Registration No. 33-34720
811-06105
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ______ / /
POST-EFFECTIVE AMENDMENT NO. 21 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
AMENDMENT NO. 24 / X /
OPPENHEIMER QUEST GLOBAL VALUE FUND, INC.
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(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
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(Address of Principal Executive Offices)
1-212-323-0200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / Immediately upon filing pursuant to paragraph (b)
/ x / On March 30, 1998 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On ______________, pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On pursuant to paragraph (a)(2) of Rule 485
FORM N-1A
OPPENHEIMER QUEST GLOBAL VALUE FUND, INC.
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses; Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and Policies; Investment
Restrictions; How the Fund is Managed--Organization and History
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 How the Fund is Managed--Organization and History;--The Transfer
Agent; Dividends, Capital Gains and Taxes
7 How to Buy Shares; How to Exchange Shares; Special Investor
Services; Service Plan for Class A Shares; Distribution and
Service Plan for Class B Shares; Distribution and Service
Plan for Class C Shares; How to Sell Shares; Shareholder Account
Rules and Policies
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A Heading in Statement of
Item No. Additional Information
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment Techniques
and Strategies; Additional Investment Restrictions
14 How the Fund is Managed - Directors and Officers of the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and Service
Plans
17 Brokerage Policies of the Fund
18 Additional Information - About the Fund
19 Your Investment Account-How to Buy Shares; How to Sell Shares;
How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 Financial Statements
--------------------------------------
* Not applicable or negative answer.
Oppenheimer Quest Global Value Fund, Inc.
Prospectus dated March 30, 1998
Oppenheimer Quest Global Value Fund, Inc. is a mutual fund that seeks
long-term capital appreciation. The Fund seeks its investment objective through
pursuit of a global investment strategy primarily involving equity securities.
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. 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.
Some of the Fund's investment techniques may be considered speculative.
Foreign investing involves special risks. These techniques may increase the
risks of investing in the Fund and the Fund's operating costs. You should
carefully review the risks associated with an investment in the Fund. Please
refer to "Investment Objective and Policies" for more information about the
types of securities in which the Fund invests and refer to "Investment Risks"
for a discussion of the risks of investing in the Fund.
This Prospectus explains concisely what you should know before investing
in the Fund. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about the Fund in the March
30, 1998 Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Fund's Transfer Agent, at 1-800-525-7048, or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).
[OppenheimerFunds logo]
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
A Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
Investment Risks
Investment Techniques and Strategies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
Appendix A: Special Sales Charge Arrangements for
Shareholders of the Former Quest for Value Funds
-2-
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services, and those
expenses are subtracted from the Fund's assets to calculate the Fund's net asset
value per share. All shareholders therefore pay those expenses indirectly.
Shareholders pay other expenses directly, such as sales charges and account
transaction charges. The following tables are provided to help you understand
your direct expenses of investing in the Fund and your share of the Fund's
business operating expenses that you will bear indirectly. The numbers below are
based on the Fund's expenses during its last fiscal year ended November 30,
1997.
o Shareholder Transaction Expenses are charges you pay when you buy or
sell shares of the Fund. Please refer to "About Your Account," starting on
page__, for an explanation of how and when these charges apply.
Class Class Class
A Shares B Shares C Shares
Maximum Sales Charge
on Purchases
(as a % of
offering price) 5.75% None None
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Maximum Deferred Sales None(1) 5% in the first 1% if
Charge (as a % of the year, declining redeemed
lower of the original to 1% in the within 12
offering price or sixth year months of
redemption proceeds) and eliminated purchase(2)
thereafter(2)
- ------------------------------------------------------------------------------
Maximum Sales Charge on
Reinvested Dividends None None None
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Exchange Fee None None None
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Redemption Fee None(3) None(3) None(3)
- --------------------
(1) If you invest $1 million or more ($500,000 or more for purchases by
"Retirement Plans," as defined in "Class A Contingent Deferred Sales
Charge" on page __) in Class A shares, you may have to pay a sales charge
of up to 1% if you sell your shares within 12 calendar months (18 months
for shares purchased prior to May 1, 1997) from the end of the calendar
month during which you purchased those shares, depending upon when you
purchased such shares. See "How to Buy Shares - Buying Class A Shares,"
below.
(2) See "How to Buy Shares - Buying Class B Shares" and "How to Buy Shares -
Buying Class C Shares" below, for more information on the contingent
deferred sales charges. (3) There is a $10 transaction fee for redemptions
paid by Federal Funds wire, but not for redemptions paid by ACH transfer
through AccountLink. o Annual Fund Operating Expenses are paid out of the
Fund's assets and represent the Fund's expenses of operating its business.
For example, the Fund pays management fees to its investment adviser,
OppenheimerFunds, Inc. (referred to in this Prospectus as the "Manager").
The rates of the Manager's fees are set forth in "How the Fund is Managed,"
below. The Fund has other regular expenses for services, such as transfer
agent fees, custodial fees paid to the bank that holds the Fund's portfolio
securities, audit fees and legal expenses. Those expenses are included in
the Fund's financial statements in the Statement of Additional Information.
Annual Fund Operating Expenses (as a Percentage of
Average Net Assets)
Class Class Class
A Shares B Shares C Shares
Management Fees 0.75% 0.75% 0.75%
12b-1 Distribution
Plan Fees 0.50% 1.00% 1.00%
Other Expenses 0.48% 0.49% 0.49%
--------- -------- -------
Total Fund Operating 1.73% 2.24% 2.24%
Expenses
The numbers in the chart above are based upon the Fund's expenses in its
last fiscal year ended November 30, 1997. These amounts are shown as a
percentage of the average net assets of each class of the Fund's shares for that
year. The "12b-1 Distribution Plan Fees" for Class A shares are service fees
(the maximum fee is 0.25% of average annual net assets of that class) and the
asset-based sales charge of 0.25% of the average annual net assets of that
class. For Class B and Class C shares, the "12b-1 Distribution Plan Fees" are
the service fees (the maximum fee is 0.25% of average annual net assets of those
classes) and the asset-based sales charge of 0.75% of the average annual net
assets of the class. These plans are described in greater detail in "How to Buy
Shares." "Other Expenses" above includes an administration fee of 0.25% of
average net assets payable to the Manager and estimated transfer agent expenses
at the fund level (rather than a class level).
The actual expenses for each class of shares in future years may be more
or less than the numbers in the chart, depending on a number of factors,
including changes in the actual value of the Fund's assets represented by each
class of shares.
o Examples. To try to show the effect of these expenses on an investment
over time, we have created the hypothetical examples shown below. Assume that
you make a $1,000 investment in each class of shares of the Fund, and the Fund's
annual return is 5%, and that its operating expenses for each class are the ones
shown in the Annual Fund Operating Expenses chart above and that Class B shares
automatically convert into Class A shares six years after purchase. If you were
to redeem your shares at the end of each period shown below, your investment
would incur the following expenses by the end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years*
------ ------- ------- ---------
Class A Shares $74 $109 $146 $250
Class B Shares $73 $100 $140 $233
Class C Shares $33 $ 70 $120 $257
If you did not redeem your investment, it would incur the following
expenses:
1 year 3 years 5 years 10 years*
------ ------- ------- ---------
Class A Shares $74 $109 $146 $250
Class B Shares $23 $ 70 $120 $233
Class C Shares $23 $ 70 $120 $257
* In the first example, expenses include the Class A initial sales charge and
the applicable Class B or Class C contingent deferred sales charge. In the
second example, Class A expenses include the initial sales charge, but Class B
and Class C expenses do not include contingent deferred sales charges. The Class
B expenses in years 7 through 10 are based on the Class A expenses shown above,
because the Fund automatically converts your Class B shares into Class A shares
after 6 years. Because of the effect of the higher asset-based sales charge and
the contingent deferred sales charge imposed on Class B and Class C shares,
long-term holders of Class B and Class C shares could pay the economic
equivalent of more than the maximum front-end sales charge allowed under
applicable regulations. For Class B shareholders, the automatic conversion of
Class B shares to Class A shares is designed to minimize the likelihood that
this will occur. Please refer to "How to Buy Shares - Buying Class B Shares" for
more information.
These examples show the effect of expenses on an investment, but are not
meant to state or predict actual or expected costs or investment returns of the
Fund, all of which may be more or less than those shown.
-3-
<PAGE>
A Brief Overview of the Fund
Some of the important facts about the Fund 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.
o What is the Fund's Investment Objective? The Fund seeks long-term
capital appreciation.
o What Does the Fund Invest in? The Fund seeks its investment objective
through pursuit of a global investment strategy primarily involving equity
securities. 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. 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. To provide liquidity, the
Fund typically invests a part of its assets in various types of U.S. Government
securities and money market instruments. For temporary defensive purposes, the
Fund may invest up to 100% of its total assets in such securities. These
investments are more fully explained in "Investment Objective and Policies,"
starting on page __.
o Who Manages the Fund? The Manager, OppenheimerFunds, Inc., supervises the
Fund's investment program and handles its day-to-day business. The Manager
(including subsidiaries) manages investment company portfolios having over $75
billion in assets as of December 31, 1997. The Manager is paid an advisory fee
by the Fund, based on its net assets. The Fund's sub-adviser is OpCap Advisors
(the "Sub-Adviser"), which is paid a fee by the Manager, not the Fund. The Sub-
Adviser provides day-to-day portfolio management of the Fund. The Fund's
portfolio managers, Richard J. Glasebrook, II and Pierre Daviron, are employed
by the Sub-Adviser and are primarily responsible for the selection of the Fund's
securities. The Fund's Board of Directors, elected by shareholders, oversees the
Manager, the Sub-Adviser and the portfolio managers. Please refer to "How the
Fund is Managed," starting on page __ for more information about the Manager,
the Sub- Adviser and their fees.
o How Risky is the Fund? All investments carry risks to some degree. It is
important to remember that the Fund is designed for long-term investors. The
Fund's investments in stocks and bonds are subject to changes in their value
from a number of factors such as changes in general stock and bond market
movements, the change in value of particular stocks because of an event
affecting the issuer or changes in interest rates that can affect bond prices.
These changes affect the value of the Fund's investments and its price per
share. The Fund's investments in foreign securities are subject to additional
risks associated with investing abroad, such as, the effect of currency rate
changes on stock values and the different regulatory requirements, reporting and
accounting standards, political and economic factors and taxation of foreign
countries.
-4-
<PAGE>
While the Sub-Adviser tries to reduce risks by diversifying investments,
by carefully researching securities before they are purchased for the Fund's
portfolio, and in some cases by using hedging techniques, there is no guarantee
of success in achieving the Fund's investment objective, and your shares may be
worth more or less than their original cost when you redeem them. Please refer
to "Investment Risks" starting on page __ for a more complete discussion of the
Fund's investment risks.
o How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through
OppenheimerFunds Distributor, Inc. (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.
o Will I Pay a Sales Charge to Buy Shares? The Fund offers Class A, Class
B and Class C shares to investors. 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. Class B and
Class C shares are offered without a front-end sales charge, but may be subject
to a contingent deferred sales charge if redeemed within 6 years or 12 months,
respectively, of buying them. There is also an annual asset-based sales charge
which is higher on Class B and Class C 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.
o 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 to other Oppenheimer funds, described in "How to Exchange Shares" on
page __.
o How Has the Fund Performed? The Fund measures its performance by quoting
its average annual total returns and cumulative total returns, 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. The Fund's performance can also be
compared to a broad-based market index, which we have done on pages ____ and
____. Please remember that past performance does not guarantee future results.
Financial Highlights
The table on the following pages presents selected financial information
about the Fund, including per share data, expense ratios and other data based on
the Fund's average net assets. This information has been audited by Price
Waterhouse LLP, the Fund's independent accountants, whose report on the Fund's
financial statements for the fiscal year ended November 30, 1997 is included in
the Statement of Additional Information.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CLASS A
-------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
1997 1996 1995(2) 1994 1993
====================================================================================================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $16.48 $15.49 $14.16 $13.54 $12.30
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 .03 .11(4) .01(4) --(4)
Net realized and unrealized gain (loss) 2.55 2.33 2.45 1.10 2.26
-------- -------- -------- -------- --------
Total income (loss) from investment
operations 2.58 2.36 2.56 1.11 2.26
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.13) -- -- (.12)
Distributions from net realized gain (.55) (1.24) (1.23) (.49) (.90)
-------- -------- -------- -------- --------
Total dividends and distributions
to shareholders (.56) (1.37) (1.23) (.49) (1.02)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.50 $16.48 $15.49 $14.16 $13.54
======== ======== ======== ======== ========
====================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(5) 16.24% 16.60% 19.75% 8.37% 19.72%
====================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $267,636 $192,000 $161,693 $148,044 $135,616
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $233,020 $174,838 $154,288 $148,461 $125,158
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.17% 0.19% 0.77% 0.05%(6) 0.04%(6)
Expenses 1.73% 1.88% 1.88% 1.92%(6) 1.76%(6)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 32.0% 47.8% 76.0% 70.0% 46.0%
Average brokerage commission rate(9) $0.0069 $0.0045 -- -- --
</TABLE>
1. For the period from September 1, 1993 (inception of offering) to November 30,
1993.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment adivsor to
the Fund.
3. For the period from July 2, 1990 (commencement of operations) to November 30,
1990.
4. Based on average shares outstanding for the period.
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
6. During the periods noted above, the former Advisor voluntarily waived a
portion of its fees. If such waivers had not been in effect, the ratios of net
investment income (loss) to average net assets and the ratios of expenses to
average net assets for Class A would have been 0.04% and 1.93%, respectively,
for the year ended November 30, 1994, (0.11)% and 1.91%, respectively, for the
year ended November 30, 1993, and 0.64% and 1.84%, respectively, for the year
ended November 30, 1992. The ratios of net investment income (loss) to average
net assets and the ratios of expenses to average net assets would have been
(0.45)% and 2.51%, respectively, for Class B and (0.59)% and 2.66%,
respectively, for Class C, for the year ended November 30, 1994 and (0.82)% and
2.32%, annualized, respectively, for Class B and (0.78)% and 2.35%, annualized,
respectively, for Class C, for the year ended November 30, 1994, and (0.82)% and
2.32%, annualized, respectively, for Class B and (0.78)% and 2.35%, annualized,
respectively, for Class C, for the period September 1, 1993 (inception of
offering) to November 30, 1993.
7. Annualized.
2
<PAGE>
<TABLE>
<CAPTION>
CLASS B
- ------------------------------------------- --------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
1992 1991 1990(3) 1997 1996 1995(2) 1994 1993(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$11.25 $10.57 $12.05(4) $16.25 $15.30 $14.07 $13.52 $13.75
- -------------------------------------------------------------------------------------------------------------
.12(4) (.04) .05 (.04) -- .02(4) (.06)(4) (.02)(4)
.93 .85 (1.53) 2.48 2.26 2.44 1.10 (.21)
-------- ------- ------- -------- ------- ------- ------- -------
1.05 .81 (1.48) 2.44 2.26 2.46 1.04 (.23)
- -------------------------------------------------------------------------------------------------------------
-- (.05) -- -- (.07) -- -- --
-- (.08) -- (.55) (1.24) (1.23) (.49) --
-------- ------- ------- -------- ------- ------- ------- -------
-- (.13) -- (.55) (1.31) (1.23) (.49) --
- -------------------------------------------------------------------------------------------------------------
$12.30 $11.25 $10.57 $18.14 $16.25 $15.30 $14.07 $13.52
======== ======= ======= ======== ======= ======= ======= =======
=============================================================================================================
9.33% 7.72% (12.28)% 15.61% 16.03% 19.12% 7.84% (1.67)%
=============================================================================================================
$111,207 $46,937 $58,087 $98,457 $38,634 $16,980 $10,268 $1,676
- -------------------------------------------------------------------------------------------------------------
$125,786 $56,467 -- $67,317 $27,351 $13,908 $ 5,982 $1,015
- -------------------------------------------------------------------------------------------------------------
0.72%(6) (0.27)% 0.92%(7) (0.34)% (0.03)% 0.16% (0.44)%(6) (0.76)%(6)(7)
1.76%(6) 2.09% 2.11%(7) 2.24% 2.41% 2.47% 2.50%(6) 2.26%(6)(7)
- -------------------------------------------------------------------------------------------------------------
62.0% 41.0% 2.0% 32.0% 47.8% 76.0% 70.0% 46.0%
-- -- -- $0.0069 $0.0045 -- -- --
</TABLE>
8. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended November 30, 1997 were $167,141,953 and $91,345,072, respectively.
9. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
3
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CLASS C
-----------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
1997 1996 1995(2) 1994 1993(1)
====================================================================================================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $16.22 $15.26 $14.06 $13.52 $13.75
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) (.04) --(4) (.08)(4) (.02)(4)
Net realized and unrealized gain (loss) 2.47 2.29 2.43 1.11 (.21)
-------- ------- ------ ------ ---------
Total income (loss) from investment
operations 2.44 2.25 2.43 1.03 (.23)
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.05) -- -- --
Distributions from net realized gain (.55) (1.24) (1.23) (.49) --
-------- ------- ------ ------ ---------
Total dividends and distributions
to shareholders (.55) (1.29) (1.23) (.49) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.11 $16.22 $15.26 $14.06 $13.52
======== ======= ====== ====== ========
====================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(5) 15.64% 16.04% 18.90% 7.77% (1.67)%
====================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $38,769 $16,149 $4,373 $2,415 $244
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $26,735 $10,152 $3,834 $1,150 $200
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.34)% (0.07)% 0.03% (0.59)%(6) (0.69)%(6)(7)
Expenses 2.24% 2.43% 2.60% 2.66%(6) 2.26%(6)(7)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 32.0% 47.8% 76.0% 70.0% 46.0%
Average brokerage commission rate(9) $0.0069 $0.0045 -- -- --
</TABLE>
1. For the period from September 1, 1993 (inception of offering) to November 30,
1993.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment adivsor to
the Fund.
3. For the period from July 2, 1990 (commencement of operations) to November 30,
1990.
4. Based on average shares outstanding for the period.
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
6. During the periods noted above, the former Advisor voluntarily waived a
portion of its fees. If such waivers had not been in effect, the ratios of net
investment income (loss) to average net assets and the ratios of expenses to
average net assets for Class A would have been 0.04% and 1.93%, respectively,
for the year ended November 30, 1994, (0.11)% and 1.91%, respectively, for the
year ended November 30, 1993, and 0.64% and 1.84%, respectively, for the year
ended November 30, 1992. The ratios of net investment income (loss) to average
net assets and the ratios of expenses to average net assets would have been
(0.45)% and 2.51%, respectively, for Class B and (0.59)% and 2.66%,
respectively, for Class C, for the year ended November 30, 1994 and (0.82)% and
2.32%, annualized, respectively, for Class B and (0.78)% and 2.35%, annualized,
respectively, for Class C, for the year ended November 30, 1994, and (0.82)% and
2.32%, annualized, respectively, for Class B and (0.78)% and 2.35%, annualized,
respectively, for Class C, for the period September 1, 1993 (inception of
offering) to November 30, 1993.
7. Annualized.
8. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended November 30, 1997 were $167,141,953 and $91,345,072, respectively.
9. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
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Investment Objective and Policies
Objective. The Fund seeks long-term capital appreciation.
Investment Policies and Strategies. The Fund seeks its investment objective
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. Accordingly, 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.
To provide liquidity for the purchase of new instruments and to effect
redemptions of shares, the Fund typically invests a part of its 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"). Such money market instruments may be issued by entities organized
in the United States or any foreign country, denominated in dollars or in the
currency of any foreign country. For temporary defensive purposes, the Fund may
invest up to 100% of its assets in such U.S. Government securities and money
market instruments.
o Can the Fund's Investment Objective and Policies Change? The Fund has an
investment objective, which is described above, as well as investment policies
it follows to try to achieve its objective. Additionally, the Fund uses certain
investment techniques and strategies in carrying out those investment policies.
The Fund's investment policies and practices are not fundamental unless this
Prospectus or the Statement of Additional Information states that a particular
policy is "fundamental." The Fund's investment objective is a fundamental
policy.
Fundamental policies are those that cannot be changed without the approval
of a "majority" of the Fund's outstanding voting shares. The term "majority" is
defined in the Investment Company Act of 1940 to be a particular percentage of
outstanding voting shares (and this term is explained in the Statement of
Additional Information). The Fund's Board of Directors may change non-
fundamental policies without shareholder approval, although significant changes
will be described in amendments to this Prospectus.
o Foreign Securities. The Fund may purchase foreign securities that are
listed on a domestic or foreign securities exchange or traded in domestic or
foreign over-the-counter markets. The Fund may also purchase foreign securities
represented by 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
security. ADRs, GDRs or EDRs are issued by persons other than the underlying
issuer, typically a domestic bank or trust company. The Fund may invest in
foreign securities that are U.S. dollar-denominated debt obligations known as
"Brady Bonds" and may purchase sovereign debt instruments issued or guaranteed
by foreign governments or their agencies.
There is no limit to the amount of foreign securities the Fund may
acquire. Subject to the requirement that the Fund will normally invest at least
65% of its total assets in equity securities in at least three different
countries, one of which may be the United States, the Fund may buy securities in
any country, including emerging market countries. The 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. The Fund will hold foreign
currency only in connection with the purchase or sale of foreign securities.
o Investment in Fixed-Income 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. Convertible
fixed-income securities in which the Fund invests are bonds, debentures or notes
that may be converted into or exchanged for a prescribed amount of common stock
of the same or a different issue within a particular period of time at a
specified price or formula. The Fund considers convertible securities to be
"equity equivalents" because of the conversion feature, and the security's
rating has less impact on the investment decision than in the case of
non-convertible securities.
The Fund's investments may include securities rated lower than "Baa3" by
Moody's Investors Service, Inc. ("Moody's") or "BBB-" by Standard & Poor's
Corporation ("S&P")(commonly known as "junk bonds"), or having comparable
ratings by another nationally recognized statistical rating organization,
although it is the present intention of the Fund to invest no more than 5% of
its total assets in securities rated lower than Baa3/BBB-. The Fund may invest
in securities rated as low as "C" or "D". The Fund does not intend to invest in
bonds that are in default. See Appendix A to the Statement of Additional
Information for a more complete general description of Moody's and S&P ratings.
o Warrants and Rights. Warrants basically are options to purchase stock at
set prices that are valid for a limited period of time. Rights are similar to
warrants but normally have a short duration and are distributed directly by the
issuer to its shareholders. The Fund may not invest more than 5% of its total
assets in warrants. For further details about these investments, please refer to
"Warrants and Rights" in the Statement of Additional Information.
o Portfolio Turnover. A change in the securities held by the Fund is known
as "portfolio turnover." The Fund ordinarily does not engage in short-term
trading to try to achieve its objective. As a result, the Fund's portfolio
turnover (excluding turnover of securities having a maturity of one year or
less) is not expected to be more than 100% each year. Portfolio turnover affects
brokerage costs, dealer markups and other transaction costs, and results in the
Fund's realization of capital gains or losses for tax purposes. The "Financial
Highlights" table shows the Fund's portfolio turnover rate during past fiscal
years.
Investment Risks
All investments carry risks to some degree, whether they are risks that market
prices of the investment will fluctuate (this is known as "market risk") or that
the underlying issuer will experience financial difficulties and may default on
its obligation under a fixed-income investment to pay interest and repay
principal (this is referred to as "credit risk"). These general investment risks
and the special risks of certain types of investments that the Fund may hold are
described below. They affect the value of the Fund's investments, its investment
performance and the prices of its shares. These risks collectively form the risk
profile of the Fund.
Because of the types of securities the Fund invests in and the investment
techniques the Fund uses, the Fund is designed for investors who are investing
for the long term. It is not intended for investors seeking assured income or
preservation of capital. While the Sub-Adviser tries to reduce risks by
diversifying investments, by carefully researching securities before they are
purchased, and in some cases by using hedging techniques, changes in overall
market prices can occur at any time, and there is no assurance that the Fund
will achieve its investment objective. When you redeem your shares, they may be
worth more or less than what you paid for them.
o Stock Investment Risks. Because the Fund may invest a substantial
portion of its assets in stocks, the value of the Fund's portfolio will be
affected by changes in the stock markets. At times, the stock markets can be
volatile and stock prices can change substantially. This market risk will affect
the Fund's net asset values per share, which will fluctuate as the values of the
Fund's portfolio securities change. Not all stock prices change uniformly or at
the same time and not all stock markets move in the same direction at the same
time. Other factors can affect a particular stock's prices, such as poor
earnings reports by an issuer, loss of major customers, major litigation against
an issuer, and changes in government regulations affecting an industry. Not all
of these factors can be predicted.
The Fund attempts to limit market risks by diversifying its investments,
that is, by not holding a substantial amount of the stock of any one company and
by not investing too great a percentage of the Fund's assets in any one company.
Because changes in market prices can occur at any time, there is no assurance
that the Fund will achieve its investment objective, and when you redeem your
shares, they may be worth more or less than what you paid for them.
o Foreign Securities Have Special Risks. There are special risks in
investing in foreign securities. Because the Fund may purchase securities
denominated in foreign currencies or traded primarily in foreign markets, a
change in the value of a foreign currency against the U.S. dollar will result in
a change in the U.S. dollar value of those foreign securities. Investments in
securities of issuers in emerging market countries generally involve more risk
and may be considered to be highly speculative. Foreign issuers are not
necessarily subject to generally-accepted accounting, auditing and financial
reporting principals or other regulatory requirements comparable to those
applicable to U.S. issuers. If foreign securities are not registered for sale in
the U.S. under U.S. securities laws, the issuer does not have to comply with
disclosure requirements that U.S. companies are subject to. Securities of many
non-U.S. companies may be less liquid and their prices more volatile than
securities of comparable U.S. companies. The value of foreign investments may be
affected by other factors, including exchange control regulations, expropriation
or nationalization of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental, economic or monetary policy in the U.S.
or abroad, or other political and economic factors.
In addition, it is generally more difficult to obtain court judgments
outside the U.S. if the Fund were to sue a foreign issuer or broker. Additional
costs may be incurred because foreign brokerage commissions are generally higher
than U.S. rates, and there are additional custodial costs associated with
holding securities abroad. 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, EDRs or GDRs. There are special
risks associated with investments in sovereign debt obligations and Brady Bonds.
More information about the risks and potential rewards of investing in foreign
securities, including investment in emerging market countries, sovereign debt
obligations and Brady Bonds, is contained in the Statement of Additional
Information.
o Risks of Fixed-Income Securities. In addition to credit risks, described
below, debt securities are subject to changes in their value due to changes in
prevailing interest rates. When prevailing interest rates fall, the values of
already-issued debt securities generally rise. When interest rates rise, the
values of already-issued debt securities generally decline. The magnitude of
these fluctuations will often be greater for longer-term debt securities than
shorter-term debt securities. Changes in the value of securities held by the
Fund mean that the Fund's share prices can go up or down when interest rates
change because of the effect of the change on the value of the Fund's portfolio
of debt securities. Credit risk relates to the ability of the issuer to meet
interest or principal payments on a security as they become due. Generally,
higher yielding lower-grade bonds are subject to credit risks to a greater
extent than lower yielding, investment grade bonds.
o Special Risks of Hedging Instruments. As described below, the Fund may
invest in certain hedging instruments. The use of hedging instruments requires
special skills and knowledge of investment techniques that are different than
what is required for normal portfolio management. If the Sub-Adviser uses a
hedging instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce the Fund's return. The Fund could also experience
losses if the prices of its futures and options positions were not correlated
with its other investments or if it could not close out a position because of an
illiquid market for the future or option.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If a covered call written by the Fund is exercised on an investment
that has increased in value, the Fund will be required to sell the investment at
the call price and will not be able to realize any profit if the investment has
increased in value above the call price. In writing a put, there is a risk that
the Fund may be required to buy the underlying security at a disadvantageous
price. The use of forward contracts may reduce the gain that would otherwise
result from a change in the relationship between the U.S. dollar and a foreign
currency. To limit its exposure in foreign currency exchange contracts, the Fund
limits its exposure to the amount of its assets denominated in the foreign
currency. These risks are described in greater detail in the Statement of
Additional Information. o Year 2000 Risks. Because many computer software
systems in use today cannot distinguish the year 2000 from year 1900, the
markets for securities in which the Fund invests could be detrimentally affected
by computer failures beginning January 1, 2000. Failures of computer systems
used for securities trading could result in settlement and liquidity problems
for the Fund and other investors. Data processing errors by corporate and
government issuers of securities could result in production problems and
economic uncertainties, and those issuers may entail substantial costs in
attempting to prevent or fix such errors, all of which could have a negative
effect on the Fund's investments and returns.
Investment Techniques and Strategies
The Fund may also use the investment techniques and strategies described
below. These techniques involve certain risks. The Statement of Additional
Information contains more information about these practices, including
limitations on their use that may help to reduce some of the risks.
o Temporary Defensive Investments. In times of unstable market or economic
conditions, when the Sub-Adviser determines it appropriate to do so to attempt
to reduce fluctuations in the value of the Fund's net assets, the Fund may
assume a temporary defensive position and invest an unlimited amount of assets
in U.S. Government securities and money market instruments of the type
identified on page __ under "Investment Policies and Strategies." At any time
that the Fund invests for temporary defensive purposes, to the extent of such
investments, it is not pursuing its investment objective.
o Investing in Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies that have been in
continuous operation for less than three years, counting the operations of any
predecessors. Securities of these companies may have limited liquidity (which
means that the Fund may have difficulty selling them at an acceptable price when
it wants to) and the prices of these securities may be volatile. As a
non-fundamental policy, the Fund may not invest more than 5% of its total assets
in securities of small, unseasoned issuers. See "Investing in Small, Unseasoned
Companies" in the Statement of Additional Information for a further discussion
of the risks involved in such investments.
o Hedging. The Fund may purchase and sell financial futures contracts,
foreign currency forward contracts, foreign currency futures contracts, options
on futures contracts and options on currencies. These are all referred to as
"hedging instruments." The Fund does not use hedging instruments for speculative
purposes, and has limits on the use of them, described below. The hedging
instruments the Fund may use are described below and in greater detail in "Other
Investment Techniques and Strategies" in the Statement of Additional
Information.
The Fund may buy and sell options, futures and forward contracts for a
number of purposes. It may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute for
purchasing individual securities. Some of these strategies, such as selling
futures, buying puts and writing covered calls, hedge the Fund's portfolio
against price fluctuations.
Other hedging strategies, such as buying futures and call options, tend to
increase the Fund's exposure to the securities market. Forward contracts are
used to try to manage foreign currency risks on the Fund's foreign investments.
Foreign currency options are used to try to protect against declines in the
dollar value of foreign securities the Fund owns, or to protect against an
increase in the dollar cost of buying foreign securities.
o Futures. The Fund may buy and sell futures contracts that relate to (1)
a securities index (these are referred to as Financial Futures), (2) interest
rates (these are referred to as Interest Rate Futures) and (3)foreign currencies
(these are called Forward Contracts and are discussed below).
o Put and Call Options. The Fund may buy and sell exchange-traded and
over-the-counter put and call options, including index options, securities
options, currency options, commodities options, and options on the other types
of futures described in "Futures," above. A call or put may be purchased only
if, after the purchase, the value of all call and put options held by the Fund
will not exceed 5% of the Fund's total assets.
If the Fund sells (that is, writes) a call option, it must be "covered."
That means the Fund must own the security subject to the call while the call is
outstanding, or, for other types of written calls, the Fund must segregate
liquid assets to enable it to satisfy its obligations if the call is exercised.
The Fund may buy puts whether or not it holds the underlying investment in
its portfolio. The Fund may write puts on securities, foreign currencies or
futures. If the Fund writes a put, the put must be covered by segregated liquid
assets. The Fund will not write puts if more than 50% of the Fund's net assets
would have to be segregated to cover put options.
o Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future delivery at
a fixed price. The Fund uses them to try to "lock in" the U.S. dollar price of a
security denominated in a foreign currency that the Fund has bought or sold, or
to protect against possible losses from changes in the relative values of the
U.S. dollar and foreign currency. The Fund limits its exposure in foreign
currency exchange contracts in a particular foreign currency to the amount of
its assets denominated in that currency or denominated in a closely-correlated
currency.
o Illiquid and Restricted Securities. Under the policies and procedures
established by the Board of Directors, the Manager determines the liquidity of
certain of the Fund's investments. Investments may be illiquid because of the
absence of an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is one
that has a contractual restriction on its resale or that cannot be sold publicly
until it is registered under the Securities Act of 1933.
The Fund may not invest more than 15% of its net assets in illiquid and
restricted securities, including repurchase agreements that have a maturity of
longer than seven days and certain over-the-counter options. The Fund's
percentage limitation on these investments does not apply to certain restricted
securities that are eligible for resale to "qualified institutional buyers". The
Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
o Loans of Portfolio Securities. The Fund may lend its portfolio securities
to certain types of eligible borrowers approved by the Board of Directors. Each
loan must be collateralized in accordance with applicable regulatory
requirements. After any loan, the value of the securities loaned is not expected
to exceed 33-1/3% of the value of the total assets of the Fund. Other conditions
to which loans are subject are described in the Statement of Additional
Information. There are some risks in connection with securities lending. The
Fund might experience a delay in receiving additional collateral to secure a
loan or a delay in recovery of the loaned securities.
o Repurchase Agreements. The Fund may enter into repurchase agreements to
generate income for liquidity purposes to meet anticipated redemptions, or
pending the investment of proceeds from sales of Fund shares or settlement of
purchases of portfolio investments. In a repurchase transaction, the fund buys a
security and simultaneously sells it to the vendor for delivery at a future
date. Repurchase agreements must be fully collateralized. However, if the vendor
fails to pay the resale price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so. Investment in repurchase agreements having a maturity
beyond seven days is subject to the limitations set forth above under "Illiquid
and Restricted Securities." There is no limit on the amount of the Fund's net
assets that may be subject to repurchase agreements of seven days or less.
o "When-Issued" and "Delayed Delivery" Transactions. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell such securities on
a "delayed delivery" basis. These terms refer to securities that have been
created and for which a market exists, but which are not available for immediate
delivery. The Fund does not intend to make such purchases for speculative
purposes. During the period between the purchase and settlement, the underlying
securities are subject to market fluctuations and no interest accrues prior to
delivery of the securities.
o Investment in Other Investment Companies. The Fund generally may invest
up to 10% of its total assets in the aggregate in shares of other investment
companies and up to 5% of its total assets in any one investment company, as
long as each investment does not represent more than 3% of the outstanding
voting securities of the acquired investment company. These limitations do not
apply in the case of investment company securities which may be purchased as
part of a plan of merger, consolidation, reorganization or acquisition.
Investment in other investment companies may involve the payment of substantial
premiums above the value of such investment companies' portfolio securities, and
is subject to limitations under the Investment Company Act and market
availability. The Fund does not intend to invest in such investment companies
unless, in the judgment of the Manager, the potential benefits of such
investment justify the payment of any applicable premiums or sales charge. As a
shareholder in an investment company, the Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time, the Fund would continue to pay its own management fees
and other expenses.
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<PAGE>
Other Investment Restrictions. The Fund has other investment restrictions
that are fundamental policies. Under these fundamental policies, the Fund
cannot do any of the following:
o With respect to 75% of its total assets, invest more than 5% of the value of
its total assets in the securities of any one issuer.
o With respect to 75% of its total assets, purchase more than 10% of the voting
securities of any one issuer (this restriction does not apply to U.S.
Government securities).
o Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, the 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) (this restriction does not apply
to U.S. Government securities).
o Borrow money in excess of 33-1/3% of the value of the Fund's total assets; the
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. With respect to this
fundamental policy, the Fund can borrow only if it maintains a 300% ratio of
assets to borrowings at all times in the manner set forth in the Investment
Company Act of 1940.
Unless this Prospectus states that a percentage restriction applies on an
ongoing basis, it applies only at the time the Fund makes an investment, and the
Fund need not sell securities to meet the percentage limits if the value of the
investment increases in proportion to the size of the Fund. Other investment
restrictions are listed in "Investment Restrictions" in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was incorporated in Maryland on April 26,
1990. The Fund is an open-end, diversified management investment company.
The Fund is governed by a Board of Directors, which is responsible for
protecting the interests of shareholders under Maryland law. The Directors meet
periodically throughout the year to oversee the Fund's activities, review its
performance, and review the actions of the Manager and the Sub-Adviser.
"Directors and Officers of the Fund" in the Statement of Additional Information
names the Directors and officers of the Fund and provides more information about
them. Although the Fund will not normally hold annual meetings of its
shareholders, it may hold shareholder meetings from time to time on important
matters, and shareholders have the right to call a meeting to remove a Director
or to take other action described in the Fund's Articles of Incorporation.
