount of foreign currency.
The Fund may effect currency hedging transactions in foreign
currency futures contracts, exchange-listed and over-the-counter
call and put options on foreign currency futures contracts and on
foreign currencies. The use of forward futures or options
contracts will not eliminate fluctuations in the underlying
prices of the securities which the Fund owns or intend to
purchase or sell. They simply establish a rate of exchange for a
future point in time. Additionally, while these techniques tend
to minimize the risk of loss due to a decline in the value of the
hedged currency, their use tends to limit any potential gain
which might result from the increase in value of such currency.
In addition, such transactions involve costs and may result in
losses.
Although the Fund values its assets daily in terms of U.S.
dollars, it does not intend to convert its holdings of foreign
currencies into U.S. dollars on a daily basis. It will, however,
do so from time to time, and investors should be aware of the
costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit
based on the spread between the prices at which they are buying
and selling various currencies. Thus, a dealer may offer to sell
a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that
currency to the dealer.
Under Internal Revenue Code Section 988, special rules are
provided for certain transactions in a currency other than the
taxpayer's functional currency (i.e., unless certain special
rules apply, currencies other than the U.S. dollar). In general,
foreign currency gains or losses from forward contracts, futures
contracts that are not "regulated futures contracts", and from
unlisted options will be treated as ordinary income or loss under
Code Section 988. Also, certain foreign exchange gains or losses
derived with respect to fixed-income securities are also subject
to Section 988 treatment. In general, therefore, Code Section
988 gains or losses will increase or decrease the amount of the
Fund's investment company taxable income available to be
distributed to shareholders as ordinary income, rather than
increasing or decreasing the amount of the Fund's net capital
gain. Additionally, if Code Section 988 losses exceed other
investment company taxable income during a taxable year, the Fund
would not be able to make any ordinary income distributions.
5
<PAGE>
PORTFOLIO TRADING. It is anticipated that the Fund's
portfolio turnover rate will not exceed 100% in any one year.
However, as it is difficult to anticipate actual portfolio
turnover, no guarantee can be given that the actual portfolio
turnover rates of the Fund will not be greater or less than these
predictions. A 100% turnover rate would occur, for example, if
100% of the securities held in the Fund's portfolio (excluding
all securities whose maturities at acquisition were one year or
less) were sold and replaced within one year.
SECURITY LOANS. Consistent with applicable regulatory
requirements and procedures adopted by the Board of Directors,
the Fund may lend its portfolio securities to brokers, dealers
and other financial institutions, provided that such loans are
callable at any time by the Fund (subject to notice provisions
described below), and are at all times secured by cash or cash
equivalents, which are maintained in a segregated account
pursuant to applicable regulations and that are equal to at least
the market value, determined daily, of the loaned securities.
The advantage of such loans is that the Fund continues to receive
the income on the loaned securities while at the same time
earning interest on the cash amounts deposited as collateral,
which will be invested in short-term obligations.
A loan may be terminated by the borrower on one business
day's notice, or by the Fund on five business days' notice. If
the borrower fails to deliver the loaned securities within five
days after receipt of notice, the Fund could use the collateral
to replace the securities while holding the borrower liable for
any excess of replacement cost over collateral. As with any
extensions of credit, there are risks of delay in recovery and in
some cases, even loss of rights in the collateral should the
borrower of the securities fail financially. However, these
loans of portfolio securities will only be made to firms deemed
by the Fund's management to be creditworthy and when the income
which can be earned from such loans justifies the attendant
risks. Upon termination of the loan, the borrower is required to
return the securities to the Fund. Any gain or loss in the
market price during the loan period would inure to the Fund. A
Fund will pay reasonable finder's, administrative and custodial
fees in connection with a loan of its securities. The
creditworthiness of firms to which each Fund lends its portfolio
securities will be monitored on an ongoing basis by its Board of
Directors.
When voting or consent rights which accompany loaned
securities pass to the borrower, each Fund will follow the policy
of calling the loaned securities, to be delivered within one day
after notice, to permit the exercise of such rights if the
matters involved would have a material effect on the Fund's
investment in such loaned securities. Neither Fund will lend
portfolio securities with a value in excess of one-third of its
total assets at the time of the loan.
REPURCHASE AGREEMENTS. When cash may be available for only
a few days, it may be invested by the Fund in repurchase
agreements until such time as it may otherwise be invested or
used for payments of obligations of the Fund. Repurchase
agreements, which may be viewed as a type of secured lending by
the Fund, typically involve the acquisition by the Fund of
government securities or other securities from a selling
financial institution such as a bank, savings and loan
association or broker-dealer. The agreement provides that the
Fund will sell back to the institution, and that the institution
will repurchase, the underlying security ("collateral") at a
specified price and at a fixed time
6
<PAGE>
in the future, usually not more than seven days from the date
of purchase. The Fund will accrue interest from the institution
until the time when the repurchase is to occur. Although such
date is deemed by the Fund to be the maturity date of a
repurchase agreement, the maturities of securities subject to
repurchase agreements are not subject to any limits and may
exceed one year.
While repurchase agreements involve certain risks not
associated with direct investments in debt securities, the Fund
follow procedures designed to minimize such risks. These
procedures include effecting repurchase transactions only with
large, well capitalized and well established financial
institutions under guidelines established and monitored by the
Directors of the Fund. In addition, the collateral will be
maintained in a segregated account and will be marked-to-market
daily to determine that the full value of the collateral, as
specified in the agreement, does not decrease below the purchase
price plus accrued interest. If such decrease occurs, additional
collateral will be requested and, when received, added to
maintain full collateralization. In the event of a default or
bankruptcy by a selling financial institution, the Fund will seek
to liquidate such collateral. However, the exercise of the
Fund's right to liquidate such collateral could involve certain
costs or delays and, to the extent that proceeds from any sale
upon a default of the obligation to repurchase were less than the
repurchase price, the Fund could suffer a loss. It is the
current policy of the Fund not to invest in repurchase agreements
that do not mature within seven days if any such investment,
together with any other illiquid assets held by the Fund, amount
to more than 15% of its total assets. The Fund's investments in
repurchase agreements may at times be substantial when, in the
view of OpCap Advisors, liquidity or other considerations
warrant.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD
COMMITMENTS. As discussed in the Prospectus, from time to time,
in the ordinary course of business, the Fund may purchase
securities on a when-issued or delayed delivery basis and may
purchase or sell securities on a forward commitment basis. When
such transactions are negotiated, the price is fixed at the time
of the commitment, but delivery and payment can take place a
month or more after the date of the commitment. The securities
so purchased are subject to market fluctuation and no interest
accrues to the purchaser during this period. While the Fund will
only purchase securities on a when-issued, delayed delivery or
forward commitment basis with the intention of acquiring the
securities, the Fund may sell the securities before the
settlement date, if it is deemed advisable. At the time the Fund
makes the commitment to purchase securities on a when-issued or
delayed delivery basis, the Fund will record the transaction and
thereafter reflect the value, each day, of such security in
determining the net asset value of the Fund. At the time of
delivery of the securities, the value may be more or less than
the purchase price. The Fund will also establish a segregated
account with the Fund's custodian bank in which it will
continuously maintain cash or U.S. Government securities or other
high grade debt portfolio securities equal in value to
commitments for such when-issued or delayed delivery securities;
subject to this requirement, the Fund may purchase securities on
such basis without limit. An increase in the percentage of the
Fund's assets committed to the purchase of securities on a when-
issued or delayed delivery basis may increase the volatility of
the Fund's net asset value. The Fund's management and Directors
do not believe that the Fund's net asset value or income will be
adversely affected by its purchases of securities on such basis.
7
<PAGE>
SECURITY SELECTION PROCESS. The allocation of assets of the
Fund between U.S. and foreign markets will vary from time to time
as deemed appropriate by OpCap Advisors. It is a dynamic process
based on an on-going analysis of economic and political
conditions, the growth potential of the securities markets
throughout the world, currency exchange considerations and the
availability of attractively priced securities within the
respective markets. In all markets, security selection is
designed to reduce risk through a value oriented approach in
which emphasis is placed on identifying well-managed companies
which, represent exceptional values in terms of such factors as
assets, earnings and growth potential.
While the U.S. securities markets represented more than 50%
of the capitalization of the global securities markets in the
late 1970s, a combination of factors reduced that percentage to
approximately 33% as of December 31, 1994. Moreover, the
relative performance of the securities markets of different
countries, expressed in terms of United States dollars, varies
widely. A global portfolio provides U.S. investors with the
opportunity to participate in these markets, diversifying their
domestic portfolios so that their investments will not be
influenced solely by the political, economic and fiscal events
affecting the U.S.
HEDGING. As stated in the Prospectus, the Fund may engage
in transactions in options and futures. Information about the
options and futures transactions the Fund may enter into is set
forth below.
FINANCIAL FUTURES. The Fund may purchase and sell futures
contracts that are currently traded, or may in the future be
traded, on U.S. and foreign commodity exchanges on common stocks,
such underlying fixed-income securities as U.S. Treasury bonds,
notes, and bills and/or any foreign government fixed-income
security ("interest rate" futures), on various currencies
("currency" futures) and on such indexes of U.S. or foreign
equity and fixed-income securities as may exist or come into
being, such as the Standard & Poor's 500 Index or the Financial
Times Equity Index ("index" futures). No price is paid or
received upon the purchase of a financial future. Upon entering
into a futures transaction, a Fund will be required to deposit an
initial margin payment equal to a specified percentage of the
contract value. Initial margin payments will be deposited with
the Fund's custodian bank in an account registered in the futures
commission merchant's name; however, the futures commission
merchant can gain access to that account only under specified
conditions. As the future is marked to market to reflect changes
in its market value, subsequent payments, called variation
margin, will be made to or from the futures commission merchant
on a daily basis. Prior to expiration of the future, if the Fund
elects to close out its position by taking an opposite position,
a final determination of variation margin is made, additional
cash is required to be paid by or released to the Fund, and any
loss or gain is realized for tax purposes. Although financial
futures by their terms call for the actual delivery or
acquisition of the specified debt security, in most cases the
obligation is fulfilled by closing out the position.
INFORMATION ON PUTS AND CALLS. The Fund is authorized to
write covered put and call options and purchase put and call
options on the securities in which it may invest. When the Fund
writes a call, it receives a premium and agrees to sell the
callable securities to a purchaser of a corresponding call during
the call period (usually not more than 9 months) at a fixed
exercise price (which may differ from
8
<PAGE>
the market price of the underlying securities) regardless of
market price changes during the call period. If the call is
exercised, the fund forgoes any possible profit from an
increase in market price over the exercise price. The Fund
may, in the case of listed options, purchase calls in "closing
purchase transactions" to terminate a call obligation. A profit
or loss will be realized, depending upon whether the net of the
amount of option transaction costs and the premium received on
the call written is more or less than the price of the call
subsequently purchased. A profit may be realized if the call
lapses unexercised, because the Fund retains the underlying
security and the premium received. Sixty percent of any such
profits are considered long-term gains and forty percent are
considered short-term gains for tax purposes. If, due to a lack
of a market, the Fund could not effect a closing purchase
transaction, it would have to hold the callable securities
until the call lapsed or was exercised. The Fund's custodian,
or a securities depository acting for the custodian, will act
as the Funds' escrow agent, through the facilities of the Options
Clearing Corporation ("OCC") in connection with listed calls,
as to the securities on which the Funds have written calls,
or as to other acceptable escrow securities, so that no margin
will be required for such transaction. OCC will release the
securities on the expiration of the calls or upon the Fund's
entering into a closing purchase transaction.
When the Fund purchases a call (other than in a closing
purchase transaction), it pays a premium and has the right to buy
the underlying investment from a seller of a corresponding call
on the same investment during the call period (or on a certain
date for OTC options) at a fixed exercise price. The Fund
benefits only if the call is sold at a profit or if, during the
call period, the market price of the underlying investment is
above the call price plus the transaction costs and the premium
paid for the call and the call is exercised. If a call is not
exercised or sold (whether or not at a profit), it will become
worthless at its expiration date and the Fund will lose its
premium payment and the right to purchase the underlying
investment.
With OTC options, such variables as expiration date,
exercise price and premium will be agreed upon between the Fund
and the transacting dealer, without the intermediation of a third
party such as the OCC. If a transacting dealer fails to make
delivery on the securities underlying an option it has written,
in accordance with the terms of the option as written, the Fund
could lose the premium paid for the option as well as any
anticipated benefit of the transaction. The Fund will engage in
OTC option transactions only with primary U.S. Government
securities dealers recognized by the Federal Reserve Bank of New
York. In the event that any OTC option transaction is not
subject to a forward price at which the Fund has the absolute
right to repurchase the OTC option which it has sold, the value
of the OTC option purchased and of the Fund assets used to
"cover" the OTC option will be considered "illiquid securities"
and will be subject to the 10% limit on illiquid securities. The
"formula" on which the forward price will be based may vary among
contracts with different primary dealers, but it will be based on
a multiple of the premium received by the Fund for writing the
option plus the amount, if any, of the option's intrinsic value,
i.e., current market value of the underlying securities minus the
option's strike price.
A put option gives the purchaser the right to sell, and the
writer the obligation to buy, the underlying investment at the
exercise price during the option period (or on a certain date for
OTC options). The investment characteristics of writing a put
covered by segregated liquid assets equal to the exercise price
of the put are similar to those of writing a covered call. The
premium paid on a put
9
<PAGE>
written by a Fund represents a profit, as long as the price of
the underlying investment remains above the exercise price.
However, the Fund has also assumed the obligation during
the option period to buy the underlying investment from the
buyer of the put at the exercise price, even though the value
of the investment may fall below the exercise price. If the
put expires unexercised, the Fund (as writer) realizes a gain in
the amount of the premium. If the put is exercised, the Fund
must fulfill its obligation to purchase the underlying investment
at the exercise price, which will usually exceed the market value
of the investment at that time. In that case, the Fund may incur
a loss upon disposition, equal to the sum of the sale price
of the underlying investment and the premium received minus
the sum of the exercise price and any transaction costs incurred.
When writing put options, to secure its obligation to pay
for the underlying security, the Fund will deposit in escrow
liquid assets with a value equal to at least the exercise price
of the option. As a result, the Fund forgoes the opportunity of
investing the segregated assets or writing calls against those
assets. As long as the Fund's obligation as a put writer
continues, the Fund may be assigned an exercise notice by the
broker-dealer through whom such option was sold, requiring the
Fund to purchase the underlying security at the exercise price.
The Fund has no control over when it may be required to purchase
the underlying security, since it may be assigned an exercise
notice at any time prior to the termination of its obligation as
the writer of the put. This obligation terminates upon the
earlier of the expiration of the put, or the consummation by the
Fund of a closing purchase transaction by purchasing a put of the
same series as that previously sold. Once the Fund has been
assigned an exercise notice, it is thereafter not allowed to
effect a closing purchase transaction.
The Fund may effect a closing purchase transaction to
realize a profit on an outstanding put option it has written or
to prevent an underlying security from being put to it.
Furthermore, effecting such a closing purchase transaction will
permit the Fund to write another put option to the extent that
the exercise price thereof is secured by the deposited assets, or
to utilize the proceeds from the sale of such assets for other
investments by the Fund. The Fund will realize a profit or loss
from a closing purchase transaction if the cost of the
transaction is less or more than the premium received from
writing the option.
When the Fund purchases a put, it pays a premium and has a
right to sell the underlying investment at a fixed exercise price
to a seller of a corresponding put on the same investment during
the put period if it is a listed option (or on a certain date if
it is an OTC option). Buying a put on securities or futures held
by it permits the Fund to attempt to protect itself during the
put period against a decline in the value of the underlying
investment below the exercise price. In the event of a decline
in the market, the Fund could exercise, or sell the put option at
a profit that would offset some or all of its loss on the
portfolio securities. If the market price of the underlying
investment is above the exercise price and as a result, the put
is not exercised, the put will become worthless at its expiration
date and the purchasing Fund will lose the premium paid and the
right to sell the underlying securities; the put may, however, be
sold prior to expiration (whether or not at a profit).
Purchasing a put on futures or securities not held by it permits
the Fund to protect its portfolio securities against a decline in
the market to the extent that the prices of the future or
securities underlying the put move in a similar pattern to the
prices of the securities in the Fund's portfolio.
10
<PAGE>
An option position may be closed out only on a market which
provides secondary trading for options of the same series, and
there is no assurance that a liquid secondary market will exist
for any particular option. The Fund's option activities may
affect its turnover rate and brokerage commissions. The exercise
of calls written by a Fund may cause that Fund to sell from its
portfolio securities to cover the call, thus increasing its
turnover rate in a manner beyond the Fund's control. The
exercise of puts on securities or futures will increase portfolio
turnover. Although such exercise is within the Fund's control,
holding a put might cause the Fund to sell the underlying
investment for reasons which would not exist in the absence of
the put. The Fund will pay a brokerage commission every time it
purchases and sells a put or a call or purchases or sells a
related investment in connection with the exercise of a put or a
call.
The Fund may purchase and write call and put options on
futures contracts which are traded on an exchange and enter into
closing transactions with respect to such options to terminate an
existing position. An option on a futures contract gives the
purchaser the right (in return for the premium paid) to assume a
position in a futures contract (a long position if the option is
a call and a short position if the option is a put) at a
specified exercise price at any time during the term of the
option. Upon exercise of the option, the delivery of the futures
position by the writer of the option to the holder of the option
is accompanied by delivery of the accumulated balance in the
writer's futures margin account, which represents the amount by
which the market price of the futures contract at the time of
exercise exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures
contract.
The Fund may purchase and write options on futures contracts
for hedging purposes. The purchase of a call option on a futures
contract is similar in some respects to the purchase of a call
option on an individual security. Depending on the pricing of
the option compared to either the price of the futures contract
upon which it is based or the price of the underlying securities,
it may or may not be less risky than ownership of the futures
contract or underlying securities. As with the purchase of
futures contracts, when the Fund is not fully invested it may
purchase a call option on a futures contract to hedge against an
anticipated increase in securities prices.
The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
security which is deliverable upon exercise of the futures
contract. If the futures price at expiration of the option is
below the exercise price, the Fund will retain the full amount of
the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's portfolio holdings.
The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security which is
deliverable upon exercise of the futures contract. If the
futures price at expiration of the option is higher than the
exercise price, the Fund will retain the full amount of the
option premium which provides a partial hedge against any
increase in the price of securities which the Fund intends to
purchase. If a put or call option the Fund has written is
exercised, the Fund will incur a loss which will be reduced by
the amount of the premium it receives. Depending on the degree
of correlation between changes in the value of its portfolio
securities and changes in the value of its futures positions, the
Fund's losses from existing options may to some extent be reduced
or increased by changes in the value of portfolio securities.
11
<PAGE>
The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put
options on portfolio securities. For example, the Fund may
purchase a put option on a futures contract to hedge the Fund's
portfolio against the risk of a decline in securities prices.
The amount of risk the Fund assumes when it purchases an
option on a futures contract is the premium paid for the option
plus related transaction costs. In addition to the correlation
risks discussed above, the purchase of an option also entails the
risk that changes in the value of the underlying futures contract
will not be fully reflected in the value of the option purchased
REGULATORY ASPECTS OF HEDGING INSTRUMENTS. Transactions in
options by the Fund are subject to limitations established (and
changed from time to time) by each of the exchanges governing the
maximum number of options which may be written or held by a
single investor or group of investors acting in concert,
regardless of whether the options were written or purchased on
the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through
one or more brokers. Thus, the number of options which a fund
may write or hold may be affected by options written or held by
other investment companies and discretionary accounts of the
manager, including other investment companies having the same or
an affiliated investment advisor. An exchange may order the
liquidation of positions found to be in violation of those limits
and may impose certain other sanctions.
Due to requirements under the Investment Company Act of 1940
(the "1940 Act"), when the Fund sells a future, it will maintain
in a segregated account or accounts with its custodian bank, cash
or readily marketable short-term (maturing in one year or less)
debt instruments in an amount equal to the market value of such
future, less the margin deposit applicable to it unless the Fund
holds an offsetting position.
The Fund must operate within certain restrictions as to its
long and short positions in futures and options thereon under a
rule ("CFTC Rule") adopted by the Commodity Futures Trading
Commission ("CFTC") under the Commodity Exchange Act (the "CEA"),
which excludes the Fund from registration with the CFTC as a
"commodity pool operator" (as defined under the CEA). Under
those restrictions a fund may not enter into any financial
futures or options contract unless such transactions are for bona
fide hedging purposes, or for other purposes only if the
aggregate initial margins and premiums required to establish such
non-hedging positions would not exceed 5% of the liquidation
value of its assets. A fund may use futures and options thereon
for bona fide hedging or for other purposes within the meaning
and intent of the applicable provisions of the CEA.
TAX ASPECTS OF HEDGING INSTRUMENTS. The Fund intends to
qualify as a "regulated investment company" under the Internal
Revenue Code. One of the tests for such qualification is that at
least 90% of its gross income must be derived from dividends,
interest and gains from the sale or other disposition of
securities. Another test is that less than 30% of its gross
income must be derived from gains realized on the sale of
securities held for less than three months. In connection with
the 90% test, the Internal Revenue Code specifies that income
from options, futures and other gains derived from investments in
securities is qualifying income under the 90% test. Due to the
30% limitation, each Fund will limit the extent to which it
engages in the following activities, but, except as otherwise set
forth herein or in the
12
<PAGE>
Prospectus, will not be precluded from them: (i) selling
investments, including futures, held for less than three months,
whether or not they were purchased on the exercise of a call
held by the Fund; (ii) writing or purchasing calls on
investments held less than three months; (iii) purchasing
calls or puts which expire in less than three months; (iv)
effecting closing transactions with respect to calls or puts
purchased less than three months previously; and (v) exercising
put or calls held by the Fund for less than three months.
Regulated futures contracts, options on certain broad-based
stock indices, options on stock index futures, certain other
futures contracts and options thereon (collectively, "Section
1256 contracts") held by a fund at the end of each taxable year
may be required to be "marked to market" for federal income tax
purposes (that is, treated as having been sold at that time at
market value). Any unrealized gain or loss taxed pursuant to
this rule will be added to realized gains or losses recognized on
Section 1256 contracts sold by a fund during the year, and the
resulting gain or loss will be deemed to consist of 60% long-term
capital gain or loss and 40% short-term capital gain or loss. A
fund may elect to exclude certain transactions from the mark-to-
market rule although doing so may have the effect of increasing
the relative proportion of short-term capital gain (taxable as
ordinary income) and/or increasing the amount of dividends that
must be distributed annually to meet income distribution
requirements.
It should also be noted that under certain circumstances,
the acquisition of positions in hedging instruments may result in
the elimination or suspension of the holding period for tax
purposes of other assets held by the Fund with the result that
the relative proportion of short-term capital gains (taxable as
ordinary income) could increase.
POSSIBLE RISK FACTORS IN HEDGING. There is a risk in
selling futures that the prices of futures will correlate
imperfectly with the behavior of the cash (i.e., market value)
prices of a fund's securities. The ordinary spreads between
prices in the cash and futures markets are subject to distortions
due to differences in the natures of those markets. First, all
participants in the futures market are subject to margin deposit
and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close out futures
contracts through offsetting transactions which could distort the
normal relationship between the cash and futures markets.
Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to
make or take delivery, liquidity in the futures market could be
reduced, thus producing distortion. Third, from the point of
view of speculators, the deposit requirements in the futures
market are less onerous than margin requirements in the
securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price
distortions.
If OpCap Advisors' investment judgment about the general
direction of securities prices is incorrect, the Fund's overall
performance would be poorer than if it had not entered into a
Hedging Transaction. For example, if the Fund has hedged against
the possibility of a decrease in securities prices which would
adversely affect the price of securities held in its portfolio
and securities prices increase instead, the Fund will lose part
or all of the benefit of the increased value of its securities
which it has hedged because it will have offsetting losses in its
futures positions. In addition, in such
13
<PAGE>
situations, if the Fund has insufficient cash, it may have to
sell securities from its portfolio to meet daily variation
margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the
rising market. The Fund may have to sell securities at a time
when it may be disadvantageous to do so. Also when an options
or futures position is a temporary substitute for the purchase
of individual securities (long hedging) by buying futures and/or
calls on such futures or on a particular security, it is
possible that the market may decline. If the Fund then
concludes not to invest in such securities at that time
because of concerns as to possible further market decline or
for other reasons, it will realize a loss on the position that
is not offset by a reduction in the price of the securities
purchased.
OTHER RISK FACTORS AND SPECIAL CONSIDERATIONS
INVESTMENTS IN EASTERN EUROPE. The Fund is authorized to
invest in Eastern European countries; however, the Fund
presently intends not to invest more than 5% of its assets in
such securities. Investments in Eastern Europe are speculative
and involve a high degree of risk of loss. With the change in
power and restructuring of the Soviet Union there is no assurance
that such markets will continue to constitute a viable investment
opportunity for the Fund and there may be a high degree of risk
of expropriation without compensation. The governments of a
number of Eastern European countries previously expropriated
large quantities of private property. The claims of many
property owners against those governments were never finally
settled. There is no assurance that such expropriation will not
occur again. If such expropriation were to recur, the Funds
could lose all or a substantial portion of its investments in
such countries. Further, no accounting standards comparable to
those in the U.S. exist in Eastern European countries. Finally,
even though certain Eastern European currencies may be
convertible into United States dollars, the conversion rates may
be artificial to the actual market values and may be adverse to
the shareholders of the Funds.
The governments of certain Eastern European countries may
require that a governmental or quasi-governmental authority act
as custodian of the Fund's assets invested in such countries.
These authorities may not be qualified to act as foreign
custodians under the 1940 Act and as a result, the Fund would not
be able to invest in the countries in the absence of exemptive
relief from the Securities and Exchange Commission. In addition,
the risk of loss through government confiscation may be increased
in such countries.
RISKS OF DEBT SECURITIES. The Fund is authorized to invest,
to the extent specified in the Prospectus, in bonds rated below
Baa by Moody's Investor Service Inc. ("Moody's) or BBB by
Standard & Poor's Corporation ("S&P") ("high yield bonds,"
commonly known as "junk bonds"). Securities rated less than Baa
by Moody's or BBB by S&P are classified as non-investment grade
securities and are considered speculative by those rating
agencies. Such bonds may be issued as a consequence of corporate
restructurings, such as leveraged buyouts, mergers, acquisitions,
debt recapitalizations, or similar events or by smaller or highly
leveraged companies. Although the growth of the high yield
securities market in the 1980s had paralleled a long economic
expansion, recently many issuers have been affected by adverse
economic and market conditions. It should be recognized that an
economic downturn or increase in interest rates is likely to have
a negative effect on (i) the high yield bond market, (ii) the
value of high yield securities and (iii) the ability of the
securities' issuers to
14
<PAGE>
service their principal and interest payment obligations, to
meet their projected business goals or to obtain additional
financing. When economic conditions appear to be deteriorating,
these bonds may decline in market value regardless of prevailing
interest rates due to heightened investor concerns over credit
quality. In such periods the ability of highly leveraged
issuers to service principal and interest payments, to meet
their business goals or obtain additional financing could be
adversely affected. These bonds may also be affected by
legislative and regulatory developments. The market for these
bonds may, therefore, be less liquid than for investment grade
bonds and their prices more volatile. In addition, there may at
times be significant disparities in the prices quoted for such
bonds by various dealers, making it difficult for the Fund to
rely on such quotes. Also, prices for high yield bonds may be
affected by legislative and regulatory developments. For
example, new federal rules require that savings and loans
gradually reduce their holding of high-yield securities. Also,
from time to time, Congress has considered legislation to
restrict or eliminate the corporate tax deduction for interest
payments or to regulate corporate restructurings such as
takeovers, mergers or leveraged buyouts. Such legislation,
if enacted, may depress the prices of outstanding high yield
bonds. Debt securities rated in the lowest category by Moody's
are of poor standing and there may be present elements of danger
with respect to principal or interest. Debt securities rated in
the lowest category by S&P have a currently identifiable
vulnerability to default and are dependent upon favorable
business, financial and economic conditions to meet timely
payment of interest and repayment of principal. In the event of
adverse business conditions they are not likely to have the
capacity to pay interest and repay principal.
RIGHTS AND WARRANTS. As mentioned in the Prospectus, the
Fund may invest in rights and warrants which entitle the holder
to buy equity securities at a specified price for a specific
period of time. Such securities do not entitle a holder to
dividends or voting rights with respect to the securities which
may be purchased, nor do they represent any rights to the assets
of the issuing company. The value of a right or warrant may be
more volatile than the value of the underlying securities. Also,
their value does not necessarily change with the value of the
underlying securities and a right or warrant ceases to have value
if it is not exercised prior to the expiration date. Rights and
warrants purchased by the Fund which expire without being
exercised will result in a loss to the Fund.
FOREIGN CUSTODY. Rules adopted under the 1940 Act permit
the Fund to maintain its securities and cash in the custody of
certain eligible banks and securities depositories. The Fund's
portfolios of securities of issuers located outside of the U.S.
will be held by their sub-custodians who will be approved by the
directors in accordance with such Rules. Such determination will
be made pursuant to such Rules following a consideration of a
number of factors, including, but not limited to, the reliability
and financial stability of the institution; the ability of the
institution to perform custodial services for the Fund; the
reputation of the institution in its national market; the
political and economic stability of the country in which the
institution is located; and the risks of potential
nationalization or expropriation of the Fund's assets. However,
no assurances can be given that the directors' appraisal of the
risks in connection with foreign custodial arrangements will
always be correct or that expropriation, nationalization, freezes
(including currency blockage), or confiscations of assets that
would affect assets of the Fund will not occur, and shareholders
bear the risk of losses arising from those or other similar
events.
15
<PAGE>
BORROWING. As discussed in the Prospectus, the Fund will
not borrow money except as a temporary measure for extraordinary
or emergency purposes. Such borrowing shall not exceed 33 1/3%
of the value of the Fund's assets, provided that a Fund will make
no additional investments while such borrowing exceeds 5% of its
assets. Borrowing may exaggerate the effect of any increase or
decrease in the value of the portfolio securities on the Fund's
net asset value and money borrowed will be subject to interest
and other costs (which may include commitment fees and/or the
cost of maintaining average balances) which may or may not exceed
the income received from the securities purchased with borrowed
funds.
ADDITIONAL RISKS. Securities in which the Fund may invest
are subject to the provisions of bankruptcy, insolvency or other
laws affecting the rights and remedies of creditors, such as the
federal Bankruptcy Code, and laws, if any, which may be enacted
by Congress or the state legislatures extending the time for
payment of principal or interest, or both or imposing other
constraints upon enforcement of such obligations.
INVESTMENT RESTRICTIONS
The Fund's significant investment restrictions are described
in the Prospectus. The following are also fundamental policies
and, together with the restrictions and other fundamental
policies described in the Prospectus, cannot be changed without
the vote of a majority of the outstanding voting securities of
the Fund, as defined in the 1940 Act. Such a majority is defined
as the lesser of (a) 67% or more of the shares of the Fund
present at a meeting of shareholders of the Fund, if the holders
of more than 50% of the outstanding shares of the Fund are
present or represented by Proxy or (b) more than 50% of the
outstanding shares of the Fund. For purposes of the following
restrictions and those contained in the Prospectus: (i) all
percentage limitations apply immediately after a purchase or
initial investment; (ii) any subsequent change in any applicable
percentage resulting from market fluctuations or other changes in
the amount of total assets does not require elimination of any
security from the Fund; and (iii) the term "industry" does not
include the U.S. Government and agencies and instrumentalities of
the U.S. Government, although a foreign government is deemed to
be an "industry." Unless otherwise noted, the restrictions apply
to the Fund.
Under these additional restrictions, the Fund cannot: (a)
Invest in physical commodities or physical commodity contracts or
speculate in financial commodity contracts, but may purchase and
sell financial futures contracts and options on such futures
contracts exclusively for hedging and other non-speculative
purposes; (b) Invest in real estate; however, the Fund may
purchase securities of issuers which engage in real estate
operations and securities which are secured by real estate or
interests therein; (c) Purchase securities on margin (except for
such short-term loans as are necessary for the clearance of
purchases of portfolio securities) or make short sales of
securities. (Collateral arrangements in connection with
transactions in futures and options are not deemed to be margin
transactions.) (d) Underwrite securities of other companies
except insofar as the Fund may be deemed to be an underwriter
under the Securities Act of 1933 in disposing of a (e) Invest
more than 10% of its assets in securities of other investment
companies or more than 5% of its assets in the securities of one
investment company or more than 3% of the outstanding voting
securities of such company, provided that the foregoing
restrictions on investment company purchases and holdings by the
Fund
16
<PAGE>
are inapplicable to acquisitions in connection with a
merger, consolidation, reorganization or acquisition of assets
(f) Invest in interests in oil, gas or other mineral exploration
or development programs; (g) Invest in securities of any issuer
if, to the knowledge of the Fund, any officer or director of the
Fund or any officer or director of Oppenheimer Management
Corporation or OpCap Advisors owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers and
directors who own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such issuer; (h) Pledge
its assets or assign or otherwise encumber its assets in excess
of 33 1/3% of its net assets (taken at market value at the time
of pledging) and then only to secure borrowings effected within
the limitations set forth in the Prospectus; (i) Invest for the
purpose of exercising control or management of another company
(j) Issue senior securities as defined in the 1940 Act except
insofar as the Fund may be deemed to have issued a senior
security by reason of: (1) entering into any repurchase
agreement; (2) borrowing money in accordance with restrictions
described in the Prospectus; or (3) lending portfolio securities.
In addition, the Fund may not with respect to 75% of its assets,
invest more than 5% of the value of its total assets in the
securities of any one issuer In addition, as a non-fundamental
investment restriction, the Fund (i) may not purchase warrants if
as a result the Fund would then have either more than 5% of its
total assets (determined at the time of investment) invested in
warrants or more than 2% of its total assets invested in warrants
not listed on the New York or American Stock Exchange; (ii) may
not invest in real estate limited partnership programs; (iii) may
not invest in oil, gas or mineral leases; (iv) may not invest
more than 15% of its assets in restricted securities, foreign
equity securities not listed on an exchange, illiquid securities,
securities for which market quotations are not readily available
and repurchase agreements in excess of seven days; and (v) more
than 5% of its assets in unseasoned issues. In addition, to
comply with a state's securities laws, the Fund may not make
loans to any person or individual (except that portfolio
securities may be loaned within the limitations set forth in the
Prospectus).
17
<PAGE>
To the knowledge of the Fund, the following shareholders
held as beneficial or record owners 5% or more of each specified
class of shares of the Fund as of September 7, 1995:
<TABLE>
<CAPTION>
Number and Class of Shares
Beneficially Owned or Held Name and Address Percentage of Class
of Record
- --------------------------- ---------------- -------------------
<S> <C> <C>
562,945 Class A Oppenheimer Group Profit 5.247%
Shares held of record Sharing Plan Indiv A/C
Omnibus Account
Oppenheimer Tower
World Financial Center
New York, NY 10281
5,704,813 Unified Management Corp. 53%
Class A Shares Omnibus Account
held for the benefit of 429 N. Pennsylvania St.
clients. Indianapolis, IN 46204
</TABLE>
DIRECTORS AND OFFICERS
The directors and officers of the Fund, and their principal
occupations during the past five years, are set forth below.
Directors who are "interested persons", as defined in the 1940
Act, are denoted by an asterisk. The address of each is Two
World Trade Center, New York, New York 10048, except as noted.
As of September 7, 1995 all of the Directors and Officers of the
Funds as a group owned less than 1% of the outstanding shares of
each of the Fund.
BRIDGET A. MACASKILL, CHAIRMAN OF THE BOARD OF DIRECTORS AND
PRESIDENT*
Chief Executive Officer of the Manager since September 30, 1995
and President and Chief Operating Officer of the Manager since
1991; prior thereto, Chief Operating Officer of the Manager from
1989 to 1991 and Executive Vice President of the Manager from
1987-1989. Vice President, Director of Oppenheimer Acquisition
Corp., Director of Oppenheimer Partnership Holdings, Inc.,
Chairman and a Director of Shareholder Services, Inc., Director
of Main Street Advisers, Inc., Director of Harbourview Asset
Management Corporation, all of which are subsidiaries of the
Manager.
PAUL Y. CLINTON, DIRECTOR
18
<PAGE>
946 Morris Avenue
Bryn Mawr, Pennsylvania 19010
Director, External Affairs, Kravco Corporation, a national real
estate owner and property management corporation; formerly
President of Essex Management Corporation, a management
consulting company; Trustee of Capital Cash Management Trust,
Prime Cash Fund and Short Term Asset Reserves, each of which is a
money-market fund; Director of Quest for Value Fund, Inc. and
Quest Cash Reserves, Inc, Trustee of Quest for Value
Accumulation Trust and Quest for Value Family of Funds, all of
which are open-end investment companies. Formerly a general
partner of Capital Growth Fund, a venture capital partnership;
formerly a general partner of Essex Limited Partnership, an
investment partnership; formerly President of Geneve Corp., a
venture capital fund; formerly Chairman of Woodland Capital
Corp., a small business investment company; formerly Vice
President of W.R. Grace & Co.
THOMAS W, COURTNEY, C.F.A., DIRECTOR
P.O. Box 580
Sewickley, Pennsylvania 15143
Principal of Courtney Associates, Inc., a venture capital firm;
former General Partner of Trivest Venture Fund, a private venture
capital fund; former President of Investment Counseling Federated
Investors, Inc.; Trustee of Cash Assets Trust, a money market
fund; Director of Quest for Value Fund, Inc. and Quest Cash
Reserves, Inc., Trustee of Quest for Value Accumulation Trust and
Quest for Value Family of Funds, all of which are open-end
investment companies; former President of Boston Company
Institutional Investors; Trustee of Hawaiian Tax-Free Trust and
Tax Free Trust of Arizona, tax-exempt bond funds; Director of
several privately owned corporations; former Director of
Financial Analysts Federation.
LACY B. HERRMANN, DIRECTOR
380 Madison Avenue, Suite 2300
New York, New York 10017
President and Chairman of the Board of Aquila Management
Corporation (since 1984) and of Incap Management Corporation
(since 1982), the sponsoring organizations and Administrator
and/or Sub-Advisor to the following open-end investment
companies, and Chairman of the Board of Trustees and President of
each; Churchill Cash Reserves Trust (since 1985), Short Term
Asset Reserves (since 1984), Cash Assets Trust (since 1984), U.S.
Treasuries Cash Assets Trust (since 1988), Tax-Free Cash Assets
Trust (since 1988), Prime Cash Fund (since 1982), Oxford Cash
Management Fund (1982-1988) and Trinity Liquid Assets Trust (1982-
1985), each of which is a money market fund, and of Churchill Tax-
Free Fund of Kentucky (since 1986), Tax-Free Fund of Colorado
(since 1986), Tax-Free Trust of Oregon (since 1985), Tax-Free
Trust of Arizona (since 1985), and Hawaiian Tax-Free Trust (since
1984), each of which is a tax-free municipal bond fund; Vice
President, Director, Secretary, and formerly Treasurer of Aquila
Distributors, Inc. (since 1981), distributor of most of the above
funds; President and Chairman of the Board of Trustees of Capital
Cash Management Trust ("CCMT") a money market fund (since 1981)
and an Officer and Trustee/Director of its predecessors
19
<PAGE>
(since 1974); President and Director of STCM Management Company,
Inc., sponsor and Sub-Advisor to CCMT; General Partner of
Tamarack Associates (1966-1984), a private investment partnership
and Chairman of the Board and President of various of its
subsidiaries through 1986. Director of the Quest for Value Fund,
Inc. and Quest Cash Reserves, Inc., and Trustee of the Quest for
Value Accumulation Trust, Quest for Value Family of Funds and The
Saratoga Advantage Trust, each of which is an open-end investment
company.
