Registration No. 33-41511
File No. 811-6332
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. 9 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
AMENDMENT NO. 9 / X /
ROCHESTER PORTFOLIO SERIES
------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
350 LINDEN OAKS, ROCHESTER, NEW YORK 14625
------------------------------------------------------------------------
(Address of Principal Executive Offices)
800-552-1149
------------------------------------------------------------------------
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
------------------------------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / Immediately upon filing pursuant to paragraph (b)
/ / On ___________, pursuant to paragraph (b)
/ X/ 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.
- -------------------------------------------------------------------
The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the Investment
Company Act of 1940. A Rule 24f-2 Notice for the Registrant's fiscal year ended
December 31, 1996 was filed on February 27, 1997.
<PAGE>
FORM N-1A
ROCHESTER PORTFOLIO SERIES
Cross Reference Sheet
-------------------------
Part A of
Form N-1A
Item No. Prospectus Heading
- ---------- ------------------
1 Cover Page
2 Expenses; A Brief Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and Policies
5 Expenses; How the Fund is Managed; Back Cover
5A Performance of the Fund
6 Dividends, Capital Gains and Taxes; How the Fund is
Managed -- Organization and History; The Transfer Agent
7 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 Buy Shares; How to Sell Shares;
Shareholder Account Rules and Policies
8 How to Sell Shares; How to Exchange Shares; Special
Investor Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information or
- ---------- ----------------------------------------------------
Prospectus
----------
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment
Techniques and Strategies; Other Investment Restrictions
14 How the Fund is Managed -- Trustees and Officers of the
Fund
15 How the Fund is Managed -- Major Shareholders
16 How the Fund is Managed; Additional Information about the
Fund; Distribution and Service Plans; Back Cover
17 How the Fund is Managed
18 Additional Information about the Fund
19 About Your 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; Additional Information about the
Fund - The Distributor; Distribution and Service Plans
22 Performance of the Fund
23 Financial Statements
- ---------------
*Not applicable or negative answer.
<PAGE>
LIMITED TERM NEW YORK MUNICIPAL FUND
Prospectus dated May 1, 1997
Rochester Portfolio Series is mutual fund consisting of one portfolio, Limited
Term New York Municipal Fund, which has four classes of shares, Class A shares,
Class B shares, Class C shares and Class D shares. The Fund's investment
objective is to provide shareholders with as high a level of income exempt from
Federal income tax and New York State and New York City personal income taxes as
is consistent with its investment policies and prudent investment management.
The Fund intends to invest primarily in a portfolio of investment grade
obligations with a dollar weighted average effective maturity of five years or
less. There can be no assurance that the investment objective of the Fund will
be realized.
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
May 1, 1997 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).
[logo]OppenheimerFunds
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 OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-1-
<PAGE>
Contents
ABOUT THE FUND
Expenses
A Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
Investment Policies and Strategies
Investment Risks
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
Class D Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
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 and Purchase
Arrangements for Class A and Class D Shareholders
Appendix B: Special Sales Charge Arrangements
-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 calculations for
Class A shares and Class D shares are based on the Fund's expenses for those
classes during its fiscal year ended December 31, 1996. On May 1, 1997 the Fund
redesignated as "Class D shares" its Class B shares which had been outstanding
prior to that date. It also authorized the issuances of new classes of shares
("Class B shares" and "Class C shares") and revised the sales charge schedule
for Class A shares. The information for Class B shares and Class C shares has
been estimated based upon expenses expected to be incurred through December 31,
1997.
o Shareholder Transaction Expenses are charges you pay when you buy or
sell shares of the Fund. Please refer to "About Your Account," for an
explanation of how and when these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C Class D
Shares Shares Shares Shares(2)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge
on Purchase (as a % of
offering price) 3.50% None None None
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge
on Reinvested Dividends None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales None 4.0% in the 1% if shares 2.5% in the
Charge (as a % of the first year are redeemed first year
lower of the original declining within 12 declining
offering price or to 1% in months of to 1% in
redemption proceeds) the fifth purchase(1) the fourth
year and year and
eliminated eliminated
thereafter(1) thereafter
-3-
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
Exchange Fee None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
Redemption Fee None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) See "How to Buy Shares - Class B Shares," and "How to Buy Shares - Class C
Shares" below for more information on the contingent deferred sales charge.
(2) See "How to Buy Shares - Class D Shares" for more information on buying
Class D Shares.
</FN>
</TABLE>
o Annual Fund Operating Expenses are paid out of the Fund's assets and
represent the Fund's expenses in operating its business. For example, the Fund
pays management fees to its investment adviser, OppenheimerFunds, Inc. (which is
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 detailed in the Fund's Financial Statements in the
Statement of Additional Information.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses (as a Percentage of Average Net Assets)
Class A Class B Class C Class D
Shares Shares Shares Shares
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Management Fees 0.43% 0.43% 0.43% 0.43%
- ---------------------------------------------------------------------------------------------------------------------------------
12b-1 Plan Fees(1) 0.25% 0.75% 0.75% 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Other Expenses 0.21% 0.20% 0.20% 0.20%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses(2) 0.89% 1.38% 1.38% 1.38%
- ----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The 12b-1 Plan Fees for Class A shares are the service plan fees (which can
be up to a maximum of 0.25% of average annual net assets of that class), and for
Class B and Class C shares, are the service plan fees (which can be up to a
maximum of 0.25%) and the asset-based sales charge of 0.75%. The 12b-1 fees for
Class D shares are the service plan fees (which can be up to a maximum of 0.25%)
and the asset-based sales charge of 0.50%. Although the
-4-
<PAGE>
Fund's Distribution and Service Plan for Class D shares permits the payment of
an asset-based sales charge of up to 0.75% of average daily net assets
attributable to Class D shares per annum, the Board of Trustees has authorized
payment of an asset-based sales charge of only 0.50%. See "How to Buy Shares"
for descriptions of these plans.
(2) The amounts in the table reflect the Fund's
interest expense during the fiscal year ended December 31, 1996. Total Fund
Operating Expenses (excluding interest) for Class A and Class D shares would
have been 0.83% and 1.32% respectively, for the fiscal year ended December 31,
1996. During fiscal 1996, the Fund's interest expense was substantially offset
by the incremental interest income generated on bonds purchased with borrowed
funds.
</FN>
</TABLE>
The numbers in the table above with respect to Class A shares and
Class D shares are shown as a percentage of the average net assets of each class
of the Fund's shares for that year. The expenses shown for Class B shares and
Class C shares are estimates since those classes were not in effect during
fiscal year ended December 31, 1996.
The actual expenses for each class of shares in future years may be
more or less than the numbers in the above table, depending on a number of
factors, including 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 that 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 table above.
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:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years*
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares $44 $62 $83 $141
Class B Shares $54 $64 $86 $140
Class C Shares $24 $44 $76 $166
Class D Shares $54 $64 $86 $140
</TABLE>
If you did not redeem your investment, it would incur the following expenses:
-5-
<PAGE>
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years*
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares $44 $62 $83 $141
Class B Shares $14 $44 $76 $140
Class C Shares $14 $44 $76 $166
Class D Shares $14 $44 $76 $140
</TABLE>
* In the first example, expenses include the Class A initial sales charge of
3.50% and the applicable Class B, Class C or Class D contingent deferred sales
charge. In the second example, Class A expenses include the initial sales
charge, but Class B, Class C and Class D expenses do not include contingent
deferred sales charges. The Class B and Class D expenses in years 7 through 10
are based on the Class A expenses shown above, because the Fund automatically
converts your Class B and Class D shares into Class A shares after 6 years.
Because of the effect of the asset-based sales charge and the contingent
deferred sales charge on Class B, Class C and Class D shares, long-term Class B,
Class C and Class D shareholders could pay the economic equivalent of more than
the maximum front-end sales charge allowed under applicable regulations. For
Class B and Class D shareholders, the automatic conversion of Class B and Class
D shares into Class A shares is designed to minimize the likelihood that this
will occur. Please refer to "How to Buy 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.
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's investment
objective is to provide shareholders with as high a level of income exempt from
Federal income tax and New York State and New York City personal income taxes as
is consistent with its investment policies and prudent investment management.
There can be
-6-
<PAGE>
no assurance that the investment objective of the Fund will be
realized.
o What Does the Fund Invest in? The Fund seeks to achieve its
objective by investing primarily in a portfolio of investment grade obligations
with a dollar weighted average effective maturity of five years or less issued
by or on behalf of New York State, its political subdivisions, agencies and
instrumentalities and obligations of other qualifying issuers (such as issuers
located in Puerto Rico, the Virgin Islands, and Guam), which pay interest that
is, in the opinion of the bond counsel to the issuer, exempt from Federal income
tax and New York State and New York City personal income taxes ( "Municipal
Obligations"). As a fundamental policy, at least 95% of the Fund's net assets
will be invested in Municipal Obligations except when the Manager believes that
market conditions would cause serious erosion of portfolio value, in which case
assets may be invested temporarily in short-term taxable investments as a
defensive measure to preserve net asset value.
o Who Manages the Fund? The Fund's investment adviser is
OppenheimerFunds, Inc. The Manager (including a subsidiary) advises investment
company portfolios having over $62 billion in assets at December 31, 1996. The
Manager is paid an advisory fee by the Fund, based on its assets. The Fund's
portfolio manager, who is employed by the Manager, is primarily responsible for
the selection of the Fund's securities. The portfolio manager is Ronald H.
Fielding. The Fund's Board of Trustees, which is elected by shareholders,
oversees the investment adviser and the portfolio manager. Please refer to "How
the Fund is Managed," for more information about the Manager and its fees.
o How Risky Is the Fund? All investments carry risks to some degree.
The Fund's bond investments are subject to change in their value from a number
of factors such as change in general bond market movements, the change in value
of particular bonds 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. In addition, as a
non-diversified fund, the Fund may invest a greater portion of its assets in the
securities of a limited number of issuers than a diversified fund. While the
Manager tries to reduce risks by structuring the Fund's portfolio to include a
broad spectrum of Municipal Obligations and by carefully researching securities
before they are purchased by the portfolio, there is no guarantee of success in
achieving the Fund's objective and your shares may be
-7-
<PAGE>
worth more or less than their original cost when you redeem them. Please refer
to "Investment Objective and Policies" for a more complete discussion.
o How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic Investment
Plan under AccountLink. Please refer to "How to Buy Shares" for more details.
o Will I Pay a Sales Charge to Buy Shares? The Fund has four classes
of shares. All classes have the same investment portfolio, but different
expenses. Class A shares are offered with a front-end sales charge, starting at
3.5%, and reduced for larger purchases. Class B, Class C and Class D shares are
offered without a front-end sales charge, but are subject to a contingent
deferred sales charge if redeemed within 5 years (Class B shares) 4 years (Class
D shares) or 12 months (Class C shares) of purchase. There is also an annual
asset-based sales charge on Class B, Class C and Class D shares. Please review
"How To Buy Shares" for more details, including a discussion about factors you
and your financial adviser 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." The Fund also offers exchange
privileges to other Oppenheimer funds, described in "How to Exchange Shares."
o How Has the Fund Performed? The Fund measures its performance by
quoting its yield and total returns, which measure historical performance. Those
yields and returns can be compared to the yields and 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
broad-based market indices and non-securities indices which we have done on page
___. Please remember that past performance does not guarantee future results.
See "Performance of the Fund." [Note: This section to be expanded.]
Financial Highlights
The table on the following pages presents selected financial information about
the Fund, including per share data and expense
-8-
<PAGE>
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 auditors, whose
report on the Fund's financial statements for the fiscal year ended December 31,
1996, is included in the Statement of Additional Information. On May 1, 1997,
the Fund redesignated as "Class D shares" its Class B shares which had been
outstanding prior to that date. Class B and Class C shares were not publicly
offered during any of the periods shown. Accordingly, information on these
classes of shares is not included for all years in the table below or in the
Fund's other financial statements.
-9-
<PAGE>
<TABLE>
<CAPTION>
Class A
Periods Ended December 31,
-----------------------------------------------------------------------------------------
1996 1995 1994 1993 1992(b) 1991(a)
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $3.28 $3.15 $3.33 $3.18 $3.07 $3.00
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.17 0.18 0.16 0.17 0.18 0.05
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) (0.02) 0.13 (0.18) 0.15 0.11 0.07
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss)
from investment
operations 0.15 0.31 (0.02) 0.32 0.29 0.12
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income (0.17) (0.18) (0.16) (0.17) (0.18) (0.05)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.17) (0.18) (0.16) (0.17) (0.18) (0.05)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $3.26 $3.28 $3.15 $3.33 $3.18 $3.07
- -----------------------------------------------------------------------------------------------------------------------------------
Total return
(excludes sales load)(c) 4.82% 10.01% (0.60%) 10.06% 9.45% 4.05%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental data:
Net assets, end of
period (000 omitted) $634,172 $567,537 $496,452 $457,860 $150,096 $18,659
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets(e) 0.89% 0.90% 0.89% 0.89% 0.83% 0.83%(d)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of total expenses
(excluding interest)
to average net assets(e)(f) 0.83% 0.84% 0.84% 0.86% 0.78% 0.74%(d)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 5.37% 5.44% 5.12% 4.94% 5.33% 5.22%(d)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(g) 24.35% 22.34% 34.58% 17.08% 59.87% 1.42%
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(a) The Fund commenced operations on September 18, 1991.
(b) Net of fees waived or reimbursed by Fielding Management
-10-
<PAGE>
Company, Inc., the Fund's previous investment adviser, and Rochester Fund
Services, Inc., the Fund's previous shareholder servicing, accounting and
pricing agent, which amounted to $0.01 per share. Without reimbursement, the
ratios would have been 5.02%,
1.14% and 1.09%, respectively.
(c) 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 total returns. Total returns
are not annualized for periods of less than one full year.
(d) Annualized.
(e) Beginning in fiscal 1995, the expense ratios reflect the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
(f) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated by bonds
purchased with borrowed funds.
(g) 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 December 31, 1996 were $256,486,227
and $153,521,279, respectively. (h) On January 4, 1996, OppenheimerFunds, Inc.
acquired substantially all of the assets of Rochester Capital Advisors, L.P. and
certain affiliates and was appointed investment adviser to the Fund. Rochester
Capital Advisors, L.P. served as investment advisers to the Fund from December
20, 1993 through January 4, 1996. Fielding Management Company, Inc. served as
investment adviser to the Fund from September 18, 1991 to December 19, 1993.
</FN>
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Class D
Period Ended December 31,
-------------------------------
1996 1995(a)
---- ----
<S> <C> <C>
Net asset value,
beginning of period $3.28 $3.21
- --------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.16 0.11
- --------------------------------------------------------------------
Net realized and
unrealized gain (loss) (0.01) 0.07
- --------------------------------------------------------------------
Total income (loss)
from investment
operations 0.15 0.18
- --------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income (0.16) (0.11)
- --------------------------------------------------------------------
Total distributions (0.16) (0.11)
- --------------------------------------------------------------------
Net asset value,
end of period $3.27 $3.28
- --------------------------------------------------------------------
Total return
(excludes sales load)(b) 4.59% 5.65%
- --------------------------------------------------------------------
Ratios/Supplemental data:
Net assets, end of
period (000 omitted) $ 40,828 $ 16,415
- --------------------------------------------------------------------
Ratio of total expenses
to average net assets(d) 1.38% 0.90%(c)
- -------------------------------------------------------------------
Ratio of total expenses
(excluding interest)
to average net assets(d)(e) 1.32% 0.85%(c)
- -------------------------------------------------------------------
Ratio of net investment
income to average
net assets 4.85% 5.21%(c)
- -------------------------------------------------------------------
Portfolio turnover rate(f) 24.35% 22.34%
- -------------------------------------------------------------------
<FN>
(a) For the period May 1, 1995 (inception of offering) to December 31, 1995.
-12-
<PAGE>
(b) 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 total returns. Total returns
are not annualized for periods of less than one full year.
(c) Annualized.
(d) Beginning in fiscal 1995, the expense ratios reflect the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not be
adjusted. (e) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(f) 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 December 31, 1996 were $256,486,227
and $153,521,279, respectively.
(g) On January 4, 1996, OppenheimerFunds, Inc.
acquired substantially all of the assets of Rochester Capital Advisors, L.P. and
certain affiliates and was appointed investment adviser to the Fund. Rochester
Capital Advisors, L.P. served as investment advisers to the Fund from December
20, 1993 through January 4, 1996.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Information On Bank Loans
Periods Ended December 31,
-------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991*
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Bank loans outstanding
at end of period (000) $9,000 $4,660 $7,797 $ 934 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
Monthly average amount
of bank loans outstanding
during the period (000) $6,352 $4,345 $3,070 $1,383 $ 661 $ 94
- ----------------------------------------------------------------------------------------------------------------------
Monthly average number of
shares of the Fund out-
standing during the
period (000) 195,866 163,398 151,481 93,580 23,330 2,461
- -----------------------------------------------------------------------------------------------------------------------
Average amount of bank
-13-
<PAGE>
loans per share out-
standing during the period $ .03 $ .03 $ .02 $ .01 $ .03 $ .04
- ------------------------------------------------------------------------------------------------------------------------
* The Fund commenced operations on September 18, 1991.
</TABLE>
Investment Objective and Policies
Objective. The investment objective of the Fund is to provide shareholders with
as high a level of income exempt from Federal income tax and New York State and
New York City personal income taxes as is consistent with its investment
policies and prudent investment management. No assurances can be made, however,
that the Fund will achieve its investment objective.
The Fund seeks to achieve its objective by investing primarily in a
portfolio of investment grade obligations with a dollar weighted average
effective maturity of five years or less issued by or on behalf of New York
State, its political subdivisions, agencies and instrumentalities and
obligations of other qualifying issuers (such as issuers located in Puerto Rico,
the Virgin Islands, and Guam), which pay interest that is, in the opinion of the
bond counsel to the issuer, exempt from Federal income tax and New York State
and New York City personal income taxes (Municipal Obligations). As a
fundamental policy, at least 95% of the Fund's net assets will be invested in
Municipal Obligations except when the Manager believes that market conditions
would cause serious erosion of portfolio value, in which case assets may be
invested temporarily in short-term taxable investments as a defensive measure to
preserve net asset value.
Can the Fund's Investment Objective and Policies Change? Except as otherwise
noted, the Fund's investment objective and policies described herein are not
designated fundamental policies and may be changed without the vote of
shareholders. As a matter of policy, however, the Fund will not change its
objective without the approval of the majority of the Board of Trustees. See the
Statement of Additional Information for a more detailed discussion of the Fund's
fundamental policies.
Investment Policies and Strategies
o Municipal Obligations. The Fund may invest in a variety of
Municipal Obligations including municipal notes, municipal bonds
and municipal leases. The prices of such fixed income securities
fluctuate inversely to the direction of interest rates. Municipal
notes are generally used to provide for short-term capital needs
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<PAGE>
and generally have a maturity of one year or less. The municipal notes in which
the Fund may invest include tax anticipation notes, revenue anticipation notes,
bond anticipation notes, construction loan notes and tax-exempt commercial paper
(also known as municipal paper). Municipal bonds, which meet longer term capital
needs, generally have maturities of more than one year. The two principal
classifications of municipal bonds in which the Fund may invest are "general
obligation" bonds and "revenue" bonds. General obligation bonds are secured by
the issuer's pledge of its faith, credit and taxing power for the payment of the
principal and interest. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facility or, in some cases, from the
proceeds of a special excise or specific revenue source. Industrial development
bonds ("IDBs") are a specific type of revenue bond backed by the credit and
security of a private user. The Fund will purchase IDBs only to the extent that
they pay interest which continues to be tax-exempt under the Internal Revenue
Code of 1986, as amended (the "Code") (although the interest may constitute a
tax preference item for purposes of the federal alternative minimum tax). See
"Dividends, Capital Gains and Taxes." Investments in tax-exempt lease
obligations, which are commonly referred to as "municipal leases," involve
additional risk factors which are not associated with investments in other
tax-exempt obligations such as general obligation bonds or revenue bonds. See
"Investments in Illiquid Securities." The Statement of Additional Information
describes the Municipal Obligations in which the Fund may invest in greater
detail.
o Credit Quality. The Fund invests at least 95% of its net assets which
are invested in Municipal Obligations in investment grade Municipal Obligations
defined as follows: (1) obligations which are backed by the full faith and
credit of the U.S. government; (2) short-term tax exempt notes which are rated
investment grade by a nationally recognized statistical rating organization
("NRSRO"); (3) municipal bonds which are rated investment grade by an NRSRO; (4)
tax-exempt commercial paper which is rated investment grade by an NRSRO; (5)
Municipal Obligations which, although unrated, are issued by an entity which has
obligations outstanding that meet one of the foregoing rating requirements; (6)
Municipal Obligations which are backed by a letter of credit or guarantee of a
bank or other institution which has outstanding securities that meet one of the
foregoing rating requirements; or (7) Municipal Obligations which, although
unrated, are determined by the Manager to be of comparable investment quality to
rated securities meeting the foregoing rating criteria.
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The remaining 5% of the Fund's net assets, which are invested in
Municipal Obligations, may be invested in tax-exempt obligations which are rated
below investment grade or unrated and of comparable quality to such lower-rated
securities. In no case will the Fund purchase a security with a rating of below
Ba by Moody's Investors Service, Inc. ("Moody's"), BB by Standard & Poor's
("S&P" or "Standard & Poor's") or BB by Fitch Investors Service, Inc. ("Fitch")
at the time of purchase or an unrated security which, in the opinion of the
Manager, is of comparable quality to rated securities below such ratings. For a
description of such ratings, see Appendix B to the Statement of Additional
Information.
o Variable Rate Obligations. The Fund may invest in variable rate
obligations. Variable rate obligations have a yield which is adjusted
periodically based upon changes in the level of prevailing interest rates.
Variable rate obligations have an interest rate fixed to a specified lending
rate, such as the prime rate, and are automatically adjusted when the specified
rate changes. Variable rate obligations lessen the capital fluctuations usually
inherent in fixed income investments, which diminishes the risk of capital
depreciation of portfolio investments and the Fund's shares; but this also means
that should interest rates decline, the yield of the Fund will decline and the
Fund and its shareholders will forego the opportunity for capital appreciation
of its portfolio investments and of their shares. Variable rate obligations with
demand periods greater than seven days may be determined to be liquid by the
Fund's Board of Trustees. Variable rate instruments in which the Fund may invest
include participation interests purchased from banks in variable rate tax-exempt
Municipal Obligations (expected to be concentrated in IDBs owned by banks). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to the
total principal amount of the Municipal Obligation. The Fund will only invest in
such participation interests to the extent that an opinion of issuer's counsel
supports the characterization of interest on such securities as tax-exempt.
o When-Issued Purchases. The Fund may also purchase and sell municipal
securities on a "when-issued" and "delayed delivery" basis. These transactions
are subject to market fluctuation and the value of a security at delivery may be
more or less than the purchase price. When the Fund is the buyer in such a
transaction, however, it will identify with its custodian, certain assets, which
may consist of liquid assets of any type, including equity
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securities and debt securities of any grade, having an aggregate value equal to
the amount of such purchase commitments until payment is made. In addition, the
Fund will mark the "when-issued" security to market each day for purposes of
portfolio valuation. To the extent the Fund engages in "when-issued" and
"delayed delivery" transactions, it will do so for the purpose of acquiring
securities for the Fund's portfolio consistent with its investment objective and
policies and not for the purpose of investment leverage. Securities purchased on
a "when-issued" and "delayed delivery" basis may not constitute more than 10% of
the Fund's net assets.
o Maturity Guidelines. The Fund intends to invest primarily in a
portfolio of investment grade Municipal Obligations with a dollar weighted
average effective maturity of five years or less. In maintaining this average,
the Fund may purchase individual bonds with effective maturities of more or less
than five years.
The effective maturity of bonds in the portfolio may lengthen if market
interest rates increase or shorten if market interest rates decrease. Increasing
market interest rates can cause the average effective maturity of the portfolio
to lengthen beyond five years, absent any portfolio transactions. At any time
that the average effective maturity of the portfolio exceeds five years, the
Fund will not purchase bonds with effective maturities exceeding five years. The
Fund may also take prudent steps to reduce the average effective maturity of the
portfolio to five years or less, including selling bonds with effective
maturities exceeding five years and purchasing bonds with effective maturities
of less than five years.
A bond's effective maturity may be shorter than its stated maturity as
a result of differences between its coupon or accretion rate and current market
interest rates, callability and call price, scheduled sinking fund payments and
anticipated prepayments, as well as other factors. In computing the Fund's
average maturity, the Fund intends to use effective maturity dates to the extent
that a particular bond is evaluated for pricing and trading purposes in the
marketplace to a date which is shorter than the bond's stated maturity. This
date may represent a mandatory put, prerefunded call date, optional call date,
or the average life to which the bond is priced. Bonds with a variable coupon
rate or anticipated principal prepayments may be assigned an effective maturity
which is shorter than a stated call date, put date, or average life to properly
reflect the reduced price volatility of such bonds.
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Bonds which are evaluated for pricing and trading purposes to a
maturity date which is shorter than the stated maturity date possess price
volatility characteristics which make them substantially similar to bonds with
stated maturity dates identical to the effective maturity date.
o Temporary Investments. From time to time when, due to adverse
factors, market conditions could cause serious erosion of portfolio value, the
Fund may invest up to 20% of its assets in taxable short-term investments as a
defensive measure to preserve net asset value. Distributions by the Fund of
interest earned from such taxable investments will be taxable to investors as
ordinary income unless such investors are otherwise exempt from taxation. The
Fund may invest on a temporary basis up to 5% of its assets in other investment
companies which have a similar objective of obtaining income exempt from Federal
income tax and New York State and New York City personal income taxes. Such
investing involves duplication of expenses similar to the Fund's by the other
investment companies involved.
o Industrial Revenue Bonds. The Fund may also invest more
than 25% of its assets in industrial revenue bonds, and may invest
more than 25% of its assets in Municipal Obligations backed by
letters of credit or guarantees issued by banks or other financial
institutions. See "Concentration in New York Municipal Securities."
o Zero Coupon Securities. The Fund may invest without limitation as to
amount in zero coupon securities. Zero coupon securities are debt obligations
that do not entitle the holder to any periodic payment of interest prior to
maturity or a specified date when the securities begin paying current interest.
They are issued and traded at a discount from their face amount of par value,
which discount varies depending on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived credit
quality of the issuer. Original issue discount earned on zero coupon securities
is included in the Fund's tax-free income. The market prices of zero coupon
securities generally are more volatile than the prices of securities that pay
interest periodically and in cash and are likely to respond to changes in
interest rates to a greater degree than do other types of debt securities having
similar maturities and credit quality.
o Investments in Illiquid Securities. The Fund may purchase
securities in private placements or in other transactions, the
disposition of which would be subject to legal restrictions, or
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securities for which there is no regular trading market (collectively, "Illiquid
Securities"). No more than an aggregate of 15% of the value of the Fund's net
assets at the time of acquisition may be invested in Illiquid Securities.
Such investments may include municipal lease obligations or installment
purchase contract obligations (herein collectively called "municipal leases") of
municipal authorities or entities. Municipal leases generally involve a
lease-purchase agreement which is, technically, not a lease, but rather an
installment purchase. The Fund may invest up to 15% of the value of its net
assets in such municipal leases. Investments in tax-exempt municipal leases
which have received an investment grade rating from an NRSRO and which have been
determined to be liquid by the Manager are excluded from the 15% limitation on
investments in municipal leases. However, unrated or illiquid municipal leases
are subject to the overall 15% limitation on investments in Illiquid Securities
which may be made by the Fund.
Investment in tax-exempt lease obligations presents certain special
risks which are not associated with investments in other tax-exempt obligations
such as general obligation bonds or revenue bonds. Although municipal leases do
not constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a municipal lease may be backed by the
municipality's covenant to budget for, appropriate and make the payments due
under the municipal lease. Most municipal leases, however, contain
"non-appropriation " clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" municipal leases are generally secured by the leased
property, the Fund's ability to recover under the lease in the event of
non-appropriation or default will be limited solely to the repossession of the
leased property without recourse to the general credit of the lessee, and
disposition of the property in the event of foreclosure might prove difficult.
In addition to the risk of "non-appropriation," municipal lease obligations may
be subject to an "abatement" risk. The leases underlying certain municipal lease
obligations may provide that lease payments are subject to partial or full
abatement if, because of material damage or destruction of the leased property,
there is substantial interference with the lessee's use or occupancy of such
property. This "abatement" risk may be reduced by the existence of insurance
covering the leased property, the maintenance by the lessee of reserve funds or
the
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provision of credit enhancements such as letters of credit.
Investment in municipal leases will be subject to the 15% limitation
unless the lease has received an investment grade rating from an NRSRO, and the
particular municipal lease is determined to be liquid by the Manager. The Board
of Trustees has adopted guidelines to be utilized by the Manager in making
determinations concerning the liquidity and valuation of a municipal lease
obligation. See the Statement of Additional Information for a description of the
guidelines which will be utilized by the Manager in making such determinations.
Under circumstances where the Fund proposes to purchase unrated municipal lease
obligations, the Fund's Board of Trustees will be responsible for determining
the credit quality of such obligations and will be responsible for assessing on
an ongoing basis the likelihood as to whether the lease will be canceled.
o Borrowing for Leverage. As a fundamental policy, the Fund may borrow
money, but only from banks, in amounts up to 10% of its total assets to purchase
additional securities. Borrowing for investment purposes increases both
investment opportunity and investment risk. Leveraging, or the purchase of
securities with borrowed funds, may exaggerate any increase or decrease in the
market value of the Fund's portfolio securities. In addition, because interest
on money borrowed is an expense that the Fund would not otherwise incur, the
Fund may have less net investment income during periods when its borrowings are
substantial. The interest paid by the Fund on borrowings may be more or less
than the yield on the securities purchased with borrowed funds, depending on
prevailing market conditions. 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.