The Board of Directors has the power, without shareholder approval, to
divide unissued shares of the Fund into two or more classes. The Board has done
so, and the Fund currently has three classes of shares, Class A, Class B and
Class C. All classes invest in the same investment portfolio. Each class has its
own dividends and distributions and pays certain expenses which may be different
for the different classes. Each class may have a different net asset value. Each
share entitles a shareholder to vote on matters submitted to the shareholders to
vote on with fractional shares voting proportionally on matters submitted to the
vote of shareholders. Only shares of a particular class vote as a class on
matters that affect that class alone. Shares are freely transferrable. Please
refer to "How the Fund is Managed" in the Statement of Additional Information
for more information on the voting of shares.
The Manager. The Fund is managed by the Manager, OppenheimerFunds, Inc., which
supervises the Fund's investment program and handles its day-to-day business.
The Manager carries out its duties, subject to the policies established by the
Board of Directors, under an Investment Advisory Agreement with the Fund which
states the Manager's responsibilities. The Investment Advisory Agreement sets
forth the fees paid by the Fund to the Manager and describes the expenses that
the Fund is responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The Manager
(including subsidiaries) currently manages investment companies, including other
Oppenheimer funds, with assets of more than $75 billion as of December 31, 1997,
and with more than 3.5 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.
The management services provided to the Fund by the Manager, and the
services provided by the Distributor and the Transfer Agent to shareholders,
depend on the smooth functioning of their computer systems. Many computer
software systems in use today cannot distinguish the year 2000 from the year
1900 because of the way dates are encoded and calculated. That failure could
have a negative impact on the handling of securities trades, pricing and account
services. The Manager, the Distributor and the Transfer Agent have been actively
working on necessary changes to their computer systems to deal with the year
2000 and expect that their systems will be adapted in time for that event
although there can be no assurance of success. Additionally, because the
services they provide depend on the interaction of their computer systems with
the computer systems of brokers, information services and other parties, any
failure on the part of the computer systems of those third parties to deal with
the year 2000 may also have a negative effect on the services provided to the
Fund.
The Sub-Adviser. The Manager has retained the Sub-Adviser to provide day-to-day
portfolio management of the Fund. Prior to November 22, 1995, the Sub-Adviser
was named Quest for Value Advisors and was the investment adviser to the Fund.
The Sub-Adviser is a majority owned subsidiary of Oppenheimer Capital, a
registered investment advisor, whose employees perform all investment advisory
services provided to the Fund by the Sub-Adviser.
On November 4, 1997, PIMCO Advisors L.P. ("PIMCO Advisors"), a registered
investment adviser with $125 billion in assets under management through various
subsidiaries and affiliates, acquired control of Oppenheimer Capital and the
Sub-Adviser. On November 5, 1997, a new sub- advisory agreement between the
Sub-Adviser and the Manager, on terms identical to the prior sub- advisory
agreement, became effective. The new sub-advisory agreement had been approved by
shareholders of the Fund on May 29, 1997. On November 30, 1997, Oppenheimer
Capital merged with a subsidiary of PIMCO Advisors and, as a result, Oppenheimer
Capital and the Sub-Adviser became indirect wholly-owned subsidiaries of PIMCO
Advisors. PIMCO Advisors has two general partners: PIMCO Partners, G.P., a
California general partnership, and PIMCO Advisors Holdings L.P. (formerly
Oppenheimer Capital, L.P.), an NYSE-listed Delaware limited partnership of which
PIMCO Partners, G.P. is the sole general partner.
o Portfolio Managers. The Fund's portfolio managers, Richard J. Glasebrook,
II and Pierre Daviron, are employed by the Sub-Adviser and are primarily
responsible for the selection of the Fund's domestic and foreign investments,
respectively. Mr. Glasebrook, who is also a Managing Director of Oppenheimer
Capital, has been portfolio manager of the Fund since 1991. Mr. Daviron, also
President and Chief Investment Officer of Oppenheimer Capital International, a
division of Oppenheimer Capital, was named portfolio manager of the Fund in
1993. Previously, Mr. Daviron 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.
The Sub-Adviser's equity investment policy is overseen by George Long, who
is Chairman, Chief Executive Officer and Chief Investment Officer for
Oppenheimer Capital. Mr. Long has been with Oppenheimer Capital since 1981.
o Fees and Expenses. Under the Investment Advisory Agreement, the Fund
pays the Manager the following annual fees, which decline on additional assets
as the Fund grows: 0.75% of the first $400 million of average annual net assets,
0.70% of the next $400 million, and 0.65% of average annual net assets in excess
of $800 million. The Fund's management fee for its last fiscal year ended
November 30, 1997 was 0.75% of average annual net assets for its Class A, Class
B and Class C shares. The Fund pays expenses related to its daily operations,
such as custodian fees, Directors' fees, transfer agency fees, legal and
auditing costs; the Fund also reimburses the Manager for bookkeeping and
accounting services performed on behalf of the Fund. These expenses are paid out
of the Fund's assets and are not paid directly by shareholders. However, they
reduce the net asset value of shares, and therefore are indirectly borne by
shareholders through their investment. More information about the Investment
Advisory Agreement and the other expenses paid by the Fund is
contained in the Statement of Additional Information.
The Manager pays the Sub-Adviser an annual fee based on the average
daily net assets of the Fund equal to 40% of the advisory fee (and
administration fee, described below) collected by the Manager based on the total
net assets of the Fund as of November 22, 1995 (the "Base Amount") plus 30% of
the investment advisory fee collected by the Manager based on the total net
assets of the Fund that exceed the Base Amount.
Pursuant to an Administration Agreement with the Fund, the Manager
provides administrative services and manages the business affairs of the Fund.
For these services, the Fund pays the Manager a fee at the annual rate of 0.25%
of average daily net assets of the Fund. The Administration Agreement is
described in the Statement of Additional Information.
Information about the Fund's brokerage policies and practices is set forth
in "Brokerage Policies of the Fund" in the Statement of Additional Information.
That section discusses how brokers and dealers are selected for the Fund's
portfolio transactions. When deciding which broker to use, the Manager and the
Sub-Adviser are permitted by the Investment Advisory Agreement to consider
whether brokers have sold shares of the Fund or any other funds for which the
Manager serves as investment adviser.
o The Distributor. The Fund's shares are sold through dealers, brokers and
other financial institutions that have a sales agreement with OppenheimerFunds
Distributor, Inc., a subsidiary of the Manager that acts as the Fund's
Distributor. The Distributor also distributes the shares of the other
Oppenheimer funds managed by the Manager and is sub-distributor for funds
managed by a subsidiary of the Manager.
o The Transfer Agent and Shareholder Servicing Agent. The Fund's transfer
agent and shareholder servicing agent is OppenheimerFunds Services, a division
of the Manager. It also acts as the shareholder servicing agent for certain
other Oppenheimer funds. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free number shown below
in this Prospectus and on the back cover.
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 the 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 and other accounts
for which Unified Management Corporation is the dealer of record.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total return"
and "average annual total return" to illustrate its performance. The performance
of each class of shares is shown separately, because the performance of each
class of shares will usually be different as a result of the different kinds of
expenses each class bears. These returns measure the performance of a
hypothetical account in the Fund over various periods, and do not show the
performance of each shareholder's investment (which will vary if dividends are
received in cash, or shares are sold or additional shares are purchased). The
Fund's performance information may help you see how well your investment in the
Fund has done over time and to compare it to other funds or, as we have done on
pages __ and __, a broad-based stock market index .
It is important to understand that the Fund's total returns represent past
performance and should not be considered to be predictions of future returns or
performance. This performance data is described below, but more detailed
information about how total returns are calculated is contained in the Statement
of Additional Information, which also contains information about other ways to
measure and compare the Fund's performance. The Fund's investment performance
will vary over time, depending on market conditions, the composition of the
portfolio, expenses and which class of shares you purchase.
o Total Returns. There are different types of total returns used to
measure the Fund's performance. Total return is the change in value of a
hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares.
The cumulative total return measures the change in value over the entire period
(for example, ten years). An average annual total return shows the average rate
of return for each year in a period that would produce the cumulative total
return over the entire period. However, average annual total returns do not show
the Fund's actual year-by-year performance.
When total returns are quoted for Class A shares, normally the current
maximum initial sales charge has been deducted. When total returns are shown for
Class B or Class C shares, normally the contingent deferred sales charge that
applies to the period for which total return is shown has been deducted.
However, total returns may also be quoted "at net asset value," without
considering the effect of the sales charge, and those returns would be less if
sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its last fiscal year ended November 30, 1997, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
stock market index.
o Management's Discussion of Performance. During the fiscal year ended
November 30, 1997, the Fund remained virtually fully invested in equity
securities, with approximately 51.1% invested in the domestic stock market and
the remainder in foreign stocks. Since the beginning of the year, the Fund had
limited holdings in the Asian markets and was not materially impacted by the
declines in those markets during the latter part of its fiscal year. Due to the
allocation of holdings, the Fund participated to a significant extent in the
domestic stock market's strong performance during the year, which helped the
Fund perform at net asset value ahead of its benchmark, the Morgan Stanley World
Index. During the year the Fund maintained an above-average cash position
resulting from profit taking on certain stocks, and was positioned to take
advantage of attractive buying opportunities, seeking investments in quality
undervalued stocks of issuers with potential for profitability, growth and
stability. This strategy led the Fund to invest in companies in the
pharmaceutical, financial and consumer goods industries. The Fund's portfolio
holdings, allocations and strategies are subject to change.
o Comparing the Fund's Performance to the Market. The graphs below show
the performance of a hypothetical $10,000 investment in Class A, Class B and
Class C shares of the Fund held until November 30, 1997. In the case of Class A
shares, performance is measured from the commencement of operations on July 2,
1990 and in the case of Class B and Class C shares, from the inception of those
classes on September 1, 1993.
The Fund's performance is compared to the performance of the Morgan
Stanley World Index, an unmanaged index of issuers listed on the stock exchanges
of 20 foreign countries and the United States, which is widely recognized as a
measure of global stock market performance. Index performance reflects the
reinvestment of dividends but does not consider the effect of capital gains or
transaction costs, and none of the data below shows the effect of taxes. The
Fund's performance reflects the reinvestment of all dividends and capital gains
distributions, and the effect of Fund business and operating expenses. While
index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
securities in the Morgan Stanley World Index. Moreover, the index performance
data does not reflect any assessment of the risk of the investments included in
the index.
-7-
<PAGE>
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Global Value Fund, Inc. (Class A) and the Morgan Stanley
World Index
[Graph]
Average Annual Total Returns of Class A Shares of the Fund at 11/30/971
1 Year 5 Years Life of Class
9.56% 14.69% 10.17%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Global Value Fund, Inc. (Class B) and the Morgan Stanley
World Index
[Graph]
Average Annual Total Returns of Class B Shares of the Fund at 11/30/972
1 Year Life of Class
10.61% 12.90%
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investment In:
Oppenheimer Quest Global Value Fund, Inc. (Class C) and the Morgan Stanley
World Index
[Graph]
Average Annual Total Returns of Class C Shares of the Fund at 11/30/973
1 Year Life of Class
14.64% 13.16%
Total returns and ending account values in the graphs show change in share value
and include reinvestment of all dividends and capital gains distributions. The
performance information for the Morgan Stanley World Index begins on 6/30/90 for
Class A shares and 8/31/93 for Class B and Class C shares. 1The inception date
of the Fund (Class A shares) was 7/2/90. Class B returns are shown net of the
applicable 5.75% maximum initial sales charge. 2Class B shares of the Fund were
first publicly offered on 9/1/93. Returns are shown net of the applicable 5% and
2% contingent deferred sales charges, respectively, for the one year period and
the life-of-class. The ending account value for Class B shares in the graph is
net of the applicable 2% contingent deferred sales charge. 3Class C shares of
the Fund were first publicly offered on 9/1/93. The 1-year return is shown net
of the applicable 1% contingent deferred sales charge. Past performance is not
predictive of future performance. Graphs are not drawn to same scale.
ABOUT YOUR ACCOUNT
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.
o 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
"Retirement Plans," as defined in "Class A Contingent Deferred Sales Charge" on
page __. If you purchase Class A shares as part of an investment of at least $1
million ($500,000 for Retirement Plans) in shares of one or more Oppenheimer
funds, you will not pay an initial sales charge, but if you sell any of those
shares within 12 months of buying them (18 months if the shares were purchased
prior to May 1, 1997), you may pay a contingent deferred sales charge. The
amount of that sales charge will vary depending on the amount you invested.
Sales charge rates are described in "Buying Class A Shares" below.
o 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 of buying
them, you will normally pay a contingent deferred sales charge that varies,
depending on how long you have owned your shares as described in "Buying Class B
Shares" below.
o Class C Shares. If 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% as
described in "Buying Class C Shares" below.
Which Class of Shares Should You Choose? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
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 to consider are how much you plan to invest and how long you plan to
hold your investment. 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 higher
annual asset-based sales charge on Class B and Class C expenses (which, like all
expenses, 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 of shares 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.
o 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.
The effect of the sales charge over time, using our assumptions will generally
depend on the amount invested. 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 Class C shares for which no initial sales charge is paid.
o 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 economic 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 Class 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 more of Class B shares or $1 million or more of
Class C shares from a single investor.
-8-
<PAGE>
o 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 or
Class 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 Fund's Right of Accumulation.
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 you should
analyze your options carefully.
o 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,
or other features (such as Automatic Withdrawal Plans) may not be advisable
(because of the effect of the contingent deferred sales charge in non-retirement
accounts) 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, or higher expenses, such as the asset-based sales
charges to which Class B and Class C shares are subject, as described below and
in the Statement of Additional Information.
o 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 of shares
than for selling 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: that is, to compensate the
Distributor for commissions it pays to dealers and financial institutions for
selling shares. The Distributor may pay additional periodic compensation from
its own resources to securities dealers or financial institutions based upon the
value of shares of the Fund owned by the dealer or financial institution for its
own account or for its customers.
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:
o 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.
o Under pension, profit-sharing plans and 401(k) and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250 (if
your IRA is established under an Asset Builder Plan, the $25 minimum applies),
and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying shares by
reinvesting dividends or distributions from the Fund or other Oppenheimer funds
(a list of them appears in the Statement of Additional Information, or you can
ask your dealer or call the Transfer Agent), or by reinvesting distributions
from unit investment trusts that have made arrangements with the Distributor.
o 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. The Distributor may appoint certain servicing agents as the
Distributor's agent to accept purchase (and redemption) orders. 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.
o Buying Shares Through Your Dealer. Your dealer will place your order
with the Distributor on your behalf.
o Buying Shares Through the Distributor. Complete an OppenheimerFunds New
Account Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. 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.
Payment by Federal Funds Wire: Shares may be purchased by Federal Funds wire.
The minimum investment is $2,500. You must first call the Distributor's Wire
Department at 1-800-525-7041 to notify the Distributor of the wire, and receive
further instructions.
o 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 to your
bank account.
Shares are purchased for your account on AccountLink 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.
o Asset Builder Plans. You may purchase shares of the Fund (and up to four
other Oppenheimer funds) automatically each month from your account at a bank or
other financial institution under an Asset Builder Plan with AccountLink.
Details are in the Statement of Additional Information.
o 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, Colorado, or the order is received and transmitted to the Distributor by
an entity authorized by the Fund to accept purchase or redemption orders. The
Fund has authorized the Distributor, certain broker-dealers and agents or
intermediaries designated by the Distributor or those broker-dealers to accept
orders. In most cases, to enable you to receive that day's offering price, the
Distributor or an authorized entity 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 close of The New York Stock Exchange on a regular
business day and normally your order must be transmitted 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, in its sole discretion, may reject any
purchase order for the Fund's shares.
Special Sales Charge Arrangements for Certain Persons. Appendix A to this
Prospectus sets forth conditions for the waiver of, or exemption from, sales
charges or the special sales charge rates that apply to shareholders of one of
the Former Quest for Value Funds (as defined in that Appendix), including the
Fund.
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, purchases are not subject to an initial sales charge and the
offering price will be the 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:
- ------------------------------------------------------------------------------
Front-End Sales Charge Commission
As a Percentage of as Percentage
Offering Amount of Offering
Amount of Purchase Price Invested Price
- ------------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
- ------------------------------------------------------------------------------
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
- ------------------------------------------------------------------------------
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
- ------------------------------------------------------------------------------
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
- ------------------------------------------------------------------------------
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
- ------------------------------------------------------------------------------
The Distributor reserves the right to reallow the entire commission to dealers.
If that occurs, the dealer may be considered an "underwriter" under Federal
securities laws.
o 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 Oppenheimer
funds in the following cases:
o Purchases by a retirement plan qualified under section 401(a) of the
Internal Revenue Code if the retirement plan has total plan assets of $500,000
or more.
o Purchases aggregating $1 million or more.
o Purchases by a retirement plan qualified under sections 401(a) or 401(k)
of the Internal Revenue Code, by a non-qualified deferred compensation plan,
employee benefit plan, group retirement plan (see "How to Buy Shares Retirement
Plans" in the Statement of Additional Information for further details), an
employee's 403(b)(7) custodial plan account, SEP IRA, SARSEP, or SIMPLE plan
(all of these plans are collectively referred to as "Retirement Plans"); 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 $200,000 or more.
o Purchases by an OppenheimerFunds Rollover IRA if the purchases are made
(1) through a broker, dealer, bank or registered investment adviser that has
made special arrangements with the Distributor for these purchases, or (2) by a
direct rollover of a distribution from a qualified retirement plan if the
administrator of that plan has made special arrangements with the Distributor
for those purchases.
The Distributor pays dealers of record commissions on those purchases in
an amount equal to (i) 1.0% for non-Retirement Plan accounts, and (ii) for
Retirement Plan accounts, 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, and calculated on a
calendar year basis. That commission will be paid only on those purchases that
were not previously subject to a front-end sales charge and dealer commission.
No sales commission will be paid to the dealer, broker or financial institution
on sales of Class A shares purchased with the redemption proceeds of shares of a
mutual fund offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a special
arrangement with the Distributor if the purchase occurs more than 30 days after
the addition of the Oppenheimer funds as an investment option to the Retirement
Plan.
If you redeem any of those shares purchased prior to May 1, 1997 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. A Class A contingent deferred sales
charge may be deducted from the redemption proceeds of any of those shares
purchased on or after May 1, 1997 that are redeemed within 12 months of the end
of the calendar month of their purchase. That sales charge may be equal to 1.0%
of the lesser 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 offering price (which is the original net
asset value) of the redeemed shares. However, the Class A contingent deferred
sales charge will not exceed the aggregate amount of the commissions the
Distributor paid to your dealer on all Class A shares of all Oppenheimer funds
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 contingent deferred
sales charge will apply.
o 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.
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:
o 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 count all 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 Oppenheimer funds 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 Oppenheimer funds 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 your
investment in one of the Oppenheimer funds. The Distributor will add the value,
at current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The Oppenheimer funds 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.
o 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 Oppenheimer funds
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.
o 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. In
order to receive a waiver of the Class A contingent deferred sales charge, you
must notify the Transfer Agent as to which conditions apply.
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:
o the Manager or its affiliates;
o 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;
o registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the Distributor for
that purpose;
o dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for their
employees;
o employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered into
sales arrangements with such dealers or brokers (and 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);
o dealers, brokers, banks or registered investment advisers that have
entered into an agreement with the Distributor (1) providing specifically for
the use of shares of the Fund in particular investment products or employee
benefit plans made available to their clients (those clients may be charged a
transaction fee by their dealer, broker or adviser for the purchase or sale of
Fund shares);
o (1) investment advisers and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an advisory,
consulting or other fee for their services and buy shares for their own accounts
or the accounts of their clients, (2) Retirement Plans and deferred compensation
plans and trusts used to fund those Plans (including, for example, plans
qualified or created under sections 401(a), 403(b) or 457 of the Internal
Revenue Code), and "rabbi trusts" that buy shares for their own accounts, in
each case if those purchases are made through a broker or agent or other
financial intermediary that has made special arrangements with the Distributor
for those purchases; and (3) clients of investment advisers or financial
planners (that have entered into an agreement for this purpose with the
Distributor) who buy shares for their own accounts may also purchase shares
without sales charge but only if their accounts are linked to a master account
of their investment adviser or financial planner on the books and records of the
broker, agent or financial intermediary with which the Distributor has made such
special arrangements (each of these investors may be charged a fee by the
broker, agent or financial intermediary for purchasing shares);
o directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit sharing or
other benefit plan which beneficially owns shares for those persons;
o employee benefit plans purchasing shares through a shareholder servicing
agent which the Distributor has appointed as agent to accept those purchase
orders;
o accounts for which Oppenheimer Capital is the investment adviser (the
Distributor must be advised of this arrangement) and persons who are directors
or trustees of the company or trust which is the beneficial owner of such
accounts;
o any unit investment trust that has entered into an appropriate agreement
with the Distributor;
o a TRAC-2000 401(k) plan (sponsored by the former Quest for Value
Advisors) whose Class B or Class C shares of a Former Quest for Value Fund were
exchanged for Class A shares of that fund due to the termination of the Class B
and Class C TRAC-2000 program on November 24, 1995; or
o qualified retirement plans that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for Value Funds at
net asset value, with such shares to be held through DCXchange, a sub-transfer
agency mutual fund clearinghouse, provided that such arrangements are
consummated and share purchases commenced by December 31, 1996.
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:
o shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party;
o shares purchased by the reinvestment of loan repayments by a participant
in a retirement plan for which the Manager or its affiliates acts as sponsor;
o shares purchased by the reinvestment of dividends or other distributions
reinvested from the Fund or other Oppenheimer funds (other than Oppenheimer Cash
Reserves) or unit investment trusts for which reinvestment arrangements have
been made with the Distributor;
o shares purchased and paid for with the proceeds of shares redeemed in
the prior 30 days from a mutual fund (other than a fund managed by the Manager
or any of its subsidiaries) on which an initial sales charge or contingent
deferred sales charge was paid (this waiver also applies to shares purchased by
exchange of shares of Oppenheimer Money Market Fund, Inc. that were purchased
and paid for in this manner); this waiver must be requested when the purchase
order is placed for your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver; or
o shares purchased with the proceeds of maturing principal of units of any
Qualified Unit Investment Liquid Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions. The Class A contingent deferred sales charge is also waived if
shares that would otherwise be subject to the contingent deferred sales charge
are redeemed in the following cases:
o to make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the original account value;
o involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and Policies,"
below);
o if, at the time of purchase of shares (prior to May 1, 1997) the dealer
agreed in writing to accept the dealer's portion of the sales commission 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);
o if, at the time of purchase of shares (if purchased during the period
May 1, 1997 through December 31, 1997) the dealer agreed in writing to accept
the dealer's portion of the sales commission in installments of 1/12th of the
commission per month (and no further commission will be payable if the shares
are redeemed within 12 months of purchase);
o for distributions from a TRAC-2000 401(k) plan sponsored by the
Distributor due to the termination of the TRAC-2000 program; or
o for distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes: (1) following
the death or disability (as defined in the Internal Revenue Code) of the
participant or beneficiary (the death or disability must occur after the
participant's account was established); (2) to return excess contributions; (3)
to return contributions made due to a mistake of fact; (4) hardship withdrawals,
as defined in the plan; (5) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (6) to meet the minimum distribution
requirements of the Internal Revenue Code; (7) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal Revenue Code;
(8) for retirement distributions or loans to participants or beneficiaries; (9)
separation from service; (10) participant-directed redemptions to purchase
shares of a mutual fund (other than a fund managed by the Manager or its
subsidiaries) offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a special
arrangement with the Distributor; or (11) plan termination or "in-service
distributions", if the redemption proceeds are rolled over directly to an
OppenheimerFunds IRA;
o for distributions from Retirement Plans having 500 or more eligible
participants, except distributions due to termination of all of the Oppenheimer
funds as an investment option under the Plan; and
o for distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing this waiver.
o Distribution and Service Plan for Class A Shares. The Fund has adopted a
Distribution and Service Plan for Class A shares to compensate the Distributor
for its services in connection with the distribution of shares and the personal
service and maintenance of shareholder accounts that hold Class A shares. Under
the Plan, the Fund pays an asset-based sales charge to the Distributor at an
annual rate of 0.25% of the average annual net assets of the class. The Fund
also pays a service fee to the Distributor of 0.25% of the average annual net
assets of the class. The Distributor uses all of the service fee and a portion
of the asset-based sales charge (equal to 0.15% annually for Class A shares
purchased prior to September 1, 1993 and 0.10% annually for Class A shares
purchased on or after September 1, 1993) 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. The
Distributor retains the balance of the asset-based sales charge to compensate
itself for its other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining accounts in
the Fund, making the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. 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
contingent deferred sales charge will be based on the lesser of the net asset
value of the redeemed shares at the time of redemption or the original offering
price (which is the original net asset value). 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. The Class B
contingent deferred sales charge is paid to compensate the Distributor for
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 and (2) shares held
the longest during the 6-year period.
The contingent deferred
sales charge is not imposed in the circumstances described in "Waivers of Class
B and Class C Sales Charges" below. Class B shares held for a period greater
than six years automatically convert to Class A shares.
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.
o Automatic Conversion of Class B Shares. 72 months after you purchase
Class B shares, those shares will automatically convert to Class A shares.
This conversion feature relieves Class B
shareholders of the asset-based sales charge that applies to Class B shares
under the Class B Distribution and Service Plan, described below. The conversion
is based on the relative net asset value of the two classes, and no sales load
or other charge is imposed. When 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.
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 contingent deferred sales charge will be based on the lesser
of the net asset value of the redeemed shares at the time of redemption or the
original offering price (which is the original net asset value). 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.
The Class C contingent deferred sales charge is paid to compensate the
Distributor for 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.
o Distribution and Service Plans for Class B and Class C Shares. The Fund
has adopted Distribution and Service Plans for Class B and Class C shares to
compensate the Distributor for its services and costs in distributing Class B
and Class C shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual "asset-based sales charge" of 0.75% per year on Class B
shares that are outstanding for 6 years or less and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under each Plan.
Under each Plan, both fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The asset-based sales charge and service
fees increase Class B and Class C expenses by up to 1.00% of the net assets per
year of the respective class.
The Distributor uses the service fees to compensate dealers for providing
personal services for accounts that hold Class B or Class C shares. Those
services are similar to those provided under the Class A Distribution and
Service Plan, described above. The Distributor pays the 0.25% service fees to
dealers in advance for the first year after Class B or Class C shares have been
sold by the dealer and retains the service fee paid by the Fund in that year.
After the shares have been held for a year, the Distributor pays the service
fees to dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B or Class C
shares without a front-end sales charge while allowing the Distributor to
compensate dealers that sell those shares. The Fund pays the asset-based sales
charges to the Distributor for its services rendered in distributing Class B and
Class C shares. Those payments are at a fixed rate that 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 and Class C shares.
The Distributor currently pays sales commissions of 3.75% of the purchase
price of Class B shares to dealers from its own resources at the time of sale.
Including the advance of the service fee, the total amount paid by the
Distributor to the dealer at the time of sale of Class B shares is 4.00% of the
purchase price. The Distributor retains the Class B asset-based sales charge.
The Distributor may pay the Class B service fee and the asset-based sales charge
to the dealer quarterly in lieu of paying the sales commission and service fee
advance at the time of purchase.
The Distributor currently pays sales commissions of 0.75% of the purchase
price of Class C shares to dealers from its own resources at the time of sale.
Including the advance of the service fee the total amount 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 retains the asset-based sales charge during the
first year Class C shares are outstanding to recoup sales commissions it has
paid, the advances of service fee payments it has made, and its financing costs
and other expenses. 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 Distributor may pay the Class C service fee and
asset-based sales charge to the dealer quarterly in lieu of paying the sales
commission and service fee advance at the time of purchase.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plans for Class B and Class C shares. At November 30, 1997, the end of
the Class B Plan year, the Distributor had incurred unreimbursed expenses in
connection with sales of Class B shares of $2,571,819 (equal to 2.61% of the
Fund's net assets represented by Class B shares on that date). At November 30,
1997, the end of the Class C Plan year, the Distributor had incurred
unreimbursed expenses in connection with sales of Class C shares of $434,070
(equal to 1.12% of the Fund's net assets represented by Class C shares on that
date). If either Plan is terminated by the Fund, the Board of Directors may
allow the Fund to continue payments of the service fee and/or asset-based sales
charge to the Distributor for distributing Class B or Class C shares, as
appropriate, before the Plan was terminated.
o 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 Class B and Class C shares
redeemed in certain circumstances as described below. The reasons for this
policy are in "Reduced Sales Charges" in the Statement of Additional
Information. In order to receive a waiver of the Class B or Class C contingent
deferred sales charge, you must notify the Transfer Agent as to which conditions
apply.
Waivers for Redemptions in Certain Cases. The Class B and Class C
contingent deferred sales charges will be waived for redemptions of shares in
the following cases:
o 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 receives
the request), or (b) following the death or disability (as defined in the
Internal Revenue Code ) of the participant or beneficiary (the death or
disability must have occurred after the account was established);
o redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder, including a trustee of a
"grantor" trust or revocable living trust for which the trustee is also the sole
beneficiary (the death or disability must have occurred after the account was
established, and for disability you must provide evidence of a determination of
disability by the Social Security Administration);
o returns of excess contributions to Retirement Plans;
o distributions from retirement plans to make "substantially equal
periodic payments" as permitted in Section 72(t) of the Internal Revenue Code,
provided the distributions do not exceed 10% of the account value annually,
measured from the date the Transfer Agent receives the request);
o shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies," below; or
o distributions from OppenheimerFunds prototype 401(k) plans and from
certain Massachusetts Mutual Life Insurance company prototype 401(k) plans:
(1) for hardship withdrawals;
(2) under a Qualified Domestic Relations Order, as defined in the Internal
Revenue Code; (3) to meet minimum distribution requirements as defined in the
Internal Revenue Code; (4) to make "substantially equal periodic payments" as
described in Section 72(t) of the Internal Revenue Code; (5) for separation from
service; or (6) for loans to participants.
Waivers for Shares Sold or Issued in Certain Transactions. The contingent
deferred sales charge is also waived on Class B and Class C shares sold or
issued in the following cases:
o shares sold to the Manager or its affiliates;
o shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager or the
Distributor for that purpose;
o shares issued in plans of reorganization to which the Fund is a
party; or
o distributions from 401(k) plans sponsored by broker-dealers that have
entered into a special agreement with the Distributor allowing this waiver.
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 call the Transfer
Agent for more information.
-9-
<PAGE>
AccountLink privileges should be requested on your dealer's settlement
instructions if you buy your shares through your dealer. After your account is
established, you can request AccountLink privileges by sending
signature-guaranteed instructions to the Transfer Agent. AccountLink privileges
will apply to each shareholder listed in the registration on your account as
well as to your dealer representative of record unless and until the Transfer
Agent receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the Transfer
Agent signed by all shareholders who own the account.
o 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.
o 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.
o 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.
o Exchanging Shares. With the OppenheimerFunds exchange privilege,
described below, you can exchange shares automatically by phone from your Fund
account to another Oppenheimer funds account you have already established by
calling the special PhoneLink number.
Please refer to "How to Exchange Shares," below, for details.
o 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.
Shareholder Transactions by Fax. Requests for certain account transactions may
be sent to the Transfer Agent by fax (telecopier). Please call 1-800-525-7048
for information about which transactions are included. Transaction requests
submitted by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
OppenheimerFunds Internet Web Site. Information about the Fund, including your
account balance, daily share prices, market and Fund portfolio information, may
be obtained by visiting the OppenheimerFunds Internet Web Site, at the following
Internet address: http://www.oppenheimerfunds.com. In 1998, the Transfer Agent
anticipates offering certain account transactions through the Internet Web Site.
To find out more information about those transactions and procedures, please
visit the Web Site.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that enable
you to sell shares automatically or exchange them to another Oppenheimer funds
account on a regular basis:
o Automatic Withdrawal Plans. If your Fund account is worth $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 Statement of Additional Information for more
details.
o 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 Oppenheimer funds on a monthly, quarterly, semi-annual or annual
basis under an Automatic Exchange Plan. The minimum purchase for each other
Oppenheimer funds 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 or Class B
shares of the Fund, you have up to 6 months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies to Class A or Class B
shares that you purchased subject to an initial sales charge and to Class A or
Class B shares on which you paid a contingent deferred sales charge when you
redeemed them. This privilege does not apply to Class C shares. You must be sure
to ask the Distributor for this privilege when you send your payment. 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:
o Individual Retirement Accounts including rollover IRAs, for individuals
and their spouses and SIMPLE IRAs offered by employers
o 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
o SEP-IRAs (Simplified Employee Pension Plans) for small business owners
or people with income from self-employment, including SAR/SEP IRAs
o Pension and Profit-Sharing Plans for self-employed persons and other
employers
o 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 by selling (redeeming)
some or all of your shares on any regular business day. Your shares will be sold
at the next net asset value calculated after your order is received 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.
o 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.
o Certain Requests Require A Signature Guarantee. To protect you and the
Fund from fraud, certain redemption requests must be in writing and must include
a signature guarantee in the following situations (there may be other situations
also requiring a signature guarantee):
o You wish to redeem more than $50,000 worth of shares and receive a check
o The redemption check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to a Fund account with a different owner
or name
o Shares are redeemed by someone other than the owners (such as an
Executor)
o Where Can I Have My Signature Guaranteed? The Transfer Agent will accept
a guarantee of your signature by a number of financial institutions, including:
a U.S. bank, trust company, credit union or savings association, or by a foreign
bank that has a U.S. correspondent bank, or by a U.S. registered dealer or
broker in securities, municipal securities or government securities, or by a
U.S. national securities exchange, a registered securities association or a
clearing agency. If you are signing as a fiduciary or on behalf of a
corporation, partnership or other business, you must also include your title in
the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement) o The dollar
amount or number of shares to be redeemed o Any special payment
instructions o Any share certificates for the shares you are selling o The
signatures of all registered owners exactly as the account is registered,
and o Any special requirements or documents requested by the Transfer
Agent to
assure proper authorization of the person asking to sell shares.
Use the following address for Send courier or Express Mail
request by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Ave.
Denver, Colorado 80217 Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price on a regular
business day, your call must be received by the Transfer Agent by 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.
o To redeem shares through a service representative, call 1-800-852-8457 o
To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds wired to that bank account.
o Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed by
telephone in any 7-day period. The check must be payable to all owners of record
of the shares and must be sent to the address on the account statement. This
service is not available within 30 days of changing the address on an account.
o Telephone Redemptions Through AccountLink or by Wire. There are no
dollar limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH transfer to your bank is
initiated on the business day after the redemption. You do not receive dividends
on the proceeds of the shares you redeemed while they are waiting to be
transferred.
Shareholders may also have the Transfer Agent send redemption proceeds of
$2,500 or more by Federal Funds wire to a designated commercial bank account.
The bank must be a member of the Federal Reserve wire system. There is a $10 fee
for each Federal Funds wire. To place a wire redemption request, call the
Transfer Agent at 1-800-852-8457. The wire will normally be transmitted on the
next bank business day after the shares are redeemed. There is a possibility
that the wire may be delayed up to seven days to enable the Fund to sell
securities to pay the redemption proceeds. No dividends are accrued or paid on
the proceeds of shares that have been redeemed and are awaiting transmittal by
wire. To establish wire redemption privileges on an account that is already
established, please contact the Transfer Agent for instructions. 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 call your dealer for more information about
this procedure. 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 Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence
o The prospectuses of this Fund and the fund whose shares you want to buy
must offer the exchange privilege
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them; after the account is open 7 days, you
can exchange shares every regular business day
o You must meet the minimum purchase requirements for the fund you
purchase by exchange
o Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class of the Fund may be exchanged only for shares
of the same class in the other Oppenheimer funds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund.
At present, Oppenheimer Money Market Fund, Inc. offers only
one class of shares, which are considered to be Class A shares for this
purpose. 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:
o 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."
o Telephone Exchange Requests. Telephone exchange requests may be made
either by calling a service representative at 1-800-852-8457 or obtain one 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 Oppenheimer funds currently available for exchanges
in the Statement of Additional Information or obtain one by calling a service
representative at 1-800-525-7048. That list can change from time to time.
There are certain exchange policies you should be aware of:
o Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that 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 up to 7 days 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 sale of portfolio securities at a time or price
disadvantageous to the Fund.
o 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.
o 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.
o For tax purposes, exchanges of shares involve a redemption of the shares
of the Fund you own and a purchase of the shares of the other fund, which may
result in a capital gain or loss. For more information about the taxes affecting
exchanges, please refer to "How to Exchange Shares" in the Statement of
Additional Information.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will be
exchanged.
Shareholder Account Rules and Policies
o Net Asset Value Per Share is determined for each class of shares as of
the close of The New York Stock Exchange that day, 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 the Fund's net assets attributable to a class by the number of
shares of that class that are outstanding. The Fund's Board of Directors has
established procedures to value the Fund's securities to determine net asset
value. In general, securities values are based on market value. There are
special procedures for valuing illiquid and restricted securities and
obligations for which market values cannot be readily obtained. These procedures
are described more completely in the Statement of Additional Information.
o 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 Directors at any time the Board believes it is in the Fund's
best interest to do so.
o Telephone Transaction Privileges for purchases, redemptions or exchanges
may be modified, suspended or terminated by the Fund at any time.