GEORGE LOFT, DIRECTOR
51 Herrick Road
Sharon, Connecticut 06069
Private Investor; Director of Quest for Value Fund, Inc. and
Quest Cash Reserves, Inc., Trustee of Quest for Value
Accumulation Trust, Quest for Value Family of Funds and The
Saratoga Advantage Trust, all of which are open-end investment
companies, and Director of the Quest for Value Dual Purpose Fund,
Inc., a closed-end investment company.
ROBERT DOLL, JR., VICE PRESIDENT
Execuive Vice President and Director of Equity Investments of the
Manager; an officer and Portfolio Manager of other Oppenheimer
Funds.
ANDREW J. DONOHUE, SECRETARY
Executive Vice President and General Counsel of the Manager and
the Distributor; an officer of other Oppenheimer Funds; formerly
Senior Vice President and Associate General Counsel of the
Manager and the Distributor; partner in Kraft & McManimon (a law
firm); an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-
dealer and investment adviser), and a director and an officer of
First Investors Family of Funds and First Investors Life
Insurance Company.
GEORGE C. BOWEN, TREASURER
3410 South Galena Street Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice
President and Treasurer of the Distributor and HarbourView;
Senior Vice President, Treasurer, Assistant Secretary and a
director of Centennial; Vice President, Treasurer and Secretary
of SSI and SFSI; an officer of other Oppenheimer Funds.
REMUNERATION OF OFFICERS AND DIRECTORS. All officers of the
Fund are officers or directors of the Manager and receive no
salary or fee from the Fund. The following table sets forth the
aggregate compensation received from the Fund and the Fund
Complex managed by OpCap Advisors, the Fund's prior manager, by
the Fund's non-interested directors during the fiscal year ended
November 30, 1994.
20
<PAGE>
<TABLE>
<CAPTION>
Name of Person Aggregate Pension or Estimated Total
- -------------- Compensation Retirement Annual Compensation
from the Benefits Benefits Upon from Fund
Fund Accrued as Part Retirement and Fund
----------- of Fund ------------- Complex
Expenses ------------
---------------
<S> <C> <C> <C> <C>
Paul Y. Clinton $4,200 None None $68,100
Thomas W. Courtney 4,200 None None 66,600
Lacy B. Herrmann 4,200 None None 67,350
George Loft 4,200 None None 74,800
</TABLE>
Messrs. Clinton, Courtney and Herrmann earned directors fees
with respect to 18 investment companies in OpCap Advisors' Fund
Complex and the fees earned by Mr. Loft were with respect to 19
investment companies in the Complex. During such periods the non-
interested Directors received fees from three investment
companies for which they no longer serve as directors and which
are no longer part of the Complex but for which OpCap Advisors
currently serves as subadviser. In addition, during such
periods, Mr. Clinton and Mr. Courtney each served as director
with respect to three investment companies in the Complex for
which they received no fees and Mr. Loft and Mr. Herrmann each
served as director with respect to 10 investment ompanies in the
Complex for which they received no fees. For the purpose of this
paragraph, a portfolio of an investment company organized in
series form is considered to be an investment company.
AMA FAMILY OF FUNDS INDEMNIFICATION. In connection with the
combination of each of the Global Equity Fund and Global Income
Fund with a portfolio of the AMA Family of Funds, Inc., each Fund
has agreed to assume the obligation of such portfolio of AMA
Family of Funds, Inc. to indemnify the directors of the AMA
Family of Funds, Inc. to the fullest extent permitted by law and
the By-Laws of the AMA Family of Funds, Inc.
INVESTMENT MANAGEMENT AND OTHER SERVICES
THE MANAGER AND ITS AFFILIATES. The Manager is wholly-owned
by Oppenheimer Acquisition Corp. ("OAC"), a holding company
controlled by MassMutual. OAC is also owned in part by certain
of the Manager's directors and officers, some of whom also serve
as officers of the Fund and one of whom (Ms. Macaskill) also
serves as Director of the Fund.
The Manager and the Fund has 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 strictly enforced by the Manager.
21
<PAGE>
THE INVESTMENT ADVISORY AGREEMENT. The Manager acts as
investment adviser to the Fund pursuant to the terms of an
Investment Advisory Agreement dated as of November , 1995.
Under the Investment Advisory Agreement, the Manager acts as the
investment adviser for the Fund and supervises the investment
program of the Fund.
Expenses not assumed by the Manager under the Investment
Advisory Agreement or paid by the Distributor will be paid by
Fund including interest, taxes, brokerage commissions, insurance
premiums, compensation, expenses and fees of non-interested
Directors, legal and audit expenses, transfer agent and custodian
fees and expenses, registration fees, expenses of printing and
mailing reports and proxy statements to shareholders, expenses of
shareholders meetings and non-recurring expenses including
litigation. The Investment Advisory Agreement contains no
expense limitation. However, independently of the Investment
Advisory Agreement, the Manager has undertaken to reimburse the
Fund to the extent that the total expenses of the Fund in any
fiscal year (including the investment advisory fee but exclusive
of taxes, interest, brokerage commissions, distribution plan
payments and any extraordinary non-recurring expenses, including
litigation) exceeds the most stringent state regulatory
limitation application to the Fund. At present, that limitation
is imposed by California and limits expenses (with specified
exclusions) to 2.5% of the first $30 million of average annual
net assets, 2% of the next $70 million and 1.5% of average annual
net assets in excess of $100 million.
The payment of the management fee at the end of any month
will be reduced or eliminated such that there will not be any
accrued but unpaid liability under this expense limitation. The
Manager reserves the right to terminate or amend the undertaking
at any time. Any assumption of the Fund's expenses under this
undertaking would lower the Fund's overall expense ratio and
increase its total return during any period in which expenses are
limited.
The Investment Advisory Agreement provides that in the
absence or willful misfeasance, bad faith, or gross negligence in
the performance of its duty, or reckless disregard for its
obligations and duties under the advisory agreement, the Manager
is not liable from any loss resulting from a good faith or
omission on its part with respect to any of its duties
thereunder. The Investment Advisory Agreement permits the
Manager to act as investment adviser for any other person, firm
or corporation and to use the name "Oppenheimer" in connection
with its other investment companies for which it may act as an
investment advisor or general distributor. If the Manager shall
no longer act as investment adviser to the Fund, the right of the
Fund to use "Oppenheimer" as part of its name may be withdrawn.
For the services and facilites to be provided by the
Manager under the Investment Advisory Agreement the Fund will pay
a monthly fee computed as a percentage of the Fund's average
daily net assets. The fee applicable to the Fund will be an
annual fee, payable monthly, at the rate of the first $400
million of net assets, .70% of the next $400 million of net
assets and .65% of net assets over $800 million.
22
<PAGE>
FEES PAID UNDER THE PRIOR INVESTMENT ADVISORY AGREEMENT
OpCap Advisors served as investment adviser to the Fund from
its inception until November , 1995. The following fees were
paid by the Fund to OpCap Advisors for services under the prior
Investment Advisory Agreement: For the fiscal year ended
November 30, 1992, the total advisory fees accrued or paid by the
Fund were $943,392, of which $103,795 was waived by OpCap
Advisors. For the fiscal year ended November 30, 1993, the total
advisory fees accrued or paid by the Fund were $940,930, of
which $187,345 was waived by OpCap Advisors. For the fiscal year
ended November 30, 1994, the total advisory fees accrued or paid
by the Fund were $1,166,949, of which $15,349 was waived by
OpCap Advisors
Expenses not expressly assumed by the Manager under the
Investment Advisory Agreement or by the Distributor are paid
by the Fund. The Fund is responsible for bearing certain expenses
attributable to the Fund but not to a particular class ("Fund
Expenses"), including deferred organization expenses; taxes;
registration fees; typesetting of prospectuses and financial
reports required for distribution to shareholders; brokerage
commissions; fees and related expenses of trustees or directors
who are not interested persons; legal, accounting and audit
expenses; custodian fees; insurance premiums; and trade
association dues. Fund Expenses will be allocated based on the
total net assets of each class. Each class of shares of the Fund
will also be responsible for certain expenses attributable only
to that class ("Class Expenses"). These Class Expenses may
include distribution and service fees, transfer and shareholder
servicing agent fees, professional fees, printing and postage
expenses for materials distributed to current shareholders, state
registration fees and shareholder meeting expenses. Such items
are considered Class Expenses provided such fees and expenses
relate solely to such Class. A portion of printing expenses,
such as typesetting costs, will be divided equally among the
Fund, while other printing expenses, such as the number of copies
printed, will be considered Class Expenses.
The Investment Advisory Agreement was approved by the
Board of Directors, including a majority of the Directors who are
not "interested persons" of the Fund (as defined in the 1940 Act)
and who have no direct or indirect financial interest in such
Agreement, on June 22, 1995 and by the shareholders of the
Fund at a meeting held for that purpose on November 3, 1995..
The Investment Advisory Agreement provides that the Manager
may enter into sub advisory agreements with other affiliated or
unaffiliated registered investment advisers in order to obtain
specialized services for the Fund provided that the Fund is not
required to pay any additional fees for such services. The
Manager has retained OpCap Advisors (previously called Quest for
Value Advisors) pursuant to a Subadvisory Agreement dated as of
November , 1995 with respect to the Fund.
THE SUBADVISORY AGREEMENT
The Subadvisory Agreement provides that OpCap Advisors shall
regularly provide investment advice with respect to the Fund and
invest and reinvest cash, securities and the property comprising
the assets of the Fund. Under the Subadvisory Agreement, OpCap
Advisors agrees not to change the Portfolio Manager of the Fund
without the written approval of the Manager and to provide
assistance
23
<PAGE>
in the distribution and marketing of the Fund. The Subadvisory
Agreement was approved by the Board of Directors, including
a majority of the Directors who are not "interested persons"
of the Fund (as defined in the 1940 Act) and who have no
direct or indirect financial interest in such agreements on June
22, 1995 and by the shareholders of each Fund at a meeting held
for that purpose on November 3, 1995.
Under the Subadvisory Agreement, the Manager will pay OpCap
Advisors an annual fee payable monthly, based on the average
daily net assets of the Fund, equal to 40% of the investment
advisory fee and administration fee collected by the Manager of
the Fund based on the total net assets of the Fund as of the
effective date of the Subadvisory Agreement (the "base amount")
plus 30% of the investment advisory fee and administration fee
collected by the Manager based on the total net assets of the
Fund that exceed the base amount.
The Subadvisory Agreement provides that in the absence of
willful misfeasance, bad faith, negligence or reckless disregard
of its duties or obligations, OpCap Advisors shall not be liable
to the Manager for any act or omission in the course of or
connected with rendering services under the Subadvisory Agreement
or for any losses that may be sustained in the purchase, holding
or sale of any security.
PORTFOLIO TRANSACTIONS. Portfolio decisions are based upon
recommendations of the portfolio manager and the judgment of the
portfolio managers. The Fund will pay brokerage commissions on
transactions in listed options and equity securities. Prices of
portfolio securities purchased from underwriters of new issues
include a commission or concession paid by the issuer to the
underwriter, and prices of debt securities purchased from dealers
include a spread between the bid and asked prices.
The Investment Advisory Agreement contains provisions
relating to the selection of broker-dealers ("brokers") for the
Fund's portfolio transactions. The Manager and the Subadvisor
may use such brokers as may, in their best judgment based on all
relevant factors, implement the policy of the Fund to achieve
best execution of portfolio transactions. While the Manager or
the Subadvisor need not seek advance competitive bidding or base
its selection on posted rates, it is expected to be aware of the
current rates of most eligible brokers and to minimize the
commissions paid to the extent consistent with the interests and
policies of the Fund as established by their Board and the
provisions of the Investment Advisory Agreement.
The Investment Advisory Agreement also provides that,
consistent with obtaining the best execution of the Fund's
portfolio transactions, the Manager and the Subadvisor, in the
interest of the Fund, may select brokers other than affiliated
brokers, because they provide brokerage and/or research services
to the Fund and/or other accounts of the Manager or any
Subadvisor. The commissions paid to such brokers may be higher
than another qualified broker would have charged if a good faith
determination is made by the Manager or the Subadvisor that the
commissions are reasonable in relation to the services provided,
viewed either in terms of that transaction or the Manager's or
the Subadvisor's overall responsibilities to all its accounts.
No specific dollar value need be put on the services, some of
which may or may not be used by the Manager or the Subadvisor for
the benefit of the Fund or other of its advisory clients. To
show
24
<PAGE>
that the determinations were made in good faith, the Manager
or any Subadvisor must be prepared to show that the amount of
such commissions paid over a representative period selected by
the Board was reasonable in relation to the benefits to the Fund.
The Investment Advisory Agreement recognizes that an affiliated
broker-dealer may act as one of the regular brokers for the Fund
provided that any commissions paid to such broker are calculated
in accordance with procedures adopted by the Fund's Board under
applicable SEC rules.
The Subadvisory Agreements permit OpCap Advisors to enter
into "soft dollar" arrangements through the agency of third
parties to obtain services for the Fund. Pursuant to these
arrangements, OpCap Advisors will undertake to place brokerage
business with broker-dealers who pay third parties that provide
services. Any such "soft dollar" arrangements will be made in
accordance with policies adopted by the Board of the Fund and in
compliance with applicable law.
Transactions may be directed to dealers during the course of
an underwriting in return for their brokerage and research
services, which are intangible and on which no dollar value can
be placed. There is no formula for such allocation. The
research information may or may not be useful to one or more of
the Funds and/or other accounts of the Manager or OpCap Advisors;
information received in connection with directed orders of other
accounts managed by the Manager or OpCap Advisors or its
affiliates may or may not be useful to one or more of the Fund.
Such information may be in written or oral form and includes
information on particular companies and industries as well as
market, economic or institutional activity areas. It serves to
broaden the scope and supplement the research activities of the
Manager or OpCap Advisors, to make available additional views for
consideration and comparison, and to enable the Manager or OpCap
Advisors to obtain market information for the valuation of
securities held in a Fund's assets.
Sales of shares of the Fund, subject to applicable rules
covering the Distributor's activities in this area, will also be
considered as a factor in the direction of portfolio transactions
to dealers, but only in conformity with the price, execution and
other considerations and practices discussed above. A Fund will
not purchase any securities from or sell any securities to an
affiliated broker-dealer including Oppenheimer & Co., Inc.
("Opco"), an affiliate of OpCap Advisors, acting as principal for
its own account. OpCap Advisors currently serves as investment
manager to a number of clients, including other investment
companies, and may in the future act as investment manager or
advisor to others. It is the practice of OpCap Advisors to cause
purchase or sale transactions to be allocated among the Fund and
others whose assets it manages in such manner as it deems equita
ble. In making such allocations among the Fund and other client
accounts, the main factors considered are the respective
investment objectives, the relative size of portfolio holdings of
the same or comparable securities, the availability of cash for
investment, the size of investment commitments generally held and
the opinions of the persons responsible for managing the
portfolio of the Fund and other client accounts. When orders to
purchase or sell the same security on identical terms are placed
by more than one of the funds and/or other advisory accounts
managed by OpCap Advisors or its affiliates, the transactions are
generally executed as received, although a fund or advisory
account that does not direct trades to a specific broker ("free
trades") usually will have its order executed first. Purchases
are combined where possible for the purpose of negotiating
brokerage commissions, which in some cases might have a
detrimental effect on the price or volume of the security in a
particular transaction as far as the Fund is concerned. Orders
25
<PAGE>
placed by accounts that direct trades to a specific broker will
generally be executed after the free trades. All orders placed
on behalf of the Fund are considered free trades. However,
having an order placed first in the market does not necessarily
guarantee the most favorable price.
The following table presents information as to the
allocation of brokerage commissions paid by the Fund for the
fiscal years ended November 30, 1992, 1993 and 1994:
<TABLE>
<CAPTION>
Fiscal year ended Total Brokerage Brokerage Commissions Total Amount of Transactions
Commissions Paid Paid to Opco Where Brokerage Commissions
Paid to Opco (1)
- -------------------------------------------------------------------------------------------------
Dollar Amounts % Dollar Amounts %
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/30/92 275,868 85,751 31.08 57,807,717 40.90
11/30/93 200,029 18,503 9.25 102,916,572 15.91
11/30/94 566,615 16,402 2.89 13,811,383 8.3
<FN>
(1) The Fund does not effect principal transactions with Opco. When the
Fund effects principal transactions with other broker-dealers,
commissions are imputed.
During the fiscal year ended November 30, 1994, the Fund directed
$65,558,341 of brokerage transactions to brokers because of research
services provided. The commissions related to such transactions were
$234,399.
</TABLE>
THE DISTRIBUTOR. Under a General Distributor's Agreement
with the Fund dated as of November , 1995, the Distributor acts
as the Fund's principal underwriter in the continuous public
offering of the Class A, Class B and Class C shares of the Fund
but is not obligated to sell a specific number of shares.
Expenses normally attributable to sales, including advertising
and the cost of printing and mailing prospectuses, other than
those furnished to existing shareholders, are borne by the
Distributor. For additional information about distribution of
the Fund's shares and the expenses connected with such
activities, please refer to "Distribution and Service Plans"
below.
THE ADMINISTRATION AGREEMENT. The Manager acts as the Fund's
administrator pursuant to an Administration Agreement as of
November , 1995. The Administration Agreement was approved by
the Fund's directors on June 22, 1995 and by the shareholders
at a meeting called for that purpose on November 3, 1995. The
Administration Agreement will remain in effect for two years from
the date of its execution and may be continued annually
thereafter if approved by a majority vote of the Directors who
are neither interested persons of the Fund nor have any direct or
indirect financial interest in the Administration Agreement, cast
in person at a meeting called for the purpose of voting on such
approval. From the inception of the Fund until November ,
1995, OpCap Advisors served as administrator for the Fund. For
the fiscal years ended November 30, 1992, 1993 and 1994, the
total administrative fees accrued or paid by the Fund to OpCap
Advisors under the Prior Administration Agreement were $314,464,
313,644 and $388,983, respectively.
26
<PAGE>
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined each
day the New York Stock Exchange (the "Exchange") is open, as of
the close of the regular trading session of the Exchange that day
(currently 4:00 p.m. Eastern Time), by dividing the value of the
Fund's net assets by the number of its shares outstanding.
Although the legal rights of Class A, B and C shares are
identical, the different expenses borne by each class may result
in differing net asset values and dividends for each class.
The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, July 4, Labor Day,
Thanksgiving and Christmas Day. It may also close on other days.
Securities listed on a national securities exchange or on
the national market system are valued at the last reported sale
price on that day. If there has been no sale on such day or on
the previous day on which the Exchange was open (if a week has
not elapsed between such days), then the value of such security
is taken to be the reported bid price at the time as of which the
value is being ascertained. Securities traded in the over-the-
counter market but not listed on the national market system are
valued at their last quoted bid price. Any securities or other
assets for which current market quotations are not readily
available are valued at their fair value as determined in good
faith under procedures established by and under the general
supervision and responsibility of each Fund's Board of Directors.
The value of a foreign security is determined in its national
currency and that value is then converted into its U.S. dollar
equivalent at the foreign exchange rate in effect on the date of
valuation.
The Fund's Board of Directors has approved the use of
nationally recognized bond pricing services for the valuation of
the Fund's debt securities. The service selected by the Manager
creates and maintains price matrices of U.S. Government and other
securities from which individual holdings are valued shortly
after the close of business each trading day. Debt securities
not covered by the pricing service are valued based upon bid
prices obtained from dealers who maintain an active market
therein or, if no readily available market quotations are
available from dealers, such securities (including restricted
securities and OTC options) are valued at fair value under the
Board's procedures. Short-term (having a maturity of 60 days or
less) debt securities are valued at amortized cost.
Puts and calls are valued at the last sales price thereof,
or, if there are no transactions, at the last reported sales
price that is within the spread between the closing bid and asked
prices on the valuation date. Futures are valued based on their
daily settlement value. When the Fund writes a call, an amount
equal to the premium received is included in the Fund's statement
of Assets and Liabilities as an asset, and an equivalent deferred
credit is included in the liability section. The deferred credit
is adjusted ("marked-to-market") to reflect the current market
value of the call. If a call written by the Fund is exercised,
the proceeds on the sale of the underlying securities are
increased by the premium received. If a call or put written by
the Fund expires on its stipulated expiration date or if a Fund
enters into a closing transaction, it will realize a gain or loss
depending on whether the premium was more or less than the
transaction costs, without regard to unrealized appreciation or
depreciation on the
27
<PAGE>
underlying securities. If a put held by the Fund is exercised
by it, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of the premium
paid by the Fund.
PERFORMANCE INFORMATION
As discussed in the Prospectus, the Fund may quote its
total return in advertisements and sales literature.
The Fund's average annual total return represents an
annualization of the Fund's total return ("T" in the formula
below), over a particular period and is computed by finding the
current percentage rate which will result in the ending
redeemable value ("ERV" in the formula below). Of a $1,000
investment, ("P" in the formula below) made at the beginning of a
one, five or ten year period, or for the period from the date of
commencement of the Fund's operation, if shorter ("N" in the
formula below). The following formula will be used to compute
the average annual total return for each Fund:
P (1 + T)N = ERV
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
For commencement of
operations* to For the Fiscal Year Ended
November 30, 1994 (1) November 30, 1994 (1)
---------------------------- ---------------------------
Reflecting Without Reflecting Without
Deduction of Deduction of Deduction of Deduction of
Maximum Maximum Maximum Maximum
Sales Charge Sales Charge Sales Charge Sales Charge
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A 5.43%(2) 6.85% 2.14%(2) 8.37%
Class B 1.63 4.82 2.84 7.84
Class C 4.76 4.76 6.77 7.77
<FN>
* The Fund commenced operations on July 2, 1990. Class B and C
shares of the Fund were initially offered on September 2,
1993.
(1) Reflects the waiver of certain advisory fees. Without such
waivers the average annual total returns would have been
lower.
(2) These numbers have been restated to reflect the maximum
sales charge of 5.75% as if it had been in effect throughout
the above periods.
</TABLE>
The preceding table assumes that a $1,000 payment was made at
the beginning of the period shown, that no further payments were
made, that any distributions from the assets of each Fund were
reinvested. The table reflects the historical rates of return
and deductions for all charges, expenses and fees of the Fund.
28
<PAGE>
In addition to the foregoing, the Fund may advertise its total
return over different periods of time by means of aggregate,
average, year by year or other types of total return figures.
Total returns quoted in advertising reflect all aspects of the
Fund's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in the Fund's net
asset value per share over the period. Average annual returns
are calculated by determining the growth or decline in value of a
hypothetical investment in a fund over a stated period, and then
calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in
value had been constant over the period. For example, a
cumulative return of 100% over ten years would produce an average
annual return of 7.18%, which is the steady annual return that
would equal 100% growth on a compounded basis in ten years.
In addition to average annual returns, the Fund may quote
unaveraged or cumulative total returns reflecting the simple
change in value of an investment over a stated period. Average
annual and cumulative total returns may be quoted as a percentage
or as a dollar amount and may be calculated for a single
investment, a series of investments and/or a series of
redemptions over any time period. Total returns and other
performance information may be quoted numerically or in a table,
graph or similar illustration. Total returns may be quoted with
or without taking the Fund's sales charge into account.
Excluding a Fund's sales charge from a total return calculation
produces a higher total return figure.
The total return on an investment made in Class A, B and C shares
of the Fund for the period from commencement of public sale
through November 30, 1994 is as follows:
AGGREGATE TOTAL RETURN
From commencement of operations* to November 30, 1994 (1)
<TABLE>
<CAPTION>
Reflecting Deduction of Without Deduction of
Maximum Sales Charge Maximum Sales Charge
----------------------- --------------------
<S> <C> <C>
Global Equity Fund
Class A 26.33% (2) 34.04% (2)
Class B 2.04% 6.04%
Class C 5.97% 5.97%
<FN>
* The Fund commenced operations on 7/2/90. Class B and C
shares of the Fund were initially offered on 9/2/93.
(1) Reflects the waiver of certain advisory fees and the
reimbursement of certain expenses. Without such waiver, the
inception to date total return for the Fund would have been
lower.
(2) This number has been restated to reflect the maximum sales
charge of 5.75% as if it has been in effect throughout the
above period.
</TABLE>
From time to time the Fund may refer in advertisements to
rankings and performance statistics published by (1) recognized
mutual fund performance rating services including but not limited
to
29
<PAGE>
Lipper Analytical Services, Inc. and Morningstar, Inc., (2)
recognized indexes including but not limited to the Standard &
Poors Composite Stock Price Index, Dow Jones Industrial Average,
Consumer Price Index and EAFE Index and (3) Money Magazine and
other financial publications including but not limited to
magazines, newspapers and newsletters. Performance statistics
may include total returns, measures of volatility or other
methods of portraying performance based on the method used by the
publishers of the information. In addition, comparisons may be
made between yields on certificates of deposit and U.S.
government securities and corporate bonds, and may refer to
current or historic financial or economic trends or conditions.
The performance of the Fund may be compared to the performance
of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be
expressed as mutual fund rankings prepared by Lipper Analytical
Services, Inc. ("Lipper"), and Morningstar, Inc. ("Morningstar"),
independent services located in Summit, New Jersey and Chicago,
Illinois, respectively, that monitor the performance of mutual
funds.. Lipper and Morningstar generally rank funds on the basis
of total return, assuming reinvestment of distributions, but do
not take sales charges or redemption fees into consideration, and
are prepared without regard to tax consequences. In addition to
the mutual fund rankings, performance may be compared to mutual
fund performance indices prepared by Lipper.
From time to time, the Fund's performance also may be compared
to other mutual funds tracked by financial or business
publications and periodicals. For example, the Fund may quote
Morningstar in its advertising materials. Morningstar rates
mutual funds on a one star to five star scale on the basis of
risk-adjusted performance.
The Distributor may provide information designed to help
individuals understand their investment goals and explore various
financial strategies such as general principles of investing,
such as asset allocation, diversification, risk tolerance, goal
setting, and a questionnaire designed to help create a personal
financial profile.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation
(based on CPI), and combinations of various capital markets. The
performance of these capital markets is based on the returns of
different indices.
The Distributor may use the performance of these capital
markets in order to demonstrate general risk-versus-reward
investment scenarios. Performance comparisons may also include
the value of a hypothetical investment in any of these capital
markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the
Fund. The Fund may also compare performance to that of other
compilations or indices that may be developed and made available
in the future.
In advertising materials, the Distributor may reference or
discuss its products and services, which may include: other
Oppenheimer funds; retirement investing; brokerage products and
services; the
30
<PAGE>
effects of dollar-cost averaging and saving for college; and
the risk of marketing timing. In addition, the Distributor
may quote financial or business publications and periodicals,
including model portfolios or allocations, as they relate to
fund management, investment philosophy, and investment
techniques. The Distributor may also reprint, and use as
advertising and sales literature, articles from a quarterly
magazine provided free of charge to Oppenheimer fund
shareholders. The Fund may present its fund number, Quotron
symbol, CUSIP number, and discuss or quote its current portfolio
manager.
VOLATILITY. The Fund may quote various measures of volatility
and benchmark correlation in advertising. In addition, the Fund
may compare these measures to those of other funds. Measures of
volatility seek to compare a fund's historical share price
fluctuations or total returns to those of a benchmark. Measures
of benchmark correlation indicate how valid a comparative
benchmark may be. All measures of volatility and correlation are
calculated using averages of historical data.
Momentum Indicators indicate the Fund's price movements over
specific periods of time. Each point on the momentum indicator
represents the Fund's percentage change in price movements over
that period.
The Fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost
averaging. In such a program, an investor invests a fixed dollar
amount in a fund at periodic intervals, thereby purchasing fewer
shares when prices are high and more shares when prices are low.
While such a strategy does not assure a profit or guard against a
loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the
same intervals. In evaluating such a plan, investors should
consider their ability to continue purchasing shares during
period of low price levels.
The Fund may be available for purchase through retirement plans
or other programs offering deferral of or exemption from income
taxes, which may produce superior after-tax returns over time.
For example, a $1,000 investment earning a taxable return of 10%
annually would have an after-tax of $1,949 after ten years,
assuming tax was deducted from the return each year at a 28%
rate. An equivalent tax-deferred investment would have an after-
tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-
year plan.
DISTRIBUTION AND SERVICE PLANS
The Fund entered into an Amended and Restated Distribution
and Service Plan and Agreement as of November , 1995 (a "Plan")
with Oppenheimer Funds Distributor, Inc. (the "Distributor") with
respect to each Class of shares (the "Plans"). The Plans were
approved on June 22, 1995 by the Directors, including the non-
interested Directors, and by the shareholders of each class of
shares of the Fund at a meeting held for that purpose on November
3, 1995.
The fees under each Plan consist of a service fee at the
annual rate of .25% of the average net assets of the shares and a
distribution fee at the annual rate of .25% of the average net
assets of Class A shares of the Fund and at the annual rate of
.75% of the average net assets of Class B and Class C shares of
the Fund.
31
<PAGE>
The Distributor will be authorized under the Plans to pay
broker dealers, banks or other entities (the "Recipients") that
render assistance in the distribution of shares or provide
administrative support with respect to shares held by customers.
The service fee payments made under the Plans will compensate the
Distributor and the Recipients for providing administrative
support with respect to shareholder accounts. The distribution
fee payments made under the Plans will compensate the Distributor
and the Recipients for providing distribution assistance in
connection with the sale of Fund shares.
The Plans provide that payments may be made by the Manager
or by the Distributor to the Recipients from their own resources
or from borrowings. The Distributor and the Manager may, in
their sole discretion, increase or decrease the amount of
payments they make from their own resources to Recipients.
The Plans may not be amended to increase materially the
amount of payments to be made without the approval of the
relevant class of shareholders of the Fund. In addition, because
Class B shares of each Fund automatically convert into Class A
shares after six years, the Fund is required to obtain the
approval of Class B as well as Class A shareholders for the
proposed amendment to the Class A Plan that would materially
increase the amount to be paid by Class A shareholders under the
Class A Plan. Such approval must be by a "majority" of the Class
A and Class B shares (as defined in the Investment Company Act),
voting separately by class. All material amendments must be
approved by the Independent Directors.
While the Plans are in effect, the Treasurer of the Fund
shall provide separate written reports to the Fund Board of
Directors at least quarterly on the amount of all payments made
pursuant to each Plan, the purpose for which the payment was made
and the identity of each Recipient that received any such
payment. Those reports, including the allocations on which they
are based, will be subject to the review and approval of the
Independent Directors in the exercise of their fiduciary duty.
Each Plan further provides that while it is in effect, the
selection and nomination of those Directors of the Fund who are
not "interested persons" of the Fund is committed to the
discretion of the Independent Directors. This does not prevent
the involvement of others in such selection and nomination if the
final decision on any such selection or nomination is approved by
a majority of such Independent Directors.
Under the Plans, no payment will be made to any Recipient in
any quarter if the aggregate net asset value of all Fund shares
held by the Recipient for itself and its customers does not
exceed a minimum amount, if any, that may be determined from time
to time by a majority of the Fund's Independent Directors.
Initially, the Board of Directors has set the fee at the maximum
rate and set no minimum amount.
Each Plan will remain in effect only if its continuance is
specifically approved at least annually by the vote of both a
majority of the Directors and a majority of the non-interested
Directrors who have no direct or indirect individual financial
interest in the operation of the Plans or any agreements related
thereto (the "Qualified Directors"). The Plans may be terminated
at
32
<PAGE>
any time by vote of a majority of the Qualified Directors or
by a vote of a majority of the relevant class of Shares of the
Fund. In the event of such termination, the Board including the
Qualified Directors shall determine whether the Distributor is
entitled to payment by the Fund of all or a portion of the
service fee and/or the distribution fee with respect to shares
sold prior to the effective date of such termination.
The service fee and the distribution fee payable under the
Plans are subject to reduction or elimination under the limits
imposed by the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. ("NASD Rules"). The Plans are
intended to comply with NASD Rules and Rule 12b-1 adopted under
the 1940 Act. Rule 12b-1 requires that the selection and
nomination of Directors who are not "interested persons" of the
Fund be committed to the discretion of the Qualified Directors
and that the Directors receive quarterly reports on the payments
made under the Plans and the purposes for those payments.
THE PRIOR PLANS From the inception date of the Fund through
November , 1995, OpCap Distributors (formerly known as Quest for
Value Distributors) served as Distributor to the Fund and
provided distribution services pursuant to plans adopted under
the Investment Company Act (the "Prior Plans").
OpCap Distributors has estimated that it spent approximately
the following amounts with respect to Class A, B and C shares of
the Fund for the fiscal year ended November 30, 1994.
<TABLE>
<CAPTION>
Printing and
mailing of
Prospectuses to
Sales Material other than
and current Compensation to Compensation to
Advertising shareholders Dealers Sales Personnel Other (1)
------------- ---------------- --------------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Class A $154,958 $94,017 $590,774 $360,944 $204,049
Class B 40,559 26,237 343,744 97,485 55,223
Class C 28,114 17,762 17,122 66,896 37,844
<FN>
(1) Includes costs of telephone and overhead.
</TABLE>
During the fiscal year ended November 30, 1994, OpCap
Distributors received the following compensation with respect to
the Fund:
PORTION OF SALES COMPENSATION ON
CHARGE ON CLASS A SHARES REDEMPTIONS (CDSC'S)
84,018 $7,300
For the fiscal year ended November 30, 1994, OpCap Distributors
paid $141,383 in distribution and service fees to OpCo with
respect to the Fund.
ADDITIONAL INFORMATION
33
<PAGE>
DESCRIPTION OF THE FUND. The Fund is a corporation formed
under the laws of Maryland on April 25, 1990. It is not
contemplated that regular annual meetings of shareholders of the
Fund will be held; however, a meeting will be held if requested
by the holders of 10% of each corporation's voting securities.
In addition, 10 shareholders holding the lesser of shares having
a net asset value of at least $25,000 or 1% of a Fund's
outstanding shares may advise the Board of Directors in writing
that they wish to communicate with other shareholders of that
Fund for the purpose of requesting a meeting to remove a
director. The Board of Directors will then either give the
applicants access to the Fund's shareholder list or mail the
applicant's communication to all other shareholders at the
applicant's expense.
When issued, the shares of each class of the Fund are fully
paid and have no preemptive, conversion, or other subscription
rights. Each class of shares represents identical interests in
the applicable Fund's investment portfolio. As such, they have
the same rights, privileges and preferences, except with respect
to: (a) the designation of each class, (b) the effect of the
respective sales charges, if any, for each class, (c) the
distribution fees borne by each class, (d) the expenses allocable
exclusively to each class, (e) voting rights on matters
exclusively affecting a single class and (f) the exchange
privilege of each class. Upon liquidation of the Fund,
shareholders are entitled to share pro rata in the net assets
available for distribution to shareholders after all debts and
expenses have been paid. The shares do not have cumulative
voting rights.
REDUCED SALES CHARGES. Sales are made at reduced sales charges
to certain persons described under "Reduced Sales Charges" in the
Prospectus because of economies of scale and/or because there is
little or no sales effort required to make sales to such persons.
POSSIBLE ADDITIONAL PORTFOLIO SERIES. The Board of Directors
is empowered to create additional portfolios of the Fund. If
additional portfolios are created by the Board of Directors,
shares of each such portfolio will be entitled to vote as a class
only to the extent permitted by the 1940 Act (see below) or as
permitted by the Board of Directors. Expenses not otherwise
identified with a particular portfolio will be allocated fairly
among two or more portfolios by the Board of Directors.
Under Rule 18f-2 of the 1940 Act, any matter required to be
submitted to a vote of shareholders of any investment company
which has two or more series outstanding is not deemed to have
been effectively acted upon unless approved by the holders of a
"majority" (as defined in that Rule) of the voting securities of
each series affected by the matter. Such separate voting
requirements do not apply to the election of directors or the
ratification of the selection of accountants. Approval of an
investment management or distribution plan and a change in
fundamental policies would be regarded as matters requiring
separate voting by each portfolio. The Rule contains special
provisions for cases in which an advisory contract is approved by
one or more, but not all, series. A change in investment policy
may go into effect as to one or more series whose holders so
approve the change even though the required vote is not obtained
as to the holders of other affected series.
DISTRIBUTION AGREEMENT. Under the Distribution Agreement
between the Fund and the Distributor, the Distributor acts as the
Fund's agent in the continuous public offering of its shares.
34
<PAGE>
Expenses normally attributable to sales, other than those paid
under the Distribution and Service Plan, are borne by the
Distributor.
INDEPENDENT ACCOUNTANTS. Price Waterhouse LLP, 1177 Avenue of
the Americas, New York, New York, are the independent accountants
of the Fund; their services include examining the annual
financial statements of the Fund as well as other related
services.
CUSTODIAN. State Street Bank and Trust Company acts as
custodian of the assets of the Fund.
THE TRANSFER AGENT. Shareholder Services, Inc., the Fund's
transfer agent, is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for
shareholder servicing and administrative functions.
DISTRIBUTION OPTIONS. Shareholders may change their
distribution options by giving the Transfer Agent three days
prior notice in writing.
SHAREHOLDER SERVICING AGENT FOR CERTAIN SHAREHOLDERS. Unified
Management Corporation (1-800-346-4601) is the shareholder
servicing agent for former shareholders of the AMA Family of
Funds and clients of AMA Investment Advisers, Inc. (which acted
as the investment advisor to the AMA Family of Funds) who acquire
shares of any former Quest Fund, and for former shareholders of
the Unified Funds and Liquid Green Trusts, accounts which
participated or participate in a retirement plan for which
Unified Investment Advisers, Inc. or an affiliate acts as
custodian or trustee, accounts which have a Money Manager
brokerage account, and other accounts for which Unified
Management Corporation is the dealer of record.
TAX INFORMATION. The Federal tax treatment of the Funds'
dividends and distributions is explained in the Prospectus under
the heading "Tax Status." Each Fund will be subject to a
nondeductible 4% excise tax to the extent that it fails to
distribute by the end of any calendar year substantially all of
its ordinary income for that year and capital gains net income
for the one year period ending on October 31 of that year.
RETIREMENT PLANS. The Distributor may print advertisements and
brochures concerning retirement plans, lump sum distributions and
401-k plans. These materials may include descriptions of tax
rules, strategies for reducing risk and descriptions of the 401-k
program offered by the Distributor. From time to time
hypothetical investment programs illustrating various tax-
deferred investment strategies will be used in brochures, sales
literature, and omitting prospectuses. The following examples
illustrate the general approaches that will be followed. These
hypotheticals will be modified with different investment amounts,
reflecting the amounts that can be invested in different types of
retirement programs, different assumed tax rates, and assumed
rates of return. They should not be viewed as indicative of past
or future performance of any Oppenheimer Fund product.