Except as otherwise noted, the Fund's investment objective and policies
described herein are not designated fundamental policies and may be changed
without the vote of a majority of the outstanding voting securities of the Fund
(as defined in the Investment Company Act of 1940). As a matter of policy,
however, the Fund will not change its objective without the approval of the
majority of the Board of Trustees. See the Statement of Additional Information
for a more detailed discussion of the Fund's fundamental policies.
o Other Investment Techniques and Strategies. The Fund may
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also use additional investment techniques and strategies such as stand-by
commitments and options transactions. Descriptions of these are in the Fund's
Statement of Additional Information, including limitations on their use that are
designed to reduce some of the risks.
Unless the 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 "Other Investment Restrictions" in the Statement of
Additional Information.
Investment Risks
o Concentration in New York Municipal Obligations. Because the Fund, as
a fundamental policy, will invest at least 95% of its assets in obligations of
New York State, its municipalities, agencies and instrumentalities, it is more
susceptible to factors affecting the State of New York than is a comparable bond
fund whose investments are not concentrated in the obligations of issuers
located in a single state. Investors should consider these matters and the
financial difficulties experienced in past years by New York State and certain
of its agencies and subdivisions (particularly New York City), as well as
economic trends in New York, summarized in the Statement of Additional
Information under "Investment Considerations/Risk Factors: Special Investment
Considerations - New York Municipal Securities." In addition, the Fund's
portfolio securities are affected by general changes in interest rates, which
result in changes in the value of portfolio securities held by the Fund, which
can be expected to vary inversely to changes in prevailing interest rates.
o Credit Quality. In general, the assets of the Fund will be invested
so that at least 95% of the Fund's assets will consist of tax-exempt securities.
Shareholders will not be subject to regular Federal income tax or New York State
and New York City personal income taxes on distributions of tax-exempt income
derived from such securities. The interest on certain private activity bonds,
(including those for housing and student loans) issued after August 15, 1986,
while still tax-exempt for regular tax purposes, constitute a preference item
for taxpayers in determining their alternative minimum tax liability under the
Code, and, as such, may be subject to the alternative minimum tax. The Code also
imposes
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certain limitations and restrictions on the use of tax-exempt bond financing for
non-essential private activity bonds. The Fund intends to purchase private
activity bonds only to the extent that the interest paid by such bonds is
tax-exempt for regular tax purposes pursuant to the Code.
At least 95% of the Fund's assets invested in Municipal Obligations
will be of investment grade quality as defined herein. Such Municipal
Obligations may include those rated in the lowest categories of investment grade
ratings (e.g., those rated "BBB" by Standard & Poor's or "Baa" by Moody's).
Municipal Obligations in such categories have speculative characteristics and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than is the case for
Municipal Obligations in the higher rated categories. Because 5% of the Fund's
assets which are invested in tax-exempt securities may be invested in securities
which are rated below the lowest investment grade categories or in securities
which are unrated but comparable quality, the Fund is dependent on the Manager's
judgment, analysis and experience in evaluating the quality of such obligations.
In evaluating the credit quality of a particular issue, whether rated or
unrated, the Manager will normally take into consideration, among other things,
the financial resources of the issuer (or, as appropriate, of the underlying
source of the funds for debt service), its sensitivity to economic conditions
and trends, any operating history of and the community support for the facility
financed by the issue, the ability of the issuer's management and regulatory
matters. The Manager will attempt to reduce the risks inherent in investments in
such obligations through active portfolio management, structuring the portfolio
to include a broad spectrum of municipal securities, credit analysis and
attention to current developments and trends in the economy and the financial
markets.
o Interest Rate Risk. The values of Municipal Securities will vary as a
result of changes in interest rates. Should interest rates rise, the values of
outstanding Municipal Securities will probably decline and (if purchased at
principal amount) would sell at a discount. If interest rates fall, the values
of outstanding Municipal Securities will probably increase and (if purchased at
principal amount) would sell at a premium. Changes in the values of the Fund's
Municipal Securities from these or other factors will not affect interest income
derived from these securities but will affect the Fund's net asset value per
share.
o Borrowing for Leverage. Borrowing for investment purposes increases both
investment opportunity and investment risk. Leveraging, as the purchase of
municipal securities with borrowed funds, may exaggerate any increase or
decrease in the market value of the Fund's portfolio securities. The Fund might
be required to sell securities at a time when it would be disadvantageous to do
so in order to reduce its borrowings. In addition, because interest on money
borrowed is an expense that the Fund would not otherwise incur, the Fund may
have less net investment income during periods when its borrowings are
substantial. The interest paid by the Fund on borrowings may be more or less
than the yield on the securities purchased with borrowed funds, depending on
prevailing market conditions.
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o Liquidity and Valuation. Unrated securities (including those that the
Manager believes are of equivalent quality to rated investment grade
securities), lower rated securities (restricted to 5% of the Fund's net assets)
and securities in which the Fund has a substantial ownership interest are
subject to greater liquidity and valuation risks. Reduced liquidity may have an
adverse impact on the market price and the Fund's ability to dispose of
particular issues, when necessary, to meet the Fund's liquidity needs or in
response to a particular economic event, such as the deterioration in the credit
worthiness of the issuer. Reduced liquidity for certain securities may also make
it more difficult for the Fund to obtain market quotations based on actual
trades for purposes of valuing the Fund's portfolio. Current values for these
securities are obtained from pricing services and pricing grids which factor in
coupons, maturities, credit quality, liquidity and other factors. When there are
no readily available market quotations, such values are determined in good faith
in accordance with procedures established by the Board of Trustees and may be
based upon factors other than actual sales.
o Non-Diversification. The Fund expects that it normally will invest in
a substantial number of issuers; however, as a non-diversified investment
company, the Fund may invest a greater portion of its assets in the securities
of a limited number of issuers than a diversified fund. The Fund's ability to
invest a greater proportion of its assets in the securities of a smaller number
of issuers may enhance the Fund's ability to achieve capital appreciation, but
may also make the Fund more susceptible to any single economic, political or
regulatory occurrence. However, as of the last day of each fiscal quarter, the
Fund generally will be required to meet certain tax-related diversification
requirements,
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which would restrict, to some degree, the amount of the securities of any one
issuer that the Fund could hold.
How The Fund Is Managed
Organization and History. Rochester Portfolio Series was organized in 1991 as a
Massachusetts business trust consisting of one portfolio. The Fund is an
open-end, non-diversified management investment company with an unlimited number
of authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible under
Massachusetts law for protecting the interests of shareholders. The Trustees
meet periodically throughout the year to oversee the Fund's activities, review
its performance, and review the actions of the Manager. "Trustees and Officers
of the Fund" in the Statement of Additional Information names the Trustees and
provides more information about them and the officers of the Fund. 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 Trustee or to take other actions
described in the Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder approval, to
divide unissued shares of the Fund into two or more classes. The Board has done
so, and the Fund currently has four classes of shares, Class A, Class B, Class C
and Class D. All classes invest in the same investment portfolio. Each class has
its own dividends and distributions and pays certain expenses which may be
different from those other classes. Each class may have a different net asset
value. Each share has one vote at shareholder meetings, with fractional shares
voting proportionally. Only shares of a particular class vote as a class on
matters that affect that class alone. Shares are freely transferrable.
The Manager and its Affiliates. The Fund is managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the Fund's
investments and handles its day-to-day business. The Manager carries out its
duties, subject to the policies established by the Board of Trustees, under an
Investment Advisory Agreement which states the Manager's responsibilities. The
Agreement sets forth the fees paid by the Fund to the Manager and describes the
expenses that the Fund is responsible to pay to conduct its business.
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The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manages investment companies, including
other Oppenheimer funds, with assets of more than $62 billion as of December 31,
1996, and with more than 3 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.
o Portfolio Manager. The Portfolio Manager of the Fund is
Ronald H. Fielding. He has been the person principally responsible
for the day-to-day management of the Fund's portfolio since the
Fund's inception in 1991. Mr. Fielding is Vice President of the
Fund and has also served as an officer and director of the Fund's
previous investment advisers and their affiliates.
o Fees and Expenses. Under the Investment Advisory Agreement, the Fund
pays the Manager an annual fee, payable monthly, of 0.50% of its average daily
net assets of the first $100 million, 0.45% of its average daily net assets on
the next $150 million, 0.40% of its average daily net assets on the next $1,750
million, and 0.39% of its average daily net assets over $2 billion. The Fund's
management fee for its last fiscal year was 0.43% of average annual net assets
for Class A and Class D shares.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing costs.
Those expenses are paid out of the Fund's assets and are not paid directly by
shareholders. However, those expenses reduce the net asset value of shares, and
therefore are indirectly borne by shareholders through their investment. More
information about the Investment Advisory Agreement and the other expenses paid
by the Fund is contained in the Statement of Additional Information.
The Fund has no obligation to deal with any dealer or group of dealers
in the execution of transactions in securities of the Fund. Municipal
Obligations and other securities in which the Fund invests are traded primarily
in the over-the-counter market. Where possible, the Fund deals directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere. It is
the policy of the Fund to obtain the best net results in conducting portfolio
transactions for the Fund, taking into account such factors as price (including
the applicable dealer spread), and the
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firm's general execution capabilities. Where more than one dealer is able to
provide the most competitive price and the execution capabilities of the dealers
are comparable, the sale of shares of the Fund may be taken into consideration
as a factor in the selection of dealers to execute portfolio transactions for
the Fund. The portfolio securities of the Fund generally are traded on a net
basis and normally do not involve the payment of brokerage commissions. The cost
of securities transactions of the Fund primarily consists of paying dealer or
underwriter spreads.
There is also information about the Fund's brokerage policies and
practices 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 brokers to use, the Manager
is 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
Distributor. The Distributor also distributes the shares of other Oppenheimer
funds managed by the Manager and is sub-distributor for funds managed by a
subsidiary of the Manager.
o The Transfer Agent. The Fund's Transfer Agent is OppenheimerFunds
Services, a division of the Manager, which acts as the shareholder servicing
agent for the Fund. Shareholders should direct inquiries about their account to
the Transfer Agent at the address and toll-free numbers shown below in this
Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total return,"
"average annual total return," "standardized yield," "dividend yield" "yield"
and "tax-equivalent yield" 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. This performance information may be useful to help
you see how well your investment has done and to compare it to other funds or
market indices.
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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 they include
the payment of the current maximum initial sales charge. Total returns may also
be quoted "at net asset value," without including the sales charge, and those
returns would be reduced if sales charges were deducted. When total returns are
shown for Class B, Class C or Class D shares, they reflect the effect of the
contingent deferred sales charge that applies to the period for which total
return is shown. They may also be shown based on the change in net asset value,
without including the effect of the contingent deferred sales charge, and those
returns would be reduced if sales charges were deducted.
o Yield. Each class of shares calculates its yield by dividing the
annualized net investment income per share on the portfolio during a 30-day
period by the maximum offering price on the last day of the period.
Tax-equivalent yield is the equivalent yield that would be earned in the absence
of taxes. It is calculated by dividing that portion of the yield that is
tax-exempt by a factor equal to one minus the applicable tax rate. The yield of
each class will differ because of the different expenses of each class of
shares. The yield data represents a hypothetical investment return on the
portfolio, and does not measure an
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investment return based on dividends actually paid to shareholders. To show that
return, a dividend yield may be calculated. Dividend yield is calculated by
dividing the dividends of a class derived from net investment income during a
stated period by the maximum offering price on the last day of the period.
Yields and dividend yields for Class A shares reflect the deduction of the
maximum initial sales charge, but may also be shown based on the Fund's net
asset value per share. Yields for Class B, Class C or Class D shares do not
reflect the deduction of the contingent deferred sales charge.
For additional information regarding calculation of yield,
tax-equivalent yield and total return, see "Performance of the Fund" in the
Statement of Additional Information. Further information about the Fund's
performance is set forth in the Fund's Annual Report to Shareholders, which may
be obtained upon request at no charge.
How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its fiscal year ended December 31, 1996, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index and the Consumer Price Index ("CPI").
o Managements' Discussion of Performance. During the Fund's fiscal year
ended December 31, 1996, the Fund benefited from actions taken by the Portfolio
Manager to enhance the Fund's stability and yield and from the outperformance of
municipal bond prices relative to U.S. Treasury bond prices.
In 1996 the general level of interest rates increased and bond prices
declined. During this time municipal bonds outperformed U.S. Treasury bonds; the
increase in yields and decline in prices of municipal bonds was much less than
that of U.S. Treasury bonds and other taxable fixed income instruments. Most of
this outperformance resulted from the abatement of investor fears surrounding
the flat tax issue.
Municipal bond yields rose steadily and sharply in the first half of
the year, then drifted lower in the second half, ending the year only slightly
higher. Despite the volatility in interest rates, the net asset value of the
Fund's Class A and Class D shares remained relatively stable, having a narrow
range of variation. The Portfolio Manager took advantage of the swings in
interest rates to continue strategies which enhanced the Fund's stability
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and return potential. The Portfolio Manager sold lower coupon serial maturity
bonds and purchased bonds with comparable effective maturities but better income
and return potential. These included out-of-favor premium coupon callable bonds
and bonds with sinking funds. During the year the Portfolio Manager extended the
Fund's average effective maturity slightly from 3.6 to 4.2 years to take
advantage of the steepness in the yield curve and enhance the Fund's yield. The
Fund benefited from the pre-refunding and credit upgrade of several high coupon
bonds, many of which were subsequently sold to capture these credit gains. The
Portfolio Manager also selectively increased the Fund's holdings of housing
issues and electric and gas utilities, while reducing the Fund's exposure to
unenhanced hospital issues with negative credit prospects.
o Comparing the Fund's Performance to the Market. The charts below
shows the performance of a hypothetical $10,000 investment in Class A and Class
D shares of the Fund held until December 31, 1996. In the case of Class A and
Class D shares, performance is measured since inception of each class (September
18, 1991 for Class A shares, and May 1, 1995 for Class D shares). Since Class B
and Class C shares are new as of the date of this Prospectus, there are no
comparisons for those classes.
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments
in:
Limited Term New York Municipal Fund (Class A), Merrill Lynch
Municipal Index (3-7 years) and the Consumer Price Index
[graph]
Class A returns are shown net of the current applicable 3.50% maximum initial
sales charge. During the period from inception to April 30,1997, the maximum
sales charge on Class A shares of the Fund was 2.00%.
Average Annual Total Return of Class A shares of the Fund at
12/31/96(1)
1 Year 5 Year Life of Class
- -------------------------------------------------------------------
XX.XX% XX.XX%
Class D Shares
Comparison of Change in Value of $10,000 Hypothetical Investments
in:
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Limited Term New York Municipal Fund (Class D), Merrill Lynch
Municipal Index (3-7 years) and the Consumer Price Index
[graph]
Average Annual Total Return of Class D shares of the Fund at
12/31/96(2)
1 Year Life of Class
- -------------------------------------------------------------------
XX.XX% XX.XX%
Total returns and the ending account values in the graphs reflect
changes in share value and include reinvestment of all dividends and capital
gains distributions. The performance information for the Merrill Lynch Municipal
Index (3-7 years) and the Consumer Price Index in each of the graphs begins on
- ----------------.
(1) The inception date of the Fund (Class A shares) was 9/18/91. Class A returns
and the ending account value in the graph are shown net of the current
applicable 3.50% maximum initial sales charge. Prior to May 1, 1997, the maximum
initial sales charge on Class A shares was 2.00%. (2) Class D shares of the Fund
were first publicly offered on 5/1/95. Returns are shown net of the applicable
2.50% and 2.00% contingent deferred sales charge, respectively, for the one-year
period and for the life-of-class. The ending account value in the graph is net
of the applicable 2.00% contingent deferred sales charge.
Past performance is not predicative of future performance.
ABOUT YOUR ACCOUNT
How To Buy Shares
Classes of Shares. The Fund offers investors four 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 pay an initial sales
charge on investments. 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.
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<PAGE>
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 five years of buying
them, you will normally pay a contingent deferred sales charge. That sales
charge varies depending on how long you 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
discussed in "Buying Class C Shares," below.
o Class D Shares. If you buy Class D shares, you pay no sales charge at
the time of purchase, but if you sell your shares within 4 years of buying them,
you will normally pay a contingent deferred sales charge that varies depending
on how long you own your shares. Class D shares are available for purchase only
by those shareholders who owned such shares prior to the effective date of this
Prospectus. Exchanges are limited as described in "Buying Class D 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 adviser. The Fund's operating costs that apply to a
class of shares and the effect of the different types of sales charges on your
investment will vary your investment results over time. The most important
factors are how much you plan to invest 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.
The decision as to which class of Shares provides a more suitable
investment for an investor depends on a number of factors, including the amount
invested and the intended length of investment. Investors making large
investments, thus qualifying for a reduced sales charge, might consider Class A
shares. Investors who prefer that 100% of their purchase be invested
immediately, or who want to spread the sales charge payment over time, might
consider Class B shares. Orders for Class B shares for $500,000 or more will be
declined because the investor would not realize the economies of scale available
to them through a similar investment
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<PAGE>
in Class A shares. For more information about these sales arrangements, contact
your investment dealer or the Transfer Agent.
o Are There Differences in Account Features that Matter to You? Because
some account features may not be available to Class B, Class C or Class D
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, Class C or Class D shares and,
if you are considering using your shares as collateral for a loan, that may be a
factor to consider. Additionally, the dividends payable to Class B, Class C or
Class D shareholders will be reduced by the additional expenses borne by those
classes, such as the asset-based sales charges described below and in the
Statement of Additional Information. The exchange privileges available to Class
D shareholders are limited. See "How to Exchange Shares".
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 than for
selling another class. It is important that investors understand that the
purpose of the Class B, Class C and Class D contingent deferred sales charges
and asset-based sales charges is the same as the purpose of the front-end sales
charge on sales of Class A shares: to compensate the Distributor for commissions
it pays to dealers and financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a minimum initial
investment of $1,000 and make additional investments at any time with as little
as $25. There are reduced minimum investments under special investment plans
o With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments for as little as $25; and subsequent purchases of at
least $25 can be made by telephone through AccountLink.
o There is no minimum investment requirement if you are buying shares
by reinvesting dividends from the Fund or other Oppenheimer funds (a list of
them appears in the Statement of Additional Information, or you can ask your
dealer or call the Transfer Agent), or by reinvesting distributions from unit
investment trusts that have made arrangements with the Distributor.
-32-
<PAGE>
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, or directly through the Distributor, or automatically from your
bank account through an Asset Builder Plan under the Oppenheimer funds
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, Class C or Class _. 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 adviser, to be sure it is appropriate for you.
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. You can
then 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
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<PAGE>
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. In most cases, to enable you to receive that day's offering price, the
Distributor must receive your order by the time of day the New York Stock
Exchange closes, which is normally 4:00 P.M., New York time, but may be earlier
on some days (all references to time in this Prospectus mean "New York time").
The net asset value of each class of shares is determined as of that time on
each day the New York Stock Exchange is open (which is a "regular business
day").
If you buy shares through a dealer, the dealer must receive your order
by the close of the New York Stock Exchange, on a regular business day and
transmit it to the Distributor so that it is received before the Distributor's
close of business that day, which is normally 5:00 P.M. The Distributor may
reject any purchase order for the Fund's shares, in its sole discretion.
Special Sales Charge and Purchase Arrangements for Certain Persons. Appendix A
to this Prospectus sets forth special sales charge rates that apply to
additional purchases of Class A shares of the Fund by a person who held Class A
shares on or before the effective date of this Prospectus. In addition, Appendix
A to this Prospectus also describes the circumstances under which additional
purchases of Class D shares of the Fund may be purchased by a person who held
shares of that class on or before the effective date of this Prospectus.
Appendix B to this Prospectus sets forth conditions for the waiver of, or
exemption from, sales charges or the special sales charge rates that apply to
purchases of shares of the Fund (including purchases by exchange) by a person
who was a shareholder of one of the former Quest for Value Funds (as defined in
that Appendix).
Buying Class A Shares. Class A shares are sold at their offering price, which is
normally net asset value plus an initial sales charge. 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
a commission. The current sales charge rates and commissions paid to dealers and
brokers are as follows:
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<PAGE>
<TABLE>
<CAPTION>
Front-End Front-End
Sales Charge Sales Charge Commission
as a % of as a % of as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Less than $100,000 3.50% 3.63% 3.00%
- -------------------------------------------------------------------------------------------------------------
$100,000 or more but
less than $250,000 3.00% 3.09% 2.50%
- -------------------------------------------------------------------------------------------------------------
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
- -------------------------------------------------------------------------------------------------------------
$500,000 or more but
less than $1,000,000 2.00% 2.04% 1.50%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The Distributor reserves the right to reallow the entire sales charge 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 aggregating $1 million or more. However, the Distributor pays dealers of
record commissions on those non-retirement plan purchases aggregating $1 million
or more in an amount equal to the sum of 1.0% of those purchases. That
commission will be paid only on the amount of those purchases that was not
previously subject to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge (called the
"Class A contingent deferred sales charge") may be deducted from the redemption
proceeds. That sales charge will 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
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<PAGE>
A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable,
the Fund will first redeem shares that are not subject to the sales charge,
including shares purchased by reinvestment of dividends and capital gains, and
then will redeem other shares in the order that you purchased them. The Class A
contingent deferred sales charge is waived in certain cases described in
"Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges of
shares under the Fund's Exchange Privilege (described below). However, if the
shares acquired by exchange are redeemed within 18 months of the end of the
calendar month of the purchase of the exchanged shares, the sales charge will
apply.
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 value of those shares will be based on the greater of the
amount you paid for the shares or their current value (at offering price). The
Oppenheimer funds are listed in "Reduced Sales Charges" in the Statement of
Additional Information, or a list can be obtained from
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<PAGE>
the Distributor. 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 shares 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 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.
Waivers of Initial 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;
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 or registered investment advisers that have entered
into an agreement with the Distributor or the Fund providing specifically for
the use of shares of the Fund in particular investment products made available
to their clients
-37-
<PAGE>
(those clients may be charged a transaction fee by their dealer,
broker or adviser on the purchase or sale of Fund shares);
o dealers, brokers or registered investment advisers that have entered
into an agreement with the Distributor to sell shares of defined contribution
employee retirement plans for which the dealer, broker or investment adviser
provides administration services;
o directors, trustees, officers or full-time employees of OpCap
Advisors or its affiliates, their relatives or any trust, pension, profit
sharing or other benefit plan which beneficially owns shares for those persons;
o accounts for which Oppenheimer Capital 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; or
o trust companies and bank trust departments for funds held in
fiduciary, agency, custodial or similar capacity.
Waivers of Initial 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 dividends or other
distributions reinvested from the Fund or other OppenheimerFunds (other than
Oppenheimer Cash Reserves) or unit investment trusts for which reinvestment
arrangements have been made with the Distributor; or
o shares purchased and paid for with the proceeds of shares redeemed in
the prior 12 months from a mutual fund (other than a fund managed by the Manager
or any of its subsidiaries) on which an initial sales charge or contingent
deferred sales charge was paid (this waiver also applies to shares purchased by
exchange of shares of Oppenheimer Money Market Fund, Inc. that were purchased
and paid for in this manner); this waiver must be requested when the purchase
order is placed for your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver; or
o shares purchased with the proceeds of maturing principal of units of
any Qualified Unit Investment Liquid Trust Series.
There is a further discussion of this policy in "Reduced Sales
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<PAGE>
Charges" in the Statement of Additional Information.
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); or
o if, at the time a purchase order is placed for Class A shares that
would otherwise be subject to the Class A contingent deferred sales charge, the
dealer agrees in writing to accept the dealer's portion of the commission
payable on the sale in installments of 1/18th of the commission per month (and
no further commission will be payable if the shares are redeemed within 18
months of purchase).
o Service Plan For Class A Shares. The Fund has adopted a Service Plan
for Class A shares to reimburse the Distributor for a portion of its costs
incurred in connection with the personal service and maintenance of accounts
that hold Class A shares. Reimbursement is made quarterly at an annual rate that
may not exceed 0.25% of the average annual net assets of Class A shares of the
Fund. The Distributor uses all of those fees to compensate dealers, brokers,
banks and other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold Class A shares and to
reimburse 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. Payments are made by the
Distributor quarterly at an annual rate not to exceed 0.25% of the average
annual net assets of Class A shares held in accounts of the dealer or its
customers. 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.
-39-
<PAGE>
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
5 years of their purchase, a contingent deferred sales charge will be deducted
from the redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains distributions. The
charge will be assessed on the lesser of the net asset value of the shares at
the time of redemption or the original purchase price. The contingent deferred
sales charge is not imposed on the amount of your account value represented by
the increase in net asset value over the initial purchase price. The Class B
contingent deferred sales charge is paid to the Distributor to reimburse its
expenses of providing distribution-related services to the Fund in connection
with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 5 years, and (3) shares held the longest during the 5 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.
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 Beginning of Contingent Deferred Sales Charge
Month in Which Purchase on Redemptions in that Year
Order Was Accepted (as % of Amount Subject to Charge)
- -------------------------------------------------------------------
0 - 1 4.00%
- -------------------------------------------------------------------
1 - 2 3.00%
- -------------------------------------------------------------------
2 - 3 2.00%
- ------------------------------------------------------------------
3 - 4 2.00%
- ------------------------------------------------------------------
4 - 5 1.00%
- -------------------------------------------------------------------
5 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
-40-
<PAGE>
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 Shares, Class B
Shares, Class C Shares and Class D Shares" in the Statement of Additional
Information.
o Waivers of Class B Sales Charges. The Class B contingent deferred
sales charges will not apply to those shares purchased in certain types of
transactions, nor will it apply to shares redeemed in certain circumstances, as
described below under "Buying Class C Shares - Waivers of Class B and Class C
Sales Charges."
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 purchase 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 its expenses of providing distribution-related services to the
Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 12 months, and (3) shares held the longest during the 12-month period.
All purchases are considered to have been made on the first regular business day
-41-
<PAGE>
of the month in which the purchase was made.
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 distributing Class B and 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 C shares. Those
services are similar to those provided under the Class A 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 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 2.75% 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 sales of Class B shares is 3.00% of the
purchase price. The Distributor retains the Class B asset-based sales
-42-
<PAGE>
charge.
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 therefore
1.00% of the purchase price. The Distributor plans to pay the asset-based sales
charge as an ongoing commission to the dealer on Class C shares that have been
outstanding for a year or more.
The Distributor's actual expenses in selling Class B and 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 C shares. If either Plan is terminated by the
Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to the Distributor for distributing shares before the
Plan was terminated.
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.
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, if the Transfer Agent is notified that these conditions
apply to the redemption:
o redemptions from accounts 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); or
o shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies" below.
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:
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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; or
o shares issued in plans of reorganization to which the Fund
is a party.
Buying Class D Shares. On May 1, 1997, the Fund redesignated as Class D shares
its Class B shares which had been outstanding prior to that date. Additional
purchases of Class D shares of the Fund are available for purchase through
January 5, 1998, by only those shareholders whose accounts holding Class D
shares were established on or before May 1, 1997. Class D shares of the Fund
will no longer be offered after January 5, 1998.
Class D shares are sold at net asset value per share without an
initial sales charge. However, if Class D shares are redeemed within 4 years of
their purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. That sales charge will not apply to shares purchased by the
reinvestment of dividends or capital gains distributions. The charge will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price. The contingent deferred sales charge
is not imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price. The Class D contingent
deferred sales charge is paid to the Distributor to reimburse its expenses of
providing distribution-related services to the Fund in connection with the sale
of Class D 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 4 years, and (3) shares held the longest during the 4-year period. The
contingent deferred sales charge is not imposed in the circumstances described
in "Waivers of Class B Sales Charges" below.
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:
Contingent Deferred
Years Since Beginning Sales Charge on
of Month in Which Redemptions in that
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<PAGE>
Purchase Order Year (as of Amount
Was Accepted Subject to Charge)
- -------------------------------------------------------------------
0-1 2.50%
- -------------------------------------------------------------------
1-2 2.00%
- -------------------------------------------------------------------
2-3 1.50%
- -------------------------------------------------------------------
3-4 1.00%
- -------------------------------------------------------------------
4 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 D Shares. 72 months after you purchase
Class D shares, those shares will automatically convert to Class A shares. This
conversion feature relieves Class D shareholders of the asset-based sales charge
that applies to Class D 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 D shares
convert, any other Class D 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 Shares, Class B
Shares, Class C Shares and Class D Shares" in the Statement of Additional
Information.
o Distribution and Service Plan for Class D Shares. The Fund has
adopted a Distribution and Service Plan for Class D shares to compensate the
Distributor for distributing Class D shares and servicing accounts. Under the
Plan, the Fund currently pays the Distributor an annual "asset-based sales
charge" of 0.50% per year on Class D shares that are outstanding for 6 years or
less. The Distributor also receives a service fee of 0.25% per year. Both fees
are computed on the average annual net assets of Class D shares, determined as
of the close of each regular business day. Although the terms of the
Distribution and Service Plan permit the Fund to pay an "asset-based sales
charge" of up to 0.75% per annum of the average daily net assets attributable to
Class D shares, the Board of Trustees has approved payment of an "asset-based
sales
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<PAGE>
charge" of up to only 0.50% per annum of the average daily net assets
attributable to Class D shares. The asset-based sales charge and service fee as
currently in effect increase Class D expenses by 0.75% of average net assets per
year.