If an account has more than one owner,
the Fund and the Transfer Agent may rely on the instructions of any one owner.
Telephone privileges apply to each owner of the account and the dealer
representative of record for the account unless and until the Transfer Agent
receives cancellation instructions from an owner of the account.
o 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 the Transfer Agent nor the 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.
o 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.
o Dealers that can perform account transactions for their clients by
participating in NETWORKING through the National Securities Clearing Corporation
are responsible for obtaining their clients' permission to perform those
transactions and are responsible to their clients who are shareholders of the
Fund if the dealer performs any transaction erroneously or improperly.
o The redemption price for shares will vary from day to day because the
value of the securities in the 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.
o 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 by federal funds wire, certified check or arrange to have your
bank to provide telephone or written assurance to the Transfer Agent that your
purchase payment has cleared.
o Involuntary redemptions of small accounts may be made by the Fund if the
account value has fallen below $500 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.
o Under unusual circumstances, shares of the Fund may be redeemed "in
kind", which means that the redemption proceeds will be paid with securities
from the Fund's portfolio. Please refer to "How to Sell Shares" in the Statement
of Additional Information for
more details.
o "Backup Withholding" of Federal income tax may be applied at the rate of
31% from taxable dividends, distributions and redemption proceeds (including
exchanges) if you fail to furnish the Fund a correct and properly certified
Social Security or Employer Identification Number when you sign your
application, or if you underreport your income to the Internal Revenue Service.
o 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.
o To avoid sending duplicate copies of materials to households, the Fund
will mail only one copy of each annual and semi-annual report to shareholders
having the same last name and address on the Fund's records. However, each
shareholder may call the Transfer Agent at 1-800-525- 7048 to ask that copies of
those materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares and pays dividends separately for Class A,
Class B and Class C shares from net investment income on an annual basis and
normally pays those dividends to shareholders following the end of its fiscal
year, which is November 30. Dividends paid on Class A shares generally are
expected to be higher than for Class B and Class C shares because expenses
allocable to Class B and Class C shares will generally be higher than for Class
A shares. There is no fixed dividend rate and there can be no assurance as to
the payment of any dividends or the realization of any gains.
Capital Gains. The Fund may make distributions annually in December out of any
net short-term or long-term capital gains, and the Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year. Short-term capital gains are treated as dividends for tax purposes.
Long-term capital gains will be separately identified in the tax information the
Fund sends you after the end of the calendar year. There can be no assurances
that the Fund will pay any capital gains distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For OppenheimerFunds
retirement accounts, all distributions are reinvested. For other accounts,
you have four options:
o 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.
o Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or sent
to your bank account on AccountLink.
o 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.
o Reinvest Your Distributions in Another Oppenheimer Fund Account. You can
reinvest all distributions in the same class of shares of another Oppenheimer
fund account you have established.
Taxes. If your account is not a tax-deferred retirement account, you should be
aware of the following tax implications of investing in the Fund. Long-term
capital gains are taxable as long-term capital gains when distributed to
shareholders. It does not matter how long you have 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
the Fund will send you and the IRS a statement showing the amount of each
taxable distribution you received in the previous year. So that the Fund will
not have to pay taxes on the amounts it distributes to shareholders as dividends
and capital gains, the Fund intends to manage its investments so that it will
qualify as a "regulated investment company" under the Internal Revenue Code,
although it reserves the right not to qualify in a particular year.
o "Buying a Dividend". 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.
o Taxes on Transactions. Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. Generally speaking a capital gain
or loss is the difference between the price you paid for the shares and the
price you receive when you sell them.
o Returns of Capital. In certain cases distributions made by the Fund may
be considered a non-taxable return of capital to shareholders. If that occurs,
it will be identified in notices to shareholders. A non-taxable return of
capital may reduce your tax basis in your Fund shares.
This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax adviser
about the effect of an investment in the Fund on your particular tax situation.
APPENDIX A
Special Sales Charge Arrangements for Shareholders of
the Former Quest for Value Funds
The initial and contingent deferred sales charge rates and waivers for
Class A, Class B and Class C shares of the Fund described elsewhere in this
Prospectus are modified as described below for those shareholders of (i)
Oppenheimer Quest Value Fund, Inc., Oppenheimer Quest Growth & Income Value
Fund, Oppenheimer Quest Opportunity Value Fund, Oppenheimer Quest Small Cap
Value Fund and Oppenheimer Quest Global Value Fund, Inc. on November 24, 1995,
when OppenheimerFunds, Inc. became the investment adviser to those funds, and
(ii) Quest for Value U.S. Government Income Fund, Quest for Value Investment
Quality Income Fund, Quest for Value Global
Income Fund, Quest for Value New York Tax-Exempt Fund, Quest for Value National
Tax-Exempt Fund and Quest for Value California Tax-Exempt Fund when those funds
merged into various Oppenheimer funds on November 24, 1995. The funds listed
above are referred to in this Prospectus as the "Former Quest for Value Funds."
Class A Sales Charges
o Reduced Class A Initial Sales Charge Rates for Certain Former Quest
Shareholders
o Purchases by Groups, Associations and Certain Qualified Retirement Plans. The
following table sets forth the initial sales charge rates for Class A shares
purchased by a "Qualified Retirement Plan" through a single broker, dealer or
financial institution, or by members of "Associations" formed for any purpose
other than the purchase of securities if that Qualified Retirement Plan or that
Association purchased shares of any of the Former Quest for Value Funds or
received a proposal to purchase such shares from OCC Distributors prior to
November 24, 1995. For this purpose only, a "Qualified Retirement Plan" includes
any 401(k) plan, 403(b) plan, and SEP/IRA or IRA plan for employees of a single
employer.
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
- ------------------------------------------------------------------------------
9 or fewer 2.50% 2.56% 2.00%
- ------------------------------------------------------------------------------
At least 10 but not
more than 49 2.00% 2.04% 1.60%
For purchases by Qualified Retirement plans and Associations having 50 or
more eligible employees or members, there is no initial sales charge on
purchases of Class A shares, but those shares are subject to the Class A
contingent deferred sales charge described on pages __ and __ of this
Prospectus.
Purchases made under this arrangement qualify for the lower of the sales
charge rate in the table based on the number of eligible employees in a
Qualified Retirement Plan or members of an Association or the sales charge rate
that applies under the Rights of Accumulation described above in the Prospectus.
In addition, purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they qualified to
purchase shares of any of the Former Quest For Value Funds by virtue of
projected contributions or investments of $1 million or more each year.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations, or as eligible employees in Qualified Retirement Plans
also may purchase shares for their individual or custodial accounts at these
reduced sales charge rates, upon request to the Fund's Distributor.
o Waiver of Class A Sales Charges for Certain Shareholders
Class A shares of the Fund purchased by the following investors are not subject
to any Class A initial or contingent deferred sales charges:
o Shareholders of the Fund who were shareholders of the AMA Family of
Funds on February 28, 1991 and who acquired shares of any of the Former Quest
for Value Funds by merger of a portfolio of the AMA Family of Funds.
o Shareholders of the Fund who acquired shares of any Former Quest for
Value Fund by merger of any of the portfolios of the Unified Funds.
o Shareholders of the Fund that have continually owned shares of the Fund
prior to November 1, 1988.
o Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions
The Class A contingent deferred sales charge will not apply to redemptions of
Class A shares of the Fund purchased by the following investors who were
shareholders of any Former Quest for Value Fund:
o Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship under the Employee Retirement
Income Security Act of 1974 and regulations adopted under that law.
o Participants in Qualified Retirement Plans that purchased shares of any
of the Former Quest For Value Funds pursuant to a special "strategic alliance"
with the distributor of those funds. The Fund's Distributor will pay a
commission to the dealer for purchases of Fund shares as described above in
"Class A Contingent Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge Waivers
o Waivers for Redemptions of Shares Purchased Prior to March 6, 1995
In the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of the Fund if those shares
were 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 or from custodial accounts under Section 403(b)(7) of the
Code, Individual Retirement Accounts, deferred compensation plans under Section
457 of the Code, and other employee benefit plans, and returns of excess
contributions made to each type of plan, (ii) withdrawals under an automatic
withdrawal plan holding only either Class B or Class C shares if the annual
withdrawal does not exceed 10% of the initial value of the account, and (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 value of such
accounts.
o Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but
Prior to November 24, 1995.
In the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of the Fund if those shares
were purchased on or after March 6, 1995, but prior to November 24, 1995: (1)
distributions to participants or beneficiaries from Individual Retirement
Accounts under Section 408(a) of the Internal Revenue Code or retirement plans
under Section 401(a), 401(k), 403(b) and 457 of the Code, if those 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 Code) 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 (but only for Class B or Class C shares)
where the annual withdrawals do not exceed 10% of the initial value of the
account; and (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
account value. A shareholder's account will be credited with the amount of any
contingent deferred sales charge paid on the redemption of any Class A, Class B
or Class C shares of the Fund described in this section if within 90 days after
that redemption, the proceeds are invested in the same class of shares in this
Fund or another Oppenheimer fund.
A-1
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER QUEST GLOBAL VALUE FUND, INC.
Graphic material included in Prospectus of Oppenheimer Quest Global Value
Fund, Inc.: "Comparison of Total Return of Oppenheimer Quest Global Value Fund,
Inc. with the Morgan Stanley World Index - Change in Value of $10,000
Hypothetical Investments in Class A, Class B and Class C Shares of Oppenheimer
Quest Global Value Fund, Inc. and the Morgan Stanley World Index"
Linear graphs will be included in the Prospectus of Oppenheimer Quest
Global Value Fund, Inc. (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in the Fund. In
the case of the Fund's Class A shares, that graph will cover the performance of
the Fund from commencement of operations (7/2/90) through 11/30/97 and in the
case of the Fund's Class B and Class C shares will cover the period from the
inception of the class (September 1, 1993) through 11/30/97. The graph will
compare such values with hypothetical $10,000 investments over the time periods
indicated below in the Morgan Stanley World Index. Set forth below are the
relevant data points that will appear on the linear graph. Additional
information with respect to the foregoing, including a description of the Morgan
Stanley World Index, is set forth in the Prospectus under "Performance of the
Fund - Comparing the Fund's Performance to the Market."
Fiscal Year/ Oppenheimer Quest Morgan Stanley
Period Ended Global Value Fund, Inc. World Index(1)
- ------------ ----------------------- --------------
07/02/90 $ 9,425 $10,000
11/30/90 $ 8,267 $ 8,807
11/30/91 $ 8,905 $ 9,972
11/30/92 $ 9,737 $10,117
11/30/93 $11,656 $11,972
11/30/94 $12,632 $13,131
11/30/95 $15,128 $15,628
11/30/96 $17,640 $18,635
11/30/97 $20,504 $21,056
Fiscal Year/ Oppenheimer Quest Morgan Stanley
Period Ended Global Value Fund, Inc. World Index (2)
- ------------ ----------------------- ---------------
09/01/93 $10,000 $10,000
11/30/93 $ 9,833 $ 9,520
11/30/94 $10,604 $10,442
11/30/95 $12,631 $12,427
11/30/96 $14,657 $14,818
11/30/97 $16,745 $16,743
Fiscal Year/ Oppenheimer Quest Morgan Stanley
Period Ended Global Value Fund, Inc. World Index (2)
- ------------ ----------------------- ---------------
09/01/93 $10,000 $10,000
11/30/93 $ 9,833 $ 9,520
11/30/94 $10,596 $10,442
11/30/95 $12,599 $12,427
11/30/96 $14,620 $14,818
11/30/97 $16,907 $16,743
(1) Performance information for the Morgan Stanley World Index begins on
6/30/90 for Class A shares.
(2) Performance information for the Morgan Stanley World Index begins on 8/31/93
for Class B and Class C shares.
<PAGE>
Oppenheimer Quest Global Value Fund, Inc.
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Sub-Adviser
OpCap Advisors
One World Financial Center
New York, New York 10281
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
OppenheimerFunds Internet Web Site:
http://www.oppenheimerfunds.com
Custodian of Portfolio Securities
State Street Bank and Trust Company
P.O. Box 8505
Boston, Massachusetts 02266-8505
Independent Accountants
Price Waterhouse LLP
950 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representations must not be relied upon as having
been authorized by the Fund, OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any state to any person to whom it is unlawful to make such an
offer in such state. PR0254.001.0398 Printed on recylced paper.
<PAGE>
OPPENHEIMER QUEST GLOBAL VALUE FUND, INC.
Two World Trade Center, New York, New York 10048
1-800-525-7048
Statement of Additional Information dated March 30, 1998
This Statement of Additional Information of Oppenheimer Quest Global Value
Fund, Inc. is not a Prospectus. This document contains additional information
about the Fund and supplements information in the Prospectus dated March 30,
1998. It should be read together with the Prospectus, which may be obtained upon
written request to the Fund's Transfer Agent, OppenheimerFunds Services, at P.O.
Box 5270, Denver, Colorado 80217, or by calling the Transfer Agent at the
toll-free number shown above.
Contents
Page
About the Fund
Investment Objective and Policies......................................
Investment Policies and Strategies.................................
Other Investment Techniques and Strategies.........................
Other Investment Restrictions......................................
How the Fund is Managed ...............................................
Organization and History...........................................
Directors and Officers of the Fund.................................
The Manager and Its Affiliates.....................................
Brokerage Policies of the Fund.........................................
Performance of the Fund................................................
Distribution and Service Plans.........................................
About Your Account
How To Buy Shares......................................................
How To Sell Shares.....................................................
How To Exchange Shares.................................................
Dividends, Capital Gains and Taxes.....................................
Additional Information About the Fund..................................
Financial Information About the Fund
Independent Auditors' Report...........................................
Financial Statements...................................................
Appendix A: Description of Ratings..................................... A-1
Appendix B: Corporate Industry Classifications......................... B-1
-1-
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies of the
Fund are described in the Prospectus. Set forth below is supplemental
information about those policies and the types of securities in which the Fund
may invest, as well as the strategies the Fund may use to try to achieve its
objective. Capitalized terms used in this Statement of Additional Information
have the same meaning as those terms have in the Prospectus.
o Foreign Securities. The Fund may invest in securities (which may be
denominated in U.S. dollars or non-U.S. currencies) issued or guaranteed by
foreign corporations, certain supranational entities (described below) and
foreign governments or their agencies or instrumentalities, and in securities
issued by U.S. corporations denominated in non-U.S. currencies. All such
securities are considered "foreign securities."
Investing in foreign securities offers the Fund potential benefits not
available from investing solely in securities of domestic issuers, including the
opportunity to invest in foreign issuers that appear to offer growth potential,
or in foreign countries with economic policies or business cycles different from
those of the U.S., or to reduce fluctuations in portfolio value by taking
advantage of foreign stock markets that do not move in a manner parallel to U.S.
markets. If the Fund's portfolio securities are held abroad, the countries in
which such securities may be held and the sub-custodians or depositories holding
them must be approved by the Fund's Board of Directors to the extent that
approval is required under applicable rules of the Securities and Exchange
Commission ("SEC"). In buying foreign securities, the Fund may convert U.S.
dollars into foreign currency, but only to effect securities transactions on
foreign securities exchanges and not to hold such foreign currency as an
investment.
o Risks of Foreign Investing. Investing in foreign securities involves
special additional risks and considerations not typically associated with
investing in securities of issuers traded in the U.S.
These include reduction of income by foreign taxes; fluctuation in value of
foreign portfolio investments due to changes in currency rates and control
regulations (e.g., currency blockage); transaction charges for currency
exchange; lack of public information about foreign issuers; lack of uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic issuers; less volume on foreign exchanges than on U.S.
exchanges; greater volatility and less liquidity on foreign markets than in the
U.S.; less regulation of foreign issuers, stock exchanges and brokers than in
the U.S.; greater difficulties in commencing lawsuits and obtaining judgments in
foreign courts; higher brokerage commission rates than in the U.S.; increased
risks of delays in settlement of portfolio transactions or loss of certificates
for portfolio securities; possibilities in some countries of expropriation or
nationalization of assets, confiscatory taxation, political, financial or social
instability or adverse diplomatic developments; and unfavorable differences
between the U.S. economy and foreign economies. In the past, U.S. Government
policies have discouraged certain investments abroad by U.S. investors, through
taxation or other restrictions, and it is possible that such restrictions could
be re-imposed.
Brady Bonds. The Fund may invest in U.S. dollar-denominated,
collateralized "Brady Bonds." These debt obligations of foreign entities may be
fixed-rate par bonds or floating- rate discount bonds and are generally
collateralized in full as to principal due at maturity by U.S. Treasury zero
coupon obligations that have the same maturity as the Brady Bonds. Brady Bonds
are often viewed as having three or four valuation components: (i) the
collateralized repayment of principal at final maturity; (ii) the collateralized
interest payments; (iii) the uncollateralized interest payments; and (iv) any
uncollateralized repayment of principal at maturity (these uncollateralized
amounts constitute the "residual risk"). In the event of a default with respect
to collateralized Brady Bonds as a result of which the payment obligations of
the issuer are accelerated, the zero coupon Treasury securities held as
collateral for the payment of principal will not be distributed to investors,
nor will such obligations be sold and the proceeds distributed. The collateral
will be held by the collateral agent to the scheduled maturity of the defaulted
Brady Bonds, which will continue to be outstanding, at which time the face
amount of the collateral will equal the principal payments which would have then
been due on the Brady Bonds in the normal course. In addition, in light of the
residual risk of Brady Bonds and, among other factors, the history of defaults
with respect to commercial bank loans to public and private entities of
countries issuing Brady Bonds, investments in Brady Bonds are to be viewed as
speculative.
Sovereign Debt Obligations. The 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 Fund 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.
o Emerging Market Countries. The Fund may invest in 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.
o Special Risks of Emerging Market Countries. Investments in emerging
market countries may involve further risks in addition to those identified
above for investments in foreign securities.
Securities issued by emerging market countries and companies located in those
countries may be subject to extended settlement periods, whereby the Fund might
not receive principal and/or income on a timely basis and its net asset value
could be affected. There may be a lack of liquidity for emerging market
securities; interest rates and foreign currency exchange rates may be more
volatile; sovereign limitations on foreign investments may be more likely to be
imposed; there may be significant balance of payment deficits; and their
economies and markets may respond in a more volatile manner to economic changes
than those in developed countries.
o U.S. Government Obligations. Obligations of U.S. Government agencies or
instrumentalities (including mortgage-backed securities) may or may not be
guaranteed or supported by the "full faith and credit" of the United States.
Some are backed by the right of the issuer to borrow from the U.S. Treasury;
others, by discretionary authority of the U.S. Government to purchase the
agencies' obligations; while others are supported only by the credit of the
instrumentality. All U.S. Treasury obligations are backed by the full faith and
credit of the United States. If the securities are not backed by the full faith
and credit of the United States, the owner of the securities must look
principally to the agency issuing the obligation for repayment and may not be
able to assert a claim against the United States in the event that the agency or
instrumentality does not meet its commitment. The Fund will invest in U.S.
Government securities of such agencies and instrumentalities only when the
Manager is satisfied that the credit risk with respect to such instrumentality
is minimal.
|X| Money Market Securities. As stated in the Prospectus, the Fund
typically invests a part of its assets in money market securities, and may
invest up to 100% of its total assets in money
market securities for temporary defensive purposes. Money market securities
in which the Fund may
invest include the following:
o Time Deposits and Variable Rate Notes. The Fund may invest in fixed time
deposits, whether or not subject to withdrawal penalties. However, investment in
such deposits which are subject to withdrawal penalties, other than overnight
deposits, are subject to the 15% limit on illiquid investments set forth in the
Prospectus for the Fund.
The commercial paper obligations which the Fund may buy are unsecured and
may include variable rate notes. The nature and terms of a variable rate note
(i.e., a "Master Note") permit the Fund to invest fluctuating amounts at varying
rates of interest pursuant to a direct arrangement between the Fund as lender,
and the issuer, as borrower. It permits daily changes in the amounts borrowed.
The Fund has the right at any time to increase, up to the full amount stated in
the note agreement, or to decrease the amount outstanding under the note. The
issuer may prepay at any time and without penalty any part or the full amount of
the note. The note may or may not be backed by one or more bank letters of
credit. Because these notes are direct lending arrangements between the Fund and
the issuer, it is not generally contemplated that they will be traded; moreover,
there is currently no secondary market for them. Except as specifically provided
in the Prospectus for the Fund, there is no limitation on the type of issuer
from whom these notes will be purchased. However, in connection with such
purchase and on an ongoing basis, OpCap Advisors (the "Sub-Adviser") will
consider the earning power, cash flow and other liquidity ratios of the issuer,
and its ability to pay principal and interest on demand, including a situation
in which all holders of such notes made demand simultaneously. The Fund will not
invest more than 5% of its total assets in variable rate notes. Variable rate
notes are subject to the Fund's investment restriction on illiquid securities
unless such notes can be put back to the issuer on demand within seven days.
o Insured Bank Obligations. The Federal Deposit Insurance Corporation
("FDIC") insures the deposits of federally insured banks and savings and loan
associations (collectively referred to as "banks") up to $100,000. The Fund may,
within the limits set forth in the Prospectus, purchase bank obligations which
are fully insured as to principal by the FDIC. Currently, to remain fully
insured as to principal, these investments must be limited to $100,000 per bank.
If the principal amount and accrued interest together exceed $100,000, the
excess principal and accrued interest will not be insured. Insured bank
obligations may have limited marketability. Unless the Board of Directors
determines that a readily available market exists for such obligations, the Fund
will treat such obligations as subject to the 15% limit for illiquid investments
set forth in the Prospectus for the Fund unless such obligations are payable at
principal amount plus accrued interest on demand or within seven days after
demand.
o 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.
o Investment Risks of Fixed-Income Securities. All fixed-income securities
are subject to two types of risks: credit risk and interest rate risk. Credit
risk relates to the ability of the issuer to meet interest or principal payments
on a security as they become due. Generally, higher yielding lower-grade bonds
are subject to credit risk to a greater extent than lower yielding, investment
grade bonds. Interest rate risk refers to the fluctuations in value of
fixed-income securities resulting solely from the inverse relationship between
price and yield of outstanding fixed-income securities. An increase in
prevailing interest rates will generally reduce the market value of
already-issued fixed-income investments, and a decline in interest rates will
tend to increase their value. In addition, debt securities with longer
maturities, which tend to produce higher yields, are subject to potentially
greater changes in their prices from changes in interest rates than obligations
with shorter maturities. Fluctuations in the market value of fixed-income
securities after the Fund buys them will not affect the interest payable on
those securities, nor the cash income from such securities. However, those price
fluctuations will be reflected in the valuations of these securities and
therefore the Fund's net asset values.
o Lower-Grade Securities. The Fund may invest up to 5% of its assets in
bonds rated below "BBB" by Standard & Poor's Corporation, or "Baa3" by Moody's
Investors Service, Inc. (commonly known as "high yield" or "junk bonds"), or
that have a comparable rating from another rating organization. If unrated, the
security must be determined by the Sub-Adviser to be of comparable quality to
securities rated less than investment grade.
Special Risks of Lower-Grade Securities. High yield, lower-grade
securities, whether rated or unrated, often have speculative characteristics.
Lower-grade securities have special risks that make them riskier investments
than investment grade securities. They may be subject to greater market
fluctuations and risk of loss of income and principal than lower yielding,
investment-grade securities. There may be less of a market for them and
therefore they may be harder to sell at an acceptable price. There is a
relatively greater possibility that the issuer's earnings may be insufficient to
make the payments of interest due on the bonds. The issuer's low
creditworthiness may increase the potential for its insolvency.
These risks mean that the Fund may not achieve the expected income from
lower-grade securities, and that the Fund's net asset value per share may be
affected by declines in value of these securities. However, the Fund's
limitations on investments in these types of securities may reduce some of the
risk, as will the Fund's policy of diversifying its investments.
o Rights and Warrants. Warrants basically are options to purchase equity
securities at specific prices valid for a specific period of time. Their prices
do not necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and warrants have
no voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.
Other Investment Techniques and Strategies.
o When-Issued Securities. The Fund may take advantage of offerings of
eligible portfolio securities on a "when-issued" basis where delivery of and
payment for such securities take place sometime after the transaction date on
terms established on such date. Normally, settlement on U.S. Government
securities takes place within ten days. The Fund only will make when-issued
commitments on eligible securities with the intention of actually acquiring the
securities. If the Fund chooses to dispose of the right to acquire a when-issued
security prior to its acquisition, it could, as with the disposition of any
other portfolio obligation, incur a gain or loss due to market fluctuation.
When-issued commitments will not be made if, as a result, more than 15% of the
net assets of the Fund would be so committed.
o Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated redemptions, or
pending the investment of the proceeds from sales of Fund shares, or pending the
settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund purchases a security from, and
simultaneously resells it to, an approved vendor (U.S. commercial bank or the
U.S. branch of a foreign bank having total domestic assets of at least $1
billion or a broker dealer with a net worth of at least $50 million and which
has been designated a primary dealer in government securities, that must meet
credit requirements set by the Fund's Board of Directors from time to time) for
delivery on an agreed upon future date. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. The majority of these
transactions run from day to day, and delivery pursuant to the resale typically
will occur within one to five days of the purchase. Repurchase agreements are
considered "loans" under the Investment Company Act, collateralized by the
underlying security. The Fund's repurchase agreements require that at all times
while the repurchase agreement is in effect, the value of the collateral must
equal or exceed the repurchase price to fully collateralize the repayment
obligation. Additionally, the Manager will impose creditworthiness requirements
to confirm that the vendor is financially sound and will continuously monitor
the collateral's value.
o Illiquid and Restricted Securities. To enable the Fund to sell restricted
securities not registered under the Securities Act of 1933, the Fund may have to
cause those securities to be registered. The expenses of registration of
restricted securities may be negotiated by the Fund with the issuer at the time
such securities are purchased by the Fund, if such registration is required
before such securities may be sold publicly. When registration must be arranged
because the Fund wishes to sell the security, a considerable period may elapse
between the time the decision is made to sell the securities and the time the
Fund would be permitted to sell them. The Fund would bear the risks of any
downward price fluctuation during that period. The Fund may also acquire,
through private placements, securities having contractual restrictions on their
resale, which might limit the Fund's ability to dispose of such securities and
might lower the amount realizable upon the sale of such securities. Illiquid
securities include repurchase agreements maturing in more than seven days, or
certain participation interests other than those with puts exercisable within
seven days.
The Fund has percentage limitations that apply to purchases of illiquid
securities, as stated in the Prospectus. Those percentage restrictions do not
limit purchases of restricted securities that are eligible for sale to qualified
institutional purchasers pursuant to Rule 144A under the Securities Act of 1933,
provided that those securities have been determined to be liquid by the Board of
Directors of the Fund or by the Sub-Adviser under Board-approved guidelines.
Those guidelines take into account the trading activity for such securities and
the availability of reliable pricing information, among other factors. If there
is a lack of trading interest in a particular Rule 144A security, the Fund's
holding of that security may be deemed to be illiquid.
o Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must at least equal the value of the loaned
securities and must consist of cash, bank letters of credit or securities of the
U.S. Government (or its agencies or instrumentalities). To be acceptable as
collateral, letters of credit must obligate a bank to pay amounts demanded by
the Fund if the demand meets the terms of the letter. Such terms and the issuing
bank must be satisfactory to the Fund. When it lends securities, the Fund
receives amounts equal to the dividends or interest on loaned securities and
also receives one or more of (a) negotiated loan fees, (b) interest on
securities used as collateral, and (c) interest on short-term debt securities
purchased with such loan collateral. Either type of interest may be shared with
the borrower. The Fund may also pay reasonable finder's, custodian and
administrative fees. The terms of the Fund's loans must meet applicable tests
under the Internal Revenue Code and must permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important matter.
o Hedging With Options and Futures Contracts. The Fund may employ one or
more types of Hedging Instruments for the purposes described in the Prospectus.
Hedging Instruments used by the Fund are interest rate futures, foreign currency
futures and financial futures (collectively, "Futures"), Forward Contracts
(defined below), and call and put options on Futures and foreign currencies.
When hedging to attempt to protect against declines in the market value of the
Fund's portfolio, or to permit the Fund to retain unrealized gains in the value
of portfolio securities which have appreciated, or to facilitate selling
securities for investment reasons, the Fund may: (i) sell Futures, (ii) buy
puts, or (iii) write covered calls on securities held by it or on Futures (as
described in the Prospectus). When hedging to establish a position in the equity
securities markets as a temporary substitute for the purchase of individual
equity securities the Fund may: (i) buy Futures, or (ii) buy calls on Futures or
securities. Normally, the Fund would then purchase the equity securities and
terminate the hedging portion. When hedging to protect against declines in the
dollar value of a foreign currency-denominated security, the Fund may (a)
purchase puts on that foreign currency and on foreign currency Futures, (b)
write calls on that currency or on such Futures, or (c) enter into Forward
Contracts at a lower rate than the spot ("cash") rate.
The Fund's strategy of hedging with Futures and options on Futures will be
incidental to the Fund's investment activities in the underlying cash market. In
the future, the Fund may employ hedging instruments and strategies that are not
presently contemplated but which may be subsequently developed, to the extent
such investment methods are consistent with the Fund's investment objective, and
are legally permissible and disclosed in the Prospectus. Additional information
about the hedging instruments the Fund may use is provided below.
o Writing Call Options. As described in the Prospectus, the Fund may write
covered calls. When the Fund writes a call on an investment, it receives a
premium and agrees to sell the callable investment 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 the market price of the underlying
investment) regardless of market price changes during the call period. To
terminate its obligation on a call it has written, the Fund may purchase a
corresponding call in a "closing purchase transaction." 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 the Fund has written is more or less
than the price of the call the Fund subsequently purchased. A profit may also be
realized if the call lapses unexercised because the Fund retains the underlying
investment and the premium received. Those profits are considered short-term
capital gains for Federal income tax purposes, as are premiums on lapsed calls,
and when distributed by the Fund are taxable as ordinary income. If the Fund
could not effect a closing purchase transaction due to the lack of a market, it
would have to hold the callable investment until the call lapsed or was
exercised.
The Fund may also write calls on Futures without owning a futures contract
or deliverable securities, provided that at the time the call is written, the
Fund covers the call by segregating in escrow an equivalent dollar value of
deliverable securities or liquid assets. The Fund will segregate additional
liquid assets if the value of the escrowed assets drops below 100% of the
current value of the Future. In no circumstances would an exercise notice as to
a Future put the Fund in a short futures position.
o Writing Put Options. A put option on securities 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. Writing a put covered by segregated liquid assets equal to the exercise
price of the put has the same economic effect to the Fund as writing a covered
call. The premium the Fund receives from writing a put option 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 the writer of the
put) realizes a gain in the amount of the premium less transaction costs. 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, 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 on securities or on foreign currencies, to secure
its obligation to pay for the underlying security, the Fund will deposit in
escrow liquid assets with a value equal to or greater than the exercise price of
the underlying securities. The Fund therefore forgoes the opportunity of
investing the segregated assets or writing calls against those assets. As long
as the obligation of the Fund as the put writer continues, it may be assigned an
exercise notice by the exchange or broker-dealer through whom such option was
sold, requiring the Fund to exchange currency at the specified rate of exchange
or to take delivery of the underlying security against payment of the exercise
price. The Fund may have 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 expiration of the put, or such earlier time at which
the Fund effects 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. 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.
As above for writing covered calls, any and all such profits described herein
from writing puts are considered short-term capital gains for Federal tax
purposes, and when distributed by the Fund, are taxable as ordinary income.
o Purchasing Puts and Calls. The Fund may purchase calls to protect against the
possibility that the Fund's portfolio will not participate in an anticipated
rise in the securities market. When the Fund purchases a call (other than in a
closing purchase transaction), it pays a premium and, except as to calls on
Futures, has the right to buy the underlying investment from a seller of a
corresponding call on the same investment during the call period at a fixed
exercise price. In purchasing a call, 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 sum of the exercise price, transaction costs, and the
premium paid, and the call is exercised. If the 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. When the Fund purchases a call on a stock index, it pays
a premium, but settlement is in cash rather than by delivery of the underlying
investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to puts on
Futures, has the right to sell the underlying investment to a seller of a
corresponding put on the same investment during the put period at a fixed
exercise price. Buying a put on an investment the Fund owns (a "protective put")
enables 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 by
selling the underlying investment at the exercise price to a seller of a
corresponding put. If the market price of the underlying investment is equal to
or above the exercise price and as a result the put is not exercised or resold,
the put will become worthless at its expiration and the Fund will lose the
premium payment and the right to sell the underlying investment. However, the
put may be sold prior to expiration (whether or not at a profit).
Puts and calls on Futures are similar to puts and calls on securities
except that all settlements are in cash and gain or loss depends on changes in
the index in question (and thus on price movements in the stock market
generally) rather than on price movements of individual securities or futures
contracts. When the Fund buys a call on a Future, it pays a premium. If the Fund
exercises the call during the call period, a seller of a corresponding call on
the same investment will pay the Fund an amount of cash to settle the call if
the closing level of the Future upon which the call is based is greater than the
exercise price of the call. That cash payment is equal to the difference between
the closing price of the call and the exercise price of the call times a
specified multiple (the "multiplier") which determines the total dollar value
for each point of difference. When the Fund buys a put on a Future, it pays a
premium and has the right during the put period to require a seller of a
corresponding put, upon the Fund's exercise of its put, to deliver cash to the
Fund to settle the put if the closing level of the Future upon which the put is
based is less than the exercise price of the put. That cash payment is
determined by the multiplier, in the same manner as described above as to calls.
When the Fund purchases a put on a Future not owned by it, the put
protects the Fund to the extent that the index moves in a similar pattern to the
securities the Fund holds. The Fund can either resell the put or buy the
underlying investment and sell it at the exercise price. The resale price of the
put will vary inversely with the price of the underlying investment. 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 on the expiration
date. In the event of a decline in price of the underlying investment, the Fund
could exercise or sell the put at a profit to attempt to offset some or all of
its loss on its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund may cause the
Fund to sell related portfolio securities, thus increasing its turnover rate.
The exercise by the Fund of puts on securities will cause the sale of underlying
investments, increasing portfolio turnover. Although the decision whether to
exercise a put it holds is within the Fund's control, holding a put might cause
the Fund to sell the related investments for reasons that would not exist in the
absence of the put. The Fund may pay a brokerage commission each time it buys or
sells a call, put or an underlying investment in connection with the exercise of
a put or call. Such commissions may be higher than the commissions for direct
purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value of the
underlying investments and, consequently, put and call options offer large
amounts of leverage. The leverage offered by trading in options could result in
the Fund's net asset value being more sensitive to changes in the value of the
underlying investments.
o Futures. The Fund may buy and sell futures contracts relating to a
securities index ("Financial Futures"), including "Stock Index Futures," a type
of Financial Future for which the index used as the basis for trading is a
broadly-based stock index (including stocks that are not limited to issuers in a
particular industry or group of industries). A stock index assigns relative
values to the common stocks included in the index and fluctuates with the
changes in the market value of those stocks. Stock indices cannot be purchased
or sold directly. Financial Futures are contracts based on the future value of
the basket of securities that comprise the underlying index. The contracts
obligate the seller to deliver, and the purchaser to take, cash to settle the
futures transaction or to enter into an offsetting contract. No physical
delivery of the securities underlying the index is made on settling the futures
obligation. No monetary amount is paid or received by the Fund on the purchase
or sale of a Financial Future or Stock Index Future.
The Fund may also buy Futures relating to debt securities ("Interest Rate
Futures"). An Interest Rate Future obligates the seller to deliver and the
purchaser to take a specific type of debt security at a specific future date for
a fixed price to settle the futures transaction, or to enter into an offsetting
contract. As with Financial Futures, no monetary amount is paid or received by
the Fund on the purchase of an Interest Rate Future.
Upon entering into a Futures transaction, the Fund will be required to
deposit an initial margin payment, in cash or U.S. Treasury bills, with the
futures commission merchant (the "futures broker"). Initial margin payments will
be deposited with the Fund's Custodian in an account registered in the futures
broker's name; however, the futures broker can gain access to that account only
under certain specified conditions. As the Future is marked to market (that is,
its value on the Fund's books is changed) to reflect changes in its market
value, subsequent margin payments, called variation margin, will be paid to or
by the futures broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may elect to
close out its position by taking an opposite position, at which time a final
determination of variation margin is made and additional cash is required to be
paid by or released to the Fund. Any gain or loss is then realized by the Fund
on the Future for tax purposes. Although Financial Futures and Stock Index
Futures by their terms call for settlement by the delivery of cash, and Interest
Rate Futures call for the delivery of a specific debt security, in most cases
the settlement obligation is fulfilled without such delivery by entering into an
offsetting transaction. All Futures transactions are effected through a
clearinghouse associated with the exchange on which the contracts are traded.
o Options on Foreign Currency. The Fund intends to write and purchase
calls on foreign currencies. The Fund may purchase and write puts and calls on
foreign currencies that are traded on a securities or commodities exchange or
over-the-counter markets or are quoted by major recognized dealers in such
options. It does so to protect against declines in the dollar value of foreign
securities and against increases in the dollar cost of foreign securities to be
acquired. If the Manager anticipates a rise in the dollar value of a foreign
currency in which securities to be acquired are denominated, the increased cost
of such securities may be partially offset by purchasing calls or writing puts
on that foreign currency. If a decline in the dollar value of a foreign currency
is anticipated, the decline in value of portfolio securities denominated in that
currency may be partially offset by writing calls or purchasing puts on that
foreign currency. However, in the event of currency rate fluctuations adverse to
the Fund's position, it would lose the premium it paid and transactions costs.