35
<PAGE>
EXAMPLES
<TABLE>
<CAPTION>
Benefits of Long Term Tax-Free Compounding - Benefits of Long Term Tax-Free Compounding -
Single Sum Periodic Investment
- ------------------------------------------------------------------------------------------------------------------------------------
Amount of Contribution: $100,000 Amount Invested Annually: $2,000
- ------------------------------------------------------------------------------------------------------------------------------------
Rates of Return Rates of Return
Years ------------------------------------------- Years -------------------------------------------------
8.00% 10.00% 12.00% 8.00% 10.00% 12.00%
------------------------------------------- -------------------------------------------------
Value at end Value at End
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5 $ 146,933 $ 161,051 $ 176,234 5 $ 12,672 $ 13,431 $ 14,230
10 $ 215,892 $ 259,374 $ 310,585 10 $ 31,291 $ 35,062 $ 39,309
15 $ 317,217 $ 417,725 $ 547,357 15 $ 58,649 $ 69,899 $ 83,507
20 $ 466,096 $ 672,750 $ 964,629 20 $ 98,846 $126,005 $161,397
25 $ 684,848 $1,083,471 $1,700,006 25 $157,909 $216,364 $298,668
30 $1,006,266 $1,744,940 $2,995,992 30 $244,692 $361,887 $540,585
<CAPTION>
Comparison of Taxable and Tax-Free Investing -- Periodic Investments
(Assumed Tax Rate : 28%)
- ------------------------------------------------------------------------------------------------------------------------------------
Amount of Annual Contribution (Pre-Tax):$2,000 Annual Contribution (After Tax): $1,440
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Deferred Rates of Return Fully Taxed Rates of Return
Years ----------------------------------------------- Years ------------------------------------------------
8.00% 10.00% 12.00% 5.76% 7.20% 8.64%
----------------------------------------------- ------------------------------------------------
Value at end Value at End
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5 $ 12,672 $ 13,431 $ 14,230 5 $ 8,544 $ 8,913 $ 9,296
10 $ 31,291 $ 35,062 $ 39,309 10 $ 19,849 $ 21,531 $ 23,364
15 $ 58,649 $ 69,899 $ 83,507 15 $ 34,807 $ 39,394 $ 44,654
20 $ 98,846 $126,005 $161,397 20 $ 54,598 $ 64,683 $ 76,874
25 $157,909 $216,364 $298,668 25 $ 80,785 $100,485 $125,635
30 $244,692 $361,887 $540,585 30 $115,435 $151,171 $199,429
<CAPTION>
Comparison of Tax Deferred Investing
-- Deducting Taxes at End
(Assumed Tax Rate at End: 28%)
-------------------------------------------------------------------------------
Amount of Annual Contribution: $2,000
-------------------------------------------------------------------------------
Tax Deferred Rates of Return
Years ------------------------------------------------------------
8.00% 10.00% 12.00%
------------------------------------------------------------
Value at End
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $ 11,924 $ 12,470 $ 13,046
10 $ 28,130 $ 30,485 $ 33,903
15 $ 50,627 $ 58,728 $ 68,525
20 $ 82,369 $101,924 $127,406
25 $127,694 $169,782 $229,041
30 $192,978 $277,359 $406,021
</TABLE>
36
<PAGE>
APPENDIX A -- RATINGS
DESCRIPTION OF MOODY'S CORPORATE RATINGS
Aaa. Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." 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 position of such
issues.
Aa. Bonds which are rated Aa are 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 fluctuation of
protective elements may be of greater amplitude, or there may be
other elements present which made the long-term risks appear
somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the
future.
Baa. Bonds which are rated Baa are considered as medium
grade obligations, (i.e.; they are neither highly protected nor
poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Ba. Bonds which are rated Ba are judges to have speculative
elements and their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate, and therefore not well safeguarded during both
good and bad times. Uncertainty of position characterizes bonds
in this class.
B. Bonds which are rated B generally lack the
characteristics of a desirable investment. Assurance of interest
and principal payments or of other terms of the contract over
long periods may be small.
Caa. Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be elements of danger
present with respect to principal or interest.
Ca. Bonds which are rated Ca represent obligations which
are speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
A-1
<PAGE>
C. Bonds which are rated C are the lowest rated class of
bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
DESCRIPTION OF S&P'S CORPORATE RATINGS
AAA. Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA. Debt rated AA has a very strong capacity to pay
interest and repay principal and differs from the highest rated
issues only in small degree.
A. Debt rated A has a strong capacity to pay interest and
repay principal and differs from the higher rated issues only in
small degree.
BBB. Debt rated BBB is regarded as having adequate capacity
to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in
this category.
BB. Debt rated BB has less near-term vulnerability to
default than other speculative grade debt. However, it faces
major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payment. The BB
rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B. Debt rated B has a greater vulnerability to default but
presently has the capacity to meet interest and principal
payments. Adverse business, financial or economic conditions
would likely impair capacity or willingness to pay interest and
repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied
BB or BB- rating
CCC. Debt rated CCC has a current identifiable
vulnerability to default and is dependent upon favorable
business, financial and economic conditions to meet timely
payments of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating
category is also used for debt subordinated to senior debt that
is assigned an actual or implied CCC rating.
CC. The rating CC is typically applied to debt subordinated
to senior debt that is assigned an actual or implied CCC rating.
A-2
<PAGE>
C. The rating C is typically applied to debt subordinated
to senior debt that is assigned an actual or implied CCC- debt
rating. The C rating may be used to cover a situation where a
bankruptcy petition has been filed, but debt service payments are
continued.
CI. The rating CI is reserved for income bonds on which no
interest is being paid.
D. Debt rated D is in payment default. The D rating
category is used when interest payments or principal payments are
not made on the date due even if the applicable grace period has
not expired, unless S & P believes that such payments will be
made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Commercial paper rated Prime-1 by Moody's are judged by
Moody's to be of the best quality. Their short-term debt
obligations carry the smallest degree of investment risk.
Margins of support for current indebtedness are large or stable
with cash flow and asset protection well assured. Current
liquidity provides ample coverage of near-term liabilities and
unused alternative financing arrangements are generally
available. While protective elements may change over the
intermediate or longer term, such changes are most unlikely to
impair the fundamentally strong position of short-term
obligations.
Issuers (or related supporting institutions) rated Prime-2
have a strong capacity for repayment of short-term promissory
obligations. 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.
Commercial paper rated A by S&P have the following
characteristics. Liquidity ratios are better than industry
average. Long-term debt rating is A or better. The issuer has
access to at least two additional channels of borrowing. Basic
earnings and cash flow are in an upward trend. Typically, the
issuer is a strong company in a well-established industry and has
superior management. Issuers rated A are further refined by use
of numbers 1, 2, and 3 to denote relative strength within this
highest classification. Those issuers rated A-1 that are
determined by S&P to possess overwhelming safety characteristics
are denoted with a plus (+) sign designation.
Fitch's commercial paper ratings represent Fitch's
assessment of the issuer's ability to meet its obligations in a
timely manner. The assessment places emphasis on the existence
of liquidity. Ratings range from F-1+ which represents
exceptionally strong credit quality to F-4 which represents weak
credit quality.
Duff & Phelps' short-term ratings apply to all obligations
with maturities of under one year, including commercial paper,
the uninsured portion of certificates of deposit, unsecured bank
loans, master notes, bankers acceptances, irrevocable letters of
credit and current maturities of long-term
A-3
<PAGE>
debt. Emphasis is placed on liquidity. Ratings range from
Duff 1+ for the highest quality to Duff 5 for the lowest,
issuers in default. Issues rated Duff 1+ are regarded as having
the highest certainty of timely payment. Issues rated Duff 1
are regarded as having very high certainty of timely payment.
A-4
<PAGE>
NOVEMBER 30, 1994
SCHEDULES OF INVESTMENTS
- ----------------------------------
GLOBAL EQUITY FUND
- ----------------------------------
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C>
COMMON STOCKS--86.6%
ARGENTINA--1.3%
- ---------------------------------------------------------------------------
ENERGY--0.6%
40,000 YPF Sociedad Anonima ADR............... $ 905,000
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS--0.7%
46,000 Quilmes Industrial SA ADR.............. 1,216,700
------------
Total Argentinean Common Stocks............................ 2,121,700
------------
AUSTRALIA--2.7%
- ---------------------------------------------------------------------------
METALS/MINING--1.9%
405,000 Comalco Ltd............................ 1,510,381
280,000 Western Mining Corp.
Holdings Ltd......................... 1,593,233
------------
3,103,614
------------
PUBLIC SERVICES--0.8%
250,000 Mayne Nickless Ltd..................... 1,207,228
------------
Total Australian Common Stocks............................. 4,310,842
------------
AUSTRIA--1.5%
- ---------------------------------------------------------------------------
BUILDING & CONSTRUCTION
35,000 Flughafen Wien AG...................... 1,503,504
2,800 Wienerberger
Baustoffindustrie AG.................. 964,522
------------
Total Austrian Common Stocks............................... 2,468,026
------------
DENMARK--2.1%
- ---------------------------------------------------------------------------
CONGLOMERATES--1.1%
20,000 Sophus Berendsen AS.................... 1,667,074
------------
TELECOMMUNICATIONS--1.0%
31,200 Tele Danmark AS (Class B).............. 1,630,476
------------
Total Danish Common Stocks................................. 3,297,550
------------
FINLAND--2.6%
- ---------------------------------------------------------------------------
EXPORTING--1.7%
20,000 Oy Nokia AB............................ 2,730,263
------------
RETAIL--0.9%
30,700 Oy Stockmann AB........................ 1,439,063
------------
Total Finnish Common Stocks................................ 4,169,326
------------
FRANCE--4.5%
- ---------------------------------------------------------------------------
AEROSPACE--0.7%
2,410 Sagem.................................. 1,184,394
------------
AUTOMOTIVE--0.6%
27,000 Renault SA............................. 909,368
------------
ENERGY--1.8%
38,340 Elf Aquitaine, Inc. ADS................ $1,303,560
24,710 Total SA............................... 1,547,820
------------
2,851,380
------------
MACHINERY & ENGINEERING--1.4%
30,000 Michelin (CGDE)........................ 1,154,275
15,300 Schneider SA........................... 1,103,420
------------
2,257,695
------------
Total French Common Stocks................................. 7,202,837
------------
GERMANY--4.3%
- ---------------------------------------------------------------------------
BANKING--1.6%
4,000 Deutsche Bank AG....................... 1,889,583
2,700 Dresdner Bank AG....................... 704,004
------------
2,593,587
------------
COMPUTER SERVICES--0.9%
2,500 SAP AG................................. 1,467,073
------------
HEALTH & PERSONAL CARE--1.1%
2,700 Schering AG............................ 1,692,018
------------
MACHINERY & ENGINEERING--0.7%
2,000 Linde AG............................... 1,142,420
------------
Total German Common Stocks................................. 6,895,098
------------
INDONESIA--0.9%
- ---------------------------------------------------------------------------
TELECOMMUNICATIONS
37,500 Indonesian Satellite ADR............... 1,425,000
------------
ITALY--1.9%
- ---------------------------------------------------------------------------
TELECOMMUNICATIONS--0.9%
690,000 Telecom Italia......................... 1,430,118
------------
TEXTILES/APPAREL--0.7%
170,000 Marzotto & Figli.......... 1,167,481
------------
UTILITIES--0.3%
114,000 Edison S.p.A........................... 476,087
------------
Total Italian Common Stocks................................ 3,073,686
------------
JAPAN--17.2%
- ---------------------------------------------------------------------------
AEROSPACE--1.1%
250,000 Mitsubishi Heavy
Industries Ltd....................... 1,855,597
------------
APPLIANCES & HOUSEHOLD DURABLES--2.0%
101,000 Sharp Corp............................. 1,756,699
29,000 Sony Corp.............................. 1,539,590
------------
3,296,289
------------
AUTOMOTIVE--0.9%
145,000 Mitsubishi Motors...................... 1,373,900
------------
</TABLE>
B-1
<PAGE>
NOVEMBER 30, 1994
SCHEDULES OF INVESTMENTS
- ----------------------------------
GLOBAL EQUITY FUND (CONT'D)
- ----------------------------------
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C>
JAPAN (CONT'D)
- ---------------------------------------------------------------------------
BANKING--1.0%
160,000 The Mitsui Trust &
Banking Co., Ltd..................... $ 1,634,139
------------
BUILDING & CONSTRUCTION--0.8%
114,000 Sekisui House Ltd...................... 1,325,716
------------
CONSUMER PRODUCTS--0.9%
91,000 Yakult Honsha Co....................... 1,407,928
------------
DRUGS & MEDICAL PRODUCTS--1.0%
150,000 Fujisawa Pharmaceutical Co............. 1,638,184
------------
Electronics--3.6%
80,000 Hitachi Maxell Co...................... 1,391,445
24,000 Kyocera Corp........................... 1,781,373
88,000 NEC Corp............................... 1,023,359
75,000 Nippondenso Co., Ltd................... 1,532,005
------------
5,728,182
------------
INSURANCE--1.1%
150,000 Tokio Marine & Fire
Insurance Co., Ltd................... 1,729,194
------------
MERCHANDISING--2.1%
45,000 Ito Yokado Co., Ltd.................... 2,389,018
85,400 Simree Co., Ltd........................ 1,001,760
------------
3,390,778
------------
MISCELLANEOUS FINANCIAL SERVICES--1.5%
8,000 Japan Associated
Finance Co., Ltd.................... 1,100,212
85,000 Toyo Tec Co., Ltd..................... 1,246,334
------------
2,346,546
------------
RECREATION--1.2%
110,000 Canon, Inc............................ 1,902,114
------------
Total Japanese Common Stocks.............................. 27,628,567
------------
MEXICO--0.9%
- ---------------------------------------------------------------------------
MISCELLANEOUS FINANCIAL SERVICES--0.3%
125,000 Grupo Finance
Del Norte (Class B).................. 494,330
------------
RETAIL--0.2%
120,000 Cifra SA de CV......................... 324,513
------------
TELECOMMUNICATIONS--0.4%
13,000 Telefonos De Mexico
SA ADR............................... 689,000
------------
Total Mexican Common Stocks................................ 1,507,843
------------
NETHERLANDS--5.5%
- ---------------------------------------------------------------------------
BUILDING & CONSTRUCTION--1.0%
19,500 Kondor Wessels Groep NV................ $ 505,296
46,000 NBM Amstelland NV...................... 484,652
22,500 Sphinx Kon
Gustavsberg--CVA..................... 694,516
------------
1,684,464
------------
ELECTRONICS--1.0%
50,833 Getronics NV........................... 1,676,195
------------
INSURANCE--1.3%
44,127 International Nederlanden.............. 2,075,796
------------
MISCELLANEOUS FINANCIAL SERVICES--1.0%
19,855 Hagemeyer.............................. 1,566,101
------------
PUBLISHING--1.2%
26,844 Wolters Kluwer......................... 1,895,698
------------
Total Netherlands Common Stocks............................ 8,898,254
------------
SINGAPORE--0.3%
- ---------------------------------------------------------------------------
Electronics
700,000 IPC Corp............................... 497,268
------------
SPAIN--1.7%
- ---------------------------------------------------------------------------
BUILDING & CONSTRUCTION--1.1%
17,000 Fomento de Construcione
Y Contra............................. 1,684,082
------------
UTILITIES--0.6%
200,000 Sevillana De Electric.................. 970,762
------------
Total Spanish Common Stocks................................ 2,654,844
------------
SWEDEN--3.8%
- ---------------------------------------------------------------------------
DRUGS & MEDICAL PRODUCTS--1.0%
60,000 ASTRA AB............................... 1,616,757
------------
MACHINERY & ENGINEERING--2.8%
20,000 ASEA AB................................ 1,422,958
125,000 Atlas Copco AB......................... 1,609,456
130,000 Kalmar Industries...................... 1,527,158
------------
4,559,572
------------
Total Swedish Common Stocks................................ 6,176,329
------------
SWITZERLAND--1.9%
- ---------------------------------------------------------------------------
BANKING--0.8%
2,900 Bil GT Gruppe AG....................... 1,345,023
------------
BUILDING & CONSTRUCTION--1.1%
2,300 Holderbank Financiere
Glaris AG............................ 1,784,842
------------
Total Swiss Common Stocks.................................. 3,129,865
------------
</TABLE>
B-2
<PAGE>
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C>
UNITED KINGDOM--3.1%
- ---------------------------------------------------------------------------
PUBLIC SERVICES--1.2%
240,000 British Airport
Authority PLC........................ $ 1,892,807
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS--1.0%
221,000 Guinness PLC........................... 1,582,777
------------
UTILITIES--0.9%
187,400 National Power PLC..................... 1,456,675
------------
Total United Kingdom Common Stocks......................... 4,932,259
------------
UNITED STATES--30.4%
- ---------------------------------------------------------------------------
AEROSPACE--3.5%
35,000 McDonnell Douglas Corp................. 4,882,500
15,300 Sundstrand Corp........................ 654,075
------------
5,536,575
------------
BANKING--6.4%
20,000 First Interstate Bancorp............... 1,410,000
169,215 Mellon Bank Corp....................... 5,605,247
23,000 Wells Fargo & Co....................... 3,320,625
------------
10,335,872
------------
CHEMICALS--2.9%
21,000 Hercules, Inc.......................... 2,401,875
31,000 Monsanto Co............................ 2,232,000
------------
4,633,875
------------
CONGLOMERATES--1.1%
20,000 General Electric Co.................... 920,000
10,000 ITT Corp............................... 796,250
------------
1,716,250
------------
CONSUMER PRODUCTS--1.3%
35,000 Avon Products, Inc..................... 2,165,625
------------
DRUGS & MEDICAL PRODUCTS--3.7%
70,000 Becton, Dickinson & Co................. 3,307,500
34,000 Warner-Lambert Co..................... 2,630,750
------------
5,938,250
------------
ENERGY--0.6%
20,000 MAPCO, Inc............................. $1,002,500
------------
INSURANCE--3.4%
70,000 EXEL Ltd............................... 2,625,000
61,000 Transamerica Corp...................... 2,889,875
------------
5,514,875
------------
METALS/MINING--0.8%
875 Freeport McMoRan
Copper & Gold (Class A).............. 17,609
70,000 Freeport McMoRan, Inc.................. 1,198,750
------------
1,216,359
------------
MISCELLANEOUS FINANCIAL SERVICES--4.7%
110,000 American Express Co.................... 3,258,750
87,000 Federal Home Loan
Mortgage Corp........................ 4,339,125
------------
7,597,875
------------
TECHNOLOGY--1.2%
30,000 Intel Corp............................. 1,893,750
------------
TELECOMMUNICATIONS--0.8%
44,000 Sprint Corp............................ 1,314,500
------------
Total United States Common Stocks.......................... 48,866,306
------------
Total Common Stocks
(cost--$121,902,041)..................................... $139,255,600
------------
------------
- ---------------------------------------------------------------------------
WARRANTS VALUE
- ---------------------------------------------------------------------------
WARRANTS--0.0%
SWITZERLAND
- ---------------------------------------------------------------------------
BUILDING & CONSTRUCTION
11,500 Holderbank Financiere
Glaris AG, 12/20/94,
strike @ CHF 620 *................... $17,779
------------
</TABLE>
B-3
<PAGE>
NOVEMBER 30, 1994
SCHEDULES OF INVESTMENTS
- ----------------------------------
GLOBAL EQUITY FUND (CONT'D)
- ----------------------------------
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C>
CONVERTIBLE BONDS--0.3%
SWEDEN
- ---------------------------------------------------------------------------
MISCELLANEOUS FINANCIAL SERVICES
2,200,000 SEK Investor AB
8.00%, 6/21/01
(cost--$359,464)..................... $ 385,473
------------
REPURCHASE AGREEMENT--13.0%
- ---------------------------------------------------------------------------
20,800,000 US$ Prudential Securities, 5.65%,
12/01/94, (proceeds at maturity:
$20,803,264, collateralized by
$21,445,000 par, $21,219,828
value, U.S. Treasury Notes 3.875%,
8/31/95) (cost--$20,800,000)......... $20,800,000
------------
- ---------------------------------------------------------------------------
LOCAL
CURRENCY VALUE
- ---------------------------------------------------------------------------
FOREIGN CURRENCY
CALL ACCOUNTS**--0.5%
- ---------------------------------------------------------------------------
STATE STREET BANK & TRUST CO.
966,524,112 Italian Lira 7.25%..................... $597,986
159,642 Pound Sterling 4.25%................... 250,183
9,431 Australian Dollar 5.50%................ 7,252
11,966 Danish Krone 3.50%..................... 1,948
------------
Total Foreign Currency Call Accounts
(cost--$856,895)......................................... $857,369
------------
Total Investments
(cost--$143,918,400)............................. 100.4% $161,316,221
Other Liabilities in Excess of
Other Assets..................................... (0.4) (589,606)
----- ------------
TOTAL NET ASSETS................................... 100.0% $160,726,615
----- ------------
----- ------------
</TABLE>
* Non-income producing security.
**Variable rate accounts have interest rates reset twice a week.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
B-4
<PAGE>
- ----------------------------------
GLOBAL INCOME FUND
- ----------------------------------
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C>
AUSTRALIA--11.3%
- ---------------------------------------------------------------------------
GOVERNMENT NOTES--4.7%
100,000 A$ Queensland Treasury Corp.
8.00%, 5/14/97..................... $ 73,673
1,000,000 Western Australia Treasury
Corp.
10.00%, 1/15/97.................... 769,753
------------
843,426
------------
EURONOTES--6.6%
500,000 Mobil Australia Finance, Ltd.
12.00%, 4/18/97...................... 398,164
1,000,000 Unilever Australia, Ltd.
12.00%, 4/08/98...................... 802,576
------------
1,200,740
------------
Total Australia............................................ 2,044,166
------------
BELGIUM--3.0%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
17,000,000 BEL Kingdom of Belgium
9.00%, 6/27/01 (A)................ 551,169
------------
CANADA--4.8%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
1,200,000 CD$ Government of Canada
8.50%, 3/01/00 (A)................ 861,670
------------
DENMARK--7.1%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
7,750,000 DKK Kingdom of Denmark
9.00%, 11/15/98 (A)............... 1,295,136
------------
GERMANY--5.6%
- ---------------------------------------------------------------------------
GOVERNMENT NOTES
1,000,000 DM German Unity Fund
8.50%, 2/20/01 (A)................. 674,487
500,000 Republic of Germany
8.50%, 8/21/00 (A)................. 337,881
------------
Total Germany.............................................. 1,012,368
------------
IRELAND--2.5%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
325,000 IEP Irish Treasury Bond
6.25%, 4/01/99.................... 460,151
------------
NEW ZEALAND--4.3%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
1,250,000 NZD Government of New Zealand
9.00%, 11/15/96................... $779,042
------------
PORTUGAL--5.3%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
950,000 ECU Republic of Portugal
6.00%, 2/16/04.................... 970,283
------------
SPAIN--9.8%
- ---------------------------------------------------------------------------
GOVERNMENT NOTES
Government of Spain
95,000,000 Pt 9.00%, 2/28/97 (A)................. 709,459
137,000,000 11.85%, 8/30/96 (A)................. 1,076,836
------------
Total Spain................................................ 1,786,295
------------
UNITED KINGDOM--4.5%
- ---------------------------------------------------------------------------
GOVERNMENT NOTE
500,000 L U.K. Exchequer
9.50%, 1/15/99 (A)................. 813,205
------------
UNITED STATES--39.0%
- ---------------------------------------------------------------------------
CORPORATE NOTES--5.3%
500,000 US$ Healthtrust, Inc.
10.25%, 4/15/04................... 527,500
500,000 Wheeling-Pittsburg Corp.
9.375%, 11/15/03.................. 433,750
------------
961,250
------------
GOVERNMENT NOTE--4.7%
900,000 U.S. Treasury Note
4.75%, 2/15/97....................... 850,077
------------
EURONOTES--28.0%
500,000 Colombia Financiera
Energetica Nacional
6.625%, 12/13/96..................... 480,500
500,000 Grupo Industrial Durango
12.00%, 7/15/01...................... 487,500
500,000 Minas Gerais
7.875%, 2/10/99...................... 407,500
500,000 National Power Corp.
(Philippines)
7.625%, 11/15/00..................... 440,000
500,000 Philippine Long Distance
Telephone
10.625%, 6/02/04..................... 496,875
</TABLE>
B-5
<PAGE>
NOVEMBER 30, 1994
SCHEDULES OF INVESTMENTS
- ----------------------------------
GLOBAL INCOME FUND (CONT'D)
- ----------------------------------
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C>
EURONOTES (CONT'D)
1,000,000 US$ Republic of Argentina
6.50%, 3/31/05 (B)................... $ 710,625
490,000 Republic of Brazil (IDU's)
6.0625%, 1/01/01 (B)................. 414,050
500,000 Republic of the Philippines
5.25%, 12/01/17 (C).................. 310,625
500,000 Telefonica de Argentina
11.875%, 11/01/04.................... 486,250
United Mexican States
500,000 5.8125%, 12/31/19
Series D (B)........................ 433,125
500,000 6.76563%, 12/31/19
Series B (B)........................ 433,125
------------
5,100,175
------------
REPURCHASE AGREEMENT--1.0%
184,000 US$ Prudential Securities,
5.65%, 12/01/94,
(proceeds at maturity:
$184,029, collateralized
by $195,000 par, $191,685
value, U.S. Treasury Notes,
5.125%, 3/31/96)..................... $ 184,000
------------
Total United States........................................ 7,095,502
------------
Total Investments
(cost--$17,865,440).............................. 97.2% $ 17,668,987
Other Assets in Excess of
Other Liabilities................................ 2.8 508,032
----- ------------
TOTAL NET ASSETS................................... 100.0% $ 18,177,019
----- ------------
----- ------------
</TABLE>
(A) Securities segregated (full or partial) as collateral for open forward
currency contracts. The market value of such segregated
securities is $6,319,844.
(B) Represents a floating interest rate bond, subject to change on respective
semi-annually coupon dates, based on the current six
month LIBOR rate plus 81.25 basis points.
(C) Coupon will pay quarterly at 5.25% until 12/94, then will "step-up" and
pay semi-annually at the following annual rates; 5.75% until 12/95, 6.25%
until 12/97 and 6.50% until maturity.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
B-6
<PAGE>
NOVEMBER 30, 1994
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------- -------------
GLOBAL EQUITY GLOBAL INCOME
FUND FUND
------------- -------------
<S> <C> <C>
ASSETS
Investments, at value (cost--$123,118,400 and $17,865,440, respectively) $140,516,221 $17,668,987
Repurchase Agreement (cost--$20,800,000 and $0, respectively)........... 20,800,000 --
Cash.................................................................... 31,774 467
Receivable for fund shares sold......................................... 266,353 2,815
Dividends receivable.................................................... 201,011 --
Withholding taxes reclaimable........................................... 146,744 7,029
Deferred organization expenses.......................................... 22,859 48,826
Interest receivable..................................................... 13,453 537,677
Receivable from adviser................................................. -- 8,493
Deposits for securities loaned.......................................... 7,186,089 --
Other assets............................................................ 83,662 75,301
----------- ------------
Total Assets........................................................ 169,268,166 18,349,595
----------- ------------
LIABILITIES
Payable for investments purchased....................................... 1,162,467 --
Payable for fund shares redeemed........................................ 96,431 70,515
Investment advisory fee payable......................................... 16,487 --
Withholding taxes payable............................................... 13,929 2,928
Distribution fee payable................................................ 11,858 763
Administration fee payable.............................................. 5,496 620
Net unrealized depreciation on forward currency contracts............... -- 34,888
Deposits for securities loaned.......................................... 7,186,089 --
Other payables and accrued expenses..................................... 48,794 62,862
----------- ------------
Total Liabilities................................................... 8,541,551 172,576
----------- ------------
NET ASSETS
Capital stock........................................................... 113,533 21,411
Paid-in-surplus......................................................... 130,055,046 20,502,349
Accumulated undistributed net investment income......................... 44,024 --
Accumulated undistributed net realized gain (loss) on
investments........................................................... 14,611,225 (1,129,077)
Accumulated net realized loss on foreign currency
transactions.......................................................... (1,391,636) (989,174)
Distributions in excess of net realized gains........................... (110,149) --
Net unrealized appreciation (depreciation) on investments and
translation of other assets and liabilities denominated in
foreign currencies.................................................... 17,404,572 (228,490)
------------ ------------
Total Net Assets.................................................... $160,726,615 $18,177,019
------------ ------------
------------ ------------
CLASS A:
Fund shares outstanding................................................. 10,451,819 1,976,697
------------ ------------
Net asset value per share............................................... $14.16 $8.49
------------ ------------
------------ ------------
Maximum offering price per share*....................................... $14.98 $8.75
------------ ------------
------------ ------------
CLASS B:
Fund shares outstanding................................................. 729,671 138,425
------------ ------------
Net asset value and offering price per share............................ $14.07 $8.49
------------ ------------
------------ ------------
CLASS C:
Fund shares outstanding................................................. 171,805 25,963
------------ ------------
Net asset value and offering price per share............................ $14.06 $8.49
------------ ------------
------------ ------------
<FN>
* Sales charges decrease on purchases of $50,000 or higher for the Global Equity Fund
and $100,000 or higher for the Global Income Fund.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
B-7
<PAGE>
YEAR ENDED NOVEMBER 30, 1994
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------- -------------
GLOBAL EQUITY GLOBAL INCOME
FUND FUND
-------------- -------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $123,756 and $0,
respectively)......................................................... $2,432,732 $ --
Interest (net of foreign withholding taxes of $0 and $5,395,
respectively)......................................................... 642,446 1,613,541
------------- -----------
Total investment income............................................ 3,075,178 1,613,541
------------- -----------
OPERATING EXPENSES
Investment advisory fees (note 2a)...................................... 1,166,949 99,506
Distribution fees (note 2d)............................................. 813,628 58,795
Administration fees (note 2c)........................................... 388,983 49,753
Transfer and dividend disbursing agent fees (note 1k)................... 215,541 37,527
Custodian fees.......................................................... 186,082 59,220
Registration fees....................................................... 76,349 78,747
Auditing, consulting and tax return preparation fees.................... 58,509 35,551
Reports and notices to shareholders..................................... 58,063 21,071
Amortization of deferred organization expenses (note 1c)................ 39,179 24,356
Directors' fees and expenses............................................ 17,219 --
Legal fees.............................................................. 14,973 11,229
Miscellaneous........................................................... 11,028 2,400
------------- -----------
Total operating expenses........................................... 3,046,503 478,155
Less: Investment advisory fees waived and expense
reimbursements (note 2a)...................................... (15,349) (139,836)
------------- -----------
Net operating expenses........................................ 3,031,154 338,319
------------- -----------
Net investment income......................................... 44,024 1,275,222
------------- -----------
------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS--NET
Net realized gain (loss) on investments.................................. 14,460,917 (654,971)
Net realized loss on foreign currency transactions....................... (1,391,636) (989,174)
Net realized gain (loss) on futures transactions......................... 150,308 (33,622)
------------- -----------
Net realized gain (loss) on investments and foreign currency
transactions....................................................... 13,219,589 (1,677,767)
Net change in unrealized appreciation (depreciation) on investments
and translation of other assets and liabilities denominated in
foreign currencies.................................................... (1,833,491) (267,788)
------------- -----------
Net realized gain (loss) and change in unrealized appreciation
(depreciation) on investments and translation of other assets and
liabilities denominated in foreign currencies..................... 11,386,098 (1,945,555)
------------- -----------
Net increase (decrease) in net assets resulting from operations......... $11,430,122 $ (670,333)
------------- -----------
------------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
B-8
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------- --------------------------------
GLOBAL EQUITY FUND GLOBAL INCOME FUND
---------------------------- --------------------------------
Year Ended November 30, Year Ended November 30,
---------------------------- --------------------------------
1994 1993* 1994 1993
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income............................ $ 44,024 $ 46,115 $ 1,275,222 $ 1,423,757
Net realized gain (loss) on investments.......... 14,611,225 5,952,817 (688,593) 252,205
Net realized loss on foreign currency
transactions................................... (1,391,636) (107,988) (989,174) (748,097)
Net change in unrealized appreciation
(depreciation) on investments and translation
of other assets and liabilities denominated in
foreign currencies............................. (1,833,491) 15,536,595 (267,788) 1,082,353
------------ ----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations................................ 11,430,122 21,427,539 (670,333) 2,010,218
------------ ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income -- Class A................. -- (1,133,661) (179,857) (378,564)
Net investment income -- Class B................. -- -- (8,671) (974)
Net investment income -- Class C................. -- -- (1,531) (372)
Net realized gain -- Class A..................... (4,944,320) (7,944,237) -- --
Net realized gain -- Class B..................... (66,298) -- -- --
Net realized gain -- Class C..................... (10,738) -- -- --
Distributions in excess of net realized gains --
Class A........................................ -- (179,902) -- --
Distributions in excess of net realized gains --
Class B........................................ -- -- -- --
Distributions in excess of net realized gains --
Class C........................................ -- -- -- --
Tax return of capital -- Class A................. -- -- (1,026,915) (1,158,775)
Tax return of capital -- Class B................. -- -- (49,507) (2,983)
Tax return of capital -- Class C................. -- -- (8,741) (1,139)
------------ ----------- ----------- -----------
Total dividends and distributions to
shareholders............................... (5,021,356) (9,257,800) (1,275,222) (1,542,807)
------------ ----------- ----------- -----------
FUND SHARE TRANSACTIONS
CLASS A
Net proceeds from sales.......................... 30,817,260 30,701,048 2,641,672 5,441,056
Reinvestment of dividends and distributions...... 4,682,941 8,963,937 1,088,618 1,341,142
Cost of shares redeemed.......................... (29,503,784) (27,477,571) (7,582,775) (4,259,950)
------------ ----------- ----------- -----------
Net increase (decrease) -- Class A........... 5,996,417 12,187,414 (3,852,485) 2,522,248
------------ ----------- ----------- -----------
CLASS B
Net proceeds from sales......................... 9,192,969 1,868,775 745,568 762,602
Reinvestment of dividends and distributions..... 64,143 -- 45,001 3,572
Cost of shares redeemed......................... (659,275) (146,699) (217,068) (61,617)
------------ ----------- ----------- -----------
Net increase -- Class B..................... 8,597,837 1,722,076 573,501 704,557
------------ ----------- ----------- -----------
CLASS C
Net proceeds from sales.......................... 2,476,331 249,911 91,369 150,714
Reinvestment of dividends and distributions...... 10,736 -- 9,804 1,510
Cost of shares redeemed.......................... (299,932) -- (15,084) --
------------ ----------- ----------- -----------
Net increase -- Class C...................... 2,187,135 249,911 86,089 152,224
------------ ----------- ----------- -----------
Total increase (decrease) in net
assets from fund share transactions.... 16,781,389 14,159,401 (3,192,895) 3,379,029
------------ ----------- ----------- -----------
Total increase (decrease) in net assets...... 23,190,155 26,329,140 (5,138,450) 3,846,440
NET ASSETS
Beginning of year................................ 137,536,460 111,207,320 23,315,469 19,469,029
------------ ----------- ----------- -----------
End of year (including undistributed net
investment income (loss) of $44,024, ($344,025),
$0 and $1,341,754, respectively)............... $160,726,615 $137,536,460 $18,177,019 $23,315,469
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
<FN>
* Dividends and Distributions to Shareholders has been restated to reflect
Statement of Position 93-2. See note 1e in the notes to financial statements.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
B-9
<PAGE>
NOVEMBER 30, 1994
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Quest for Value Global Funds (collectively, the "Funds") are registered
under the Investment Company Act of 1940 as diversified, open-end management
investment companies. The Quest for Value Global Equity Fund, Inc. ("Global
Equity") commenced investment operations on July 2, 1990. The Global Income
Fund ("Global Income"), a series of Quest for Value Global Funds, Inc.,
commenced investment operations on December 2, 1991. Quest for Value
Advisors (the "Adviser") serves as the Funds' investment adviser and
administrator. Quest for Value Distributors (the "Distributor") serves as the
Funds' distributor. Both the Adviser and Distributor are majority-owned
(99%) subsidiaries of Oppenheimer Capital. Clay Finlay, Inc. (the
"Sub-Adviser") had primary responsibility for non-U.S. investment decisions
for Global Equity through December 31, 1993. Effective January 1, 1994, the
Adviser assumed responsibility for all non-U.S. investment decisions for
Global Equity.
Prior to September 1, 1993, the Funds issued only one class of shares
which were redesignated Class A shares. Subsequent to that date, the Funds
were authorized to issue Class A, Class B and Class C shares. Shares of each
Class represent an identical interest in the investment portfolio of their
respective fund and generally have the same rights, but are offered under
different sales charge and distribution fee arrangements. Furthermore, Class
B shares will automatically convert to Class A shares of the same fund eight
years after their respective purchase.
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their financial
statements:
(A) VALUATION OF INVESTMENTS
Investment securities listed on a U.S. or foreign stock exchange and
securities traded in the over-the-counter National Market System are valued
at the last reported sale price on the valuation date; if there are no such
sales, the securities are valued at their last quoted bid price. Other
investments traded over-the-counter and not part of the National Market
System are valued at the last quoted bid price. Investment debt securities
(other than short-term obligations) are valued each day by an independent
pricing service (approved by the Board of Directors) using methods which
include current market quotations from a major market maker in the securities
and trader reviewed "matrix" prices. Short-term debt securities having a
remaining maturity of sixty days or less are valued at amortized cost or
amortized value, which approximates market value. Any security or other asset
for which market quotations are not readily available is valued at its fair
value as determined under procedures established by the Funds' Board of
Directors. Investments in countries in which the Funds may invest may involve
certain considerations and risks not typically associated with domestic
investments as a result of, among others, the possibility of future political
and economic developments and the level of governmental supervision and
regulation of foreign securities markets.
(B) FEDERAL INCOME TAXES
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders; accordingly,
no Federal income tax provision is required.
(C) DEFERRED ORGANIZATION EXPENSES
Costs incurred by Global Equity and Global Income in connection with
their organization approximated $194,000 and $122,000, respectively. These
costs have been deferred and are being amortized to expense on a straight
line basis over sixty months from commencement of the Funds' operations.
(D) INVESTMENT TRANSACTIONS AND OTHER INCOME
Investment transactions are accounted for on the trade date. In
determining the gain or loss from the sale of investments, the cost of
investments sold is determined on the basis of identified cost. Dividend
income and other distributions are recorded on the ex-dividend date, except
certain dividends or other distributions from foreign securities which are
recorded as soon as the information is available after the ex-dividend date.
Interest income is accrued as earned. Discounts on debt securities purchased
are accreted to interest income over the lives of the respective securities.
B-10
<PAGE>
(E) DIVIDENDS AND DISTRIBUTIONS
Each fund records dividends and distributions to its shareholders on the
ex-dividend date.The following table summarizes the Funds' income dividend
and capital gain declaration policy:
<TABLE>
<CAPTION>
INCOME SHORT-TERM LONG-TERM
DIVIDENDS CAPITAL GAINS CAPITAL GAINS
--------- ------------- -------------
<S> <C> <C> <C>
Global Equity....................... annually annually annually
Global Income....................... daily* annually annually
<FN>
* paid monthly.
</TABLE>
During the fiscal year ended November 30, 1994, the Funds' adopted
Statement of Position 93-2: Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of Capital Distributions by
Investment Companies. The amount of dividends and distributions from net
investment income, net realized foreign currency gains and net realized
capital gains are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting principles.