The Fund pays the asset-based sales charge to the Distributor for its
services rendered in connection with the distribution of Class D shares. Those
payments, retained by the Distributor, are at a fixed rate which is not related
to the Distributor's expenses. The services rendered by the Distributor include
paying and financing the payment of sales commissions, service fees, and other
costs of distributing and selling Class D shares. If the Plan is terminated by
the Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to the Distributor for distributing Class D shares
before the Plan was terminated. The asset-based sales charge allows investors to
buy Class D shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell Class D shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class D shares. Those
services are similar to those provided under the Class A Service Plan, described
above. The Distributor pays the 0.25% service fee to dealers in advance for the
first year after Class D shares have been sold by the dealer. After the shares
have been held for a year, the Distributor pays the fee on a quarterly basis.
The Distributor pays sales commissions of 2.00% (including a prepaid service fee
of 0.25%) of the purchase price to dealers from its own resources at the time of
sale.
The Distributor's actual expenses in selling Class D 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 A, Class B, Class C and Class D shares. Therefore, those expenses may
be carried over and paid in future years. At December 31, 1996, the end of the
Class D Plan year, the Distributor had incurred unreimbursed expenses under the
Plan of $367,902 (equal to 0.90% of the Fund's net assets represented by Class D
shares on that date), which have been carried over into the present Plan year.
If Plan is terminated by the Fund, the Board of Trustees may allow the Fund to
continue payments of the asset-based sales charge to the Distributor for
distributing shares before the Plan was terminated.
o Waivers of Class D Sales Charge. The Class D contingent
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<PAGE>
deferred sales charge will not be applied to shares purchased in certain types
of transactions nor will it apply to Class D shares redeemed in certain
circumstances as described below. The reasons for this policy are in "Reduced
Sales Charges" in the Statement of Additional Information.
Waivers for Redemptions of Shares in Certain Cases. The Class D
contingent deferred sales charge will be waived for redemptions of shares in the
following cases:
o Following the death or disability of the last surviving shareholder
(the death or disability must have occurred after the account was established,
and for disability you must provide evidence of a determination of disability by
the Social Security Administration);
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; and
o shares redeemed in involuntary redemptions as described below.
Further details about this policy are contained in "Reduced Sales Charges" in
the Statement of Additional Information.
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.
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
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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.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that enable
you to sell shares automatically or exchange them to another OppenheimerFunds
account on a regular basis:
o Automatic Withdrawal Plans. If your Fund account is $5,000 or more,
you can establish an Automatic Withdrawal Plan to receive payments of at least
$50 on a monthly, quarterly, semi-annual or annual basis. The checks may be sent
to you or sent automatically to your bank account on AccountLink. You may even
set up certain types of withdrawals of up to $1,500 per month by telephone. You
should consult the Statement of Additional Information for more details.
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<PAGE>
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
OppenheimerFunds account is $25. These exchanges are subject to the terms of the
Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A 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 or B shares of the Fund or other Oppenheimer
funds without paying a sales charge. This privilege applies to Class A 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. It does not apply to Class C or Class D 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.
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, please call the
Transfer Agent first, at 1-800-525-7048, for assistance.
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
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<PAGE>
o Shares are being transferred to a Fund account with a
different owner or name, or
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 on behalf of
a corporation, partnership or other business, or as a fiduciary,
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 Send courier or Express Mail
for requests by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231
Selling Shares By Telephone. You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price on a regular
business day, your call must be received by the Transfer Agent by the close of
The New York Stock Exchange that day, which is normally 4:00 P.M., but may be
earlier on some days. You may not redeem shares held in an OppenheimerFunds
retirement plan or under a share certificate by telephone.
o To redeem shares through a service representative, call
1-800-852-8457
o To redeem shares automatically on PhoneLink, call
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<PAGE>
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. This service is
not available within 30 days of changing the address on an account.
o Telephone Redemptions Through AccountLink. There are no dollar limits
on telephone redemption proceeds sent to a bank account designated when you
establish AccountLink. Normally the ACH wire to your bank is initiated on the
business day after the redemption. You do not receive dividends on the proceeds
of the shares you redeemed while they are waiting to be wired.
Selling Shares Through Your Dealer. The Distributor has made arrangements to
repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. Please call your dealer for
additional information. 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.
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
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<PAGE>
Except with respect to the Class D shares of the Fund which may be
exchanged only for Class B shares of other Oppenheimer funds, shares of a
particular class 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. 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 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 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 disposition of securities at a time
or price disadvantageous to the Fund.
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<PAGE>
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 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.
The Distributor has entered into agreements with certain dealers and
investment advisors permitting them to exchange their clients' shares by
telephone. These privileges are limited under those agreements and the
Distributor has the right to reject or suspend those privileges. As a result,
those exchanges may be subject to notice requirements, delays and other
limitations that do not apply to shareholders who exchange their shares directly
by calling or writing to the Transfer Agent.
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, 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 Trustees 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 Trustees at any time the
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<PAGE>
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 transaction 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
transactons and are responsible to their clients who are shareholders of the
Fund if the dealer performs any transaction erroneously.
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, Class C and Class D. Therefore, the redemption value of your
shares may be more or less than their original cost.
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<PAGE>
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 certified check or arrange to
have your bank 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 $200 for reasons other than the fact that the
market value of shares has dropped, and in some cases involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of share
purchase orders.
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 dividends, distributions and redemption proceeds (including
exchanges) if you fail to furnish the Fund a certified Social Security or
Employer Identification Number when you sign your application, or if you violate
Internal Revenue
Service regulations on tax reporting of income.
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 charge when redeeming certain Class A, Class B, Class
C and Class D shares.
o To avoid sending duplicate copies of materials to
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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 dividends separately for Class A, Class B, Class C
and Class D shares from net investment income each regular business day and pays
such dividends to shareholders monthly. Normally, dividends are paid monthly. It
is expected that distributions paid with respect to Class A shares will
generally be higher than for Class B, Class C and Class D shares because
expenses allocable to Class B, Class C and Class D shares will generally be
higher. There is no fixed dividend rate and there can be no assurance as to the
payment of any dividends. The amount of a class' dividends or distributions may
vary from time to time depending on market conditions, the composition of the
Fund's portfolio and expenses borne by that class.
Capital Gains. Although the Fund does not seek capital gains, it may realize
capital gains on the sale of portfolio securities. If it does, it may make
distributions out of any net short- or long-term capital gains in December. The
Fund may make supplemental distributions of dividends and capital gains
following the end of its fiscal year (which ends December 31st). Long-term
capital gains will be separately identified in the tax information the Fund
sends you after the end of the year. Short-term capital gains are treated as
dividends for tax purposes. There can be no assurance 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. 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
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or have them sent to your bank account on AccountLink.
o Reinvest your distributions in another Oppenheimer Fund
account. You can reinvest all distributions in another Oppenheimer
fund account you have established.
Federal Income Taxes. Long-term capital gains are taxable as long-term capital
gains when distributed to shareholders. Dividends paid from short-term capital
gains and net investment income are taxable as ordinary income. Dividends paid
from net investment income earned by the Fund on Municipal Obligations will be
excludable from your gross income for Federal income tax purposes. A portion of
the dividends paid by the Fund may be an item of tax preference if you are
subject to the alternative minimum tax. Distributions are subject to Federal
income tax and may be subject to state and/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.
o "Buying a Dividend." When a fund goes ex-dividend, its share price is
reduced by the amount of the distribution. If you buy shares on or just before
the ex-dividend date, or just before the Fund declares a capital gains
distribution, you will pay the full price for the shares and then receive a
portion of the price back as a taxable dividend or capital gain.
o Taxes on Transactions. Even though the Fund seeks tax-exempt income
for distribution to shareholders, you may have a capital gain or loss when you
sell or exchange your shares. 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.
Any capital gain is subject to capital gains tax.
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.
o New York State and City Taxes. To the extent that exempt- interest
dividends are derived from interest on Municipal Obligations, such distributions
will be exempt from New York State and City personal income taxes. However, an
investment in the Fund may result in liability for state and/or local taxes for
individual
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shareholders subject to taxation by states other than New York State or cities
other than New York City because the exemption from New York State and New York
City personal income taxes does not prevent such other jurisdictions from taxing
individual shareholders on dividends received from the Fund. In addition,
distributions derived from interest on tax exempt securities other than
Municipal Obligations will be treated as taxable ordinary income for purposes of
New York State and New York City personal income taxes. For New York State and
New York City personal income tax purposes, distributions of net long-term
capital gains will be taxable at the same rates as ordinary income.
Exempt-interest dividends are included in a corporation's net
investment income for purposes of calculating such corporation's New York State
corporate franchise tax and New York City general corporation tax and will be
subject to such taxes to the extent that a corporate shareholder's net
investment income is allocated to New York State and/or New York City.
All or a portion of interest on indebtedness incurred or continued to
purchase or carry the Fund's shares generally will not be deductible for New
York State and New York City personal income tax purposes.
This information is only a summary of certain Federal income tax and
New York State and New York City personal income 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.
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APPENDIX A
SPECIAL SALES CHARGE AND PURCHASE ARRANGEMENTS FOR CLASS A AND
Class D SHAREHOLDERS
CLASS A SHAREHOLDERS
Those shareholders who own Class A shares on May 1, 1997 may purchase additional
Class A shares of the Fund through January 5, 1998 subject to the following
sales charges:
<TABLE>
<CAPTION>
Front-End Front-End
Sales Charge Sales Charge Commission
as a as a as a Percentage
Percentage of Percentage of of Offering
Amount of Purchase Offering Price Amount Invested Price
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Less than $100,000 2.00% 2.04% 1.75%
- ----------------------------------------------------------------------------------------------------------------------
$100,000 or more but
less than $500,000 1.60% 1.63% 1.40%
- ----------------------------------------------------------------------------------------------------------------------
$500,000 or more but
less than $1,000,000 1.30% 1.32% 1.10%
- ----------------------------------------------------------------------------------------------------------------------
$1,000,000 and over* 1.00% 1.01% 0.80%
</TABLE>
* At the option of the Class A shareholder, additional purchases of $1,000,000
or more made through January 5, 1998 could be made at net asset value but will
be subject to the Class A contingent deferred sales charge. Please advise the
Distributor if this is desired. See "Buying Class A Shares" in the Prospectus.
Class D SHAREHOLDERS
Those shareholders who own Class D shares on May 1, 1997 may purchase additional
Class D shares of the Fund through January 5, 1998 subject to the following
sales charges. (No other purchases of Class D shares are permitted.):
Years Since Contingent Deferred
Beginning of Sales Charge on
Month in Which Redemptions in that
Purchase Order Year (as of amount
Was Accepted subject to Charge)
- -------------------------------------------------------------------
A-1
<PAGE>
0-1 2.50%
- -----------------------------------------------------------------
1-2 2.00%
- -------------------------------------------------------------------
2-3 1.50%
- -------------------------------------------------------------------
3-4 1.00%
- ------------------------------------------------------------------
4 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.
A-2
<PAGE>
APPENDIX B
Special Sales Charge Arrangements for Shareholders of the Fund
Who Were Shareholders of the Former Quest for Value Funds
The initial and contingent 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) Quest for Value
Fund, Inc., Quest for Value Growth and Income Fund, Quest for Value Opportunity
Fund, Quest for Value Small Capitalization Fund and Quest for Value Global
Equity 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." The waivers of initial and contingent deferred sales charges
described in this Appendix apply to shares of the Fund (i) acquired by such
shareholder pursuant to an exchange of shares of one of the Oppenheimer funds
that was one of the Former Quest for Value Funds or (ii) received by such
shareholder pursuant to the merger of any of the Former Quest for Value Funds
into an Oppenheimer fund on November 24, 1995.
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.
B-1
<PAGE>
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
9 or fewer 2.50% 2.56% 2.00%
- ----------------------------------------------------------------------------------------------------------------------
At least 10 but not
more than 49 2.00% 2.04% 1.60%
</TABLE>
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 30 to 31 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 Special Class A Contingent Deferred Sales Charge Rates. Class A
shares of the Fund purchased by exchange of shares of other Oppenheimer funds
that were acquired as a result of the merger of Former Quest for Value Funds
into those Oppenheimer funds, and which shares were subject to a Class A
contingent deferred sales charge prior to November 24, 1995 will be subject to a
contingent deferred sales charge at the following rates: if they are redeemed
within 18 months of the end of the calendar month in which they were purchased,
at a rate equal to 1.0% if the redemption occurs within 12 months of their
initial purchase and at a rate of 0.50 of
B-2
<PAGE>
1.0% if the redemption occurs in the subsequent six months. Class A shares of
any of the Former Quest Fund for Value Funds purchased without an initial sales
charge on or before November 22, 1995 will continue to be subject to the
applicable contingent deferred sales charge in effect as of that date as set
forth in the then-current prospectus for such fund.
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 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, B or C shares of the Fund acquired by merger of a Former
Quest for Value Fund into the Fund or by exchange from an Oppenheimer fund that
was a Former
B-3
<PAGE>
Quest for Value Fund or into which such fund merged, 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 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, B or C shares of the
Fund acquired by merger of a Former Quest for Value Fund into the Fund or by
exchange from an Oppenheimer fund that was a Former Quest For Value Fund or into
which such fund merged, 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 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, B or 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.
B-4
<PAGE>
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value Fund to Quest for
Value prototype 401(k) plans that were maintained on the TRAC-2000 recordkeeping
system and that were transferred to an OppenheimerFunds prototype 401(k) plan
shall be eligible for an additional one-time payment by the Distributor of 1% of
the value of the plan assets transferred, but that payment may not exceed $5,000
as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value Fund to
Quest for Value prototype 401(k) plans that were maintained on the TRAC-2000
recordkeeping system and (i) the shares held by those plans were exchanged for
Class A shares, or (ii) the plan assets were transferred to an OppenheimerFunds
prototype 401(k) plan, shall be eligible for an additional one-time payment by
the Distributor of 1% of the value of the plan assets transferred, but that
payment may not exceed $5,000.
B-5
<PAGE>
Limited Term New York Municipal Fund
350 Linden Oaks
Rochester, New York 14625-2807
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Price Waterhouse LLP
1100 Bausch & Lomb Place
Rochester, New York 14604-2705
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
No dealer, salesperson or another 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., Oppenheimer Funds 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.
PR0355.001.????
<PAGE>
ROCHESTER PORTFOLIO SERIES-LIMITED TERM NEW YORK MUNICIPAL FUND
350 Linden Oaks, Rochester, New York 14625
1-800-525-7048
Statement of Additional Information dated May 1, 1997
This Statement of Additional Information of Rochester Portfolio
Series-Limited Term New York Municipal Fund is not a Prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated May 1, 1997. It should be read together with the
Prospectus, which may be obtained by writing to OppenheimerFunds Services, the
Fund's Transfer Agent, 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...........................
Investment Considerations/Risk Factors...............................
Other Investment Restrictions........................................
How the Fund is Managed...................................................
Organization and History.............................................
Trustees 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: Industry Classifications......................................
Appendix B: Description of Municipal Securities Ratings..................
-1-
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective of the Fund is to
provide shareholders with as high a level of income exempt from Federal income
tax and New York State and New York City personal income taxes as is consistent
with its investment policies and prudent investment management. The Fund intends
to invest primarily in a portfolio of investment grade Municipal Obligations as
defined below and in the Prospectus with a dollar weighted average effective
maturity of five years or less. There can be no assurance that the investment
objective of the Fund will be realized.
The Fund seeks to achieve its objective by investing primarily in a
portfolio of obligations issued by or on behalf of New York State, its political
subdivisions, agencies and instrumentalities and obligations of other qualifying
issuers, such as issuers located in Puerto Rico, the Virgin Islands, and Guam,
which pay interest which, in the opinion of the bond counsel to the issuer, is
exempt from Federal income tax and New York State and New York City personal
income taxes ("Municipal Obligations").
The Fund is classified as non-diversified within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
means that the Fund is not limited by the Investment Company Act in the
proportion of its assets that it may invest in obligations of a single issuer.
The Fund intends to continue to qualify as a "regulated investment company,"
however, under the Internal Revenue Code of 1986, as amended (the "Code"). See
"Dividends, Capital Gains and Taxes." In addition to satisfying other
requirements to so qualify, the Fund will limit its investments so that, at the
close of each quarter of its taxable year, (i) not more than 25% of the market
value of its total assets will be invested in the securities of a single issuer
and (ii) with respect to 50% of its total assets, not more than 5% will be
invested in the securities of a single issuer. In contrast, a fund which elects
to be classified as "diversified" under the Investment Company Act must satisfy
the foregoing 5% requirement with respect to 75% of its assets at all times. To
the extent that the Fund assumes large positions in the obligations of a small
number of issuers, the Fund's total return may fluctuate to a greater extent
than that of a diversified company as a result of changes in the financial
condition or in the market's assessment of the issuers.
Municipal Obligations
o Municipal Bonds. Municipal bonds include debt obligations issued to
obtain funds for various public purposes, including the construction of a wide
range of public facilities such as bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which municipal securities or bonds may be issued include the
refunding of outstanding obligations, the obtaining of funds for general
operating expenses and the obtaining of funds to loan to other public
institutions and facilities. In addition, certain types of private activity
bonds are issued by or on behalf of public authorities to obtain funds to
provide housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, port or parking facilities, manufacturing
facilities, air or water pollution control facilities and certain local
-2-
<PAGE>
facilities for water supply, gas, electricity or sewage or solid waste disposal.
o General Obligation Bonds. Issuers of general obligation bonds include
states, counties, cities, towns and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. General obligation bonds are secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of principal and interest. The
taxes that can be levied for the payment of debt service may be limited or
unlimited as to the rate or amount of special assessments.
o Revenue Bonds. Revenue Bonds are not secured by the full faith,
credit and taxing power of an issuer. Rather, the principal security for revenue
bonds is generally the net revenue derived from a particular facility, group of
facilities or, in some cases, the proceeds of a special excise tax or other
specific revenue source. Revenue bonds are issued to finance a wide variety of
capital projects including: electric, gas, water, and sewer systems; highways,
bridges, and tunnels; port and airport facilities; colleges and universities,
and hospitals. Although the principal security behind these bonds may vary, many
provide additional security in the form of a debt service reserve fund, from
which money may be used to make principal and interest payments on the issuer's
obligations. Housing finance authorities have a wide range of security,
including partially or fully insured mortgages, rent subsidized and/or
collateralized mortgages, and/or the net revenues from housing or other public
projects. Some authorities are provided with further security in the form of
state assurance (although without obligation) to make up deficiencies in the
debt service reserve fund.
o Industrial Development Bonds. Industrial development bonds are, in
most cases, revenue bonds and are issued by or on behalf of public authorities
to raise money for the financing of various privately-operated facilities such
as manufacturing, housing, and pollution control. These bonds are also used to
finance public facilities such as airports, mass transit systems, ports and
parking. The payment of the principal and interest on such bonds is solely
dependent on the ability of the facilities user to meet its financial
obligations and the pledge, if any, of the real and personal property so
financed as security for such payment. The Fund will purchase industrial
development bonds only to the extent that the interest paid by a particular bond
is tax-exempt pursuant to the Code, which limits the types of facilities that
may be financed with tax-exempt industrial development and private activity
bonds and the amounts of such bonds each state may issue.
o Municipal Notes. Municipal notes generally fund short-term capital
needs and have maturities of one year or less. The Fund may invest in
municipal notes which include:
o Tax Anticipation Notes. Tax anticipation notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various seasonal tax revenues, such as income, sales, use and
business taxes, and are payable from these specific future taxes.
o Revenue Anticipation Notes. Revenue anticipation notes are issued in
expectation of receipt of other types of revenue, such as federal revenues
available under the Federal Revenue Sharing Programs.
-3-
<PAGE>
o Bond Anticipation Notes. Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged. In most
cases, the long-term bonds then provide the
money for the repayment of the notes.
o Miscellaneous, Temporary and Anticipatory Instruments. These
instruments may include notes issued to obtain interim financing pending
entering into alternate financial arrangements such as receipt of anticipated
federal, state or other grants or aid, passage of increased legislative
authority to issue longer term instruments or obtaining other refinancing.
o Construction Loan Notes. Construction loan notes are sold to provide
construction financing. Permanent financing, the proceeds of which are applied
to the payment of the Construction Loan Notes, is sometimes provided by a
commitment of the Government National Mortgage Association ("GNMA") to purchase
the loan, accompanied by a commitment by the Federal Housing Administration to
insure mortgage advances thereunder. In other instances, permanent financing is
provided by commitments of banks to purchase the loan. The Fund will only
purchase Construction Loan Notes that are subject to permanent GNMA or bank
purchase commitments.
o Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a
short-term obligation with a stated maturity of 365 days or less. It is issued
by agencies of state and local governments to finance seasonal working capital
needs or as short-term financing in anticipation of longer term financing.
o Municipal Leases. Municipal lease obligations or installment purchase
contract obligations (collectively, "Municipal Leases") have special risks not
normally associated with Municipal Obligations. Although Municipal Leases do not
constitute general obligations of the municipality for which the municipality's
taxing power is pledged, a Municipal Lease may be backed by the municipality's
covenant to budget for, appropriate and make the payments due under the lease
obligations. However, most lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated for
such purpose on a yearly basis. Although "non- appropriation" Municipal Leases
are generally secured by the leased property, the Fund's ability to recover
under the lease in the event of non-appropriation or default will be limited
solely to repossession of the leased property without recourse to the general
credit of the lessee, and disposition of the property in the event of
foreclosure might prove difficult. In addition, Municipal Leases may be subject
to an " abatement" risk. The leases underlying certain municipal lease
obligations may provide that lease payments are subject to partial or full
abatement if, because of material damage or destruction of the leased property,
there is substantial interference with the lessee's use or occupancy of such
property. The "abatement" risk may be reduced by the existence of insurance
covering the leased property, the maintenance by the lessee of reserve funds or
the provision of credit enhancements such as letters of credit.
In addition to the "non-appropriation" and "abatement" risks,
investments in Municipal Leases represent a relatively new type of financing.
As such, Municipal Leases have not yet developed the depth of marketability
associated with more conventional Municipal Obligations. The
-4-
<PAGE>
Fund will seek to minimize these risks by investing not more than 10% of its
total assets in Municipal Leases that contain "non-appropriation" clauses, and
by investing only in those "non- appropriation" lease obligations where (1) the
nature of the leased equipment or property is such that its ownership or use is
essential to a governmental function of the municipality, (2) the lease payments
will commence amortization of principal at an early date resulting in an average
life of seven years or less for the lease obligation, (3) appropriate covenants
will be obtained from the municipal obligor prohibiting the substitution or
purchase of similar equipment if lease payments are not appropriated, (4) the
lease obligor has maintained good market acceptability in the past, (5) the
investment is of a size that will be attractive to institutional investors, and
(6) the underlying leased equipment has elements of portability and/or use that
enhance its marketability in the event foreclosure on the underlying equipment
is ever required.
Investments in Municipal Leases will be subject to the Fund's 15% limit
on investments in Illiquid Securities unless, in the judgment of
OppenheimerFunds, Inc. ("the Manager"), a particular Municipal Lease is liquid.
The Board of Trustees has adopted guidelines to be utilized by the Manager in
making determinations concerning the liquidity and valuation of a municipal
lease obligation. Such determinations will be based on all relevant factors
including among others: (1) the frequency of trades and quotes for the
obligation; (2) the number of dealers willing to purchase or sell the security
and the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; (4) the nature of the marketplace
trades, including, the time needed to dispose of the security, the method of
soliciting offers, and the mechanics of transfer; (5) the likelihood that the
marketability of the obligation will be maintained throughout the time the Fund
holds the obligation; and (6) the likelihood that the municipality will continue
to appropriate funding for the leased property.
o New Forms of Municipal Obligations. New forms of Municipal
Obligations in which the Fund may desire to invest are continuing to evolve.
Accordingly, the descriptions herein as to certain types of existing Municipal
Obligations should be viewed as illustrative and not exclusive. The Fund may
invest in new forms of instruments or variations of existing instruments,
subject only to the Fund's criteria of investment quality and tax exemption and
to the restrictions specified in this Statement of Additional Information. As
new forms of instruments or variations of existing instruments evolve, the Fund
will revise its prospectus to reflect such evolution prior to investing.
o Definition of Issuer. For purposes of diversification under the
Investment Company Act, identification of the "issuer" of a Municipal Obligation
depends on the terms and conditions of the obligation. If the assets and
revenues of an agency, authority, instrumentality or other political subdivision
are separate from those of the government creating the subdivision and the
obligation is backed only by the assets and revenues of the subdivision, such
subdivision would be regarded as the sole issuer. Similarly, in the case of an
industrial development revenue bond, if the bond is backed only by the assets
and revenues of the non-governmental user, the non-governmental user would be
deemed to be the sole issuer.
If, however, in either case, the creating government or some other
entity guarantees the security, such a guarantee would not be a separate
security which must be included in the Fund's limitation on investments in a
single issuer, provided the value of all securities guaranteed by a
-5-
<PAGE>
guarantor is not greater than 10% of the Fund's total assets.
Other Investment Techniques and Strategies
o Stand-by Commitments. The Fund may purchase municipal securities
together with the right to resell the securities to the seller at an agreed upon
price or yield within a specified period prior to the maturity date of the
securities. Although it is not a put option in the technical sense, such a right
to resell is commonly known as a "put" and is also referred to as a "stand-by
commitment."
o When-Issued Securities. Municipal bonds are frequently offered on a
"when-issued" basis. When so offered, the price, which is generally expressed in
yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for the when-issued securities take place at a later date.
Normally, the settlement date occurs within six months of the purchase of
municipal bonds and notes. However, the Fund may, from time to time, purchase
municipal securities whose settlement extends beyond six months and possibly as
long as two years or more beyond trade date. During the period between purchase
and settlement, no payment is made by the Fund to the issuer and no interest
accrues to the Fund. To the extent that assets of the Fund are held in cash
pending the settlement of a purchase of securities, the Fund would earn no
income; however, it is the Fund's intention to be fully invested to the extent
practicable and subject to the policies stated above. While when-issued
securities may be sold prior to the settlement date, the Fund intends to
purchase such securities with the purpose of actually acquiring them unless a
sale appears desirable for investment reasons. At the time the Fund makes the
commitment to purchase a municipal bond on a when-issued basis, it will record
the transaction and reflect the value of the security in determining its net
asset value. The Fund does not believe that its net asset value or income will
be adversely affected by its purchase of municipal bonds on a when-issued basis.
The Fund will establish a segregated account in which it will maintain cash and
marketable securities equal in value to commitment for when-issued securities.
o Options Transactions. The Fund may engage in options transactions in
order to provide additional income (the writing of covered call options) or in
order to afford protection against adverse market conditions (the buying of put
options). Such transactions may, however, limit the amount of possible capital
appreciation which might otherwise be realized. The Fund may only write covered
call options or purchase put options which are listed for trading on a national
securities exchange and purchase call options and sell put options to the extent
necessary to cancel options previously written. As an operational policy, no
more than 5% of the Fund's net assets will be invested in options transactions.
Unless otherwise noted, the foregoing investment objectives and
policies are not designated as fundamental policies within the meaning of the
Investment Company Act.
Investment Considerations/Risk Factors
Special Investment Considerations - New York Municipal Securities. As explained
in the Prospectus, the Fund is highly sensitive to the fiscal stability of New
York State (the "State") and its subdivisions, agencies, instrumentalities or
authorities, including New York City, which issue the
-6-
<PAGE>
Municipal Securities in which the Fund concentrates its investments. The
following information on risk factors in concentrating in New York Municipal
Securities is only a summary, based on official statements relating to offerings
of New York issuers of Municipal Securities on or prior to February 12, 1997
with respect to offerings of the State and January 28, 1997 with respect to
offerings of New York City, and no representation is made as to the accuracy of
such information.
During the mid-1970's, the State, some of its agencies,
instrumentalities and public benefit corporations (the "Authorities"), and
certain of its municipalities faced serious financial difficulties. To address
many of these financial problems, the State developed various programs, many of
which were successful in ameliorating the financial crisis. Any further
financial problems experienced by these Authorities or municipalities could have
a direct adverse effect on the New York Municipal Securities in which the Fund
invests.
o New York City. More than any other municipality, the fiscal health of
New York City (the "City") has a significant effect on the fiscal health of the
State. The national economic downturn which began in July 1990 adversely
affected the local economy which had been declining since late 1989. As a
result, the City experienced job losses in 1990 and 1991 and real Gross City
Product ("GCP") fell in those two years. Beginning in 1992, the improvement in
the national economy helped stabilize conditions in the City. Employment losses
moderated toward year-end and real GCP increased, boosted by strong wage gains.
After noticeable improvements in the City's economy during 1994, economic growth
slowed in 1995 and the City's current four-year financial plan assumes that
moderate economic growth will continue through the calendar year 2000.
For each of the 1981 through 1996 fiscal years, the City achieved
balanced operating results as reported in accordance with generally accepted
accounting principles ("GAAP") and the City's 1997 fiscal year results are
projected to be balanced in accordance with GAAP. The City was required to close
substantial budget gaps in recent years in order to maintain balanced operating
results. There can be no assurance that the City will continue to maintain a
balanced budget as required by State law, or that it can maintain a balanced
budget without additional tax or other revenue increases or additional
reductions in City services or programs, which could adversely affect the City's
economic base.
The Mayor is responsible for preparing the City's four-year financial
plan, including the City's current financial plan for the 1997 through 2000
fiscal years (the "1997-2000 Financial Plan", "Financial Plan" or "City Plan").
On November 14, 1996, the City submitted to the New York State Financial Control
Board (the "Control Board") the Financial Plan for the 1997-2000 fiscal years,
which is a modification to a financial plan submitted to the Control Board on
June 21, 1996 (the "June Financial Plan") and which relates to the City, the New
York City Board of Education ("BOE") and the City University of New York.