A call written on a foreign currency by the Fund is covered if the Fund
owns the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other foreign currency held in
its portfolio. A call may be written by the Fund on a foreign currency to
provide a hedge against a decline due to an expected adverse change in the
exchange rate in the U.S. dollar value of a security which the Fund owns or has
the right to acquire and which is denominated in the currency underlying the
option. This is a cross-hedging strategy. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account with the Fund's
Custodian, cash or U.S. Government Securities in an amount not less than the
value of the underlying foreign currency in U.S. dollars marked-to-market daily.
o Forward Contracts. The Fund may enter into foreign currency
exchange contracts ("Forward Contracts"), which obligate the seller to
deliver and the purchaser to take a specific
amount of foreign currency at a specific future date for a fixed price. A
Forward Contract involves bilateral obligations of one party to purchase, and
another party to sell, a specific currency at a future date (which 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 the contract is entered into. These contracts are
generally traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. The Fund may enter
into a Forward Contract in order to "lock in" the U.S. dollar price of a
security denominated in a foreign currency which it has purchased or sold but
which has not yet settled, or to protect against a possible loss resulting from
an adverse change in the relationship between the U.S. dollar and a foreign
currency.
There is a risk that use of Forward Contracts may reduce the gain that
would otherwise result from a change in the relationship between the U.S. dollar
and a foreign currency. Forward contracts include standardized foreign currency
futures contracts which are traded on exchanges and are subject to procedures
and regulations applicable to other Futures. The Fund may also enter into a
forward contract to sell a foreign currency denominated in a currency other than
that in which the underlying security is denominated. This is done in the
expectation that there is a greater correlation between the foreign currency of
the forward contract and the foreign currency of the underlying investment than
between the U.S. dollar and the foreign currency of the underlying investment.
This technique is referred to as "cross hedging." The success of cross hedging
is dependent on many factors, including the ability of the Manager to correctly
identify and monitor the correlation between foreign currencies and the U.S.
dollar. To the extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the cross
currency hedge.
The Fund may use Forward Contracts to protect against uncertainty in the
level of future exchange rates. The use of Forward Contracts does not eliminate
fluctuations in the prices of the underlying securities the Fund owns or intends
to acquire, but it does fix a rate of exchange in advance. In addition, although
Forward Contracts limit the risk of loss due to a decline in the value of the
hedged currencies, at the same time they limit any potential gain that might
result should the value of the currencies increase.
There is no limitation as to the percentage of the Fund's assets that may
be committed to foreign currency exchange contracts. The Fund does not enter
into such forward contracts or maintain a net exposure in such contracts to the
extent that the Fund would be obligated to deliver an amount of foreign currency
in excess of the value of the Fund's assets denominated in that currency, or
enter into a "cross hedge," unless it is denominated in a currency or currencies
that the Manager believes will have price movements that tend to correlate
closely with the currency in which the investment being hedged is denominated.
See "Tax Aspects of Covered Calls and Hedging Instruments" below for a
discussion of the tax treatment of foreign currency exchange contracts
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the purchase
or sale of a security denominated in a foreign currency, or when the Fund
anticipates receipt of dividend payments in a foreign currency, the Fund may
desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar
equivalent of such payment by entering into a Forward Contract, for a fixed
amount of U.S. dollars per unit of foreign currency, for the purchase or sale of
the amount of foreign currency involved in the underlying transaction
("transaction hedge"). The Fund will thereby be able to protect itself against a
possible loss resulting from an adverse change in the relationship between the
currency exchange rates during the period between the date on which the security
is purchased or sold, or on which the payment is declared, and the date on which
such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar value
of portfolio positions ("position hedge"). In a position hedge, for example,
when the Fund believes that foreign currency may suffer a substantial decline
against the U.S. dollar, it may enter into a forward sale contract to sell an
amount of that foreign currency approximating the value of some or all of the
Fund's portfolio securities denominated in such foreign currency, or when the
Fund believes that the U.S. dollar may suffer a substantial decline against a
foreign currency, it may enter into a forward purchase contract to buy that
foreign currency for a fixed dollar amount. In this situation the Fund may, in
the alternative, enter into a forward contract to sell a different foreign
currency for a fixed U.S. dollar amount where the Fund believes that the U.S.
dollar value of the currency to be sold pursuant to the forward contract will
fall whenever there is a decline in the U.S. dollar value of the currency in
which portfolio securities of the Fund are denominated ("cross hedge").
The Fund's Custodian will place liquid assets of any types, in a separate
account of the Fund having a value equal to the aggregate amount of the Fund's
commitments under forward contracts to cover its short positions. 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 net commitments with respect to
such contracts. As an alternative to maintaining all or part of the separate
account, the Fund may purchase a call option permitting the Fund to purchase the
amount of foreign currency being hedged by a forward sale contract at a price no
higher than the forward contract price, or the Fund may purchase a put option
permitting the Fund to sell the amount of foreign currency subject to a forward
purchase contract at a price as high or higher than the forward contract price.
Unanticipated changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such contracts.
The precise matching of the Forward Contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of these securities between the date the Forward Contract
is entered into and the date it is sold. Accordingly, it may be necessary for
the Fund to purchase additional foreign currency on the spot (i.e., cash) market
(and bear the expense of such purchase), if the market value of the security is
less than the amount of foreign currency the Fund is obligated to deliver and if
a decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security if its market
value exceeds the amount of foreign currency the Fund is obligated to deliver.
The projection of short-term currency market movements is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Forward Contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing the Fund to sustain losses
on these contracts and transactions costs.
At or before the maturity of a Forward Contract requiring the Fund to sell
a currency, the Fund may either sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, the Fund may
close out a Forward Contract requiring it to purchase a specified currency by
entering into a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would realize a
gain or loss as a result of entering into such an offsetting Forward Contract
under either circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first contract and
offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with factors
such as the currencies involved, the length of the contract period and the
market conditions then prevailing. Because Forward Contracts are usually entered
into on a principal basis, no fees or commissions are involved. Because such
contracts are not traded on an exchange, the Fund must evaluate the credit and
performance risk of each particular counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert all of its holdings of foreign currency deposits into
U.S. dollars on a daily basis. The Fund may convert foreign currency from time
to time, and investors should be aware of the costs of currency conversion.
Foreign exchange dealers do not charge a fee for conversion, but they do seek to
realize a profit based on the difference between the prices at which they buy
and sell 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.
o Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain guidelines and restrictions with respect to its use of
futures and options thereon as established by the Commodities Futures Trading
Commission ("CFTC"). In particular, the Fund is excluded from registration as a
"commodity pool operator" if it complies with the requirements of Rule 4.5
adopted by the CFTC. Under this Rule, the Fund is not limited regarding the
percentage of its assets committed to futures margins and related options
premiums subject to a hedge position. However, under the Rule the Fund must
limit its aggregate initial futures margin and related options premiums to 5% or
less of the Fund's total assets for hedging strategies that are not considered
bona fide hedging strategies under the Rule. Under the Rule, the Fund must also
use short futures and options on futures positions solely for bona fide hedging
purposes within the meaning and intent of applicable provisions of the Commodity
Exchange Act.
Transactions in options by the Fund are subject to limitations established
by option exchanges governing the maximum number of options that 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 the
Fund may write or hold may be affected by options written or held by other
entities, including other investment companies having the same adviser as the
Fund (or an adviser that is an affiliate of the Fund's adviser). The exchanges
also impose position limits on Futures transactions. 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, when the Fund
purchases a Stock Index Future, the Fund will maintain, in a segregated account
or accounts with its custodian, cash or readily-marketable, short-term (maturing
in one year or less) debt instruments in an amount equal to the market value of
the securities underlying such Future, less the margin deposit applicable to it.
o Additional Information About Hedging Instruments and Their Use. The
Fund's Custodian, or a securities depository acting for the Custodian, will act
as the Fund's escrow agent, through the facilities of the Options Clearing
Corporation ("OCC"), as to the investments on which the Fund has written options
traded on exchanges or as to other acceptable escrow securities, so that no
margin will be required for such transactions. OCC will release the securities
on the expiration of the option or upon the Fund's entering into a closing
transaction. 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.
When the Fund writes an over-the-counter ("OTC") option, it will enter
into an arrangement with a primary U.S. Government securities dealer, which
would establish a formula price at which the Fund would have the absolute right
to repurchase that OTC option. That formula price would generally be based on a
multiple of the premium received for the option, plus the amount by which the
option is exercisable below the market price of the underlying security (that
is, the extent to which the option is "in-the-money"). When the Fund writes an
OTC option, it will treat as illiquid (for purposes of the limit on its assets
that may be invested in the illiquid securities, stated in the Prospectus) the
marked-to-market value of any OTC option held by it unless subject to a buy-back
agreement with the executing broker. The SEC is evaluating whether OTC options
should be considered liquid securities, and the procedure described above could
be affected by the outcome of that evaluation.
The Fund's option activities may affect its turnover rate and brokerage
commissions. The exercise by the Fund of puts on securities will cause the sale
of related investments, increasing portfolio turnover. Although such exercise is
within the Fund's control, holding a put might cause the Fund to sell the
related investments for reasons which would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys a put or call, sells
a call, or buys or sells an underlying investment in connection with the
exercise of a put or call. Such commissions may be higher than those which would
apply to direct purchases or sales of such underlying investments. Premiums paid
for options are small in relation to the market value of the related
investments, and consequently, put and call options offer large amounts of
leverage. The leverage offered by trading options could result in the Fund's net
asset value being more sensitive to changes in the value of the underlying
investments.
o Tax Aspects of Covered Calls and Hedging Instruments. The Fund intends to
qualify as a "regulated investment company" under the Internal Revenue Code
(although it reserves the right not to qualify). That qualification enables the
Fund to "pass through" its income and realized capital gains to shareholders
without having to pay tax on them. This avoids a "double tax" on that income and
capital gains, since shareholders normally will be taxed on the dividends and
capital gains they receive from the Fund (unless the Fund's shares are held in a
retirement account or the shareholder is otherwise exempt from tax).
Certain foreign currency exchange contracts ("Forward Contracts") in which
the Fund may invest are treated as "section 1256 contracts." Gains or losses
relating to section 1256 contracts generally are characterized under the
Internal Revenue Code as 60% long-term and 40% short-term capital gains or
losses. However, foreign currency gains or losses arising from certain section
1256 contracts (including Forward Contracts) generally are treated as ordinary
income or loss. In addition, section 1256 contracts held by the Fund at the end
of each taxable year are "marked-to-market" with the result that unrealized
gains or losses are treated as though they were realized. These contracts also
may be marked-to-market for purposes of the excise tax applicable to investment
company distributions and for other purposes under rules prescribed pursuant to
the Internal Revenue Code. An election can be made by the Fund to exempt these
transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may affect the
character and timing of gains (or losses) recognized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a position making
up a straddle is allowed only to the extent such loss exceeds any unrecognized
gain in the offsetting positions making up the straddle. Disallowed loss is
generally allowed at the point where there is no unrecognized gain in the
offsetting positions making up the straddle, or the offsetting position is
disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates that occur between the time the Fund accrues
interest or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of foreign currency forward contracts, gains
or losses attributable to fluctuations in the value of a foreign currency
between the date of acquisition of the security or contract and the date of the
disposition also are treated as an ordinary gain or loss. Currency gains and
losses are offset against market gains and losses on each trade before
determining a net "section 988" gain or loss under the Internal Revenue Code,
which may ultimately increase or decrease the amount of the Fund's investment
company income available for distribution to its shareholders.
o Additional Risk Factors in Hedging. In addition to the risks with
respect to options discussed in the Prospectus and above, there is a risk in
using short hedging by (i) selling Stock Index
Futures or (ii) purchasing puts on stock indices or Stock Index Futures to
attempt to protect against declines in the value of the Fund's equity
securities. The risk is that the prices of Stock Index Futures will correlate
imperfectly with the behavior of the cash (i.e., market value) prices of the
Fund's equity 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 markets 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 markets 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 markets could be reduced, thus producing distortion.
Third, from the point of view of speculators, the deposit requirements in the
futures markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable index.
To compensate for the imperfect correlation of movements in the price of the
equity securities being hedged and movements in the price of the hedging
instruments, the Fund may use hedging instruments in a greater dollar amount
than the dollar amount of equity securities being hedged if the historical
volatility of the prices of the equity securities being hedged is more than the
historical volatility of the applicable index. It is also possible that if the
Fund has used hedging instruments in a short hedge, the market may advance and
the value of equity securities held in the Fund's portfolio may decline. If that
occurred, the Fund would lose money on the hedging instruments and also
experience a decline in value in its portfolio securities. However, while this
could occur for a very brief period or to a very small degree, over time the
value of a diversified portfolio of equity securities will tend to move in the
same direction as the indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of individual equity
securities (long hedging) by buying Stock Index Futures and/or calls on such
Futures, on securities or on stock indices, it is possible that the market may
decline. If the Fund then concludes not to invest in equity securities at that
time because of concerns as to a possible further market decline or for other
reasons, the Fund will realize a loss on the hedging instruments that is not
offset by a reduction in the price of the equity securities purchased.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in the
Prospectus. There are additional investment restrictions that the Fund must
follow that are also fundamental policies. Fundamental policies and the Fund's
investment objective cannot be changed without the vote of a "majority" of the
Fund's outstanding voting securities. Under the Investment Company Act, such a
majority vote is defined as the vote of the holders of the lesser of: (i) 67% or
more of the shares present or represented by proxy at a shareholder meeting, if
the holders of more than 50% of the outstanding shares are present or
represented by proxy, or (ii) more than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot:
o invest in physical commodities or physical commodity contracts; however,
the Fund may: (i) buy and sell hedging instruments to the extent specified in
its Prospectus from time to time, and (ii) buy and sell options, futures,
securities or other instruments backed by, or the investment return from which
is linked to changes in the price of, physical commodities;
o 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;
o 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 security;
o 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 the Manager or the
Sub-Adviser 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;
o 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;
o invest for the purpose of exercising control or management of another
company;
olend money, but the Fund can engage in repurchase transactions and can
invest in all or a portion of an issue of bonds, debentures, commercial paper,
or other similar corporate obligations; the Fund may also make loans of
portfolio securities subject to the restrictions set forth in the Prospectus and
above under the caption of "Loans of Portfolio Securities";
o 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.
Non-Fundamental Investment Restrictions. The following operating policies of
the Fund are not fundamental policies and, as such, may be changed by vote of
a majority of the Fund's Board of
Directors without shareholder approval. These additional restrictions provide
that the Fund cannot:
o 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 (collateral arrangements in connection with transactions in futures and
options are not deemed to be margin transactions).
o purchase warrants if as a result the Fund would then have more than 5%
of its total assets (determined at the time of investment) invested in warrants.
o invest in real estate limited partnership programs.
o invest more than 5% of its assets in unseasoned issues.
o invest in oil, gas or other mineral exploration or development
programs.
For purposes of the Fund's policy not to concentrate its assets as
described in the Prospectus, the Fund has adopted, as a matter of
non-fundamental policy, the corporate industry classifications set forth in
Appendix B to this Statement of Additional Information. The percentage
restrictions described above and in the Prospectus apply only at the time of
investment and require no action by the Fund as a result of subsequent changes
in relative values.
How the Fund is Managed
Organization and History. Oppenheimer Quest Global Value Fund, Inc.
(referred to as the "Fund") is organized as a Maryland Corporation.
The Directors are authorized to create new series and classes of series.
The Directors may reclassify unissued shares of the Fund or classes into
additional series or classes of shares. The Directors may also divide or combine
the shares of a class into a greater or lesser number of shares without thereby
changing the proportionate beneficial interest of a shareholder in the Fund.
Shares do not have cumulative voting rights or preemptive or subscription
rights. Shares may be voted in person or by proxy.
As a Maryland corporation, the Fund is not required to hold, and does not
plan to hold, regular annual meetings of shareholders. The Fund will hold
meetings when required to do so by the Investment Company Act or other
applicable law, or when a shareholder meeting is called by the Directors or upon
proper request of the shareholders. Each share of the Fund represents an
interest in the Fund proportionately equal to the interest of each other share
of the same class and entitles the holder to one vote per share (and a
fractional vote for a fractional share) on matters submitted to their vote at
shareholders' meetings. Shareholders of the Fund vote together in the aggregate
on certain matters at shareholders' meetings, such as the election of Directors
and ratification of appointment of auditors for the Fund. Shareholders of a
particular class vote separately on proposals which affect that class, and
shareholders of a class which is not affected by that matter are not entitled to
vote on the proposal. For example, only shareholders of a class of a series vote
on certain amendments to the Distribution and/or Service Plans if the amendments
affect that class.
Directors and Officers of the Fund. The Fund's Directors and officers, and the
Fund's portfolio manager (who is not an officer), are listed below, together
with principal occupations and business affiliations during the past five years.
The address of each is Two World Trade Center, New York, New York 10048, except
as noted. All of the Directors are directors or trustees of Oppenheimer Quest
For Value Funds (Oppenheimer Quest Opportunity Value Fund, Oppenheimer Quest
Growth & Income Value Fund, Oppenheimer Quest Small Cap Value Fund and
Oppenheimer Quest Officers Value Fund), Oppenheimer Quest Value Fund, Inc.,
Oppenheimer Quest Global Value Fund, Inc. and Oppenheimer Quest Capital Value
Fund, Inc. (collectively, the "Oppenheimer Quest Funds"), Rochester Portfolio
Series - Limited-Term New York Municipal Fund, Bond Fund Series -Oppenheimer
Bond Fund For Growth and Rochester Fund Municipals (collectively, the
"Oppenheimer Rochester Funds") and Oppenheimer MidCap Fund. As of March 2, 1998,
the Directors and officers of the Fund as a group owned less than 1% of the
outstanding shares of each class of the Fund. The foregoing does not include
shares held of record by an employee benefit plan for employees of the Manager
for which one of the officers listed below, Mr. Donohue, is a trustee, other
than the shares beneficially owned under that plan by officers of the Fund
listed below.
Bridget A. Macaskill, Chairman of the Board of Directors and President*; Age: 49
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView Asset Management Corporation ("HarbourView"), a
subsidiary of the Manager; Chairman and a director of Shareholder Services, Inc.
("SSI") (since August 1994) and Shareholder Financial Services, Inc. ("SFSI")
(September 1995), transfer agent subsidiaries of the Manager; President (since
September 1995) and a director (since October 1990) of Oppenheimer Acquisition
Corp. ("OAC"), the Manager's parent holding company; President (since September
1995) and a director (since November 1989) of Oppenheimer Partnership Holdings,
Inc., a holding company subsidiary of the Manager; a director of Oppenheimer
Real Asset Management, Inc. (since July 1996); President and a director (since
October 1997) of OppenheimerFunds International Ltd. ("OFIL"), an offshore fund
manager subsidiary of the Manager and Oppenheimer Millennium Funds plc (since
October 1997); President and a director of other Oppenheimer funds; a director
of the NASDAQ Stock Market, Inc. and of Hillsdown Holdings plc (a U.K. food
company); formerly an Executive Vice President of the Manager.
Paul Y. Clinton, Director; Age: 67
39 Blossom Avenue, Osterville, Massachusetts 02655
Principal of Clinton Management Associates (financial and venture capital
consulting firm); Trustee of Capital Cash Management Trust (money-market fund)
and Narragansett Tax-Free Fund (tax-exempt bond fund); Director of OCC Cash
Reserves, Inc. and Trustee of OCC Accumulation Trust, (both open-end investment
companies). Formerly: Director, External Affairs, Kravco Corporation, ( national
real estate owner and property management corporation); President of Essex
Management Corporation (management consulting company); a general partner of
Capital Growth Fund (venture capital partnership); a general partner of Essex
Limited Partnership ( investment partnership); President of Geneve Corp.
(venture capital fund); Chairman of Woodland Capital Corp. (small business
investment company); and Vice President of W.R. Grace & Co.
Thomas W. Courtney, Director; Age: 64
833 Wyndemere Way, Naples, Florida 34105
Principal of Courtney Associates, Inc. (venture capital firm); former General
Partner of Trivest Venture Fund (private venture capital fund); Trustee of Cash
Assets Trust, (money market fund); Director of OCC Cash Reserves, Inc., and
Trustee of OCC Accumulation Trust, both open-end investment companies); Trustee
of Hawaiian Tax-Free Trust and Tax Free Trust of Arizona, (both tax-exempt bond
funds); Director of several privately owned corporations. Formerly President of
Investment Counseling Federated Investors, Inc.; former President of Boston
Company Institutional Investors; Director of Financial Analysts Federation.
- --------
*A director who is an "interested person" of the Fund as defined in the
Investment Company Act.
Lacy B. Herrmann, Director; Age: 68
380 Madison Avenue, Suite 2300, New York, New York 10017
Chairman and Chief Executive Officer of Aquila Management Corporation
(sponsoring organization and Administrator and/or Sub-Adviser to the following
open-end investment companies, and Chairman of the Board of Trustees and
President of each: Churchill Cash Reserves Trust, Aquila Cascadia Equity Fund,
Pacific Capital Cash Assets Trust, Pacific Capital U.S. Treasuries Cash Assets
Trust, Pacific Capital Tax-Free Cash Assets Trust, Prime Cash Fund, Narragansett
Insured Tax-Free Income Fund, Tax-Free Fund For Utah, Churchill Tax-Free Fund of
Kentucky, Tax-Free Fund of Colorado, Tax-Free Trust of Oregon, Tax-Free Trust of
Arizona, Hawaiian Tax-Free Trust, and Aquila Rocky Mountain Equity Fund); Vice
President, Director, Secretary, and formerly Treasurer of Aquila Distributors,
Inc., distributor of the above funds; President and Chairman of the Board of
Trustees of Capital Cash Management Trust ("CCMT"), and an Officer and
Trustee/Director of its predecessors; President and Director of STCM Management
Company, Inc. (sponsor and adviser to CCMT; Chairman, President and a Director
of InCap Management Corporation (formerly sub-adviser and administrator of Prime
Cash Fund and Short Term Asset Reserves); Director of OCC Cash Reserves, Inc.,
and Trustee of OCC Accumulation Trust (both open-end investment companies);
Trustee Emeritus of Brown University.
George Loft, Director; Age: 83
51 Herrick Road, Sharon, Connecticut 06069
Private Investor; Director of OCC Cash Reserves, Inc. and Trustee of OCC
Accumulation Trust (both open-end investment companies).
Robert C. Doll, Jr., Vice President; Age: 43
Executive Vice President and Director of the Manager (since January 1993) ;
Executive Vice President of HarbourView (since January 1993); Vice President and
a director of OAC (since September 1995); an officer of other Oppenheimer funds.
Pierre Daviron, Portfolio Manager; Age 56
One World Financial Center, 200 Liberty Street, New York, New York 10281
President and Chief Investment Officer of Oppenheimer Capital International, a
division of Oppenheimer Capital created in 1993; previously Chairman and Chief
Executive Officer at Indosuez Gartmore Asset Management, a division of Banque
Indosuez, Paris, France.
Richard J. Glasebrook, II, Portfolio Manager; Age 49 One World Financial Center,
200 Liberty Street, New York, New York 10281 Managing Director of Oppenheimer
Capital; previously a partner with Delafield Asset Management, where he was a
portfolio manager and analyst.
Andrew J. Donohue, Secretary; Age: 47
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President (since September 1993), and a director (since January 1992) of
OppenheimerFunds Distributor, Inc. (the "Distributor"); Executive Vice
President, General Counsel and a director of HarbourView, SSI, SFSI and
Oppenheimer Partnership Holdings, Inc. since (September 1995) and MultiSource
Services, Inc. (a broker-dealer) (since December 1995); President and a director
of Centennial Asset Management Corporation ("Centennial") (since September
1995); President and a director of Oppenheimer Real Asset Management, Inc.
(since July 1996); General Counsel (since May 1996) and Secretary (since April
1997) of OAC; Vice President of OFIL and Oppenheimer Millennium Funds plc (since
October 1997); an officer of other Oppenheimer funds.
George C. Bowen, Treasurer; Age: 61
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President (since September 1987) and Treasurer (since March 1985) of
the Manager; Vice President (since June 1983) and Treasurer (since March 1985)
of the Distributor; Vice President (since October 1989) and Treasurer (since
April 1986) of HarbourView; Senior Vice President (since February 1992),
Treasurer (since July 1991) and a director (since December 1991) of Centennial;
President, Treasurer and a director of Centennial Capital Corporation (since
June 1989); Vice President and Treasurer (since August 1978) and Secretary
(since April 1981) of SSI; Vice President, Treasurer and Secretary of SFSI
(since November 1989); Treasurer of OAC (since June 1990); Treasurer of
Oppenheimer Partnership Holdings, Inc. (since November 1989); Vice President and
Treasurer of Oppenheimer Real Asset Management, Inc. (since July 1996); Chief
Executive Officer, Treasurer and a director of MultiSource Services, Inc., a
broker-dealer (since December 1995); a director and an officer of other
Oppenheimer funds.
Robert Bishop, Assistant Treasurer; Age: 39
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994-May 1996), and a Fund Controller for
the Manager.
Scott T. Farrar, Assistant Treasurer; Age: 32
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994-May 1996), and a Fund Controller for
the Manager.
Robert G. Zack, Assistant Secretary; Age: 49
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of SSI (since May 1985), and SFSI
(since November 1989); Assistant Secretary of Oppenheimer Millennium Funds plc
(since October 1997); an officer of other Oppenheimer funds.
o Remuneration of Directors. All officers of the Fund and Ms. Macaskill, a
Director, are officers or directors of the Manager and receive no salary or fee
from the Fund. The remaining Directors of the Fund received the total amounts
shown below from (i) the Fund during its fiscal year ended November 30, 1997 and
(ii) other investment companies (or series thereof) managed by the Manager and
the Sub-Adviser, paid during the calendar year ended December 31, 1997.
Pension or
Retirement
Aggregate Benefits Estimated Total
Compensation Accrued as Annual
Compensation
from the Part of Fund Benefits Upon From Fund
Name of Person Fund(1) Expenses Retirement Complex(2)
Paul Y. Clinton $7,340 None None $68,379
Thomas W. Courtney $7,340 None None $68,379
Lacy B. Herrmann $6,790 None None $63,154
George Loft $7,340 None None $68,379
- ----------------------
(1) For the purpose of the chart above, "Fund Complex" includes the Oppenheimer
Quest Funds (including the Fund), the Oppenheimer Rochester
Funds, Oppenheimer MidCap Fund and three other
funds advised by the Sub-Adviser (the "Sub-Adviser Funds"). For these purposes,
each series constitutes a separate fund. Messrs. Clinton and Courtney served as
directors or trustees of two Sub- Adviser Funds, for which they are to receive
$49,250 and $49,250, respectively, and Messrs. Herrmann and Loft served as a
directors or trustees of three Sub-Adviser Funds, for which they are to receive
$45,388 and $50,688, respectively. Effective April 1997, Messrs. Herrmann and
Loft resigned as trustees from the third Sub-Adviser fund.
Deferred Compensation Plan. The Board of Directors has adopted a Deferred
Compensation plan for disinterested Directors that enables a Director to elect
to defer receipt of all or a portion of the annual fees they are entitled to
receive from the Fund. Under the plan, the compensation deferred by a Director
is periodically adjusted as though an equivalent amount had been invested in
shares of one or more Oppenheimer funds selected by the Director. The amount
paid to the Director under the plan will be determined based upon the
performance of the selected funds. Deferral of Directors' fees under the plan
will not materially affect the Fund's assets, liabilities or net income per
share. The plan will not obligate the Fund to retain the services of any
Director or to pay any particular level of compensation to any Director.
Pursuant to an Order issued by the SEC, the Fund may, without shareholder
approval, invest in the funds selected by the Director under the plan for the
limited purpose of determining the value of the Director's deferred fee account.
o Major Shareholders. As of March 2, 1998, no person owned of record or
was known by the Fund to own beneficially 5% or more of the Fund's outstanding
Class A, Class B or Class C shares except: Unified Advisors, Inc., 429 N.
Pennsylvania St., Indianapolis, Indiana 46204-1873 which owned of record
4,921,378.087 Class A shares (approximately 32.22% of the Class A shares then
outstanding) and Merrill Lynch Pierce Fenner & Smith, Inc., 4800 Deer Lake Drive
East, Floor 3, Jacksonville, Florida 32246-6484 which owned of record
252,813.763 Class C shares (approximately 10.39% of the Class C shares then
outstanding).
The Manager and its Affiliates. The Manager is wholly-owned by Oppenheimer
Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts
Mutual Life Insurance Company. 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 an officer and Director of the Fund.
The Manager and the Fund have a Code of Ethics. In addition to having its
own Code of Ethics, the Sub-Adviser is obligated to report to the Manager any
violations of the Sub-Adviser's Code of Ethics relating to the Fund. The Code of
Ethics is designed to detect and prevent improper personal trading by certain
employees, including the Fund's portfolio manager, who is an employee of the
Sub-Adviser, that would compete with or take advantage of the Funds' portfolio
transactions. Compliance with the Code of Ethics is carefully monitored and
strictly enforced by the Manager.
o Portfolio Management. The Portfolio Managers of the Fund are
Pierre Daviron and Richard J. Glasebrook, II, who are principally responsible
for the day-to-day management of the
Fund's portfolio. Their backgrounds are described in the Prospectus under
"Portfolio Managers".
o The Investment Advisory Agreement. The Manager acts as investment
adviser to the Fund pursuant to the terms of an Investment Advisory Agreement
dated May 29, 1997, which replaced the Investment Advisory Agreement dated as of
November 22, 1995. 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 Investment Company Act) and who have no
direct or indirect financial interest in such agreement on February 4, 1997 and
the shareholders of the Fund at a meeting held for that purpose on May 29, 1997.
The Sub-Adviser previously served as the Fund's investment adviser from the
Fund's inception (July 2, 1990) to November 22, 1995.
Under the Investment Advisory Agreement, the Manager acts as the
investment adviser for the Fund and supervises the investment program of the
Fund. The Investment Advisory Agreement also provides that the Manager , at its
own expense, will provide and supervise the activities of all administrative and
clerical personnel as shall be required to provide effective corporate
administration for the Fund to the extent such services are not being provided
under the Administration Agreement described below.
Expenses not assumed by the Manager under the Investment Advisory
Agreement or paid by the Distributor under the General Distributor's Agreement
will be paid by the Fund. Certain expenses are further allocated to certain
classes of shares of a series as explained in the Prospectus and under "How to
Buy Shares," below. The Investment Advisory Agreement lists examples of expenses
paid by the Fund, including interest, taxes, brokerage commissions, insurance
premiums, fees of non- interested Directors, legal and audit expenses, transfer
agent and custodian expenses, share issuance costs, certain printing and
registration costs, and non-recurring expenses, including litigation. For the
fiscal years ended November 30, 1996 and 1997 the Fund paid the Manager
$1,591,600 and $2,448,836, respectively, in management fees.
The Investment Advisory Agreement provides that in the absence of 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 for any loss resulting from good faith errors or
omissions 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" or
"Quest For Value" in connection with its other investment companies for which it
may act as an investment adviser or general distributor. If the Manager shall no
longer act as investment adviser to a Fund, the right of the Fund to use
"Oppenheimer" or "Quest For Value" as part of its name may be withdrawn.
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 Funds
provided that the Fund is not required to pay any additional fees for such
services. The Manager has retained the Sub-Adviser pursuant to a separate
Subadvisory Agreement, dated as of November 5, 1997, with respect to the Fund as
described below, which replaced the Subadvisory Agreement dated as of November
22, 1995.
o Fees Paid Under the Prior Investment Advisory Agreement. The Sub-Adviser
served as investment adviser to the Fund from the inception of the Fund (July 2,
1990) until November 22, 1995. Under the prior Investment Advisory Agreement,
the total advisory fees accrued or paid by the Fund were $1,290,224 for the
fiscal year ended November 30, 1995.
o The Subadvisory Agreement. The Subadvisory Agreement provides that the
Sub-Adviser 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, the Sub-Adviser agrees not to
change the Portfolio Manager of the Fund without the written approval of the
Manager and to provide assistance 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 Investment Company Act) and who have no direct or indirect
financial interest in such agreements, on February 28, 1997 and by the
shareholders of the Fund at a meeting held for that purpose on May 29, 1997.
Under the Subadvisory Agreement, the Manager will pay the Sub-Adviser 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 from the Fund based on the total net assets of the Fund as of
November 22, 1995 (the "Base Amount") plus 30% of the investment advisory 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, the Sub-Adviser 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.
The Sub-Adviser is a majority owned subsidiary of Oppenheimer Capital, a
registered investment advisor, whose employees perform all investment advisory
services provided to the Fund by the Sub-Adviser. On November 4, 1997, PIMCO
Advisors L.P. ("PIMCO Advisors"), a registered investment adviser with $125
billion in assets under management through various subsidiaries and affiliates,
acquired control of Oppenheimer Capital and the Sub-Adviser. On November 5,
1997, the new Sub-advisory Agreement between the Sub-Adviser and the Manager
became effective. On November 30, 1997, Oppenheimer Capital merged with a
subsidiary of PIMCO Advisors and, as a result, Oppenheimer Capital and the
Sub-Adviser became indirect wholly-owned subsidiaries of PIMCO Advisors. PIMCO
Advisors has two general partners: PIMCO Partners, G.P., a California general
partnership ("PIMCO GP"), and PIMCO Advisors Holdings L.P. (formerly Oppenheimer
Capital, L.P.), an NYSE-listed Delaware limited partnership of which PIMCO GP is
the sole general partner.
PIMCO GP beneficially owns or controls (through its general partner
interest in Oppenheimer Capital, L.P.) greater than 80% of the units of limited
partnership ("Units") of PIMCO Advisors. PIMCO GP has two general partners. The
first of these is Pacific Investment Management Company, a wholly-owned
subsidiary of Pacific Financial Asset Management Company, which is a direct
subsidiary of Pacific Life Insurance Company ("Pacific Life").
The managing general partner of PIMCO GP is PIMCO Partners L.L.C.
("PPLLC"), a California limited liability company. PPLLC's members are the
Managing Directors (the "PIMCO Managers") of Pacific Investment Management
Company, a subsidiary of PIMCO Advisors (the "PIMCO Subpartnership"). The PIMCO
Managers are: William H. Gross, Dean S. Meiling, James F. Muzzy, William F.
Podlich, III, Brent R. Harris, John L. Hague, William S. Thompson Jr., William
C. Powers, David H. Edington, Benjamin Trosky, William R. Benz, II and Lee R.
Thomas, III.
PIMCO Advisors is governed by a Management Board, which consists of
sixteen members, pursuant to a delegation by its general partners. PIMCO GP has
the power to designate up to nine members of the Management Board and the PIMCO
Subpartnership, of which the PIMCO Managers are the Managing Directors, has the
power to designate up to two members. In addition, PIMCO GP, as the controlling
general partner of PIMCO Advisors, has the power to revoke the delegation to the
Management Board and exercise control of PIMCO Advisors. As a result, Pacific
Life and/or the PIMCO Managers may be deemed to control PIMCO Advisors. Pacific
Life and the PIMCO Managers disclaim such control.
o The Administration Agreement. The Manager acts as the Fund's
administrator pursuant to an Administration Agreement as of May 29, 1997, which
replaced the Administration Agreement dated as of November 22, 1995. The
Administration Agreement provides that the Manager will provide administrative
services for the Fund, including determination of the Fund's net asset value,
compilation and maintenance of books and records, preparation of proxy materials
and semi-annual reports, preparation of such financial or other information
required for the Fund's reports to the Securities and Exchange Commission and
respond to or refer to the Fund's officers or transfer agents, shareholders'
inquiries relating to the Fund. Further, as administrator, the Manager will
furnish the Fund with office space, facilities and equipment and arrange for its
employees to serve as officers of the Fund. The Administration Agreement was
approved by the Fund's directors on February 4, 1997 and by the shareholders at
a meeting called for that purpose on May 29, 1997.