These "book-tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their Federal tax-basis
treatment; temporary differences do not require reclassification. Dividends
and distributions which exceed net investment income, net realized foreign
currency gains and net realized capital gains for financial reporting
purposes but not for tax purposes are reported as dividends in excess of net
investment income, dividends in excess of net realized foreign currency gains
or distributions in excess of net realized capital gains, respectively. To
the extent distributions exceed current and accumulated earnings and profits
for Federal income tax purposes, they are reported as distributions of
paid-in-surplus or tax return of capital. Accordingly, permanent book-tax
differences relating to shareholder distributions have been reclassified to
paid-in-surplus. Net investment income(loss), net realized foreign currency
gain(loss), net realized gain(loss) and net assets were not affected by this
change. The following table discloses the cumulative effect of such
differences reclassified from accumulated undistributed net investment
income(loss), accumulated undistributed net realized foreign currency
gain(loss) and accumulated undistributed net realized gain(loss) on
investments to paid-in-surplus:
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED ACCUMULATED
UNDISTRIBUTED NET REALIZED UNDISTRIBUTED PAID
NET INVESTMENT FOREIGN CURRENCY NET REALIZED IN
INCOME LOSS GAIN (LOSS) SURPLUS
-------------- ---------------- -------------- ----------
<S> <C> <C> <C> <C>
Global Equity........ $344,025 $397,015 ($83,763) ($657,277)
Global Income........ (1,341,754) 1,310,676 -- 31,078
</TABLE>
(F) FOREIGN CURRENCY TRANSLATION
The books and records of the Funds are maintained in U.S. dollars as
follows: (1) the foreign currency market value of investment securities,
other assets and liabilities and forward contracts stated in foreign
currencies are translated at the exchange rates at the end of the period; and
(2) purchases, sales, income and expenses are translated at the rate of
exchange prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Funds' Statements of
Operations. Since the net assets of the Funds are presented at the foreign
exchange rates and market prices at the close of the period, the Funds do not
isolate that portion of the results of operations arising as a result of
changes in the exchange rates from fluctuations arising from changes in the
market prices of securities.
(G) FORWARD CURRENCY CONTRACTS
As part of its investment program, the Funds may utilize forward currency
contracts for hedging purposes. The use of these contracts involves, to
varying degrees, elements of market risk. Risks arise from the possible
movements in foreign exchange rates and security values underlying these
instruments. In addition, credit risk may arise from the potential inability
of counterparties to meet the terms of their contracts. Forward currency
contracts are recorded at market value. Realized gains and losses arising
from such transactions are included in net realized gain or loss on foreign
currency transactions in the results of operations. At November 30, 1994,
there were no forward currency contracts outstanding for Global Equity.
Outstanding contracts at November 30, 1994 for Global Income are as follows:
B-11
<PAGE>
NOVEMBER 30, 1994
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
CONTRACT TO
SETTLEMENT ----------------------------------------- UNREALIZED
DATE DELIVER RECEIVE GAIN (LOSS)
---------- ------------------- ------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
12/09/94 DM 1,000,000 US$ 644,870 US$ 7,249
12/14/94 DM 1,300,000 US$ 847,126 US$ 18,135
01/09/95 CD$ 700,000 US$ 515,806 US$ 6,585
01/27/95 DM 1,500,000 US$ 944,912 US$ (4,170)
01/27/95 US$ 653,240 DM 1,000,000 US$ (23,299)
02/06/95 DM 1,000,000 US$ 658,892 US$ 20,450
02/17/95 Ffr 2,900,000 US$ 546,345 US$ 6,638
02/27/95 DM 460,000 US$ 296,315 US$ 2,449
02/28/95 ESP 90,000,000 US$ 685,767 US$ 714
02/28/95 Ffr 4,000,000 US$ 746,129 US$ 1,555
04/20/95 DM 1,140,000 US$ 660,985 US$ (8,455)
04/20/95 US$ 642,550 DM 1,000,000 US$ (62,739)
--------------
US$ (34,888)
--------------
--------------
</TABLE>
Net unrealized depreciation of $34,888 on these contracts at November 30,
1994 is included in the accompanying financial statements.
(H) FUTURES ACCOUNTING POLICIES
Futures contracts are agreements between two parties to buy and sell a
financial instrument at a set price on a future date. Upon entering into such
a contract, a fund is required to pledge to the broker an amount of cash or
U.S. Government securities equal to the minimum "initial margin" requirements
of the exchange. Pursuant to the contract, a fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in the
value of the contract. Such receipts or payments are known as "variation
margin" and are recorded by the fund as unrealized appreciation or
depreciation. When a contract is closed, the fund records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed and reverses any
unrealized appreciation or depreciation previously recorded.
(I) REPURCHASE AGREEMENTS
The Funds' custodian takes possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued
daily on a mark-to-market basis to ensure that the value, including accrued
interest, is at least equal to the repurchase price. In the event of default
of the obligor to repurchase, the Funds have the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral or
proceeds may be subject to legal proceedings.
(J) SECURITY LENDING PROCEDURES
Global Equity periodically lends securities through a lending program run
by its custodian, State Street Bank and Trust Company, for its participating
clients. Under the program, the bank makes available to select qualified
brokerage firms or other borrowing institutions the use of the participants
securities for a period of time. Security loans are collateralized with U.S.
Government securities or cash equal to at least 105% of the market value of
the securities at the time of the loan. The securities loaned are
marked-to-market daily and collateral is adjusted daily to reflect any
fluctuations in value.
Global Equity earns income from the borrower which is generally the
difference between the interest earned on the collateral and the rebate paid
to the borrower. Global Equity pays State Street Bank and Trust Company 35%
of the net interest earned as a fee for administering the security lending
program. For the year ended November 30, 1994, Global Equity earned $2,247
from security lending. At November 30, 1994, Global Equity had the following
securities on loan:
B-12
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE MARKET VALUE
SECURITY SHARES OF SHARES COLLATERAL OF COLLATERAL
- ----------------------------- -------- ------------ --------------- --------------
<S> <C> <C> <C> <C>
Linde Ag (Germany) 1,960 $1,119,572 U.S. Dollars $1,174,530
Mitsubishi Motors (Japan) 142,000 1,345,474 U.S. Dollars 1,420,000
Nippondenso Co., Ltd. (Japan) 30,000 612,802 U.S. Dollars 645,000
Scheinder SA (France) 14,994 1,081,352 U.S. Dollars 1,135,796
Telecom Italia (Italy) 676,200 1,401,516 U.S. Dollars 1,521,450
Total SA (France) 19,677 1,232,556 U.S. Treasuries 1,289,313
---------- ----------
$6,793,272 $7,186,089
---------- ----------
---------- ----------
</TABLE>
(K) ALLOCATION OF EXPENSES
Expenses specifically identifiable to a particular fund or class are
borne by that fund or class. Other expenses are allocated to each fund or
class based on its net assets in relation to the total net assets of all
applicable funds or classes or on another reasonable basis. For the year
ended November 30, 1994, transfer and dividend disbursing agent fees accrued
to classes A, B and C were $198,935, $12,410 and $4,196, respectively, for
Global Equity, and $34,699, $1,941 and $887, respectively, for Global Income.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
(a) The investment advisory fee is payable monthly to the Adviser and is
computed as a percentage of each fund's net assets as of the close of
business each day at the following annual rates: .75% for Global Equity and
.50% for Global Income. For the year ended November 30, 1994, the Adviser
voluntarily waived $15,349 and $99,506 in investment advisory fees for Global
Equity and Global Income, respectively. The Adviser also reimbursed Global
Income $40,330 in other operating expenses. Effective January 7, 1994, the
Adviser discontinued its voluntary waiver of investment advisory fees for
Global Equity.
(b) The Adviser paid the Sub-Adviser fees through December 31, 1993 at an
annual rate of .375% of Global Equity's average net assets.
(c) The administration fees are payable monthly to the Adviser and are
computed on each fund's average daily net assets at the annual rate of .25%.
(d) The Funds have adopted a Plan and Agreement of Distribution (the
"Plan") pursuant to which they are permitted to compensate the Distributor in
connection with the distribution of fund shares. Under the Plan, the
Distributor has entered into agreements with securities dealers and other
financial institutions and organizations to obtain various sales-related
services in rendering distribution assistance. To compensate the Distributor
for the services it and other dealers under the Plan provide and for the
expenses they bear under the Plan, the Funds pay the Distributor
compensation, accrued daily and payable monthly, on the daily net assets for
Class A shares at the following annual rates: .25% for Global Equity and .05%
for Global Income. The Funds' Class A shares also pay a service fee at an
annual rate of .25%. Although Global Income's Plan for Class A shares
authorizes it to pay a maximum service fee of .25% and a distribution fee of
.05%, the Board of Directors has set a maximum .25% total fee under the Plan.
Compensation for Class B and Class C shares of each fund is at an annual rate
of .75% of average daily net assets. Each fund's Class B and Class C shares
also pay a service fee at the annual rate of .25% of average daily net
assets. Distribution and service fees may be paid by the Distributor to
broker-dealers or others for providing personal service, maintenance of
accounts and ongoing sales or shareholder support functions in connection
with the distribution of fund shares. While payments under the plan may not
exceed the stated percentage of average daily net assets on an annual basis,
the payments are not limited to the amounts actually paid or expenses
actually incurred by the Distributor. For the year ended November 30, 1994,
distribution and service fees charged to classes A, B and C were $742,304,
$59,822 and $11,502, respectively, for Global Equity, and $46,739, $10,182
and $1,874, respectively, for Global Income.
B-13
<PAGE>
NOVEMBER 30, 1994
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(e) Total brokerage commissions paid by Global Equity during the year
ended November 30, 1994 amounted to $566,615, of which $16,402 was paid to
Oppenheimer & Co., Inc., an affiliate of the Adviser.
(f) Oppenheimer & Co., Inc. has informed the Funds that it received
approximately $252,000 and $24,000, from Global Equity and Global Income,
respectively, in connection with the sale of Class A shares for the year
ended November 30, 1994.
(g) The Distributor has informed the funds that it received contingent
deferred sales charges on the redemption of Class B and Class C shares of
approximately $7,300 and $600 for Global Equity and Global Income,
respectively, for the year ended November 30, 1994.
3. FUND SHARE TRANSACTIONS
The following table summarizes the fund share activity for the two years
ended November 30, 1994:
<TABLE>
<CAPTION>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
--------------------------- ---------------------------
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
--------------------------- ---------------------------
1994 1993 1994 1993
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
CLASS A
Issued.................................... 2,167,814 2,374,953 290,147 585,048
Dividends and distributions reinvested.... 344,081 758,804 123,568 144,981
Redeemed.................................. (2,079,717) (2,156,199) (837,949) (458,116)
---------- ---------- -------- --------
Net increase (decrease)--Class A........ 432,178 977,558 (424,234) 271,913
---------- ---------- -------- --------
CLASS B *
Issued.................................... 647,583 134,395 82,174 80,836
Dividends and distributions reinvested.... 4,716 -- 5,164 381
Redeemed.................................. (46,590) (10,433) (23,568) (6,562)
---------- ---------- -------- --------
Net increase--Class B................... 605,709 123,962 63,770 74,655
---------- ---------- -------- --------
CLASS C *
Issued.................................... 174,051 18,037 10,411 15,993
Dividends and distributions reinvested.... 789 -- 1,118 161
Redeemed.................................. (21,072) -- (1,720) --
---------- ---------- -------- --------
Net increase--Class C.................... 153,768 18,037 9,809 16,154
---------- ---------- -------- --------
Total net increase (decrease)......... 1,191,655 1,119,557 (350,655) 362,722
---------- ---------- -------- --------
---------- ---------- -------- --------
<FN>
* Initial offering September 2, 1993.
</TABLE>
B-14
<PAGE>
4. DIVIDENDS AND DISTRIBUTIONS
The following table summarizes the per share dividends and distributions
made for the two years ended November 30, 1994:
<TABLE>
<CAPTION>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
--------------------------- ---------------------------
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
--------------------------- ---------------------------
1994 1993 1994 1993
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Class A.................................. -- $0.119 $0.085 $0.168
Class B *................................ -- -- 0.075 0.030
Class C *................................ -- -- 0.072 0.031
NET REALIZED GAINS:
Class A.................................. $0.494 0.900 -- --
Class B *................................ 0.494 -- -- --
Class C *................................ 0.494 -- -- --
TAX RETURN OF CAPITAL:
Class A.................................. -- -- 0.485 0.513
Class B *................................ -- -- 0.426 0.091
Class C *................................ -- -- 0.411 0.095
<FN>
* Initial offering September 2, 1993.
</TABLE>
5. PURCHASES AND SALES OF SECURITIES
For the year ended November 30, 1994, purchases and sales of investment
securities, other than short-term securities, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Global Equity........................ $97,066,487 $98,504,257
Global Income........................ 26,188,485 28,990,912
</TABLE>
6. UNREALIZED APPRECIATION (DEPRECIATION) AND COST OF INVESTMENTS FOR FEDERAL
INCOME TAX PURPOSES
At November 30, 1994, the composition of unrealized appreciation
(depreciation) of investment securities and the cost of investments for
Federal income tax purposes were as follows:
<TABLE>
<CAPTION>
APPRECIATION (DEPRECIATION) NET TAX COST
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
Global Equity........... $20,499,912 ($3,260,543) $17,239,369 $144,076,852
Global Income........... 178,922 (375,375) (196,453) 17,865,440
</TABLE>
7. AUTHORIZED FUND SHARES AND PAR VALUE PER SHARE
<TABLE>
<CAPTION>
AUTHORIZED PAR VALUE
FUND SHARES PER SHARE
------------- ------------
<S> <C> <C>
Global Equity...................... 100,000,000 $0.01
Global Income...................... 100,000,000 0.01
</TABLE>
B-15
<PAGE>
NOVEMBER 30, 1994
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. CAPITAL LOSS CARRYFORWARDS
For the year ended November 30, 1994, Global Income had net capital loss
carryfowards of $1,077,004, of which $204,539, $214,944 and $657,521 will be
available to offset future net capital gains realized through fiscal years
ending 1998, 2001 and 2002, respectively, to the extent provided by
regulations. Capital and currency losses incurred after October 31, 1994 are
deemed to arise on the first business day of the following tax year.
Accordingly, for the fiscal year ended November 30, 1994, Global Income
incurred and elected to defer $52,073 and $127,100 in net capital and net
currency losses, respectively.
9. SUBSEQUENT EVENTS
On December 5, 1994, Global Equity declared net realized short-term and
long-term capital gain distributions of $0.3296 and $0.8985, respectively,
per share, for each class, payable December 5, 1994 to shareholders of record
on the opening of business December 5, 1994.
B-16
<PAGE>
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS DIVIDENDS AND DISTRIBUTIONS
-------------------------------------- -------------------------------------------------------
NET REALIZED DIVIDENDS TO DISTRIBUTIONS TO
NET ASSET NET AND SHAREHOLDERS SHAREHOLDERS TAX TOTAL
VALUE, INVESTMENT UNREALIZED TOTAL FROM FROM NET FROM NET RETURN DIVIDENDS
BEGINNING INCOME GAIN (LOSS) INVESTMENT INVESTMENT REALIZED GAIN OF AND
OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS INCOME ON INVESTMENTS CAPITAL DISTRIBUTIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GLOBAL EQUITY FUND
CLASS A
YEAR ENDED
NOVEMBER 30,
1994 $13.54 $ 0.01 $1.10 $1.11 -- ($0.49) -- ($0.49)
1993 12.30 -- 2.26 2.26 ($0.12) (0.90) -- (1.02)
1992 11.25 0.12 0.93 1.05 -- -- -- --
1991 10.57 (0.04) 0.85 0.81 (0.05) (0.80) -- (0.13)
JULY 2, 1990 (3)
TO NOV. 30, 1990 12.05(4) 0.05 (1.53) (1.48) -- -- -- --
CLASS B
YEAR ENDED
NOV. 30, 1994 13.52 (0.06) 1.10 1.04 -- (0.49) -- (0.49)
SEPT. 2, 1993 (5)
TO NOV. 30, 1993 13.75(4) (0.02) (0.21) (0.23) -- -- -- --
CLASS C
YEAR ENDED
NOV. 30, 1994 13.52 (0.08) 1.11 1.03 -- (0.49) -- (0.49)
SEPT. 2, 1993 (5)
TO NOV. 30, 1993 13.75(4) (0.02) (0.21) (0.23) -- -- -- --
RATIOS
-----------------------------------------
RATIO OF NET RATIO OF NET
NET ASSET NET ASSETS OPERATING INVESTMENTS
VALUE, END OF EXPENSES INCOME (LOSS) PORTFOLIO
END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
PERIOD RETURN* (000'S) NET ASSETS NET ASSETS RATE
<S> <C> <C> <C> <C> <C> <C>
GLOBAL EQUITY FUND
CLASS A
YEAR ENDED
NOVEMBER 30,
1994 $14.16 8.37% $148,044 1.92%(1,2) 0.05%(1,2) 70%
1993 13.54 19.72% 135,616 1.76% 0.04%(2) 46%
1992 12.30 9.33% 111,207 1.76%(2) 0.72%(2) 62%
1991 11.25 7.72% 46,937 2.09% (0.27%) 41%
JULY 2, 1990 (3)
TO NOV. 30, 1990 10.57 (12.28%) 58,087 2.11%(6) 0.92% 2%
CLASS B
YEAR ENDED
NOV. 30, 1994 14.07 7.84% 10,268 2.50%(1,2) (0.44%)(1,2) 70%
SEPT. 2, 1993 (5)
TO NOV. 30, 1993 13.52 (1.67%) 1,676 2.26%(2,6) (0.76%)(2,6) 46%
CLASS C
YEAR ENDED
NOV. 30, 1994 14.06 7.77% 2,415 2.66%(1,2) (0.59%)(1,2) 70%
SEPT. 2, 1993 (5)
TO NOV. 30, 1993 13.52 (1.67%) 244 2.26%(2,6) (0.69%)(2,6) 46%
<FN>
(1) AVERAGE NET ASSETS FOR THE YEAR ENDED NOVEMBER 30, 1994 FOR CLASS A, CLASS
B AND CLASS C WERE $148,460,823, $5,982,186 AND $1,150,224, RESPECTIVELY.
(2) DURING THE PERIODS PRESENTED ABOVE, THE ADVISER VOLUNTARILY WAIVED A
PORTION OF ITS FEES. IF SUCH WAIVERS HAD NOT BEEN IN EFFECT, THE RATIOS
OF NET OPERATING EXPENSES TO AVERAGE NET ASSETS AND THE RATIOS OF NET
INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS FOR CLASS A WOULD HAVE
BEEN 1.93% AND 0.04%, RESPECTIVELY, FOR THE YEAR ENDED NOVEMBER 30, 1994,
1.91% AND (0.11%), RESPECTIVELY, FOR THE YEAR ENDED NOVEMBER 30, 1993 AND
1.84% AND 0.64%, RESPECTIVELY, FOR THE YEAR ENDED NOVEMBER 30, 1992. THE
RATIOS OF NET OPERATING EXPENSES TO AVERAGE NET ASSETS AND THE RATIOS OF
NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS WOULD HAVE BEEN 2.51%
AND (0.45%), RESPECTIVELY, FOR CLASS B AND 2.66% AND (0.59%), RESPECTIVELY,
FOR CLASS C, FOR THE YEAR ENDED NOVEMBER 30, 1994 AND 2.32% AND (0.82%),
ANNUALIZED, RESPECTIVELY, FOR CLASS B AND 2.35% AND (0.78%), ANNUALIZED,
RESPECTIVELY, FOR CLASS C, FOR THE PERIOD SEPTEMBER 2, 1993 (INITIAL
OFFERING) TO NOVEMBER 30, 1993.
(3) COMMENCEMENT OF OPERATIONS.
(4) INITIAL OFFERING PRICE.
(5) INITIAL OFFERING OF CLASS B AND CLASS C SHARES, RESPECTIVELY.
(6) ANNUALIZED.
- ----------------
* Assumes reinvestment of all dividends and distributions, but does not reflect
deductions for sales charges. Aggregate (not annualized) total return is
shown for any period shorter than one year.
</TABLE>
B-17
<PAGE>
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
(CONTINUED)
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DIVIDENDS AND DISTRIBUTIONS
------------------------------------- ------------------------------------------------------
NET DISTRIBUTIONS
REALIZED TO
NET AND DIVIDEND TO SHAREHOLDERS
ASSET NET UNREALIZED SHAREHOLDERS FROM NET TAX TOTAL
VALUE, INVESTMENT GAIN (LOSS) TOTAL FROM FROM NET REALIZED RETURN DIVIDENDS
BEGINNING INCOME ON INVESTMENT INVESTMENT GAIN ON OF AND
OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS CAPITAL DISTRIBUTIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GLOBAL INCOME FUND
CLASS A
YEAR
ENDED
NOVEMBER
30, 1994 $9.36 $0.57 ($0.87) ($0.30) ($0.08) -- ($0.49) ($0.57)
1993 9.14 0.63 0.27 0.90 (0.17) -- (0.51) (0.68)
DEC. 2.,
1991(3)
TO NOV.
30, 1992 10.00(4) 0.77 (1.00) (0.23) (0.63) -- -- (0.63)
CLASS B
YEAR
ENDED
NOV. 30,
1994 9.36 0.50 (0.87) (0.37) (0.07) -- (0.43) (0.50)
SEPT 2,
1993(5)
TO NOV.
30, 1993 9.42(4) 0.12 (0.06) (0.06) (0.03) -- (0.09) (0.12)
CLASS C
YEAR ENDED
NOV. 30,
1994 9.36 0.48 (0.87) (0.39) (0.07) -- (0.41) (0.48)
SEPT 2,
1993(5)
TO NOV.
30, 1993 9.42(4) 0.13 (0.06) 0.07 (0.03) -- (0.10) (0.13)
<CAPTION>
RATIOS
--------------------------------------
NET RATIO OF NET RATIO OF NET
ASSET NET ASSETS OPERATING INVESTMENT
VALUE, END OF EXPENSES INCOME (LOSS) PORTFOLIO
END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
PERIOD RETURN* (000'S) NET ASSETS NET ASSETS RATE
<S> <C> <C> <C> <C> <C> <C>
GLOBAL INCOME FUND
CLASS A
YEAR
ENDED
NOVEMBER
30, 1994 $8.49 (3.24%) $16,781 1.65%(1,2) 6.45%(1,2) 144%
1993 9.36 10.20% 22,465 1.70%(2) 6.73 (2) 114%
DEC. 2.,
1991(3)
TO NOV.
30, 1992 9.14 (2.60%) 19,469 1.84%(2,6) 7.93%(2,6) 360%
CLASS B
YEAR
ENDED
NOV. 30,
1994 8.49 (3.99%) 1,176 2.41%(1,2) 5.71%(1,2) 144%
SEPT 2,
1993(5)
TO NOV.
30, 1993 9.36 0.65% 699 2.45%(2,6) 4.38%(2,6) 114%
CLASS C
YEAR ENDED
NOV. 30,
1994 8.49 (4.20%) 220 2.70%(1,2) 5.48%(1,2) 144%
SEPT 2,
1993(5)
TO NOV.
30, 1993 9.36 0.71% 151 2.45%(2,6) 5.16%(2,6) 114%
<FN>
(1) AVERAGE NET ASSETS FOR THE YEAR ENDED NOVEMBER 30, 1994 FOR CLASS A, CLASS
B AND CLASS C WERE $18,695,485, $1,018,251 AND $187,397, RESPECTIVELY.
(2) DURING THE PERIODS PRESENTED ABOVE, THE ADVISER VOLUNTARILY WAIVED ALL OR A
PORTION OF ITS FEES AND REIMBURSED THE FUND FOR A PORTION OF ITS OPERATING
EXPENSES. IF SUCH WAIVERS AND REIMBURSMENTS HAD NOT BEEN IN EFFECT, THE RATIOS
OF NET OPERATING EXPENSES TO AVERAGE NET ASSETS AND THE RATIOS OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS FOR CLASS A WOULD HAVE BEEN 2.35% AND 5.75%,
RESPECTIVELY, FOR THE YEAR ENDED NOVEMBER 30, 1994, 2.09% AND 6.34%,
RESPECTIVELY, FOR THE YEAR ENDED NOVEMBER 30, 1993 AND 1.88% AND 7.89%,
ANNUALIZED, RESPECTIVELY, FOR THE PERIOD DECEMBER 2, 1991 (COMMENCEMENT OF
OPERATIONS) TO NOVEMBER 30, 1992. THE RATIOS OF NET OPERATING EXPENSES TO
AVERAGE NET ASSETS AND THE RATIOS OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
WOULD HAVE BEEN 3.12% AND 5.00%, RESPECTIVELY, FOR CLASS B AND 3.39% AND 4.79%,
RESPECTIVELY, FOR CLASS C, FOR YEAR ENDED NOVEMBER 30, 1994 AND 2.88% AND 3.95%,
ANNUALIZED, RESPECTIVELY, FOR CLASS B AND 2.84% AND 4.77%, ANNUALIZED,
RESPECTIVELY, FOR CLASS C, FOR THE PERIOD SEPTEMBER 2, 1993 (INITIAL OFFERING)
TO NOVEMBER 30, 1993.
(3) COMMENCEMENT OF OPERATIONS.
(4) INITIAL OFFERING PRICE.
(5) INITIAL OFFERING OF CLASS B AND CLASS C SHARES, RESPECTIVELY.
(6) ANNUALIZED.
- -------------------
* Assumes reinvestment of all dividends and distributions, but does not reflect
deductions for sales charges. Aggregate (not annualized) total return is shown
for any period shorter than one year.
</TABLE>
B-18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of Quest for Value Global Equity Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Quest for Value Global Equity Fund,
Inc. (the "Fund") at November 30, 1994, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended and for the period July 2, 1990 (commencement of operations)
to November 30, 1990, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsiblilty of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at November 30, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of Americas
New York, New York
January 25, 1995
To the Shareholders and Board of Directors
of Global Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Global Income Fund (a series of
Quest for Value Global Funds, Inc. hereafter referred to as the "Fund") at
November 30, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the two years in the period then ended and
for the period December 2, 1991 (commencement of operations) to November 30,
1992, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsiblilty of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
November 30, 1994 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of Americas
New York, New York
January 25, 1995
B-19
<PAGE>
TAX INFORMATION
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Funds' fiscal year end (November
30, 1994) as to the Federal tax status of dividends and distributions received
by shareholders during such fiscal year. Accordingly, we are advising you that
during the fiscal year ended November 30, 1994, the Funds paid per share
dividends and distributions to shareholders as follows:
<TABLE>
<CAPTION>
Taxable as Ordinary Income
------------------------------ Tax
Net Investment Short-term Long-term Return of
Income Capital Gains Capital Gains Capital
-------------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
GLOBAL EQUITY FUND
Class A............... -- $0.0707 $0.4228 --
Class B............... -- 0.0707 0.4228 --
Class C............... -- 0.0707 0.4228 --
GLOBAL INCOME FUND
Class A............... $0.0850 -- -- $0.4853
Class B............... 0.0747 -- -- 0.4264
Class C............... 0.0719 -- -- 0.4106
</TABLE>
Since each fund's fiscal year is not the calendar year, another notification
will be sent in respect to calendar year 1994. In January 1995, you will be
advised on IRS Form 1099 DIV as to the Federal tax status of the dividends and
distributions received by you in calendar 1994. The amounts that will be
reported, will be the amounts to use on your 1994 Federal income tax return and
probably will differ from the amounts which we must report for each fund's
fiscal year ended November 30, 1994. Shareholders are advised to consult with
their own tax advisers as to the Federal, state and local tax status of each
funds' income and realized gain distributions received.
B-20
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCKS--79.4%
ARGENTINA--0.3%
- --------------------------------------------------------------------------------
Tobacco/Beverages/Food Products
30,000 Quilmes Industrial SA ADR................. $ 622,500
------------
AUSTRALIA--2.9%
- --------------------------------------------------------------------------------
Metals/Mining--1.7%
405,000 Comalco Ltd............................... 1,500,970
280,000 Western Mining Corp.
Holdings Ltd........................... 1,490,196
------------
2,991,166
------------
Oil/Gas--0.8%
1,075,000 Novus Petroleum Ltd....................... 1,374,344
------------
Tobacco/Beverages/Food Products--0.4%
795,000 Foster's Brewing Group Ltd................ 702,327
------------
Total Australian Common Stocks................................. 5,067,837
------------
AUSTRIA--2.0%
- --------------------------------------------------------------------------------
Building & Construction--1.6%
35,000 Flughafen Wien AG......................... 1,736,877
2,800 Wienerberger
Baustoffindustrie AG................... 1,048,467
------------
2,785,344
------------
Electronics--0.4%
5,000 Austria Mikro Systeme
International AG....................... 654,789
------------
Total Austrian Common Stocks................................... 3,440,133
------------
BELGIUM--0.7%
- --------------------------------------------------------------------------------
Conglomerates
4,400 Colruyt SA................................ 1,180,516
------------
DENMARK--1.0%
- --------------------------------------------------------------------------------
Telecommunications
31,200 Tele Danmark AS (Class B)................. 1,769,451
------------
FINLAND--2.6%
- --------------------------------------------------------------------------------
Retail--0.8%
30,700 Oy Stockmann AB........................... 1,382,244
------------
Telecommunications--1.8%
68,000 Oy Nokia AB............................... $ 3,108,751
------------
Total Finnish Common Stocks.................................... 4,490,995
------------
FRANCE--3.7%
- --------------------------------------------------------------------------------
Machinery & Engineering--0.7%
15,300 Schneider SA.............................. 1,202,660
------------
Oil/Gas--1.7%
38,340 Elf Aquitaine, Inc. ADR................... 1,504,845
24,710 Total SA.................................. 1,531,955
------------
3,036,800
------------
Rubber Products--0.8%
30,000 Michelin (CGDE)........................... 1,368,336
------------
Utilities--0.5%
7,200 Compagnie Generale des
Eaux................................... 798,146
------------
Total French Common Stocks..................................... 6,405,942
------------
GERMANY--3.1%
- --------------------------------------------------------------------------------
Banking--0.6%
2,200 Deutsche Bank AG.......................... 1,077,196
------------
Computer Services--1.5%
2,000 SAP AG.................................... 2,504,776
------------
Drugs & Medical Products--1.0%
2,500 Schering AG............................... 1,737,069
------------
Total German Common Stocks..................................... 5,319,041
------------
HONG KONG--0.8%
- --------------------------------------------------------------------------------
Real Estate
675,000 Hong Kong Land Holdings
Ltd.................................... 1,397,250
------------
INDONESIA--0.5%
- --------------------------------------------------------------------------------
Agriculture
733,000 PT Bakrie Sumatra
Plantations............................ 839,501
------------
ITALY--1.5%
- --------------------------------------------------------------------------------
Telecommunications--0.8%
690,000 Telecom Italia............................ 1,408,163
------------
Textiles--0.7%
170,000 Marzotto & Figli.......................... 1,134,024
------------
Total Italian Common Stocks.................................... 2,542,187
------------
</TABLE>
B-21
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Equity Fund (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
JAPAN--3.4%
- --------------------------------------------------------------------------------
Casinos/Gaming--0.2%
16,000 Heiwa Corp................................ $ 381,920
------------
Electronics--1.1%
24,000 Kyocera Corp.............................. 1,823,575
------------
Healthcare Services--0.9%
120,000 SRL, Inc.................................. 1,630,724
------------
Insurance--0.2%
80,000 Fuji Fire & Marine
Insurance.............................. 432,024
------------
Jewelry--0.0%
8,000 Nagahori Corp............................. 57,666
------------
Machinery & Engineering--0.4%
21,000 Aoki Marine Co., Ltd...................... 177,430
32,000 Kyudenko Co., Ltd......................... 431,078
------------
608,508
------------
Merchandising--0.3%
36,000 Mutow Co.................................. 329,690
30,000 Simree Co., Ltd........................... 136,484
------------
466,174
------------
Security/Investigation--0.3%
52,000 Toyo Tec Co., Ltd......................... 546,883
------------
Total Japanese Common Stocks................................... 5,947,474
------------
MALAYSIA--2.5%
- --------------------------------------------------------------------------------
Conglomerates--2.1%
690,000 Boustead Holdings Bhd..................... 1,343,883
800,000 Renong Bhd................................ 1,480,219
255,000 Technology Resources
Industries Bhd.......................... 832,928
------------
3,657,030
------------
Paper Products--0.4%
250,000 Aokam Perdana Bhd......................... 674,579
------------
Total Malaysian Common Stocks.................................. 4,331,609
------------
NETHERLANDS--3.8%
- --------------------------------------------------------------------------------
Building & Construction--0.7%
19,500 Kondor Wessels Groep NV................... 581,869
46,000 NBM-Amstelland NV......................... 578,708
------------
1,160,577
------------
Computer Services--0.7%
28,417 Getronics NV.............................. $ 1,228,844
------------
Importing/Exporting--0.7%
29,580 Hagemeyer NV.............................. 1,280,965
------------
Miscellaneous Financial Services--0.7%
22,550 International Nederlanden
Groep.................................. 1,221,732
------------
Publishing--1.0%
20,294 Wolters Kluwer............................ 1,699,934
------------
Total Netherlands Common Stocks................................ 6,592,052
------------
SINGAPORE--1.4%
- --------------------------------------------------------------------------------
Conglomerates
685,937 Jardine Strategic Holdings
Ltd.................................... 2,400,779
------------
SOUTH KOREA--0.4%
- --------------------------------------------------------------------------------
Metals/Mining
25,500 Pohang Iron & Steel Co.,
Ltd. ADR............................... 720,375
------------
SPAIN--2.0%
- --------------------------------------------------------------------------------
Building & Construction--1.0%
17,000 Fomento de Construcciones y
Contratas SA........................... 1,701,041
------------
Oil/Gas--0.4%
20,000 Repsol SA................................. 646,927
------------
Utilities--0.6%
200,000 Compania Sevillana de
Electricidad........................... 1,137,023
------------
Total Spanish Common Stocks.................................... 3,484,991
------------
SWEDEN--4.7%
- --------------------------------------------------------------------------------
Conglomerates--1.0%
20,000 ASEA AB................................... 1,698,242
------------
Drugs & Medical Products--1.0%
60,000 ASTRA AB.................................. 1,758,212
------------
Machinery & Engineering--1.9%
125,000 Atlas Copco AB............................ 1,822,952
103,400 Kalmar Industries AB...................... 1,465,667
------------
3,288,619
------------
Paper Products--0.8%
63,000 AssiDoman AB.............................. 1,408,205
------------
Total Swedish Common Stocks.................................... 8,153,278
------------
</TABLE>
B-22
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
SWITZERLAND--1.9%
- --------------------------------------------------------------------------------
Banking--0.9%
2,900 Bil GT Gruppe AG.......................... $ 1,516,502
------------
Building & Construction--1.0%
2,357 Holderbank Financiere
Glaris AG.............................. 1,875,093
------------
Total Swiss Common Stocks...................................... 3,391,595
------------
TAIWAN--0.8%
- --------------------------------------------------------------------------------
Other
15,000 Taipei Fund Units IDR..................... 1,322,250
------------
UNITED KINGDOM--4.1%
- --------------------------------------------------------------------------------
Building & Construction--0.8%
250,000 Wolseley PLC.............................. 1,457,043
------------
Retail--1.1%
355,000 Argyll Group PLC.......................... 1,882,960
76,000 Booker PLC................................ 517,167
------------
2,400,127
------------
Textiles--0.3%
450,000 Readicut International PLC................ 460,934
------------
Tobacco/Beverages/Food Products--1.0%
221,000 Guinness PLC.............................. 1,681,102
------------
Utilities--0.6%
70,000 London Electricity PLC.................... 717,008
35,000 Midlands Electricity PLC.................. 355,725
------------
1,072,733
------------
Total United Kingdom Common Stocks............................. 7,071,939
------------
UNITED STATES--35.3%
- --------------------------------------------------------------------------------
Aerospace--5.6%
25,000 Lockheed Martin Corp...................... 1,487,500
105,000 McDonnell Douglas Corp.................... 7,586,250
10,000 Sundstrand Corp........................... 555,000
------------
9,628,750
------------
Banking--6.6%
169,215 Mellon Bank Corp.......................... 7,233,941
23,000 Wells Fargo & Co.......................... 4,232,000
------------
11,465,941
------------
Chemicals--2.6%
63,000 Hercules, Inc............................. $ 3,307,500
15,000 Monsanto Co............................... 1,248,750
------------
4,556,250
------------
Conglomerates--0.5%
8,000 ITT Corp.................................. 895,000
------------
Consumer Products--0.2%
10,000 Reebok International Ltd.................. 335,000
------------
Drugs & Medical Products--2.5%
33,000 Becton Dickinson & Co..................... 1,897,500
30,000 Warner-Lambert Co......................... 2,486,250
------------
4,383,750
------------
Electronics--2.3%
35,000 Intel Corp................................ 3,928,750
------------
Insurance--4.0%
70,000 EXEL Ltd.................................. 3,272,500
61,000 Transamerica Corp......................... 3,644,750
------------
6,917,250
------------
Metals/Mining--1.3%
25,937 Freeport McMoRan Copper
& Gold (Class A)....................... 531,708
100,000 Freeport McMoRan, Inc..................... 1,725,000
------------
2,256,708
------------
Miscellaneous Financial Services--5.5%
100,000 American Express Co....................... 3,562,500
87,000 Federal Home Loan
Mortgage Corp.......................... 5,926,875
------------
9,489,375
------------
Oil/Gas--1.5%
25,000 MAPCO, Inc................................ 1,471,875
25,000 Tenneco, Inc.............................. 1,200,000
------------
2,671,875
------------
Paper Products--0.8%
30,000 Champion International
Corp................................... 1,391,250
------------
Telecommunications--1.0%
50,000 Sprint Corp............................... 1,675,000
------------
Textiles--0.9%
100,000 Shaw Industries, Inc...................... 1,587,500
------------
Total United States Common Stocks.............................. 61,182,399
------------
Total Common Stocks
(cost--$109,752,675)........................................... $137,674,094
------------
</TABLE>
B-23
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Equity Fund (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
PREFERRED STOCK--0.9%
SOUTH KOREA
- --------------------------------------------------------------------------------
Electronics
19,000 Samsung Electronics Co.
(cost--$1,609,426)..................... $ 1,514,284
------------
<CAPTION>
- --------------------------------------------------------------------------------
Warrants Value
- --------------------------------------------------------------------------------
WARRANTS--0.1%
SINGAPORE
- --------------------------------------------------------------------------------
Conglomerates
218,437 Jardine Strategic Holdings
Ltd. 5/02/98, strike @
HKD 3.57*.............................. $ 110,311
------------
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<S> <C>
CONVERTIBLE BOND--0.5%
JAPAN
- --------------------------------------------------------------------------------
Drugs & Medical Products
80,000,000 JPY Yamanouchi Pharmaceutical
1.25%, 3/31/14
(cost--$945,864)....................... $ 939,439
------------
REPURCHASE AGREEMENT--19.1%
- --------------------------------------------------------------------------------
33,125,000 US$ J.P. Morgan, 6.05%, 6/01/95,
(proceeds at maturity:
$33,130,567, collateralized
by $33,085,000 par,
$33,788,056 value, U.S.
Treasury Notes 7.25%,
11/15/96)
(cost--$33,125,000).................... $ 33,125,000
------------
Total Investments
(cost--$145,432,965)............................ 100.0% $173,363,128
Other Liabilities in Excess of
Other Assets.................................... (0.0) (46,299)
----- ------------
Total Net Assets.................................. 100.0% $173,316,829
===== ============
</TABLE>
* Non-income producing security.
B-24
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<S> <C>
AUSTRALIA--5.4%
- --------------------------------------------------------------------------------
Corporate Notes
250,000 A$ New South Wales Treasury Corp.
12.00%, 12/01/01 (A)................... $ 208,233
250,000 Queensland Treasury Corp.