The City's projections set forth in the City Plan are based on various
assumptions and contingencies which are uncertain and which may not materialize.
Changes in major assumptions could significantly affect the City's ability to
balance its budget as required by State law and to meet its annual cash flow and
financing requirements. Such assumptions and contingencies include the condition
of the regional and local economies, the impact on real estate tax revenues of
the real estate
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market, wage increases for City employees consistent with those assumed in the
City Plan, employment growth, the ability to implement reductions in City
personnel and other cost reduction initiatives, the ability of the New York City
Health and Hospitals Corporation ("HHC") and BOE to take actions to offset
reduced revenues, the ability to complete certain revenue generating
transactions, provision of State and Federal aid and mandate relief and the
impact on City revenues of Federal and State welfare reform and any future
legislation affecting Medicare or other entitlements.
Implementation of the City Plan is also dependent upon the City's
ability to market its securities successfully in the public credit markets. The
City's financing program for fiscal years 1997 through 2000 contemplates the
issuance of $9.0 billion of general obligation bonds and $3.8 billion of bonds
to be issued by the proposed New York City Finance Authority (the "Finance
Authority") primarily to reconstruct and rehabilitate the City's infrastructure
and physical assets and to make other capital investments. The creation of the
Finance Authority, which is subject to the enactment of State legislation, is
being proposed by the City in an attempt to avoid certain State constitutional
debt limitations. The City's projections indicate that City debt may exceed such
limitations sometime by the end of the 1997 fiscal year (July 1 - 1996 - June
30, 1997) unless legislation is enacted or other legislative initiatives are
identified and implemented. Without the Finance Authority or other legislative
relief, the City's capital program funded with general obligation debt, with
respect to new projects, would be virtually brought to a halt during the period
of the City Plan. In addition, the City issues revenue and tax anticipation
notes to finance its seasonal working capital requirements. The success of
projected public sales of City bonds and notes and Finance Authority bonds and
notes will be subject to prevailing market conditions, and no assurance can be
given that such sales will be completed. If the City were unable to sell its
general obligation bonds and notes or bonds and notes of the proposed Finance
Authority, it would be prevented from meeting its planned operating and capital
expenditures. Future developments concerning the City and public discussion of
such developments, as well as prevailing market conditions, may affect the
market for outstanding City general obligation bonds and notes.
o 1997-2000 Financial Plan. The June Financial Plan set forth actions
to close a previously projected gap of approximately $2.6 billion in the 1997
fiscal year. The proposed actions in the June Financial Plan for the 1997 fiscal
year included (i) agency actions; (ii) a revised tax reduction program which
would increase projected tax revenues due to the extension of the 12.5% personal
income tax surcharge and other actions; (iii) savings resulting from cost
containment in entitlement programs to reduce City expenditures and additional
proposed State aid; (iv) the assumed receipt of revenues relating to rent
payments for the City's airports, which are currently the subject of a dispute
with the Port Authority of New York and New Jersey (the "Port Authority"); (v)
the sale of the City's television station; and (vi) pension cost savings
resulting from a proposed increase in the earnings assumption for pension
assets.
The 1997-2000 Financial Plan published on November 14, 1996 reflects
actual receipts and expenditures and changes in forecast revenues and
expenditures since the June Financial Plan. The 1997-2000 Financial Plan
projects revenues and expenditures for the 1997 fiscal year balanced in
accordance with GAAP, and projects budget gaps of $1.2 billion, $2.1 billion and
$3.0 billion for the 1998, 1999 and 2000 fiscal years, respectively, after
successful implementation of the gap
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closing program for the 1997 fiscal year. Changes since the June Financial Plan
include (i) an increase in projected tax revenues in fiscal years 1997 through
2000, respectively; (ii) a delay in the assumed receipt of projected rent
payments for the City airports from the 1997 fiscal year to the 1998 and 1999
fiscal years, and a reduction in assumed State and Federal aid for the 1997
fiscal year; (iii) an increase in projected overtime and other expenditures in
each of the fiscal years 1997 through 2000; (iv) an increase in expenditures for
BOE in the 1997 fiscal year for school text books; (v) a reduction in projected
pension costs, in fiscal years 1997 through 2000, respectively; and (vi)
additional agency actions in fiscal years 1997 through 2000, including personnel
reductions through attrition and early retirement.
The Financial Plan assumes (i) approval by the Governor and the State
Legislature of a retroactive extension of the 12.5% personal income tax
surcharge, which expired on December 31, 1996; (ii) collection of the projected
rent payments for the City's airports in the 1998 and 1999 fiscal years,
respectively, which may depend on the successful completion of negotiations with
the Port Authority or the enforcement of the City's rights under the existing
leases thereto through pending legal actions; (iii) the ability of HHC and BOE
to identify actions to offset substantial City and State revenue reductions and
the receipt by BOE of additional State aid; (iv) State approval of the cost
containment initiatives and State aid proposed by the City; and (v) a reduction
in City funding for labor settlements for certain public authorities or
corporations. The Financial Plan does not reflect any increased costs which the
City might incur as a result of welfare legislation recently enacted by Congress
or legislation proposed by the Governor, which would, if enacted, implement such
Federal welfare legislation. In addition, the economic and financial condition
of the City may be affected by various financial, social, economic and political
factors which could have a material effect on the City.
The City's financial plans have been the subject of extensive public
comment and criticism. In December 1996, the City Comptroller, the New York
State Comptroller and the Control Board each issued reports which, among other
things, state that projected revenues may be less and future expenditures may be
greater than forecasted in the City Plan. It is reasonable to expect that such
reports and statements will continue to be issued and to engender public
comment.
o Ratings. As of January 28, 1997, Moody's rated the City's general
obligation bonds Baa1, Standard & Poor's rated the bonds BBB+ and Fitch rated
the bonds A-. These ratings do not reflect any credit enhancements relating to
any portion of City bonds. Such ratings reflect only the views of Moody's,
Standard & Poor's and Fitch, from which an explanation of the significance of
such ratings will continue for any given period of time or that they will not be
revised downward or withdrawn entirely. Any such downward revision or withdrawal
could have an adverse effect on the market prices of the bonds. On February 28,
1996, Fitch Investors Service, Inc.. ("Fitch") placed the City's general
obligation bonds on FitchAlert with negative implications. On November 5, 1996,
Fitch removed the City's general obligation bonds from FitchAlert, although
Fitch stated that the outlook remains the negative.
o Outstanding Net Indebtedness. As of December 31, 1996, the City
and the Municipal Assistance Corporation for the City of New York had,
respectively, approximately $25.9 billion and $3.9 billion of outstanding net
long-term debt. As of October 24, 1996, the New York City
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Municipal Water Finance Authority ( the "Water Authority") had approximately
$6.6 billion of long-term debt and $400 million of commercial paper notes
outstanding.
Debt service on Water Authority obligations is secured by fees and
charges collected from the users of the City's water and sewer system. State and
federal regulations require the City's water supply to met certain standards to
avoid filtration. The City's water supply now meets all technical standards and
the City has taken the position that increased regulatory, enforcement and other
efforts to protect its water supply will preserve the high quality of water in
the upstate water supply system and prevent the need for filtration. The U.S.
Environmental Protection Agency has granted the City a waiver of filtration
regulations through December 15, 1996, and has stated it will issue a waiver
through April, 2002 if the City and State implement certain protective actions
estimated to cost approximately $400 million. Preliminary estimates of the costs
of such filtration are from $4 to $8 billion. Such an expenditure could cause
significant increases in City water and sewer charges.
The City depends on the State for State aid both to enable the City to
balance its budget and to meet its cash requirements. There can be no assurance
that there will not be reductions in State aid to the City from amounts
currently projected or that State budgets in future fiscal years will be adopted
by the April 1 statutory deadline or that any such reductions or delays will not
have adverse effects on the City's cash flow or expenditures.
o Litigation. The City is a defendant in lawsuits pertaining to
material matters, including claims asserted which are incidental to performing
routine governmental and other functions. This litigation includes, but is not
limited to, actions commenced and claims asserted against the City arising out
of alleged torts, alleged breaches of contracts, alleged violations of law and
condemnation proceedings. As of June 30, 1996, claims in excess of $380 billion
were outstanding against the City for which the City estimates its potential
future liability to be approximately $2.8 billion.
o New York State. The State has historically been one of the wealthiest
states in the nation. For decades, however, the State economy has grown more
slowly than that of the nation as a whole, resulting in the gradual erosion of
its relative economic affluence. The causes of this relative decline are varied
and complex, in many cases involving national and international developments
beyond the State's control.
o Recent Developments. The national economy has resumed a more robust
rate of growth after a "soft landing" in 1995, with over 11 million jobs added
nationally since early 1992. The State economy has continued to expand, but
growth remains somewhat slower than in the nation. Although the State has added
approximately 240,000 jobs since late 1992, employment growth in the State has
been hindered during recent years by significant cutbacks in the computer and
instrument manufacturing, utility, defense and banking industries. Government
downsizing has also moderated these job gains. Moderate growth is projected to
continue in 1997 for employment, wages and personal income, followed by a slight
slowing in 1998.
The New York State Financial Plan for the State's 1996-1997 fiscal year
(April 1, 1996- March 31, 1997) (the "State Plan") is based on the State's
1996-1997 fiscal year budget and updated, relying on actual results, through the
third quarter of the fiscal year. The State Plan assumes that the
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State's economy will show modest expansion during the calendar year 1996.
Although industries that export goods and services are expected to continue to
do well, growth is expected to be slowed by government cutbacks at all levels
and by tight fiscal constraints on health and social services. On an average
annual basis, employment growth in the State is expected to be up slightly from
the 1995 rate. Personal income is expected to record moderate gains in 1996.
Bonus payments in the securities industry are expected to increase further from
last year's record level.
o The 1996-97 Fiscal Year. The State's General Fund (the major
operating fund of the State) is projected in the State Plan to be balanced on a
cash basis for the 1996-97 fiscal year. The State Plan projects General Fund
receipts and transfers from other funds at $32.966 billion, an increase of $158
million from the prior fiscal year, and disbursements and transfers to other
funds at $32.895 billion, an increase of $216 million from the total disbursed
in the prior fiscal year. The State Financial Plan includes gap closing actions
to offset a previously projected budget gap of $3.9 billion for the 1996-1997
fiscal year. Such gap closing actions include reductions in the State workforce,
spending reductions in health care and education programs, projected increases
in tax collections, pension and debt service savings and the use of certain
reserve funds. There can be no assurance that additional gap closing measures
will not be required and there is no assurance that any such measures will
enable the State to achieve a balanced budget for its 1996-1997 fiscal year.
The State Plan is based upon forecasts of national and State economic
activity developed through both internal analysis and review of State and
national economic forecasts prepared by commercial forecasting services and
other public and private forecasters. Economic forecasts have frequently failed
to predict accurately the timing and magnitude of changes in the national and
the State economies. Many uncertainties exist in forecasts of both the national
and State economies, including consumer attitudes toward spending, the extent of
corporate and governmental restructuring, federal fiscal and monetary policies,
the level of interest rates, and the condition of the world economy, which could
have an adverse effect on the State. There can be no assurance that the State
economy will not experience results in the current fiscal year that are worse
than predicted, with corresponding material and adverse effects on the State's
projections of receipts and disbursements.
Projections of total State receipts in the State Financial Plan are
based on the State tax structure in effect during the fiscal year and on
assumptions relating to basic economic factors and their historical
relationships to State tax receipts. Projections of total State disbursements
are based on assumptions relating to economic and demographic factors, levels of
disbursements for various services provided by local governments (where cost is
partially reimbursed by the State), and the results of various administrative
and statutory mechanisms in controlling disbursements for State operations.
Factors that may affect the level of disbursements in the fiscal year include
uncertainties relating to the economy of the nation and the State, the policies
of the federal government, and changes in the demand for and use of State
services.
o Future Fiscal Years. The Governor presented his proposed 1997-1998
Executive Budget (the "Executive Budget") to the Legislature on January 14,
1997. It is expected that the Governor will prepare amendments to the Executive
Budget as permitted under law in a revised Financial Plan to be released in
February 13, 1997. There can be no assurance that the Legislature will enact the
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Executive Budget as proposed by the Governor into law, or that the State's
adopted budget projections will not differ materially and adversely from the
projections set forth in the Executive Budget.
The draft 1997-1998 Financial Plan based on the Executive Budget,
projects balance on a cash basis and reflects a continuing strategy of
substantially reduced State spending, including reductions in social welfare
spending and efficiency and productivity initiatives. Total General Fund
receipts are projected to be $32.88 billion and total General Fund disbursements
and transfers to other funds are projected to be $32.84 billion.
The Executive Budget proposes $2.3 billion in gap closing actions to
balance the 1997-1998 Financial Plan. As a result of the loss of non-recurring
revenues available in 1996-1997 and implementation of previously enacted tax
reduction programs, the Executive Budget proposes to close this gap primarily
through a series of spending reductions and Medicaid cost containment measures,
the use of a portion of the 1996-1997 projected budget surplus, and other
actions.
In recent years, State actions affecting the level of receipts and
disbursements, the relative strength of the State and regional economy, actions
of the federal government and other factors, have created structural gaps for
the State. These gaps resulted from a significant disparity between recurring
revenues and the costs of maintaining or increasing the level of support for
State programs. To address a potential imbalance in any given fiscal year, the
State would be required to take actions to increase receipts and/or reduce
disbursements as it enacts the budget for that year, and under the State
Constitution, the Governor is required to propose a balanced budget each year.
There can be no assurance, however, that the Legislature will enact the
Governor's proposals or that the State's actions will be sufficient to preserve
budgetary balance in a given fiscal year or to align recurring receipts and
disbursements in future fiscal years.
On August 22, 1996, the President signed into law the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996. The new law
abolishes the federal Aid to Families with Dependent Children program (AFDC),
and creates a new Temporary Assistance to Needy Families Program (TANF) funded
with a fixed federal block grant to states. The new law also imposes (with
certain exceptions) a five-year durational limit on TANF recipients, requires
that virtually all recipients be engaged in work or community service activities
within two years of receiving benefits, and limits assistance provided to
certain immigrants and other classes of individuals. States are required to
comply with the new federal welfare reform law no later than July 1, 1997.
States who fail to meet these federally mandated job participation rates, or who
fail to conform with certain other federal standards, face potential sanctions
in the form of a reduced federal block grant.
On October 16, 1996, the Governor submitted the State's TANF
implementation plan to the federal government as required under the new federal
welfare law. Submission of this plan to the federal government requires New York
State to begin compliance with certain time limits on welfare benefits and
permits the State to become eligible for federal block grant funding. The
Governor has indicated that he plans to introduce legislation necessary to
conform with federal law for consideration by the Legislature in the 1997
legislative session. Given the size and scope of the changes required under
federal law, it is likely that these proposals will produce extensive public
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discussions. There can be no assurances that the State legislature will enact
welfare reform proposals as submitted by the Governor and as required by federal
law.
It is expected that funding levels provided under the federal TANF
block grant will be higher than currently anticipated in the State Plan.
However, the net fiscal impact of any changes to the State's welfare programs
that are necessary to conform with federal law will be dependent upon such
factors as the ability of the State to avoid any federal fiscal penalties, the
level of additional resources required to comply with any new State and/or
federal requirements, and the division of non-federal welfare costs between the
State and its localities.
o Prior Fiscal Years. The State ended its 1995-1996 fiscal year in
balance, with a reported 1995-1996 General Fund cash surplus of $445 million.
Prior to adoption of the State's 1995-1996 fiscal year budget, the State had
projected a potential budget gap of approximately $5 billion, which was closed
primarily through spending reductions, cost containment measures, State agency
actions and local assistance reforms.
In July 1995, the State Comptroller issued its audit of the State's
1994-1995 fiscal year prepared in accordance with generally accepted auditing
standards. The State completed its 1994- 1995 fiscal year with a General Fund
operating deficit of $1.426 billion, as compared with an operating surplus of
$914 million for the previous fiscal year. The 1994-1995 fiscal year deficit was
caused by several factors, including the use of $1.026 billion of the 1993-1994
fiscal year surplus in the 1994-1995 fiscal year and the adoption of changes in
accounting methodologies by the State Comptroller.
o Local Government Assistance Corporation ("LGAC"). In 1990, as part of
a State fiscal reform program, legislation was enacted creating LGAC, a public
benefit corporation empowered to issue long-term obligations to fund certain
payments to local governments traditionally funded through the State's annual
seasonal borrowing. As of June 1995, LGAC had issued bonds and notes to provide
net proceeds of $4.7 billion completing the program. The impact of LGAC's
borrowing is that the State is able to meet its cash flow needs in the first
quarter of the fiscal year without relying on short-term seasonal borrowings.
The State Plan includes no seasonal borrowing.
o Authorities. The fiscal stability of the State is related to the
fiscal stability of its public authorities ("Authorities"). Authorities have
various responsibilities, including these which finance, construct and/or
operate revenue-producing public facilities. Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply to the State
itself, and may issue bonds and notes within the amounts, and restrictions set
forth in, their legislative authorization. As of September 30, 1995, the latest
data available, 17 Authorities each had outstanding debt of $100 million or more
and, collectively, had aggregate outstanding debt, including refunding bonds, of
$73.45 billion.
Authorities are generally supported by revenues generated by the
projects financed or operated, such as fares, user fees on bridges or tunnels,
highway tolls, rentals for dormitory rooms and housing units and charges for
occupancy at medical care facilities. In addition, State legislation authorizes
several financing techniques for Authorities. Also, there are statutory
arrangements
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providing for State local assistance payments otherwise payable to localities to
be made under certain circumstances to Authorities. Although the State has no
obligation to provide additional assistance to localities whose local assistance
payments have been paid to Authorities under these arrangements, if local
assistance payments are diverted the affected localities could seek additional
State assistance. Some Authorities also receive moneys from State appropriations
to pay for the operating costs of certain of their programs.
o Ratings. On January 13, 1992, Standard & Poor's reduced its ratings
on the State's general obligation bonds from A to A- and, in addition, reduced
its ratings on the State's moral obligation, lease purchase, guaranteed and
contractual obligation debt. Standard & Poor's also continued its negative
rating outlook assessment on State general obligation debt. On April 26, 1993,
Standard & Poor's revised the rating outlook assessment to stable. On February
14, 1994, Standard & Poor's raised its outlook to positive and, on October 3,
1995, confirmed its A-rating. On January 6, 1992, Moody's reduced its ratings on
outstanding limited-liability State lease purchase and contractual obligations
from A to Baa1. On October 2, 1995, Moody's reconfirmed its A rating on the
State's general obligation long-term indebtedness. Ratings reflect only the
respective views of such organizations, and an explanation of the significance
of such ratings may be obtained from the rating agency furnishing the same.
There is no assurance that a particular rating will continue for any given
period of time or that any such rating will not be revised downward or withdrawn
entirely, if in the judgment of the agency originally establishing the rating,
circumstances so warrant. A downward revision or withdrawal of such ratings, or
either of them, may have an effect on the market price of the State Municipal
Securities in which the Fund invests.
o General Obligation Debt. As of March 31, 1996, the State had
approximately $5.05 billion in general obligation bonds, including $294 million
in bond anticipation notes outstanding. Principal and interest due on general
obligation bonds and interest due on bond anticipation notes were $735 million
for the 1995-96 fiscal year and are estimated to be $719 million for the State's
1996-97 fiscal year.
o Litigation. The State is a defendant in numerous legal proceedings
pertaining to matters incidental to the performance of routine governmental
operations. Such litigation includes, but is not limited to, claims asserted
against the State arising from alleged torts, alleged breaches of contracts,
condemnation proceedings and other alleged violations of State and Federal laws.
These proceedings could affect adversely the financial condition of the State in
the 1996-1997 fiscal year or thereafter.
The State believes that the State Plan includes sufficient reserves for
the payment of judgments that may be required during the 1996-97 fiscal year.
There can be no assurance, however, that an adverse decision in any of these
proceedings would not exceed the amount the State Plan reserves for the payment
of judgments and, therefore, could affect the ability of the State to maintain a
balanced 1996-1997 State Plan. In its audited financial statements for the
fiscal year ended March 31, 1996, the State reported its estimated liability for
awarded and anticipated unfavorable judgments at $474 million.
In addition, the State is party to other claims and litigations which
its counsel has advised
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are not probable of adverse court decisions. Although, the amounts of potential
losses, if any, are not presently determinable, it is the State's opinion that
its ultimate liability in these cases is not expected to have a material adverse
effect on the State's financial position in the 1996-97 fiscal year or
thereafter.
o Other Localities. Certain localities in addition to the City could
have financial problems leading to requests for additional State assistance
during the State's 1996-97 fiscal year and thereafter. The potential impact on
the State of such actions by localities is not included in the projections of
the State receipts and disbursements in the State's 1996-97 fiscal year.
Fiscal difficulties experienced by the City of Yonkers ("Yonkers")
resulted in the creation of the Financial Control Board for the City of Yonkers
(the "Yonkers Board") by the State in 1984. The Yonkers Board is charged with
oversight of the fiscal affairs of Yonkers. Future actions taken by the Governor
or the State Legislature to assist Yonkers could result in increased State
expenditures for extraordinary local assistance.
Management of Credit Risk. Because 5% of the Fund's assets may be invested in
securities which are rated below the lowest investment grade categories, as
rated by a nationally recognized statistical rating organization ("NRSRO"), and
because a substantial portion of its assets may be invested in securities which
are unrated, but which are, in the opinion of the Manager, comparable in quality
to investment grade securities, the Fund is dependent on the Manager's judgment,
analysis and experience in evaluating the quality of such obligations. In
evaluating the credit quality of a particular issue, whether rated or unrated,
the Manager will normally take into consideration, among other things, the
financial resources of the issuer (or, as appropriate, of the underlying source
of the funds for debt service), its sensitivity to economic conditions and
trends, any operating history of and the community support for the facility
financed by the issue, the ability of the issuer's management and regulatory
matters. The Manager will attempt to reduce the risks inherent in investments in
such obligations through active portfolio management, structuring the Fund's
portfolio to include a broad spectrum of municipal securities, credit analysis
and attention to current developments and trends in the economy and the
financial markets.
Changes in the value of municipal bonds held in the Fund's portfolio
arising from these or other factors will cause changes in the net asset value
per share of the Fund. As an operational policy, however, the Fund will not
invest more than 5% of its assets in securities where the principal and interest
are the responsibility of an industrial user with less than three years'
operational history.
Default. The Fund will also take such action as it considers appropriate in the
event of anticipated financial difficulties, default or bankruptcy of either the
issuer of any such obligation or of the underlying source of funds for debt
service. Such action may include retaining the services of various persons and
firms to evaluate or protect any real estate, facilities or other assets
securing any such obligation or acquired by the Fund as a result of any such
event. The Fund will incur additional expenditures in taking protective action
with respect to portfolio obligations in default and assets securing such
obligations, and, as a result, the Fund's net asset value could be adversely
affected. Any income derived from the Fund's ownership or operation of assets
acquired as a result of such actions may not be tax-exempt.
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Liquidity and Valuations. The Fund may from time to time, purchase securities
which have a rating which is less than investment grade or securities for which
there is no regular trading market. The market values of such securities tend to
reflect individual developments affecting the issuer to a greater extent than do
higher rated or more liquid securities, which react primarily to fluctuation in
the general level of interest rates. Such securities also tend to be more
sensitive to economic conditions than higher rated securities or securities for
which there is a regular trading market. A portion of these fixed income
securities are considered by S&P and Moody's, on balance, to be speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation and will generally involve more credit risk than
securities in the higher rating categories. Securities rated BBB or Baa by S&P
or Moody's are considered to be speculative with respect to their ability to
timely make principal and interest payments. It is possible that the Fund may be
required to liquidate such securities at an inopportune time, thus having a
possible adverse affect on the Fund's performance.
Other Investment Restrictions
o Fundamental Investment Restrictions. The following investment
restrictions and policies are designated fundamental policies within the meaning
of the Investment Company Act and may not be changed without the consent of the
shareholders of a majority of the Fund's outstanding shares, including a
majority of the shares of the Fund. A majority of the shares means the lesser of
(i) 67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented or (ii) more than 50% of the outstanding
shares. The Fund may not:
(1) Purchase common stocks, preferred stocks, warrants, or other
equity securities;
(2) Borrow money or mortgage or pledge any of its assets, except that
the Fund may borrow from a bank for temporary or emergency purposes or for
investment purposes in amounts not exceeding 10% of its total assets. Where
borrowings are made for a purpose other than temporary or emergency purposes,
the Investment Company Act requires that the Fund maintain asset coverage of at
least 300% for all such borrowings. Should such asset coverage at any time fall
below 300%, the Fund will be required to reduce its borrowings within three (3)
days to the extent necessary to meet such asset coverage;
(3) Sell securities short, purchase securities on margin, or write
put options. The Fund
reserves the right to purchase securities with puts attached;
(4) Underwrite the securities of other issuers, except to the extent
that the purchase of municipal obligations in accordance with the Fund's
investment objective and policies, either directly from the issuer, or from an
underwriter for an issuer, may be deemed an underwriting;
(5) Purchase or sell real estate, real estate investment trust
securities, commodities, or commodity contracts, or oil and gas interests, but
this shall not preclude the Fund from investing in municipal obligations secured
by real estate or interests therein;
(6) Purchase the securities of any issuer which would result in the
Fund owning more than
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10% of the voting securities of such issuer;
(7) Purchase or retain securities of any issuer if trustees of the
Fund, each of whom owns more than 1/2 of 1% of the outstanding securities of
such issuer, together own more than 5% of such outstanding securities;
(8) Make loans to others, except in accordance with the Fund's
investment objective and policies or pursuant to contracts providing for the
compensation of service providers by compensating balances;
(9) Invest more than 25% of its assets in any particular industry or
industries, except that the Fund may invest more than 25% of its assets in
obligations issued or guaranteed by the U. S. Government, its agencies or
instrumentalities. Industrial development bonds, where the payment of principal
and interest is the responsibility of companies within the same industry, are
grouped together as an "industry";
(10) Invest in companies for the purpose of exercising control or
management; or
(11) Issue senior securities.
o Non-Fundamental Investment Restrictions. The Fund operates under
certain investment restrictions which are non-fundamental investment policies of
the Fund and which can be changed by the Board without shareholder approval.
These restrictions provide that, for purposes of Fundamental Investment
Restriction No. 9 described above, the Fund's policy with respect to
concentration of investments shall be interpreted as prohibiting the Fund from
making an investment in any given industry if, upon making the proposed
investment, 25% or more of the value of its total assets would be invested in
such industry.
The percentage limitations on investments which are set forth above
(fundamental and non- fundamental) are applied at the time an investment is
made. No violation of the percentage limitation will occur unless the limitation
is exceeded immediately after an investment is made and as a result thereof
(except for the limitations on borrowing which are in effect at all times).
How the Fund Is Managed
Organization and History. Rochester Portfolio Series (the "Trust"), a
Massachusetts business trust established on June 14, 1991, is an open-end,
non-diversified, management investment company consisting of one portfolio, the
Limited Term New York Municipal Fund, with four classes of shares. As a
Massachusetts business trust, the Fund is not required to hold, and does not
plan to hold, regular annual meetings of shareholders. The Fund will hold
meetings when required to do so by the Investment Company Act or other
applicable law, or when a shareholder meeting is called by the Trustees.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Fund, to remove a Trustee. The
Trustees will call a meeting of
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<PAGE>
shareholders to vote on the removal of a Trustee upon the written request of the
record holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been shareholders for
at least six months) holding shares of the Fund valued at $25,000 or more or
holding at least 1% of the Fund's outstanding shares, whichever is less, stating
that they wish to communicate with other shareholders to request a meeting to
remove a Trustee, the Trustees will then either make the Fund's shareholder list
available to the applicants or mail their communication to all other
shareholders at the applicants' expense, or the Trustees may take such other
action as set forth under Section 16(c) of the Investment Company Act.
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
entitle 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 Trustees and ratification of
appointment of auditors for the Fund. Shareholders of a particular series or
class vote separately on proposals which affect that series or class, and
shareholders of a series or class which is not affected by that matter are not
entitled to vote on the proposal.
The Trustees are authorized to create new series and classes of series.
The Trustees may reclassify unissued shares of the Fund or its series or classes
into additional series or classes of shares. The Trustees 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.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides for
indemnification and reimbursement of expenses out of its property for any
shareholder held personally liable for its obligations. The Declaration of Trust
also provides that the Fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances, the risk of a Fund shareholder incurring financial
loss on account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any shareholder
of the Trust, agrees under the Trust's Declaration of Trust to look solely to
the assets of the Trust for satisfaction of any claim or demand which may arise
out of any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers 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 trustees are also trustees of Rochester
Fund Municipals and Oppenheimer Bond Fund for Growth. With the
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<PAGE>
exception of Mr. Cannon, all of the trustees are also trustees or directors of
Oppenheimer Quest Growth & Income Value Fund, Oppenheimer Quest Officers Value
Fund, Oppenheimer Quest Opportunity Value Fund, Oppenheimer Quest Small Cap
Fund, Oppenheimer Quest Value Fund, Inc., and Oppenheimer Quest Global Value
Fund, Inc. Ms. Macaskill (in her capacity as President) Messrs. Donohue, Bowen,
Zack, Bishop and Farrar, respectively, hold the same offices with the New
York-based Oppenheimer funds as with the Fund. As of February 25, 1997 the
Trustees and officers of the Fund as a group owned less than 1% of the
outstanding shares of any class of shares of the Fund.
BRIDGET A. MACASKILL, Chairman of the Board of Trustees and President;* Age 48
President, Chief Executive Officer, and a Director of OppenheimerFunds, Inc.