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 22, 1995, OpCap Advisors served as administrator for the
Fund. For the fiscal year ended November 30, 1995 the total administrative fees
accrued or paid by the Fund to OpCap Advisors under the Prior Administration
Agreement were $430,074. For the fiscal years ended November 30, 1996 and 1997
the total administrative fees accrued or paid by the Fund to Manager under the
current Administration Agreement were $540,533 and $816,450.
o The Distributor. Under a General Distributor's Agreement with the Fund
dated as of November 22, 1995, the Distributor acts as the Fund's principal
underwriter in the continuous public offering of its 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. During the Fund's fiscal year ended
November 30, 1997, the aggregate amount of sales charges on sales of the Fund's
Class A shares was $1,030,743 of which the Distributor and affiliated brokers
retained $297,948. During the fiscal year ended November 30, 1997, the
Distributor received contingent deferred sales charges of $109,830, upon
redemption of Class B shares, and received contingent deferred sales charges of
$14,818, upon redemption of Class C shares. 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.
o The Transfer Agent. OppenheimerFunds Services acts as the Fund's
Transfer Agent pursuant to a Transfer Agency and Service Agreement dated
November 22, 1995. Pursuant to the Agreement, the Transfer Agent is responsible
for maintaining the Fund's shareholder registry and shareholder accounting
records, and for shareholder servicing and administrative functions. As
compensation therefor, the Fund is obligated to pay the Transfer Agent an annual
maintenance fee for each Fund shareholder account and reimburse the Transfer
Agent for its out of pocket expenses.
o Shareholder Servicing Agent for Certain Shareholders. Unified Management
Corporation (1-800-346-4601) is the shareholder servicing agent of the Fund for
former shareholders of the AMA Family of Funds and clients of AMA Investment
Advisers, Inc. (which had been the investment adviser of AMA Family of Funds)
who acquire shares of any Oppenheimer Quest Fund, and for (i) former
shareholders of the Unified Funds and Liquid Green Trusts, (ii) accounts which
participated or participate in a retirement plan for which Unified Investment
Advisers, Inc. or an affiliate acts as custodian or trustee, (iii) accounts
which have a Money Manager brokerage account, and (iv) other accounts for which
Unified Management Corporation is the dealer of record.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory and Subadvisory Agreement. The
Investment Advisory Agreement contains provisions relating to the selection of
broker-dealers ("brokers") for the Fund's portfolio transactions. The Manager
and the Sub-Adviser 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 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 its 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 Sub-Adviser, 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 the Sub-Adviser. 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
Sub-Adviser that the commissions are reasonable in relation to the services
provided, viewed either in terms of that transaction or the Manager's or the
Sub-Adviser'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 Sub- Adviser for the benefit of the Fund or other of its advisory
clients. To show that the determinations were made in good faith, the Manager or
any Sub-Adviser 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 rules of the SEC.
In addition, the Subadvisory Agreement permits the Sub-Adviser to enter
into "soft dollar" arrangements through the agency of third parties to obtain
services for the Fund. Pursuant to these arrangements, the Sub-Adviser 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 in compliance with
applicable law.
Description of Brokerage Practices. 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.
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 Fund and/or other accounts of the Manager or the Sub-Adviser;
information received in connection with directed orders of other accounts
managed by the Manager or the Sub- Adviser or its affiliates may or may not be
useful to one or more of the Funds. 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 the Sub-Adviser, to
make available additional views for consid eration and comparison, and to enable
the Manager or the Sub-Adviser to obtain market information for the valuation of
securities held in the 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.
The Fund will not purchase any securities from or sell any securities to an
affiliated broker-dealer acting as principal for its own account.
The Sub-Adviser 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 the Sub-Adviser
to cause purchase or sale transactions to be allocated among the Fund and others
whose assets it manages in such manner as it deems equitable. 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 portfolios of each 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
the Sub-Adviser 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 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, 1995, 1996
and 1997. Prior to November 3, 1997, Oppenheimer & Co., Inc. ("OpCo"), a
broker-dealer, was an affiliate of the Sub-Adviser.
<TABLE>
<CAPTION>
For the Total Brokerage Commissions Total Amount of Transactions
Fiscal Year Brokerage Paid to Opco Where Brokerage
Ended Commissions Dollar Paid to Opco
November 30, Paid Amounts % Dollar Amounts %
<S> <C> <C> <C> <C> <C> <C>
1995 $644,312 $27,013 4.19% $ 22,043,449 10.90%
1996 $600,532 $25,132 4.18% $ 19,646,075 9.15%
1997 $598,916 $30,571 5.10 % $31,526,849 12.20%
</TABLE>
During the Fund's fiscal year ended November 30, 1997, $11,940 was paid by
the Fund to brokers as commissions in return for research services; the
aggregate dollar amount of those transactions was $9,130,868.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to time the
"average annual total return," "cumulative total return" and "total return at
net asset value" of an investment in a class of shares of the Fund may be
advertised. An explanation of how these total returns are calculated for each
class and the components of those calculations is set forth below.
The Fund's advertisements of its performance data must, under applicable
rules of the SEC, include the average annual total returns for each advertised
class of shares of the Fund for the 1, 5, and 10-year periods (or the life of
the class, if less) ending as of the most recently-ended calendar quarter prior
to the publication of the advertisement. This enables an investor to compare the
Fund's performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using such information
as a basis for comparison with other investments. An investment in the Fund is
not insured; its returns and share prices are not guaranteed and normally will
fluctuate on a daily basis. When redeemed, an investor's shares may be worth
more or less than their original cost. Returns for any given past period are not
a prediction or representation by the Fund of future returns. The returns of
Class A, Class B and Class C shares of the Fund are affected by portfolio
quality, the type of investments the Fund holds and its operating expenses
allocated to the particular class.
o Average Annual Total Returns. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n") to achieve an Ending Redeemable Value ("ERV") of
that investment, according to the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
The "average annual total returns" on an investment in Class A shares of
the Fund (using the method described above) for the one and five year periods
ended November 30, 1997 and for the period from July 2, 1990 (commencement of
operations) to November 30, 1997 were 9.56%, 14.69% and 10.17%, respectively.
The average annual total return on Class B shares for the one-year period ended
November 30, 1997 and for the period September 1, 1993 (commencement of the
public offering of the class) through November 30, 1997 were 10.61% and 12.90%,
respectively. The average annual total return on Class C shares for the one-year
period ended November 30, 1997 and for the period September 1, 1993
(commencement of the public offering of the class) through November 30, 1997
were 14.64% and 13.16%, respectively.
o Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown at net asset value, as
described below). Prior to November 24, 1995, the maximum initial sales charge
on Class A shares was 5.50%. For Class B shares, the payment of the applicable
contingent deferred sales charge (5.0% for the first year, 4.0% for the second
year, 3.0% for the third and fourth years, 2.0% for the fifth year, 1.0% for the
sixth year, and none thereafter) is applied to the investment result for the
period shown (unless the total return is shown at net asset value, as described
below). For Class C shares, the 1.0% contingent deferred sales charge is applied
to the investment result for the one-year period (or less). Total returns also
assume that all dividends and capital gains distributions during the period are
reinvested to buy additional shares at net asset value per share, and that the
investment is redeemed at the end of the period.
The "cumulative total return" on Class A shares for the period from July
2, 1990 (commencement of operations) to November 30, 1997 was 105.04%. The
cumulative total return on Class B shares for the period from September 1, 1993
(commencement of the public offering of the class) through November 30, 1997 was
67.45%. The cumulative total return on Class C shares for the period from
September 1, 1993 (commencement of the public offering of the class) through
November 30, 1997 was 69.06%.
o Total Returns at Net Asset Value. From time to time the Fund may also
quote an "average annual total return at net asset value" or a "cumulative total
return at net asset value" for Class A, Class B or Class C shares. Each is based
on the difference in net asset value per share at the beginning and the end of
the period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.
The average annual total returns at net asset value on the Fund's Class A
shares for the one and five year periods ended November 30, 1997 and for the
period from July 2, 1990 (commencement of operations) to November 30, 1997 were
16.24%, 16.06% and 11.06%, respectively. The cumulative total return at net
asset value on the Fund's Class A shares for the period July 2, 1990 through
November 30, 1997 was 117.55%.
The average annual total returns at net asset value on the Fund's Class B
shares for the one year period ended November 30, 1997 and for the period from
September 1, 1993 (commencement of the public offering of the class) through
November 30, 1997 were 15.61% and 13.22%, respectively. The cumulative total
return at net asset value on the Fund's Class B shares for the period September
1, 1993 through November 30, 1997 was 69.45%.
The average annual total returns at net asset value on the Fund's Class C
shares for the one-year period ended November 30, 1997 and for the period
September 1, 1993 (commencement of the public offering of the class) through
November 30, 1997 were 15.64% and 13.16%, respectively. The cumulative total
return at net asset value on the Fund's Class C shares for the period September
1, 1993 through November 30, 1997 was 69.06%.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B and/or Class C shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent mutual fund
monitoring service. Lipper monitors the performance of regulated investment
companies, including the Fund, and ranks their performance for various periods
based on categories relating to investment objectives. The performance of the
Fund is ranked against (i) all other funds, (ii) all other "global" funds and
(iii) all other "global" funds in a specific size category. The Lipper
performance rankings are based on total returns that include the reinvestment of
capital gain distributions and income dividends but do not take sales charges or
taxes into consideration.
From time to time the Fund may publish the star ranking of the performance
of its Class A, Class B or Class C shares by Morningstar Inc. ("Morningstar"),
an independent mutual fund monitoring service. Morningstar ranks mutual funds
monthly in broad investment categories: domestic stock funds, international
stock funds, taxable bond funds and municipal bond funds, based on risk-adjusted
total investment returns. The Fund is ranked among global funds. Investment
return measure a fund's or class's one, three, five and ten-year average annual
total returns (depending on the inception of the fund or class) in excess of
90-day U.S. Treasury bill monthly returns after considering the fund's sales
charges and expenses. Risk measure a fund's class performance below 90-day U.S.
Treasury bill returns. Risk and investment return are combined to produce star
rankings reflecting performance relative to the average fund in the fund's
category. Five stars is the "highest" ranking (top 10%), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is "below
average" (next 22.5%) and one star is "lowest" (bottom 10%). The current star
rankings is the fund's or class's 3-year ranking or its combined 3 and 5-year
ranking (weighted 60%/40% respectively, or its combined 3-,5-and 10-year ranking
(weighted 40%, 30% and 30%, respectively) depending on the inception of the fund
or class. Rankings are subject to change monthly. From time to time, the Fund
may include in its advertisements and sales literature performance information
about the Fund cited in newspapers and other periodicals, such as The New York
Times, which may include performance quotations from other sources, including
Lipper.
The Fund may also compare its performance to that of other funds in its
Morningstar category. In addition to its star rankings, Morningstar also
categorizes and compares a fund's 3-year performance based on Morningstar's
classification of the fund's investments and investment style, rather than how a
fund defines its investment objective. Morningstar's four broad categories are
each further subdivided into categories based on types of investments and
investment styles. Those comparison by Morningstar are based on the same risk
and return measurements as its star rankings but do not consider the effect of
sales charges.
The total return on an investment in the Fund's Class A, Class B or Class
C shares may be compared with performance for the same period of the Morgan
Stanley World Index, an unmanaged index of issuers on the stock exchanges of 20
foreign countries and the United States and widely recognized as a measure of
global stock market performance. The performance of such Index includes a factor
for the reinvestment of dividends but does not reflect expenses or taxes. The
performance of the Fund's Class A, Class B or Class C shares may also be
compared in publications to (i) the performance of various market indices or to
other investments for which reliable performance data is available, and (ii) to
averages, performance rankings or other benchmarks prepared by recognized mutual
fund statistical services.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A, Class B or Class C shares. However, when
comparing total return of an investment in Class A, Class B and Class C shares
of the Fund, a number of factors should be considered before using such
information as a basis for comparison with other investments. For example, an
investor may also wish to compare the Fund's Class A, Class B or Class C return
to the returns on fixed income investments available from banks and thrift
institutions, such as certificates of deposit, ordinary interest-paying checking
and savings accounts, and other forms of fixed or variable time deposits, and
various other instruments such as Treasury bills. However, the Fund's returns
and share price are not guaranteed or insured by the FDIC or any other agency
and will fluctuate daily, while bank depository obligations may be insured by
the FDIC and may provide fixed rates of return, and Treasury bills are
guaranteed as to principal and interest by the U.S. government.
From time to time, the Fund's Manager may publish rankings or ratings of
the Manager (or Transfer Agent) or the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of shareholder/investor
services by third parties may compare the Oppenheimer funds' services to those
of other mutual fund families selected by the rating or ranking services and may
be based upon the opinions of the rating or ranking service itself, based on its
research or judgment, or based upon surveys of investors, brokers, shareholders
or others.
Distribution and Service Plans
The Fund has adopted separate Amended and Restated Distribution and
Service Plans and Agreements, each dated February 3, 1998, for Class A, Class B
and Class C shares of the Fund under Rule 12b-1 of the Investment Company Act
pursuant to which the Fund will compensate the Distributor for all or a portion
of its costs incurred in connection with the distribution and/or servicing of
the shares of that class, as described in the Prospectus. Each Plan has been
approved by a vote of the Board of Directors of the Fund, including a majority
of the Directors who are not "interested persons" (as defined in the Investment
Company Act) of the Fund and who have no direct or indirect financial interest
in the operation of the Fund's 12b-1 plans or in any related agreement
("Independent Directors"), cast in person at a meeting on February 3, 1998
called for the purpose, among others, of voting on that Plan. The Plans replace
the amended and restated distribution and service plans and agreements dated
November 22, 1996.
Under the Plans the Manager and the Distributor, in their sole discretion, from
time to time may use their own resources (which, in the case of the Manager, may
include profits from the advisory fee it receives from the Fund) to make
payments to brokers, dealers or other financial institutions (each is referred
to as a "Recipient" under the Plans) for distribution and administrative
services they perform at no cost to the Fund. 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.
Unless terminated as described below, each plan continues in effect from
year to year but only as long as such continuance is specifically approved at
least annually by the Fund's Board of Directors and its "Independent Directors"
by a vote cast in person at a meeting called for the purpose of voting on such
continuance. Any Plan may be terminated at any time by the vote of a majority of
the Independent Directors or by the vote of the holders of a "majority" (as
defined in the Investment Company Act) of the outstanding shares of that class.
No Plan may be amended to increase materially the amount of payments to be made
unless such amendment is approved by shareholders of the class affected by the
amendment. In addition, because Class B shares of the Fund automatically convert
into Class A shares after six years, the Fund is required by an SEC rule to
obtain the approval of Class B as well as Class A shareholders for a proposed
material amendment to the Class A Plan that would materially increase payments
under the 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 Board of Directors and the
Independent Directors.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Directors at least quarterly
detailing services rendered in connection with the distribution of the shares,
the amount of all payments made pursuant to each Plan and the purpose for which
the payments were made. The reports shall also include the distribution costs
for that quarter, and such costs for previous fiscal periods that are carried
forward, as explained in the Prospectus and below. 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 the 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 did 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
requirement for a minimum amount.
The Plans allow the service fee payments to be paid by the Distributor to
Recipients in advance for the first year Class B and Class C shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net assets of shares of that
class sold. An exchange of shares does not entitle the Recipient to an advance
service fee payment. In the event shares are redeemed during the first year such
shares are outstanding, the Recipient will be obligated to repay a pro rata
portion of such advance payment to the Distributor.
Although the Plans permit the Distributor to retain both the asset-based
sales charge and the service fee, or to pay Recipients the service fee on a
quarterly basis, without payment in advance, the Distributor presently intends
to pay the service fee to Recipients in the manner described above. A minimum
holding period may be established from time to time under the Plans by the
Board. Initially, the Board has set no minimum holding period. All payments
under the Class B and Class C Plans are subject to the limitations imposed by
the Conduct Rules of the National Association of Securities Dealers, Inc. on
payments of asset-based sales charges and service fees.
For the year ended November 30, 1997 (i) payments under the Plan for Class
A shares totaled $1,163,838 of which $308,247 was retained by the Distributor
and $190,803 was paid to an affiliate of the Distributor, (ii) payments made
under the Class B Plan totaled $671,438, of which $584,762 was retained by the
Distributor and $21,209 was paid to a dealer affiliated with the Distributor and
(iii) payments made under the Class C plan totaled $266,690, of which $160,673
was retained by the Distributor and $16,035 was paid to a dealer affiliated with
the Distributor.
The Plans provide for
the Distributor to be compensated at a flat rate, whether the Distributor's
expenses are more or less than the amounts paid by the Fund during that period.
The asset-based sales charges paid to the Distributor by the Fund under the
Plans are intended to allow the Distributor to recoup the cost of sales
commissions paid to authorized brokers and dealers at the time of sale, plus
financing costs, as described in the Prospectus. Such payments may also be used
to pay for the following expenses in connection with the distribution of shares:
(i) financing the advance of the service fee payment to Recipients under the
Plans, (ii) compensation and expenses of personnel employed by the Distributor
to support distribution of shares, and (iii) costs of sales literature,
advertising and prospectuses (other than those furnished to current
shareholders).
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C Shares. The
availability of three classes of shares permits the individual investor to
choose the method of purchasing shares that is more beneficial to the investor
depending on the amount of the purchase, the length of time the investor expects
to hold shares and other relevant circumstances. Investors should understand
that the purpose and function of the deferred sales charge and asset-based sales
charge with respect to Class B and Class C shares are the same as those of the
initial sales charge with respect to Class A shares. Any salesperson or other
person entitled to receive compensation for selling Fund shares may receive
different compensation with respect to one class of shares than another. The
Distributor will generally not accept any order for $500,000 or more of Class B
shares or $1 million or more of Class C shares, on behalf of a single investor
(not including dealer "street name" or omnibus accounts) because generally it
will be more advantageous for that investor to purchase Class A shares of the
Fund instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different shareholder
privileges and features. The net income attributable to Class B and Class C
shares and the dividends payable on Class B and Class C shares will be reduced
by incremental expenses borne solely by that class, respectively, including the
asset-based sales charges to which Class B and Class C shares are subject.
The conversion of Class B shares to Class A shares after six years is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax adviser, to the effect
that the conversion of Class B shares does not constitute a taxable event for
the holder under Federal income tax law. If such a revenue ruling or opinion is
no longer available, the automatic conversion feature may be suspended, in which
event no further conversions of Class B shares would occur while such suspension
remained in effect. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the holder, and absent such exchange, Class B shares might continue to
be subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares recognizes two
types of expenses. General expenses that do not pertain specifically to either
class are allocated pro rata to the shares of each class, based on the
percentage of the net assets of such class to the Fund's total net assets, and
then equally to each outstanding share within a given class. Such general
expenses include (i) management fees, (ii) legal, bookkeeping and audit fees,
(iii) printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, (iv) fees to Independent Directors, (v) custodian expenses, (vi)
share issuance costs, (vii) organization and start-up costs, (viii) interest,
taxes and brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to a class are
allocated equally to each outstanding share within that class. Such expenses
include (a) Distribution and Service Plan fees, (b) incremental transfer and
shareholder servicing agent fees and expenses, (c) registration fees and (d)
shareholder meeting expenses, to the extent that such expenses pertain to a
specific class rather than to the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values per share of
Class A, Class B and Class C shares of the Fund are determined as of the close
of business of The New York Stock Exchange (the "Exchange") on each day that the
Exchange is open, by dividing the value of the Fund's net assets attributable to
that class by the total number of Fund shares of that class outstanding. The
Exchange normally closes at 4:00 P.M. New York time, but may close earlier on
some other days (for example, in case of weather emergencies or on days falling
before a holiday). The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's Day, Martin Luther
King Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.
The Fund may invest a substantial portion of its assets in foreign securities
primarily listed on foreign exchanges which may trade on Saturdays or customary
U.S. business holidays on which the Exchange is closed. Because the Fund's net
asset values will not be calculated on those days, the Fund's net asset value
per share may be significantly affected on such days when shareholders may not
purchase or redeem shares.
The Fund's Board of Directors has established procedures for the valuation
of the Fund's securities, generally as follows: (i) equity securities traded on
a U.S. securities exchange or on the Automated Quotation System ("NASDAQ") of
the Nasdaq Stock Market, Inc. for which last sale information is regularly
reported are valued at the last reported sale price on the principal exchange
for such security or NASDAQ that day (the "Valuation Date") or, in the absence
of sales that day, at the last reported sale price preceding the Valuation Date
if it is within the spread of the closing "bid" and "asked" prices on the
Valuation Date or, if not, the closing "bid" price on the Valuation Date; (ii)
equity securities traded on a foreign securities exchange are valued generally
at the last sales price available to the pricing service approved by the Fund's
Board of Directors or to the Manager as reported by the principal exchange on
which the security is traded at its last trading session on or immediately
preceding the Valuation Date, or, if unavailable, at the mean between "bid" and
"asked" prices obtained from the principal exchange or two active market makers
in the security on the basis of reasonable inquiry; (iii) a non-money market
fund will value (x) debt instruments that had a maturity of more than 397 days
when issued, (y) debt instruments that had a maturity of 397 days or less when
issued and have a remaining maturity in excess of 60 days, and (z) non-money
market type debt instruments that had a maturity of 397 days or less when issued
and have a remaining maturity of sixty days or less, at the mean between "bid"
and "asked" prices determined by a pricing service approved by the Fund's Board
of Directors or, if unavailable, obtained by the Manager from two active market
makers in the security on the basis of reasonable inquiry; (iv) money
market-type debt securities held by a non-money market fund that had a maturity
of less than 397 days when issued and have a remaining maturity of 60 days or
less, and debt instruments held by a money market fund that have a remaining
maturity of 397 days or less, shall be valued at cost, adjusted for amortization
of premiums and accretion of discount; and (v) securities (including restricted
securities) not having readily-available market quotations are valued at fair
value determined under the Board's procedures. If the Manager is unable to
locate two market makers willing to give quotes (see (ii) and (iii) above), the
security may be priced at the mean between the "bid" and "asked" prices provided
by a single active market maker (which in certain cases may be the "bid" price
if no "asked" price is available) provided that the Manager is satisfied that
the firm rendering the quotes is reliable and that the quotes reflect the
current market value.
In the case of U.S. Government securities and mortgage-backed securities,
where last sale information is not generally available, such pricing procedures
may include "matrix" comparisons to the prices for comparable instruments on the
basis of quality, yield, maturity and other special factors involved. The
Manager may use any of the pricing services approved by the Board of Directors
to price U.S. Government securities or mortgage-backed securities, for which
last sale information is not generally available. The Manager will monitor the
accuracy of such pricing services, which may include comparing prices used for
portfolio evaluation to actual sales prices of selected securities.
Trading in securities on European and Asian exchanges and over-the-counter
markets is normally completed before the close of the Exchange. Events affecting
the values of foreign securities traded in such securities markets that occur
between the time their prices are determined and the close of the Exchange will
not be reflected in the Fund's calculation of its net asset value unless the
Board of Directors or the Manager, under procedures established by the Board of
Directors, determines that the particular event is likely to effect a material
change in the value of a security. Foreign currency, including forward
contracts, will be valued at the closing price in the London foreign exchange
market that day as provided by a reliable bank, dealer or pricing service. The
values of securities denominated in foreign currency will be converted to U.S.
dollars at the closing price in the London foreign exchange market that day as
provided by a reliable bank, dealer or pricing service.
Puts, calls and futures are valued at the last sale price on the principal
exchanges on which they are traded or on NASDAQ, as applicable, as determined by
a pricing service approved by the Board of Directors or by the Manager. If there
were no sales that day, value shall be the last sale price on the preceding
trading day if it is within the spread of the closing "bid" and "asked" prices
on the principal exchange or on NASDAQ on the valuation date, or, if not, value
shall be the closing "bid" price on the principal exchange or on NASDAQ on the
valuation date. If the put, call or future is not traded on an exchange or on
NASDAQ, it shall be valued at the mean between "bid" and "asked" prices obtained
by the Manager from two active market makers (which in certain cases may be the
"bid" price if no "asked" price is available).
When the Fund writes an option, an amount equal to the premium received is
included in the Fund's Statement of Assets and Liabilities as an asset, and an
equivalent credit is included in the liability section. Credit is adjusted
("marked-to-market") to reflect the current market value of the option. In
determining the Fund's gain on investments, if a call or put written by the Fund
is exercised, the proceeds are increased by the premium received. If a call or
put written by the Fund expires, the Fund has a gain in the amount of the
premium; if the Fund enters into a closing purchase transaction, it will have a
gain or loss depending on whether the premium received was more or less than the
cost of the closing transaction. If the Fund exercises a put it holds, the
amount the Fund receives on its sale of the underlying investment is reduced by
the amount of premium paid by the Fund.
AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25.00. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House ("ACH")
transfer to buy the shares. Dividends will begin to accrue on shares purchased
by the proceeds of ACH transfers on the business day the Fund receives Federal
Funds for the purchase through the ACH system before the close of The New York
Stock Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier
on certain days. If Federal Funds are received on a business day after the close
of the Exchange, the shares will be purchased and dividends will begin to accrue
on the next regular business day. The proceeds of ACH transfers are normally
received by the Fund 3 days after the transfers are initiated. The Distributor
and the Fund are not responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Rights of Accumulation and Letters
of Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No sales
charge is imposed in certain other circumstances described in the Prospectus
because the Distributor or broker or dealer incurs little or no selling
expenses. The term "immediate family" refers to one's spouse, children,
grandchildren, parents, grandparents, parents-in- law, sons- and
daughters-in-law, aunts, uncles, nieces, nephews, siblings, a sibling's spouse
and a spouse's siblings. Relations by virtue of a remarriage (step-children,
step-parents, etc.) are included.
o The Oppenheimer Funds. The Oppenheimer funds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor and
include the following:
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Discovery Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Multiple Strategies Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer International Bond Fund
Oppenheimer International Small Company Fund
Oppenheimer Enterprise Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Bond Fund For Growth
Limited Term New York Municipal Fund
Rochester Fund Municipals
Oppenheimer Disciplined Value Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Developing Markets Fund
Oppenheimer MidCap Fund
Oppenheimer Real Asset Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of each
of the Oppenheimer funds except Money Market Funds (under certain circumstances
described herein, redemption proceeds of Money Market Fund shares may be subject
to a contingent deferred sales charge).
o Letters of Intent. A Letter of Intent ("Letter") is an investor's
statement in writing to the Distributor of the intention to purchase Class A
shares or Class A and Class B shares (or shares of either class) of the Fund
(and other eligible Oppenheimer funds) during the 13-month period from the
investor's first purchase pursuant to the Letter (the "Letter of Intent
period"), which may, at the investor's request, include purchases made up to 90
days prior to the date of the Letter. The Letter states the investor's intention
to make the aggregate amount of purchases (excluding any purchases made by
reinvestment of dividends or distributions or purchases made at net asset value
without sales charge), which together with the investor's holdings of such funds
(calculated at their respective public offering prices calculated on the date of
the Letter) will equal or exceed the amount specified in the Letter. This
enables the investor to count the shares to be purchased under the Letter of
Intent to obtain the reduced sales charge rate on purchases of Class A shares of
the Fund (and other Oppenheimer funds) that applies under the Right of
Accumulation to current purchases of Class A shares. Each purchase of Class A
shares under the Letter will be made at the public offering price (including the
sales charge) that applies to a single lump-sum purchase of shares in the amount
intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of Intent
period, when added to the value (at offering price) of the investor's holdings
of shares on the last day of that period, do not equal or exceed the intended
purchase amount, the investor agrees to pay the additional amount of sales
charge applicable to such purchases, as set forth in "Terms of Escrow," below
(as those terms may be amended from time to time). The investor agrees that
shares equal in value up to 5% of the intended purchase amount will be held in
escrow by the Transfer Agent subject to the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the Prospectus, this Statement of Additional
Information and the Application used for such Letter of Intent, and if such
terms are amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the Transfer
Agent will not hold shares in escrow. If the intended purchase amount under the
Letter entered into by an OppenheimerFunds prototype 401(k) plan is not
purchased by the plan by the end of the Letter of Intent period, there will be
no adjustment of commissions paid to the broker-dealer or financial institution
of record for accounts held in the name of that plan.
If the total eligible purchases made during the Letter of Intent period do
not equal or exceed the intended purchase amount, the commissions previously
paid to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to actual
total purchases. If total eligible purchases during the Letter of Intent period
exceed the intended purchase amount and exceed the amount needed to qualify for
the next sales charge rate reduction set forth in the applicable prospectus, the
sales charges paid will be adjusted to the lower rate, but only if and when the
dealer returns to the Distributor the excess of the amount of commissions
allowed or paid to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the Distributor
will be used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly after the
Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter, shares
redeemed by the investor prior to the termination of the Letter of Intent period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.
o Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary) made
pursuant to a Letter, shares of the Fund equal in value up to 5% of the intended
purchase amount specified in the Letter shall be held in escrow by the Transfer
Agent. For example, if the intended purchase amount is $50,000, the escrow shall
be shares valued in the amount of $2,500 (computed at the public offering price
adjusted for a $50,000 purchase). Any dividends and capital gains distributions
on the escrowed shares will be credited to the investor's account.
2. If the total minimum investment purchase amount specified under the
Letter is completed within the thirteen-month Letter of Intent period, the
escrowed shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended purchase amount
specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid
and the amount of sales charges which would have been paid if the total amount
purchased had been made at a single time. Such sales charge adjustment will
apply to any shares redeemed prior to the completion of the Letter. If such
difference in sales charges is not paid within twenty days after a request from
the Distributor or the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares necessary to
realize such difference in sales charges. Full and fractional shares remaining
after such redemption will be released from escrow. If a request is received to
redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for redemption any
or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include (a) Class A shares
sold with a front-end sales charge or subject to a Class A contingent deferred
sales charge, (b) Class B shares of other Oppenheimer funds acquired subject to
a contingent deferred sales charge, and (c) Class A shares acquired in exchange
for either (i) Class A shares of one of the other Oppenheimer funds that were
acquired subject to a Class A initial or contingent deferred sales charge or
(ii) Class B shares of one of the other Oppenheimer funds that were acquired
subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares," and the escrow will
be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank account, a
check (minimum $25) for the initial purchase must accompany the application.
Shares purchased by Asset Builder Plan payments from bank accounts are subject
to the redemption restrictions for recent purchases described in "How to Sell
Shares" in the Prospectus. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use those accounts for monthly automatic purchases
of shares of up to four other Oppenheimer funds. If you make payments from your
bank account to purchase shares of the Fund, your bank account will be
automatically debited normally four to five business days prior to the
investment dates selected in the Account Application. Neither the Distributor,
the Transfer Agent nor the Fund shall be responsible for any delays in
purchasing shares resulting from delays in ACH transmissions.
There is a front-end sales charge on the purchase of certain Oppenheimer
funds, or a contingent deferred sales charge may apply to shares purchased by
Asset Builder payments. An application should be obtained from the Distributor,
completed and returned, and a prospectus of the selected fund(s) should be
obtained from the Distributor or your financial advisor before initiating Asset
Builder payments. The amount of the Asset Builder investment may be changed or
the automatic investments may be terminated at any time by writing to the
Transfer Agent. A reasonable period (approximately 15 days) is required after
the Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans at any
time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's
shares (for example, when a purchase check is returned to the Fund unpaid)
causes a loss to be incurred when the net asset value of the Fund's shares on
the cancellation date is less than on the purchase date. That loss is equal to
the amount of the decline in the net asset value per share multiplied by the
number of shares in the purchase order. The investor is responsible for that
loss. If the investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the Distributor for that amount by redeeming
shares from any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
Retirement Plans. In describing certain types of employee benefit plans that may
purchase Class A shares without being subject to the Class A contingent differed
sales charge, the term "employee benefit plan" means any plan or arrangement,
whether or not "qualified" under the Internal Revenue Code, including, medical
savings accounts, payroll deduction plans or similar plans in which Class A
shares are purchased by a fiduciary or other person for the account of
participants who are employees of a single employer or of affiliated employers,
if the Fund account is registered in the name of the fiduciary or other person
for the benefit of participants in the plan.
The term "group retirement plan" means any qualified or non-qualified
retirement plan (including 457 plans, SEPs, SARSEPs, 403(b) plans other than
public school 403(b) plans, and SIMPLE plans) for employees of a corporation or
a sole proprietorship, members and employees of a partnership or association or
other organized group of persons (the members of which may include other
groups), if the group or association has made special arrangements with the
Distributor and all members of the group or association participating in or who
are eligible to participate in the plan(s) purchase Class A shares of the Fund
through a single investment dealer, broker, or other financial institution
designated by the group. "Group retirement plan" also includes qualified
retirement plans and non-qualified deferred compensation plans and IRAs that
purchase Class A shares of the Fund through a single investment dealer, broker,
or other financial institution, if that broker-dealer has made special
arrangements with the Distributor enabling those plans to purchase Class A
shares of the Fund at net asset value but subject to a contingent deferred sales
charge.
In addition to the discussion in the Prospectus relating to the ability of
Retirement Plans to purchase Class A shares at net asset value in certain
circumstances, there is no initial sales charge on purchases of Class A shares
of any one or more of the Oppenheimer funds by a Retirement Plan in the
following cases: (I) the recordkeeping for the Retirement Plan is performed on a
daily valuation basis by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill
Lynch") and, on the date the plan sponsor signs the Merrill Lynch recordkeeping
service agreement, the Retirement Plan has $3 million or more in assets invested
in mutual funds other than those advised or managed by Merrill Lynch Asset
Management, L.P. ("MLAM") that are made available pursuant to a Service
Agreement between Merrill Lynch and the mutual fund's principal underwriter or
distributor and in funds advised or managed by MLAM (collectively, the
"Applicable Investments"); or (ii) the recordkeeping for the Retirement Plan is
performed on a daily valuation basis by an independent record keeper whose
services are provided under a contract or arrangement between the Retirement
Plan and Merrill Lynch. On the date the plan sponsor signs the Merrill Lynch
record keeping service agreement, the Plan must have $3 million or more in
assets, excluding assets held in money market funds, invested in Applicable
Investments; or (iii) the Plan has 500 or more eligible employees, as determined
by the Merrill Lynch plan conversion manager on the date the plan sponsor signs
the Merrill Lynch record keeping service agreement.
If a Retirement Plan's records are maintained on a daily valuation basis
by Merrill Lynch or an independent record keeper under a contract or alliance
arrangement with Merrill Lynch, and if on the date the plan sponsor signs the
Merrill Lynch record keeping service agreement the Retirement Plan has less than
$3 million in assets, excluding money market funds, invested in Applicable
Investments, then the Retirement Plan may purchase only Class B shares of one or
more of the Oppenheimer funds. Otherwise, the Retirement Plan will be permitted
to purchase Class A shares of one or more of the Oppenheimer funds. Any of those
Retirement Plans that currently invest in Class B shares of the Fund will have
their Class B shares be converted to Class A shares of the Fund once the Plan's
Applicable Investments have reached $5 million.
Any redemptions of shares of the Fund held by Retirement Plans whose
records are maintained on a daily valuation basis by Merrill Lynch or an
independent record keeper under a contract with Merrill Lynch that are currently
invested in Class B shares of the Fund shall not be subject to the Class B CDSC.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information
below supplements the terms and conditions for redemptions set forth in the
Prospectus.
o Involuntary Redemptions. The Board of Directors has the right to
cause the involuntary redemption of the shares held in any Fund account if
the aggregate net asset value of those shares is
less than $200 or such lesser amount as the Board may fix. The Board of
Directors will not cause the involuntary redemption of shares in an account if
the aggregate net asset value of the shares has fallen below the stated minimum
solely as a result of market fluctuations. Should the Board elect to exercise
this right, it may also fix, in accordance with the Investment Company Act, and
provisions of Maryland law, the requirements for any notice to be given to the
shareholders in question (not less than 30 days), or the Board may set
requirements for granting permission to the Shareholder to increase the
investment, and set other terms and conditions so that the shares would not be
involuntarily redeemed.
Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of (i) Class A shares that
you purchased subject to an initial sales charge
or Class A contingent deferred sales charge, or (ii) Class B shares that were
subject to the Class B contingent deferred sales charge when you redeemed them.