8.00%, 5/14/03......................... 169,412
------------
Total Australia 377,645
------------
CZECH REPUBLIC--2.8%
- --------------------------------------------------------------------------------
Time Deposit
5,046,642 CZK ING Bank-Prague
9.50%, 6/14/95......................... 192,253
------------
DENMARK--7.7%
- --------------------------------------------------------------------------------
Government Note
3,000,000 DKK Kingdom of Denmark
8.00%, 3/15/06 (A)..................... 535,912
------------
FINLAND--3.5%
- --------------------------------------------------------------------------------
Government Note
1,000,000 FIN Government of Finland
9.50%, 3/15/04......................... 244,699
------------
FRANCE--2.9%
- --------------------------------------------------------------------------------
Government Note
1,000,000 FRF French Treasury Bond
7.50%, 4/25/05 (A)..................... 202,358
------------
GERMANY--10.2%
- --------------------------------------------------------------------------------
Government Notes
300,000 DM Bundesobligationen
7.00%, 12/22/97........................ 221,694
650,000 Treuhandanstalt
7.50%, 9/09/04 (A)..................... 485,442
------------
Total Germany 707,136
------------
IRELAND--2.9%
- --------------------------------------------------------------------------------
Government Notes
Ireland Treasury Bond (A)
75,000 Iep 8.00%, 10/18/00...................... $ 120,660
50,000 8.00%, 8/18/06....................... 79,507
------------
Total Ireland 200,167
------------
NEW ZEALAND--7.3%
- --------------------------------------------------------------------------------
Government Note
750,000 NZD$ Government of New Zealand
9.00%, 11/15/96........................ 502,933
------------
UNITED STATES--55.9%
- --------------------------------------------------------------------------------
Government Agency--3.4%
235,000 US$ Federal Home Loan Bank
6.10%, 6/01/95......................... 235,000
------------
Government Note--13.2%
900,000 U.S. Treasury Note
6.50%, 5/15/05......................... 913,779
------------
Corporate Note--8.3%
500,000 Healthtrust, Inc
10.25%, 4/15/04........................ 577,500
------------
Euronotes--31.0%
500,000 National Power Corp (Philippines)
7.625%, 11/15/00....................... 472,500
500,000 Philippine Long Distance Telephone
10.625%, 6/02/04....................... 521,250
500,000 Republic of Argentina
5.00%, 3/31/23......................... 250,312
485,000 Republic of Brazil (IDU's)
7.81%, 1/01/01 (B)..................... 389,212
500,000 Republic of South Africa
9.625%, 12/15/99....................... 513,125
------------
2,146,399
------------
Total United States............................................ 3,872,678
------------
Total Investments
(cost--$6,449,128)....................... 98.6% $ 6,835,781
Other Assets in Excess of
Other Liabilities........................ 1.4 95,681
---- ------------
Total Net Assets........................... 100.0% $ 6,931,462
===== ============
</TABLE>
(A) Securities segregated (full or partial) as collateral for open forward
currency contracts. The market value of such segregated securities is
$963,072.
(B) Represents a floating interest rate bond subject to change on the semi-
annual coupon dates, based on the current six month LIBOR rate plus 81.25
basis points.
See accompanying notes to financial statements.
B-25
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------- -------------
Global Equity Global Income
Fund Fund
------------- -------------
<S> <C> <C>
Assets
Investments, at value (cost--$112,307,965 and $6,449,128, respectively)............ $140,238,128 $ 6,835,781
Repurchase agreement (cost -- $33,125,000 and $0, respectively).................... 33,125,000 --
Cash............................................................................... 376,052 2,309
Dividends receivable............................................................... 423,226 --
Receivable for fund shares sold.................................................... 370,465 3,291
Withholding taxes reclaimable...................................................... 83,029 --
Receivable for investments sold.................................................... 17,244 --
Interest receivable................................................................ 7,569 137,959
Deferred organization expenses..................................................... 3,323 42,572
Receivable from adviser............................................................ -- 30,154
Deposits for securities loaned..................................................... 6,021,321 --
Other assets....................................................................... 49,852 51,490
------------ ------------
Total Assets.................................................................... 180,715,209 7,103,556
------------ ------------
Liabilities
Payable for investments purchased.................................................. 1,046,030 --
Payable for fund shares redeemed................................................... 125,877 --
Withholding taxes payable.......................................................... 41,262 --
Distribution fee payable........................................................... 26,989 8,492
Investment advisory fee payable.................................................... 24,770 --
Administration fee payable......................................................... 8,257 7,714
Net unrealized depreciation on forward currency contracts.......................... -- 107,076
Deposits for securities loaned..................................................... 6,021,321 --
Other payables and accrued expenses................................................ 103,874 48,812
------------ ------------
Total Liabilities............................................................... 7,398,380 172,094
------------ ------------
Net Assets
Capital stock...................................................................... 121,697 7,797
Paid-in-surplus.................................................................... 140,564,310 8,901,503
Accumulated net investment income.................................................. 874,828 --
Accumulated net realized gain (loss) on investments................................ 5,330,679 (1,560,467)
Accumulated net realized loss on foreign currency transactions..................... (1,405,075) (698,819)
Distributions in excess of net realized gains...................................... (110,149) --
Net unrealized appreciation (depreciation) on investments and translation of
other assets and liabilities denominated in foreign currencies..................... 27,940,539 281,448
------------ ------------
Total Net Assets................................................................ $173,316,829 $ 6,931,462
============ ============
Class A:
Fund shares outstanding............................................................ 10,897,900 609,877
------------ ------------
Net asset value per share.......................................................... $ 14.26 $ 8.89
============ ============
Maximum offering price per share *................................................. $ 15.09 $ 9.16
============ ============
Class B:
Fund shares outstanding............................................................ 999,259 134,676
------------ ------------
Net asset value and offering price per share....................................... $ 14.12 $ 8.89
============ ============
Class C:
Fund shares outstanding............................................................ 272,523 35,114
------------ ------------
Net asset value and offering price per share....................................... $14.09 $8.89
============ ============
</TABLE>
* Sales charges decrease on purchases of $50,000 or higher for the Global Equity
Fund and $100,000 or higher for the Global Income Fund.
See accompanying notes to financial statements.
B-26
<PAGE>
Six Months Ended May 31, 1995
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------- -------------
Global Equity Global Income
Fund Fund
------------- -------------
<S> <C> <C>
Investment Income
Dividends (net of foreign withholding taxes of $109,638 and $0, respectively)............... $ 1,585,643 $ --
Interest (net of foreign withholding taxes of $0 and $2,759, respectively).................. 800,312 634,383
------------ ------------
Total investment income.................................................................. 2,385,955 634,383
------------ ------------
Operating Expenses
Investment advisory fees (note 2a).......................................................... 606,192 34,607
Distribution fees (note 2c)................................................................. 440,912 22,601
Administration fees (note 2b)............................................................... 202,064 17,304
Transfer and dividend disbursing agent fees (note 1k)....................................... 99,463 15,562
Custodian fees.............................................................................. 96,171 25,358
Auditing, consulting and tax return preparation fees........................................ 28,305 19,019
Registration fees........................................................................... 23,340 15,997
Reports and notices to shareholders......................................................... 19,895 3,839
Amortization of deferred organization expenses (note 1c).................................... 19,536 12,145
Directors' fees and expenses................................................................ 8,581 --
Legal fees.................................................................................. 4,986 5,599
Miscellaneous............................................................................... 5,706 6,284
------------ ------------
Total operating expenses................................................................. 1,555,151 178,315
Less: Investment advisory fees waived and expense
reimbursements (note 2a).............................................................. -- (54,892)
------------ ------------
Net operating expenses................................................................ 1,555,151 123,423
------------ ------------
Net investment income................................................................. 830,804 510,960
------------ ------------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions--Net
Net realized gain (loss) on investments........................................................ 4,663,609 (394,711)
Net realized loss on option transactions....................................................... -- (36,679)
Net realized gain (loss) on foreign currency transactions...................................... (13,439) 290,355
------------ ------------
Net realized gain (loss) on investments, options and foreign currency transactions....... 4,650,170 (141,035)
Net change in unrealized appreciation (depreciation) on investments and
translation of other assets and liabilities denominated in foreign
currencies............................................................................... 10,535,967 509,938
------------ ------------
Net realized gain (loss) and change in unrealized appreciation (depreciation)
on investments and translation of other assets and liabilities denominated
in foreign currencies................................................................. 15,186,137 368,903
------------ ------------
Net increase in net assets resulting from operations........................................... $ 16,016,941 $ 879,863
============ ============
</TABLE>
See accompanying notes to financial statements.
B-27
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------- --------------------------------
Global Equity Fund Global Income Fund
---------------------------------- --------------------------------
Six Months Year Ended Six Months Year Ended
Ended November 30, Ended November 30,
May 31, 1995* 1994 May 31, 1995* 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Operations
Net investment income..................................... $ 830,804 $ 44,024 $ 510,960 $ 1,275,222
Net realized gain (loss) on investments................... 4,663,609 14,611,225 (431,390) (688,593)
Net realized gain (loss) on foreign currency
transactions............................................ (13,439) (1,391,636) 290,355 (989,174)
Net change in unrealized appreciation
(depreciation) on investments and translation
of other assets and liabilities denominated in
foreign currencies...................................... 10,535,967 (1,833,491) 509,938 (267,788)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations.................................... 16,016,941 11,430,122 879,863 (670,333)
------------ ------------ ----------- -----------
Dividends and Distributions to Shareholders
Net investment income -- Class A.......................... -- -- (465,412) (179,857)
Net investment income -- Class B.......................... -- -- (37,105) (8,671)
Net investment income -- Class C.......................... -- -- (8,443) (1,531)
Net realized gain -- Class A.............................. (12,834,813) (4,944,320) -- --
Net realized gain -- Class B.............................. (896,581) (66,298) -- --
Net realized gain -- Class C.............................. (212,761) (10,738) -- --
Tax return of capital -- Class A.......................... -- -- -- (1,026,915)
Tax return of capital -- Class B.......................... -- -- -- (49,507)
Tax return of capital -- Class C.......................... -- -- -- (8,741)
------------ ------------ ----------- -----------
Total dividends and distributions to
shareholders....................................... (13,944,155) (5,021,356) (510,960) (1,275,222)
------------ ------------ ----------- -----------
Fund Share Transactions
Class A
Net proceeds from sales................................... 15,571,099 30,817,260 832,213 2,641,672
Reinvestment of dividends and distributions............... 12,377,446 4,682,941 435,635 1,088,618
Cost of shares redeemed................................... (22,289,658) (29,503,784) (12,930,331) (7,582,775)
------------ ------------ ----------- -----------
Net increase (decrease) -- Class A...................... 5,658,887 5,996,417 (11,662,483) (3,852,485)
------------ ------------ ----------- -----------
Class B
Net proceeds from sales................................... 3,386,870 9,192,969 133,594 745,568
Reinvestment of dividends and distributions............... 832,752 64,143 27,577 45,001
Cost of shares redeemed................................... (675,446) (659,275) (189,894) (217,068)
------------ ------------ ----------- -----------
Net increase (decrease) -- Class B...................... 3,544,176 8,597,837 (28,723) 573,501
------------ ------------ ----------- -----------
Class C
Net proceeds from sales................................... 1,440,786 2,476,331 99,544 91,369
Reinvestment of dividends and distributions............... 210,836 10,736 8,141 9,804
Cost of shares redeemed................................... (337,257) (299,932) (30,939) (15,084)
------------ ------------ ----------- -----------
Net increase -- Class C................................. 1,314,365 2,187,135 76,746 86,089
------------ ------------ ----------- -----------
Total increase (decrease) in net assets
from fund share transactions...................... 10,517,428 16,781,389 (11,614,460) (3,192,895)
------------ ------------ ----------- -----------
Total increase (decrease) in net assets................... 12,590,214 23,190,155 (11,245,557) (5,138,450)
Net Assets
Beginning of period....................................... 160,726,615 137,536,460 18,177,019 23,315,469
------------ ------------ ----------- -----------
End of period (including undistributed
net investment income of $874,828,
$44,024, $0 and $0, respectively)....................... $173,316,829 $160,726,615 $ 6,931,462 $18,177,019
============ ============ =========== ===========
</TABLE>
* Unaudited.
See accompanying notes to financial statements.
B-28
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Quest for Value Global Funds (collectively, the "Funds") are registered
under the Investment Company Act of 1940 as diversified open-end management
investment companies. The Quest for Value Global Equity Fund, Inc. ("Global
Equity") commenced investment operations on July 2, 1990. The Global Income Fund
("Global Income"), a series of Quest for Value Global Funds, Inc., commenced
investment operations on December 2, 1991. Quest for Value Advisors (the
"Adviser") serves as the Funds' investment adviser and administrator. Quest for
Value Distributors (the "Distributor") serves as the Funds' distributor. Both
the Adviser and Distributor are majority-owned (99%) subsidiaries of Oppenheimer
Capital.
Prior to September 1, 1993, the Funds issued only one class of shares which
were redesignated Class A shares. Subsequent to that date, the Funds were
authorized to issue Class A, Class B and Class C shares. Shares of each Class
represent an identical interest in the investment portfolio of their respective
fund and generally have the same rights, but are offered under different sales
charge and distribution fee arrangements. Futhermore, Class B shares will
automatically convert to Class A shares of the same fund eight years after their
respective purchase.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements:
(a) Valuation of Investments
Investment securities listed on a U.S. or foreign stock exchange and
securities traded in the over-the-counter National Market System are valued at
the last reported sale price on the valuation date; if there are no such sales,
the securities are valued at their last quoted bid price. Other investments
traded over-the-counter and not part of the National Market System are valued at
the last quoted bid price. Investment debt securities (other than short-term
obligations) are valued each day by an independent pricing service (approved by
the Board of Directors) using methods which include current market quotations
from a major market maker in the securities and trader reviewed "matrix" prices.
Short-term debt securities having a remaining maturity of sixty days or less are
valued at amortized cost or amortized value, which approximates market value.
Any security or other asset for which market quotations are not readily
available is valued at its fair value as determined under procedures established
by the Funds' Board of Directors. Investments in countries in which the Funds
may invest may involve certain considerations and risks not typically associated
with domestic investments as a result of, among others, the possibility of
future political and economic developments and the level of governmental
supervision and regulation of foreign securities markets.
(b) Federal Income Taxes
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders; accordingly, no
Federal income tax provision is required.
(c) Deferred Organization Expenses
Costs incurred by Global Equity and Global Income in connection with their
organization approximated $194,000 and $122,000, respectively. These costs have
been deferred and are being amortized to expense on a straight line basis over
sixty months from commencement of the Funds' operations.
(d) Investment Transactions and Other Income
Investment transactions are accounted for on the trade date. In determining
the gain or loss from the sale of investments, the cost of investments sold is
determined on the basis of identified cost. Dividend income and other
distributions are recorded on the ex-dividend date, except certain dividends or
other distributions from foreign securities which are recorded as soon as the
information is available after the ex-dividend date. Interest income is accrued
as earned. Discounts on debt securities purchased are accreted to interest
income over the lives of the respective securities.
B-29
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
(e) Dividends and Distributions
Each fund records dividends and distributions to its shareholders on the
ex-dividend date. The following table summarizes the Funds' income dividend and
capital gain declaration policy:
<TABLE>
<CAPTION>
Income Short-Term Long-Term
Dividends Capital Gains Capital Gains
--------- ------------- -------------
<S> <C> <C> <C>
Global Equity.................... annually annually annually
Global Income.................... daily* annually annually
</TABLE>
* paid monthly.
The amount of dividends and distributions from net investment income, net
realized foreign currency gains and net realized capital gains are determined in
accordance with Federal income tax regulations, which may differ from generally
accepted accounting principles. These "book-tax" differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their Federal tax-basis treatment; temporary differences do not require
reclassification. Dividends and distributions which exceed net investment
income, net realized foreign currency gains and net realized capital gains for
financial reporting purposes but not for tax purposes are reported as dividends
in excess of net investment income, dividends in excess of net realized foreign
currency gains or distributions in excess of net realized capital gains,
respectively. To the extent dividends and distributions exceed current and
accumulated earnings and profits for Federal income tax purposes, they are
reported as dividends or distributions of paid-in-surplus or tax return of
capital. Accordingly, permanent book-tax differences relating to shareholder
distributions have been reclassified to paid-in-surplus. Net investment income
(loss), net realized foreign currency gain (loss), net realized capital
gain (loss) and net assets were not affected by this change.
(f) Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars as
follows: (1) the foreign currency market value of investment securities, other
assets and liabilities and forward contracts stated in foreign currencies are
translated at the exchange rates at the end of the period; and (2) purchases,
sales, income and expenses are translated at the rate of exchange prevailing on
the respective dates of such transactions. The resultant exchange gains and
losses are included in the Funds' Statements of Operations. Since the net assets
of the Funds are presented at the foreign exchange rates and market prices at
the close of the period, the Funds do not isolate that portion of the results of
operations arising as a result of changes in the exchange rates from
fluctuations arising from changes in the market prices of securities.
(g) Forward Currency Contracts
As part of its investment program, the Funds may utilize forward currency
contracts for hedging purposes. The use of these contracts involves, to varying
degrees, elements of market risk. Risks arise from the possible movements in
foreign exchange rates and security values underlying these instruments. In
addition, credit risk may arise from the potential inability of counterparties
to meet the terms of their contracts. Forward currency contracts are recorded at
market value. Realized gains and losses arising from such transactions are
included in net realized gain or loss on foreign currency transactions in the
results of operations. At May 31, 1995, there were no forward currency contracts
outstanding for Global Equity.
B-30
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Outstanding contracts at May 31, 1995 for Global Income are as follows:
<TABLE>
<CAPTION>
Settlement Contract to Unrealized
------------------------------------------------
Date Deliver Receive Gain (Loss)
-------- ---------------------- ------------------------ -------------
<S> <C> <C> <C> <C> <C>
06/06/95 AUS 1,500,000 US$ 1,100,400 US$ 23,300
06/06/95 US$ 936,833 AUS 1,284,000 (14,836)
06/06/95 DM 1,000,000 US$ 695,165 (12,892)
06/06/95 US$ 454,790 DM 631,350 (7,758)
06/08/95 FIN 1,940,000 US$ 448,089 104
06/08/95 US$ 456,040 FIN 1,940,000 (8,056)
06/08/95 GBP 410,000 US$ 657,600 6,542
06/08/95 US$ 658,393 GBP 410,000 (7,336)
06/09/95 CHF 850,000 US$ 647,471 (81,711)
06/09/95 US$ 663,301 CHF 850,000 65,881
07/03/95 BEL 20,550,000 US$ 649,905 (59,724)
07/03/95 US$ 660,984 BEL 20,550,000 48,645
07/07/95 CHF 520,000 US$ 461,443 14,407
07/07/95 US$ 465,075 CHF 520,000 (18,039)
07/10/95 ESP 51,270,000 US$ 380,652 (36,547)
07/10/95 US$ 396,765 ESP 51,270,000 20,434
07/24/95 JPY 45,000,000 US$ 551,673 16,059
07/24/95 US$ 521,890 JPY 45,000,000 13,724
08/02/95 DM 1,500,000 US$ 998,336 (65,841)
08/02/95 US$ 1,045,538 DM 1,500,000 18,640
08/10/95 FRF 1,550,000 US$ 293,116 (18,390)
08/10/95 US$ 112,596 FRF 550,000 (2,062)
08/17/95 DKK 792,960 US$ 140,297 (3,169)
09/01/95 IEP 125,000 US$ 204,075 1,549
-------------
US$ (107,076)
=============
</TABLE>
Net unrealized depreciation of $107,076 on these contracts at May 31, 1995
is included in the accompanying financial statements.
(h) Currency Options
When the Funds write a call or a put option on a foreign currency, an
amount equal to the premium received is included in the Funds' Statement of
Assets and Liabilities as an asset and an equivalent liability. The amount of
the liability is subsequently marked-to-market to reflect the current market
value of the option written. If the option expires on its stipulated expiration
date or if the fund enters into a closing purchase transaction, the fund will
realize a gain (or loss if the cost of a closing purchase transaction exceeds
the premium received when the option was written) without regard to any
unrealized gain or loss on the underlying foreign currency, and the liabilty
related to such option will be extinguished. If a call option which the fund has
written is exercised, the fund realizes a gain or loss from the sale of the
underlying foreign currency and the proceeds from such sale are increased by the
premium originally received. If a put option which the fund has written is
exercised, the amount of the premium originally received will reduce the cost of
the foreign currency which the fund purchases upon exercise of the option.
Written options involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Fund, as a writer of
an option, has no control over whether the option is exercised. The underlying
foreign currency may be purchased (put) or sold (called) and, as a result, the
Fund bears the market risk of an unfavorable change in the value of the foreign
currency underlying the written option. Currency options are traded in the
interbank and over-the-counter markets and counterparty credit risk can exist.
B-31
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
(i) Repurchase Agreements
The Funds' custodian takes possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued daily
on a mark-to-market basis to ensure that the value, including accrued interest,
is at least equal to the repurchase price. In the event of default of the
obligor to repurchase, the Funds have the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
(j) Security Lending Procedures
Global Equity periodically lends securities through a lending program run
by its custodian, State Street Bank and Trust Company, for its participating
clients. Under the program, the bank makes available to select qualified
brokerage firms or other borrowing institutions the use of the participants
securities for a period of time. Security loans are collateralized with U.S.
Government securities or cash equal to at least 105% of the market value of the
securities at the time of the loan. The securities loaned are marked-to-market
daily and collateral is adjusted daily to reflect any fluctuations in value.
Global Equity earns income from the borrower which is generally the
difference between the interest earned on the collateral and the rebate paid to
the borrower. Global Equity pays State Street Bank and Trust Company 35% of the
net interest earned as a fee for administering the security lending program. For
the six months ended May 31, 1995, Global Equity earned $14,273 from security
lending. At May 31, 1995, Global Equity had the following securities on loan:
<TABLE>
<CAPTION>
Market Value Market Value
Security Shares of Shares Collateral of Collateral
- -------------------------- ------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Deutsche Bank AG (Germany) 2,152 $1,053,694 U.S. Dollars $1,105,590
Holderbank Financiere
Glaris AG (Switzerland) 1,659 1,319,805 U.S. Dollars 1,385,680
Jardine Strategic
Holdings Ltd. (Singapore) 203,552 712,432 U.S. Dollars 763,320
Jardine Strategic Holdings
Ltd. Warrants (Singapore) 16,552 8,359 U.S. Dollars 8,276
Scheinder SA (France) 14,994 1,178,607 U.S. Dollars 1,237,005
Telecom Italia (Italy) 676,200 1,380,000 U.S. Dollars 1,521,450
------------ -------------
$5,652,897 $6,021,321
============ =============
</TABLE>
(k) Allocation of Expenses
Expenses specifically identifiable to a particular fund or class are borne
by that fund or class. Other expenses are allocated to each fund or class based
on its net assets in relation to the total net assets of all applicable funds or
classes or on another reasonable basis. For the six months ended May 31, 1995,
transfer and dividend disbursing agent fees accrued to Classes A, B and C were
$79,847, $13,666 and $5,950, respectively, for Global Equity and $12,975, $1,535
and $1,052, respectively, for Global Income.
2. Investment Advisory Fee, Administration Fee, Distribution Fee and Other
Transactions with Affiliates
(a) The investment advisory fees are payable monthly to the Adviser and is
computed as a percentage of each fund's net assets as of the close of business
each day at the following annual rates: .75% for Global Equity and .50% for
Global Income. For the six months ended May 31, 1995, the Adviser voluntarily
waived all of its investment advisory fee and reimbursed $20,285 in other
operating expenses for Global Income.
B-32
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(b) The administration fees are payable monthly to the Adviser and are
computed on each fund's average daily net assets at the annual rate of .25%.
(c) The Funds have adopted a Plan and Agreement of Distribution (the
"Plan") pursuant to which they are permitted to compensate the Distributor in
connection with the distribution of fund shares. Under the Plan, the Distributor
has entered into agreements with securities dealers and other financial
institutions and organizations to obtain various sales-related services in
rendering distribution assistance. To compensate the Distributor for the
services it and other dealers under the Plan provide and for the expenses they
bear under the Plan, the Funds pay the Distributor compensation, accrued daily
and payable monthly, on the daily net assets for Class A shares at the following
annual rates: .25% for Global Equity and .05% for Global Income. The Funds'
Class A shares also pay a service fee at an annual rate of .25%. Although Global
Income's Plan for Class A shares authorizes it to pay a maximum service fee of
.25% and a distribution fee of .05%, the Board of Directors has set a maximum
.25% total fee under the Plan. Compensation for Class B and Class C shares of
each fund is at an annual rate of .75% of average daily net assets. Each fund's
Class B and Class C shares also pay a service fee at the annual rate of .25% of
average daily net assets. Distribution and service fees may be paid by the
Distributor to broker-dealers or others for providing personal service,
maintenance of accounts and ongoing sales or shareholder support functions in
connection with the distribution of fund shares. While payments under the plan
may not exceed the stated percentage of average daily net assets on an annual
basis, the payments are not limited to the amounts actually paid or expenses
actually incurred by the Distributor.
For the six months ended May 31, 1995, distribution and service fees
charged to Classes A, B and C were $367,344, $58,407 and $15,161, respectively,
for Global Equity and $15,538, $5,679 and $1,384, respectively, for Global
Income.
(d) Total brokerage commissions paid by Global Equity during the six months
ended May 31, 1995 amounted to $318,699, of which $8,616 was paid to Oppenheimer
& Co., Inc., an affiliate of the Adviser.
(e) Oppenheimer & Co., Inc. has informed the Funds that it received
approximately $95,000 and $3,000, from Global Equity and Global Income,
respectively, in connection with the sale of Class A shares for the six months
ended May 31, 1995.
(f) The Distributor has informed the funds that it received contingent
deferred sales charges on the redemption of Class C shares of approximately
$1,000 and $150 for Global Equity and Global Income, respectively, for the six
months ended May 31, 1995.
(g) The Distributor has assigned the right to receive the compensation and
contingent deferred sales charge on the Class B shares to a bank in return for
the banks reimbursement to the Distributor of commissions paid by the
Distributor to broker/dealers on Class B shares.
3. Purchases and Sales of Securities
For the six months ended May 31, 1995, purchases and sales of investment
securities, other than short-term securities, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Global Equity ............................ $46,360,050 $61,015,102
Global Income ............................ 11,351,905 23,002,020
</TABLE>
B-33
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
4. Fund Share Transactions
The following table summarizes the fund share activity for the six
months ended May 31, 1995 and the year ended November 30, 1994:
<TABLE>
<CAPTION>
----------------------------- ------------------------------
Global Equity Fund Global Income Fund
----------------------------- ------------------------------
Six Months Year Ended Six Months Year Ended
Ended May 31, November 30, Ended May 31, November 30,
1995* 1994 1995* 1994
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Class A
Issued......................................... 1,167,015 2,167,814 98,678 290,147
Dividends and distributions reinvested......... 954,313 344,081 51,606 123,568
Redeemed....................................... (1,675,247) (2,079,717) (1,517,104) (837,949)
---------- ---------- ---------- ----------
Net increase (decrease) -- Class A............. 446,081 432,178 (1,366,820) (424,234)
---------- ---------- ---------- ----------
Class B
Issued......................................... 255,704 647,583 15,629 82,174
Dividends and distributions reinvested......... 64,705 4,716 3,250 5,164
Redeemed....................................... (50,821) (46,590) (22,628) (23,568)
---------- ---------- ---------- ----------
Net increase (decrease) -- Class B............. 269,588 605,709 (3,749) 63,770
---------- ---------- ---------- ----------
Class C
Issued......................................... 109,826 174,051 11,872 10,411
Dividends and distributions reinvested......... 16,395 789 957 1,118
Redeemed....................................... (25,503) (21,072) (3,678) (1,720)
---------- ---------- ---------- ----------
Net increase -- Class C........................ 100,718 153,768 9,151 9,809
---------- ---------- ---------- ----------
Total net increase (decrease).................. 816,387 1,191,655 (1,361,418) (350,655)
========== ========== ========== ==========
</TABLE>
5. Dividends and Distributions
The following table summarizes the per share dividends and distributions
made for the six months ended May 31, 1995 and the year ended November 30, 1994:
<TABLE>
<CAPTION>
------------------------------- --------------------------------
Global Equity Fund Global Income Fund
------------------------------- --------------------------------
Six Months Year Ended Six Months Year Ended
Ended May 31, November 30, Ended May 31, November 30,
1995* 1994 1995* 1994
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net investment income:
Class A........................... -- -- $0.309 $0.085
Class B........................... -- -- 0.276 0.075
Class C........................... -- -- 0.260 0.072
Net realized gains:
Class A........................... $1.228 $0.494 -- --
Class B........................... 1.228 0.494 -- --
Class C........................... 1.228 0.494 -- --
Tax return of capital:
Class A........................... -- -- -- 0.485
Class B........................... -- -- -- 0.426
Class C........................... -- -- -- 0.411
</TABLE>
* Unaudited.
B-34
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Unrealized Appreciation (Depreciation) and Cost of Investments for
Federal Income Tax Purposes
At May 31, 1995, the composition of unrealized appreciation (depreciation)
of investment securities and the cost of investments for Federal income tax
purposes were as follows:
<TABLE>
<CAPTION>
Appreciation (Depreciation) Net Tax Cost
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
Global Equity................. $30,808,595 ($3,035,566) $27,773,029 $145,867,629
Global Income................. 391,446 (4,793) 386,653 6,449,128
</TABLE>
7. Authorized Fund Shares and Par Value Per Share
<TABLE>
<CAPTION>
Authorized Par Value
Fund Shares Per Share
----------- ---------
<S> <C> <C>
Global Equity................. 100,000,000 $0.01
Global Income................. 100,000,000 0.01
</TABLE>
B-35
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (For a share outstanding throughout each period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DIVIDENDS AND DISTRIBUTIONS
------------------------------------------------- -----------------------------------------------------
Net Realized Dividends to Distributions to
Net Asset Net and Shareholders Shareholders Tax Total Net Asset
Value, Investment Unrealized Total from from Net from Net Return Dividends Value,
Beginning Income Gain (Loss) Investment Investment Realized Gain of and End of
of Period (Loss) on Investments Operations Income on Investments Capital Distributions Period
Global Equity Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
Six Months Ended
May 31, 1995 (7) $14.16 $0.07 $1.26 $1.33 $ -- ($1.23) -- ($1.23) $14.26
Year Ended
Nov. 30,
1994 13.54 0.01 1.10 1.11 -- (0.49) -- (0.49) 14.16
1993 12.30 0.00 2.26 2.26 (0.12) (0.90) -- (1.02) 13.54
1992 11.25 0.12 0.93 1.05 -- -- -- -- 12.30
1991 10.57 (0.04) 0.85 0.81 (0.05) (0.08) -- (0.13) 11.25
July 2, 1990 (3)
to Nov. 30, 1990 12.05(4) 0.05 (1.53) (1.48) -- -- -- -- 10.57
Class B
Six Months Ended
May 31, 1995 (7) 14.07 0.04 1.24 1.28 -- (1.23) -- (1.23) 14.12
Year Ended
Nov. 30, 1994 13.52 (0.06) 1.10 1.04 -- (0.49) -- (0.49) 14.07
Sept. 2, 1993 (5)
to Nov. 30, 1993 13.75(4) (0.02) (0.21) (0.23) -- -- -- -- 13.52
Class C
Six Months Ended
May 31, 1995 (7) 14.06 0.03 1.23 1.26 -- (1.23) -- (1.23) 14.09
Year Ended
Nov. 30, 1994 13.52 (0.08) 1.11 1.03 -- (0.49) -- (0.49) 14.06
Sept. 2, 1993 (5)
to Nov. 30, 1993 13.75(4) (0.02) (0.21) (0.23) -- -- -- -- 13.52
<CAPTION>
RATIOS
-----------------------------------------
Ratio of Net Ratio of Net
Net Assets Operating Investment
End of Expenses Income (Loss) Portfolio
Total Period to Average to Average Turnover
Return* (000's) Net Assets Net Assets Rate
<S> <C> <C> <C> <C> <C>
Class A
Six Months Ended
May 31, 1995 (7) 10.24% 155,369 1.87%(1,6) 1.07%(1,6) 34%
Year Ended
Nov. 30,
1994 8.37% 148,044 1.92%(2) 0.05%(2) 70%
1993 19.72% 135,616 1.76%(2) 0.04%(2) 46%
1992 9.33% 111,207 1.76%(2) 0.72%(2) 62%
1991 7.72% 46,937 2.09% (0.27%) 41%
July 2, 1990 (3)
to Nov. 30, 1990 (12.28%) 58,087 2.11%(6) 0.92%(6) 2%
Class B
Six Months Ended
May 31, 1995 (7) 9.93% 14,107 2.44%(1,2,6) 0.58%(1,2,6) 34%
Year Ended
Nov. 30, 1994 7.84% 10,268 2.50%(2) (0.44%)(2) 70%
Sept. 2, 1993 (5)
to Nov. 30, 1993 (1.67%) 1,676 2.26%(2,6) (0.76%)(2,6) 46%
Class C
Six Months Ended
May 31, 1995 (7) 9.78% 3,841 2.53%(1,2,6) (0.54%)(1,2,6) 34%
Year Ended
Nov. 30, 1994 7.77% 2,415 2.66%(2) (0.59%) (2) 70%
Sept. 2, 1993 (5)
to Nov. 30, 1993 (1.67%) 244 2.26%(2,6) (0.69%)(2,6) 46%
</TABLE>
(1) Average net assets for the six months ended May 31, 1995 for Class A, Class
B and Class C were $147,341,261, $11,713,425 and $3,040,585, respectively.
(2) During the periods noted above, the Adviser voluntarily waived a portion of
its fees. If such waivers had not been in effect, the ratios of net
operating expenses to average net assets and the ratios of net investment
income (loss) to average net assets for Class A would have been 1.93% and
0.04%, respectively, for the year ended November 30, 1994, 1.91% and
(0.11%), respectively, for the year ended November 30, 1993 and 1.84% and
0.64%, respectively, for the year ended November 30, 1992. The ratios of net
operating expenses to average net assets and the ratios of net investment
income (loss) to average net assets would have been 2.51% and (0.45%),
respectively, for Class B and 2.66% and (0.59%), respectively, for Class C,
for the year ended November 30, 1994 and 2.32% and (0.82%), annualized,
respectively, for Class B and 2.35% and (0.78%), annualized, respectively,
for Class C, for the period September 2, 1993 (initial offering) to November
30, 1993.
(3) Commencement of operations.
(4) Initial offering price.
(5) Initial offering of Class B and Class C shares.
(6) Annualized.
(7) Unaudited.
- ---------------
* Assumes reinvestment of all dividends and distributions, but does not reflect
deductions for sales charges. Aggregate (not annualized) total return is shown
for any period shorter than one year.
B-36
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DIVIDENDS AND DISTRIBUTIONS
---------------------------------------------------- ---------------------------------------------------
Net Realized Dividends to Distributions to
Net Asset Net and Shareholders Shareholders Tax Total
Value, Investment Unrealized Total from from Net from Net Return Dividends
Beginning Income Gain (Loss) Investment Investment Realized Gain of and
of Period (Loss) on Investments Operations Income on Investments Capital Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Global Income Fund
Class A
Six Months Ended
May 31, 1995 (7) $8.49 $0.31 $0.40 $0.71 ($0.31) -- $-- ($0.31)
Year Ended
Nov. 30,
1994 9.36 0.57 (0.87) (0.30) (0.08) -- (0.49) (0.57)
1993 9.14 0.63 0.27 0.90 (0.17) -- (0.51) (0.68)
Dec. 2, 1991 (3)
to Nov. 30, 1992 10.00(4) 0.77 (1.00) (0.23) (0.63) -- -- (0.63)
Class B
Six Months Ended
May 31, 1995 (7) 8.49 0.28 0.40 0.68 (0.28) -- -- (0.28)
Year Ended
Nov. 30, 1994 9.36 0.50 (0.87) (0.37) (0.07) -- (0.43) (0.50)
Sept. 2, 1993 (5)
to Nov. 30, 1993 9.42(4) 0.12 (0.06) 0.06 (0.03) -- (0.09) (0.12)
Class C
Six Months Ended
May 31, 1995 (7) 8.49 0.26 0.40 0.66 (0.26) -- -- (0.26)
Year Ended
Nov. 30, 1994 9.36 0.48 (0.87) (0.39) (0.07) -- (0.41) (0.48)
Sept. 2, 1993 (5)
to Nov. 30, 1993 9.42(4) 0.13 (0.06) 0.07 (0.03) -- (0.10) (0.13)
<CAPTION>
RATIOS
-----------------------------------------
Ratio of Net Ratio of Net
Net Asset Net Assets Operating Investment
Value, End of Expenses Income (Loss) Portfolio
End of Total Period to Average to Average Turnover
Period Return* (000's) Net Assets Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
Global Income Fund
Class A
Six Months Ended
May 31, 1995 (7) $8.89 8.57% 5,422 1.70%(1,2,6) 7.49%(1,2,6) 90%
Year Ended
Nov. 30,
1994 8.49 (3.24%) 16,781 1.65%(2) 6.45%(2) 144%
1993 9.36 10.20% 22,465 1.70%(2) 6.73%(2) 114%
Dec. 2, 1991 (3)
to Nov. 30, 1992 9.14 (2.60%) 19,469 1.84%(2,6) 7.93%(2,6) 360%
Class B
Six Months Ended
May 31, 1995 (7) 8.89 8.17% 1,197 2.44%(1,2,6) 6.53%(1,2,6) 90%
Year Ended
Nov. 30, 1994 8.49 (3.99%) 1,176 2.41%(2) 5.71%(2) 144%
Sept. 2, 1993 (5)
to Nov. 30, 1993 9.36 0.65% 699 2.45%(2,6) 4.38%(2,6) 114%
Class C
Six Months Ended
May 31, 1995 (7) 8.89 7.96% 312 2.84%(1,2,6) 6.10%(1,2,6) 90%
Year Ended
Nov. 30, 1994 8.49 (4.20%) 220 2.70%(2) 5.48%(2) 144%
Sept. 2, 1993 (5)
to Nov. 30, 1993 9.36 0.71% 151 2.45%(2,6) 5.16%(2,6) 114%
</TABLE>
(1) Average net assets for the six months ended May 31, 1995 for Classes A, B
and C were $12,464,638, $1,138,777 and $277,617, respectively.
(2) During the periods noted above, the Adviser voluntarily waived all or a
portion of its fees and reimbursed the fund for a portion of its
operating expenses. If such waivers and reimbursements had not been in
effect, the ratios of net operating expenses to average net assets and
the ratios of net investment income to average net assets for Class A
would have been 2.48% and 6.71%, annualized, respectively for the six
months ended May 31, 1995, 2.35% and 5.75%, respectively, for the year
ended November 30, 1994, 2.09% and 6.34%, respectively, for the year ended
November 30, 1993 and 1.88% and 7.89%, annualized, respectively, for the
period December 2, 1991 (commencement of operations) to November 30,
1992. The ratios of net operating expenses to average net assets and the
ratios of net investment income to average net assets would have been 3.37%
and 5.60%, annualized, respectively, for Class B and 3.80% and 5.14%,
annualized, respectively, for Class C, for the six months ended May 31,
1995, 3.12% and 5.00%, respectively, for Class B and 3.39% and 4.79%,
respectively, for Class C, for the year ended November 30, 1994 and 2.88%
and 3.95%, annualized, respectively, for Class B and 2.84% and 4.77%,
annualized, respectively, for Class C, for the period September 2, 1993
(initial offering) to November 30, 1993.
(3) Commencement of operations.