(the "Manager") and HarbourView Asset Management Corporation ("HarbourView") a
subsidiary of the Manager; President and a director of Oppenheimer Acquisition
Corp. ("OAC") the Manager's parent holding company; and of Oppenheimer
Partnership Holdings, Inc.; Chairman and a director of Shareholder Services,
Inc. ("SSI"), a transfer agent subsidiary of the Manager and Shareholder
Financial Services, Inc. ("SFSI"); and a director of Oppenheimer Real Asset
Management, Inc.
JOHN CANNON, Trustee; Age 67
620 Sentry Parkway West Suite 220, Blue Bell, PA 19422
Independent Consultant; Chairman and Treasurer, CDC Associates, Inc., registered
investment adviser, 1993-February, 1996; prior thereto, President, AMA
Investment Advisers, Inc., a mutual fund investment adviser, 1976-1991; Senior
Vice President AMA Investment Advisers, Inc., 1991- 1993; Director, Neuberger &
Berman Income Managers Trust, Neuberger & Berman Income Funds and Neuberger
Berman Trust, 1995-Present.
PAUL Y. CLINTON, Trustee; Age 66
39 Blossom Avenue, Osterville, MA 02655
Principal of Clinton Management Associates, a financial and venture capital
consulting firm; formerly, Director, External Affairs, Kravco Corporation, a
national real estate owner and property management corporation; formerly
President of Essex Management Corporation, a management consulting company;
Trustee of Capital Cash Management Trust and Prime Cash Fund, each of which is a
money-market fund and Narragansett Insured Tax Free Fund; Director of Quest Cash
Re serves, Inc. and Trustee of Quest For Value Accumulation Trust, all of which
are open-end investment companies. Formerly a general partner of Capital Growth
Fund, a venture capital partnership; formerly a general partner of Essex Limited
Partnership, an investment partnership, President of Geneve Corp., a venture
capital fund, Chairman of Woodland Capital Corp., a small business investment
company; Vice President of W.R. Grace & Co.
THOMAS W. COURTNEY, Trustee; Age 63
P.O. Box 580, Sewickley, Pennsylvania 15143
Principal of Courtney Associates, Inc., a venture capital firm; former General
Partner of Trivest Venture Fund, a private venture capital fund; former
President of Investment Counseling Federated Investors, Inc.; Trustee of Cash
Assets Trust, a money market fund; Director of Quest Cash Reserves, Inc. and
Trustee of Quest for Value Accumulation Trust, each of which is an open-end
investment company; former President of Boston Company Institutional Investors;
Trustee of
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<PAGE>
Hawaiian Tax-Free Trust and Tax Free Trust of Arizona, tax-exempt bond funds;
Director of several privately owned corporations; former Director of Financial
Analysts Federation.
LACY B. HERRMANN, Trustee; Age 67
380 Madison Avenue, Suite 2300, New York, New York 10017
President and Chairman of the Board of Aquila Management Corporation, the
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, Short Term Asset Reserves,
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 or Trustee of Quest Cash
Reserves, Inc., and Trustee of Quest for Value Accumulation Trust and The
Saratoga Advantage Trust, each of which is an open-end investment company;
Trustee of Brown University.
GEORGE LOFT, Trustee; Age 82
51 Herrick Road, Sharon, Connecticut 06069
Private Investor; Director of Quest Cash Reserves, Inc. and Trustee of Quest for
Value Accumulation Trust and The Saratoga Advantage Trust, each of which is an
open-end investment company and Director of the Quest for Value Dual Purpose
Fund, Inc., a closed-end investment company.
RONALD H. FIELDING, Vice President and Portfolio Manager; Age 48
350 Linden Oaks, Rochester, NY 14625
Senior Vice President of the Manager, Chairman of the Rochester Funds Division
of the Manager; formerly President and a trustee or director of the Fund,
Limited Term New York Municipal Fund and Rochester Tax Managed Fund, Inc;
President and a director, Fielding Management Company, Inc., Chairman and a
director of Rochester Fund Distributors, Inc., President and a director of
Fielding Management Company, Inc., President and a director of Rochester Capital
Advisors, Inc., President and a director of Rochester Fund Services, Inc.
ANDREW J. DONOHUE, Secretary; Age 47
Executive Vice President and General Counsel of the Manager and OppenheimerFunds
Distributor, Inc. (the "Distributor"); President and a director of Centennial;
Executive Vice President, General Counsel and a director of HarbourView, SFSI,
and Oppenheimer Partnership Holdings, Inc.; President and a director of
Oppenheimer Real Asset Management, Inc.; General Counsel of OAC; Executive Vice
President, Chief Legal Officer and a director of MultiSource Services, Inc. (a
broker-dealer); formerly Senior Vice President and Associate General Counsel of
the Manager and the Distributor, partner in Kraft & McManimon (a law firm), an
officer of First Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment
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<PAGE>
adviser), and a director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.
GEORGE C. BOWEN, Treasurer; Age 60
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer of the Manager; Vice President and
Treasurer of the Distributor and HarbourView; Senior Vice President, Treasurer,
Assistant Secretary and a director of Centennial Asset Management Corporation,
an investment advisory subsidiary of the Manager; Senior Vice President,
Treasurer and Secretary of SSI; Vice President, Treasurer and Secretary of SFSI;
Treasurer of OAC; Vice President and Treasurer of Oppenheimer Real Asset
Management, Inc.; Chief Executive Officer, Treasurer and a director of
MultiSource Services, Inc.(a broker-dealer);
an officer of other Oppenheimer funds.
ROBERT BISHOP, Assistant Treasurer; Age 38
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting; an officer of other
Oppenheimer funds; formerly a Fund Controller for the Manager, prior to which he
was an Accountant for Yale & Seffinger, P.C., an accounting firm, and previously
an Accountant and Commissions Supervisor for Stuart James Company Inc., a
broker-dealer.
SCOTT T. FARRAR, Assistant Treasurer; Age 31
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting; an officer of other
Oppenheimer funds; formerly a Fund Controller for the Manager, prior to which he
was an International Mutual Fund Supervisor for Brown Brothers, Harriman Co., a
bank, and previously a Senior Fund Accountant for State Street Bank & Trust
Company.
ROBERT G. ZACK, Assistant Secretary; Age 48
Senior Vice President and Associate General Counsel of the Manager, Assistant
Secretary of SSI, SFSI; an officer of other Oppenheimer funds.
ADELE A. CAMPBELL, Assistant Treasurer; Age 33
350 Linden Oaks, Rochester, New York 14625
Assistant Vice President of the Manager; formerly Assistant Vice President of
Rochester Fund Services, Inc., Assistant Manager of Fund Accounting, Rochester
Fund Services, Audit Manager for Price Waterhouse, LLP.
- -------------------
*A Trustee who is an "interested" person as defined in the Investment Company
Act.
o Remuneration of Trustees. All officers of the Fund and Ms. Macaskill,
a Trustee and President, are officers or directors of the Manager and receive no
salary or fee from the Fund. The following table sets forth the aggregate
compensation received by the non-interested Trustees from the Fund during the
fiscal year ended December 31, 1996.
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<PAGE>
<TABLE>
<CAPTION>
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 Expenses(1) Retirement(1) Complex(2)
<S> <C> <C> <C> <C>
John Cannon $ $0 $0 $
Paul Y. Clinton $ $0 $0 $
Thomas W. Courtney $ $0 $0 $
Lacy B. Herrmann $ $0 $0 $
George Loft $ $0 $0 $
- ---------------------
<FN>
(1) The Board of Rochester Fund Municipals has adopted a Retirement Plan for
Independent Trustees of that Fund. Under the terms of the Retirement Plan, as
amended and restated on October 16, 1995, an eligible Trustee (an Independent
Trustee who has served as such for at least three years prior to retirement) may
receive an annual benefit equal to the product of $1500 multiplied by the number
of years of service as an Independent Trustee up to a maximum of nine years. The
maximum annual benefit which may be paid to an eligible Trustee under the
Retirement Plan is $13,500. The Retirement Plan will be effective for all
eligible Trustees who have dates of retirement occurring on or after December
31, 1995. Subject to certain exceptions, retirement is mandatory at age 72 in
order to qualify for the Retirement Plan. Although the Retirement Plan permits
Eligible Trustees to elect early retirement at age 63, retirement benefits are
not payable to Eligible Trustees who elect early retirement until age 65. The
Retirement Plan provides that no Independent Trustee who is elected as a Trustee
of Rochester Fund Municipals after September 30, 1995, will be eligible to
receive benefits thereunder. Mr. Cannon is the only current Independent Trustee
who may be eligible to receive benefits under the Retirement Plan. The estimate
of annual benefits payable to Mr. Cannon under the Retirement Plan is based upon
the assumption that Mr. Cannon, who was first elected as a Trustee of the Fund
in 1992, will serve as an Independent Trustee for nine years.
(2) Includes
compensation received during the fiscal year ended December 31, 1996, from all
registered investment companies within the Quest/Rochester Fund complex during
that year which consisted of the Fund, Rochester Fund Municipals, Bond Fund
Series -Oppenheimer Bond Fund for Growth, Oppenheimer Quest Global Value Fund,
Inc., Oppenheimer Quest Value Fund, Inc. and Oppenheimer Quest for Value Funds.
</FN>
</TABLE>
o Major Shareholders. As of February 25 , 1997 no person owned of
record or was known by the Fund to own beneficially 5% or more of the Fund as a
whole or of the Fund's outstanding Class A or Class D shares , except for
Merrill Lynch Pierce Fenner & Smith, Inc., P.O. Box 41621, Jacksonville, Florida
32203-1621 which was the record owner of 27.14% of the Class D 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 serve as officers of the Fund and one of
whom (Ms. Macaskill) serves as a Trustee of the Fund.
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<PAGE>
The Manager and the Fund have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees, including
portfolio managers, that would compete with or take advantage of the Fund's
portfolio transactions. Compliance with the Code of Ethics is carefully
monitored and strictly enforced by the Manager.
o The Investment Advisory Agreement. The Investment Advisory Agreement
between the Manager and the Fund which was entered into on January 4, 1996 (the
"Advisory Agreement") requires the Manager, at its expense, to provide the Fund
with adequate office space, facilities and equipment, and to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective corporate administration for the Fund, including the
compilation and maintenance of records with respect to its operations, the
preparation and filing of specified reports, and the composition of proxy
materials and registration statements for continuous public sale of shares of
the Fund. For these services, the Manager will receive from the Fund an annual
fee, computed and payable monthly as a percentage of average daily net assets,
as follows: 0.50% of average daily net assets of the first $100 million; 0.45%
of average daily net assets on the next $150 million; 0.40% of average daily net
assets of the next $1,750 million and 0.39% of average daily net assets over $2
billion.
Expenses not expressly assumed by the Manager under the Advisory
Agreement or by the Distributor are paid by the Fund. The Advisory Agreement
lists examples of expenses paid by the Fund, the major categories of which
relate to interest, taxes, brokerage commissions, fees to certain Trustees,
legal and audit expenses, custodian and transfer agent expenses, share issuance
costs, certain printing and registration costs, and non-recurring expenses,
including litigation. For the Fund's fiscal year ended December 31, 1996, the
management fees paid by the Fund to the Manager were $2,687,213 and to Rochester
Capital Advisors, L.P., its previous investment adviser, were $27,896. For the
Fund's fiscal years ended December 31, 1995 and December 31, 1994, the
management fees paid by the Fund to Rochester Capital Advisors, L.P. were
$2,282,690 and $2,154,234, respectively.
The Advisory Agreement contains no expense limitation. However, because
of state regulations limiting fund expenses that previously applied, the Manager
has voluntarily undertaken that the Fund's total expenses in any fiscal year
(including the investment advisory fee but exclusive of taxes, interest,
brokerage commissions, distribution plan payments and any extraordinary
non-recurring expenses, such including litigation) would not exceed the most
stringent state regulatory limitation applicable to the Fund. Due to changes in
federal securities laws, such state regulations no longer apply and the
Manager's undertaking is therefore inapplicable and has been withdrawn. During
the Fund's last fiscal year, the Fund's expenses did not exceed the most
stringent state regulatory limit and the voluntary undertaking was not invoked.
The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard for its obligations and duties under the advisory agreement,
the Manager is not liable for any loss sustained by reason of any investment of
Fund assets made with due care and in good faith. The Advisory Agreement permits
the Manager to act as investment adviser for any other person, firm or
corporation and to use the name "Oppenheimer" in connection with other
investment companies for which it may act as investment
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<PAGE>
adviser or general distributor. If the Manager shall no longer act as investment
adviser to the Fund, the right of the Fund to use the name "Oppenheimer" as part
of its name may be withdrawn.
o The Distributor. Under its General Distributor's Agreement with the
Fund, which was entered into on January 4, 1996, the Distributor acts as the
Fund's principal underwriter in the continuous public offering of the Fund's
Class A , Class B, Class C and Class D shares , but is not obligated to sell a
specific number of shares. Expenses normally attributable to sales (other than
those paid under the Distribution and Service Plans, but 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
years ended December 31, 1994, 1995 and 1996, the aggregate amount of sales
charge on sales of the Fund's Class A shares was $1,699,143, $1,652,514 and
$1,623,032, respectively, of which Rochester Fund Distributors, Inc., the Fund's
previous principal underwriter, retained $211,300 and $217,615 in 1994 and 1995,
respectively. In 1996, the Distributor retained $290,035. Class D shares were
offered to the public commencing on May 1, 1995. During the period from May 1,
1995 through December 31, 1995 and during fiscal year ended December 31, 1996,
the contingent deferred sales charge collected by Rochester Fund Distributors,
Inc. on the redemption of Class D shares in 1995 totaled $6,001 and the
contingent deferred sales charge collected by the Distributor in 1996 was
$31,172, all of which was retained by the Distributor. For additional
information about distribution of the Fund's shares and the payments made by the
Fund to the Distributor in connection with such activities, see "Distribution
and Service Plans," below.
o The Transfer Agent. OppenheimerFunds Services, a division of the
Manager, serves as the Fund's transfer agent pursuant to a Service Contract
dated March 8, 1996. The transfer agent is responsible for maintaining
shareholder accounting records, and for shareholder servicing and administrative
functions. The Transfer Agent is compensated on the basis of a fixed fee per
account and as a percentage of the Fund's average daily net assets. The
compensation paid by the Fund for such services under a comparable arrangement
with Rochester Fund Services, Inc., the Fund's previous shareholder services
agent, for the fiscal years ending December 31, 1994, 1995 and 1996 was
$255,622, $292,278 and $3,066, respectively. The compensation paid to
OppenheimerFunds Services for such services for fiscal year ended December 31,
1996 was $297,354.
o Accounting and Recordkeeping Services. The Manager also provides
certain accounting and recordkeeping services to the Fund pursuant to an
Accounting and Administration Agreement entered into on January 4, 1996. The
services provided pursuant to the Fund thereunder include the maintenance of
general ledger accounts and records relating to the business of the Fund in the
form required to comply with the Investment Company Act and the calculation of
the daily net asset value of the Fund. The compensation paid by the Fund for
such services to Rochester Fund Services, Inc. its previous shareholder services
agent, for the fiscal years ended December 31, 1994 and 1995 was $150,500 and
$161,850, respectively. The compensation paid to OppenheimerFunds Services for
the fiscal year ended December 31,1996 was $193,682.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the duties
of the Manager under the Advisory Agreement is to arrange the portfolio
transactions for the Fund. The Advisory
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<PAGE>
Agreement contains provisions relating to the employment of broker-dealers
("brokers") to effect the Fund's portfolio transactions. In doing so, the
Manager is authorized by the Advisory Agreement to employ broker-dealers,
including "affiliated" brokers, as that term is defined in the Investment
Company Act, as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the "best
execution" (prompt and reliable execution at the most favorable price
obtainable) of such transactions. The Manager need not seek competitive
commission bidding but is expected to minimize the commissions paid to the
extent consistent with the interest and policies of the Fund as established by
its Board of Trustees.
Under the Advisory Agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund and/or the
other accounts over which the Manager or its affiliates have investment
discretion. 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 that the commission is fair and reasonable in relation to the services
provided. Subject to the foregoing considerations, the Manager may also consider
sales of shares of the Fund and other investment companies managed by the
Manager or its affiliates as a factor in the selection of brokers for the Fund's
portfolio transactions.
Description of Brokerage Practices Followed by the Manager. Subject to the
provisions of the Advisory Agreement and the procedures and rules described
above, allocations of brokerage are generally made by the Manager's portfolio
traders based upon recommendations from the Manager's portfolio managers. In
certain instances, portfolio managers may directly place trades and allocate
brokerage, also subject to the provisions of the Advisory Agreement and the
procedures and rules described above. In either case, brokerage is allocated
under the supervision of the Manager's executive officers. Transactions in
securities other than those for which an exchange is the primary market are
generally done with principals or market makers. As stated in the prospectus,
the portfolio securities of the Fund are generally traded on a net basis and, as
such, do not involve the payment of brokerage commissions. It is the policy of
the Manager to obtain the best net results in conducting portfolio transactions
for the Fund, taking into account such factors as price (including the
applicable dealer spread) and the firm's general execution capabilities. Where
more than one dealer is able to provide the most competitive price, both the
sale of Fund shares and the receipt of research may be taken into consideration
as factors in the selection of dealers to execute portfolio transactions for the
Fund. The transaction costs associated with such transactions consist primarily
of the payment of dealer and underwriter spreads. Brokerage commissions are paid
primarily for effecting transactions in listed securities and or for certain
fixed-income agency transactions, in the secondary market, otherwise only if it
appears likely that a better price or execution can be obtained. When possible,
concurrent orders to purchase or sell the same security by more than one of the
accounts managed by the Manager or its affiliates are combined. The transactions
effected pursuant to such combined orders are averaged as to price and allocated
in accordance with the purchase or sale orders actually placed for each account.
The research services provided by a particular broker may be useful in
one or more of the advisory accounts of the Manager and its affiliates. The
research services provided by brokers broaden the scope and supplement the
research activities of the Manager, by making available additional views for
consideration and comparisons. The Board of Trustees, including the
"independent" Trustees of the Fund (those Trustees of the Fund who are not
"interested persons" as
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<PAGE>
defined in the Investment Company Act, and who have no direct or indirect
financial interest in the operation of the Advisory Agreement or the
Distribution Plans described below) annually reviews information furnished by
the Manager as to the commissions paid to brokers furnishing such services so
that the Board may ascertain whether the amount of such commissions was
reasonably related to the value or benefit of such services. The Fund did not
incur costs for brokerage commissions in connection with its portfolio
transactions during the fiscal years ended December 31, 1994, 1995 and 1996.
A change in securities held by the Fund is known as "portfolio
turnover". As portfolio turnover increases, the Fund can be expected to incur
brokerage commission expenses and transaction costs which will be borne by the
Fund. In any particular year, however, market conditions could result in
portfolio activity at a greater or lesser rate than anticipated. For the fiscal
years ended December 31, 1994, 1995 and 1996 the Fund's portfolio turnover rates
were and 34.58%, 22.34% and 24.35 %, respectively.
Performance of the Fund
Yield and Total Return Information. As described in the Prospectus, from time to
time the "standardized yield," "dividend yield," "tax-equivalent yield,"
"average annual total return," "cumulative total return," "average annual total
return at net asset value" 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 currently offers four classes of shares of beneficial
interest: Class A, Class B, Class C and Class D shares. The different classes of
shares represent investments in the same portfolio of securities, but are
subject to different expenses and are likely to have different share prices. On
May 1, 1997, the Fund redesignated as "Class D" shares its "Class B" shares
which had been outstanding prior to that date. Performance information set forth
below relates only to the Fund's Class A and Class D shares, which were first
publicly offered on September 18, 1991 and May 1, 1995, respectively. No
performance information is provided for either new Class B or Class C shares
because no shares of either of those classes were issued during the fiscal year
ended December 31, 1996.
The Fund's advertisements of its performance data with respect to any
class must, under applicable rules of the Securities and Exchange Commission,
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 each class of
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.
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<PAGE>
|X| Standardized Yields
o Yield. The Fund's "yield" (referred to as "standardized yield") for a
given 30-day period for a class of shares is calculated using the following
formula set forth in rules adopted by the Securities and Exchange Commission
that apply to all funds that quote yields:
a-b 6
Standardized Yield = 2 ((------ + 1) - 1)
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense
reimbursements).
c = the average daily number of shares of that class outstanding
during the 30-day period that were entitled to receive dividends.
d = the maximum offering price per share of that class on the last
day of the period, adjusted for undistributed net investment
income.
The standardized yield of a class of shares for a 30-day period may
differ from its yield for any other period. The SEC formula assumes that the
standardized yield for a 30-day period occurs at a constant rate for a six-month
period and is annualized at the end of the six-month period. This standardized
yield is not based on actual distributions paid by the Fund to shareholders in
the 30-day period, but is a hypothetical yield based upon the net investment
income from the Fund's portfolio investments calculated for that period. The
standardized yield may differ from the "dividend yield" of that class, described
below. Additionally, because each class of shares is subject to different
expenses, it is likely that the standardized yields of the Fund's classes of
shares will differ. For the 30-day period ended December 31, 1996, the
standardized yields for the Fund's Class A and Class D shares were 4.88%, and
4.52%, respectively.
o Tax-Equivalent Yield. The Fund's "tax-equivalent yield" adjusts the
Fund's current yield, as calculated above, by a stated combined Federal, state
and city tax rate. The tax-equivalent yield is based on a 30-day period, and is
computed by dividing the tax-exempt portion of the Fund's current yield (as
calculated above) by one minus a stated income tax rate and adding the result to
the portion (if any) of the Fund's current yield that is not tax exempt. The tax
equivalent yield may be used to compare the tax effects of income derived from
the Fund with income from taxable investments at the tax rates stated. The
Fund's tax-equivalent yields for its Class A shares and Class D shares for the
30-day period ended December 31, 1996, for an individual New York City resident
in the 46.08% combined tax bracket were 9.05% and 8.38 %, respectively, assuming
application of 1997 tax rates.
o Dividend Yield and Distribution Return. From time to time the Fund
may quote a "dividend yield" or a "distribution return" for each class. Dividend
yield is based on the dividends paid on shares of a class from dividends derived
from net investment income during a stated period. Distribution return includes
dividends derived from net investment income and from realized capital gains
declared during a stated period. Under those calculations, the dividends and/or
distributions for that class declared during a stated period of one year or less
(for example, 30 days) are added
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together, and the sum is divided by the maximum offering price per share of that
class on the last day of the period. When the result is annualized for a period
of less than one year, the "dividend yield" is calculated as follows:
Dividend Yield of the Class =
Dividends of the Class
- ----------------------------------------------------
Max Offering Price of the Class (last day of period)
Divided by number of days (accrual period) x 365
The maximum offering price for Class A shares includes the maximum
front-end sales charge. For Class B, Class C and Class D shares , the maximum
offering price is the net asset value per share without considering the effect
of contingent deferred sales charges.
From time to time similar yield or distribution return calculations may
also be made using the Class A net asset value (instead of its maximum offering
price) at the end of the period.
The dividend yields on Class A shares for the 30-day period ended
December 31, 1996 were 4.61 % and 4.78 % when calculated at maximum offering
price and at net asset value, respectively. The dividend yield on Class D shares
for the 30-day period ended December 31, 1996, was 4.29% when calculated at net
asset value.
o Total Return Information
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:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
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 3.50% (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). For Class B shares, payment of a contingent deferred sales
charge (4.0% for the first year, 3.0% for the second year, 2.0% for the third
and fourth years, 1.0% in the fifth year and none thereafter), is applied, as
described in the Prospectus. For Class C shares, the 1.0% contingent deferred
sales charge is applied to the investment result for the one year period (or
less). For Class D shares, the payment of a contingent deferred sales charge
(2.5% in the first year, 2.0% for the second year, 1.5% for the third year, 1.0%
for the fourth year
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and none thereafter) is applied, as described in the Prospectus. 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 "average annual total returns" on an investment in Class A shares
of the Fund for the one and five year periods ended December 31, 1996 and for
the period from September 18, 1991 through December 31, 1996, were 1.15%, 5.96%
and 6.43%, respectively. The cumulative "total return" on Class A shares for the
period from September 18, 1991 through December 31, 1996 was 38.99%. For fiscal
year ended December 31, 1996 and the period from May 1, 1995 (date Class D
shares were first publicly offered) through December 31, 1996, the average
annual total returns on an investment in Class D shares were 0.60% and 4.44%,
respectively. The cumulative total return on Class D shares for the period from
May 1, 1995 through December 31, 1996 was 7.51%.
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, Class C or Class D 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 an investment in
Class A shares for the one and five year periods ended December 31, 1996 and for
the period from September 18, 1991 to December 31, 1996 were 4.82%, 6.72% and
7.15%, respectively. The average annual total returns at net asset value on an
investment in Class D shares for the fiscal year ended December 31, 1996 and for
the period from May 1, 1995 to December 31, 1996 were 4.59% and 6.18%,
respectively.
The cumulative total return at net asset value of the Fund's Class A shares for
the period from September 18, 1991 through December 31, 1996 was 44.03%. The
cumulative total return at net asset value for Class D shares for the period
from May 1, 1995 through December 31, 1996 was 10.51%.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B, Class C or Class D shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent 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's classes are ranked against
(i) all other funds (excluding money market funds) and (ii) all other New York
municipal bond funds. 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 include in its advertisement and sales literature performance
information about the Fund cited in other newspapers and periodicals such as The
New York Times, which may include performance quotations from other sources,
including Lipper and Morningstar.
From time to time the Fund may publish the star ranking of the
performance of its Class A, Class B, Class C or Class D shares by Morningstar,
Inc., 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 investment return. The Fund is ranked among municipal bond funds.
Investment return
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measures 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 returns after considering sales charges and expenses. Risk
measures a fund's or class's performance below 90-day U.S. Treasury bill monthly
returns. Risk and investment return are combined to produce star rankings
reflecting performance relative to the average fund in a 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 rating 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.
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
(domestic equity, international equity, municipal bond and taxable bond) are
each further subdivided into categories based on types of investments and
investment styles. Those comparisons 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, Class
C or Class D shares may be compared with performance for the same period of
comparable indices, including but not limited to The Merrill Lynch Municipal
Index (3-7 year maturities) and the Lehman Brothers 5-year Municipal Bond Index.
The Merrill Lynch Municipal Index is a broadly based, widely recognized
unmanaged index of municipal bonds with a specific maturity of between 3 and 7
years. The Lehman Brothers Municipal Bond Index is also a broadly based, widely
recognized unmanaged index of municipal bonds, but with a specific maturity of
between 4 and 6 years. Whereas the Fund's portfolio comprises bonds principally
from New York State, the Indices are comprised of bonds from all 50 states and
many jurisdictions. Index performance reflects the reinvestment of income but
does not consider the effect of capital gains or transaction costs. Any other
index selected for comparison would be similar in composition to one of these
two indices.
Investors may also wish to compare the return on the Fund's Class A,
Class B, Class C or Class D shares 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 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 OppenheimerFunds' services to
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<PAGE>
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.
The performance of the Fund's Class A, Class B, Class C or Class D
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.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B shares, Class C shares and Class D shares under Rule
12b-1 of the Investment Company Act, pursuant to which the Fund makes payment to
the Distributor for all or a portion of its costs in connection with the
distribution and/or servicing of shares of that class as described in the
Prospectus (collectively, the "Plans"). Each Plan has been approved by a vote of
(i) the Board of Trustees of the Fund, including a majority of the "Independent
Trustees", cast in person at a meeting called for the purpose of voting on that
Plan, and (ii) the holders of a "majority" (as defined in the Investment Company
Act) of the shares of each class. For the Distribution and Service Plans for
Class B and Class C shares, that vote was cast by the Manager, as the sole
initial holder of Class B and Class C shares of the Fund.
In addition, 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 Trustees, including the Independent
Trustees, by a vote cast in person at a meeting called for the purpose of voting
on such continuance. Each Plan may be terminated at any time by the vote of a
majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of that class. No Plan may be amended to increase materially the amount of
payments to be made unless such amendment is approved by majority vote of the
shareholders of the class affected by the amendment. In addition, because Class
B and Class D shares of the Fund automatically convert into Class A shares after
six years, the Fund is required by a Securities and Exchange Commission rule to
obtain the approval of Class B and Class D as well as Class A shareholders for a
proposed amendment to the Class A Plan that would materially increase the amount
to be paid by Class A shareholders under the Class A Plan. Such approval must be
by a "majority" (as defined in the Investment Company Act), of the Class A,
Class B and Class D shares voting separately by class. All material amendments
must be approved by the Board and the Independent Trustees.
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<PAGE>
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Trustees at least quarterly for
its review, detailing the amount of all payments made pursuant to each Plan, the
identity of each Recipient that received any such payment, and the purpose of
the payments. Those reports, including the allocations on which they are based,
will be subject to the review and approval of the Independent Trustees in the
exercise of their fiduciary duty. Each Plan further provides that while it is in
effect, the selection and nomination of those Trustees of the Fund who are not
"interested persons" of the Fund is committed to the discretion of the
Independent Trustees. This does not prevent the involvement of others in such
selection and nomination if the final decision as to any such selection or
nomination is approved by a majority of the Independent Trustees.
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
Trustees. Initially, the Board of Trustees has set the fees at the maximum rate
and has set no minimum amount of assets to qualify for payment.
For the fiscal year ended December 31, 1996, payments under the Class A
Plan totaled $1,488,992, all of which was paid by the Distributor to Recipients,
including $7,144 paid to an affiliate of the Distributor. Any unreimbursed
expenses incurred by the Distributor with respect to Class A shares for any
fiscal year may not be recovered in subsequent years. Payments received by the
Distributor under the Plan for Class A shares will not be used to pay any
interest expense, carrying charge, or other financial costs, or allocation of
overhead by the Distributor.