This privilege does not apply to Class C shares. The reinvestment may be made
without sales charge only in Class A shares of the Fund or any of the other
Oppenheimer funds into which shares of the Fund are exchangeable as described in
"How to Exchange Shares" below, at the net asset value next computed after the
Transfer Agent receives the reinvestment order. The shareholder must ask the
Distributor for that privilege at the time of reinvestment. Any capital gain
that was realized when the shares were redeemed is taxable, and reinvestment
will not alter any capital gains tax payable on that gain. If there has been a
capital loss on the redemption, some or all of the loss may not be tax
deductible, depending on the timing and amount of the reinvestment. Under the
Internal Revenue Code, if the redemption proceeds of Fund shares on which a
sales charge was paid are reinvested in shares of the Fund or another of the
Oppenheimer funds within 90 days of payment of the sales charge, the
shareholder's basis in the shares of the Fund that were redeemed may not include
the amount of the sales charge paid. That would reduce the loss or increase the
gain recognized from the redemption. However, in that case the sales charge
would be added to the basis of the shares acquired by the reinvestment of the
redemption proceeds. The Fund may amend, suspend or cease offering this
reinvestment privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a contingent
deferred sales charge of any class at the time of transfer to the name of
another person or entity (whether the transfer occurs by absolute assignment,
gift or bequest, not involving, directly or indirectly, a public sale). The
transferred shares will remain subject to the contingent deferred sales charge,
calculated as if the transferee shareholder had acquired the transferred shares
in the same manner and at the same time as the transferring shareholder. If less
than all shares held in an account are transferred, and some but not all shares
in the account would be subject to a contingent deferred sales charge if
redeemed at the time of transfer, the priorities described in the Prospectus
under "How to Buy Shares" for the imposition of the Class B and Class C
contingent deferred sales charge will be followed in determining the order in
which shares are transferred. Distributions From Retirement Plans. Requests for
distributions from OppenheimerFunds- sponsored IRAs, 403(b)(7) custodial plans,
401(k) plans, or pension or profit-sharing plans should be addressed to
"Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its
address listed in "How To Sell Shares" in the Prospectus or on the back cover of
the Statement of Additional Information. The request must: (i) state the reason
for the distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the plan and
the Fund's other redemption requirements. Participants, other than self-employed
persons maintaining a plan account in their own name, in
OppenheimerFunds-sponsored prototype pension or profit-sharing or 401(k) plans
may not directly redeem or exchange shares held for their account under those
plans. The employer or plan administrator must sign the request. Distributions
from pension, profit sharing plans or 401(k) plans are subject to special
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed before the distribution may be made.
Distributions from retirement plans are subject to withholding requirements
under the Internal Revenue Code, and IRS Form W-4P (available from the Transfer
Agent) must be submitted to the Transfer Agent with the distribution request, or
the distribution may be delayed. Unless the shareholder has provided the
Transfer Agent with a certified tax identification number, the Internal Revenue
Code requires that tax be withheld from any distribution even if the shareholder
elects not to have tax withheld. The Fund, the Manager, the Distributor, the
Trustee and the Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not be
responsible for any tax penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is the Fund's agent to repurchase its shares from authorized dealers
or brokers on behalf of their customers. The shareholder should contact the
broker or dealer to arrange this type of redemption. The repurchase price per
share will be the net asset value next computed after the Distributor receives
the order placed by the dealer or broker, except that if the Distributor
receives a repurchase order from the dealer or broker after the close of The New
York Stock Exchange on a regular business day, it will be processed at that
day's net asset value, if the order was received by the dealer or broker from
its customer prior to the time the Exchange closes (normally, that is 4:00 P.M.,
but may be earlier on some days) and the order was transmitted to and received
by the Distributor prior to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been
redeemed upon the Distributor's receipt of the required redemption documents in
proper form, with the signature(s) of the registered owners guaranteed on the
redemption document as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(minimum $50) automatically on a monthly, quarterly, semi-annual or annual basis
under an Automatic Withdrawal Plan. Shares will be redeemed three business days
prior to the date requested by the shareholder for receipt of the payment.
Automatic withdrawals of up to $1,500 per month may be requested by telephone if
payments are to be made by check payable to all shareholders of record and sent
to the address of record for the account (and if the address has not been
changed within the prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on this basis.
Payments are normally made by check, but shareholders having AccountLink
privileges (see "How To Buy Shares") may arrange to have Automatic Withdrawal
Plan payments transferred to the bank account designated on the OppenheimerFunds
New Account Application or signature- guaranteed instructions. Shares are
normally redeemed pursuant to an Automatic Withdrawal Plan three business days
before the date you select in the Account Application. If a contingent deferred
sales charge applies to the redemption, the amount of the check or payment will
be reduced accordingly. The Fund cannot guarantee receipt of a payment on the
date requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an Automatic
Withdrawal Plan. Class B and Class C shareholders should not establish
withdrawal plans because of the imposition of the contingent deferred sales
charges on such withdrawals (except where the Class B and Class C contingent
deferred sales charges are waived as described in the Prospectus under "Waivers
of Class B and Class C Sales Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated below, as
well as the Prospectus. These provisions may be amended from time to time by the
Fund and/or the
Distributor. When adopted,
such amendments will automatically apply to existing Plans.
o Automatic Exchange Plans. Shareholders can authorize the Transfer Agent
(on the OppenheimerFunds Application or signature-guaranteed instructions) to
exchange a pre-determined amount of shares of the Fund for shares (of the same
class) of other Oppenheimer funds automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount
that may be exchanged to each other fund account is $25. Exchanges made under
these plans are subject to the restrictions that apply to exchanges as set forth
in "How to Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
o Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to
meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first and shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales
charge, to the extent necessary to make withdrawal payments. Depending upon the
amount withdrawn, the investor's principal may be depleted. Payments made under
withdrawal plans should not be considered as a yield or income on your
investment. It may not be desirable to purchase additional Class A shares while
making automatic withdrawals because of the sales charges that apply to
purchases when made. Accordingly, a shareholder normally may not maintain an
Automatic Withdrawal Plan while simultaneously making regular purchases of Class
A shares.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who executed the
Plan authorization and application submitted to the Transfer Agent. Neither the
Transfer Agent nor the Fund shall incur any liability to the Planholder for any
action taken or omitted by the Transfer Agent in good faith to administer the
Plan. Certificates will not be issued for shares of the Fund purchased for and
held under the Plan, but the Transfer Agent will credit all such shares to the
account of the Planholder on the records of the Fund. Any share certificates
held by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the account
may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made at
the net asset value per share determined on the redemption date. Checks or ACH
transfer payments of the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment (receipt of payment on the date selected cannot be guaranteed),
according to the choice specified in writing by the Planholder.
The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time in mailing such notification
for the requested change to be put in effect. The Planholder may, at any time,
instruct the Transfer Agent by written notice (in proper form in accordance with
the requirements of the then-current Prospectus of the Fund) to redeem all, or
any part of, the shares held under the Plan. In that case, the Transfer Agent
will redeem the number of shares requested at the net asset value per share in
effect in accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to the
Transfer Agent. A Plan may also be terminated at any time by the Transfer Agent
upon receiving directions to that effect from the Fund. The Transfer Agent will
also terminate a Plan upon receipt of evidence satisfactory to it of the death
or legal incapacity of the Planholder. Upon termination of a Plan by the
Transfer Agent or the Fund, shares that have not been redeemed from the account
will be held in uncertificated form in the name of the Planholder, and the
account will continue as a dividend- reinvestment, uncertificated account unless
and until proper instructions are received from the Planholder or his or her
executor or guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the Planholder
may request issuance of a portion of the shares in certificated form. Upon
written request from the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued without causing the
withdrawal checks to stop because of exhaustion of uncertificated shares needed
to continue payments. However, should such uncertificated shares become
exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act
as agent in
administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of Oppenheimer
funds having more than one class of shares may be exchanged only for shares of
the same class of other Oppenheimer funds. Shares of the Oppenheimer funds that
have a single class without a class designation are deemed "Class A" shares for
this purpose. All of the Oppenheimer funds offer Class A, B and C shares except
Oppenheimer Money Market Fund, Inc., Centennial Tax Exempt Trust, Centennial
Government Trust, Centennial New York Tax Exempt Trust, Centennial California
Tax Exempt Trust, Centennial Money Market Trust and Centennial America Fund,
L.P., which only offer Class A shares and Oppenheimer Main Street California
Municipal Fund which only offers Class A and Class B shares (Class B and Class C
shares of Oppenheimer Cash Reserves are generally available only by exchange
from the same class of shares of other Oppenheimer funds or through
OppenheimerFunds sponsored 401(k) plans). A current list showing which funds
offer which classes can be obtained by calling the distributor at
1-800-525-7048.
For accounts established on or before March 8, 1996 holding Class M shares
of Oppenheimer Bond Fund for Growth, Class M shares can be exchanged only for
Class A shares of other Oppenheimer funds. Exchanges to Class M shares of
Oppenheimer Bond Fund for Growth are permitted from Class A shares of
Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves that were
acquired by exchange from Class M shares. Otherwise no exchanges of any class of
any Oppenheimer fund into Class M shares are permitted.
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund purchased
without a sales charge may be exchanged for shares of Oppenheimer funds offered
with a sales charge upon payment of the sales charge (or, if applicable, may be
used to purchase shares of Oppenheimer funds subject to a contingent deferred
sales charge). However, shares of Oppenheimer Money Market Fund, Inc. purchased
with the redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 12 months prior
to that purchase may subsequently be exchanged for shares of other Oppenheimer
funds without being subject to an initial or contingent deferred sales charge,
whichever is applicable. To qualify for that privilege, the investor or the
investor's dealer must notify the Distributor of eligibility for this privilege
at the time the shares of Oppenheimer Money Market Fund, Inc. are purchased,
and, if requested, must supply proof of entitlement to this privilege.
Shares of the Fund acquired by reinvestment of dividends or distributions
from any other of the Oppenheimer funds (except Oppenheimer Cash Reserves) or
from any unit investment trust for which reinvestment arrangements have been
made with the Distributor may be exchanged at net asset value for shares of any
of the Oppenheimer funds. No contingent deferred sales charge is imposed on
exchanges of shares of any class purchased subject to a contingent deferred
sales charge. However, when Class A shares acquired by exchange of Class A
shares of other Oppenheimer funds purchased subject to a Class A contingent
deferred sales charge are redeemed within 12 months of the end of the calendar
month of the initial purchase of the exchanged Class A shares (18 months if the
shares were initially purchased prior to May 1, 1997), the Class A contingent
deferred sales charge is imposed on the redeemed shares (see "Class A Contingent
Deferred Sales Charge" in the Prospectus). The Class B contingent deferred sales
charge is imposed on Class B shares acquired by exchange if they are redeemed
within six years of the initial purchase of the exchanged Class B shares. The
Class C contingent deferred sales charge is imposed on Class C shares acquired
by exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares.
When Class B or Class C shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the imposition
of the Class B and Class C contingent deferred sales charges will be followed in
determining the order in which the shares are exchanged. Shareholders should
take into account the effect of any exchange on the applicability and rate of
any contingent deferred sales charge that might be imposed in the subsequent
redemption of remaining shares. Shareholders owning shares of more than one
class must specify whether they intend to exchange Class A, Class B or Class C
shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than one account. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may be less
than the number requested if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or this Statement of
Additional Information or would include shares covered by a share certificate
that is not tendered with the request. In those cases, only the shares available
for exchange without restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of, the
fund to which the exchange is to be made. For full or partial exchanges of an
account made by telephone, any special account features such as Asset Builder
Plans, Automatic Withdrawal Plans and retirement plan contributions will be
switched to the new account unless the Transfer Agent is instructed otherwise.
If all telephone lines are busy (which might occur, for example, during periods
of substantial market fluctuations), shareholders might not be able to request
exchanges by telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the "Redemption
Date"). Normally, shares of the fund to be acquired are purchased on the
Redemption Date, but such purchases may be delayed by either fund up to five
business days if it determines that it would be disadvantaged by an immediate
transfer of the redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may disadvantage it (for
example, if the receipt of multiple exchange requests from a dealer might
require the disposition of portfolio securities at a time or at
a price that might be
disadvantageous to the Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure that
the Fund selected is appropriate for his or her investment and should be aware
of the tax consequences of an exchange. For federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above, discusses some
of the tax consequences of reinvestment of redemption proceeds in such cases.
The Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax treatment
of the Fund's dividends and capital gains distributions is explained in the
Prospectus under the caption "Dividends, Capital Gains and Taxes." Special
provisions of the Internal Revenue Code govern the eligibility of the Fund's
dividends for the dividends-received deduction for corporate shareholders.
Long-term capital gains distributions are not eligible for the deduction. In
addition, the amount of dividends paid by the Fund which may qualify for the
deduction is limited to the aggregate amount of qualifying dividends that the
Fund derives from its portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be eligible for the
deduction on dividends paid on Fund shares held for 45 days or less. To the
extent the Fund's dividends are derived from gross income from option premiums,
interest income or short-term gains from the sale of securities or dividends
from foreign corporations, those dividends will not qualify for the deduction.
Under the Internal Revenue Code, by December 31 each year, the Fund must
distribute 98% of its taxable investment income earned from January 1 through
December 31 of that year and 98% of its capital gains realized in the period
from November 1 of the prior year through October 31 of the current year, or
else the Fund must pay an excise tax on the amounts not distributed. While it is
presently anticipated that the Fund will meet those requirements, the Board of
Directors and the Manager might determine in a particular year that it would be
in the best interest of shareholders for the Fund not to make such distributions
at the required levels and to pay the excise tax on the undistributed amounts.
That would reduce the amount of income or capital gains available for
distribution to shareholders.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on amounts
paid by it as dividends and distributions. The Fund qualified during its last
fiscal year, and intends to qualify in current and future years, but reserves
the right not to do so. The Internal Revenue Code contains a number of complex
tests to determine whether the Fund will qualify, and the Fund might not meet
those tests in a particular year.
The amount of a class's distributions may vary from time to time depending
on market conditions, the composition of the Fund's portfolio, and expenses
borne by the Fund or borne separately by a class, as described in "Alternative
Sales Arrangements -- Class A, Class B and Class C Shares," above. Dividends are
calculated in the same manner, at the same time and on the same day for shares
of each class. However, dividends on Class B and Class C shares are expected to
be lower as a result of the asset-based sales charge on Class B and Class C
shares, and Class B and Class C dividends will also differ in amount as a
consequence of any difference in net asset value between the classes.
Dividends, distributions and the proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund, Inc.,
as promptly as possible after the return of such checks to the Transfer Agent,
to enable the investor to earn a return on otherwise idle funds.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the same
class of any of the other Oppenheimer funds listed in "Reduced Sales Charges,"
above, at net asset value without sales charge. To elect this option, a
shareholder must notify the Transfer Agent in writing and either must have an
existing account in the fund selected for reinvestment or must obtain a
prospectus for that fund and an application from the Distributor to establish an
account. The investment will be made at the net asset value per share in effect
at the close of business on the payable date of the dividend or distribution.
Dividends and/or distributions from certain of the Oppenheimer funds may be
invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. State Street Bank and Trust Company acts as custodian of the
assets of the Fund. The Fund's cash balances in excess of $100,000 are not
protected by Federal deposit insurance. Such
uninsured balances may be substantial.
Independent Accountants. Price Waterhouse LLP serves as the Fund's
independent accountants. Their services include examining the annual
financial statements of the Fund as well as other related
services.
<PAGE>
30 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
================================================================================
To the Board of Directors and Shareholders of
Oppenheimer Quest Global Value Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement 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 Oppenheimer Quest Global Value
Fund, Inc. (the Fund), at November 30, 1997, 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 the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
financial statements) are the responsibility 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, 1997 by correspondence with the custodian and the application of
alternative auditing procedures where securities purchased had not been
received, provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Denver, Colorado
December 19, 1997
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--86.9%
- --------------------------------------------------------------------------------
Basic Materials--9.8%
- --------------------------------------------------------------------------------
Chemicals--6.8%
Dainippon Ink & Chemicals, Inc. 420,000 $ 1,480,901
- --------------------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 180,000 10,901,250
- --------------------------------------------------------------------------------
Hercules, Inc. 60,000 2,913,750
- --------------------------------------------------------------------------------
Monsanto Co. 120,000 5,242,500
- --------------------------------------------------------------------------------
Sekisui Chemical Co. 130,000 946,288
- --------------------------------------------------------------------------------
SGL Carbon AG 20,000 2,579,615
- --------------------------------------------------------------------------------
Shin-Etsu Chemical Co.(1) 74,000 1,756,866
- --------------------------------------------------------------------------------
Showa Denko K.K.(1)(2) 750,000 1,110,676
- --------------------------------------------------------------------------------
Solutia, Inc. 18,000 410,625
------------
27,342,471
- --------------------------------------------------------------------------------
Metals--0.8%
Toho Titanium Co.(1) 72,000 614,927
- --------------------------------------------------------------------------------
Usinor SA 123,000 1,933,500
- --------------------------------------------------------------------------------
WMC Ltd. 268,043 859,254
------------
3,407,681
- --------------------------------------------------------------------------------
Paper--2.2%
Aracruz Celulose SA, Sponsored ADR 84,350 1,212,531
- --------------------------------------------------------------------------------
AssiDoman AB 72,000 1,860,387
- --------------------------------------------------------------------------------
Champion International Corp. 110,000 5,891,875
------------
8,964,793
- --------------------------------------------------------------------------------
Consumer Cyclicals--15.5%
- --------------------------------------------------------------------------------
Autos & Housing--3.2%
Calsonic Corp.(1) 142,000 745,465
- --------------------------------------------------------------------------------
Cie Generale de Etablissements Michelin, B Shares 43,643 2,350,893
- --------------------------------------------------------------------------------
Corporacion GEO, SA de CV, Series B(2) 368,916 2,202,618
- --------------------------------------------------------------------------------
Electrolux AB, Series B Free 33,900 2,669,507
- --------------------------------------------------------------------------------
Honda Motor Co. 72,000 2,606,386
- --------------------------------------------------------------------------------
LucasVarity plc 605,086 1,942,012
- --------------------------------------------------------------------------------
Murakami Corp. 77,000 386,131
------------
12,903,012
- --------------------------------------------------------------------------------
Leisure & Entertainment--5.2%
Hagemeyer NV 21,796 983,476
- --------------------------------------------------------------------------------
McDonald's Corp. 260,000 12,610,000
- --------------------------------------------------------------------------------
Time Warner, Inc. 85,000 4,951,250
- --------------------------------------------------------------------------------
Verenigd Bezit VNU 100,000 2,394,425
------------
20,939,151
11 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Media--1.5%
Benpres Holdings Corp., Sponsored GDR.(2) 241,600 $ 773,120
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 87,000 1,190,933
- --------------------------------------------------------------------------------
Thomson Corp. 69,000 1,737,806
- --------------------------------------------------------------------------------
Wolters Kluwer NV 18,800 2,488,130
------------
6,189,989
- --------------------------------------------------------------------------------
Retail: General--2.7%
adidas AG 25,000 3,529,254
- --------------------------------------------------------------------------------
Cia Tecidos Norte de Minas, Preference 3,650,000 1,233,853
- --------------------------------------------------------------------------------
Circle K Japan Co. Ltd. 19,800 994,460
- --------------------------------------------------------------------------------
La Rinascente SpA, Ordinary 459,000 3,479,586
- --------------------------------------------------------------------------------
Siam Makro Public Co. Ltd. 404,000 464,223
- --------------------------------------------------------------------------------
Yue Yuen Industrial Holdings Ltd. 478,000 1,045,006
------------
10,746,382
- --------------------------------------------------------------------------------
Retail: Specialty--2.9%
Aldeasa SA(2) 60,000 1,253,311
- --------------------------------------------------------------------------------
Dixons Group plc 233,451 2,655,917
- --------------------------------------------------------------------------------
Metro AG(1) 72,000 3,318,689
- --------------------------------------------------------------------------------
Minolta Co. Ltd.(1) 270,000 1,554,946
- --------------------------------------------------------------------------------
Mycal Corp.(1) 75,000 617,042
- --------------------------------------------------------------------------------
Ryohin Keikaku Co. Ltd.(1) 14,000 910,480
- --------------------------------------------------------------------------------
Safeway plc 280,000 1,534,808
------------
11,845,193
- --------------------------------------------------------------------------------
Consumer Non-Cyclicals--6.7%
- --------------------------------------------------------------------------------
Beverages--0.2%
Mikuni Coca-Cola Bottling Ltd. 73,000 972,380
- --------------------------------------------------------------------------------
Food--0.3%
Bompreco SA Supermercados do Nordeste,
Sponsored GDR(3) 50,000 928,485
- --------------------------------------------------------------------------------
Bompreco SA Supermercados do Nordeste,
Sponsored GDR 22,000 408,533
------------
1,337,018
- --------------------------------------------------------------------------------
Healthcare/Drugs--3.7%
Ares-Serono Group, Cl. B 2,000 3,472,008
- --------------------------------------------------------------------------------
Astra AB Free, Series A 120,000 2,082,639
- --------------------------------------------------------------------------------
Gedeon Richter Rt., GDR, Registered S Shares 5,500 516,313
- --------------------------------------------------------------------------------
Gedeon Richter Rt., Sponsored GDR 22,000 2,065,250
- --------------------------------------------------------------------------------
Novartis AG 2,810 4,489,888
- --------------------------------------------------------------------------------
Takeda Chemical Industries Ltd. 74,000 2,162,742
------------
14,788,840
12 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--2.0%
Becton, Dickinson & Co. 65,000 $ 3,351,563
- --------------------------------------------------------------------------------
Gehe AG 26,000 1,319,289
- --------------------------------------------------------------------------------
SmithKline Beecham plc 360,859 3,352,598
------------
8,023,450
- --------------------------------------------------------------------------------
Household Goods--0.5%
Antofagasta Holdings plc 360,454 2,176,743
- --------------------------------------------------------------------------------
Energy--3.1%
- --------------------------------------------------------------------------------
Oil-Integrated--3.1%
Novus Petroleum Ltd. 706,648 2,151,645
- --------------------------------------------------------------------------------
PanCanadian Petroleum Ltd. 82,500 1,373,616
- --------------------------------------------------------------------------------
Quinenco SA, ADR(2) 75,000 890,625
- --------------------------------------------------------------------------------
Repsol SA(1) 49,000 2,119,363
- --------------------------------------------------------------------------------
Saga Petroleum AS, Cl. A 118,000 2,116,585
- --------------------------------------------------------------------------------
Suncor Energy, Inc. 50,000 1,649,182
- --------------------------------------------------------------------------------
Total SA, B Shares 22,000 2,310,498
------------
12,611,514
- --------------------------------------------------------------------------------
Financial--23.3%
- --------------------------------------------------------------------------------
Banks--9.7%
Bank Handlowy W Warszawie, GDR(2)(3) 55,100 633,650
- --------------------------------------------------------------------------------
Bank Handlowy W Warszawie, GDR(2) 38,100 448,172
- --------------------------------------------------------------------------------
Bayerische Vereinsbank AG 41,400 2,457,483
- --------------------------------------------------------------------------------
Citicorp 100,000 11,993,750
- --------------------------------------------------------------------------------
Credit Suisse Group 22,000 3,217,394
- --------------------------------------------------------------------------------
Lloyds TSB Group plc 277,736 3,166,775
- --------------------------------------------------------------------------------
Macquarie Bank Ltd. 132,000 979,966
- --------------------------------------------------------------------------------
Wells Fargo & Co. 50,000 15,362,500
- --------------------------------------------------------------------------------
Yasuda Trust & Banking Ltd.(1) 1,100,000 939,471
------------
39,199,161
- --------------------------------------------------------------------------------
Diversified Financial--7.5%
Acom Co. Ltd. 18,875 1,021,949
- --------------------------------------------------------------------------------
American Express Co. 55,000 4,338,125
- --------------------------------------------------------------------------------
Freddie Mac 388,000 16,005,000
- --------------------------------------------------------------------------------
Fletcher Challenge Building 272,000 793,497
- --------------------------------------------------------------------------------
ING Groep NV 36,127 1,468,377
- --------------------------------------------------------------------------------
Manhattan Card Co. Ltd. 1,610,000 541,506
- --------------------------------------------------------------------------------
Nordbanken AB 66,000 2,350,739
- --------------------------------------------------------------------------------
Orix Corp. 25,000 1,678,746
- --------------------------------------------------------------------------------
Shohkoh Fund & Co. 7,500 2,133,203
------------
30,331,142
13 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Insurance--6.1%
ACE Ltd. 42,500 $ 4,218,125
- --------------------------------------------------------------------------------
AXA SA 42,000 3,047,824
- --------------------------------------------------------------------------------
EXEL Ltd. 140,000 8,610,000
- --------------------------------------------------------------------------------
Fuji Fire & Marine Insurance Co. Ltd.(1) 160,000 362,311
- --------------------------------------------------------------------------------
Koelnische Rueckversicherungs AG 2,675 2,464,454
- --------------------------------------------------------------------------------
Transamerica Corp. 55,000 5,970,938
------------
24,673,652
- --------------------------------------------------------------------------------
Industrial--9.0%
- --------------------------------------------------------------------------------
Electrical Equipment--2.4%
Inaba Denkisangyo Co.(1) 70,000 767,875
- --------------------------------------------------------------------------------
Le Carbone-Lorraine(1) 8,000 2,151,947
- --------------------------------------------------------------------------------
Schneider SA 41,690 2,231,568
- --------------------------------------------------------------------------------
Siebe plc 160,500 2,919,927
- --------------------------------------------------------------------------------
Unican Security Systems Ltd., Cl. B 81,000 1,644,545
------------
9,715,862
- --------------------------------------------------------------------------------
Industrial Materials--1.0%
Holderbank Financiere Glarus AG 1,600 1,394,976
- --------------------------------------------------------------------------------
Kinden Corp. 200 2,272
- --------------------------------------------------------------------------------
Sho-Bond Corp. 40,000 777,277
- --------------------------------------------------------------------------------
Tarkett AG 89,599 2,057,319
------------
4,231,844
- --------------------------------------------------------------------------------
Industrial Services--1.0%
CKD Praha Holding AS(2) 24,200 792,256
- --------------------------------------------------------------------------------
Munters AB(2) 109,600 1,050,437
- --------------------------------------------------------------------------------
Toyo Corp. 37,000 223,232
- --------------------------------------------------------------------------------
Vedior Services 103,880 1,970,006
------------
4,035,931
- --------------------------------------------------------------------------------
Manufacturing--3.9%
Atlas Copco AB, A Shares 115,000 3,529,995
- --------------------------------------------------------------------------------
Graboplast Rt. 5,550 275,350
- --------------------------------------------------------------------------------
Hutchison Whampoa Ltd. 199,000 1,325,758
- --------------------------------------------------------------------------------
Sodick Co.(2) 125,000 479,925
- --------------------------------------------------------------------------------
Tenneco, Inc. 120,000 5,197,500
- --------------------------------------------------------------------------------
Unilever plc 428,000 3,387,151
- --------------------------------------------------------------------------------
Vidrala SA 38,000 1,625,750
------------
15,821,429
14 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Transportation--0.7%
Bombardier, Inc., Cl. B 73,100 $ 1,514,964
- --------------------------------------------------------------------------------
Canadian Pacific Ltd. 50,000 1,410,323
------------
2,925,287
- --------------------------------------------------------------------------------
Technology--16.3%
- --------------------------------------------------------------------------------
Aerospace/Defense--6.3%
Boeing Co. 300,000 15,937,500
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 100,000 9,756,250
------------
25,693,750
- --------------------------------------------------------------------------------
Computer Hardware--0.7%
Canon, Inc. 82,000 1,978,923
- --------------------------------------------------------------------------------
Viglen Technology plc(2) 1,020,000 878,722
------------
2,857,645
- --------------------------------------------------------------------------------
Computer Software/Services--1.7%
SAP AG 23,000 6,702,464
- --------------------------------------------------------------------------------
Electronics--5.9%
ABB AB, A Shares 163,000 2,079,465
- --------------------------------------------------------------------------------
Intel Corp. 100,000 7,762,500
- --------------------------------------------------------------------------------
Kyocera Corp. 22,500 1,085,994
- --------------------------------------------------------------------------------
Nokia AB 71,000 5,700,162
- --------------------------------------------------------------------------------
Omron Corp. 65,000 1,110,284
- --------------------------------------------------------------------------------
Rohm Co. 11,000 1,085,994
- --------------------------------------------------------------------------------
SGS-Thomson Microelectronics NV(2) 28,300 1,995,648
- --------------------------------------------------------------------------------
Sony Corp. 35,000 2,989,226
------------
23,809,273
- --------------------------------------------------------------------------------
Telecommunications/Technology--1.7%
Ericsson Telecomunicacoes SA 55,000,000 1,932,608
- --------------------------------------------------------------------------------
Fujitsu Ltd.(1) 135,000 1,512,635
- --------------------------------------------------------------------------------
Tele-Communications TCI Ventures Group, Cl. A(2) 145,519 3,292,367
------------
6,737,610
15 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Utilities--2.8%
- --------------------------------------------------------------------------------
Electric Utilities--1.7%
Cie Generale des Eaux 13,509 $ 1,784,880
- --------------------------------------------------------------------------------
Endesa SA(1) 141,000 2,652,171
- --------------------------------------------------------------------------------
Hongkong Electric Holdings Ltd. 298,000 1,008,073
- --------------------------------------------------------------------------------
Tokyo Electric Power Corp. 78,000 1,399,569
------------
6,844,693
- --------------------------------------------------------------------------------
Gas Utilities--0.7%
Precision Drilling Corp.(2) 102,100 2,643,177
- --------------------------------------------------------------------------------
Telephone Utilities--0.4%
Telecom Italia Mobile SpA 830,000 1,815,572
------------
Total Common Stocks (Cost $267,266,526) 350,287,109
Face
Amount
================================================================================
Other Securities--0.4%
- --------------------------------------------------------------------------------
Viglen Technology plc Loan Nts., 3/1/98(2)(4) 831,300 1,404,232
(Cost $1,178,139)
Units
================================================================================
Rights, Warrants and Certificates--0.0%
- --------------------------------------------------------------------------------
Benpres Holdings Corp., Sponsored GDR Rts.,
Exp. 12/97 (Cost $0) 241,600 --
Face
Amount
================================================================================
Short-Term Notes--12.7%(5)
- --------------------------------------------------------------------------------
Federal Farm Credit Bank, 5.45%, 12/9/97 $11,000,000 10,986,678
- --------------------------------------------------------------------------------
Federal Farm Credit Bank, 5.46%, 12/18/97 6,690,000 6,672,751
- --------------------------------------------------------------------------------
Federal Home Loan Bank, 5.44%, 12/8/97 7,285,000 7,277,294
- --------------------------------------------------------------------------------
Federal Home Loan Bank, 5.60%, 12/1/97 20,000,000 20,000,000
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 5.63%, 12/1/97 3,800,000 3,800,000
- --------------------------------------------------------------------------------
Student Loan Marketing Assn., 5.45%, 12/5/97 2,915,000 2,913,235
------------
Total Short-Term Notes (Cost $51,649,958) 51,649,958
- --------------------------------------------------------------------------------
Total Investments, at Value (Cost $320,094,623) 99.6% 403,341,299
- --------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.4 1,520,500
----------- ------------
Net Assets 100.0% $404,861,799
=========== ============
16 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
Country Market Value Percent
- -------------------------------------------------------------------------------
United States $206,367,325 51.1%
- -------------------------------------------------------------------------------
Japan 36,408,574 9.0
- -------------------------------------------------------------------------------
Germany 24,428,567 6.1
- -------------------------------------------------------------------------------
Great Britain 23,418,885 5.8
- -------------------------------------------------------------------------------
France 17,806,759 4.4
- -------------------------------------------------------------------------------
Sweden 15,623,169 3.9
- -------------------------------------------------------------------------------
Switzerland 12,574,266 3.1
- -------------------------------------------------------------------------------
Canada 11,973,612 3.0
- -------------------------------------------------------------------------------
The Netherlands 9,304,414 2.3
- -------------------------------------------------------------------------------
Spain 7,650,595 1.9
- -------------------------------------------------------------------------------
Brazil 5,716,010 1.4
- -------------------------------------------------------------------------------
Finland 5,700,162 1.4
- -------------------------------------------------------------------------------
Italy 5,295,159 1.3
- -------------------------------------------------------------------------------
Australia 3,990,865 1.0
- -------------------------------------------------------------------------------
Hong Kong 3,920,342 1.0
- -------------------------------------------------------------------------------
Hungary 2,856,913 0.7
- -------------------------------------------------------------------------------
Mexico 2,202,618 0.6
- -------------------------------------------------------------------------------
Norway 2,116,585 0.5
- -------------------------------------------------------------------------------
Singapore 1,190,936 0.3
- -------------------------------------------------------------------------------
Poland 1,081,822 0.3
- -------------------------------------------------------------------------------
Chile 890,625 0.2
- -------------------------------------------------------------------------------
New Zealand 793,497 0.2
- -------------------------------------------------------------------------------
Czech Republic 792,256 0.2
- -------------------------------------------------------------------------------
Philippines 773,120 0.2
- -------------------------------------------------------------------------------
Thailand 464,223 0.1
------------ -----
Total $403,341,299 100.0%
============ =====
1. Loaned security--See Note 7 of Notes to Financial Statements.
2. Non-income producing security.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $1,562,135 or 0.39% of the Fund's net
assets as of November 30, 1997.
4. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
5. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
17 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities November 30, 1997
- --------------------------------------------------------------------------------
================================================================================
Assets
Investments, at value (cost $320,094,623) $403,341,299
- -------------------------------------------------------------------------------
Cash 13,301
- --------------------------------------------------------------------------------
Collateral for securities loaned--Note 7 11,887,896
- --------------------------------------------------------------------------------
Cash--foreign currencies 82,623
- --------------------------------------------------------------------------------
Receivables:
Interest and dividends 508,334
Investments sold 811,691
Shares of capital stock sold 788,564
- -------------------------------------------------------------------------------
Other 2,669
------------
Total assets 417,436,377
===============================================================================
Liabilities
Return of collateral for securities loaned--Note 7 11,887,896
- -------------------------------------------------------------------------------
Payables and other liabilities:
Shares of capital stock redeemed 374,791
Transfer and shareholder servicing agent fees 25,919
Distribution and service plan fees 169,303
Other 116,669
------------
Total liabilities 12,574,578
===============================================================================
Net Assets $404,861,799
============
===============================================================================
Composition of Net Assets
Par value of shares of capital stock $ 220,377
- -------------------------------------------------------------------------------
Additional paid-in capital 305,106,076
- --------------------------------------------------------------------------------
Overdistributed net investment income (165,139)
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 16,486,331
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 83,214,154
------------
Net assets $404,861,799
============
18 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $267,636,193 and 14,469,717 shares of capital stock
outstanding) $18.50
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $19.63
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $98,457,003 and 5,427,392 shares
of capital stock outstanding) $18.14
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $38,768,603 and 2,140,599 shares
of capital stock outstanding) $18.11
See accompanying Notes to Financial Statements.
19 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended November 30, 1997
- --------------------------------------------------------------------------------
===============================================================================
Investment Income
Dividends (net of foreign withholding taxes of $169,293) $ 4,077,642
- -------------------------------------------------------------------------------
Interest 2,066,755
- -------------------------------------------------------------------------------
Security lending fees--Note 7 63,122
------------
Total income 6,207,519
===============================================================================
Expenses
Management fees--Note 4 2,448,836
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 1,163,838
Class B 671,438
Class C 266,690
- -------------------------------------------------------------------------------
Administrative fees--Note 4 816,450
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 290,796
- -------------------------------------------------------------------------------
Registration and filing fees:
Class A 55,067
Class B 32,139
Class C 13,326
- -------------------------------------------------------------------------------
Shareholder reports 97,548
- -------------------------------------------------------------------------------
Custodian fees and expenses 176,431
- -------------------------------------------------------------------------------
Legal and auditing fees 43,295
- -------------------------------------------------------------------------------
Directors' fees and expenses 17,380
- -------------------------------------------------------------------------------
Other 34,656
------------
Total expenses 6,127,890
===============================================================================
Net Investment Income 79,629
===============================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 21,556,604
Foreign currency transactions (5,029,385)
------------
Net realized gain 16,527,219
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 32,894,431
Translation of assets and liabilities denominated
in foreign currencies (6,340,980)
------------
Net change 26,553,451
------------
Net realized and unrealized gain 43,080,670
===============================================================================
Net Increase in Net Assets Resulting from Operations $ 43,160,299
============
See accompanying Notes to Financial Statements
20 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
Year Ended November 30,
1997 1996
===============================================================================
Operations
Net investment income $ 79,629 $ 310,505
- -------------------------------------------------------------------------------
Net realized gain 16,527,219 7,971,101
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation 26,553,451 24,507,199
------------ ------------
Net increase in net assets resulting from
operations 43,160,299 32,788,805
===============================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (67,908) (1,335,495)
Class B -- (79,285)
Class C -- (18,174)
- -------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (6,430,679) (12,615,414)
Class B (1,344,536) (1,413,588)
Class C (546,226) (405,576)
===============================================================================
Capital Stock Transactions
Net increase in net assets resulting from
capital stock transactions--Note 2:
Class A 49,561,888 17,211,738
Class B 53,533,310 18,976,456
Class C 20,211,931 10,628,255
===============================================================================
Net Assets
Total increase 158,078,079 63,737,722
- -------------------------------------------------------------------------------
Beginning of period 246,783,720 183,045,998
------------ ------------
End of period (including overdistributed net
investment income of $165,139 and $147,118,
respectively) $404,861,799 $246,783,720
============ ============
See accompanying Notes to Financial Statements.