(4) Initial offering price.
(5) Initial offering of Class B and Class C shares.
(6) Annualized.
(7) Unaudited.
- ------------------
* Assumes reinvestment of all dividends and distributions, but does not reflect
deductions for sales charges. Aggregate (not annualized) total return is shown
for any period shorter than one year.
B-37
<PAGE>
PART C OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS:
Included in the Prospectus:
Financial Highlights
Included in Part B:
AUDITED FINANCIALS: Schedule of Investments,
Statement of Assets and Liabilities, Statement of
Operations, Statement of Changes in Net Assets for
the two fiscal years ended November 30, 1994, Notes
to Financial Statements, Financial Highlights, and
Report of Independent Accountants for the fiscal year
ended November 30, 1994.
UNAUDITED FINANCIALS: Schedule of Investments, Statement
of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets, Notes to Financial
Statements and Financial Highlights for the Six-month period
ended May 31, 1995.
Included in Part C:
None
Exhibits:
---------
(1) Articles of Incorporation; originally
filed as Exhibit 1 to the Registration Statement
on Form N-1A filed on May 4, 1990; Amendment filed
as Exhibit 1(b) to Pre-Effective Amendment No. 3.
(2) By-Laws; originally filed as Exhibit 2
to the Registration Statement on Form N-1A filed
on May 4, 1990; Amendment filed as Exhibit 2(b) to
Pre-Effective Amendment No. 3.
(3) Not Applicable.
(4) Not Applicable.
(5) (a) Investment Advisory Agreement.
(b) Subadvisory Agreement.
(b) Administration Agreement.
(6) (a) General Distributor's Agreement.
C-1
<PAGE>
(b) Dealer Agreement. *
(7) Not Applicable.
(8) Custody Agreement. *
(9) Not Applicable.
(10) Opinion and consent of counsel as to the
legality of the securities being registered,
indicating whether they will when sold be legally
issued, fully paid and non-assessable. *
(11) Consent of Independent Accountants.
(12) Not Applicable.
(13) Initial Capital Agreement. *
(14) Not Applicable.
(15) (a) Amended and Restated Distribution and
Service Plan and Agreement with respect to
Class A shares.
(b) Amended and Restated Distribution and
Service Plan and Agreement in respect of
Class B shares.
(c) Amended and Restated Distribution and
Service Plan and Agreement with respect to
Class C Shares.
(16) Performance Calculations. *
* Previously filed with Pre-Effective Amendment No. 3.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
No person is presently controlled by or under common control with
Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
Number of Record
Holders as of
Title of Class September 26, 1995
- -------------- ------------------
<S> <C>
Common Stock......................... 7,836
------
------
</TABLE>
ITEM 27. INDEMNIFICATION
See Registrant's Articles of Incorporation (Exhibit 1), Article Eighth,
Section 6 and 7, which is incorporated herein by reference.
C-2
<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) Oppenheimer Management Corporation is the investment adviser of the
Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts A
and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any time
during the past two fiscal years has been, engaged for his/her own account or
in the capacity of director, officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals
Fund and Oppenheimer Global Emerging Growth
Fund.
Victor Babin, None.
Senior Vice President
Bruce Bartlett, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc.
and Oppenheimer Variable Account
Funds; formerly a Vice President
and Senior Portfolio Manager at
First of America Investment Corp.
Robert J. Bishop Assistant Treasurer of the OppenheimerFunds
Assistant Vice President (listed below); previously a Fund
Controller for Oppenheimer Management
Corporation (the "Manager").
George Bowen Treasurer of the New York-based
Senior Vice President OppenheimerFunds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
OppenheimerFunds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
</TABLE>
C-3
<PAGE>
<TABLE>
<S> <C>
adviser subsidiary of the Manager; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers; formerly Senior Vice President/
Comptroller and Secretary of Oppenheimer
Asset Management Corporation ("OAMC"), an
investment adviser which was a subsidiary of
the OMC.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Formerly Vice President\Director of
Vice President Internal Audit of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
Senior Vice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer
Target Fund and Oppenheimer Variable Account
Funds; Senior Vice President and Portfolio
Manager of Strategic Income & Growth Fund.
John Doney, Vice President and Portfolio Manager of
Vice President Oppenheimer Equity Income Fund.
</TABLE>
C-4
<PAGE>
<TABLE>
<S> <C>
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President & OppenheimerFunds; Vice President of the
General Counsel Denver-based OppenheimerFunds; Executive
Vice President, Director and General Counsel
of the Distributor; formerly Senior Vice
President and Associate General Counsel of
the Manager and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President and Portfolio Manager
Vice President of Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the OppenheimerFunds;
Assistant Vice President previously a Fund Controller for the Manager.
Katherine P. Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board, Acquisition Corp. ("OAC"), the Manager's
Chief Executive Officer parent holding company; President, CEO and
and Director a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
OppenheimerFunds; formerly President of the
Manager. President and Chairman of the Board
of Main Street Advisers, Inc.
Robert G. Galli, Trustee of the New York-based
Vice Chairman OppenheimerFunds; Vice President and Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of
HarbourView and Centennial, a director of SFSI
and SSI, an officer of other OppenheimerFunds
and Executive Vice President & General Counsel
of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
</TABLE>
C-5
<PAGE>
<TABLE>
<S> <C>
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman Brothers.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Bond Fund and
Oppenheimer Intermediate Tax Exempt Bond
Fund; an officer of other OppenheimerFunds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, None.
Vice President
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Bennett Inkeles, Formerly employed by Doremus & Company, an
Assistant Vice President advertising agency.
Stephen Jobe, None.
Vice President
Heidi Kagan None.
Assistant Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund; Associate Portfolio
Manager of Oppenheimer Discovery Fund and
Oppenheimer Time Fund. Formerly a Securities
Analyst for Columbus Circle Investors.
</TABLE>
C-6
<PAGE>
<TABLE>
<S> <C>
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director of HarbourView; Director of Main
President and Director Street Advisers, Inc.; and Chairman of
Shareholder Services, Inc.
Sally Marzouk, None.
Vice President
Marilyn Miller, Formerly a director of marketing for
Vice President TransAmerica Fund Management Company.
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund, Oppenheimer
Multiple Strategies Fund, Oppenheimer
Strategic Investment Grade Bond Fund,
Oppenheimer Asset Allocation Fund, Oppenheimer
Strategic Diversified Income Fund, Oppenheimer
Strategic Income Fund, Oppenheimer Strategic
Income & Growth Fund, Oppenheimer Strategic
Short-Term Income Fund, Oppenheimer High Income
Fund and Oppenheimer Bond Fund; an officer of
other OppenheimerFunds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
</TABLE>
C-7
<PAGE>
<TABLE>
<S> <C>
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Bond Fund, Oppenheimer Intermediate Tax-
Exempt Bond Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer New Jersey
Tax-Exempt Fund, Oppenheimer Pennsylvania
Tax-Exempt Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York Tax-Exempt
Fund and Oppenheimer Tax-Free Bond Fund;
Vice President of the New York Tax-Exempt
Income Fund, Inc.; Vice President of Oppenheimer
Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund and
Portfolio Manager for Oppenheimer Variable
Account Funds-Growth Fund; Senior Investment
Officer and Portfolio Manager with Chemical
Bank.
Russell Read, Formerly an International Finance Consultant
Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-Government
Trust; an officer of other OppenheimerFunds;
formerly a Securities Analyst for the Manager.
David Robertson, None.
Vice President
Adam Rochlin, Formerly a product manager for Metropolitan
Assistant Vice President Life Insurance Company.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund and
Oppenheimer U.S. Government Trust. Formerly
Vice President and Senior Portfolio Manager
for Delaware Investment Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
</TABLE>
C-8
<PAGE>
<TABLE>
<S> <C>
Strategies Fund; an officer of other
OppenheimerFunds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
James Ruff, None.
Executive Vice President
Ellen Schoenfeld, None.
Assistant Vice President
Diane Sobin, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc. and
Oppenheimer Variable Account Funds;
formerly a Vice President and Senior Portfolio
Manager for Dean Witter InterCapital, Inc.
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus OppenheimerFunds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Investment Grade Bond
Fund, Oppenheimer Strategic Short-Term
Income Fund; an officer of other OppenheimerFunds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion High Yield Fund and
Oppenheimer High Yield Fund; an officer of
other OppenheimerFunds.
John Stoma, Formerly Vice President of Pension Marketing
Vice President with Manulife Financial.
</TABLE>
C-9
<PAGE>
<TABLE>
<S> <C>
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors OppenheimerFunds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, None.
Vice President
Jay Tracey, Vice President of the Manager; Vice President
Vice President and Portfolio Manager of Oppenheimer Discovery
Fund. Formerly Managing Director of Buckingham
Capital Management.
Gary Tyc, Assistant Treasurer of the Distributor and
Vice President, SFSI.
Assistant Secretary
and Assistant Treasurer
Ashwin Vasan, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-Government
Trust: an officer of other OppenheimerFunds.
Valerie Victorson, None.
Vice President
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc., Oppenheimer
Cash Reserves, Centennial America Fund, L.P.,
Centennial Government Trust and Centennial Money
Market Trust; Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
OppenheimerFunds.
</TABLE>
C-10
<PAGE>
<TABLE>
<S> <C>
Susan Wilson-Perez, None.
Vice President
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc., Centennial
America Fund, L.P., Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the OppenheimerFunds;
and Assistant Secretary Assistant Secretary of SSI, SFSI; an officer
of other OppenheimerFunds.
Eva A. Zeff, An officer of certain OppenheimerFunds; Assistant
Vice President formerly a Securities Analyst for
the Manager.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
OppenheimerFunds.
</TABLE>
The OppenheimerFunds include the New York-based OppenheimerFunds and the
Denver-based OppenheimerFunds set forth below:
New York-based OppenheimerFunds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Trust
Oppenheimer Fund
C-11
<PAGE>
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based OppenheimerFunds
Oppenheimer Cash Reserves
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
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-based
OppenheimerFunds, Oppenheimer Funds 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 OppenheimerFunds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., Oppenheimer Shareholder Services,
Centennial Asset Management Corporation, Centennial Capital Corp., and Main
Street Advisers, Inc. is 3410 South Galena Street, Denver, Colorado 80231.
ITEM 29. PRINCIPAL UNDERWRITER
(a) Oppenheimer Funds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in Part A and B of this
Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal underwriter
are:
C-12
<PAGE>
<TABLE>
<CAPTION>
Name & Principal Positions and
with Positions & Offices
Business Address with Underwriter Registrant Offices
- ---------------- --------------------------- -------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Vice President, Secretary and
Treasurer
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President -- None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Mary Crooks+ Vice President None
Paul Della Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Vice President & Director
President
</TABLE>
C-13
<PAGE>
<TABLE>
<S> <C> <C>
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Wendy Fishler* Vice President -- None
Financial Institution Div.
Wayne Flanagan Vice President -- None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Senior Vice President -- None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President -- None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager -- Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. -- #1
</TABLE>
C-14
<PAGE>
<TABLE>
<S> <C> <C>
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Hans Klehmet II Vice President None
26542 Love Lane
Ramona, CA 92065
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President -- None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President -- None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President -- None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President -- None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
</TABLE>
C-15
<PAGE>
<TABLE>
<S> <C> <C>
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
664 Circuit Road
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President -- None
Financial Institution Div.
Minnie Ra Vice President -- None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President -- None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Robert Shore Vice President -- None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President -- None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
Paul Stickney Vice President None
1314 Log Cabin Lane
St. Louis, MO 63124
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President -- None
3410 South Galena St. Financial Institution Div.
Executive Suites, 3rd Fl.
Denver, CO 80231
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
Bernard J. Wolocko Vice President None
33915 Grand River
Farmington, MI 48335
William Harvey Young+ Vice President None
</TABLE>
C-17
<PAGE>
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of both Oppenheimer
Management Corporation at its offices at 3410 South Galena Street, Denver,
Colorado 80231 and MassMutual at its offices at 1295 State Street,
Springfield, Massachusetts 01111.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
(a) Registrant hereby undertakes to assist shareholder communication in
accordance with the provisions of Section 16 of the Investment Company
Act of 1940 and to call a meeting of shareholders for the purpose of
voting upon the question of the removal of a Director or Directors
when requested to do so in writing by the holders of at least 10% of
the Registrant's outstanding shares of common stock.
(b) Insofar as indemnification for liabilities under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in
such Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than a payment by
the Registrant of expenses incurred by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
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 of whether such indemnification
by it is against public policy as expressed in the Act, and will be
governed by the final adjudication of such issue.
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's annual report to
shareholders upon request and without charge, if the information
called for by Item 5A7 Form N-1A is contained in the latest annual
report to shareholders.
C-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant has duly caused this
registration statement to be signed on its behalf by the undersigned thereto
duly authorized in the City of New York, and State of New York on the 29th
day of September, 1995.
QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
/s/ Joseph M. La Motta, President
---------------------------------------
Joseph M. La Motta, President
Attest:
/s/ Deborah Kaback, Secretary
- -------------------------------------
Deborah Kaback, Secretary
Pursuant to the requirements of the Securities Act of 1933 this
registration statement has been signed below by the following persons
in the capacities and on the date indicated:
QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
DATE
/s/ Joseph M. La Motta September 29, 1995
- --------------------------------------- -------------------
Joseph M. La Motta, President, Director
/s/ Paul Y. Clinton, September 29, 1995
- --------------------------------------- -------------------
Paul Y. Clinton, Director
/s/ Thomas W. Courtney September 29, 1995
- --------------------------------------- -------------------
Thomas W. Courtney, Director
/s/ Lacy B. Herrmann September 29, 1995
- --------------------------------------- -------------------
Lacy B. Herrmann, Director
/s/ George Loft September 29, 1995
- --------------------------------------- -------------------
George Loft, Director
/s/ Deborah Kaback September 29, 1995
- --------------------------------------- -------------------
Deborah Kaback, Secretary
/s/ Sheldon Siegel September 29, 1995
- --------------------------------------- -------------------
Sheldon Siegel, Treasurer
C-19
<PAGE>
QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
5(a) Investment Advisory Agreement
5(b) Subadvisory Agreement
5(c) Administration Agreement
6(a) General Distributor's Agreement
6(b) Dealer Agreement
(11) Consent of Independent Accountants
(15)(a) Amended and Restated Distribution and Service Plan
and Agreement in respect of Class A shares
(15)(b) Amended and Restated Distribution and Service Plan
and Agreement in respect of Class B shares
15(c) Amended and Restated Distribution and Service Plan
and Agreement in respect of Class C Shares
</TABLE>
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the ____ day of October, 1995, by and between OPPENHEIMER/
QUEST FOR VALUE GLOBAL EQUITY FUND, INC., a Maryland corporation (hereinafter
referred to as the "Company"), and OPPENHEIMER MANAGEMENT CORPORATION
(hereinafter referred to as "OMC").
WHEREAS, the Company is an open-end, diversified management investment
company registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), and OMC is an investment adviser registered as such with the
Commission under the Investment Advisors Act of 1940;
WHEREAS, the Company desires that OMC shall act as its investment adviser
with respect to each Series pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as follows:
1. GENERAL PROVISIONS:
The Company hereby employs OMC and OMC hereby undertakes to act as the
investment adviser of the Company in connection with and for the benefit of each
Series, including any Series hereafter created and to perform for the Company
such other duties and functions in connection with each Series for the period
and on such terms as set forth in this Agreement. OMC shall, in all matters,
give to the Company and its Board of Directors (the "Directors") the benefit of
its best judgement, effort, advice and recommendations and shall, at all times
conform to, and use its best efforts to enable the Company to conform to (i) the
provisions of the Investment Company Act and any rules or regulations
thereunder; (ii) any
1
<PAGE>
other applicable provisions of state or Federal law; (iii) the provisions of the
Certificate of Incorporation and By-Laws of the Company as amended from time to
time; (iv) policies and determinations of the Directors; (v) the fundamental
policies and investment restrictions of each Series as reflected in the
registration statement of the Company under the Investment Company Act or as
such policies may, from time to time, be amended and (vi) the Prospectus and
Statement of Additional Information of each Series in effect from time to time.
The appropriate officers and employees of OMC shall be available upon reasonable
notice for consultation with any of the Directors and officers of the Company
with respect to any matters dealing with the business and affairs of the Company
including the valuation of portfolio securities of the Company which are either
not registered for public sale or not traded on any securities market.
2. INVESTMENT MANAGEMENT:
(a) OMC shall, subject to the direction and control by the Directors,
(i) regularly provide investment advise and recommendations to the Company with
respect to the investments, investment policies and the purchase and sale of
securities for each Series; (ii) supervise continuously the investment program
of each Series of the Company and the composition of its portfolio and determine
what securities shall be purchased or sold by; and(iii) arrange, subject to the
provisions of paragraph 7 hereof, for the purchase of securities and other
investments for each Series of the Company and the sale of securities and other
investments held in the portfolio of each Series.
(b) Provided that the Company shall not be required to pay any
compensation for services under this Agreement other than as provided by the
terms of the Agreement and subject to the provisions of paragraph 7 hereof, OMC
may obtain investment information,
2
<PAGE>
research or assistance from any other person, firm or corporation to supplement,
update or otherwise improve its investment management services including
entering into sub-advisory agreements with other affiliated or unaffiliated
registered investment advisors to obtain specialized services.
(c) Provided that nothing herein shall be deemed to protect OMC from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard of its obligations and duties under this
Agreement, OMC shall not be liable for any loss sustained by reason of good
faith errors or omissions in connection with any matters to which this Agreement
relates.
(d) Nothing in this Agreement shall prevent OMC or any entity
controlling, controlled by or under common control with OMC or any officer
thereof from acting as investment adviser for any other person, firm or
corporation or in any way limit or restrict OMC or any of its directors,
officers, stockholders or employees from buying, selling or trading any
securities for its or their own account or for the account of others for whom it
or they may be acting, provided that such activities will not adversely affect
or otherwise impair the performance by OMC of its duties and obligations under
this Agreement.
3. OTHER DUTIES OF OMC:
OMC shall, at its own expense, provide and supervise the activities of
all administrative and clerical personnel as shall be required to provide
effective corporate administration for the Company, including the compilation
and maintenance of such records with respect to its operations as may reasonably
be required; the preparation and filing of such reports with respect thereto as
shall be required by the Commission; composition of periodic reports with
respect to operations of each Series of the Company for its shareholders;
3
<PAGE>
composition of proxy materials for meetings of the Company's shareholders; and
the composition of such registration statements as may be required by Federal
and state securities laws for continuous public sale of Shares of each Series
and the Company. OMC shall, at its own cost and expense, also provide the
Company with adequate office space, facilities and equipment. OMC shall, at its
own expense, provide such officers for the Company as the Board of Directors may
request.
4. ALLOCATION OF EXPENSES:
All other costs and expenses of the Fund not expressly assumed by OMC
under this Agreement, or to be paid by the Distributor of the Shares of the
Fund, shall be paid by the Fund, including, but not limited to: (i) interest,
taxes and governmental fees; (ii) brokerage commissions and other expenses
incurred in acquiring or disposing of the portfolio securities and other
investments of each Series; (iii) insurance premiums for fidelity and other
coverage requisite to its operations; (iv) compensation and expenses of its
Directors other than those affiliated with OMC; (v) legal and audit expenses;
(vi) custodian and transfer agent fees and expenses; (vii) expenses incident to
the redemption of its Shares; (viii) expenses incident to the issuance of its
Shares against payment therefor by or on behalf of the subscribers thereto; (ix)
fees and expenses, other than as hereinabove provided, incident to the
registration under Federal and state securities laws of Shares of the Company
and Series for public sale; (x) expenses of printing and mailing reports,
notices and proxy materials to shareholders of the Company and each Series; (xi)
except as noted above, all other expenses incidental to holding meetings of the
Company's shareholders; and (xii) such extraordinary non-recurring expenses as
may arise, including litigation, affecting the Company or any Series thereof and
any legal obligation which the Company, or any Series of the Company, may have
to indemnify its
4
<PAGE>
officers and Directors with respect thereto. Any officers or employees of OMC
or any entity controlling, controlled by, or under common control with, OMC who
also serve as officers, Directors or employees of the Company shall not receive
any compensation from the Company or any Series thereof for their services.
5. COMPENSATION OF OMC:
The Company agrees to pay OMC and OMC agrees to accept as full
compensation for the performance of all functions and duties on its part to be
performed pursuant to the provisions hereof, a fee computed on the total net
asset value of each Series of the Company as of the close of each business day
and payable monthly at the annual rate for each Series set forth on Schedule A
hereto.
6. USE OF NAME "OPPENHEIMER" OR "QUEST FOR VALUE":
OMC hereby grants to the Company a royalty-free, non-exclusive license
to use the name "Oppenheimer" or "Quest For Value" in the name of the Company
for the duration of this Agreement and any extensions or renewals thereof. To
the extent necessary to protect OMC's rights to the name "Oppenheimer" or "Quest
For Value" under applicable law, such license shall allow OMC to inspect and,
subject to control by the Company's Board, control the nature and quality of
services offered by the Company under such name and may, upon termination of
this Agreement, be terminated by OMC, in which event the Company shall promptly
take whatever action may be necessary to change its name and discontinue any
further use of the name "Oppenheimer" or "Quest For Value" in the name of the
Company or otherwise. The name "Oppenheimer" and "Quest For Value" may be used
or licensed by OMC in connection with any of its activities, or licensed by OMC
to any other party.
7. PORTFOLIO TRANSACTIONS AND BROKERAGE:
5
<PAGE>
(a) OMC (and any Sub Advisor) is authorized, in arranging the
purchase and sale of the portfolio securities of each Series of the Company to
employ or deal with such members of securities or commodities exchanges, brokers
or dealers (hereinafter "broker-dealers"), including "affiliated" broker-dealers
(as that term is defined in the Investment Company Act), as may, in its best
judgment, implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable security
price obtainable) of the portfolio transactions of each Series of the Company as
well as to obtain, consistent with the provisions of subparagraph (c) of this
paragraph 7, the benefit of such investment information or research as will be
of significant assistance to the performance by OMC of its investment management
functions.
(b) OMC (and any Sub Advisor) shall select broker-dealers to effect
the portfolio transactions of each Series of the Company on the basis of its
estimate of their ability to obtain best execution of particular and related
portfolio transactions. The abilities of a broker-dealer to obtain best
execution of particular portfolio transaction(s) will be judged by OMC (or any
Sub Advisor) on the basis of all relevant factors and considerations including,
insofar as feasible, the execution capabilities required by the transaction or
transactions; the ability and willingness of the broker-dealer to facilitate the
portfolio transactions of each Series of the Company by participating therein
for its own account; the importance to the Company of speed, efficiency or
confidentiality; the broker-dealer's apparent familiarity with sources from or
to whom particular securities might be purchased or sold; as well as any other
matters relevant to the selection of a broker-dealer for particular and related
transactions of each Series of the Company.
6
<PAGE>
(c) OMC (and any Sub Advisor) shall have discretion, in the interest
of the Company and each Series, to allocate brokerage on the portfolio
transactions of each Series of the Company to broker-dealers, other than an
affiliated broker-dealers, qualified to obtain best execution of such
transactions who provide brokerage and/or research services (as such services
are defined in Section 28(e)(3) of the Securities Exchange Act of 1934) for the
Fund and/or other accounts for which OMC or its affiliates (or any Sub Advisor)
exercise "investment discretion" (as that term is defined in Section 3(a)(35) of
the Securities Exchange Act of 1934) and to cause the Company or a Series to pay
such broker-dealers a commission for effecting a portfolio transaction for the
Company or a Series that is in excess of the amount of commission another
broker-dealer adequately qualified to effect such transaction would have charged
for effecting that transaction, if OMC determines (or any Sub Advisor), in good
faith, that such commission is reasonable in relation to the value of the
brokerage and/or research services provided by such broker-dealer viewed in
terms of either that particular transaction or the overall responsibilities of
OMC or its affiliates (or any Sub Advisor) with respect to accounts as to which
they exercise investment discretion. In reaching such determination, OMC (or
any Sub Advisor) will not be required to place or attempt to place a specific
dollar value on the brokerage and/or research services provided or being
provided by such broker-dealer. In demonstrating that such determinations were
made in good faith, OMC (and any Sub Advisor) shall be prepared to show that
all commissions were allocated for purposes contemplated by this Agreement and
that the total commissions paid by the Company and each Series over a
representative period selected by the Company's Trustees were reasonable in
relation to the benefits to the Company and each Series.
7
<PAGE>
(d) OMC (or any Sub Advisor) shall have no duty or obligation to
seek advance competitive bidding for the most favorable commission rate
applicable to any particular portfolio transactions or to select any broker-
dealer on the basis of its purported or "posted" commission rate but will, to
the best of its ability, endeavor to be aware of the current level of the
charges of eligible broker-dealers and to minimize the expense incurred by the
Company and each Series for effecting its portfolio transactions to the extent
consistent with the interests and policies of the Company and each Series as
established by the determinations of the Board of Directors of the Company and
the provisions of this paragraph 7.
(e) The Company recognizes that an affiliated broker-dealer: (i) may
act as one of the Company's regular brokers for the Company or a Series thereof
so long as it is lawful for it so to act; (ii) may be a major recipient of
brokerage commissions paid by the Company or a Series; and (iii) may effect
portfolio transactions for the Company or a Series thereof only if the
commissions, fees or other renumeration received or to be received by it are
determined in accordance with procedures contemplated by any rule, regulation or
order adopted under the Investment Company Act for determined the permissible
level of such commissions.
(f) Subject to the foregoing provisions of this paragraph 7, OMC
(and any Sub Advisor) may also consider sales of Shares of the Company, each
Series thereof and the other funds advised by OMC and its affiliates as a
factor in the selection of broker-dealers for its portfolio transactions.
8. DURATION:
This Agreement will take effect on the date first set forth above.
Unless earlier terminated pursuant to paragraph 10 hereof, this Agreement shall
remain in effect from year to year, so long as such continuance shall be
approved at least annually by the Company's
8
<PAGE>
Board of Directors, including the vote of the majority of the Directors of the
Company who are not parties to this Agreement or "interested persons" (as
defined in the Investment Company Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval, or by the holders of
a "majority" (as defined in the Investment Company Act) of the outstanding
voting securities of the Company, or each Series thereof, and by such a vote of
the Company's Board of Directors.
9. TERMINATION.
This Agreement may be terminated (i) by OMC at any time without
penalty upon sixty days' written notice to the Company (which notice may be
waived by the Company); or (ii) by the Company at any time without penalty upon
sixty days' written notice to OMC (which notice may be waived by OMC) provided
that such termination by the Company shall be directed or approved by the vote
of a majority of all of the Directors of the Company then in office or by the
vote of the holders of a "majority" of the outstanding voting securities of the
Company (as defined in the Investment Company Act).
10. ASSIGNMENT OR AMENDMENT:
This Agreement may not be amended or the rights of OMC hereunder sold,
transferred, pledged or otherwise in any manner encumbered without the
affirmative vote or written consent of the holders of the "majority" of the
outstanding voting securities of the Company. This Agreement shall
automatically and immediately terminate in the event of its "assignment," as
defined in the Investment Company Act.
11. DEFINITIONS:
9
<PAGE>
The terms and provisions of the Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions contained in
the Investment Company Act.
12. Notwithstanding any provision of this Agreement to the contrary, OMC
is not required under this Agreement to perform for the Company any duties or
functions set forth in the Administration Agreement between the Company and
OMC.
OPPENHEIMER/QUEST FOR VALUE
GLOBAL EQUITY FUND, INC.
Attest: ______________________ By: _______________________
Title: _______________________
OPPENHEIMER MANAGEMENT
CORPORATION
Attest: ______________________ By: _______________________
Katherine P. Feld Andrew J. Donohue
Secretary Executive Vice President
10
<PAGE>
SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
BETWEEN
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
AND
OPPENHEIMER MANAGEMENT CORPORATION
- --------------------------------------------------------------------------------
NAME OF SERIES ANNUAL FEE AS A PERCENTAGE OF DAILY
TOTAL NET ASSETS
- --------------------------------------------------------------------------------
Oppenheimer/Quest For Value 0.75% of first $400 million of net assets
Global Equity Fund 0.70% of next $400 million of net assets
0.65% of net assets over $800 million
- --------------------------------------------------------------------------------
11
<PAGE>
FORM OF
SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between Oppenheimer Management Corporation, a
Colorado corporation (the "Adviser"), and _____________ Advisors, a Delaware
general partnership (the "Subadviser"), as of the date set forth below.
RECITAL
WHEREAS, Oppenheimer/Quest For Value Global Equity Fund, Inc. (the "Fund")
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, diversified management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Adviser has entered into an Investment Advisory Agreement as
of the date hereof with the Fund (the "Investment Advisory Agreement"), pursuant
to which the Adviser shall act as investment adviser with respect to the Fund;
and
WHEREAS, pursuant to Paragraph ___ of the Investment Advisory Agreement,
the Adviser wishes to retain the Subadviser for purposes of rendering investment
advisory services to the Adviser in connection with the Fund upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which are hereby
acknowledged, the parties hereto agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER.
The Adviser hereby appoints the Subadviser to render to the Adviser with
respect to the Fund, investment research and advisory services as set forth
below in Section II, under the supervision of the Adviser and subject to the
approval and direction of the Fund's Board of Directors (the "Board"), and the
Subadviser hereby accepts such appointment, all subject to the terms and
conditions contained herein. The Subadviser shall, for all purposes herein, be
deemed an independent contractor and shall not have, unless otherwise expressly
provided or authorized, any authority to act for or represent the Fund in any
way or otherwise to serve as or be deemed an agent of the Fund.
<PAGE>
II. DUTIES OF THE SUBADVISER AND THE ADVISER.
A. DUTIES OF THE SUBADVISER.
The Subadviser shall regularly provide investment advice with respect to
the Fund and shall, subject to the terms of this Agreement, continuously
supervise the investment and reinvestment of cash, securities and instruments or
other property comprising the assets of the Fund, and in furtherance thereof,
the Subadviser's duties shall include:
1. Obtaining and evaluating pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Fund, and whether concerning the individual issuers whose securities
are included in the Fund or the activities in which such issuers
engage, or with respect to securities which the Subadviser considers
desirable for inclusion in the Fund's investment portfolio;
2. Determining which securities shall be purchased, sold or
exchanged by the Fund or otherwise represented in the Fund's
investment portfolio and regularly reporting thereon to the Adviser
and, at the request of the Adviser, to the Board;
3. Formulating and implementing continuing programs for the
purchases and sales of the securities of such issuers and regularly
reporting thereon to the Adviser and, at the request of the Adviser,
to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to the
Subadviser necessary to carry into effect such investment program,
including the placing of purchase and sale orders, and making
appropriate reports thereon to the Adviser and the Board.
B. DUTIES OF THE ADVISER.
The Adviser shall retain responsibility for, among other things, providing
the following advice and services with respect to the Fund:
1. Without limiting the obligation of the Subadviser to so comply,
the Adviser shall monitor the investment program maintained by the
Subadviser for the Fund to ensure that the Fund's assets are invested
in compliance with this Agreement and the Fund's Registration
Statement, as currently in effect from time to time; and
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2. The Adviser shall oversee matters relating to Fund promotion,
including, but not limited to, marketing materials and the
Subadviser's reports to the Board.
III. REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SUBADVISER.
1. ORGANIZATION. The Subadviser is now, and will continue to be, a
general partnership duly formed and validly existing under the laws of
its jurisdiction of formation, fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder.
2. REGISTRATION. The Subadviser is registered as an investment
adviser with the Securities and Exchange Commission (the "SEC") under
the Advisers Act, and is registered or licensed as an investment
adviser under the laws of all jurisdictions in which its activities
require it to be so registered or licensed, except where the failure
to be so licensed would not have a material adverse effect on the
Subadviser. The Subadviser shall maintain such registration or
license in effect at all times during the term of this Agreement.
3. BEST EFFORTS. The Subadviser at all times shall provide its best
judgment and effort to the Adviser and the Fund in carrying out its
obligations hereunder.
4. OTHER COVENANTS. The Subadviser further agrees that:
a. it will use the same skill and care in providing such
services as it uses in providing services to other accounts
for which it has investment management responsibilities;
b. it will not make loans to any person to purchase or
carry shares of the Fund or make loans to the Fund;
c. it will report regularly to the Fund and to the Adviser
and will make appropriate persons available for the purpose
of reviewing with representatives of the Adviser on a
regular basis the management of the Fund, including, without
limitation, review of the general investment strategy of the
Fund, economic considerations and general conditions
affecting the marketplace;
d. as required by applicable laws and regulations, it will
maintain books and records with respect to the Fund's
securities transactions and it will furnish to the Adviser
and to the Board such periodic and special reports as the
Adviser or the Board may reasonably request;
e. it will treat confidentially and as proprietary
information of the Fund all records and other information
relative to the Fund, and will
-3-
<PAGE>
not use records and information for any purpose other than
performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing
by the Fund or when so requested by the Fund or required by
law or regulation;
f. it will, on a continuing basis and at its own expense,
(1) provide the distributor of the Fund (the "Distributor")
with assistance in the distribution and marketing of the
Fund in such amount and form as the Adviser may reasonably
request from time to time, and (2) use its best efforts to
cause the portfolio manager or other person who manages or
is responsible for overseeing the management of the Fund's
portfolio (the "Portfolio Manager") to provide marketing and
distribution assistance to the Distributor, including,
without limitation, conference calls, meetings and road
trips, provided that each Portfolio Manager shall not be
required to devote more than 10% of his or her time to such
marketing and distribution activities;
g. it will use its reasonable best efforts (i) to retain
the services of the Portfolio Manager who manages the
portfolio of the Fund, from time to time and (ii) to
promptly obtain the services of a Portfolio Manager
acceptable to the Adviser if the services of the Portfolio
Manager are no longer available to the Subadviser;
h. it will, from time to time, assure that each Portfolio
Manager is acceptable to the Adviser;
i. it will obtain the written approval of the Adviser
prior to designating a new Portfolio Manager; provided,
however, that, if the services of a Portfolio Manager are no
longer available to the Subadviser due to circumstances
beyond the reasonable control of the Subadviser (e.g.,
voluntary resignation, death or disability), the Subadviser
may designate an interim Portfolio Manager who (a) shall be
reasonably acceptable to the Adviser and (b) shall function
for a reasonable period of time until the Subadviser
designates an acceptable permanent replacement; and
j. it will promptly notify the Adviser of any impending
change in Portfolio Manager, portfolio management or any
other material matter that may require disclosure to the
Board, shareholders of the Fund or dealers.
B. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ADVISER.
1. ORGANIZATION. The Adviser is now, and will continue to be, duly
organized and in good standing under the laws of its state of
incorporation, fully authorized to enter into this Agreement and carry
out its duties and obligations hereunder.
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<PAGE>
2. REGISTRATION. The Adviser is registered as an investment adviser
with the SEC under the Advisers Act, and is registered or licensed as
an investment adviser under all of the laws of all jurisdictions in
which its activities require it to be so registered or licensed. The
Adviser shall maintain such registration or license in effect at all
times during the term of this Agreement.
3. BEST EFFORTS. The Adviser at all times shall provide its best
judgment and effort to the Fund in carrying out its obligations
hereunder. For a period of five years from the date hereof, and
subject to the Adviser's fiduciary obligations to the Fund and its
shareholders, the Adviser will not recommend to the Board that the
Fund be reorganized into another Fund unless the total net assets of
the Fund are less than $100 million at the time of such
reorganization.
IV. COMPLIANCE WITH APPLICABLE REQUIREMENTS.
In carrying out its obligations under this Agreement, the Subadviser shall
at all times conform to:
A. all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
B. the provisions of the registration statement of the Fund, as
the same may be amended from time to time, under the Securities Act of
1933, as amended, and the 1940 Act;
C. the provisions of the Fund's Certificate of Incorporation or
other governing document, as amended from time to time;
D. the provisions of the By-laws of the Fund, as amended from
time to time;
E. any other applicable provisions of state or federal law; and
F. guidelines, investment restrictions, policies, procedures or
instructions adopted or issued by the Fund or the Adviser from time to
time.
The Adviser shall promptly notify the Subadviser of any changes or
amendments to the provisions of B., C., D. and F. above when such changes or
amendments relate to the obligations of the Subadviser.
V. CONTROL BY THE BOARD.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Adviser and the Board.
-5-
<PAGE>
VI. BOOKS AND RECORDS.
The Subadviser agrees that all records which it maintains for the Fund on
behalf of the Adviser are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Adviser any of such records upon
request. The Subadviser further agrees to preserve for the periods prescribed
by applicable laws, rules and regulations all records required to be maintained
by the Subadviser on behalf of the Adviser under such applicable laws, rules and
regulations, or such longer period as the Adviser may reasonably request from
time to time.
VII. BROKER-DEALER RELATIONSHIPS.
A. PORTFOLIO TRADES.
The Subadviser, at its own expense, and to the extent appropriate, in
consultation with the Adviser, shall place all orders for the purchase and sale
of portfolio securities for the Fund with brokers or dealers selected by the
Subadviser, which may include, to the extent permitted by the Adviser and the
Fund, brokers or dealers affiliated with the Subadviser. The Subadviser shall
use its best efforts to seek to execute portfolio transactions at prices that
are advantageous to the Fund and at commission rates that are reasonable in
relation to the benefits received.
B. SELECTION OF BROKER-DEALERS.
With respect to the execution of particular transactions, the
Subadviser may, to the extent permitted by the Adviser and the Fund, select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Fund and/or the other accounts over which the Subadviser or its
affiliates exercise investment discretion. The Subadviser is authorized to pay
a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund that is in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction if the Subadviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities that the Subadviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Adviser,
Subadviser and the Board shall periodically review the commissions paid by the
Fund to determine, among other things, if the commissions paid over
representative periods of time were reasonable in relation to the benefits
received.
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<PAGE>
C. SOFT DOLLAR ARRANGEMENTS.
The Subadviser may enter into "soft dollar" arrangements through the
agency of third parties on behalf of the Adviser. Soft dollar arrangements for
services may be entered into in order to facilitate an improvement in
performance in respect of the Subadviser's service to the Adviser with respect
to the Fund. The Subadviser makes no direct payments but instead undertakes to
place business with broker-dealers who in turn pay third parties who provide
these services. Soft dollar transactions will be conducted on an arm's-length
basis, and the Subadviser will secure best execution for the Adviser. Any
arrangements involving soft dollars and/or brokerage services shall be effected
in compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and the policies that the Adviser and the Board may adopt from time to
time. The Subadviser agrees to provide reports to the Adviser as necessary for
purposes of providing information on these arrangements to the Board.
VIII. COMPENSATION.
A. AMOUNT OF COMPENSATION. The Adviser shall pay the
Subadviser, as compensation for services rendered hereunder, from
its own assets, an annual fee, payable monthly, equal to 40% of
the investment advisory fee and administration fee collected by
the Adviser from the Fund, based on the total net assets of the
Fund existing as of the date hereof (the "base amount"), plus 30%
of the advisory fee and administration fee collected by the
Adviser, based on the total net assets of the Fund that exceed
the base amount (the "marginal amount"), in each case calculated
after any waivers, voluntary or otherwise.
B. CALCULATION OF COMPENSATION. Except as hereinafter set
forth, compensation under this Agreement shall be calculated and
accrued on the same basis as the advisory fee paid to the Adviser
by the Fund. If this Agreement becomes effective subsequent to
the first day of a month or shall terminate before the last day
of a month, compensation for that part of the month this
Agreement is in effect shall be prorated in a manner consistent
with the calculation of the fees set forth above.