The Class B, Class C and Class D Plans allow the service fee payment to
be paid by the Distributor to Recipients in advance for the first year such
shares are outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net asset value of Class B,
Class C or Class D shares sold. An exchange of shares does not entitle the
Recipient to an advance service fee payment. In the event Class B, Class C or
Class D shares are redeemed during the first year that the shares are
outstanding, the Recipient will be obligated to repay to the Distributor a pro
rata portion of the Distributor's advance payment for those shares.
Although the Class B, Class C and Class D Plans permit the Distributor
to retain both the asset-based sales charges and the service fees on such
shares, 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 Class B, Class C and Class D Plans by
the Board. Initially, the Board has set no minimum holding period. All payments
under the Class B, Class C and Class D 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.
The Class B, Class C and Class D Plans provide for the Distributor to
be compensated at a flat rate, whether the Distributor's distribution expenses
are more or less than the amounts paid by the Fund during that period. Such
payments are made in recognition that the Distributor (i) pays sales commissions
to authorized brokers and dealers at the time of sale and pays service fees as
described in the Prospectus, (ii) may finance such commissions and/or the
advance of the service fee
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<PAGE>
payment to Recipients under those Plans, or may provide such financing from its
own resources, or from an affiliate, (iii) employs personnel to support
distribution of shares, and (iv) may bear the costs of sales literature,
advertising and prospectuses (other than those furnished to current
shareholders), state "blue sky" registration fees and certain other distribution
expenses.
For the fiscal year ended December 31, 1996, payments under the Class D
Plan totaled $214,619, of which the Distributor retained $171,044 as
reimbursement for Class D sales commissions and service fee advances, as well as
financing costs. The Class D Plan allows the service fee payment to be paid by
the Distributor to Recipients in advance for the first year such shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net assets of the shares 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.
ABOUT YOUR ACCOUNT
How to Buy Shares
Alternative Sales Arrangements - Class A Shares, Class B Shares, Class C Shares,
Class D Shares. The availability of four classes of shares permits an 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, Class C and Class D 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 the other. The Distributor normally will not accept any order for
$500,000 or $1 million or more of Class B, Class C or Class D shares ,
respectively, 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 four 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 shares, Class C
and Class D shares and the dividends payable on Class B, Class C and Class D
shares will be reduced by incremental expenses borne by those classes, including
the asset-based sales charges.
The conversion of Class B and Class D 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 and Class D 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 or Class D shares
would occur while such suspension remained in effect. Although Class B or Class
D shares could then be exchanged for Class A shares on the
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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.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A , Class B, Class C and Class D shares
recognizes two types of expenses. General expenses that do not pertain
specifically to any 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
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 unaffiliated Trustees, (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 (i) Distribution and/or Service Plan fees, (ii) incremental transfer and
shareholder servicing agent fees and expenses, (iii) registration fees and (iv)
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 Value Per Share. The net asset values per share of
Class A, Class B Class C and Class D shares of the Fund are determined as of the
close of business of The New York Stock 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 number of shares of that class outstanding. The Exchange normally
closes at 4:00 P.M., New York time, but may close earlier on some days (for
example, in case of weather emergencies or on days falling before a holiday).
The Exchanges most recent annual holiday schedule (which is subject to change)
states that it will close on New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
It may also close on other days. Trading may occur in debt securities and in
foreign securities when the Exchange is closed (including weekends and
holidays). 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 Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) long-term debt
securities having a remaining maturity in excess of 60 days are valued based on
the mean between the "bid" and "ask" prices determined by a portfolio pricing
service approved by the Fund's Board of Trustees or obtained by the Manager from
two active market makers in the security on the basis of reasonable inquiry;
(ii) debt instruments having a maturity of more than 397 days when issued, and
non-money market type instruments having a maturity of 397 days or less when
issued, which have a remaining maturity of 60 days or less are valued at the
mean between the "bid" and "ask" prices determined by a pricing service approved
by the Fund's Board of Trustees or obtained by the Manager from two active
market makers in the security on the basis of reasonable inquiry; (iii) money
market debt securities that had a maturity of less than 397 days when issued
that have a remaining maturity of 60 days or less are valued at cost, adjusted
for amortization of premiums and accretion of discounts; and (iv) 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 (i) and (ii)
above), the security may be priced at the mean between
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the "bid" and "ask" prices provided by a single active market maker (which in
certain cases may be the "bid" price if no "ask" price is available).
In the case of Municipal Securities, U.S. Government securities and
corporate bonds, when 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 (such as the tax-exempt status of the interest paid by Municipal
Securities). The Manager may use pricing services approved by the Board of
Trustees to price any of the types of securities described above. 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.
Puts and calls are valued at the last sales price on the principal
exchange on which they are traded or on NASDAQ, as applicable, as determined by
a pricing service approved by the Board of Trustees 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 "ask" 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 or call is not traded on an exchange or on NASDAQ, it
shall be valued at the mean between "bid" and "ask" prices obtained by the
Manager from two active market makers (which in certain cases may be the "bid"
price if no "ask" price is available).
AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25.00. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House (ACH)
transfer to buy shares. Dividends will begin to accrue on shares purchased by
the proceeds of ACH transfers on the business day the Fund receives Federal
Funds for the purchase through the ACH system before the close of The New York
Stock Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier
on certain days. If Federal Funds are received on a business day after the close
of the Exchange, the shares will be purchased and dividends will begin to accrue
on the next regular business day. The proceeds of ACH transfers are normally
received by the Fund 3 days after the transfers are initiated. The Distributor
and the Fund are not responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Reduced Sales Charges. See "How to Purchase Shares" in the Prospectus for a
description of how Shares are offered to the public and how the excess of public
offering price over the net amount invested, if any, is allocated to authorized
dealers. The Prospectus describes several special purchase plans and methods by
which Shares may be purchased. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Shares under Right of Accumulation and Letters
of Intent because of the economies of sales efforts and expenses realized by the
Distributor, dealers and brokers making such sales. No sales charge is imposed
in certain circumstances described in the Prospectus because the Distributor or
dealer or broker incurs little or no selling expenses. The term "immediate
family" refers to one's spouse, children, grandchildren, parents, grandparents,
parents-in- law, brothers and sisters, sons-and daughters-in-law, siblings, a
sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews.
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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 Bond Fund
Oppenheimer Bond Fund for Growth
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Champion Income Fund
Oppenheimer Developing Markets Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer Disciplined Value Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Income Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer New York Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
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Oppenheimer U.S. Government Trust
Oppenheimer Value Stock Fund
Oppenheimer World Bond Fund
Rochester Fund Municipals
The New York Tax Exempt Income Fund, Inc.
the following "Money Market 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
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Money Market 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).
Letters of Intent. A Letter of Intent (referred to as a "Letter") is an
investor's statement in writing to the Distributor of the intention to purchase
Class A shares of the Fund or Class A and Class B shares of the Fund and of
other Oppenheimer funds during a 13-month period (the "Letter of Intend
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 of shares which, when added to the
investor's holdings of shares of those funds, will equal or exceed the amount
specified in the Letter. Purchases made by reinvestment of dividends or
distributions of capital gains and purchases made at net asset value without
sales charge do not count toward satisfying the amount of the Letter. A Letter
enables an investor to count the Class A and Class B shares purchased under the
Letter 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 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
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they may be from time to time by the Fund, that those amendments will apply
automatically to existing Letters of Intent.
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
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 intended 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
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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 or Class B 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 transmission.
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 adviser 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.
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.
Involuntary Redemptions. The Fund's Board of Trustees has the right to cause
the involuntary redemption of the shares held in any 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 Trustees 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, the
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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.
Payments "In Kind." The Prospectus states that payment for shares tendered for
redemption is ordinarily made in cash. However, the Board of Trustees of the
Fund may determine that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make payment of a redemption order wholly
or partly in cash. In that case the Fund may pay the redemption proceeds in
whole or in part by a distribution "in kind" of securities from the portfolio of
the Fund, in lieu of cash, in conformity with applicable rules of the Securities
and Exchange Commission. The Fund has elected to be governed by Rule 18f-1 under
the Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets of
the Fund during any 90-day period for any one shareholder. If shares are
redeemed in kind, the redeeming shareholder might incur brokerage or other costs
in selling the securities for cash. The method of valuing securities used to
make redemptions in kind will be the same as the method the Fund uses to value
its portfolio securities described above under the "Determination of Net Asset
Values Per Share" and that valuation will be made as of the time the redemption
price is determined.
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 (ii) Class B or Class D shares
on which you paid a contingent deferred sales charge when you redeemed them
without sales charge. 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 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, Class C and Class D
contingent deferred sales charge will be followed in determining the order in
which shares are transferred.
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
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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 a dealer
or broker after the close of the New York Stock Exchange on a regular business
day, it will be processed at that day's net asset value if the order was
received by the dealer or broker from its customers prior to the time the
Exchange closes (normally, 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 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 shareholders should not establish withdrawal plans
because of the imposition of the contingent deferred sales charge on such
withdrawals (except where the contingent deferred sales charge is waived as
described in the Prospectus.
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 in 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
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by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should not be
considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who executed the
Plan authorization and application submitted to the Transfer Agent. The Transfer
Agent and the Fund shall incur no 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
AccountLink payments of the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment (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 Class A shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the Class A shares in
certificated form. Share certificates are not issued for Class B, Class C or
Class D shares. Upon written request from the Planholder, the Transfer Agent
will determine the number of Class A 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.
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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, except with respect to Class D shares of the Fund
which may be exchanged only for Class B shares of other Oppenheimer funds,
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, Class B and Class C shares except Centennial America Fund,
L.P., Centennial California Tax Exempt Trust, Centennial Government Trust,
Centennial Money Market Trust, Centennial New York Tax Exempt Trust, Centennial
Tax Exempt Trust, Daily Cash Accumulation Fund, Inc. and Oppenheimer Money
Market Fund, Inc., which offer only Class A shares, and Oppenheimer Main Street
California Municipal Fund which offer only Class A and Class B shares. (Class B
and Class C shares of Oppenheimer Cash Reserves are generally only available by
exchange from the same class of other Oppenheimer funds or through
OppenheimerFunds sponsored 401(k) plans). A current list showing which funds
offer which class can be obtained by calling the Distributor at 1-800-525-7048.
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
this 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 either 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 18 months of the end of the calendar month of the
initial purchase of the exchanged Class A shares, the Class A contingent
deferred sales charge is imposed on the redeemed shares (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 6 years of the initial purchase of the exchanged Class B shares. The
Class C contingent deferred sales charge is imposed on Class C shares acquired
by exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares.
When Class B or Class C shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the imposition
of the Class B or Class C contingent deferred sales charge 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
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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, Class C or
Class D 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 exchanges 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, Checkwriting, if available, 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
Dividends and Distributions. Dividends will be payable on shares held of record
at the time of the previous determination of net asset value, or as otherwise
described in "How to Buy Shares." Daily dividends on newly purchased shares will
not be declared or paid until such time as Federal Funds (funds credited to a
member bank's account at the Federal Reserve Bank) are available from the
purchase payment for such shares. Normally, purchase checks received from
investors are converted to Federal Funds on the next business day. Shares
purchased through dealers or brokers normally are paid for by the third business
day following the placement of the purchase order. Shares redeemed through the
regular redemption procedure will be paid dividends through and including the
day on which the redemption request is received by the Transfer Agent in proper
form.
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Dividends will be declared on shares repurchased by a dealer or broker for three
business days following the trade date (i.e., to and including the day prior to
settlement of the repurchase). If all shares in an account are redeemed, all
dividends accrued on shares of the same class in the account will be paid
together with the redemption proceeds.
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.
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, Class C and Class D 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 shares,
Class C and Class D shares are expected to be lower as a result of the
asset-based sales charge on Class B shares, Class C shares and Class D shares ,
and Class B, Class C and Class D dividends will also differ in amount as a
consequence of any difference in net asset value between Class A shares, Class B
shares, Class C shares and Class D shares.
Distributions may be made annually in December out of any net
short-term or long-term capital gains realized from the sale of securities. Any
difference between the net asset values of Class A, Class B, Class C and Class D
shares will be reflected in such distributions. Distributions from net
short-term capital gains are taxable to shareholders as ordinary income and when
paid by the Fund are considered "dividends." The Fund may make a supplemental
distribution of capital gains and ordinary income following the end of its
fiscal year. Long-term capital gains distributions, if any are taxable as
long-term capital gains whether received in cash or reinvested and regardless of
how long Fund shares have been held. There is no fixed dividend rate and there
can be no assurance as to the payment of any dividends or the realization of any
capital gains.
Tax Status of the Fund's Dividends and Distributions. The Fund intends to
qualify under the Internal Revenue Code during each fiscal year to pay
"exempt-interest dividends" to its shareholders. Exempt-interest dividends which
are derived from net investment income earned by the Fund on Municipal
Obligations will be excludable from gross income of shareholders for Federal
income tax purposes. Net investment income includes the allocation of amounts of
income from the Municipal Securities in the Fund's portfolio which are free from
Federal income taxes. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends made during the Fund's tax
year. Such designation will normally be made following the end of each fiscal
year as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may substantially differ from the percentage of the
Fund's income that was tax-exempt for a given period. All of the Fund's
dividends (excluding capital gains distributions) paid during 1996 were exempt
from Federal income tax and New York State and New York City personal income
taxes. A portion of the exempt-interest dividends paid by the Fund may be an
item of tax preference for shareholders subject to the alternative minimum tax.
The amount of any dividends attributable to tax preference items for purposes of
the alternative minimum tax will be identified when tax information is
distributed by the Fund. 19.23% of the Fund's dividends (excluding
distributions) paid during 1996 were a tax preference item for shareholders
subject to the alternative minimum tax.
A shareholder receiving a dividend from income earned by the Fund from
one or more of: (1) certain taxable temporary investments (such as certificates
of deposit, repurchase agreements, commercial paper and obligations of the U.S.
government, its agencies and instrumentalities); (2)
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<PAGE>
income from securities loans; (3) income or gains from options or futures; or
(4) an excess of net short-term capital gain over net long-term capital loss
from the Fund, treats the dividend as a receipt of either ordinary income or
long-term capital gain in the computation of gross income, regardless of whether
the dividend is reinvested. The Fund's dividends will not be eligible for the
dividends-received deduction for corporations. Shareholders receiving Social
Security benefits should be aware that exempt-interest dividends are a factor in
determining whether such benefits are subject to Federal income tax. Losses
realized by shareholders on the redemption of Fund shares within six months of
purchase (which period may be shortened by regulation) will be disallowed for
Federal income tax purposes to the extent of exempt-interest dividends received
on such shares.
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 as a regulated
investment company in its last fiscal year and intends to qualify in future
years, but reserves the right not to qualify. The Internal Revenue Code contains
a number of complex tests to determine whether the Fund will qualify, and the
Fund might not meet those tests in a particular year. For example, if the Fund
derives 30% or more of its gross income from the sale of securities held less
than three months, it may fail to qualify. If it does not qualify, the Fund will
be treated for tax purposes as an ordinary corporation, will receive no tax
deduction for payments of dividends and distributions made to shareholders and
will no longer be able to pay dividends which are exempt from Federal income tax
and New York State and New York City personal income taxes to its shareholders.
Under the Internal Revenue Code, by December 31 each year the Fund must
distribute at least 98% of its taxable investment income earned and its capital
gains realized from January 1 through December 31 of that year or else the Fund
must pay an excise tax on the amounts not distributed. The Manager might
determine in a particular year that it might be in the best interest of
shareholders for the Fund not to make distributions at the required levels and
to pay the excise tax on the undistributed amounts. That would reduce the amount
of income or capital gains available for distribution to shareholders.
The Internal Revenue Code requires that a holder (such as the Fund) of
a zero coupon security accrue as income each year a portion of the discount at
which the security was purchased even though the Fund receives no interest
payment in cash on the security during the year. As an investment company, the
Fund must pay out substantially all of its net investment income each year or be
subject to excise taxes, as described above. Accordingly, when the Fund holds
zero coupon securities, it may be required to pay out as an income distribution
each year an amount which is greater than the total amount of cash interest the
Fund actually received during that year. Such distributions will be made from