21 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------
Year Ended November 30,
1997 1996 1995(2) 1994
============================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $16.48 $15.49 $14.16 $13.54
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 .03 .11(3) .01(3)
Net realized and unrealized gain (loss) 2.55 2.33 2.45 1.10
------ ------ ------ ------
Total income (loss) from investment
operations 2.58 2.36 2.56 1.11
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.13) -- --
Distributions from net realized gain (.55) (1.24) (1.23) (.49)
------ ------ ------ ------
Total dividends and distributions
to shareholders (.56) (1.37) (1.23) (.49)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.50 $16.48 $15.49 $14.16
====== ====== ====== ======
============================================================================================================================
Total Return, at Net Asset Value(4) 16.24% 16.60% 19.75% 8.37%
============================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $267,636 $192,000 $161,693 $148,044
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $233,020 $174,838 $154,288 $148,461
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.17% 0.19% 0.77% 0.05%(5)
Expenses 1.73% 1.88% 1.88% 1.92%(5)
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 32.0% 47.8% 76.0% 70.0%
Average brokerage commission rate(8) $0.0069 $0.0045 -- --
</TABLE>
1. For the period from September 1, 1993 (inception of offering) to November 30,
1993.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
3. Based on average shares outstanding for the period.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
22 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
- ------------ --------------------------------------------------------------------------------
Year Ended November 30,
1993 1997 1996 1995(2) 1994 1993(1)
=====================================================================================================
<S> <C> <C> <C> <C> <C>
$12.30 $16.25 $15.30 $14.07 $13.52 $13.75
- -----------------------------------------------------------------------------------------------------
--(3) (.04) -- .02(3) (.06)(3) (.02)(3)
2.26 2.48 2.26 2.44 1.10 (.21)
------ ------ ------ ------ ------ ------
2.26 2.44 2.26 2.46 1.04 (.23)
- -----------------------------------------------------------------------------------------------------
(.12) -- (.07) -- -- --
(.90) (.55) (1.24) (1.23) (.49) --
------ ------ ------ ------ ------ ------
(1.02) (.55) (1.31) (1.23) (.49) --
- -----------------------------------------------------------------------------------------------------
$13.54 $18.14 $16.25 $15.30 $14.07 $13.52
====== ====== ====== ====== ====== ======
=====================================================================================================
19.72% 15.61% 16.03% 19.12% 7.84% (1.67)%
=====================================================================================================
$135,616 $98,457 $38,634 $16,980 $10,268 $1,676
- -----------------------------------------------------------------------------------------------------
$125,158 $67,317 $27,351 $13,908 $5,982 $1,015
- -----------------------------------------------------------------------------------------------------
0.04%(5) (0.34)% (0.03)% 0.16% (0.44)%(5) (0.76)%(5)(6)
1.76%(5) 2.24% 2.41% 2.47% 2.50%(5) 2.26%(5)(6)
- -----------------------------------------------------------------------------------------------------
46.0% 32.0% 47.8% 76.0% 70.0% 46.0%
-- $0.0069 $0.0045 -- -- --
</TABLE>
5. During the periods noted above, the former Advisor voluntarily waived a
portion of its fees. If such waivers had not been in effect, the ratios of net
investment income (loss) to average net assets and the ratios of expenses to
average net assets for Class A would have been 0.04% and 1.93%, respectively,
for the year ended November 30, 1994 and (0.11)% and 1.91%, respectively, for
the year ended November 30, 1993. The ratios of net investment income (loss) to
average net assets and the ratios of expenses to average net assets would have
been (0.45)% and 2.51%, respectively, for Class B and (0.59)% and 2.66%,
respectively, for Class C, for the year ended November 30, 1994 and (0.82)% and
2.32%, annualized, respectively, for Class B and (0.78)% and 2.35%, annualized,
respectively, for Class C, for the period September 1, 1993 (inception of
offering) to November 30, 1993.
6. Annualized.
23 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
------------------------------------------------------------------------
Year Ended November 30,
1997 1996 1995(2) 1994 1993(1)
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $16.22 $15.26 $14.06 $13.52 $13.75
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) (.04) --(3) (.08)(3) (.02)(3)
Net realized and unrealized gain (loss) 2.47 2.29 2.43 1.11 (.21)
------ ------ ------ ------ ------
Total income (loss) from investment
operations 2.44 2.25 2.43 1.03 (.23)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.05) -- -- --
Distributions from net realized gain (.55) (1.24) (1.23) (.49) --
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.55) (1.29) (1.23) (.49) --
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.11 $16.22 $15.26 $14.06 $13.52
====== ====== ====== ====== ======
============================================================================================================================
Total Return, at Net Asset Value(4) 15.64% 16.04% 18.90% 7.77% (1.67)%
============================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $38,769 $16,149 $4,373 $2,415 $244
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $26,735 $10,152 $3,834 $1,150 $200
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.34)% (0.07)% 0.03% (0.59)%(5) (0.69)%(5)(6)
Expenses 2.24% 2.43% 2.60% 2.66%(5) 2.26%(5)(6)
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 32.0% 47.8% 76.0% 70.0% 46.0%
Average brokerage commission rate(8) $0.0069 $0.0045 -- -- --
</TABLE>
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended November 30, 1997 were $167,141,953 and $91,345,072, respectively.
8. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities. See accompanying Notes to Financial Statements.
24 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Quest Global Value Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to seek
long-term capital appreciation through pursuit of a global investment strategy
primarily involving equity securities. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class
C shares. Class A shares are sold with a front-end sales charge. Class B and
Class C shares may be subject to a contingent deferred sales charge. All classes
of shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution and/or service plan, expenses
directly attributable to that class and exclusive voting rights with respect to
matters affecting that class. Class B shares will automatically convert to Class
A shares six years after the date of purchase. The following is a summary of
significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
25 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies(continued)
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders
to reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended November 30, 1997, amounts have been reclassified to reflect an
increase in accumulated net realized gain on investments of $339,526, an
increase in overdistributed net investment income of $29,742, and a decrease in
paid-in capital of $309,784.
26 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Capital Stock
The Fund has authorized 100 million shares of $.01 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended November 30, 1997 Year Ended November 30, 1996
---------------------------- ----------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 5,472,340 $97,919,431 2,539,864 $38,385,735
Dividends and distributions
reinvested 402,738 6,322,991 950,833 13,558,877
Redeemed (3,053,828) (54,680,534) (2,280,780) (34,723,874)
---------- ------------ ---------- ------------
Net increase 2,821,250 $49,561,888 1,209,917 $17,211,738
========== ============ ========== ============
- -----------------------------------------------------------------------------------------------
Class B:
Sold 3,404,941 $59,914,611 1,411,432 $21,229,261
Dividends and distributions
reinvested 80,637 1,247,453 99,401 1,404,541
Redeemed (435,710) (7,628,754) (243,157) (3,657,346)
---------- ------------ ---------- ------------
Net increase 3,049,868 $53,533,310 1,267,676 $18,976,456
========== ============ ========== ============
- -----------------------------------------------------------------------------------------------
Class C:
Sold 1,522,007 $26,737,430 807,869 $12,121,286
Dividends and distributions
reinvested 31,126 480,587 29,254 412,482
Redeemed (407,992) (7,006,086) (128,191) (1,905,513)
---------- ------------ ---------- ------------
Net increase 1,145,141 $20,211,931 708,932 $10,628,255
========== ============ ========== ============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Investments
At November 30, 1997, net unrealized appreciation on investments of $83,246,676
was composed of gross appreciation of $98,760,265, and gross depreciation of
$15,513,589.
27 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% of the first
$400 million of average annual net assets, 0.70% of the next $400 million and
0.65% of average annual net assets in excess of $800 million.
The Manager pays OpCap Advisors (the Sub-Advisor) based on the fee
schedule set forth in the Prospectus. For the year ended November 30, 1997, the
Manager paid $1,163,959 to the Sub-Advisor. On February 13, 1997, PIMCO Advisors
L.P. signed a definitive agreement with Oppenheimer Group, Inc. and its
subsidiary Oppenheimer Financial Corp. for PIMCO Advisors L.P. and its
affiliate, Thomson Advisory Group, Inc., to acquire the one-third managing
general partner interest in Oppenheimer Capital (the parent of OpCap Advisors)
and the 1.0% general interest in Oppenheimer Capital L.P.
The administration fees are payable monthly to the Manager and are
computed on the Fund's average daily net assets at the annual rate of 0.25%.
For the year ended November 30, 1997, commissions (sales charges
paid by investors) on sales of Class A shares totaled $1,030,743, of which
$297,948 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary
of the Manager, as general distributor, and by affiliated broker/dealers. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $2,024,540 and $236,179, respectively, of which $117,193
and $2,812, respectively, was paid to an affiliated broker/dealer. During the
year ended November 30, 1997, OFDI received contingent deferred sales charges of
$109,830 and $14,818, respectively, upon redemption of Class B and Class C
shares as reimbursement for sales commissions advanced by OFDI at the time of
sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is
the transfer and shareholder servicing agent for the Fund and for other
registered investment companies. The Fund pays OFS an annual maintenance fee of
$14.85 for each Fund shareholder account and reimburses OFS for its
out-of-pocket expenses. During the year ended November 30, 1997, the Fund paid
OFS $263,207.
The Fund has adopted a Distribution and Service Plan for Class A
shares to compensate OFDI for a portion of its costs incurred in connection with
the personal service and maintenance of shareholder accounts that hold Class A
shares. Under the Plan, the Fund pays an annual asset-based sales charge to OFDI
of 0.25% per year on Class A shares. The Fund also pays a service fee to OFDI of
0.25% per year. Both fees are computed on the average annual net assets of Class
A shares of the Fund, determined as of the close of each regular business day.
OFDI uses all of the service fee and a portion of the asset-based sales charge
to compensate brokers, dealers, banks and other financial institutions quarterly
for providing personal service and maintenance of accounts of their customers
that hold Class A shares. OFDI retains the balance of the asset-based sales
charge to reimburse itself for its other expenditures under the Plan.
28 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
During the year ended November 30, 1997, OFDI paid $190,803 to an affiliated
broker/dealer as compensation for Class A personal service and maintenance
expenses and retained $308,247 as compensation for Class A sales commissions and
service fee advances, as well as financing costs.
The Fund has adopted Distribution and Service Plans for Class B and
Class C shares to compensate OFDI for its costs in distributing Class B and
Class C shares and servicing accounts. Under the Plans, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B and Class C shares
for its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and C shares. Each fee is
computed on the average annual net assets of Class B and Class C shares,
determined as of the close of each regular business day. During the year ended
November 30, 1997, OFDI paid $21,209 and $16,035, respectively, to an affiliated
broker/dealer as reimbursement for Class B and Class C personal service and
maintenance expenses and retained $584,762 and $160,673, respectively, as
reimbursement for Class B and Class C sales commissions and service fee
advances, as well as financing costs. If either Plan is terminated by the Fund,
the Board of Directors may allow the Fund to continue payments of the
asset-based sales charge to OFDI for distributing shares before the Plan was
terminated. At November 30, 1997, OFDI had incurred unreimbursed expenses of
$2,571,819 for Class B and $434,070 for Class C.
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward contracts as a hedge upon the purchase or
sale of a security denominated in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against changes in foreign currency
exchange rates on portfolio positions.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets and Liabilities. Realized gains and losses
are reported with all other foreign currency gains and losses in the Fund's
Statement of Operations.
Risks include the potential inability of the counterparty to meet
the terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
29 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
6. Illiquid and Restricted Securities
At November 30, 1997, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Directors as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at November 30, 1997 was $1,404,232, which represents
0.35% of the Fund's net assets. Information concerning restricted securities is
as follows:
Cost Valuation Per Unit
Security Acquisition Dates Per Unit As of Nov. 30, 1997
- --------------------------------------------------------------------------------
Viglen Technology
plc Loan Nts.,
3/1/98 6/22/95-5/23/96 $1.42 $1.69
================================================================================
7. Securities Loaned
The Fund has entered into a securities lending arrangement with the custodian.
Under the terms of the agreement, the Fund pays State Street Bank and Trust
Company 35% of the net interest earned as a fee for administering the security
lending program. The custodian is authorized to loan securities on behalf of the
Fund, against receipt of cash collateral at least equal in value to the value of
the securities loaned. The Fund did not always loan securities on the total
number of shares held as of November 30, 1997. The collateral is invested by the
custodian in money market instruments approved by the Manager. As of November
30, 1997, the Fund had on loan securities valued at $11,223,026. Cash of
$10,984,296 was received as collateral for the loans, and has been invested in
approved instruments. U.S. Treasury bonds valued at $903,600 were also received
as collateral. The Fund bears the risk of any deficiency in the amount of
collateral available for return to a borrower due to a loss in an approved
investment.
================================================================================
8. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended
November 30, 1997.
31 Oppenheimer Quest Global Value Fund, Inc.
<PAGE>
<PAGE>
Appendix A
DESCRIPTION OF RATINGS
Bond Ratings
o Moody's Investors Service, Inc.
Aaa: Bonds which are rated "Aaa" are judged to be the best quality and to carry
the smallest degree of investment risk. 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, the changes that can be
expected 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 with "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than those of
"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 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 have speculative characteristics as
well.
Ba: Bonds which are rated "Ba" are judged to have speculative elements; their
future cannot be considered well-assured. Often the protection of interest
and principal payments may be very
moderate and not well safeguarded during both good and bad times over the
future. Uncertainty of
position characterizes bonds in this class.
B: Bonds which are rated "B" generally lack characteristics of desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated "Caa" are of poor standing and may be in default
or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated "Ca" represent obligations which are speculative in
a high degree and are often in default or have other marked shortcomings.
C: Bonds which are rated "C" can be regarded as having extremely poor
prospects of ever retaining any real investment standing.
o Standard & Poor's Corporation
AAA: "AAA" is the highest rating assigned to a debt obligation and indicates
an extremely strong capacity to pay principal and interest.
AA: Bonds rated "AA" also qualify as high quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from "AAA" issues only in small degree.
A: Bonds rated "A" have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to adverse effects of change in
circumstances and economic conditions.
BBB: Bonds rated "BBB" are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the "A" category.
BB, B, CCC, CC: Bonds rated "BB," "B," "CCC" and "CC" are regarded, on balance,
as predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "CC" the highest degree.
While such bonds will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.
C, D: Bonds on which no interest is being paid are rated "C." Bonds rated "D"
are in default and payment of interest and/or repayment of principal is in
arrears.
o Fitch Investors Service, Inc.
AAA Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated "AAA." Because bonds rated in the "AAA" and
"AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated "F-1+."
A Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
BB Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.
B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity through the
life of the issue.
CCC Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C Bonds are in imminent default in payment of interest or principal.
DDD, DD, and D Bonds are in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. "DDD"
represents the highest potential for recovery of these bonds, and "D" represents
the lowest potential for recovery.
Plus (+) Minus (-) Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "DDD," "DD," or "D" categories.
Short-Term Debt Ratings.
o Moody's Investors Service, Inc. The following rating designations for
commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are
judged by Moody's to be investment grade, and indicate the relative repayment
capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by
the following characteristics: (a) leveling market positions in well-established
industries; (b) high rates of return on funds employed; (c) conservative
capitalization structures with moderate reliance on debt and ample asset
protection; (d) broad margins in earning coverage of fixed financial charges and
high internal cash generation; and (e) well established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced by
many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound,
will be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained. Moody's ratings for state and municipal short-term
obligations are designated "Moody's Investment Grade" ("MIG"). Short-term notes
which have demand features may also be designated as "VMIG". These rating
categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by established cash
flows, superior liquidity support or demonstrated broadbased access to the
market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although not so
large as in the preceding group.
o Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of no more
than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
A-2: Satisfactory capacity for timely payment. However, the relative degree of
safety is not as high as for issues designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand or
double feature as part of their provisions. The first rating addresses the
likelihood of repayment of principal and interest as due, and the second rating
addresses only the demand feature. With short-term demand debt, S&P's note
rating symbols are used with the commercial paper symbols (for example,
"SP-1+/A-1+").
o Fitch Investors Service, Inc. Fitch assigns the following short-term
ratings to debt obligations that are payable on demand or have original
maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree of assurance for
timely payment.
F-1: Very strong credit quality; assurance of timely payment is only slightly
less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for timely payment,
but the margin of safety is not as great as for issues assigned "F-1+" or "F-1"
ratings.
o Duff & Phelps, Inc. The following ratings are for commercial paper (defined by
Duff & Phelps as obligations with maturities, when issued, of under one year),
asset-backed commercial paper, and certificates of deposit (the ratings cover
all obligations of the institution with maturities, when issued, of under one
year, including bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of funds, is
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
o IBCA Limited or its affiliate IBCA Inc. Short-term ratings, including
commercial paper (with maturities up to 12 months), are as follows:
A1+: Obligations supported by the highest capacity for timely repayment.
A1: Obligations supported by a very strong capacity for timely repayment.
A2: Obligations supported by a strong capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic, or
financial conditions.
o Thomson BankWatch, Inc. The following short-term ratings apply to commercial
paper, certificates of deposit, unsecured notes, and other securities having a
maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety regarding timely
repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1".
A-1
<PAGE>
Appendix B
Corporate Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Information Technology
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
Wireless Services
Oppenheimer Quest Global Value Fund, Inc.
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Sub-Adviser
OpCap Advisors
One World Financial Center
New York, New York 10281
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
State Street Bank and Trust Company
P.O. Box 8505
Boston, Massachusetts 02266-8505
Independent Accountants
Price Waterhouse LLP
950 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
254sai.#4
B-1
OPPENHEIMER QUEST GLOBAL VALUE FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- ------- ---------------------------------
(a) Financial Statements:
--------------------
(1) Financial Highlights - See Parts A and B: Filed herewith
(2) Report of Independent Accountants - See Part B: Filed
herewith.
(3) Statement of Investments - See Part B: Filed herewith.
(4) Statement of Assets and Liabilities - See Part B: Filed
herewith.
(5) Statement of Operations - See Part B: Filed herewith.
(6) Statement of Changes in Net Assets - See Part B: Filed
herewith.
(7) Notes to Financial Statements - See Part B: Filed herewith.
(b) Exhibits:
--------
(1) Articles of Incorporation: Previously filed as Exhibit 1 to the
original Registration Statement on Form N-1A filed on May 4, 1990, and refiled
with Post-Effective Amendment No. 18, 3/11/96, pursuant to Item 102 of
Regulation S-T and incorporated herein by
reference.
(2)(a)By Laws: Previously filed as Exhibit 2 to the original
Registration Statement on Form N-1A filed on May 4, 1990, and refiled with
Post-Effective Amendment No. 18, 3/11/96, pursuant to Item 102 of Regulation S-T
and incorporated herein by reference.
(2)(b) Amendment No. 1 to By-Laws: Filed with Post-Effective
Amendment No. 20,
1/20/98, and incorporated herein by reference.
(3) Not Applicable.
(4) (i) Specimen Class A Share Certificate: Filed with
Post-Effective Amendment No. 19, 3/19/97, and incorporated herein by
reference.
(ii) Specimen Class B Share Certificate: Filed with
Post-Effective Amendment
No. 19, 3/19/97, and incorporated herein by reference.
(iii) Specimen Class C Share Certificate: Filed with
Post-Effective Amendment
No. 19, 3/19/97, and incorporated herein by reference.
(5) (a) Investment Advisory Agreement dated 5/29/97: Filed
with Post-Effective Amendment No. 20, 1/20/98, and incorporated herein by
reference.
(b) Subadvisory Agreement dated 11/5/97: Filed with
Post-Effective Amendment No. 20, 1/20/98, and incorporated herein by
reference.
(c) Administration Agreement dated 5/29/97: Filed with
Post-Effective Amendment No. 20, 1/20/98, and incorporated herein by
reference.
(6) (a) General Distributor's Agreement: Filed with
Post-Effective Amendment No. 18, 3/11/96, pursuant to Item 102 of Regulation
S-T and incorporated herein by reference.
(b)(1)Form of Dealer Agreement of Oppenheimer Funds
Distributor, Inc.: Filed with Post-Effective Amendment No. 14 of Oppenheimer
Main Street Funds, Inc. (Reg. No. 33-
17850), 9/30/94, and incorporated herein by reference.
(2)Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement: Filed
with Post-Effective Amendment No. 14 of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-
17850), 9/30/94, and incorporated herein by reference.
(3)Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement: Filed
with Post-Effective Amendment No. 14 of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-
17850), 9/30/94, and incorporated herein by reference.
(4)Broker Agreement between Oppenheimer Funds Distributor,
Inc. and
Newbridge Securities dated 10/1/86: Previously filed with Post-Effective
Amendment No. 25 of
Oppenheimer Special Fund (Reg. No. 2-45272), 11/1/86, refiled with
Post-Effective Amendment No.
45 of Oppenheimer Special Fund (Reg. No. 2-45272), 8/22/94, pursuant to Item
102 of Regulation
S-T, and incorporated herein by reference.
(7) Not Applicable.
(8) Custody Agreement: Incorporated by reference to the
Registration Statement on Form N-14 filed with the SEC on July 19, 1991, File
No. 33-41819.
(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: Incorporated by reference to the
Registration Statement on Form N-14 filed with the SEC on July 19, 1991, File
No. 33-41819.
(11) Consent of Independent Accountants: Filed herewith.
(12) Not Applicable.
(13) Initial Capital Agreement: Incorporated by reference to the
Registration Statement on Form N-14 filed with the SEC on July 19, 1991, File
No. 33-41819.
(14) (i) Form of Individual Retirement Account Trust
Agreement: Filed as Exhibit 14 of Post-Effective Amendment No. 21 of
Oppenheimer U.S. Government Trust (Reg. No.
2-76645), 8/25/93, and incorporated herein by reference.
(ii) Form of prototype Standardized and Non-Standardized Profit-Sharing
Plan and Money Purchase Pension Plan for self-employed persons and corporations:
Filed with Post- Effective Amendment No. 3 of Oppenheimer Global Growth & Income
Fund (File No. 33-33799), 1/31/92, and refiled with Post-Effective Amendment No.
7 to the Registration Statement of Oppenheimer Global Growth & Income Fund (Reg.
No. 33-33799), 12/1/94, pursuant to Item 102 of Regulation S-T, and incorporated
herein by reference.
(iii) Form of Tax-Sheltered Retirement Plan and Custody Agreement for
employees of public schools and tax-exempt organizations: Filed with
Post-Effective Amendment No. 47 to the Registration Statement of Oppenheimer
Growth Fund (Reg. No. 2-45272), 10/21/94, and incorporated herein by reference.
(iv) Form of Simplified Employee Pension IRA: Filed with Post-Effective
Amendment No. 42 to the Registration Statement of Oppenheimer Equity Income Fund
(Reg. No. 2-33043), 10/28/94, and incorporated herein by reference.
(v) Form of SAR-SEP Simplified Employee Pension IRA: Filed with
Post-Effective Amendment No. 15 to the Registration Statement of Oppenheimer
Mortgage Income Fund, (File No. 33-6614), 2/20/94, and incorporated herein
by reference.
(vi) Form of Prototype 401(k) plan: Filed with Post-Effective
Amendment No. 7 to the Registration Statement of Oppenheimer Strategic Income &
Growth Fund (33-47378), 9/28/95, and incorporated herein by reference.
(15) (a)Amended and Restated Distribution and Service Plan and
Agreement dated 2/3/98 with respect to Class A shares: Filed herewith.
(b) Amended and Restated Distribution and Service Plan and
Agreement dated 2/3/98 respect to Class B shares: Filed herewith.
(c)Amended and Restated Distribution and Service Plan and
Agreement dated 2/3/98 with respect to Class C shares: Filed herewith.
(16) Performance Computation Schedule: Filed herewith.
(17) (1)Financial Data Schedule for Class A shares: Filed herewith.
(2)Financial Data Schedule for Class B shares: Filed
herewith.
(3)Financial Data Schedule for Class C shares: Filed
herewith.
(18) Oppenheimer Funds Multiple Class Plan under Rule 18f-3 dated
3/18/96: Filed with the initial Registration Statement of Oppenheimer MidCap
Fund (333-31533), 7/18/97, and incorporated herein by reference.
-- Powers of Attorney and Certified Board Resolutions signed by
Registrant's Trustees: Filed with Post-Effective Amendment No. 17 to
Registrant's Registration Statement, 11/24/95 and
incorporated herein by reference.
Item 25. Persons Controlled by or Under Common Control with Registrant
- -------
- ------------------------------------------------------------------------------
No person is presently controlled by or under common control with
Registrant.
C-1
<PAGE>
Item 26. Number of Holders of Securities
- ------- --------------------------------------
Number of Record
Holders as of
Title of Class March 2, 1998
- -------------- -----------------
Shares of Beneficial Interest
Class A 11,231
Class B 12,189
Class C 3,863
Item 27. Indemnification
- ------- --------------------
Reference is made to the provisions of Article SEVENTH of
Registrant's Articles of Incorporation filed as Exhibit 24(b)(1) to this
Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person, Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ---------------------------------------------------------------
(a) OppenheimerFunds, Inc. 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.
(a1) The directors and executive officers of OpCap Advisors, their positions and
their other business affiliations and business experience for the past two years
are 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 OppenheimerFunds, Inc. 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.
Name and Current Position with Other Business and Connections
OppenheimerFunds, Inc.("OFI") During the Past Two Years
Mark J.P. Anson,
Vice President Vice President of Oppenheimer Real
Asset Management, Inc. ("ORAMI");
formerly Vice President of Equity
Derivatives at
Salomon Brothers, Inc.
Peter M. Antos,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Senior Vice
President of
HarbourView Asset Management Corporation
("HarbourView"); prior to March, 1996
he was the senior
equity portfolio manager for the
Panorama Series Fund, Inc.
(the "Company") and other mutual funds
and pension funds
managed by G.R. Phelps & Co. Inc.
("G.R. Phelps"), the
Company's former investment adviser,
which was a subsidiary
of Connecticut Mutual Life Insurance
Company; was also
responsible for managing the common
stock department and
common stock investments of Connecticut
Mutual Life
Insurance Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly a
Vice President and Senior Portfolio
Manager at First of America Investment
Corp.
Beichert, Kathleen
Vice President None.
Rajeev Bhaman,
Vice President Formerly Vice President (January 1992 -
February, 1996) of Asian Equities for
Barclays de Zoete Wedd, Inc.
Robert J. Bishop,
Vice President Vice President of Mutual Fund
Accounting (since May 1996); an officer
of other Oppenheimer funds; formerly
an Assistant
Vice President of OFI/Mutual Fund
Accounting (April 1994-
May 1996), and a Fund Controller for
OFI.
George C. Bowen,
Senior Vice President & Treasurer Vice President (since June 1983) and
Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc. (the
"Distributor"); Vice President (since
October 1989) and Treasurer (since
April 1986) of HarbourView; Senior Vice
President (since February 1992),
Treasurer (since July
1991)and a director (since December
1991) of Centennial;
President, Treasurer and a director of
Centennial Capital
Corporation (since June 1989); Vice
President and Treasurer
(since August 1978) and Secretary
(since April 1981) of
Shareholder Services, Inc. ("SSI");
Vice President, Treasurer
and Secretary of Shareholder Financial
Services, Inc. ("SFSI")
(since November 1989); Treasurer of
Oppenheimer
Acquisition Corp. ("OAC") (since June
1990); Treasurer of
Oppenheimer Partnership Holdings, Inc.
(since November
1989); Vice President and Treasurer of
ORAMI (since July
1996); Chief Executive Officer,
Treasurer and a director of
MultiSource Services, Inc., a
broker-dealer (since December
1995); an officer of other Oppenheimer
funds.
Scott Brooks,
Vice President None.
Susan Burton,
Assistant Vice President None.
Adele Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division Formerly Assistant Vice President of
Rochester Fund Services, Inc.
Michael Carbuto,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial.
Ruxandra Chivu,
Assistant Vice President None.
H.D. Digby Clements,
Assistant Vice President:
Rochester Division None.
O. Leonard Darling,
Executive Vice President Trustee (1993 - present) of Awhtolia
College - Greece.
Robert A. Densen,
Senior Vice President None.
Sheri Devereux,
Assistant Vice President None.
Robert Doll, Jr.,
Executive Vice President & Director An officer
and/or portfolio manager of certain
Oppenheimer funds.
John Doney,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Executive Vice President (since
September 1993), and a director (since
January 1992) of the Distributor;
Executive
Vice President, General Counsel and a
director of
HarbourView, SSI, SFSI and Oppenheimer
Partnership
Holdings, Inc. since (September 1995)
and MultiSource
Services, Inc. (a broker-dealer) (since
December 1995);
President and a director of Centennial
(since September
1995); President and a director of
ORAMI (since July 1996);
General Counsel (since May 1996) and
Secretary (since April
1997) of OAC; Vice President of
OppenheimerFunds
International, Ltd. ("OFIL") and
Oppenheimer Millennium
Funds plc (since October 1997); an
officer of other
Oppenheimer funds.
George Evans,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Edward Everett,
Assistant Vice President None.
Scott Farrar,
Vice President Assistant Treasurer of Oppenheimer
Millennium Funds plc (since October
1997); an officer of other Oppenheimer
funds;
formerly an Assistant Vice President
of OFI/Mutual Fund
Accounting (April 1994-May 1996), and a
Fund Controller
for OFI.
Leslie A. Falconio,
Assistant Vice President None.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of the
Distributor; Secretary of HarbourView,
MultiSource and Centennial; Secretary,
Vice
President and Director of Centennial
Capital Corporation;
Vice President and Secretary of ORAMI.
Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division An officer, Director and/or portfolio
manager of certain Oppenheimer funds;
Presently he holds the following other
positions: Director (since 1995) of ICI
Mutual Insurance
Company; Governor (since 1994) of St.
John's College;
Director (since 1994 - present) of
International Museum of
Photography at George Eastman House;
Director (since 1986)
of GeVa Theatre. Formerly he held the
following positions: formerly, Chairman
of the Board and Director of Rochester
Fund Distributors, Inc. ("RFD");
President and Director of
Fielding Management Company, Inc.
("FMC"); President and
Director of Rochester Capital Advisors,
Inc. ("RCAI");
Managing Partner of Rochester Capital
Advisors, L.P.,
President and Director of Rochester
Fund Services, Inc.
("RFS"); President and Director of
Rochester Tax Managed
Fund, Inc.; Director (1993 - 1997) of
VehiCare Corp.;
Director (1993 - 1996) of VoiceMode.
John Fortuna,
Vice President None.
Patricia Foster,
Vice President Formerly she held the following
positions: An officer of certain former
Rochester funds (May, 1993 - January,
1996);
Secretary of Rochester Capital
Advisors, Inc. and General
Counsel (June, 1993 - January 1996) of
Rochester Capital
Advisors, L.P.
Jennifer Foxson,
Assistant Vice President None.
Paula C. Gabriele,
Executive Vice President Formerly, Managing Director (1990-1996)
for Bankers Trust Co.
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds. Formerly Vice
President and General Counsel of
Oppenheimer Acquisition Corp.
Linda Gardner,
Vice President None.
Alan Gilston,
Vice President Formerly Vice President for Schroder
Capital Management International.
Jill Glazerman,
Assistant Vice President None.
Jeremy Griffiths,
Chief Financial Officer Currently a Member and
Fellow of the Institute of Chartered
Accountants; formerly an accountant for
Arthur Young (London, U.K.).
Robert Grill,
Vice President Formerly Marketing Vice President for
Bankers Trust Company (1993-1996);
Steering Committee Member,
Subcommittee Chairman for American
Savings Education
Council (1995-1996).
Caryn Halbrecht,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Elaine T. Hamann,
Vice President Formerly Vice President (September,
1989 - January, 1997) of Bankers Trust
Company.
Glenna Hale,
Director of Investor Marketing Formerly, Vice President (1994-1997) of
Retirement Plans Services for
OppenheimerFunds Services.
Thomas B. Hayes,
Vice President None.
Barbara Hennigar,
Executive Vice President and
Chief Executive Officer of
OppenheimerFunds Services,
a division of the Manager President and Director of SFSI;
President and Chief executive Officer
of SSI.
Dorothy Hirshman, None.
Assistant Vice President
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Nicholas Horsley,
Vice President Formerly a Senior Vice President and
Portfolio Manager for Warburg, Pincus
Counsellors, Inc. (1993-1997),
Co-manager
of Warburg, Pincus Emerging Markets
Fund (12/94 - 10/97),
Co-manager Warburg, Pincus
Institutional Emerging Markets
Fund - Emerging Markets Portfolio (8/96
- 10/97), Warburg
Pincus Japan OTC Fund, Associate
Portfolio Manager of
Warburg Pincus International Equity
Fund, Warburg Pincus
Institutional Fund - Intermediate
Equity Portfolio, and
Warburg Pincus EAFE Fund.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President None.
Jane Ingalls,
Vice President None.
Byron Ingram,
Assistant Vice President None.
Ronald Jamison,
Vice President Formerly Vice President and Associate
General Counsel at Prudential
Securities, Inc.
Frank Jennings,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly, a
Managing Director of Global Equities at
Paine Webber's Mitchell Hutchins
division.
Thomas W. Keffer,
Senior Vice President Formerly Senior Managing Director (1994
- 1996) of Van Eck Global.
Avram Kornberg,
Vice President None.
Joseph Krist,
Assistant Vice President None.
Paul LaRocco,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for
Columbus Circle
Investors.
Michael Levine,
Assistant Vice President None.
Shanquan Li,
Vice President Director of Board (since 2/96),
Chinese Finance Society; formerly,
Chairman (11/94-2/96), Chinese Finance
Society; and Director (6/94-6/95), Greater
China Business Networks.
Stephen F. Libera,
Vice President An officer and/or portfolio manager for
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March 1996, the
senior bond portfolio
manager for Panorama Series Fund Inc.,
other mutual funds
and pension accounts managed by G.R.
Phelps; also
responsible for managing the public
fixed-income securities
department at Connecticut Mutual Life
Insurance Co.
Mitchell J. Lindauer,
Vice President None.
David Mabry,
Assistant Vice President None.
Steve Macchia,
Assistant Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director Chief Executive Officer (since
September 1995); President and director
(since June 1991) of HarbourView;
Chairman
and a director of SSI (since August
1994), and SFSI
(September 1995); President (since
September 1995) and a
director (since October 1990) of
OAC; President (since
September 1995) and a director (since
November 1989) of
Oppenheimer Partnership Holdings, Inc.,
a holding company
subsidiary of OFI; a director of ORAMI
(since July 1996) ;
President and a director (since October
1997) of OFIL, an
offshore fund manager subsidiary of OFI
and Oppenheimer
Millennium Funds plc (since October
1997); President and a
director of other Oppenheimer funds; a
director of the
NASDAQ Stock Market, Inc. and of
Hillsdown Holdings plc
(a U.K. food company); formerly an
Executive Vice President
of OFI.
Wesley Mayer,
Vice President Formerly Vice President (January, 1995
- June, 1996) of Manufacturers Life
Insurance Company.
Loretta McCarthy,
Executive Vice President None.
Tanya Mrva,
Assistant Vice President None.
Lisa Migan,
Assistant Vice President None.
Robert J. Milnamow,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly a Portfolio Manager (August, 1989
August, 1995) with Phoenix Securities
Group.
Denis R. Molleur,
Vice President None.
Linda Moore,
Vice President Formerly, Marketing Manager (July
1995-November 1996) for Chase
Investment Services Corp.
Tanya Mrva,
Assistant Vice President None.
Kenneth Nadler,
Vice President None.
David Negri,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Richard M. O'Shaugnessy,
Assistant Vice President:
Rochester Division None.
Gina M. Palmieri,
Assistant Vice President None.
Robert E. Patterson,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
John Pirie,
Assistant Vice President Formerly, a Vice President with Cohane
Rafferty Securities, Inc.
Jane Putnam,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Russell Read,
Senior Vice President Vice President of Oppenheimer Real
Asset Management, Inc. (since March,
1995); formerly director of Quantitative
Research for the Manager. Prior to
that he was a lecturer at
Stamford University, an investment
manager for The
Prudential, and Associate Economist for
the First National
Bank of Chicago.
Thomas Reedy,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for the
Manager.
Adam Rochlin,
Vice President None.
Michael S. Rosen
Vice President; President,
Rochester Division An officer and/or portfolio manager of
certain Oppenheimer funds; Formerly,
Vice President (June, 1983 - January,
1996)
of RFS, President and Director of RFD;
Vice President and
Director of FMC; Vice President and
director of RCAI;
General Partner of RCA; Vice President
and Director of
Rochester Tax Managed Fund Inc.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly
Vice President and Portfolio
Manager/Security Analyst for
Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Assistant Vice President None.
James Ruff,
Executive Vice President None.
Valerie Sanders,
Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Stephanie Seminara,
Vice President Formerly, Vice President of Citicorp
Investment Services.
Richard Soper,
Vice President None.
Nancy Sperte,
Executive Vice President None.
Donald W. Spiro,
Chairman Emeritus and Director Vice Chairman and
Trustee of the New York-based Oppenheimer
Funds; formerly Chairman of the Manager
and the Distributor.
Richard A. Stein,
Vice President: Rochester Division Assistant Vice President (since 1995)
of Rochester Capitol Advisors, L.P.
Arthur Steinmetz,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Ralph Stellmacher,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
John Stoma,
Senior Vice President, Director
Retirement Plans Formerly Vice President of U.S. Group
Pension Strategy and Marketing for
Manulife Financial.