C. PAYMENT OF COMPENSATION: Subject to the provisions of
this paragraph, payment of the Subadviser's compensation for the
preceding month shall be made within 15 days after the end of the
preceding month.
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<PAGE>
D. REORGANIZATION OF THE FUND. If the Fund is reorganized
with another investment company for which the Subadviser does not
serve as an investment adviser or subadviser, and the Fund is the
surviving entity, the subadvisory fee payable under this section
shall be adjusted in an appropriate manner as the parties may
agree.
IX. ALLOCATION OF EXPENSES.
The Subadviser shall pay the expenses incurred in providing services in
connection with this Agreement, including, but not limited to, the salaries,
employment benefits and other related costs of those of its personnel engaged in
providing investment advice to the Fund hereunder, including, without
limitation, office space, office equipment, telephone and postage costs and
other expenses. In the event of an "assignment" of this Agreement, other than
an assignment resulting solely by action of the Adviser or an affiliate thereof,
the Subadviser shall be responsible for payment of all costs and expenses
incurred by the Adviser and the Fund relating thereto, including, but not
limited to, reasonable legal, accounting, printing and mailing costs related to
obtaining approval of Fund shareholders.
X. NON-EXCLUSIVITY.
The services of the Subadviser with respect to the Fund are not to be
deemed to be exclusive, and the Subadviser shall be free to render investment
advisory and administrative or other services to others (including other
investment companies) and to engage in other activities, subject to the
provisions of a certain Agreement Not to Compete dated as of __________, 1995
among the Adviser, Oppenheimer Capital, the Subadviser and Quest For Value
Distributors (the "Agreement Not to Compete"). It is understood and agreed that
officers or directors of the Subadviser may serve as officers or directors of
the Adviser or of the Fund; that officers or directors of the Adviser or of the
Fund may serve as officers or directors of the Subadviser to the extent
permitted by law; and that the officers and directors of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies (subject to the provisions of the Agreement Not to Compete), provided
it is permitted by applicable law and does not adversely affect the Fund.
XI. TERM.
This Agreement shall become effective at the close of business on the date
hereof and shall remain in force and effect, subject to Paragraphs XII.A and
XII.B hereof and approval by the Fund's shareholders, for a period of two years
from the date hereof.
XII. RENEWAL.
Following the expiration of its initial two-year term, the Agreement shall
continue in full force and effect from year to year for a period of eight years,
provided that such continuance is specifically approved:
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<PAGE>
A. at least annually (1) by the Board or by the vote of a
majority of the Fund's outstanding voting securities (as defined in
Section 2(a)(42) of the 1940 Act), and (2) by the affirmative vote of
a majority of the directors who are not parties to this Agreement or
interested persons of a party to this Agreement (other than as a
director of the Fund), by votes cast in person at a meeting
specifically called for such purpose; or
B. by such method required by applicable law, rule or
regulation then in effect.
XIII. TERMINATION.
A. TERMINATION BY THE FUND. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of the Board
or by vote of a majority of the Fund's outstanding voting securities,
on sixty (60) days' written notice. The notice provided for herein
may be waived by the party required to be notified.
B. ASSIGNMENT. This Agreement shall automatically terminate in
the event of its "assignment," as defined in Section 2 (a) (4) of the
1940 Act. In the event of an assignment that occurs solely due to the
change in control of the Subadviser (provided that no condition exists
that permits, or, upon the consummation of the assignment, will
permit, the termination of this Agreement by the Adviser pursuant to
Section XIII. D. hereof), the Adviser and the Subadviser, at the sole
expense of the Subadviser, shall use their reasonable best efforts to
obtain shareholder approval of a successor Subadvisory Agreement on
substantially the same terms as contained in this Agreement.
C. PAYMENT OF FEES AFTER TERMINATION. Notwithstanding the
termination of this Agreement prior to the tenth anniversary of the
date hereof, the Adviser shall continue to pay to the Subadviser the
subadvisory fee for the term of this Agreement and any renewals
thereof through such tenth anniversary, if: (1) the Adviser or the
Fund terminates this Agreement for a reason other than the reasons set
forth in Section XIII.D. hereof, provided the Investment Advisory
Agreement remains in effect; (2) the Fund reorganizes with another
investment company advised by the Adviser (or an affiliate of the
Adviser) and for which the Subadviser does not serve as an investment
adviser or subadviser and such other investment company is the
surviving entity; or (3) the Investment Advisory Agreement terminates
(i) by reason of an "assignment;" (ii) because the Adviser is
disqualified from serving as an investment adviser; or (iii) by reason
of a voluntary termination by the Adviser; provided that the
Subadviser does not serve as the investment adviser or subadviser of
the Fund after such termination of the Investment Advisory Agreement.
The amount of the subadvisory fee paid pursuant to this section shall
be calculated on the basis of the Fund's net assets measured at the
time of such termination or such reorganization. Notwithstanding
anything to the contrary, if the Subadviser terminates this Agreement
or if this Agreement is terminated by operation of law, due solely to
an act or omission by the Subadviser, Oppenheimer Capital ("OpCap") or
their respective partners, subsidiaries, directors, officers,
employees or agents (other than by reason of an "assignment"of this
Agreement), then
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the Adviser shall not be liable for any further payments under this
Agreement, provided, however, that if at any time prior to the end of
the term of the Agreement Not to Compete any event that would have
permitted the termination of this Agreement by the Adviser pursuant to
Section XIII. D. (3) hereof occurs, the Adviser shall be under no
further obligation to pay any subadvisory fees.
D. TERMINATION BY THE ADVISER. The Adviser may terminate this
Agreement without penalty and without the payment of any fee or
penalty, immediately after giving written notice, upon the occurrence
of any of the following events:
1. The Fund's investment performance of the Fund's Class A
shares compared to the appropriate universe of Class A shares (or
their equivalent), as set forth on Schedule D-1, as amended from
time to time, ranks in the bottom quartile for two consecutive
calendar years (beginning with the calendar year 1995) and earns
a Morningstar three-year rating of less than three (3) stars at
the time of such termination; or
2. Any of the Subadviser, OpCap, their respective partners,
subsidiaries, affiliates, directors, officers, employees or
agents engages in an action or omits to take an action that would
cause the Subadviser or OpCap to be disqualified in any manner
under Section 9(a) of the 1940 Act, if the SEC were not to grant
an exemptive order under Section 9(c) thereof or that would
constitute grounds for the SEC to deny, revoke or suspend the
registration of the Subadviser as an investment adviser with the
SEC;
3. Any of OpCap, the Subadviser, their respective partners,
subsidiaries, affiliates, directors, officers, employees or
agents causes a material violation of the Agreement Not to
Compete which is not cured in accordance with the provisions of
that agreement; or
4. The Subadviser breaches the representations contained in
Paragraph III.A.4.i. of this Agreement or any other material
provision of this Agreement, and any such breach is not cured
within a reasonable period of time after notice thereof from the
Adviser to the Subadviser. However, consistent with its
fiduciary obligations, for a period of seven months the Adviser
will not terminate this Agreement solely because the Subadviser
has failed to designate an acceptable permanent replacement to a
Portfolio Manager whose services are no longer available to the
Subadviser due to circumstances beyond the reasonable control of
the Subadviser, provided that the Subadviser uses its reasonable
best efforts to promptly obtain the services of a Portfolio
Manager acceptable to the Adviser and further provided that the
Adviser has not unreasonably withheld approval of such
replacement Portfolio Manager.
E. TRANSACTIONS IN PROGRESS UPON TERMINATION. The Adviser and
Subadviser will cooperate with each other to ensure that portfolio or
other transactions in progress at the date of termination of this
Agreement shall be completed by the Adviser in
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accordance with the terms of such transactions, and to this end the
Subadviser shall provide the Adviser with all necessary information
and documentation to secure the implementation thereof.
XIV. NON-SOLICITATION.
During the term of this Agreement, the Adviser (and its affiliates under
its control) shall not solicit or knowingly assist in the solicitation of any
Portfolio Manager of the Fund or any portfolio assistant of the Fund then
employed by the Subadviser or OpCap, provided, however, that the Adviser (or its
affiliates) may solicit or hire any such individual who (A) the Subadviser or
OpCap (or its affiliates) has terminated or (B) has voluntarily terminated his
or her employment with the Subadviser, OpCap (or its affiliates) without
inducement of the Adviser (or its affiliates under its control) prior to the
time of such solicitation. Advertising in general circulation newspapers or
industry newsletters by the Adviser shall not constitute "inducement" by the
Adviser (or its affiliates under its control).
XV. LIABILITY OF THE SUBADVISER.
In the absence of willful misfeasance, bad faith, negligence or reckless
disregard of obligations or duties hereunder on the part of the Subadviser or
any of its officers, directors or employees, the Subadviser shall not be subject
to liability to the Adviser for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security; PROVIDED, HOWEVER,
that the foregoing shall not be construed to relieve the Subadviser of any
liability it may have arising under the Agreement Not to Compete or the
Acquisition Agreement dated August 10, 1995, among the Subadviser, the Adviser
and certain affiliates of the Subadviser.
XVI. NOTICES.
Any notice or other communication required or that may be given hereunder
shall be in writing and shall be delivered personally, telecopied, sent by
certified, registered or express mail, postage prepaid or sent by national next-
day delivery service and shall be deemed given when so delivered personally or
telecopied, or if mailed, two days after the date of mailing, or if by next-day
delivery service, on the business day following delivery thereto, as follows or
to such other location as any party notifies any other party:
A. if to the Adviser, to:
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Attention: Andrew J. Donohue
Executive Vice President and General Counsel
Telecopier: 212-321-1159
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B. if to the Subadviser, to:
Quest For Value Advisors
c/o Oppenheimer Capital
225 Liberty Street
New York, New York 10281
Attention: Thomas E. Duggan
Secretary and General Counsel
Telecopier: 212-349-4759
XVII. QUESTIONS OF INTERPRETATION.
This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within the State of
New York (without regard to any conflicts of law principles thereof). Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
XVIII. FORM ADV - DELIVERY.
The Adviser hereby acknowledges that it has received from the Subadviser a
copy of the Subadviser's Form ADV, Part II as currently filed, at least 48 hours
prior to entering into this Agreement and that it has read and understood the
disclosures set forth in the Subadviser's Form ADV, Part II.
XIX. MISCELLANEOUS.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors.
XX. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which, collectively, shall constitute one
agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the _____ day of
October, 1995.
OPPENHEIMER MANAGEMENT CORPORATION
By:___________________________________
Name: Andrew J. Donohue
Title: Executive Vice President
ADVISORS
By: OPPENHEIMER FINANCIAL CORP.,
a general partner
By:____________________________________
Name:
Title:
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OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
ADMINISTRATION AGREEMENT
AGREEMENT made as of the ____ day of October, 1995, by and between
OPPENHEIMER/ QUEST FOR VALUE GLOBAL EQUITY FUND, INC., a Maryland corporation
(the "Company") and OPPENHEIMER MANAGEMENT CORPORATION, a Colorado corporation
(the "Administrator").
WHEREAS, the Company is an open-end, diversified, management investment
company registered with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "1940 Act")
and the Administrator is engaged in the business of providing investment
management and advisory services;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Company and the Administrator agree as follows:
1. GENERAL PROVISIONS:
The Company hereby employs the Administrator and the Administrator
hereby undertakes to act as the corporate administrator of the Company and to
perform for the Company such other duties and functions for the period and on
such terms as are set forth in this Agreement. In performing its duties
hereunder, the Administrator shall at all times conform to, and use its best
efforts to enable the Company to conform to:
(a) the provisions of the 1940 Act and any rules or regulations
thereunder;
(b) any other applicable provisions of state or federal law;
(c) the provisions of the articles of incorporation and by-laws of
the Company as amended from time to time;
(d) the policies and determinations of the Company's Board of
Directors;
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(e) the investment objectives and policies and investment
restrictions of the Company as reflected in its registration statement under the
1940 Act or as such objectives, policies and restrictions may from time to time
be amended; and
(f) the Prospectus, if any, of the Company in effect from time to
time. The appropriate officers and employees of the Administrator shall be
available upon reasonable notice for consultation with any of the Company's
directors or officers with respect to any matters relating to the
Administrator's duties and functions under this Agreement.
2. ADMINISTRATION:
(a) the Administrator shall, subject to the direction and control of
the Company's Board of Directors: (i) provide the Company with adequate office
space, facilities, equipment and personnel; (ii) determine and publish the
Company's net asset value in accordance with such policies as may be adopted
from time to time by the Company's Board of Directors; (iii) compile and
maintain the Company's books and records with respect to its operations as
required by Rule 31a-1 under the 1940 Act and such other records as may
reasonably be required; (iv) prepare the Company's proxy materials for annual
and special meetings of the Company's shareholders, as well as semi-annual
reports to shareholders; (v) prepare such financial or other information
required for the Company's reports to the Commission; and (vi) respond to or
refer to the Company's officers or transfer agents, shareholders' inquiries
relating to the Company.
(b) so long as the Administrator shall have acted with due care and
in good faith, the Administrator shall not be liable to the Company, its
shareholders or others for losses resulting from any error in judgement, mistake
of law or any other act or omission in the course of or connected with,
rendering services hereunder. Nothing herein contained shall, however,
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be construed to protect the Administrator against any liability to the Company
or its shareholders arising out of the Administrator's willful misfeasance, bad
faith or gross negligence in the performance of its duties or reckless disregard
of its obligations and duties under this Agreement.
(c) nothing in this Agreement shall prevent the Administrator or any
entity controlling, controlled by or under common control with the Administrator
or any officer thereof from acting as an administrator or an investment adviser
for any other person, firm or corporation and shall not in any way limit or
restrict the activities of the Administrator or any entity controlling,
controlled by or under common control with the Administrator or any of its
directors, officers, stockholders or employees if such activities will not
adversely affect or otherwise impair the performance by the Administrator of its
duties and obligations under this Agreement.
3. ALLOCATION OF EXPENSES:
The Administrator will bear all costs and expenses of its employees
and overhead incurred by it in connection with its duties hereunder. All other
expenses (other than those to be paid by the Company's investment adviser under
an investment advisory agreement, by any underwriter under an underwriting
agreement concerning the Company's shares or by the Company's distributor under
a distribution agreement), shall be paid by the Company, including, but not
limited to:
(a) interest expense, taxes and governmental fees;
(b) brokerage commissions and other expenses incurred in acquiring or
disposing of the Company's portfolio securities;
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(c) insurance premiums for fidelity and other coverage requisite to
the Company's operations;
(d) fees of the Company's directors other than those who are
interested persons of the Administrator and out-of-pocket travel expenses for
all directors and other expenses incurred by the Company in connection with
directors' meetings;
(e) outside legal and audit expenses;
(f) custodian, dividend disbursing and transfer agent fees and
expenses;
(g) expenses in connection with the issuance, offering, distribution,
sale or underwriting of securities issued by the Company, including preparation
of stock certificates;
(h) fees and expenses, other than as hereinabove provided, incident
to the registration or qualification of the Company's shares for sale with the
Commission and in various states and foreign jurisdictions;
(i) expenses of printing and mailing reports and notices and proxy
material to the Company's shareholders;
(j) all other expenses incidental to holding regular annual meetings
of the Company's shareholders;
(k) such extraordinary non-recurring expenses as may arise, including
litigation affecting the Company and the legal litigation affecting the Company
and the legal obligation which the Company may have to indemnify its officers
and directors with respect thereto.
Notwithstanding the foregoing, the Administrator shall pay all salaries and
fees of the Company's officers and directors who are interested persons of the
Administrator.
4. COMPENSATION OF THE ADMINISTRATOR:
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The Company agrees to pay the Administrator and the Administrator
agrees to accept as full compensation for the performance of all its functions
and duties to be performed hereunder, an annual fee equal to an amount computed
by applying an annual percentage rate of 0.25% to the Company's daily net
assets. Determination of net asset value will be made in accordance with the
policies disclosed in the Company's registration statement under the 1940 Act.
The fee is payable at the end of each calendar month.
5. DURATION:
This Agreement will become effective as of the date hereof. This
Agreement will continue in effect for two years from the date hereof and
thereafter (unless sooner terminated in accordance with this Agreement) for
successive periods of twelve months so long as each continuance shall be
specifically approved at least annually by (1) the vote of a majority of those
directors who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, (2) a majority of the Board of Directors of the Company or by a vote
of a majority of the outstanding voting securities of the Company.
6. TERMINATION:
This Agreement may be terminated (i) by the Administrator at any time,
without payment of any penalty upon giving the Company one hundred twenty (120)
days' written notice (which notice may be waived by the Company) or (ii) by the
Company at any time, without payment of any penalty upon sixty (60) days'
written notice to the Administrator (which notices may be waived by the
Administrator), provided that such termination by the Company shall be directed
or approved by the vote of the majority of all of the directors of the Company
or by the vote of a majority of the outstanding voting securities of the
Company.
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7. ASSIGNMENT OR AMENDMENT:
This Agreement may be amended only if such amendment is specifically
approved by (i) the vote of the outstanding voting securities of the Company and
(ii) a majority of the Board of Directors of the Company, including a majority
of those directors who are not parties to this Agreement or interested persons
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. This Agreement shall automatically and immediately terminate
in the event of its assignment as defined in the 1940 Act and the rule
thereunder.
8. GOVERNING LAW:
This Agreement shall be interpreted in accordance with the laws of the
State of New York and the applicable provisions of the 1940 Act and the rules
thereunder. To the extent that the applicable laws of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
9. SEVERABILITY.
If any provisions of this Agreement shall be held or made
unenforceable by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected hereby.
10. As used in this Agreement, the terms "interested person" and "vote of
a majority of the outstanding voting securities of the Company" shall have the
respective meanings set forth in Sections 2(a)(19) and 2(a)(42) of the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
OPPENHEIMER/QUEST FOR VALUE
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GLOBAL EQUITY FUND, INC.
Attest: ______________________ By: _______________________
Title: _______________________
OPPENHEIMER MANAGEMENT
CORPORATION
Attest: ______________________ By: _______________________
Katherine P. Feld Andrew J. Donohue
Secretary Executive Vice President
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GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
AND
OPPENHEIMER FUND MANAGEMENT, INC.
Date:
OPPENHEIMER FUND MANAGEMENT, INC.
Two World Trade Center, Suite 3400
New York, NY 10048
Dear Sirs:
QUEST FOR VALUE GLOBAL EQUITY FUND, INC., a Maryland corporation (the
"Fund"), is registered as an investment company under the Investment Company Act
of 1940 (the "1940 Act"), and an indefinite number of one or more classes of its
shares of beneficial interest ("Shares") have been registered under the
Securities Act of 1933 (the "1933 Act") to be offered for sale to the public in
a continuous public offering in accordance with the terms and conditions set
forth in the Prospectus and Statement of Additional Information ("SAI") included
in the Fund's Registration Statement as it may be amended from time to time (the
"current Prospectus and/or SAI").
In this connection, the Fund desires that your firm (the "General
Distributor") act in a principal capacity as General Distributor for the sale
and distribution of Shares which have been registered as described above and of
any additional Shares which may become registered during the term of this
Agreement. You have advised the Fund that you are willing to act as such
General Distributor, and it is accordingly agreed by and between us as follows:
1. APPOINTMENT OF THE DISTRIBUTOR. The Fund hereby appoints you as the
sole General Distributor, pursuant to the aforesaid continuous public offering
of its Shares, and the Fund further agrees from and after the date of this
Agreement, that it will not, without your consent, sell or agree to sell any
Shares otherwise than through you, except (a) the Fund may itself sell shares
without sales charge as an investment to the officers, trustees or directors and
bona fide present and former full-time employees of the Fund, the Fund's
Investment Adviser and affiliates thereof, and to other investors who are
identified in the current Prospectus and/or SAI as having the privilege to buy
Shares at net asset value; (b) the Fund may issue shares in connection with a
merger, consolidation or acquisition of assets on such basis as may be
authorized or permitted under the 1940 Act; (c) the Fund may issue shares for
the reinvestment of dividends and other distributions of the Fund or of any
other Fund if permitted by the current Prospectus and/or SAI; and (d) the Fund
may issue shares as underlying securities of a unit investment trust if such
unit investment trust has elected to use Shares as an underlying investment;
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provided that in no event as to any of the foregoing exceptions shall Shares be
issued and sold at less than the then-existing net asset value.
2. SALE OF SHARES. You hereby accept such appointment and agree to use
your best efforts to sell Shares, provided, however, that when requested by the
Fund at any time because of market or other economic considerations or abnormal
circumstances of any kind, or when agreed to by mutual consent of the Fund and
the General Distributor, you will suspend such efforts. The Fund may also
withdraw the offering of Shares at any time when required by the provisions of
any statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that you do not undertake to sell all or any
specific number of Shares.
3. SALES CHARGE. Shares shall be sold by you at net asset value plus a
front-end sales charge not in excess of 8.5% of the offering price, but which
front-end sales charge shall be proportionately reduced or eliminated for larger
sales and under other circumstances, in each case on the basis set forth in the
current Prospectus and/or SAI. The redemption proceeds of shares offered and
sold at net asset value with or without a front-end sales charge may be subject
to a contingent deferred sales charge ("CDSC") under the circumstances described
in the current Prospectus and\or SAI. You may reallow such portion of the
front-end sales charge to dealers or cause payment (which may exceed the front-
end sales charge, if any) of commissions to brokers through which sales are
made, as you may determine, and you may pay such amounts to dealers and brokers
on sales of shares from your own resources (such dealers and brokers shall
collectively include all domestic or foreign institutions eligible to offer and
sell the Shares), and in the event the Fund has more than one class of Shares
outstanding, then you may impose a front-end sales charge and/or a CDSC on
Shares of one class that is different from the charges imposed on Shares of the
Fund's other class(es), in each case as set forth in the current Prospectus
and/or SAI, provided the front-end sales charge and CDSC to the ultimate
purchaser do not exceed the respective levels set forth for such category of
purchaser in the current Prospectus and/or SAI.
4. PURCHASE OF SHARES.
(a) As General Distributor, you shall have the right to accept
or reject orders for the purchase of Shares at your discretion.
Any consideration which you may receive in connection with
a rejected purchase order will be returned promptly.
(b) You agree promptly to issue or to cause the duly appointed
transfer or shareholder servicing agent of the Fund
to issue as your agent confirmations of all accepted purchase
orders and to transmit a copy of such confirmations to the Fund.
The net asset value of all Shares which are the subject of such
confirmations, computed in accordance with the applicable rules
under the 1940 Act, shall be a liability of the General
Distributor to the Fund to be paid promptly after receipt of
payment from the originating dealer or broker (or investor, in the
case of direct purchases) and not later than eleven business days
after such confirmation even if you have not actually received
payment from the originating dealer or broker, or investor. In no
event shall the General Distributor make payment to the Fund later
than permitted by applicable rules of the National Association of
Securities Dealers, Inc.
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(c) If the originating dealer or broker shall fail to make timely
settlement of its purchase order in accordance with applicable
rules of the National Association of Securities Dealers, Inc.,
or if a direct purchaser shall fail to make good payment for
shares in a timely manner, you shall have the right to cancel
such purchase order and, at your account and risk, to hold
responsible the originating dealer or broker, or investor. You
agree promptly to reimburse the Fund for losses suffered by it
that are attributable to any such cancellation, or to errors on
your part in relation to the effective date of accepted purchase
orders, limited to the amount that such losses exceed
contemporaneous gains realized by the Fund for either of such
reasons with respect to other purchase orders.
(d) In the case of a canceled purchase for the account of a directly
purchasing shareholder, the Fund agrees that if such investor fails
to make you whole for any loss you pay to the Fund on such canceled
purchase order, the Fund will reimburse you for such loss to the
extent of the aggregate redemption proceeds of any other shares of
the Fund owned by such investor, on your demand that the Fund
exercise its right to claim such redemption proceeds. The Fund
shall register or cause to be registered all Shares sold to you
pursuant to the provisions hereof in such names and amounts as
you may request from time to time and the Fund shall issue or
cause to be issued certificates evidencing such Shares for
delivery to you or pursuant to your direction if and to the extent
that the shareholder account in question contemplates the issuance
of such certificates. All Shares, when so issued and paid for,
shall be fully paid and non-assessable by the Fund (which shall not
prevent the imposition of any CDSC that may apply) to the extent
set forth in the current Prospectus and/or SAI.
5. REPURCHASE OF SHARES.
(a) In connection with the repurchase of Shares, you are appointed
and shall act as Agent of the Fund. You are authorized, for
so long as you act as General Distributor of the Fund, to
repurchase, from authorized dealers, certificated or
uncertificated shares of the Fund ("Shares") on the basis of
orders received from each dealer ("authorized dealer") with which
you have a dealer agreement for the sale of Shares and permitting
resales of Shares to you, provided that such authorized dealer, at
the time of placing such resale order, shall represent (i) if such
Shares are represented by certificate(s), that certificate(s) for
the Shares to be repurchased have been delivered to it by the
registered owner with a request for the redemption of such Shares
executed in the manner and with the signature guarantee required
by the then-currently effective prospectus of the Fund, or (ii) if
such Shares are uncertificated, that the registered owner(s) has
delivered to the dealer a request for the redemption of such
Shares executed in the manner and with the signature guarantee
required by the then-currently effective prospectus of the Fund.
(b) You shall (a) have the right in your discretion to accept or reject
orders for the repurchase of Shares; (b) promptly transmit
confirmations of all accepted repurchase orders; and (c) transmit
a copy of such confirmation to the Fund, or, if
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so directed, to any duly appointed transfer or shareholder
servicing agent of the Fund. In your discretion, you may accept
repurchase requests made by a financially responsible dealer which
provides you with indemnification in form satisfactory to you in
consideration of your acceptance of such dealer's request in
lieu of the written redemption request of the owner of the
account; you agree that the Fund shall be a third party
beneficiary of such indemnification.
(c) Upon receipt by the Fund or its duly appointed transfer or
shareholder servicing agent of any certificate(s) (if any has
been issued) for repurchased Shares and a written redemption
request of the registered owner(s) of such Shares executed in
the manner and bearing the signature guarantee required by the
then-currently effective Prospectus or SAI of the Fund, the
Fund will pay or cause its duly appointed transfer or shareholder
servicing agent promptly to pay to the originating authorized
dealer the redemption price of the repurchased Shares (other than
repurchased Shares subject to the provisions of part (d) of
Section 5 of this Agreement) next determined after your receipt of
the dealer's repurchase order.
(d) Notwithstanding the provisions of part (c) of Section 5 of this
Agreement, repurchase orders received from an authorized dealer
after the determination of the Fund's redemption price on a regular
business day will receive that day's redemption price if the
request to the dealer by its customer to arrange such repurchase
prior to the determination of the Fund's redemption price that day
complies with the requirements governing such requests as stated in
the current Prospectus and/or SAI.
(e) You will make every reasonable effort and take all reasonably
available measures to assure the accurate performance of all
services to be performed by you hereunder within the requirements
of any statute, rule or regulation pertaining to the redemption of
shares of a regulated investment company and any requirements set
forth in the then-current Prospectus and/or SAI of the Fund. You
shall correct any error or omission made by you in the performance
of your duties hereunder of which you shall have received notice in
writing and any necessary substantiating data; and you shall hold
the Fund harmless from the effect of any errors or omissions which
might cause an over- or under-redemption of the Fund's Shares
and/or an excess or non-payment of dividends, capital gains
distributions, or other distributions.
(f) In the event an authorized dealer initiating a repurchase order
shall fail to make delivery or otherwise settle such order in
accordance with the rules of the National Association of
Securities Dealers, Inc., you shall have the right to cancel such
repurchase order and, at your account and risk, to hold responsible
the originating dealer. In the event that any cancellation of a
Share repurchase order or any error in the timing of the acceptance
of a Share repurchase order shall result in a gain or loss to the
Fund, you agree promptly to reimburse the Fund for any amount by
which any losses shall exceed then-existing gains so arising.
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6. 1933 ACT REGISTRATION. The Fund has delivered to you a copy of its
current Prospectus and SAI. The Fund agrees that it will use its best efforts
to continue the effectiveness of the Registration Statement under the 1933 Act.
The Fund further agrees to prepare and file any amendments to its Registration
Statement as may be necessary and any supplemental data in order to comply with
the 1933 Act. The Fund will furnish you at your expense with a reasonable
number of copies of the Prospectus and SAI and any amendments thereto for use in
connection with the sale of Shares.
7. 1940 ACT REGISTRATION. The Fund has already registered under the 1940
Act as an investment company, and it will use its best efforts to maintain such
registration and to comply with the requirements of the 1940 Act.
8. STATE BLUE SKY QUALIFICATION. At your request, the Fund will take
such steps as may be necessary and feasible to qualify Shares for sale in
states, territories or dependencies of the United States, the District of
Columbia, the Commonwealth of Puerto Rico and in foreign countries, in
accordance with the laws thereof, and to renew or extend any such qualification;
provided, however, that the Fund shall not be required to qualify shares or to
maintain the qualification of shares in any jurisdiction where it shall deem
such qualification disadvantageous to the Fund.
9. DUTIES OF DISTRIBUTOR. You agree that:
(a) Neither you nor any of your officers will take any long or short
position in the Shares, but this provision shall not prevent you
or your officers from acquiring Shares for investment purposes
only;
(b) You shall furnish to the Fund any pertinent information required to
be inserted with respect to you as General Distributor within the
purview of the Securities Act of 1933 in any reports or
registration required to be filed with any governmental authority;
and
(c) You will not make any representations inconsistent with the
information contained in the current Prospectus and/or SAI.
(d) You shall maintain such records as may be reasonably required for
the Fund or its transfer or shareholder servicing agent to respond
to shareholder requests or complaints, and to permit the Fund to
maintain proper accounting records, and you shall make such records
available to the Fund and its transfer agent or shareholder
servicing agent upon request.
(e) In performing under this Agreement, you shall comply with all
requirements of the Fund's current Prospectus and/or SAI and all
applicable laws, rules and regulations with respect to the
purchase, sale and distribution of Shares.
10. ALLOCATION OF COSTS. The Fund shall pay the cost of composition and
printing of sufficient copies of its Prospectus and SAI as shall be required for
periodic distribution to its shareholders and the expense of registering Shares
for sale under federal securities laws. You shall pay the expenses normally
attributable to the sale of Shares, other than as paid under the Fund's
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Distribution Plan under Rule 12b-1 of the 1940 Act, including the cost of
printing and mailing of the Prospectus (other than those furnished to existing
shareholders) and any sales literature used by you in the public sale of the
Shares and for registering such shares under state blue sky laws pursuant to
paragraph 8.
11. DURATION. This Agreement shall take effect on the date first written
above, and shall supersede any and all prior General Distributor's Agreements by
and among the Fund and you. Unless earlier terminated pursuant to paragraph 12
hereof, this Agreement shall remain in effect until September 30, 1994. This
Agreement shall continue in effect from year to year thereafter, provided that
such continuance shall be specifically approved at least annually: (a) by the
Fund's Board of Trustees or by vote of a majority of the voting securities of
the Fund; and (b) by the vote of a majority of the Trustees, who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
such person, cast in person at a meeting called for the purpose of voting on
such approval.
12. TERMINATION. This Agreement may be terminated (a) by the General
Distributor at any time without penalty by giving sixty days' written notice
(which notice may be waived by the Fund); (b) by the Fund at any time without
penalty upon sixty days' written notice to the General Distributor (which notice
may be waived by the General Distributor); or (c) by mutual consent of the Fund
and the General Distributor, provided that such termination by the Fund shall be
directed or approved by the Board of Trustees of the Fund or by the vote of the
holders of a majority of the outstanding voting securities of the Fund. In the
event this Agreement is terminated by the Fund, the General Distributor shall be
entitled to be paid the CDSC under paragraph 3 hereof on the redemption proceeds
of Shares sold prior to the effective date of such termination.
13. ASSIGNMENT. This Agreement may not be amended or changed except in
writing and shall be binding upon and shall enure to the benefit of the parties
hereto and their respective successors; however, this Agreement shall not be
assigned by either party and shall automatically terminate upon assignment.
14. DISCLAIMER OF SHAREHOLDER LIABILITY. The General Distributor
understands and agrees that the obligations of the Fund under this Agreement are
not binding upon any Trustee or shareholder of the Fund personally, but bind
only the Fund and the Fund's property; the General Distributor represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder liability for acts or obligations of the Fund.
15. SECTION HEADINGS. The headings of each section is for descriptive
purposes only, and such headings are not to be construed or interpreted as part
of this Agreement.
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If the foregoing is in accordance with your understanding, so indicate by
signing in the space provided below.
QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
By: ____________________________________
Accepted:
OPPENHEIMER FUND MANAGEMENT, INC.
By: _______________________________________
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OPPENHEIMERFUNDS
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
P.O. BOX 5270
DENVER, CO 80217-5270
From: DEALER AGREEMENT
FOR THE OPPENHEIMERFUNDS
To: OPPENHEIMER FUNDS DISTRIBUTOR, INC.
P.O. BOX 5270
DENVER, CO 80217-5270
Gentlemen:
We desire to enter into an agreement with you whereby we will act as
principal for the sale, distribution and resale of the shares of each of the
open-end investment companies of which you are, or may become, Distributor or
Sub-Distributor (hereinafter collectively referred to as the "Funds" and
individually as a "Fund") and whose shares are offered to the public at an
offering price which may or may not include a sales charge (hereinafter referred
to as "Shares"). Upon acceptance of this Agreement by you, we understand that we
may offer and sell Shares, subject, however, to all of the following terms and
conditions and to your right, without notice, to suspend or terminate the sale
of the Shares of any one or more of the Funds; and
1. Shares will be offered and sold at the current offering price in effect
at the time the order for such Shares is confirmed and accepted by you at your
office in Denver, Colorado. All purchase orders, resale orders and applications
submitted by us are subject to acceptance or rejection in your sole discretion
and, if accepted, each purchase or resale order will be deemed to have been
consummated at your office in Denver, Colorado.
2. We represent and warrant to you: (a) that we are a member of the
National Association of Securities Dealers, Inc. ("NASD"), that such membership
has not been suspended, and that we agree to maintain membership in the NASD, or
(b) in the alternative, that we are a foreign dealer not eligible for membership
in the NASD, and are fully licensed and legally empowered to act as a securities
broker-dealer under the laws of each jurisdiction in which we conduct such
business. In either case, we agree to abide by the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"), the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, and all the rules
and regulations of the Securities and Exchange Commission and the NASD which are
binding upon underwriters and dealers in the distribution of the securities of
open-end investment companies, including without limitation, the NASD Rules of
Fair Practice.
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We further agree to comply with all other state and Federal laws and the rules
and regulations of authorized regulatory agencies applicable to the sale of
Shares. We agree that we will not sell or offer for sale Shares in any state or
other jurisdiction where they have not been qualified for sale or if you have
not advised us in advance that such sale is exempt from such qualification
requirements. We are responsible under this Agreement for inquiring of you as
to the jurisdictions in which such Shares have been qualified for sale.
3. We will offer and sell Shares of any Fund only in accordance with the
terms and conditions of its then current Prospectus and Statement of Additional
Information (collectively referred to as the "Prospectus") and we will make no
representations about such Shares not included in said Prospectus or in any
authorized supplemental material supplied or authorized by you. We will not use
any other offering materials for the Funds without your written consent. We
will use our best efforts in the development and promotion of sales of Shares
and agree to be responsible for the proper instruction and training of all sales
personnel employed by us, in order that the Shares will be offered and sold in
accordance with the terms and conditions of this Agreement and all applicable
laws, rules and regulations. We agree to hold harmless and indemnify you, the
Funds, and your and their respective officers, directors, trustees and employees
in the event that we, or any of our current or former representatives, should
violate any law, rule or regulation, or any provisions of this Agreement, which
violation may result in any loss or liability to you, your affiliates or any
Fund. If you determine to refund any amounts paid by any investor by reason of
any such violation on our part, we shall promptly return to you on demand any
commissions previously paid or discounts allowed by you to us with respect to
the transaction for which the refund is made. Furthermore, we agree to
indemnify you, your affiliates and the Funds against any and all claims,
demands, controversies, actions, losses, damages, liabilities, expenses,
arbitrations, complaints or investigations, including without limitation,
reasonable attorneys' fees and court costs that are the result of or arise
directly or indirectly, in whole or in part, from you, your affiliates or the
Funds acting upon instructions for the purchase, exchange or resale of
uncertificated book shares received through your manual or automated phone
system or the Fund/SERV program of National Securities Clearing Corporation;
provided such loss, liability or damages are not the result of the gross
negligence, recklessness or intentional misconduct of you, your affiliates or
the Funds. All expenses which we incur in connection with our activities under
this Agreement shall be borne by us. Termination or cancellation of this
Agreement shall not relieve us from the requirements of this paragraph as to
transactions or occurrences arising prior to such termination.
4. Any applicable sales charge and dealer commission relative to any sales
of Shares made by us will only be at a rate or rates set forth in the then
current Prospectus of such Fund. In the event the Prospectus or Statement of
Additional Information provides for a minimum holding period in order for us to
receive a an agency commission, asset-based sales charge, service fee or other
payment and Shares relating to that payment are redeemed prior to the
termination of that holding period, we are obligated to repay you a pro rata
portion of such payment, based on the ratio of (i) the difference in the period
of time such Shares were held and the minimum holding period to (ii) the holding
period. You may recoup some or all of such amounts from and to the extent there
are any other commissions or payments due and owing from you to us at any time,
provided, however, that you are not obligated to accept repayment only out of
such other commissions or payments and may demand payment directly from us at
any time until such amounts are repaid in full. To secure our obligation to
repay such payments, we hereby grant you, and you shall have, a security
interest in any and all commissions and other payments due us under this
Agreement or under any Distribution and Service Plan and Agreement for any of
the Funds.
<PAGE>
5. The rate(s) of any commission for sales of such Shares are subject to
change by you from time to time, and any decreases in such commissions shall be
made upon 30 days' written notice, and any orders placed after the effective
date of such change, will be subject to the rate(s) in effect at the time of
receipt of the payment by you. Such notice requirement shall not apply to any
changes in the asset-based sales charges or service fees paid for such shares.
6. Payments for the purchase of Shares made by us by telephone or wire
order (including purchase orders received through your manual or automated phone
system, or via the Fund/SERV program of National Securities Clearing
Corporation), and all necessary account information required by you to establish
an account or to settle a resale order, including, without limitation, the tax
identification number of the purchaser, certified either by the purchaser or by
us, shall be provided to you and received by you within three business days
after your acceptance of our order or such shorter time as may be required by
law. If such payment or other settlement information are not timely received by
you, we understand that you reserve the right, without notice, to cancel the
purchase or resale order, or, at your option in the case of a purchase order, to
sell the Shares ordered by us back to the Fund, and in either case we shall
promptly reimburse you for any loss to you or the Fund, including without
limitation loss of your profit, suffered by you resulting from our failure to
make the aforesaid timely payment or settlement. If sales of any Fund's Shares
are contingent upon the Fund's receipt of Federal Funds in payment therefor, we
will forward promptly to you any purchase orders and/or payments received by us
for such Shares from our customers. With respect to purchase orders of
uncertificated book shares placed via Fund/SERV, we shall retain in our files
all applications and other documents required by you to establish an account or
to settle a resale order. We will provide you with the original of such
documents at your request.
7. We agree to purchase Shares only from you or from our customers. If we
purchase Shares from you, we agree that all such purchases shall be made only
to cover orders received by us from our customers, or for our own bona fide
investment. If we purchase Shares from our
customers, we agree to pay such customers not less than the applicable
redemption or repurchase price then quoted by the Fund.