the cash assets of the Fund or by liquidation of portfolio securities, if
necessary. The Fund may realize a gain or loss from such sales. In the event the
Fund realizes net capital gains from such transactions, its shareholders may
receive a larger capital gain distribution than they would have had in the
absence of such transactions.
New York State and City Taxes. To the extent that exempt-interest dividends are
derived from interest on Municipal Obligations, such distributions will be
exempt from New York State and City personal income taxes. However, an
investment in the Fund may result in liability for state and/or local taxes for
individual shareholders subject to taxation by states other than New York State
or cities other than New York City because the exemption from New York State and
New York City personal income taxes does not prevent such other jurisdictions
from taxing individual shareholders on dividends received from the Fund. In
addition, distributions derived from interest on tax exempt securities other
than Municipal Obligations will be treated as taxable ordinary income for
purposes of New York State and New York City personal income taxes. For New York
State and New York
-46-
<PAGE>
City personal income tax purposes, distributions of net long-term capital gains
will be taxable at the same rates as ordinary income.
Exempt-interest dividends are included in a corporation's net
investment income for purposes of calculating such corporation's New York State
corporate franchise tax and New York City general corporation tax and will be
subject to such taxes to the extent that a corporate shareholder's net
investment income is allocated to New York State and/or New York City.
All or a portion of interest on indebtedness incurred or continued to
purchase or carry the Fund's shares generally will not be deductible for New
York State and New York City personal income tax purposes.
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. Not all of the Oppenheimer funds
offer Class B shares and Class C shares. The names of the funds that offer Class
B and Class C shares can be obtained by calling the Distributor at 1-800-
525-7048. To elect this option, the shareholder must notify the Transfer Agent
in writing and must either 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. Citibank, N.A., 399 Park Avenue, New York, NY 10043, is currently
the custodian of the Fund's assets. The custodian's responsibilities include
safeguarding and controlling the Fund's portfolio securities and handling the
delivery of such securities to and from the Fund. It will be the practice of the
Fund to deal with the custodian in a manner uninfluenced by any banking
relationship the custodian may have with the Manager and its affiliates.
Independent Auditors. Price Waterhouse LLP, 1100 Bausch & Lomb Place, Rochester,
NY 14604-2705, serves as the Fund's independent accountants. The services
provided by Price Waterhouse LLP include auditing services and review and
consultations on various filings by the Fund with the Securities and Exchange
Commission and tax authorities. They also act as auditors for certain other
funds advised by the Manager and its affiliates.
-47-
<PAGE>
Report of Independent Accountants
To the Shareholders and Trustees of the Limited Term New York Municipal Fund
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 the Limited Term New York Municipal
Fund (the Fund) at December 31, 1996, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the 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
December 31, 1996 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
/s/ Price Waterhouse LLP
- --------------------------
Price Waterhouse LLP
Rochester, New York
January 24, 1997
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 538,600 Albany Hsg. Auth. 0.000 % 10/01/12 10/01/02 (a) $ 138,980
40 Albany IDA (152 Washington Avenue) 7.500 11/01/01 05/01/97 (b) 40,400
1,975 Albany IDA (H. Johnson Office Pk.) 5.750 03/01/18 03/01/98 (d) 1,965,382
240 Albany IDA (Port of Albany) 6.250 02/01/05 07/10/01 (c) 245,388
30 Albany IDA (Spectrapark) 7.150 12/01/98 ----- 30,319
50 Albany IDA (Spectrapark) 7.500 12/01/03 12/01/98 (b) 53,192
3,525 Albany IDA (Spectrapark) 7.600 12/01/09 12/01/98 (b) 3,741,788
40 Albany Parking Auth. 0.000 09/15/02 ----- 29,398
625 Albany Parking Auth. 0.000 09/15/04 ----- 389,269
25 Albany Parking Auth. 0.000 09/15/03 ----- 16,724
20 Albany Parking Auth. 0.000 09/15/05 ----- 11,768
1,610 Albany Parking Auth. 6.850 11/01/12(s) 11/01/04 (b) 1,732,795
5,000 Albany Parking Auth. 7.150 09/15/16(s) 09/15/01 (b) 5,455,150
645 Allegany IDA (Alfred University) 6.900 09/01/99 ----- 678,863
300 American Samoa Power Auth. 6.600 09/01/97 ----- 304,641
600 American Samoa Power Auth. 6.700 09/01/97 ----- 609,672
300 American Samoa Power Auth. 6.700 09/01/98 ----- 308,817
300 American Samoa Power Auth. 6.750 09/01/99 ----- 312,246
700 American Samoa Power Auth. 6.800 09/01/98 ----- 721,651
700 American Samoa Power Auth. 6.900 09/01/99 ----- 731,157
700 American Samoa Power Auth. 7.000 09/01/00 ----- 737,926
120 Auburn IDA (Alcoa) 7.500 12/01/97 ----- 121,800
50 Auburn IDA (Alcoa) 7.600 12/01/98 06/01/97 (b) 51,000
670 Babylon IDA (WWH Ambulance) 7.000 09/15/01 11/03/99 (c) 701,189
70 Baldwinsville Development Corp. 7.200 06/01/10 07/01/97 (b) 72,800
800 Batavia Hsg. Auth. (Trocaire Place) 7.650 04/01/08 08/14/03 (c) 842,544
185 Brookhaven IDA (Dowling College) 6.200 03/01/01 ----- 196,217
195 Brookhaven IDA (Dowling College) 6.300 03/01/02 ----- 209,307
205 Brookhaven IDA (Dowling College) 6.400 03/01/03 ----- 221,937
275 Brookhaven IDA (Farber) 6.188 (v) 12/01/98 06/01/97 (f) 275,000
30 Broome IDA (Industrial Park) 7.450 12/01/98 ----- 30,300
1,550 Carnegie Redevelopment Corp. 6.250 09/01/05 12/04/01 (c) 1,580,101
1,550 Carnegie Redevelopment Corp. 6.500 09/01/11 05/17/09 (c) 1,589,928
515 Clifton Park (Caldor) 11.250 12/01/12 12/01/98 (b) 536,785
1,570 Clifton Springs Hospital & Clinic 7.000 01/01/01 07/31/99 (c) 1,609,941
40 Clinton County COP 7.000 08/01/97 ----- 40,250
5 Colonie IDA (Capital Plaza) 9.625 11/01/98 05/01/97 (b) 5,075
35 Colonie IDA (Homeowner Association) 7.250 10/01/02 04/01/97 (b) 35,525
35 Cortland IDA (Paul Bunyon) 8.000 07/01/00 07/01/98 (b) 36,749
275 Dutchess IDA (Bard College) 6.500 11/01/03 ----- 286,855
1,175 Dutchess Res Rec (Solid Waste) 6.800 01/01/10 01/01/05 (b) 1,216,842
290 Elmira HDC 7.500 08/01/08 08/01/97 (b) 300,359
15 Elmira HDC 7.500 08/01/09 08/01/97 (b) 15,843
440 Erie IDA (FMC Corp.) 6.000 02/01/03 08/01/97 (b) 439,485
385 Erie IDA (Medaille College) 7.400 12/30/02 09/13/00 (c) 400,858
40 Erie IDA (Medishield) 7.200 08/01/04 08/01/98 (b) 40,800
880 Erie IDA (Mercy Hospital) 5.900 06/01/03 08/21/00 (c) 901,868
960 Essex IDA (International Paper) 6.500 05/01/06 05/01/97 (b) 967,296
1,980 Franklin IDA (Correctional Facilities) 6.375 11/01/02 07/17/00 (c) 2,041,380
60 Franklin IDA (Correctional Facilities) 6.750 11/01/12(s) 11/01/04 (b) 62,393
2,120 Franklin SWMA 6.000 06/01/05 11/19/03 (c) 2,130,155
1,350 Franklin SWMA 6.125 06/01/09 12/28/07 (c) 1,347,476
11,635 Guam Airport Authority 6.600 10/01/10 10/01/05 (b) 12,035,477
1,200 Guam Power Authority 6.300 10/01/12 10/01/04 (b) 1,222,284
3,030 Guam Power Authority 6.375 10/01/08 10/01/04 (b) 3,109,628
2,950 Guam Power Authority 6.625 10/01/14(s) 10/01/04 (b) 3,083,163
905 Hamilton Elderly Hsg. 11.250 01/01/15(s) 05/01/97 (b) 950,304
30 Hempstead IDA (Amer. Ref-Fuel Co.) 6.700 12/01/97 ----- 30,620
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 30 Hempstead IDA (Amer. Ref-Fuel Co.) 7.000 % 12/01/99 06/01/97 (b) $ 30,600
35,500 Hempstead IDA (Amer. Ref-Fuel Co.) 7.375 12/01/05 06/01/97 (b) 36,387,500
30,820 Hempstead IDA (Amer. Ref-Fuel Co.) 7.400 12/01/10 06/01/97 (b) 31,590,500
1,500 Hempstead IDA (Nassau Dist. Energy) 7.750 09/15/15(s) 09/15/97 (b) 1,524,840
20 Hempstead IDA (UCP) 7.500 10/01/09 10/01/99 (b) 21,098
2,700 Herkimer Hsg. Auth. 7.150 03/01/11(s) 09/01/06 (b) 2,898,315
1,970 Herkimer IDA (Burrows Paper) 7.250 01/01/01 08/08/99 (c) 1,920,986
1,000 Herkimer IDA (Burrows Paper) 8.000 01/01/09 10/28/05 (c) 984,830
50 Heuvelton CSD 8.375 06/15/97 ----- 50,726
90 Islip IDA (WJL Realty) 7.400 03/01/99 ----- 95,531
2,160 Islip Res Rec 5.850 07/01/02 ----- 2,300,033
250 Jamestown GO 7.000 03/15/00 ----- 266,980
330 Jamestown GO 7.000 03/15/99 ----- 348,031
3,345 Jamestown Hsg. Auth. 6.125 07/01/10 04/06/05 (c) 3,391,228
460 Jefferson IDA (Stature Electric) 7.500 08/01/99 02/01/97 (b) 467,930
55 Lakeside Village Hsg. Corp. 0.000 09/01/05 03/01/97 (b) 24,769
430 Lincoln Towers Hsg. Corp. 11.250 01/01/15(s) 05/01/97 (b) 451,586
104 Locke Fire District #1 (i) 7.500 07/01/02 08/10/00 (c) 110,275
220 Medina Hsg. Corp. 8.250 08/15/11(s) 02/15/97 (b) 233,200
630 Middleton IDA (Fleurchem) 7.125 12/01/08 05/05/04 (c) 637,258
915 Middleton IDA (Southwinds) 7.250 03/01/03 06/14/00 (c) 914,780
5 Monroe County Airport 0.000 01/01/04 ----- 3,346
30 Monroe County GO 6.100 05/01/03 ----- 30,000
1,325 Monroe IDA (Al Sigl Center) 6.375 12/15/05 05/11/02 (c) 1,350,718
1,135 Monroe IDA (Al Sigl Center) 6.750 12/15/10 02/01/09 (c) 1,163,012
10 Monroe IDA (Cohber) 7.500 12/01/00 12/01/98 (b) 10,429
100 Monroe IDA (Cohber) 7.550 12/01/01 12/01/98 (b) 105,066
931 Monroe IDA (Emil Muller) 6.500 10/01/04 04/05/01 (c) 932,505
1,145 Monroe IDA (GEVA) 7.750 04/01/02 12/20/99 (c) 1,148,080
360 Monroe IDA (GEVA) 7.750 04/01/03 ----- 360,968
131 Monroe IDA (Hahn) 7.250 06/01/98 10/17/97 (c) 131,679
20 Monroe IDA (Hahn) 7.250 06/01/98 10/03/97 (c) 20,155
105 Monroe IDA (Palmer) 6.500 08/01/98 12/17/97 (c) 105,030
2,170 Monroe IDA (Piano Works) 6.625 11/01/06 11/12/02 (c) 2,181,718
300 Monroe IDA (Roberts Wesleyan) 6.200 09/01/05 ----- 304,971
215 Monroe IDA (West End Business) 6.750 12/01/04 11/05/01 (c) 218,915
140 Montgomery IDA (Amsterdam) 5.750 01/15/97 ----- 140,000
145 Montgomery IDA (Amsterdam) 6.000 01/15/98 ----- 145,183
885 Montgomery IDA (Amsterdam) 6.500 01/15/03 02/17/01 (c) 894,921
65 MTA 6.250 07/01/11 07/01/04 (b) 67,009
50 MTA 7.000 07/01/09 07/01/03 (b) 53,100
530 Municipal Assistance Corp. for NYC 6.875 07/01/07 07/01/97 (b) 547,877
50 Municipal Assistance Corp. for NYC 7.000 07/01/06 07/01/97 (b) 51,597
198 Municipal Assistance Corp. for Troy, NY 0.000 01/15/22 ----- 48,153
130 Municipal Assistance Corp. for Troy, NY 0.000 07/15/21 ----- 32,710
430 Nassau IDA (ACLDD) 7.250 10/01/04 08/10/01 (c) 445,760
1,025 Nassau IDA (Farmingdale Market) 10.000 05/01/98 05/01/97 (b) 1,034,738
1,090 New Rochelle IDA (CNR) 6.000 07/01/02 08/11/00 (c) 1,133,360
260 New Rochelle IDA (CNR) 6.300 07/01/03 ----- 273,848
275 New Rochelle IDA (CNR) 6.400 07/01/04 ----- 291,255
2,450 Niagara IDA (Sevenson Hotel) 5.750 05/01/03 04/30/00 (c) 2,464,994
575 North Country Development Auth. 6.600 07/01/02 ----- 599,489
2,995 North Country Development Auth. 6.750 07/01/12(s) 07/01/99 (b) 3,112,045
80 Northern Marianas Island Port Auth. 7.050 10/01/04 04/01/97 (b) 82,000
10 Northern Marianas Island Port Auth. 7.050 10/01/05 04/01/97 (b) 10,300
1,460 NYC GO 0.000 02/01/02 ----- 1,131,923
170 NYC GO 0.000 04/01/00 ----- 153,437
2,000 NYC GO 0.000 08/15/00 ----- 1,686,660
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1,500 NYC GO 0.000 % 02/01/01 ----- $ 1,230,420
1,000 NYC GO 0.000 02/01/03 ----- 730,900
50 NYC GO 0.000 08/15/01 ----- 40,048
630 NYC GO 0.000 04/01/01 ----- 512,574
50 NYC GO 0.000 02/01/12 02/01/02 (b) 38,255
10 NYC GO 0.000 08/01/03 ----- 9,848
2,500 NYC GO 6.250 08/01/08 ----- 2,610,950
4,050 NYC GO 6.250 08/01/13 08/01/08 (b) 4,123,265
10,550 NYC GO 6.250 08/01/09 08/01/08 (b) 10,954,804
2,000 NYC GO 6.250 08/01/12 08/01/08 (b) 2,041,180
1,050 NYC GO 6.300 08/15/08 08/15/07 (b) 1,097,366
1,000 NYC GO 6.375 02/15/06 ----- 1,060,560
13,500 NYC GO 6.375 08/15/09 08/15/07 (b) 14,111,550
2,105 NYC GO 6.375 08/01/07 08/01/04 (b) 2,177,623
1,890 NYC GO 6.375 08/01/10 08/01/07 (b) 1,962,822
600 NYC GO 6.375 08/01/06 08/01/04 (b) 624,432
970 NYC GO 6.375 08/15/10 08/15/07 (b) 1,007,452
20 NYC GO 6.500 08/01/06 08/01/04 (b) 20,996
110 NYC GO 6.500 08/01/05 08/01/04 (b) 115,786
115 NYC GO 6.500 08/01/08 08/01/04 (b) 120,492
5,600 NYC GO 6.500 08/01/11 08/01/04 (b) 5,832,176
1,550 NYC GO 6.750 10/01/05 10/01/04 (b) 1,660,066
3,250 NYC GO 7.000 02/01/06 02/01/02 (b) 3,498,203
600 NYC GO 7.000 02/01/00 08/01/97 (b) 610,344
1,000 NYC GO 7.000 02/01/01 08/01/97 (b) 1,017,240
10 NYC GO 7.000 02/01/02 08/01/97 (b) 10,167
40 NYC GO 7.000 08/01/09 08/01/97 (b) 41,024
1,360 NYC GO 7.000 08/15/16 08/15/04 (b) 1,465,890
1,000 NYC GO 7.000 02/01/16 02/01/04 (b) 1,074,980
40 NYC GO 7.000 02/01/09 02/01/00 (b) 40,960
40 NYC GO 7.000 02/01/13 08/01/97 (b) 40,652
9,140 NYC GO 7.000 10/01/13 10/01/02 (b) 9,862,791
5 NYC GO 7.000 12/01/10 12/01/97 (b) 5,198
5 NYC GO 7.000 12/01/08 12/01/97 (b) 5,198
730 NYC GO 7.000 10/01/09 10/01/04 (b) 787,728
200 NYC GO 7.100 02/01/10 02/01/04 (b) 215,412
100 NYC GO 7.100 08/15/07 08/15/04 (b) 108,362
2,275 NYC GO 7.100 02/01/09 02/01/02 (b) 2,450,312
1,450 NYC GO 7.200 08/15/08 08/15/04 (b) 1,589,911
25 NYC GO 7.200 02/01/05 08/01/97 (b) 25,423
20 NYC GO 7.200 02/01/15 02/01/02 (b) 21,749
100 NYC GO 7.250 02/01/08 08/15/04 (b) 101,693
115 NYC GO 7.250 02/01/07 08/01/97 (b) 117,588
20 NYC GO 7.300 08/15/98 08/15/97 (b) 20,684
285 NYC GO 7.400 02/01/02 ----- 312,782
500 NYC GO 7.400 02/01/00 ----- 535,635
2,900 NYC GO 7.500 02/01/06 02/01/02 (b) 3,224,481
2,425 NYC GO 7.500 02/01/09 02/01/02 (b) 2,697,497
10,125 NYC GO 7.500 02/01/04 02/01/02 (b) 11,212,526
55 NYC GO 7.500 02/01/05 02/01/02 (b) 59,983
5 NYC GO 7.500 10/01/12 10/01/99 (b) 5,394
50 NYC GO 7.500 08/01/04 08/01/98 (b) 53,185
25 NYC GO 7.500 08/15/02 08/15/97 (b) 25,870
220 NYC GO 7.500 02/01/07 02/01/02 (b) 243,681
5 NYC GO 7.500 08/15/05 08/15/97 (b) 5,176
25 NYC GO 7.500 08/01/01 08/01/99 (b) 26,933
100 NYC GO 7.500 03/15/09 03/15/00 (b) 106,582
150 NYC GO 7.500 08/15/03 08/15/99 (b) 161,921
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 50 NYC GO 7.625 % 02/01/13 02/01/02 (b) $ 55,895
4,020 NYC GO 7.650 02/01/07 02/01/02 (b) 4,523,264
300 NYC GO 7.700 02/01/09 02/01/02 (b) 336,360
1,420 NYC GO 7.750 08/15/09 08/15/01 (a) 1,631,424
1,350 NYC GO 7.750 08/15/05 08/15/01 (a) 1,551,002
5,780 NYC GO 7.750 08/15/06 08/15/01 (a) 6,640,584
295 NYC GO 7.750 08/15/12 08/15/01 (a) 338,923
725 NYC GO 7.750 08/15/01 08/15/99 (b) 781,478
55 NYC GO 7.750 08/15/01 08/15/99 (a) 59,294
135 NYC GO 7.750 08/15/09 08/15/01 (b) 150,717
905 NYC GO 7.750 08/15/12 08/15/01 (b) 1,010,360
1,500 NYC GO 7.750 08/15/07 08/15/01 (b) 1,674,630
2,145 NYC GO 7.750 08/15/06 08/15/01 (b) 2,394,721
650 NYC GO 7.750 08/15/05 08/15/01 (b) 723,119
95 NYC GO 7.875 08/01/04 08/01/00 (b) 105,443
55 NYC GO 7.875 08/01/04 08/01/00 (a) 61,158
1,685 NYC GO 8.000 08/01/03 08/01/01 (b) 1,903,174
1,230 NYC GO 8.000 08/01/03 08/01/01 (a) 1,422,864
115 NYC GO 0.000 (+) 10/01/06 10/01/02 (b) 84,080
1,445 NYC GO 6.600 02/15/10 02/15/07 (b) 1,499,390
110 NYC GO 8.250 11/15/10 11/15/01 (b) 123,505
1,950 NYC GO LIMO 0.000 (+) 02/01/07 02/01/02 (e) 1,478,334
2,000 NYC GO LIMO 0.000 (+) 02/01/04 02/01/00 (b) 1,778,480
75 NYC HDC 0.000 04/01/01 ----- 60,112
90 NYC HDC 0.000 10/01/00 ----- 73,915
15 NYC HDC 0.000 10/01/02 ----- 10,643
40 NYC HDC 0.000 04/01/99 ----- 35,543
90 NYC HDC 0.000 10/01/03 04/01/98 (b) 59,729
30 NYC HDC 0.000 10/01/99 ----- 26,141
30 NYC HDC 0.000 04/01/03 04/01/98 (b) 20,687
60 NYC HDC 0.000 04/01/04 04/01/98 (b) 38,121
290 NYC HDC 0.000 10/01/06 04/01/98 (b) 151,943
50 NYC HDC 0.000 04/01/00 ----- 42,156
50 NYC HDC 0.000 10/01/08 04/01/98 (b) 22,721
30 NYC HDC 0.000 04/01/08 04/01/98 (b) 14,118
70 NYC HDC 0.000 10/01/07 04/01/98 (b) 34,387
80 NYC HDC 0.000 04/01/06 04/01/98 (b) 43,870
200 NYC HDC 7.375 04/01/17 04/01/98 (b) 207,570
1,705 NYC HDC 7.900 02/01/23(s) 02/01/00 (b) 1,811,358
725 NYC HDC 8.100 09/01/23(s) 09/01/00 (b) 780,071
100 NYC Housing Auth., Section 8 8.250 01/01/11 07/01/97 (b) 102,500
1,325 NYC IDA 7.625 11/01/09 05/01/97 (b) 1,328,207
65 NYC IDA 8.125 11/01/09 05/01/97 (b) 66,950
1,160 NYC IDA (ALA Realty) 7.000 12/01/05 05/12/02 (c) 1,193,106
575 NYC IDA (Amster Novelty) 7.375 12/01/05 05/30/02 (c) 582,774
835 NYC IDA (Atlantic Veal & Lamb) 7.250 12/01/08 05/25/04 (c) 837,756
425 NYC IDA (BHMS) 7.500 01/01/07 03/08/03 (c) 425,978
2,945 NYC IDA (Blood Center) 6.800 05/01/02 01/08/00 (c) 3,217,265
815 NYC IDA (CCM) 7.250 12/01/06 01/08/02 (c) 832,449
250 NYC IDA (CNR) 6.200 09/01/10 10/14/08 (c) 256,168
1,281 NYC IDA (Cummins Engine) 6.500 03/01/05 06/24/01 (c) 1,284,957
1,040 NYC IDA (EPG) 7.400 07/30/02 04/11/00 (c) 1,096,118
2,140 NYC IDA (JBFS) 6.500 12/15/02 08/12/00 (c) 2,245,138
490 NYC IDA (Koenig Manufacturing) 7.375 12/01/10 09/13/05 (c) 495,586
20 NYC IDA (Lighthouse) 6.375 07/01/10 07/01/04 (b) 20,187
570 NYC IDA (OHEL) 7.125 03/15/03 06/28/00 (c) 579,747
91 NYC IDA (Paper Enterprises) 10.000 11/01/98 12/26/97 (c) 92,739
3,285 NYC IDA (Plaza Packaging) 7.650 12/01/09 12/01/99 (b) 3,508,610
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 785 NYC IDA (Promotional Slideguide) 7.000 % 12/01/05 05/19/02 (c) $ 779,003
260 NYC IDA (Streamline Plastics) 7.125 12/01/05 05/25/02 (c) 265,572
3,565 NYC IDA (St. Bernard's School) 6.125 12/01/11 01/08/06 (c) 3,583,467
50 NYC IDA (St. Christopher Ottilie) 6.750 07/01/99 ----- 52,562
160 NYC IDA (United Nations School) 6.050 12/01/05 ----- 159,782
170 NYC IDA (United Nations School) 6.100 12/01/06 ----- 169,752
180 NYC IDA (United Nations School) 6.150 12/01/07 ----- 179,719
100 NYC IDA (Visy Paper ) 7.550 01/01/05 03/29/02 (c) 104,714
2,305 NYS COP 7.625 03/01/09 09/01/01 (b) 2,540,225
1,725 NYS COP 8.250 09/01/07 09/01/97 (b) 1,801,573
4,040 NYS COP 8.300 09/01/12(s) 09/01/97 (b) 4,222,568
1,620 NYS Dorm (Brookhaven) 8.700 07/01/06 07/01/97 (b) 1,641,254
30 NYS Dorm (City University) 0.000 07/01/03 07/01/98 (b) 20,042
1,900 NYS Dorm (City University) 6.000 07/01/10 ----- 1,917,290
975 NYS Dorm (City University) 7.200 07/01/01 07/01/00 (a) 1,082,270
8,380 NYS Dorm (City University) 8.125 07/01/07 07/01/98 (b) 8,986,042
5,000 NYS Dorm (City University) 8.125 07/01/08 07/01/98 (a) 5,411,950
100 NYS Dorm (Crouse Irving) 10.250 07/01/04 01/27/97 (b) 102,702
25 NYS Dorm (ECC) 7.100 07/01/09 07/01/97 (b) 25,250
25 NYS Dorm (Higher Education) 8.500 06/01/03 06/01/97 (b) 25,593
25 NYS Dorm (JGB) 7.000 07/01/09 07/01/97 (b) 25,250
200 NYS Dorm (Judicial-Suffolk) 9.000 10/15/01 04/15/97 (b) 216,000
4,565 NYS Dorm (Judicial-Suffolk) 9.000 10/15/01 04/15/97 (b) 4,977,356
40 NYS Dorm (Manhattan E,E&T) 9.500 07/01/12(s) 07/01/97 (b) 40,800
370 NYS Dorm (Manhattan E,E&T) 11.500 07/01/09 07/01/97 (b) 379,250
80 NYS Dorm (Montefiore) 8.625 07/01/10 07/01/97 (b) 81,760
225 NYS Dorm (NY Medical College) 6.875 07/01/03 ----- 235,334
1,000 NYS Dorm (Nyack) 6.250 07/01/13 05/10/09 (c) 1,020,550
75 NYS Dorm (PCP) 7.800 12/01/05 12/01/98 (b) 80,310
2,150 NYS Dorm (State University) 5.750 05/15/10 ----- 2,149,828
2,465 NYS Dorm (State University) 5.750 05/15/09 ----- 2,487,358
1,620 NYS Dorm (State University) 6.375 05/15/14 05/15/05 (b) 1,660,986
25 NYS Dorm (State University) 7.000 05/15/16(s) 05/01/02 (b) 27,040
120 NYS Dorm (St. Francis G&H) 7.375 08/01/10 08/01/00 (b) 129,461
255 NYS Dorm (United Health) 7.150 08/01/07 02/01/00 (b) 273,903
50 NYS Dorm (United Hospital) 6.500 09/15/10 07/01/97 (b) 50,250
175 NYS Dorm (United Hospital) 11.750 09/15/10 07/01/97 (b) 180,250
15 NYS Dorm (University of Rochester) 6.500 07/01/09 07/01/97 (b) 15,406
500 NYS Dorm (Wildwood) 7.300 07/01/15 07/01/01 (a) 565,850
200 NYS Environ. (Consolidated Water) 7.150 11/01/14(s) 11/01/06 (b) 212,658
275 NYS Environ. (Huntington Res Rec) 7.375 10/01/99 10/18/98 (c) 286,891
7,545 NYS Environ. (Huntington Res Rec) 7.500 10/01/12(s) 10/01/99 (b) 7,983,817
50 NYS Environ. (Long Island Water) 10.000 10/01/17 10/01/97 (b) 52,680
370 NYS Environ. (RSP) 7.000 04/01/99 ----- 391,948
595 NYS Environ. (RSP) 7.000 04/01/00 ----- 641,321
330 NYS Environ. (RSP) 7.100 04/01/01 ----- 362,489
2,985 NYS Environ. (RSP) 7.250 04/01/07 04/01/02 (b) 3,412,034
4,080 NYS ERDA (Con Ed) 7.750 01/01/24 01/01/98 (b) 4,259,846
15 NYS ERDA (Con Ed) 9.250 09/15/22 09/15/97 (b) 15,698
175 NYS ERDA (LILCO) 7.500 12/01/06 06/01/97 (b) 176,750
425 NYS ERDA (LILCO) 7.800 12/01/09 06/01/97 (b) 425,608
315 NYS ERDA (LILCO) 8.250 10/01/12 04/01/97 (b) 315,945
2,125 NYS ERDA (Niagara Mohawk) 8.875 11/01/25 05/01/97 (b) 2,183,438
40 NYS GO 6.600 12/01/14 06/01/97 (b) 41,000
1,500 NYS HDC 6.550 10/01/15(s) 04/01/05 (b) 1,567,770
600 NYS HDC 9.625 01/01/19(s) 07/01/97 (b) 622,902
520 NYS HDC 5.750 04/01/07 05/22/03 (c) 528,809
1,970 NYS HDC (Pass Through Certificate) (i) 6.500 09/20/03 11/20/02 (c) 2,043,225
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 80 NYS HFA (Children's Rescue) 7.400 % 11/01/00 ----- $ 84,615
65 NYS HFA (Children's Rescue) 7.500 05/01/01 ----- 69,352
140 NYS HFA (Children's Rescue) 7.500 11/01/01 ----- 150,195
94 NYS HFA (General Housing) 6.500 11/01/03 ----- 94,940
10 NYS HFA (General Housing) 6.600 11/01/05 11/01/00 (b) 10,425
6 NYS HFA (General Housing) 6.750 11/01/98 ----- 6,060
1,435 NYS HFA (Health Facility) 6.000 05/01/07 ----- 1,464,762
2,165 NYS HFA (Health Facility) 6.000 05/01/08 ----- 2,195,007
20,730 NYS HFA (Health Facility) 7.900 11/01/99 08/21/98 (c) 22,003,651
1,535 NYS HFA (HELP/Bronx) 8.050 11/01/05 11/01/99 (b) 1,645,796
2,000 NYS HFA (H&N) 5.625 09/15/13 06/21/12 (c) 1,960,580
55 NYS HFA (H&N) 5.900 11/01/05 ----- 53,900
650 NYS HFA (H&N) 6.800 11/01/02 05/01/97 (b) 663,637
480 NYS HFA (H&N) 6.800 11/01/01 05/01/97 (b) 490,738
55 NYS HFA (H&N) 6.875 11/01/04 05/01/97 (b) 55,550
1,710 NYS HFA (H&N) 6.875 11/01/07 05/01/97 (b) 1,747,842
300 NYS HFA (H&N) 6.875 11/01/11 05/01/97 (b) 306,180
25 NYS HFA (H&N) 6.875 11/01/05 05/01/97 (b) 25,250
45 NYS HFA (H&N) 6.875 11/01/09 05/01/97 (b) 45,743
15 NYS HFA (H&N) 6.875 11/01/10 05/01/97 (b) 15,375
1,550 NYS HFA (H&N) 7.000 11/01/17(s) 05/01/97 (b) 1,596,500
570 NYS HFA (H&N) 8.000 11/01/08 11/01/00 (b) 638,674
5 NYS HFA (H&N) 8.625 11/01/05 05/01/97 (b) 5,050
140 NYS HFA (H&N) 9.000 11/01/17(s) 05/01/97 (b) 142,800
10 NYS HFA (Insured Mtg.) 6.250 08/15/14(s) 08/15/06 (b) 10,298
145 NYS HFA (Meadow Manor) 7.750 11/01/19 05/01/97 (b) 148,045
135 NYS HFA (Monroe) 7.625 05/01/05 05/01/00 (b) 147,454
1,000 NYS HFA (Multi-Family) 6.450 08/15/14(s) 08/15/04 (b) 1,037,630
15 NYS HFA (Multi-Family) 7.300 11/01/04 11/01/99 (b) 16,424
800 NYS HFA (Multi-Family) 7.450 11/01/28(s) 11/01/99 (b) 842,392
875 NYS HFA (Multi-Family) 10.000 11/15/99 05/15/97 (b) 879,253
10 NYS HFA (NonProfit) 6.100 11/01/98 ----- 10,000
50 NYS HFA (NonProfit) 6.100 11/01/99 ----- 50,250
25 NYS HFA (NonProfit) 6.400 11/01/05 ----- 25,250
40 NYS HFA (NonProfit) 6.400 11/01/00 ----- 40,400
35 NYS HFA (NonProfit) 6.400 11/01/09 11/01/01 (b) 35,140
10 NYS HFA (NonProfit) 6.400 11/01/04 ----- 10,100
35 NYS HFA (NonProfit) 6.500 11/01/02 ----- 36,373
10 NYS HFA (NonProfit) 6.500 11/01/01 ----- 10,100
20 NYS HFA (NonProfit) 6.600 11/01/01 ----- 21,164
15 NYS HFA (NonProfit) 6.600 11/01/11 11/01/03 (b) 15,000
75 NYS HFA (NonProfit) 6.600 11/01/05 11/01/98 (b) 78,351
5 NYS HFA (NonProfit) 6.600 11/01/10 ----- 5,050
5 NYS HFA (NonProfit) 6.600 11/01/02 ----- 5,186
225 NYS HFA (NonProfit) 6.600 11/01/03 11/01/98 (b) 228,375
25 NYS HFA (NonProfit) 6.600 11/01/05 11/01/00 (b) 25,438
10 NYS HFA (NonProfit) 6.600 11/01/13 05/01/97 (b) 9,980
1,420 NYS HFA (NonProfit) 6.750 11/01/11 05/01/97 (b) 1,470,637
20 NYS HFA (NonProfit) 6.750 11/01/01 11/01/98 (b) 20,400
61 NYS HFA (NonProfit) 6.875 11/01/10 05/01/97 (b) 62,525
250 NYS HFA (Phillips Village) 6.700 08/15/02 ----- 262,988
195 NYS HFA (Phillips Village) 6.700 02/15/02 ----- 204,705
175 NYS HFA (Phillips Village) 6.900 02/15/04 ----- 186,212
85 NYS HFA (Phillips Village) 6.900 08/15/04 ----- 90,644
415 NYS HFA (Simeon Dewitt) 8.000 11/01/18(s) 05/01/98 (b) 421,350
360 NYS HFA (Westchester/HELP) 7.500 11/01/00 03/05/99 (c) 381,247
60 NYS HFA (Westchester/HELP) 7.550 11/01/02 05/01/00 (b) 64,988
795 NYS LGSC (SCSB) 6.375 12/15/09 10/15/04 (c) 806,035
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 35 NYS Medcare (Beth Israel Medical Center) 7.200 % 11/01/14 05/01/97 (b) $ 35,788
615 NYS Medcare (Brookdale Hospital) 6.600 08/15/03 ----- 643,917
260 NYS Medcare (Brookdale Hospital) 6.600 02/15/03 ----- 271,588
1,000 NYS Medcare (Central Suffolk) 6.125 11/01/16 06/03/12 (c) 880,310
365 NYS Medcare (Downtown Hospital) 6.550 02/15/06 ----- 383,754
945 NYS Medcare (Downtown Hospital) 6.550 08/15/06 ----- 995,558
95 NYS Medcare (Good Samaritan) 7.650 11/01/01 11/01/97 (b) 98,886
1,750 NYS Medcare (Huntington Hospital) 6.500 11/01/14(s) 11/01/06 (b) 1,820,963
1,470 NYS Medcare (H&N) 6.400 08/15/14 08/15/06 (b) 1,555,892
20 NYS Medcare (H&N) 7.000 02/15/99 ----- 20,991
25 NYS Medcare (H&N) 7.100 08/15/01 02/15/98 (b) 26,172
550 NYS Medcare (H&N) 7.100 11/01/99 ----- 562,007
10 NYS Medcare (H&N) 7.100 11/01/98 ----- 10,100