Michael C. Strathearn,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March 1996, an
equity portfolio
manager for Panorama Series Fund, Inc.
and other mutual
funds and pension accounts managed by
G.R. Phelps.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee, Director or
Managing Partner of the Denver-based
Oppenheimer Funds; President and a
Director of Centennial; formerly
President and Director of
OAMC, and Chairman of the Board of SSI.
James Tobin,
Vice President None.
Jay Tracey,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Managing Director of Buckingham
Capital
Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant Treasurer Assistant Treasurer of the Distributor
and SFSI.
Ashwin Vasan,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Dorothy Warmack,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Jerry Webman,
Senior Vice President Director of New York-based tax-exempt
fixed income Oppenheimer funds;
Formerly, Managing Director and Chief
Fixed Income Strategist at Prudential
Mutual Funds.
Christine Wells,
Vice President None.
Joseph Welsh,
Assistant Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Vice President of
HarbourView; prior to March 1996, an
equity portfolio
manager for Panorama Series Fund, Inc.
and other mutual
funds and pension funds managed by G.R.
Phelps.
William L. Wilby,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of HarbourView.
Carol Wolf,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice
President of Centennial; Vice
President, Finance
and Accounting and member of the Board
of Directors of the Junior League of
Denver, Inc.; Point of Contact: Finance
Supporters of Children; Member of the
Oncology Advisory
Board of the Childrens Hospital; Member
of the Board of
Directors of the Colorado Museum of
Contemporary Art.
Caleb Wong,
Assistant Vice President None.
Robert G. Zack,
Senior Vice President and
Assistant Secretary, Associate
General Counsel Assistant Secretary of SSI (since May
1985), and SFSI (since November 1989);
Assistant Secretary of Oppenheimer
Millennium Funds plc (since October 1997);
an officer of other Oppenheimer funds.
Jill Zachman,
Assistant Vice President:
Rochester Division None.
Arthur J. Zimmer,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial.
The Oppenheimer Funds include the New York-based Oppenheimer Funds, the
Denver-
based Oppenheimer Funds and the Oppenheimer/Quest Rochester Funds, as set
forth below:
New York-based Oppenheimer Funds
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Quest/Rochester Funds
Limited Term New York Municipal Fund
Oppenheimer Bond Fund For Growth
Oppenheimer MidCap Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
Denver-based Oppenheimer Funds
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer 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 Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
The address of OppenheimerFunds, Inc., the New York-based Oppenheimer
Funds, the Quest Funds, OppenheimerFunds Distributor, Inc., HarbourView Asset
Management Corp., Oppenheimer Partnership Holdings, Inc., and Oppenheimer
Acquisition Corp. is Two World Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp., and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood,
Colorado 80012.
The address of MultiSource Services, Inc. is 1700 Lincoln Street,
Denver, Colorado
80203.
The address of the Rochester-based funds is 350 Linden Oaks, Rochester,
New York
14625-2807.
Name & Current Position Other Business and Connections
with OpCap Advisors During the Past Two Years
Gavin Albert,
Portfolio Manager Vice President of Oppenheimer Capital.
Robert J. Bluestone,
Director of Fixed Income
Management Managing Director of Oppenheimer
Capital; Director of Oppenheimer
Capital Trust Company.
Timothy J. Curro,
Portfolio Manager Vice President of Oppenheimer Capital.
Pierre Daviron,
Portfolio Manager President, Oppenheimer Capital
International Division.
Thomas E. Duggan,
General Counsel & Secretary Managing Director & General Counsel of
Oppenheimer Capital; Assistant
Secretary of Oppenheimer Financial Corp;
General Counsel of Oppenheimer Capital
Limited.
Linda S. Ferrante,
Portfolio Manager Managing Director of Oppenheimer
Capital.
Bernard H. Garil,
President Managing Director of Oppenheimer
Capital and Oppenheimer & Co., Inc;
Director of Oppenheimer Capital Trust
Company.
John Giusio,
Portfolio Manager Vice President of Oppenheimer Capital.
Richard J. Glasebrook, II,
Portfolio Manager Managing Director of Oppenheimer
Capital.
Colin Glinsman,
Portfolio Manager Senior Vice President of Oppenheimer
Capital.
Louis Goldstein,
Assistant Portfolio Manager Senior Vice President of Oppenheimer
Capital.
Matthew Greenwald,
Portfolio Manager Senior Vice President of Oppenheimer
Capital.
Vikki Y. Hanges,
Portfolio Manager Vice President of Oppenheimer Capital.
Joseph M. LaMotta,
Chairman Chairman Emeritus of Oppenheimer
Capital; Director & President of
Oppenheimer Financial Corp. and
Oppenheimer
Group, Inc.; General Partner of
Oppenheimer & Co., L.P.;
Director of Oppenheimer Capital Trust
Company; Director
and President of Oppenheimer Capital
Limited.
Francis A. LeCates, Jr.,
Director of Research Managing Director of Oppenheimer
Capital.
George A. Long,
Chief Investment Officer Chairman, President, Chief Executive
Officer and Chief Investment Officer of
Oppenheimer Capital.
Elisa A. Mazen,
Portfolio Manager Vice President of Oppenheimer Capital
International Division.
Timothy McCormack,
Portfolio Manager Vice President of Oppenheimer Capital;
formerly Assistant Vice President of
Oppenheimer Capital.
Susan Murphy,
President of an affiliate President of OCC Cash
Management Services Division and
Oppenheimer Capital Trust Company;
Managing Director of Oppenheimer Capital.
Eileen Rominger,
Portfolio Manager Managing Director of Oppenheimer
Capital.
Sheldon M. Siegel,
Treasurer and Chief Financial
Officer Managing Director/Treasurer/Chief
Financial Officer of Oppenheimer
Capital; Director of Oppenheimer
Capital Trust
Company; Treasurer and Chief Financial
Officer of
Oppenheimer Capital Limited.
Jeffrey Whittington,
Portfolio Manager Senior Vice President of Oppenheimer
Capital.
The address of OpCap Advisors is 200 Liberty Street, New York, New York
10281.
For information as to the business, profession, vocation or employment of
a substantial nature of the officers of Oppenheimer Capital, reference is made
to Form ADV filed by OpCap Advisors, under the Investment Advisers Act of 1940,
which is incorporated
herein by reference.
Item 29. Principal Underwriter
(a) OppenheimerFunds Distributor, Inc. is the Distributor of the Registrant's
shares. It is also the Distributor of each of the other registered open-end
investment companies for which OppenheimerFunds, Inc. is the investment adviser,
as described in Part A and B of this Registration Statement and listed in Item
28(b) above.
(b) The directors and officers of the Registrant's principal underwriter are:
Name & Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
George C. Bowen(1) Vice President and Vice President and
Treasurer Treasurer of the
Oppenheimer funds.
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Maryann Bruce(2) Senior Vice President; None
Director: Financial
Institution Division
Robert Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce de Leon Ave.
Decatur, GA 30030
William Coughlin Vice President None
542 West Surf - #2N
Chicago, IL 60657
Mary Crooks(1)
Rhonda Dixon-Gunner(1) Assistant Vice President None
Andrew John Donohue(2) Executive Vice Secretary of the
President & Director Oppenheimer funds.
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
Todd Ermenio Vice President None
11011 South Darlington
Tulsa, OK 74137
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
George Fahey Vice President None
201 E. Rund Grove Rd.
#26-22
Lewisville, TX 75067
Katherine P. Feld(2) Vice President None
& Secretary
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding(3) Vice President None
Reed F. Finley Vice President None
1215 W. 10th Street
Apt. 510
Cleveland, OH 44113
Birmingham, MI 48009
Ronald R. Foster Senior Vice President None
11339 Avant Lane
Cincinnati, OH 45249
Patricia Gadecki Vice President None
950 First St., S.
Suite 204
Winter Haven, FL 33880
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President None
5506 Bryn Mawr
Dallas, TX 75209
Ralph Grant(2) Vice President/National None
Sales Manager
Sharon Hamilton Vice President None
720 N. Juanita Ave.,#1
Redondo Beach, CA 90277
C. Webb Heidinger(2) Vice President None
Byron Ingram(2) Assistant Vice President None
Mark D. Johnson Vice President None
409 Sundowner Ridge Court
Wildwood, MO 63011
Michael Keogh(2) Vice President None
Richard Klein Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409
Daniel Krause Vice President None
560 Beacon Hill Drive
Orange Village, OH 44022
Ilene Kutno(2) Assistant Vice President None
Todd Lawson Vice President None
3333 E. Bayaud Avenue
Unit 714
Denver, CO 80209
Wayne A. LeBlang Senior Vice President None
23 Fox Trail
Lincolnshire, IL 60069
Dawn Lind Vice President None
7 Maize Court
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Todd Marion Vice President None
39 Coleman Avenue
Chatham, N.J. 07928
Marie Masters Vice President None
520 E. 76th Street
New York, NY 10021
John McDonough Vice President None
P.O. Box 760
50 Riverview Road
New Castle, NH 03854
Tanya Mrva(2) Assistant Vice President None
Laura Mulhall(2) Senior Vice President None
Charles Murray Vice President None
18 Spring Lake Drive
Far Hills, NJ 07931
Wendy Murray Vice President None
32 Carolin Road
Upper Montclair, NJ 07043
Denise-Marke Nakamura Vice President None
2870 White Ridge Place, #24
Thousand Oaks, CA 91362
Chad V. Noel Vice President None
60 Myrtle Beach Drive
Henderson, NV 89014
Joseph Norton Vice President None
2518 Fillmore Street
San Francisco, CA 94115
Kevin Parchinski Vice President None
1105 Harney St., #310
Omaha, NE 68102
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
1777 Larimer St. #807
Denver, CO 80202
Steve Puckett Vice President None
2555 N. Clark, #209
Chicago, IL 60614
Elaine Puleo(2) Vice President None
Minnie Ra Vice President None
895 Thirty-First Ave.
San Francisco, CA 94121
Michael Raso Vice President None
16 N. Chatsworth Ave.
Apt. 301
Larchmont, NY 10538
John C. Reinhardt(3) Vice President None
Douglas Rentschler Vice President None
867 Pemberton
Grosse Pointe Park, MI 48230
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Michael S. Rosen(3) Vice President None
Kenneth Rosenson Vice President None
3802 Knickerbocker Place
Apt. #3D
Indianapolis, IN 46240
James Ruff(2) President None
Timothy Schoeffler Vice President None
1717 Fox Hall Road
Washington, DC 77479
Michael Sciortino Vice President None
785 Beau Chene Drive
Mandeville, LA 70471
Robert Shore Vice President None
26 Baroness Lane
Laguna Niguel, CA 92677
George Sweeney Vice President None
5 Smokehouse Lane
Hummelstown, PA 17036
Andrew Sweeny Vice President None
5967 Bayberry Drive
Cincinnati, OH 45242
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
David G. Thomas Vice President None
8116 Arlingon Blvd. #123
Falls Church, VA 22042
Philip St. John Trimble Vice President None
201 Summerfield
Northbrook, IL 60062
Sarah Turpin Vice President None
2735 Dover Road
Atlanta, GA 30327
Gary Paul Tyc(1) Assistant Treasurer None
Mark Stephen Vandehey(1) Vice President None
Marjorie Williams Vice President None
6930 East Ranch Road
Cave Creek, AZ 85331
(1) 6803 South Tucson Way, Englewood, Colorado 80112
(2) Two World Trade Center, New York, NY 10048-0203
(3) 350 Linden Oaks, Rochester, NY 14625-2807
(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 OppenheimerFunds, Inc.
at its offices at 6803 South Tucson Way, Englewood, Colorado 80112 and Two World
Trade Center, New York, New York 10048-0203
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 removal of a Trustee or Trustees when requested in
writing to do so by the holders of at least 10% of the Registrant's outstanding
shares of beneficial interest.
(b)Not applicable.
(c)Registrant hereby undertakes to file a post-effective
amendment containing financial statements for any series portfolio of
Registrant, which need not be certified, within four to six months from the
effective date of the registration statement with respect to such portfolio
under the Securities Act of 1933.
(d)Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
shareholders upon request and without charge, if the information called for by
Item 5A of Form N-1A is contained in the latest annual report to shareholders.
C-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York and State of New York on the 25th day of March, 1998.
Oppenheimer Quest Global Value Fund, Inc.
By: /s/ Bridget A. Macaskill*
Bridget A. Macaskill
Chairman of the Board and President
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 dates
indicated:
Signatures Title Date
/s/ Bridget A Macaskill*Chairman of the Board, March 25, 1998
Bridget A. Macaskill President (Principal
Executive Officer) and
Director
/s/ George C. Bowen* Treasurer (Principal March 25, 1998
- --------------------
George Bowen Financial and Accounting
Officer)
/s/ Paul Y. Clinton* Director March 25, 1998
- --------------------
Paul Y. Clinton
/s/ Thomas W. Courtney* Director March 25, 1998
- -----------------------
Thomas W. Courtney
/s/ Lacy B. Herrmann* Director March 25, 1998
- ---------------------
Lacy B. Herrmann
/s/ George Loft* Director March 25, 1998
George Loft
By: */s/ Robert G. Zack
Robert G. Zack
Attorney-in-Fact
C-3
<PAGE>
OPPENHEIMER QUEST GLOBAL VALUE FUND, INC.
Registration No. 33-34720
Post-Effective Amendment No. 21
Index to Exhibits
Exhibit
Number Description
24(b)(11) Consent of Independent Accountants
24(b)(15)(a) Amended and Restated Service Plan and Agreement dated
2/3/98
with respect to Class A shares
24(b)(15)(b) Amended and Restated Service Plan and Agreement dated
2/3/98
with respect to Class B shares
24(b)(15)(c) Amended and Restated Service Plan and Agreement dated
2/3/98
with respect to Class C shares
24(b)(16) Performance Computation Schedules
24(b)(17)(1) Financial Data Schedules for Class A shares
24(b)(17)(2) Financial Data Schedules for Class B shares
24(b)(17)(3) Financial Data Schedules for Class C shares
254ptc.4
C-4
<PAGE>
Consent of Independent Public Accountants
We hereby consent to the use in the Statement of Additional
Information constituting part of this Post-Effective Amendment No.
21 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 19, 1997, relating to the
financial statements and financial highlights of Oppenheimer Quest
Global Value 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 heading "Financial Highlights" in the Prospectus and
under the heading "Independent Accountants" in the Statement of
Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Denver, Colorado
March 20, 1998
PROSP\254CON
<PAGE>
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class A Shares of
Oppenheimer Quest Global Value Fund, Inc.
This Amended and Restated Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 3rd day of February, 1998, by and between Oppenheimer
Quest Global Value Fund, Inc. (the "Fund") and OppenheimerFunds Distributor,
Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class A shares of the Fund (the "Shares"), contemplated by Rule 12b-1 as it may
be amended from time to time (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 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) Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., or any amendment or successor to such rule (the "NASD
Conduct Rules") 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 U.S.
Securities and Exchange Commission ("SEC").
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.
(b) "Independent Directors" shall mean the members of the Fund's Board of
Directors who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating
to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment
advisory or other clients of a Recipient, and/or accounts as to which such
Recipient provides administrative support services or is a custodian or other
fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such Recipient's
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
1
<PAGE>
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) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution assistance services to the
Fund. Such services include distribution assistance and administrative support
services rendered in connection with Shares (1) sold in purchase transactions,
(2) issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant to
a plan of reorganization to which the Fund is a party. If the Board believes
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. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments in the
aggregate amount of 0.020833% (0.25% 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"). Such Asset-Based Sales
Charge payments received from the Fund will compensate the Distributor for
providing distribution assistance in connection with the sale of Shares.
The distribution assistance 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" (as defined below) in advance of, and\or in amounts 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 the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those prospectuses furnished to current holders of the Fund's shares
("Shareholders")) and state "blue sky" registration expenses.
(b) Payments to Recipients. The Distributor is authorized under the Plan
to pay Recipients (1)
distribution assistance fees for rendering distribution assistance in
connection with the sale of Shares
2
<PAGE>
and/or (2) service fees for rendering administrative support services with
respect to Accounts. 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, that may be set from time to time by a majority of the Independent
Directors. All fee payments made by the Distributor hereunder are subject to
reduction or chargeback so that the aggregate service fee payments and Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by the NASD Conduct Rules. 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 or retain such
payments if the Distributor qualifies as a Recipient.
(i) Service Fee. In consideration of the administrative support
services provided by a Recipient during a calendar quarter, the Distributor
shall make service fee payments to that 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, that may be set from time to time by a
majority of the Independent Directors.
Alternatively, the Distributor may, at its sole option, make the
following service fee payments to any Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter: (i) "Advance Service Fee
Payments" at a rate not to exceed 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) service fee payments 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 one (1)
year. At the Distributor's sole option, the Advance Service Fee Payments may be
made more often than quarterly, and sooner than the end of the calendar quarter.
In the event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated to and will repay 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 administrative support services to be rendered by Recipients in
connection with the Accounts 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.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever alternative
method of making service fee payments to Recipients is selected by the
Distributor, in addition the Distributor may make distribution assistance fee
payments to a Recipient quarterly, within forty-five (45) days after 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
3
<PAGE>
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. Distribution assistance fee payments shall be made only to
Recipients that are registered with the SEC as a broker-dealer or are exempt
from registration.
The distribution assistance to be rendered by the Recipients in
connection with the sale of Shares may include, but shall not be limited to, the
following: distributing sales literature and prospectuses other than those
furnished to current Shareholders, providing compensation to and paying expenses
of personnel of the Recipient who support the distribution of Shares by the
Recipient, and providing such other information and services in connection with
the distribution of Shares as the Distributor or the Fund may reasonably
request.
(c) A majority of the Independent Directors may at any time or from time
to time increase or decrease 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 any Minimum Holding Period or any Minimum
Qualified Holdings. The Distributor shall notify all Recipients of any Minimum
Qualified Holdings and Minimum Holding Period that are established 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.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") 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 OFI), from its own resources, from Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. 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 that 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 not satisfied after the receipt
of such report, 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. Additionally, in their
discretion, a majority of the Fund's Independent Directors at any time may
remove any broker, dealer, bank or other person or entity as a Recipient, where
upon such person's or entity's rights as a third-party beneficiary hereof shall
terminate. 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. The Distributor has
no obligation to pay any
4
<PAGE>
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received payment of Service Fees or Distribution Fees from the Fund.
4. Selection and Nomination of Directors. While this Plan is in effect, the
selection and nomination of persons to be Directors of the Fund who are not
"interested persons" of the Fund ("Disinterested Directors") shall be committed
to the discretion of the incumbent Disinterested Directors. Nothing herein shall
prevent the incumbent Disinterested Directors from soliciting the views or the
involvement of others in such selection or nominations as long as 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 Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan 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 Class A voting shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement 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
(v) such agreement 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 of the Independent
Directors and replaces the Fund's prior Amended and Restated Distribution and
Service Plan for Class A Shares. Unless terminated as hereinafter provided, it
shall continue in effect until renewed by the Board in accordance with the Rule
and thereafter from year to year or as the Board may otherwise determine but
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 under this Plan, without approval of the Class A Shareholders at a
meeting called for that purpose, and all material amendments must be approved by
a vote of the Board and of the Independent Directors.
5
<PAGE>
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 Class A voting shares. 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.
6
<PAGE>
Oppenheimer Quest Value Fund, Inc.
By: ____________________________________
OppenheimerFunds Distributor, Inc.
By: ____________________________________
ofmi\254a.#2
7
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class B Shares of
Oppenheimer Quest Global Value Fund, Inc.
This Amended and Restated Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 3rd day of February, 1998, by and between Oppenheimer
Quest Global Value Fund, Inc. (the "Fund") and OppenheimerFunds 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 as it may
be amended from time to time (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 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) Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., or any amendment or successor to such rule (the "NASD
Conduct Rules") 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 U.S.
Securities and Exchange Commission ("SEC").
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.
(b) "Independent Directors" shall mean the members of the Fund's Board of
Directors who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating
to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment
advisory or other clients of a Recipient, and/or accounts as to which such
Recipient provides administrative support services or is a custodian or other
fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such Recipient's
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
1
<PAGE>
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) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution assistance services to the
Fund. Such services include distribution assistance and administrative support
services rendered in connection with Shares (1) sold in purchase transactions,
(2) issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant to
a plan of reorganization to which the Fund is a party. If the Board believes
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. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments 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 no more than
six years (the "Maximum Holding Period"). Such Asset-Based Sales Charge payments
received from the Fund will compensate the Distributor for providing
distribution assistance in connection with the sale of Shares.
The distribution assistance 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" (as defined below) in advance of, and\or in amounts 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 the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those prospectuses furnished to current holders of the Fund's shares
("Shareholders")) and state "blue sky" registration expenses.
(b) Payments to Recipients. The Distributor is authorized under the Plan
to pay Recipients (1)
distribution assistance fees for rendering distribution assistance in
connection with the sale of Shares
2
<PAGE>
and/or (2) service fees for rendering administrative support services with
respect to Accounts. 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, that may be set from time to time by a majority of the Independent
Directors. All fee payments made by the Distributor hereunder are subject to
reduction or chargeback so that the aggregate service fee payments and Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by the NASD Conduct Rules. 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 or retain such
payments if the Distributor qualifies as a Recipient.
(i) Service Fee. In consideration of the administrative support
services provided by a Recipient during a calendar quarter, the Distributor
shall make service fee payments to that 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, that may be set from time to time by a
majority of the Independent Directors.
Alternatively, the Distributor may, at its sole option, make the
following service fee payments to any Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter: (i) "Advance Service Fee
Payments" at a rate not to exceed 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) service fee payments 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 one (1)
year. At the Distributor's sole option, the Advance Service Fee Payments may be
made more often than quarterly, and sooner than the end of the calendar quarter.
In the event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated to and will repay 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 administrative support services to be rendered by Recipients in
connection with the Accounts 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.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever alternative
method of making service fee payments to Recipients is selected by the
Distributor, in addition the Distributor may make distribution assistance fee
payments to a Recipient quarterly, within forty-five (45) days after 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
3
<PAGE>
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 no more than six years and for any minimum period that the
Distributor may establish. Distribution assistance fee payments shall be made
only to Recipients that are registered with the SEC as a broker-dealer or are
exempt from registration.
The distribution assistance to be rendered by the Recipients in
connection with the sale of Shares may include, but shall not be limited to, the
following: distributing sales literature and prospectuses other than those
furnished to current Shareholders, providing compensation to and paying expenses
of personnel of the Recipient who support the distribution of Shares by the
Recipient, and providing such other information and services in connection with
the distribution of Shares as the Distributor or the Fund may reasonably
request.
(c) A majority of the Independent Directors may at any time or from time
to time increase or decrease 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 Maximum Holding Period, any Minimum
Holding Period or any Minimum Qualified Holdings. The Distributor shall notify
all Recipients of any Minimum Qualified Holdings, Maximum Holding Period and
Minimum Holding Period that are established 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.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") 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 OFI), from its own resources, from Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. 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 that 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 not satisfied after the receipt
of such report, 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. Additionally, in their
discretion, a majority of the Fund's Independent Directors at any time may
remove any broker, dealer, bank or other person or entity as a Recipient, where
upon such person's or entity's rights as a third-party beneficiary hereof shall
terminate. 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. The Distributor has
no obligation to pay any
4
<PAGE>
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received payment of Service Fees or Distribution Fees from the Fund.
4. Selection and Nomination of Directors. While this Plan is in effect, the
selection and nomination of persons to be Directors of the Fund who are not
"interested persons" of the Fund ("Disinterested Directors") shall be committed
to the discretion of the incumbent Disinterested Directors. Nothing herein shall
prevent the incumbent Disinterested Directors from soliciting the views or the
involvement of others in such selection or nominations as long as 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 Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan 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 Class B voting shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement 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
(v) such agreement 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 of the Independent
Directors and replaces the Fund's prior Amended and Restated Distribution and
Service Plan for Class B Shares. Unless terminated as hereinafter provided, it
shall continue in effect until renewed by the Board in accordance with the Rule
and thereafter from year to year or as the Board may otherwise determine but
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 under this Plan, without approval of the Class B Shareholders at a
meeting called for that purpose, and all material amendments must be approved by
a vote of the Board and of the Independent Directors.
5
<PAGE>
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 Class B voting shares. 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 Value Fund, Inc.
By: ____________________________________
OppenheimerFunds Distributor, Inc.
By: ____________________________________
ofmi\254b.#2
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
with
OppenheimerFunds Distributor, Inc.
For Class C Shares of
Oppenheimer Quest Global Value Fund, Inc.
This Amended and Restated Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 3rd day of February, 1998, by and between Oppenheimer
Quest Global Value Fund, Inc. (the "Fund") and OppenheimerFunds Distributor,
Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class C shares of the Fund (the "Shares"), contemplated by Rule 12b-1 as it may
be amended from time to time (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 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) Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., or any applicable amendment or successor to such rule
(the "NASD Conduct Rules") 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 U.S.
Securities and Exchange Commission ("SEC").
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.
(b) "Independent Directors" shall mean the members of the Fund's Board of
Directors who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating
to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment
advisory or other clients of a Recipient, and/or accounts as to which such
Recipient provides administrative support services or is a custodian or other
fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or
1
<PAGE>
of record by: (i) such Recipient, or (ii) such Recipient's 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) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution services to the Fund. Such
services include distribution assistance and administrative support services
rendered in connection with Shares (1) sold in purchase transactions, (2) issued
in exchange for shares of another investment company for which the Distributor
serves as distributor or sub-distributor, or (3) issued pursuant to a plan of
reorganization to which the Fund is a party. If the Board believes 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. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments 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"). Such Asset-Based Sales
Charge payments received from the Fund will compensate the Distributor for
providing distribution assistance in connection with the sale of Shares.
The distribution assistance 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" (as defined below) in advance of, and/or in amounts 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 the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those prospectuses furnished to current holders of the Fund's shares
("Shareholders")) and state "blue sky" registration
2
<PAGE>
expenses.
(b) Payments to Recipients. The Distributor is authorized under the Plan
to pay Recipients (1) distribution assistance fees for rendering distribution
assistance in connection with the sale of Shares and/or (2) service fees for
rendering administrative support services with respect to Accounts. However, no
such payments shall be made to any Recipient for any 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, that may be set from time
to time by a majority of the Independent Directors. All fee payments made by the
Distributor hereunder are subject to reduction or chargeback so that the
aggregate service fee payments and Advance Service Fee Payments do not exceed
the limits on payments to Recipients that are, or may be, imposed by the NASD
Conduct Rules. 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 or retain such payments if the Distributor qualifies as
a Recipient.
In consideration of the services provided by Recipients, the Distributor
shall make the following payments to Recipients:
(i) Service Fee. In consideration of administrative support services
provided by a Recipient during a calendar quarter, the Distributor shall make
service fee payments to that 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, that may be set from time to time by a majority of the
Independent Directors.
Alternatively, the Distributor may, at its sole option, make the following
service fee payments to any Recipient quarterly, within forty-five (45) days of
the end of each calendar quarter: (A) "Advance Service Fee Payments" at a rate
not to exceed 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 (B) service fee payments 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 one (1) year. At the Distributor's
sole option, Advance Service Fee Payments may be made more often than quarterly,
and sooner than the end of the calendar quarter. In the event Shares are
redeemed less than one year after the date such Shares were sold, the Recipient
is obligated to and will repay 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 administrative support services to be rendered by Recipients in
connection with the Accounts 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
3
<PAGE>
services and/or the maintenance of Accounts, as the Distributor or the Fund
may reasonably request.
(ii) Distribution Assistance Fee (Asset-Based Sales Charge)
Payments. Irrespective of whichever alternative method of making service fee
payments to Recipients is selected by the Distributor, in addition the
Distributor shall make distribution assistance fee payments to each Recipient
quarterly, within forty-five (45) days after 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. Alternatively, at its sole option, the Distributor may make
distribution assistance fee payments to a Recipient quarterly, at the rate
described above, on Shares constituting Qualified Holdings owned beneficially or
of record by the Recipient or its Customers without regard to the 1-year holding
period described above. Distribution assistance fee payments shall be made only
to Recipients that are registered with the SEC as a broker-dealer or are exempt
from registration.
The distribution assistance to be rendered by the Recipients in connection
with the sale of Shares may include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than those furnished to
current Shareholders, providing compensation to and paying expenses of personnel
of the Recipient who support the distribution of Shares by the Recipient, and
providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
(c) A majority of the Independent Directors may at any time or from time
to time (i) increase or decrease 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 (ii)
direct the Distributor to increase or decrease any Minimum Holding Period, any
maximum period set by a majority of the Independent Directors during which fees
will be paid on Shares constituting Qualified Holdings owned beneficially or of
record by a Recipient or by its Customers (the "Maximum Holding Period"), or
Minimum Qualified Holdings. The Distributor shall notify all Recipients of any
Minimum Qualified Holdings, Maximum Holding Period and Minimum Holding Period
that are established 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 supplement or amendment to or revision of the
prospectus of the Fund shall constitute sufficient notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") 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 OFI), from its own resources, from Asset- Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. It
may be presumed that a Recipient has provided distribution
4
<PAGE>
assistance or administrative support services qualifying for payment under the
Plan if it has Qualified Holdings of Shares that entitle it to payments under
the Plan. If either the Distributor or the Board 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 not satisfied after the receipt of such report, either may
take appropriate steps to terminate the Recipient's status as a Recipient under
the Plan, whereupon such Recipient's rights as a third-party beneficiary
hereunder shall terminate. Additionally, in their discretion a majority of the
Fund's Independent Directors at any time 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. 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. The Distributor has no obligation to pay any
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received payment of Service Fees or Distribution Assistance Fees from
the Fund.
4. Selection and Nomination of Directors. While this Plan is in effect, the
selection and nomination of persons to be Directors of the Fund who are not
"interested persons" of the Fund ("Disinterested Directors") shall be committed
to the discretion of the incumbent Disinterested Directors. Nothing herein shall
prevent the incumbent Disinterested Directors from soliciting the views or the
involvement of others in such selection or nomination as long as 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 Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan 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 Class C shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement 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
(v) such agreement 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 of the Independent
Directors and replaces the Fund's prior Amended and Restated Distribution and
Service Plan for Class C Shares. Unless terminated as hereinafter provided, it
shall continue in effect until renewed by the Board in accordance with the Rule
and thereafter from year to year or as the Board may otherwise determine but
only so long as such
5
<PAGE>
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 under this Plan, without approval of the Class C Shareholders at a
meeting called for that purpose 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 Class C voting shares. 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 Global Value Fund, Inc.
By: ________________________________________
OppenheimerFunds Distributor, Inc.
By: ________________________________________
ofmi/254C.#2
6
Oppenheimer Quest Global Value Fund, Inc.
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated as
described below, on the basis of the Fund's distributions, for the past 10 years
which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
12/28/90 0.1180000 0.0000000 10.460
01/14/91 0.0080000 0.0000000 10.050
12/18/92 0.0000000 0.8110000 11.630
12/31/92 0.0920000 0.0000000 11.450
08/13/93 0.0270000 0.0890000 13.530
12/13/93 0.0000000 0.4935000 13.610
12/05/94 0.0000000 1.2281000 12.970
12/27/95 0.1309900 1.2377000 14.260
12/17/96 0.0055100 0.5513400 15.700
Class B Shares
12/13/93 0.0000000 0.4935000 13.600
12/05/94 0.0000000 1.2281000 12.870
12/27/95 0.0694200 1.2377000 14.130
12/17/96 0.0000000 0.5513400 15.470
Class C Shares
12/13/93 0.0000000 0.4935000 13.600
12/05/94 0.0000000 1.2281000 12.860
12/27/95 0.0554600 1.2377000 14.100
12/17/96 0.0000000 0.5513400 15.440
<PAGE>
Oppenheimer Quest Global Value Fund, Inc.
Page 2
1. Average Annual Total Returns for the Periods Ended 11/30/97:
The formula for calculating average annual total return is as follows:
1/number of years = n {(ERV/P)^n} - 1 = average annual total return
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum Examples at NAV:
sales charge of 5.75%:
One Year One Year
{($1,095.55/$1,000)^ 1} - 1 = 9.56% {($1,162.39/$1,000)^ 1} - 1 = 16.24%
Five Year Five Year
{($1,984.74/$1,000)^.2} - 1 = 14.69% {($2,105.84/$1,000)^.2} - 1 = 16.06%
Inception Inception
{($2,050.43/$1,000)^.1349}- 1 = 10.17% {($2,175.53/$1,000)^.1349}- 1 =11.06%
Class B Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 5.00% for the first year, and
2.00% for the inception year:
One Year One Year
{($1,106.09/$1,000)^ 1} - 1 = 10.61% {($1,156.08/$1,000)^ 1} - 1 = 15.61%
Inception Inception
{($1,674.47/$1,000)^.2354}- 1 = 12.90% {($1,694.48/$1,000)^.2354}- 1= 13.22%
Class C Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 1.00% for the first year, and
0.00% for the inception year:
One Year One Year
{($1,146.40/$1,000)^ 1} - 1 = 14.64% {($1,156.40/$1,000)^ 1} - 1 = 15.64%
Inception Inception
{($1,690.64/$1,000)^.2354}- 1 = 13.16% {($1,690.64/$1,000)^.2354}- 1 = 13.16%
<PAGE>
Oppenheimer Quest Global Value Fund, Inc.
Page 3
2. Cumulative Total Returns for the Periods Ended 11/30/97:
The formula for calculating cumulative total return is as follows:
(ERV - P) / P = Cumulative Total Return
Class A Shares
Examples, assuming a maximum Examples at NAV:
sales charge of 5.75%:
One Year One Year
$1,095.55 - $1,000/$1,000 = 9.56% $1,162.39 - $1,000/$1,000 = 16.24%
Five Year Five Year
$1,984.74 - $1,000/$1,000 = 98.47% $2,105.84 - $1,000/$1,000 =110.58%
Inception Inception
$2,050.43 - $1,000/$1,000 = 105.04% $2,175.53 - $1,000/$1,000 =117.55%
Class B Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 5.00% for the first year, and
2.00% for the inception year:
One Year One Year
$1,106.09 - $1,000/$1,000 = 10.61% $1,156.08 - $1,000/$1,000 = 15.61%
Inception Inception
$1,674.47 - $1,000/$1,000 = 67.45% $1,649.48 - $1,000/$1,000 = 69.45%
Class C Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 1.00% for the first year, and
0.00% for the inception year:
One Year One Year
$1,146.40 - $1,000/$1,000 = 14.64% $1,156.40 - $1,000/$1,000 = 15.64%
Inception Inception
$1,690.64 - $1,000/$1,000 = 69.06% $1,690.64 - $1,000/$1,000 = 69.06%
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> Oppenheimer Quest Global Value Fund, Inc.-A
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<ACCUM-APPREC-OR-DEPREC> 83,214,154
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<DISTRIBUTIONS-OF-INCOME> 67,908
<DISTRIBUTIONS-OF-GAINS> 6,430,679
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<NUMBER-OF-SHARES-SOLD> 5,472,340
<NUMBER-OF-SHARES-REDEEMED> 3,053,828
<SHARES-REINVESTED> 402,738
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<GROSS-ADVISORY-FEES> 2,448,836
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,127,890
<AVERAGE-NET-ASSETS> 233,020,000
<PER-SHARE-NAV-BEGIN> 16.48
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<PER-SHARE-GAIN-APPREC> 2.55
<PER-SHARE-DIVIDEND> 0.01
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<EXPENSE-RATIO> 1.73
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<AVG-DEBT-PER-SHARE> 0.00
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PAID-IN-CAPITAL-COMMON> 305,326,453
<SHARES-COMMON-STOCK> 5,427,392
<SHARES-COMMON-PRIOR> 2,377,524
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<ACCUMULATED-NET-GAINS> 16,486,331
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 83,214,154
<NET-ASSETS> 98,457,003
<DIVIDEND-INCOME> 4,077,642
<INTEREST-INCOME> 2,066,755
<OTHER-INCOME> 63,122
<EXPENSES-NET> 6,127,890
<NET-INVESTMENT-INCOME> 79,629
<REALIZED-GAINS-CURRENT> 16,527,219
<APPREC-INCREASE-CURRENT> 26,553,451
<NET-CHANGE-FROM-OPS> 43,160,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,344,536
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,404,941
<NUMBER-OF-SHARES-REDEEMED> 435,710
<SHARES-REINVESTED> 80,637
<NET-CHANGE-IN-ASSETS> 158,078,079
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,941,027
<OVERDISTRIB-NII-PRIOR> 147,118
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<GROSS-ADVISORY-FEES> 2,448,836
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,127,890
<AVERAGE-NET-ASSETS> 67,317,000
<PER-SHARE-NAV-BEGIN> 16.25
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 2.48
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.55
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<PER-SHARE-NAV-END> 18.14
<EXPENSE-RATIO> 2.24
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
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<DISTRIBUTIONS-OF-GAINS> 546,226
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<NUMBER-OF-SHARES-REDEEMED> 407,992
<SHARES-REINVESTED> 31,126
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