8. You may consider any order we place for Fund shares to be the total
holding of Shares by the investor, and you may assume that the investor is not
entitled to any reduction in sales price beyond that accorded to the amount of
that purchase order as determined by the schedule set forth in the then current
Prospectus, unless we advise you otherwise when we place the order.
9. We may place resale orders with you for Shares owned by our customers,
but only in accordance with the terms of the applicable Fund Prospectus. We
understand and agree that by placing a resale order with you by wire or
telephone (including resale orders for uncertificated book shares placed via
your manual or automated phone system or via the Fund/SERV program of National
Securities Clearing Corporation) we represent to you that a request for the
redemption of the shares covered by the resale order has been delivered to us by
the registered owner(s) of such shares, and that such request has been executed
in the manner and with the signature(s) of such registered owner(s) guaranteed
as required by the then-current Prospectus of the applicable Fund. Such resale
orders shall be subject to the following additional conditions:
(a) We shall furnish you with the exact registration, account number
and Class of
<PAGE>
Shares to be redeemed at the time we place a resale order by wire or
telephone. Other than for resale orders of uncertificated book shares
placed via Fund/SERV, we shall tender to you, within three business
days of our placing such resale order: (i) a stock power or letter,
duly signed by the registered owner(s) of the Shares which are the
subject of the order, duly guaranteed, (ii) any Share certificates
required for such redemption, and (iii) any additional documents which
may be required by the applicable Fund or its transfer agent, in
accordance with the terms of the then-current Prospectus of the
applicable Fund and the policies of the transfer agent. With respect
to resale orders of uncertificated book shares placed via Fund/SERV,
we shall retain in our files all documents required by you to effect
such transaction. We will provide you with the original of such
documents at your request.
(b) The resale price will be the next net asset value per share of
the Shares computed after your receipt, prior to the close of the New
York Stock Exchange ("NYSE"), of an order placed by us to resell such
Shares, except that orders placed by us after the close of the NYSE on
a business day will be based on the Fund's net asset value per share
determined that day, but only if such orders were received by us from
our customer prior to the close of business of the NYSE that day and
if we placed our resale order with you prior to your normal close of
business that day.
(c) In connection with a resale order we have placed, if we fail to
make delivery of all required certificates and documents in a timely
manner as stated above (other than for resale orders placed via
Fund/SERV), or if the registered owner of the Shares subject to the
resale order redeems such Shares prior to our settlement of the order,
you have the right to cancel our resale order. If any cancellation of
a resale order or if any error in the timing of the acceptance of a
resale order placed by us shall result in a loss to you or the
applicable Fund, we shall promptly reimburse you for such loss.
10. If any Shares sold by us under the terms of this Agreement are
redeemed by any of the Funds (including without limitation redemptions resulting
from an exchange for Shares of another Fund) or are repurchased by you as agent
for the Fund or are tendered to a Fund for redemption within seven business days
after your confirmation to us of our original purchase order for such Shares, we
shall promptly repay you the full amount of the commission (including any
supplemental commission) allowed to us on the original sale, provided you notify
us of such repurchase or redemption. Termination, amendment or cancellation of
this Agreement shall not relieve us from the requirements of this paragraph.
11. We will comply with, and conform our selling practices to, any and all
written compliance standards and policies and procedures that you may from time
to time provide to us.
12. Your obligations to us under this Agreement are subject to the
provisions of any distributorship agreements entered into between you and the
Funds and any plans adopted by the Funds under Rule 12b-1 under the 1940 Act.
If we are paid a service fee by you or by any of the Funds, we agree to provide,
at the request of you or such Funds, verification that such payments were used
for personal services and/or the maintenance of personal accounts, related to
the Shares held by your customers. We understand and agree that you are in no
way responsible for the manner of our performance of, or for any of our acts or
omissions in connection with, the services we
<PAGE>
provide under this Agreement. Nothing in this Agreement shall be construed to
constitute us or any of our agents, employees or representatives as the agent or
employee of you or any of the Funds.
13. We undertake to promptly notify you if we are not now a member of the
Securities Investor Protection Corporation (or its successor) ("SIPC"), or if at
any time during the term of the Dealer Agreement we cease being a member of
SIPC. Such notice shall be in writing and shall be sent via first class mail
to:
Oppenheimer Funds Distributor, Inc.
Attn: General Counsel
Two World Trade Center
New York, NY 10048-0203
14. We may terminate this Agreement by written notice to you, which
termination shall become effective ten days after the date of our mailing such
notice to you. We agree that you have and reserve the right, in your sole
discretion without notice to us, to suspend sales of Shares of any of the Funds,
or to withdraw entirely the offering of Shares of any of the Funds, at any time,
or, in your sole discretion, to modify, amend or cancel this Agreement upon
written notice to us of such modification, amendment or cancellation, which
shall be effective on the date stated in such notice. Without limiting the
foregoing, you may terminate this Agreement if we violate any of the provisions
of this Agreement, said termination to become effective on the date you mail
such notice to us. Without limiting the foregoing, and any provision hereof to
the contrary notwithstanding, our expulsion from the NASD will automatically
terminate this Agreement without notice; our suspension from the NASD, the
initiation of customer protection proceedings by the Securities Investor
Protection Corporation (or its successor), the appointment of a trustee for all
or substantially all of our business assets, or our violation of applicable
state, Federal or foreign laws or rules and regulations of authorized regulatory
agencies will terminate this Agreement effective upon the date you mail notice
to us of such termination. Your failure to terminate this Agreement for a
particular cause shall not constitute a waiver of your right to terminate this
Agreement at a later date for the same or any other cause. All notices
hereunder shall be to the respective parties at the addresses listed hereon,
unless such address is changed by written notice sent to the last address of the
other party provided under this Agreement.
15. This Agreement shall become effective as of the date when it is
executed and dated by you below and shall be in substitution of any prior
agreement between you and us covering any of the Funds. This Agreement and all
the rights and obligations of the parties hereunder shall be governed by and
construed under the laws of the State of New York applicable to agreements to be
performed in New York, without giving effect to choice of law rules. This
Agreement is not assignable or transferable, except that you may without notice
or consent from us, assign or transfer this Agreement to any successor firm or
corporation which becomes the Distributor or Sub-Distributor of the Funds or
assign any of your duties under this Agreement to any entity under common
control with you.
16. By signing this Agreement, we represent and warrant to you that this
Agreement has been duly authorized by us by all necessary action, corporate or
otherwise, and is signed on our behalf by our duly authorized officer or
principal.
__________________________________________________
<PAGE>
(Name of Dealer)
__________________________________________________
(Address of Dealer)
By: ______________________________________________
(Authorized Signature of Dealer)
__________________________________________________
(Name) (Title)
Accepted:
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:_______________________________
Date:_____________________________
6/95
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 16 to the
registration statement on Form N-1A (the "Registration Statement") of our
report dated January 25, 1995, relating to the financial statements and
financial highlights of Quest for Value Global Equity Fund, Inc., which
appears in such Statement of Additional Information, and to the incorporation
by reference of our report into the Prospectus which constitutes part of this
Registration Statement. We also consent to the references to us under the
headings "Financial Highlights" in such Prospectus and "Additional
Information -- Independent Accountants" in such Statement of Additional
Information.
/s/ Price Waterhouse LLP
- ---------------------------
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
September 27, 1995
<PAGE>
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
AND
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
FOR CLASS A SHARES OF
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the
"Plan") dated the ___ day of ______, 1995, by and between OPPENHEIMER/QUEST FOR
VALUE GLOBAL EQUITY FUND, INC. (the "Corporation") for the account of its
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC. (the "Fund") and
OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. THE PLAN. This Plan is the Fund's written distribution plan for Class
A shares of the Fund (the "Shares"), contemplated by Rule 12b-1 (the "Rule")
under the Investment Company Act of 1940 (the "1940 Act"), pursuant to which the
Fund will compensate the Distributor for its services incurred in connection
with the distribution of Shares, and the personal service and maintenance of
shareholder accounts that hold Shares ("Accounts"). The Fund may act as
distributor of securities of which it is the issuer, pursuant to the Rule,
according to the terms of this Plan. The Distributor is authorized under the
Plan to pay "Recipients," as hereinafter defined, for rendering (1) distribution
assistance in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor (the "NASD
Rules of Fair Practice") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution, to which the Fund is
subject under any order on which the Fund relies, issued at any time by the
Securities and Exchange Commission.
2. DEFINITIONS. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the foregoing,
a majority of the Corporation's Board of Directors (the "Board") who are not
"interested persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
relating to this Plan (the "Independent Directors") may remove any broker,
dealer, bank or other person or entity as a Recipient, whereupon such person's
or entity's rights as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such customers,
clients and/or accounts as to which such Recipient is a fiduciary or
-1-
<PAGE>
custodian or co-fiduciary or co-custodian (collectively, the "Customers"), but
in no event shall any such Shares be deemed owned by more than one Recipient for
purposes of this Plan. In the event that more than one person or entity would
otherwise qualify as Recipients as to the same Shares, the Recipient which is
the dealer of record on the Fund's books as determined by the Distributor shall
be deemed the Recipient as to such Shares for purposes of this Plan.
3. PAYMENTS FOR DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SUPPORT
SERVICES.
(a) THE FUND WILL MAKE PAYMENTS TO THE DISTRIBUTOR (I) WITHIN FORTY-FIVE
(45) DAYS OF THE END OF EACH CALENDAR QUARTER, IN THE AGGREGATE AMOUNT OF
0.0625% (0.25% ON AN ANNUAL BASIS) OF THE AVERAGE DURING THE CALENDAR QUARTER OF
THE AGGREGATE NET ASSET VALUE OF THE SHARES COMPUTED AS OF THE CLOSE OF EACH
BUSINESS DAY (THE "SERVICE FEE"), PLUS (II) WITHIN TEN (10) DAYS OF THE END OF
EACH MONTH, IN THE AGGREGATE 0.020833% (0.25% ON AN ANNUAL BASIS) OF THE AVERAGE
DURING THE CALENDAR QUARTER OF THE AGGREGATE NET ASSET VALUE OF THE SHARES
COMPUTED AS OF THE CLOSE OF EACH BUSINESS DAY (THE "ASSET-BASED SALES CHARGE").
SUCH SERVICE FEE PAYMENTS RECEIVED FROM THE FUND WILL COMPENSATE THE DISTRIBUTOR
AND RECIPIENTS FOR PROVIDING ADMINISTRATIVE SUPPORT SERVICES WITH RESPECT TO
ACCOUNTS. SUCH ASSET-BASED SALES CHARGE PAYMENTS RECEIVED FROM THE FUND WILL
COMPENSATE THE DISTRIBUTOR AND RECIPIENTS FOR PROVIDING DISTRIBUTION ASSISTANCE
IN CONNECTION WITH THE SALE OF SHARES.
The administrative support services in connection with the Accounts to be
rendered by Recipients may include, but shall not be limited to, the following:
answering routine inquiries concerning the Fund, assisting in establishing and
maintaining accounts or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment options
available, and providing such other information and services in connection with
the rendering of personal services and/or the maintenance of Accounts, as the
Distributor or the Fund may reasonably request.
The distribution assistance in connection with the sale of Shares to be
rendered by the Distributor and by Recipients may include, but shall not be
limited to, the following: distributing sales literature and prospectuses other
than those furnished to current holders of the Fund's Shares ("Shareholders"),
and providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for the Accounts, then the
Distributor, at the request of the Board, shall require the Recipient to provide
a written report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Directors still is not satisfied, either may take
appropriate steps to terminate the Recipient's status as such under the Plan,
whereupon such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed 0.0625% (0.25% on an annual basis) of the
-2-
<PAGE>
average during the calendar quarter of the aggregate net asset value of Shares,
computed as of the close of each business day, constituting Qualified Holdings
owned beneficially or of record by the Recipient or by its Customers for a
period of more than the minimum period (the "Minimum Holding Period"), if any,
to be set from time to time by a majority of the Independent Directors.
Alternatively, the Distributor may, at its sole option, make service fee
payments ("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed (i) 0.25% of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day, constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers for a period of
more than one (1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by Article III, Section 26, of the NASD Rules of Fair
Practice. In the event Shares are redeemed less than one year after the date
such Shares were sold, the Recipient is obligated and will repay to the
Distributor on demand a pro rata portion of such Advance Service Fee Payments,
based on the ratio of the time such shares were held to one (1) year.
THE ADVANCE SERVICE FEE PAYMENTS DESCRIBED IN PART (I) OF THE PRECEDING
SENTENCE MAY, AT THE DISTRIBUTOR'S SOLE OPTION, BE MADE MORE OFTEN THAN
QUARTERLY, AND SOONER THAN THE END OF THE CALENDAR QUARTER. IN ADDITION, THE
DISTRIBUTOR MAY MAKE ASSET-BASED SALES CHARGE PAYMENTS TO ANY RECIPIENT
QUARTERLY, WITHIN FORTY-FIVE (45) DAYS OF THE END OF EACH CALENDAR QUARTER, AT A
RATE NOT TO EXCEED 0.0625% (0.25% ON AN ANNUAL BASIS) OF THE AVERAGE DURING THE
CALENDAR QUARTER OF THE AGGREGATE NET ASSET VALUE OF SHARES COMPUTED AS OF THE
CLOSE OF EACH BUSINESS DAY, CONSTITUTING QUALIFIED HOLDINGS OWNED BENEFICIALLY
OR OF RECORD BY THE RECIPIENT OR ITS CUSTOMERS. HOWEVER, NO SUCH SERVICE FEE OR
ASSET-BASED SALES CHARGE PAYMENTS (COLLECTIVELY, THE "RECIPIENT PAYMENTS") SHALL
BE MADE TO ANY RECIPIENT FOR ANY SUCH QUARTER IN WHICH ITS QUALIFIED HOLDINGS
DO NOT EQUAL OR EXCEED, AT THE END OF SUCH QUARTER, THE MINIMUM AMOUNT ("MINIMUM
QUALIFIED HOLDINGS"), IF ANY, TO BE SET FROM TIME TO TIME BY A MAJORITY OF THE
INDEPENDENT DIRECTORS.
A majority of the Independent Directors may at any time or from time to
time decrease and thereafter adjust the rate of fees to be paid to the
Distributor or to any Recipient, but not to exceed the rates set forth above,
and/or direct the Distributor to increase or decrease the Minimum Holding Period
or the Minimum Qualified Holdings. The Distributor shall notify all Recipients
of the Minimum Qualified Holdings or Minimum Holding Period, if any, and the
rates of Recipient Payments hereunder applicable to Recipients, and shall
provide each Recipient with written notice within thirty (30) days after any
change in these provisions. Inclusion of such provisions or a change in such
provisions in a revised current prospectus shall constitute sufficient notice.
The Distributor may make Plan payments to any "affiliated person" (as defined in
the 1940 Act) of the Distributor if such affiliated person qualifies as a
Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III, Section 26, of the
NASD Rules of Fair Practice. The distribution assistance and administrative
support services to be rendered by the Distributor in connection with the Shares
may include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity that sells
Shares,
-3-
<PAGE>
and\or paying such persons Advance Service Fee Payments in advance of, and\or
greater than, the amount provided for in Section 3(b) of this Agreement; (ii)
paying compensation to and expenses of personnel of the Distributor who support
distribution of Shares by Recipients; (iii) obtaining financing or providing
such financing from its own resources, or from an affiliate, for interest and
other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; (iv) paying other direct distribution costs, including without limitation
the costs of sales literature, advertising and prospectuses (other than those
furnished to current Shareholders) and state "blue sky" registration expenses;
and (v) providing any service rendered by the Distributor that a Recipient may
render pursuant to part (a) of this Section 3. Such services include
distribution assistance and administrative support services rendered in
connection with Shares acquired (i) by purchase, (ii) in exchange for shares of
another investment company for which the Distributor serves as distributor or
sub-distributor, or (iii) pursuant to a plan of reorganization to which the Fund
is a party. In the event that the Board should have reason to believe that the
Distributor may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report or other information to verify that the Distributor is providing
appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by Oppenheimer
Management Corporation ("OMC") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OMC), from its own resources, from Asset-Based
Sales Charge payments or from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. In no event shall
the amounts to be paid to the Distributor exceed the rate of fees to be paid by
the Fund to the Distributor set forth in paragraph (a) of this Section 3.
4. SELECTION AND NOMINATION OF DIRECTORS. While this Plan is in effect,
the selection and nomination of those persons to be Directors of the Corporation
who are not "interested persons" of the Fund or the Corporation ("Disinterested
Directors") shall be committed to the discretion of such Disinterested
Directors. Nothing herein shall prevent the Disinterested Directors from
soliciting the views or the involvement of others in such selection or
nomination if the final decision on any such selection and nomination is
approved by a majority of the incumbent Disinterested Directors.
5. REPORTS. While this Plan is in effect, the Treasurer of the
Corporation shall provide at least quarterly a written reports to the
Corporation's Board for its review, detailing services rendered in connection
with the distribution of the Shares, the amount of all payments made and the
purpose for which the payments were made. The reports shall be provided
quarterly and shall state whether all provisions of Section 3 of this Plan have
been complied with.
6. RELATED AGREEMENTS. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Directors or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Directors cast in
-4-
<PAGE>
person at a meeting called for the purpose of voting on such agreement; and (iv)
it shall, unless terminated as herein provided, continue in effect from year to
year only so long as such continuance is specifically approved at least annually
by a vote of the Board and its Independent Directors cast in person at a meeting
called for the purpose of voting on such continuance.
7. EFFECTIVENESS, CONTINUATION, TERMINATION AND AMENDMENT. THIS AMENDED
AND RESTATED PLAN HAS BEEN APPROVED BY A VOTE OF THE BOARD AND ITS INDEPENDENT
DIRECTORS CAST IN PERSON AT A MEETING CALLED ON JUNE 22, 1995 FOR THE PURPOSE OF
VOTING ON THIS PLAN, AND SHALL TAKE EFFECT AFTER APPROVAL BY CLASS A
SHAREHOLDERS OF THE FUND, AT WHICH TIME IT SHALL REPLACE THE FUND'S PLAN AND
AGREEMENT OF DISTRIBUTION FOR THE SHARES MADE AS OF JUNE 21, 1990 AS AMENDED AS
OF JULY 27, 1992 AND SEPTEMBER 1, 1993. UNLESS TERMINATED AS HEREINAFTER
PROVIDED, IT SHALL CONTINUE IN EFFECT FROM YEAR TO YEAR FROM THE DATE FIRST SET
FORTH ABOVE OR AS THE BOARD MAY OTHERWISE DETERMINE ONLY SO LONG AS SUCH
CONTINUANCE IS SPECIFICALLY APPROVED AT LEAST ANNUALLY BY A VOTE OF THE BOARD
AND ITS INDEPENDENT DIRECTORS CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE
OF VOTING ON SUCH CONTINUANCE. THIS PLAN MAY NOT BE AMENDED TO INCREASE
MATERIALLY THE AMOUNT OF PAYMENTS TO BE MADE WITHOUT APPROVAL OF THE CLASS C
SHAREHOLDERS, IN THE MANNER DESCRIBED ABOVE, AND ALL MATERIAL AMENDMENTS MUST BE
APPROVED BY A VOTE OF THE BOARD AND OF THE INDEPENDENT DIRECTORS. THIS PLAN MAY
BE TERMINATED AT ANY TIME BY VOTE OF A MAJORITY OF THE INDEPENDENT DIRECTORS OR
BY THE VOTE OF THE HOLDERS OF A "MAJORITY" (AS DEFINED IN THE 1940 ACT) OF THE
FUND'S OUTSTANDING VOTING SECURITIES OF THE CLASS. IN THE EVENT OF SUCH
TERMINATION, THE BOARD AND ITS INDEPENDENT DIRECTORS SHALL DETERMINE WHETHER THE
DISTRIBUTOR IS ENTITLED TO PAYMENT FROM THE FUND OF ALL OR A PORTION OF THE
SERVICE FEE AND/OR THE ASSET-BASED SALES CHARGE IN RESPECT OF SHARES SOLD PRIOR
TO THE EFFECTIVE DATE OF SUCH TERMINATION.
OPPENHEIMER/QUEST FOR VALUE GLOBAL
EQUITY FUND, INC.
By: ____________________________________
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:____________________________________
Andrew J. Donohue
Executive Vice President
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<PAGE>
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
AND
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
FOR CLASS B SHARES OF
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the
"Plan") dated the ____ day of ________, 1995, by and between OPPENHEIMER/QUEST
FOR VALUE GLOBAL EQUITY FUND, INC. (the "Corporation") for the account of its
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC. (the "Fund") and
OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. THE PLAN. This Plan is the Fund's written distribution and service
plan for Class B shares of the Fund (the "Shares"), contemplated by Rule 12b-1
(the "Rule") under the Investment Company Act of 1940 (the "1940 Act"), pursuant
to which the Fund will compensate the Distributor for its services in connection
with the distribution of Shares, and the personal service and maintenance of
shareholder accounts that hold Shares ("Accounts"). The Fund may act as
distributor of securities of which it is the issuer, pursuant to the Rule,
according to the terms of this Plan. The Distributor is authorized under the
Plan to pay "Recipients," as hereinafter defined, for rendering (1) distribution
assistance in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor (the "NASD
Rules of Fair Practice") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution, to which the Fund is
subject under any order on which the Fund relies, issued at any time by the
Securities and Exchange Commission.
2. DEFINITIONS. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the foregoing,
a majority of the Corporation's Board of Directors (the "Board") who are not
"interested persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
relating to this Plan (the "Independent Directors") may remove any broker,
dealer, bank or other person or entity as a Recipient, whereupon such person's
or entity's rights as a third-party beneficiary hereof shall terminate.
1
<PAGE>
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such customers,
clients and/or accounts as to which such Recipient is a fiduciary or custodian
or co-fiduciary or co-custodian (collectively, the "Customers"), but in no event
shall any such Shares be deemed owned by more than one Recipient for purposes of
this Plan. In the event that more than one person or entity would otherwise
qualify as Recipients as to the same Shares, the Recipient which is the dealer
of record on the Fund's books as determined by the Distributor shall be deemed
the Recipient as to such Shares for purposes of this Plan.
3. PAYMENTS FOR DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SUPPORT
SERVICES.
(a) The Fund will make payments to the Distributor, (i) within forty-five
(45) days of the end of each calendar quarter, in the aggregate amount of
0.0625% (0.25% on an annual basis) of the average during the calendar quarter of
the aggregate net asset value of the Shares computed as of the close of each
business day (the "Service Fee"), plus (ii) within ten (10) days of the end of
each month, in the aggregate amount of 0.0625% (0.75% on an annual basis) of the
average during the month of the aggregate net asset value of Shares computed as
of the close of each business day (the "Asset-Based Sales Charge") outstanding
for six years or less (the "Maximum Holding Period"). Such Service Fee payments
received from the Fund will compensate the Distributor and Recipients for
providing administrative support services with respect to Accounts. Such Asset-
Based Sales Charge payments received from the Fund will compensate the
Distributor and Recipients for providing distribution assistance in connection
with the sales of Shares.
The administrative support services in connection with the Accounts to be
rendered by Recipients may include, but shall not be limited to, the following:
answering routine inquiries concerning the Fund, assisting in the establishment
and maintenance of accounts or sub-accounts in the Fund and processing Share
redemption transactions, making the Fund's investment plans and dividend payment
options available, and providing such other information and services in
connection with the rendering of personal services and/or the maintenance of
Accounts, as the Distributor or the Fund may reasonably request.
The distribution assistance in connection with the sale of Shares to be
rendered by the Distributor and Recipients may include, but shall not be limited
to, the following: distributing sales literature and prospectuses other than
those furnished to current holders of the Fund's Shares ("Shareholders"), and
providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Directors still is
2
<PAGE>
not satisfied, either may take appropriate steps to terminate the Recipient's
status as such under the Plan, whereupon such Recipient's rights as a third-
party beneficiary hereunder shall terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, to be set from time to
time by a majority of the Independent Directors.
Alternatively, the Distributor may, at its sole option, make service fee
payments ("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed (i) 0.25% of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day, constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers for a period of
more than one (1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by Article III, Section 26, of the NASD Rules of Fair
Practice. In the event Shares are redeemed less than one year after the date
such Shares were sold, the Recipient is obligated and will repay to the
Distributor on demand a pro rata portion of such Advance Service Fee Payments,
based on the ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this paragraph
(b) may, at the Distributor's sole option, be made more often than quarterly,
and sooner than the end of the calendar quarter. However, no such payments
shall be made to any Recipient for any such quarter in which its Qualified
Holdings do not equal or exceed, at the end of such quarter, the minimum amount
("Minimum Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Directors.
A majority of the Independent Directors may at any time or from time to
time decrease and thereafter adjust the rate of fees to be paid to the
Distributor or to any Recipient, but not to exceed the rate set forth above,
and/or direct the Distributor to increase or decrease the Maximum Holding
Period, the Minimum Holding Period or the Minimum Qualified Holdings. The
Distributor shall notify all Recipients of the Minimum Qualified Holdings,
Maximum Holding Period and Minimum Holding Period, if any, and the rate of
payments hereunder applicable to Recipients, and shall provide each Recipient
with written notice within thirty (30) days after any change in these
provisions. Inclusion of such provisions or a change in such provisions in a
revised current prospectus shall constitute sufficient notice. The Distributor
may make Plan payments to any "affiliated person" (as defined in the 1940 Act)
of the Distributor if such affiliated person qualifies as a Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination of such amounts under the limits to which the
Distributor is, or may become, subject
3
<PAGE>
under Article III, Section 26, of the NASD Rules of Fair Practice. The
distribution assistance and administrative support services to be rendered by
the Distributor in connection with the Shares may include, but shall not be
limited to, the following: (i) paying sales commissions to any broker, dealer,
bank or other person or entity that sells Shares, and\or paying such persons
Advance Service Fee Payments in advance of, and\or greater than, the amount
provided for in Section 3(b) of this Agreement; (ii) paying compensation to and
expenses of personnel of the Distributor who support distribution of Shares by
Recipients; (iii) obtaining financing or providing such financing from its own
resources, or from an affiliate, for interest and other borrowing costs on the
Distributor's unreimbursed expenses incurred in rendering distribution
assistance and administrative support services to the Fund; (iv) paying other
direct distribution costs, including without limitation the costs of sales
literature, advertising and prospectuses (other than those furnished to current
Shareholders) and state "blue sky" registration expenses; and (v) providing any
service rendered by the Distributor that a Recipient may render pursuant to part
(a) of this Section 3. Such services include distribution assistance and
administrative support services rendered in connection with Shares acquired (i)
by purchase, (ii) in exchange for shares of another investment company for which
the Distributor serves as distributor or sub-distributor, or (iii) pursuant to a
plan of reorganization to which the Fund is a party. In the event that the
Board should have reason to believe that the Distributor may not be rendering
appropriate distribution assistance or administrative support services in
connection with the sale of Shares, then the Distributor, at the request of the
Board, shall provide the Board with a written report or other information to
verify that the Distributor is providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by Oppenheimer
Management Corporation ("OMC") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OMC), from its own resources, from Asset-Based
Sales Charge payments or from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. In no event shall
the amounts to be paid to the Distributor exceed the rate of fees to be paid by
the Fund to the Distributor set forth in paragraph (a) of this Section 3.
4. SELECTION AND NOMINATION OF DIRECTORS. While this Plan is in effect, the
selection and nomination of those persons to be Directors of the Corporation who
are not "interested persons" of the Fund or the Corporation ("Disinterested
Directors") shall be committed to the discretion of such Disinterested
Directors. Nothing herein shall prevent the Disinterested Directors from
soliciting the views or the involvement of others in such selection or
nomination if the final decision on any such selection and nomination is
approved by a majority of the incumbent Disinterested Directors.
5. REPORTS. While this Plan is in effect, the Treasurer of the Corporation
shall provide written reports to the Corporation's Board for its review,
detailing services rendered in connection with the distribution of the Shares,
the amount of all payments made and the purpose for which the payments were
made. The reports shall be provided quarterly, and shall state whether all
provisions of Section 3 of this Plan have been complied with.
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<PAGE>
6. RELATED AGREEMENTS. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Directors or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Directors cast in person at a meeting called
for the purpose of voting on such agreement; and (iv) it shall, unless
terminated as herein provided, continue in effect from year to year only so long
as such continuance is specifically approved at least annually by a vote of the
Board and its Independent Directors cast in person at a meeting called for the
purpose of voting on such continuance.
7. EFFECTIVENESS, CONTINUATION, TERMINATION AND AMENDMENT. This Amended and
Restated Plan has been approved by a vote of the Board and its Independent
Directors cast in person at a meeting called on June 22, 1995, for the purpose
of voting on this Plan, and shall take effect after approval by Class B
shareholders of the Fund, at which time it shall replace the Fund's Amended and
Restated Distribution and Plan adopted as of December 23, 1994 and the Amended
and Restated Distribution Agreement for the Shares dated December 23, 1994.
Unless terminated as hereinafter provided, it shall continue in effect from year
to year thereafter or as the Board may otherwise determine only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Directors cast in person at a meeting called for the purpose
of voting on such continuance. This Plan may not be amended to increase
materially the amount of payments to be made without approval of the Class B
Shareholders, in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Directors. This Plan may
be terminated at any time by vote of a majority of the Independent Directors or
by the vote of the holders of a "majority" (as defined in the 1940 Act) of the
Fund's outstanding voting securities of the Class. In the event of such
termination, the Board and its Independent Directors shall determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the Service Fee and/or the Asset-Based Sales Charge in respect of Shares sold
prior to the effective date of such termination.
OPPENHEIMER QUEST FOR VALUE GLOBAL EQUITY FUND, INC
By:____________________________________
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:___________________________________
Andrew J. Donohue
Executive Vice President
5
<PAGE>
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
AND OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
FOR CLASS C SHARES OF
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC.
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the
"Plan") dated the ___ day of ______, 1995, by and between OPPENHEIMER/QUEST FOR
VALUE GLOBAL EQUITY FUND, INC. (the "Corporation") for the account of its
OPPENHEIMER/QUEST FOR VALUE GLOBAL EQUITY FUND, INC. (the "Fund") and
OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. THE PLAN. This Plan is the Fund's written distribution plan for Class
C shares of the Fund (the "Shares"), contemplated by Rule 12b-1 (the "Rule")
under the Investment Company Act of 1940 (the "1940 Act"), pursuant to which the
Fund will compensate the Distributor for its services incurred in connection
with the distribution of Shares, and the personal service and maintenance of
shareholder accounts that hold Shares ("Accounts"). The Fund may act as
distributor of securities of which it is the issuer, pursuant to the Rule,
according to the terms of this Plan. The Distributor is authorized under the
Plan to pay "Recipients," as hereinafter defined, for rendering (1) distribution
assistance in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor (the "NASD
Rules of Fair Practice") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution, to which the Fund is
subject under any order on which the Fund relies, issued at any time by the
Securities and Exchange Commission.
2. DEFINITIONS. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the foregoing,
a majority of the Corporation's Board of Directors (the "Board") who are not
"interested persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
relating to this Plan (the "Independent Directors") may remove any broker,
dealer, bank or other person or entity as a Recipient, whereupon such person's
or entity's rights as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such customers,
clients and/or accounts as to which such Recipient is a fiduciary or custodian
or co-fiduciary or co-custodian (collectively, the "Customers"), but in no event
shall any such Shares be
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<PAGE>
deemed owned by more than one Recipient for purposes of this Plan. In the event
that more than one person or entity would otherwise qualify as Recipients as to
the same Shares, the Recipient which is the dealer of record on the Fund's books
as determined by the Distributor shall be deemed the Recipient as to such Shares
for purposes of this Plan.
3. PAYMENTS FOR DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SUPPORT
SERVICES.
(a) The Fund will make payments to the Distributor, within forty-five (45)
days of the end of each calendar quarter, in the aggregate amount (i) of 0.0625%
(0.25% on an annual basis) of the average during the calendar quarter of the
aggregate net asset value of the Shares computed as of the close of each
business day (the "Service Fee"), plus (ii) 0.1875% (0.75% on an annual basis)
of the average during the calendar quarter of the aggregate net asset value of
the Shares computed as of the close of each business day (the "Asset-Based Sales
Charge"). Such Service Fee payments received from the Fund will compensate the
Distributor and Recipients for providing administrative support services with
respect to Accounts. Such Asset-Based Sales Charge payments received from the
Fund will compensate the Distributor and Recipients for providing distribution
assistance in connection with the sale of Shares.
The administrative support services in connection with the Accounts to be
rendered by Recipients may include, but shall not be limited to, the following:
answering routine inquiries concerning the Fund, assisting in establishing and
maintaining accounts or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment options
available, and providing such other information and services in connection with
the rendering of personal services and/or the maintenance of Accounts, as the
Distributor or the Fund may reasonably request.
The distribution assistance in connection with the sale of Shares to be
rendered by the Distributor and by Recipients may include, but shall not be
limited to, the following: distributing sales literature and prospectuses other
than those furnished to current holders of the Fund's Shares ("Shareholders"),
and providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for the Accounts, then the
Distributor, at the request of the Board, shall require the Recipient to provide
a written report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Directors still is not satisfied, either may take
appropriate steps to terminate the Recipient's status as such under the Plan,
whereupon such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares, computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or by its Customers
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<PAGE>
for a period of more than the minimum period (the "Minimum Holding Period"), if
any, to be set from time to time by a majority of the Independent Directors.
Alternatively, the Distributor may, at its sole option, make service fee
payments ("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed (i) 0.25% of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day, constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers for a period of
more than one (1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by Article III, Section 26, of the NASD Rules of Fair
Practice. In the event Shares are redeemed less than one year after the date
such Shares were sold, the Recipient is obligated and will repay to the
Distributor on demand a pro rata portion of such Advance Service Fee Payments,
based on the ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of the preceding
sentence may, at the Distributor's sole option, be made more often than
quarterly, and sooner than the end of the calendar quarter. In addition, the
Distributor shall make asset-based sales charge payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed 0.1875% (0.75% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or its Customers for a period of more than one (1)
year. However, no such service fee or asset-based sales charge payments
(collectively, the "Recipient Payments") shall be made to any Recipient for any
such quarter in which its Qualified Holdings do not equal or exceed, at the end
of such quarter, the minimum amount ("Minimum Qualified Holdings"), if any, to
be set from time to time by a majority of the Independent Directors.
A majority of the Independent Directors may at any time or from time to
time decrease and thereafter adjust the rate of fees to be paid to the
Distributor or to any Recipient, but not to exceed the rates set forth above,
and/or direct the Distributor to increase or decrease the Minimum Holding Period
or the Minimum Qualified Holdings. The Distributor shall notify all Recipients
of the Minimum Qualified Holdings or Minimum Holding Period, if any, and the
rates of Recipient Payments hereunder applicable to Recipients, and shall
provide each Recipient with written notice within thirty (30) days after any
change in these provisions. Inclusion of such provisions or a change in such
provisions in a revised current prospectus shall constitute sufficient notice.
The Distributor may make Plan payments to any "affiliated person" (as defined in
the 1940 Act) of the Distributor if such affiliated person qualifies as a
Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III, Section 26, of the
NASD Rules of Fair Practice. The distribution assistance and administrative
support services to be rendered by the Distributor in connection with the Shares
may include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity that sells
Shares, and\or paying such persons Advance Service Fee Payments in advance of,
and\or greater than, the amount provided for in Section 3(b) of this Agreement;
(ii) paying compensation to and expenses of personnel of the
-3-
<PAGE>
Distributor who support distribution of Shares by Recipients; (iii) obtaining
financing or providing such financing from its own resources, or from an
affiliate, for interest and other borrowing costs of the Distributor's
unreimbursed expenses incurred in rendering distribution assistance and
administrative support services to the Fund; (iv) paying other direct
distribution costs, including without limitation the costs of sales literature,
advertising and prospectuses (other than those furnished to current
Shareholders) and state "blue sky" registration expenses; and (v) providing any
service rendered by the Distributor that a Recipient may render pursuant to part
(a) of this Section 3. Such services include distribution assistance and
administrative support services rendered in connection with Shares acquired (i)
by purchase, (ii) in exchange for shares of another investment company for which
the Distributor serves as distributor or sub-distributor, or (iii) pursuant to a
plan of reorganization to which the Fund is a party. In the event that the
Board should have reason to believe that the Distributor may not be rendering
appropriate distribution assistance or administrative support services in
connection with the sale of Shares, then the Distributor, at the request of the
Board, shall provide the Board with a written report or other information to
verify that the Distributor is providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by Oppenheimer
Management Corporation ("OMC") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OMC), from its own resources, from Asset-Based
Sales Charge payments or from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. In no event shall
the amounts to be paid to the Distributor exceed the rate of fees to be paid by
the Fund to the Distributor set forth in paragraph (a) of this Section 3.
4. SELECTION AND NOMINATION OF DIRECTORS. While this Plan is in effect,
the selection and nomination of those persons to be Directors of the Corporation
who are not "interested persons" of the Fund or the Corporation ("Disinterested
Directors") shall be committed to the discretion of such Disinterested
Directors. Nothing herein shall prevent the Disinterested Directors from
soliciting the views or the involvement of others in such selection or
nomination if the final decision on any such selection and nomination is
approved by a majority of the incumbent Disinterested Directors.
5. REPORTS. While this Plan is in effect, the Treasurer of the
Corporation shall provide at least quarterly a written reports to the
Corporation's Board for its review, detailing services rendered in connection
with the distribution of the Shares, the amount of all payments made and the
purpose for which the payments were made. The reports shall be provided
quarterly and shall state whether all provisions of Section 3 of this Plan have
been complied with.
6. RELATED AGREEMENTS. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Directors or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Directors cast in person at a meeting called
for the purpose of voting on such agreement; and (iv) it shall, unless
terminated as herein provided, continue in effect from year to year only so long
as such continuance is specifically approved at
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<PAGE>
least annually by a vote of the Board and its Independent Directors cast in
person at a meeting called for the purpose of voting on such continuance.
7. EFFECTIVENESS, CONTINUATION, TERMINATION AND AMENDMENT. This Amended
and Restated Plan has been approved by a vote of the Board and its Independent
Directors cast in person at a meeting called on June 22, 1995 for the purpose of
voting on this Plan, and shall take effect after approval by Class C
shareholders of the Fund, at which time it shall replace the Fund's Plan and
Agreement of Distribution for the Shares make as of September 1, 1993. Unless
terminated as hereinafter provided, it shall continue in effect from year to
year from the date first set forth above or as the Board may otherwise determine
only so long as such continuance is specifically approved at least annually by a
vote of the Board and its Independent Directors cast in person at a meeting
called for the purpose of voting on such continuance. This Plan may not be
amended to increase materially the amount of payments to be made without
approval of the Class C Shareholders, in the manner described above, and all
material amendments must be approved by a vote of the Board and of the
Independent Directors. This Plan may be terminated at any time by vote of a
majority of the Independent Directors or by the vote of the holders of a
"majority" (as defined in the 1940 Act) of the Fund's outstanding voting
securities of the Class. In the event of such termination, the Board and its
Independent Directors shall determine whether the Distributor is entitled to
payment from the Fund of all or a portion of the Service Fee and/or the Asset-
Based Sales Charge in respect of Shares sold prior to the effective date of such
termination.
OPPENHEIMER/QUEST FOR VALUE GLOBAL
EQUITY FUND, INC.
By: ____________________________________
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:____________________________________
Andrew J. Donohue
Executive Vice President
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