60 NYS Medcare (H&N) 7.100 11/01/00 ----- 61,200
755 NYS Medcare (H&N) 7.200 11/01/01 05/01/97 (b) 771,663
5 NYS Medcare (H&N) 7.250 02/15/98 ----- 5,153
185 NYS Medcare (H&N) 7.250 11/01/03 05/01/97 (b) 190,550
310 NYS Medcare (H&N) 7.250 02/15/09 02/15/99 (b) 335,349
90 NYS Medcare (H&N) 7.250 11/01/02 05/01/97 (b) 92,700
20 NYS Medcare (H&N) 7.300 08/15/10 08/15/99 (b) 21,067
470 NYS Medcare (H&N) 7.400 11/01/16(s) 05/01/97 (b) 480,589
10 NYS Medcare (H&N) 7.500 02/15/09 02/15/99 (b) 10,482
120 NYS Medcare (H&N) 7.500 02/15/08 02/15/98 (b) 128,747
5 NYS Medcare (H&N) 7.750 08/15/08 08/15/98 (b) 5,355
10 NYS Medcare (H&N) 8.000 02/15/28 08/15/98 (b) 10,513
350 NYS Medcare (H&N) 8.000 02/15/27 08/15/97 (b) 364,536
245 NYS Medcare (H&N) 8.625 02/15/06 02/15/97 (b) 246,313
335 NYS Medcare (H&N) 8.875 08/15/27 02/15/98 (b) 350,705
960 NYS Medcare (H&N) 9.000 02/15/26 02/15/97 (b) 965,578
3,090 NYS Medcare (H&N) 10.000 11/01/06 05/01/97 (b) 3,267,675
1,660 NYS Medcare (Insured Hospital) 7.250 02/15/12 08/15/97 (b) 1,721,603
310 NYS Medcare (Insured Hospital) 7.625 02/15/02 08/15/97 (b) 321,941
1,610 NYS Medcare (Insured Hospital) 7.875 02/15/07 08/15/97 (b) 1,675,543
5 NYS Medcare (Insured Mtg.) 7.100 02/15/00 ----- 5,212
690 NYS Medcare (Insured Mtg.) 9.375 11/01/16(s) 05/01/97 (b) 720,429
665 NYS Medcare (Insured Nursing) 10.250 01/01/24 07/01/97 (b) 687,610
1,345 NYS Medcare (Long Beach) 7.625 02/15/06 08/15/98 (b) 1,447,637
20 NYS Medcare (Mental Health) 0.000 08/15/01 ----- 15,528
10 NYS Medcare (Mental Health) 0.000 02/15/03 08/15/98 (b) 6,912
30 NYS Medcare (Mental Health) 0.000 08/15/03 08/15/98 (b) 19,987
85 NYS Medcare (Mental Health) 6.850 08/15/00 ----- 91,098
45 NYS Medcare (Mental Health) 7.000 02/15/01 ----- 47,622
50 NYS Medcare (Mental Health) 7.200 08/15/00 ----- 53,044
40 NYS Medcare (Mental Health) 7.200 02/15/04 08/15/99 (b) 42,869
90 NYS Medcare (Mental Health) 7.375 02/15/14 08/15/99 (b) 94,566
45 NYS Medcare (Mental Health) 7.400 08/15/00 ----- 49,044
25 NYS Medcare (Mental Health) 7.400 02/15/02 02/15/00 (b) 27,353
15 NYS Medcare (Mental Health) 7.500 08/15/07 02/15/01 (b) 16,838
400 NYS Medcare (Mental Health) 7.625 02/15/07 08/15/01 (b) 440,380
20 NYS Medcare (Mental Health) 7.625 08/15/07 08/15/01 (b) 21,888
105 NYS Medcare (Mental Health) 7.750 08/15/10 02/15/00 (b) 111,600
3,000 NYS Medcare (Mental Health) 8.250 02/15/99 08/15/97 (b) 3,126,450
35 NYS Medcare (Mental Health) 8.875 08/15/07 08/15/97 (b) 36,260
50 NYS Medcare (North Shore) 7.125 11/01/08 11/01/00 (b) 52,447
10 NYS Medcare (N. General) 7.000 02/15/98 ----- 10,254
275 NYS Medcare (N. General) 7.100 02/15/99 ----- 289,174
25 NYS Medcare (N. General) 7.150 08/15/01 08/15/99 (b) 26,825
10 NYS Medcare (N. General) 7.200 08/15/02 08/15/99 (b) 10,452
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 965 NYS Medcare (N. General) 7.350 % 08/15/09 08/15/99 (b) $ 1,017,641
135 NYS Medcare (Secured Hospital) 7.000 02/15/07 02/15/97 (b) 138,375
105 NYS Medcare (Secured Hospital) 7.000 02/15/07 02/15/97 (b) 108,150
15 NYS Medcare (St. Luke's Hospital) 7.400 02/15/09 02/15/00 (b) 16,655
10 NYS Medcare (Vassar Brothers Hospital) 7.700 11/01/99 11/01/97 (b) 10,417
715 NYS Medcare (WHMC) 6.850 02/15/00 ----- 744,780
80 NYS Medcare (WHMC) 6.850 08/15/00 ----- 83,764
80 NYS Medcare (WHMC) 6.950 08/15/01 ----- 84,671
250 NYS Medcare (WHMC) 6.950 02/15/01 ----- 263,188
50 NYS Medcare (WHMC) 7.150 08/15/03 08/15/01 (b) 53,806
25 NYS Medcare (WHMC) 7.150 02/15/03 08/15/01 (b) 26,849
1,600 NYS Medcare (WHMC) 7.350 08/15/11(s) 08/15/01 (b) 1,727,360
100 NYS Power Authority 7.500 01/01/02 01/01/98 (b) 105,408
385 NYS Thruway 0.000 01/01/06 ----- 232,767
530 NYS Thruway 0.000 01/01/01 ----- 429,602
250 NYS Thruway 0.000 01/01/05 ----- 159,220
400 NYS Thruway 0.000 01/01/98 ----- 380,652
10 NYS UDC 0.000 01/01/00 ----- 8,518
15 NYS UDC 0.000 01/01/11 04/08/08 (c) 6,419
20 NYS UDC 0.000 01/01/99 ----- 17,888
30 NYS UDC 0.000 01/01/07 ----- 16,437
25 NYS UDC (Correctional Facilities) 0.000 01/01/03 ----- 18,032
250 NYS UDC (Correctional Facilities) 6.700 01/01/99 ----- 260,128
50 NYS UDC (South Mall) 0.000 01/01/05 06/24/04 (c) 32,851
35 NYS UDC (South Mall) 0.000 01/01/03 ----- 24,929
130 NYS UDC (South Mall) 0.000 01/01/05 ----- 84,033
175 NYS UDC (South Mall) 0.000 01/01/11 04/08/08 (c) 76,801
10 NYS (SONYMA) Mortgage, 1 0.000 10/01/14(s) 04/01/97 (b) 1,924
125 NYS (SONYMA) Mortgage, 1 0.000 10/01/98 04/01/97 (b) 107,111
120 NYS (SONYMA) Mortgage, 10-A 7.800 10/01/03 04/01/98 (b) 126,145
25 NYS (SONYMA) Mortgage, 10-A 8.000 10/01/08 04/01/98 (b) 25,877
15 NYS (SONYMA) Mortgage, 11 6.875 04/01/16(s) 10/01/98 (b) 15,300
30 NYS (SONYMA) Mortgage, 12 0.000 04/01/03 10/01/97 (b) 19,655
30 NYS (SONYMA) Mortgage, 12 0.000 04/01/99 10/01/97 (b) 27,204
100 NYS (SONYMA) Mortgage, 12 0.000 10/01/00 10/01/97 (b) 79,785
60 NYS (SONYMA) Mortgage, 12 0.000 10/01/99 10/01/97 (b) 51,717
15 NYS (SONYMA) Mortgage, 12 6.800 10/01/97 ----- 15,236
25 NYS (SONYMA) Mortgage, 12 6.800 04/01/97 ----- 25,129
830 NYS (SONYMA) Mortgage, 2 0.000 10/01/14(s) 04/01/97 (b) 156,903
50 NYS (SONYMA) Mortgage, 44 7.000 10/01/07 11/01/06 (b) 52,419
215 NYS (SONYMA) Mortgage, 6 9.375 04/01/10 04/01/01 (c) 224,221
65 NYS (SONYMA) Mortgage, 7 GAINS 0.000 (+) 10/01/14(s) 04/01/98 (b) 60,022
25 NYS (SONYMA) Mortgage, 8-A 0.000 04/01/02 10/01/98 (b) 18,283
250 NYS (SONYMA) Mortgage, 8-A 0.000 04/01/00 10/01/98 (b) 204,068
60 NYS (SONYMA) Mortgage, 8-A 0.000 10/01/01 10/01/98 (b) 45,310
85 NYS (SONYMA) Mortgage, 8-A 0.000 04/01/01 10/01/98 (b) 66,116
30 NYS (SONYMA) Mortgage, 8-A 0.000 10/01/00 10/01/98 (b) 24,079
70 NYS (SONYMA) Mortgage, 8-A 0.000 10/01/02 10/01/98 (b) 49,689
20 NYS (SONYMA) Mortgage, 8-A 0.000 10/01/98 ----- 18,275
75 NYS (SONYMA) Mortgage, 8-A 6.875 04/01/17(s) 04/01/97 (b) 76,875
50 NYS (SONYMA) Mortgage, 8-B 7.200 04/01/99 ----- 51,281
25 NYS (SONYMA) Mortgage, 8-C 7.500 04/01/99 10/01/97 (b) 25,947
40 NYS (SONYMA) Mortgage, 8-C 7.900 10/01/01 10/01/97 (b) 41,646
85 NYS (SONYMA) Mortgage, 8-C 8.300 10/01/06 10/01/97 (b) 87,570
3,535 NYS (SONYMA) Mortgage, 8-C 8.400 10/01/17(s) 10/01/97 (b) 3,611,886
25 NYS (SONYMA) Mortgage, 8-D 7.700 10/01/99 01/04/98 (b) 26,297
100 NYS (SONYMA) Mortgage, 8-D 8.200 10/01/06 01/04/98 (b) 103,231
80 NYS (SONYMA) Mortgage, 8-E 8.100 10/01/17(s) 04/01/98 (b) 82,655
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 40 NYS (SONYMA) Mortgage, 8-F 7.200 % 10/01/00 07/01/98 (b) $ 42,270
30 NYS (SONYMA) Mortgage, 8-F 7.800 10/01/06 07/01/98 (b) 31,347
110 NYS (SONYMA) Mortgage, 8-F 8.000 10/01/17(s) 10/01/97 (c) 112,768
100 NYS (SONYMA) Mortgage, 9-A 6.700 10/01/98 04/01/97 (b) 101,600
25 NYS (SONYMA) Mortgage, 9-A 6.900 04/01/00 04/01/97 (b) 25,558
20 NYS (SONYMA) Mortgage, 9-A 7.000 04/01/01 04/01/97 (b) 20,400
100 NYS (SONYMA) Mortgage, 9-A 7.250 10/01/06 04/01/97 (b) 102,300
15 NYS (SONYMA) Mortgage, 9-A 7.300 04/01/17 04/01/97 (b) 15,360
10 NYS (SONYMA) Mortgage, 9-A 8.250 10/01/08 04/01/98 (b) 10,423
190 NYS (SONYMA) Mortgage, 9-B 8.000 10/01/02 07/01/97 (b) 196,555
230 NYS (SONYMA) Mortgage, 9-B 8.125 10/01/07 07/01/97 (b) 237,539
6,120 NYS (SONYMA) Mortgage, 9-B 8.300 10/01/17(s) 07/01/97 (b) 6,285,240
90 NYS (SONYMA) Mortgage, 9-C 8.400 10/01/02 10/01/97 (b) 92,786
25 NYS (SONYMA) Mortgage, 9-E 7.375 10/01/98 ----- 26,263
440 NYS (SONYMA) Mortgage, 9-E 8.000 10/01/03 04/01/98 (b) 458,665
70 NYS (SONYMA) Mortgage, AA 7.700 04/01/99 ----- 73,179
65 NYS (SONYMA) Mortgage, BB-2 7.125 10/01/98 10/01/97 (b) 67,432
210 NYS (SONYMA) Mortgage, BB-2 7.850 10/01/08 10/01/97 (b) 217,946
12,570 NYS (SONYMA) Mortgage, BB-2 7.950 10/01/15(s) 10/01/97 (b) 13,043,135
35 NYS (SONYMA) Mortgage, EE-1 8.000 10/01/10 04/14/99 (b) 36,478
35 NYS (SONYMA) Mortgage, EE-2 7.050 10/01/00 02/04/99 (c) 37,336
65 NYS (SONYMA) Mortgage, EE-2 7.450 10/01/10 09/14/99 (b) 68,586
230 NYS (SONYMA) Mortgage, EE-3 7.125 10/01/00 02/04/99 (c) 239,796
115 NYS (SONYMA) Mortgage, EE-4 7.800 10/01/13(s) 10/01/00 (b) 123,686
25 NYS (SONYMA) Mortgage, FF 7.000 04/01/97 ----- 25,142
50 NYS (SONYMA) Mortgage, FF 7.100 10/01/98 ----- 51,862
10 NYS (SONYMA) Mortgage, FF 7.850 10/01/08 10/01/97 (b) 10,369
4,875 NYS (SONYMA) Mortgage, FF 7.950 10/01/14(s) 10/01/97 (b) 5,058,495
55 NYS (SONYMA) Mortgage, HH-2 7.700 10/01/09 10/01/99 (b) 57,294
125 NYS (SONYMA) Mortgage, HH-3 7.875 10/01/09 06/07/00 (b) 132,886
3,600 NYS (SONYMA) Mortgage, HH-3 7.950 04/01/22(s) 06/07/00 (b) 3,817,044
75 NYS (SONYMA) Mortgage, II 0.000 04/01/05 04/01/99 (b) 41,654
300 NYS (SONYMA) Mortgage, II 0.000 10/01/09 04/01/99 (b) 116,850
45 NYS (SONYMA) Mortgage, II 0.000 10/01/05 04/01/99 (b) 24,017
40 NYS (SONYMA) Mortgage, II 0.000 10/01/06 04/01/99 (b) 19,756
175 NYS (SONYMA) Mortgage, II 0.000 04/01/09 04/01/99 (b) 70,872
6,910 NYS (SONYMA) Mortgage, II 0.000 04/01/20 04/01/99 (b) 1,133,102
90 NYS (SONYMA) Mortgage, II 0.000 04/01/07 04/01/99 (b) 42,599
520 NYS (SONYMA) Mortgage, II 0.000 10/01/08 04/01/99 (b) 218,962
120 NYS (SONYMA) Mortgage, II 0.000 10/01/07 04/01/99 (b) 54,626
100 NYS (SONYMA) Mortgage, JJ 0.000 04/01/02 ----- 73,883
75 NYS (SONYMA) Mortgage, JJ 0.000 10/01/01 ----- 55,773
215 NYS (SONYMA) Mortgage, JJ 0.000 04/01/03 10/01/99 (b) 142,801
145 NYS (SONYMA) Mortgage, JJ 0.000 04/01/01 ----- 108,432
10 NYS (SONYMA) Mortgage, JJ 0.000 10/01/00 ----- 7,738
200 NYS (SONYMA) Mortgage, JJ 0.000 04/01/07 10/01/99 (b) 98,164
75 NYS (SONYMA) Mortgage, JJ 0.000 04/01/00 ----- 60,055
50 NYS (SONYMA) Mortgage, JJ 0.000 10/01/08 10/01/99 (b) 21,989
30 NYS (SONYMA) Mortgage, JJ 0.000 04/01/04 10/01/99 (b) 18,431
10 NYS (SONYMA) Mortgage, JJ 0.000 10/01/04 10/01/99 (b) 5,922
170 NYS (SONYMA) Mortgage, JJ 0.000 04/01/05 10/01/99 (b) 97,158
185 NYS (SONYMA) Mortgage, JJ 0.000 10/01/05 10/01/99 (b) 101,774
35 NYS (SONYMA) Mortgage, JJ 0.000 10/01/03 10/01/99 (b) 22,352
60 NYS (SONYMA) Mortgage, JJ 0.000 04/01/06 10/01/99 (b) 31,715
270 NYS (SONYMA) Mortgage, JJ 0.000 10/01/06 10/01/99 (b) 137,711
15 NYS (SONYMA) Mortgage, KK 7.050 10/01/99 07/22/98 (c) 15,731
100 NYS (SONYMA) Mortgage, MM-1 7.100 10/01/97 ----- 101,790
30 NYS (SONYMA) Mortgage, MM-1 7.200 10/01/98 ----- 31,258
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 35 NYS (SONYMA) Mortgage, MM-1 7.500 % 04/01/13(s) 02/04/01 (b) $ 37,025
25 NYS (SONYMA) Mortgage, MM-1 7.650 10/01/03 02/04/01 (b) 26,652
100 NYS (SONYMA) Mortgage, MM-1 7.700 10/01/04 02/04/01 (b) 106,226
50 NYS (SONYMA) Mortgage, MM-1 7.750 04/01/05 02/04/01 (b) 53,202
10 NYS (SONYMA) Mortgage, MM-2 7.550 04/01/02 10/01/00 (b) 10,514
25 NYS (SONYMA) Mortgage, NN 7.100 04/01/02 01/01/00 (b) 26,789
20 NYS (SONYMA) Mortgage, NN 7.150 10/01/03 01/01/00 (b) 21,014
25 NYS (SONYMA) Mortgage, QQ 7.700 10/01/12 04/01/00 (b) 26,284
25 NYS (SONYMA) Mortgage, RR 7.700 10/01/10 10/01/00 (b) 26,849
115 NYS (SONYMA) Mortgage, SS 7.500 10/01/19(s) 10/01/00 (b) 118,711
25 NYS (SONYMA) Mortgage, TT 6.850 10/01/01 ----- 26,744
20 NYS (SONYMA) Mortgage, TT 6.950 04/01/02 ----- 20,499
25 NYS (SONYMA) Mortgage, TT 7.200 10/01/05 04/01/03 (b) 26,563
25 NYS (SONYMA) Mortgage, UU 6.850 10/01/99 ----- 26,158
75 NYS (SONYMA) Mortgage, UU 6.950 04/01/00 ----- 79,509
525 NYS (SONYMA) Mortgage, UU 7.150 10/01/22(s) 10/01/01 (b) 547,418
135 NYS (SONYMA) Mortgage, UU 7.750 10/01/23(s) 04/01/01 (b) 142,649
50 NYS (SONYMA) Mortgage, VV 6.300 04/01/97 ----- 50,210
5 NYS (SONYMA) Mortgage, VV 6.400 04/01/98 ----- 5,106
40 NYS (SONYMA) Mortgage, VV 6.600 04/01/00 ----- 42,051
25 NYS (SONYMA) Mortgage, VV 6.800 10/01/02 ----- 27,064
60 NYS (SONYMA) Mortgage, VV 6.900 04/01/03 ----- 65,974
50 NYS (SONYMA) Mortgage, VV 7.000 04/01/04 10/01/03 (b) 52,566
580 NYS (SONYMA) Mortgage, VV 7.250 10/01/07 10/01/01 (b) 618,268
13,260 NYS (SONYMA) Mortgage, VV 7.375 10/01/11(s) 10/01/01 (b) 14,179,714
20 Oneida Healthcare Corp. 7.100 08/01/11 08/01/01 (b) 21,465
1,150 Oneida Herkimer SWMA 6.600 04/01/04 ----- 1,228,775
2,200 Oneida Herkimer SWMA 6.750 04/01/14(s) 04/01/05 (b) 2,251,590
15 Oneida IDA (MetLife Insurance) 7.250 12/01/97 ----- 15,225
15,300 Onondaga County Res Rec 6.625 05/01/00 11/30/98 (c) 15,756,246
8,260 Onondaga County Res Rec 6.875 05/01/06 01/12/04 (c) 8,637,978
60 Onondaga IDA (Sysco Foods) 7.750 04/01/03 04/01/97 (b) 60,600
1,805 Oswego County Res Rec 6.500 06/01/04 05/23/03 (c) 1,942,036
50 Philadelphia, NY GO 7.500 12/15/09 ----- 57,105
75 Port Authority NY/NJ (Delta Airlines) 6.950 06/01/08 06/01/04 (b) 82,586
1,000 Port Authority NY/NJ (KIAC) 6.750 10/01/11 05/03/10 (c) 1,023,410
10,000 Port Authority NY/NJ (KIAC) 7.000 10/01/07 05/02/05 (c) 10,732,600
15 Portchester Community Devel. 8.100 08/01/10 02/08/05 (c) 17,416
2,499 Puerto Rico Aqueduct & Sewer (i) 7.250 03/21/00 10/16/98 (c) 2,560,018
95 Puerto Rico Commonwealth GO 7.125 07/01/02 07/01/97 (b) 98,091
50 Puerto Rico Commonwealth Infrastructure 7.500 07/01/09 07/01/98 (b) 52,447
5 Puerto Rico Commonwealth Infrastructure 7.700 07/01/01 07/01/98 (b) 5,266
10 Puerto Rico Commonwealth Infrastructure 7.750 07/01/08 07/01/98 (b) 10,524
10 Puerto Rico Electric 7.000 07/01/07 07/01/99 (b) 10,314
45 Puerto Rico HFC 0.000 04/15/08 09/15/98 (b) 20,936
25 Puerto Rico HFC 0.000 10/15/04 09/15/98 (b) 15,292
5 Puerto Rico HFC 6.700 04/01/97 ----- 5,029
45 Puerto Rico HFC 6.800 10/01/99 ----- 47,395
15 Puerto Rico HFC 6.900 04/15/98 ----- 15,424
20 Puerto Rico HFC 7.000 04/15/99 ----- 20,959
40 Puerto Rico HFC 7.000 04/01/00 ----- 42,836
15 Puerto Rico HFC 7.100 10/15/00 10/01/98 (b) 15,845
10 Puerto Rico HFC 7.100 04/01/02 04/01/00 (b) 10,758
65 Puerto Rico HFC 7.300 04/01/06 04/01/00 (b) 68,447
30 Puerto Rico HFC 7.400 04/01/07 04/01/00 (b) 31,633
20 Puerto Rico HFC 7.450 10/15/09 09/27/00 (b) 21,294
6,585 Puerto Rico HFC 7.500 04/01/22(s) 04/01/00 (b) 6,962,518
1,060 Puerto Rico HFC 7.500 10/01/15(s) 04/01/00 (b) 1,125,603
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 245 Puerto Rico HFC 8.250 % 06/01/11(s) 06/01/97 (b) $ 248,295
10 Puerto Rico IME (Baxter Travenol) 8.000 09/01/12 09/01/98 (b) 10,823
15 Puerto Rico IME (Dr. Pila Hospital) 7.700 08/01/08 08/01/98 (a) 16,039
710 Puerto Rico IME (Squibb) 6.500 07/01/04 07/01/97 (b) 717,988
55 Puerto Rico PCR 8.000 01/01/03 07/01/97 (b) 56,100
130 Puerto Rico Port Auth. 7.300 07/01/07 07/01/97 (b) 132,600
586 Puerto Rico Port Auth. (Computer Lease) (i) 9.000 05/15/99 05/31/98 (c) 614,961
2,000 Puerto Rico TEMEC (MGH) 6.500 07/01/12(s) 07/01/08 (b) 2,056,600
20 Puerto Rico Urban Renewal 0.000 10/01/97 ----- 19,242
105 Puerto Rico Urban Renewal 7.875 10/01/04 10/01/99 (b) 113,359
1,440 Putnam IDA (Brewster Plastics) 7.375 12/01/08 03/28/04 (c) 1,477,814
35 Radisson Senior Citizens Hsg. 12.000 11/01/11(s) 11/01/97 (b) 38,114
125 Rensselaer Hsg. Auth. (Renwyck) 7.650 01/01/11(s) 01/01/03 (b) 143,754
1,440 Rensselaer Municipal Leasing Corp. 6.250 06/01/04 12/28/02 (c) 1,475,914
25 Riverhead Hsg. Devel. 8.250 08/01/10 02/01/97 (b) 26,250
3,025 Rochester Hsg. Auth. (Crossroads) 7.300 07/01/05 12/05/01 (c) 3,285,967
770 Rochester Hsg. Auth. (Stonewood) 5.900 09/01/09 06/24/04 (c) 774,435
775 Rockland IDA (DC) 7.000 03/01/03 06/12/00 (c) 808,255
225 Roxbury CSD 6.400 06/15/10 06/15/07 (b) 228,346
235 Roxbury CSD 6.400 06/15/11 06/15/07 (b) 238,494
295 Saratoga IDA (ARC) 7.250 03/01/01 04/20/99 (c) 301,151
250 Saratoga IDA (City Center) 10.000 10/01/08 10/01/99 (b) 279,868
2,495 Saratoga IDA (Saratoga Sheraton) 6.750 12/31/07 08/13/02 (c) 2,579,556
50 Schodack IDA (Hamilton Printing) 7.600 07/01/00 ----- 53,945
50 Steuben IDA (Corning Glass) 7.625 07/01/99 07/01/97 (b) 51,000
240 Steuben IDA (Corning Glass) 9.000 11/01/04 05/01/97 (b) 244,800
25 St. Casimer's Elderly Hsg. 7.000 09/01/98 ----- 25,625
950 St. Casimer's Elderly Hsg. 7.375 09/01/10 03/01/97 (b) 988,618
30 St. Lawrence County (SWDA) 8.250 01/01/02 01/01/99 (a) 32,645
10 St. Lawrence County (SWDA) 8.300 01/01/99 01/01/98 (a) 10,574
5 Suffolk County GO 6.000 09/15/97 ----- 5,063
10 Suffolk County GO 6.400 02/01/00 ----- 10,100
210 Suffolk IDA (ADP) 7.750 04/01/18 04/01/97 (b) 215,775
240 Suffolk IDA (Dowling College) 6.500 12/01/06 ----- 249,218
20 Suffolk IDA (Marbar) 8.150 03/01/04 03/01/97 (b) 20,656
25 Suffolk IDA (Marbar) 8.200 03/01/05 03/01/97 (b) 25,491
85 Suffolk IDA (OPWC) 7.000 11/01/02 08/14/00 (c) 90,876
480 Suffolk IDA (Printing Assoc.) 7.013 (v) 01/01/01 07/01/97 (f) 480,000
1,420 Suffolk IDA (Rimland Facilities) 6.188 (v) 12/01/04 06/01/97 (f) 1,420,000
2,410 Sunnybrook Elderly Hsg. Corp. 11.250 12/01/14(s) 04/01/97 (b) 2,553,082
133 Syracuse IDA (Genesee St.) 6.023 (v) 12/01/98 06/01/97 (f) 135,334
1,010 Syracuse IDA (Rockwest Center) 7.000 12/01/05 06/12/02 (c) 1,029,503
460 Syracuse IDA (Rockwest Center) 7.250 06/01/03 09/15/00 (c) 491,832
1,240 Syracuse IDA (St. Joseph's Hospital) 7.250 06/01/01 07/22/99 (c) 1,313,495
1,030 Syracuse Senior Citizens Hsg. 8.000 12/01/10 06/01/97 (b) 1,079,183
195 Tomkins IDA (Kendall at Ithaca) 7.875 06/01/15(s) 06/01/05 (b) 199,801
300 Tompkins Healthcare 10.800 02/01/28 08/01/05 (b) 394,119
310 Tonawanda Housing Devel. 10.000 05/01/08 05/01/97 (b) 317,263
130 Tonawanda Housing Devel. 10.000 05/01/07 05/01/97 (b) 132,600
105 Tonawanda Housing Devel. 10.000 05/01/06 05/01/97 (b) 107,100
85 Tupper Lake Housing Devel. 8.125 10/01/10 03/15/02 (b) 89,250
510 Ulster County Res Rec 5.500 03/01/02 ----- 513,279
1,080 Ulster County Res Rec 5.500 03/01/03 ----- 1,080,248
1,600 Union Elderly Hsg. 10.000 04/01/13(s) 04/01/97 (b) 1,664,000
5 Union Elderly Hsg. 11.000 04/01/00 04/01/97 (b) 5,200
910 Union Hsg. (Methodist Homes) 6.800 11/01/04 09/07/01 (c) 949,267
90 Union Hsg. (Methodist Homes) 7.800 04/01/97 ----- 90,607
95 Union Hsg. (Methodist Homes) 7.900 04/01/98 ----- 98,112
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Effective
Face Amount Maturity
(000) Omitted Description Coupon Maturity Date* Market Value
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 555 University of V. I. 6.500 % 10/01/99 10/14/98 (c) $ 570,634
500 University of V. I. 7.500 10/01/09 10/01/04 (b) 547,790
500 University of V. I. 7.650 10/01/14 10/01/04 (b) 549,755
100 Utica GO 5.900 12/01/02 ----- 105,235
580 Utica GO 6.000 01/15/06 ----- 505,998
560 Utica GO 6.250 01/15/07 ----- 492,862
100 Utica Hsg. Corp. (Brookhaven) 0.000 01/01/99 ----- 89,117
10 Utica Hsg. Corp. (Brookhaven) 0.000 07/01/99 ----- 8,659
35 Utica Senior Citizen Hsg. 0.000 01/01/98 ----- 33,073
40 Utica Senior Citizen Hsg. 0.000 01/01/02 ----- 29,989
1,963 Utica Senior Citizen Hsg. 10.230 07/01/22 07/01/97 (b) 2,097,703
10 Valley Health & Devel. 7.850 02/01/02 12/15/98 (c) 11,531
20 Valley Health & Devel. 11.300 02/01/07 08/01/00 (b) 24,289
820 V. I. Airport 7.875 10/01/97 ----- 840,959
17,785 V. I. Airport 8.100 10/01/05 10/01/98 (b) 18,826,134
15 V. I. HFA 7.550 06/01/03 12/01/98 (b) 16,253
260 V. I. Highway 7.650 10/01/99 ----- 281,432
1,535 V. I. Port Auth. (Marine Division) 7.400 11/01/99 05/01/97 (b) 1,539,083
1,220 V. I. Port Auth. (Marine Division) 7.550 11/01/99 05/01/97 (b) 1,223,501
765 V. I. Public Finance Auth. 6.500 10/01/99 10/15/98 (c) 791,882
515 V. I. Public Finance Auth. 6.625 10/01/99 10/15/98 (c) 534,663
1,500 V. I. Public Finance Auth. 6.800 10/01/00 ----- 1,583,265
2,000 V. I. Public Finance Auth. 7.250 10/01/18(s) 10/01/02 (b) 2,141,720
250 V. I. Public Finance Auth. 7.700 10/01/04 10/01/99 (b) 270,605
2,185 V. I. Water & Power 7.200 01/01/02 09/22/99 (c) 2,280,572
13,700 V. I. Water & Power 7.400 07/01/11(s) 01/01/00 (b)(c) 14,620,366
16,700 V. I. Water & Power 8.500 01/01/10 01/01/98 (b) 17,819,735
777 V. I. (GO/HUGO) 7.750 10/01/06(s) 10/01/99 (b)(c) 847,311
95 Watervliet Elderly Hsg. 8.000 11/15/00 05/15/97 (b) 98,107
95 Watervliet Elderly Hsg. 8.000 11/15/01 05/15/97 (b) 98,107
100 Watervliet Elderly Hsg. 8.000 11/15/02 05/15/97 (b) 103,270
45 Wayne IDA (Hauser Machine) 7.700 12/01/09 12/01/01 (d) 48,993
455 Westchester IDA (BAH) 7.250 12/01/09 08/22/04 (c) 466,632
1,000 Westchester IDA (JBFS) 6.500 12/15/02 07/14/01 (c) 1,037,850
570 Westchester IDA (JDAM) 6.250 04/01/05 01/23/02 (c) 580,773
1,000 Westchester IDA (JDAM) 6.750 04/01/16(s) 04/01/08 (b) 1,023,200
50 Yonkers IDA (Waldbaum) 9.250 03/01/98 03/01/97 (b) 51,200
---------------
Total municipal bond investments, at value (cost $655,947,818) - 99.4% 670,678,326
Other assets and liabilities (net) - 0.6% 4,321,424
---------------
Net assets - 100.0% 674,999,750
===============
</TABLE>
* Call Date, Put Date or Average Life of Sinking Fund if applicable as
detailed:
(a) Date of prerefunded call.
(b) Optional call date; corresponds to the most conservative yield
calculation.
(c) Average life because of mandatory (sinking fund) principal payments
prior to maturity.
(d) Date of mandatory put.
(e) Date of conversion.
(f) Effective maturity corresponding to variable coupon payment date.
(i) Illiquid security.
(s) Security also has mandatory sinking fund principal payments prior to
maturity and an average life which is shorter than the stated final
maturity.
(v) Variable rate security that fluctuates as a percentage of prime rate.
(+) Security will convert to a fixed coupon at a date prior to maturity.
See accompanying Notes to Financial Statements.
<PAGE>
Limited Term New York Municipal Fund - December 31, 1996
================================================================================
Portfolio Abbreviations
To simplify the listings of the Limited Term New York Municipal Fund's holdings
in the Statement of Investments, we have abbreviated the descriptions of many of
the securities per the table below:
ACLDD Adults and Children with Learning
and Developmental Disabilities
ARC Association of Retarded Citizens
BAH Beth Abraham Hospital
BHMS Brooklyn Heights Montessori School
CCM Comprehensive Care Management
CNR College of New Rochelle
Con Ed Consolidated Edison Co.
COP Certificate of Participation
CSD Central School District
DC Dominican College
ECC Erie Community College
E,E&T Ear, Eye and Throat
EPG Elmhurst Parking Garage
ERDA Energy Research and Development Authority
GAINS Growth and Income Securities
GO General Obligation
G&H Geriatric and Healthcare
HDC Housing Development Corporation
HELP Homeless Economic Loan Program
HFA Housing Finance Agency
HFC Housing Finance Corporation
H&N Hospital and Nursing
IDA Industrial Development Authority
IME Industrial Medical and Environmental
JBFS Jewish Board of Family Services
JDAM Julia Dyckman Angus Memorial
LGSC Local Government Services Corporation
LILCO Long Island Lighting Corporation
LIMO Limited Interest Muncipal Obligation
MGH Mennonite General Hospital
MTA Metropolitan Transit Authority
OPWC Ocean Park Water Corporation
PCP Pooled Capital Program
PCR Pollution Control Revenue
Res Rec Resource Recovery Facility
RSP Riverbank State Park
SCSB Schuyler Community Services Board
SONYMA State of New York Mortgage Agency
SWDA Solid Waste Development Authority
SWMA Solid Waste Management Authority
TEMEC Tourist, Educational, Medical and Environmental Control
UCP United Cerebral Palsy
UDC Urban Development Corporation
V.I. United States Virgin Islands
WHMC Wyckoff Heights Medical Center
WWH Wyandach/Wheatley Heights
The Fund had the following concentrations at December 31, 1996 (as a percentage
of total net assets):
# of % of Total
Issuers Net Assets
------- ----------
General Obligation 19 20.4%
Resource Recovery 7 15.7%
Hospital/Healthcare 44 11.3%
Housing, Single Family 27 8.3%
Housing, Multi-Family 40 7.4%
Electric Utilities 11 6.9%
Marine/Aviation Facilities 10 5.3%
Higher Education 20 4.7%
Corporate Backed 25 3.9%
Lease Rental 12 3.9%
Water Utilities 4 3.0%
NonProfit Organization 12 2.0%
Manufacturing, Non-Durable Goods 12 1.8%
Pollution Control 4 1.6%
Education 6 1.0%
Other 28 2.2%
-------
Total 99.4%
=======
================================================================================
Asset Composition Table
December 31, 1996 (Unaudited)
Percentage
Rating of Investments
- -----------------------------
AAA 2.7%
AA 12.6%
A 45.0%
BBB 35.7%
BB 0.6%
B 0.2%
CCC 0.0%
CC 0.0%
C 0.0%
Not Rated 3.2%
------------
Total 100.0%
=============
ALL bonds are current with their debt service requirements. All unrated bonds
are backed by mortgage liens and guarantees by the issuer. Bonds which are
backed by a letter of credit or by other financial institutions or agencies may
be assigned an investment grade rating by the Manager, which reflects the
quality of the guarantor, institution or agency. Unrated bonds may also be
assigned a rating when the issuer has rated bonds outstanding with comparable
credit characteristics, or when, in the opinion of the Manager, the bond itself
possesses credit characteristics which allow for rating. The unrated bonds in
the portfolio are predominantly smaller issuers which have not applied for a
bond rating. Only those unrated bonds which subsequent to purchase have not been
designated investment grade are included in the "Not Rated" category. For
further information see "Credit Quality" in the Prospectus.
<PAGE>
Limited Term New York Municipal Fund
================================================================================
Statement of Assets and Liabilities - December 31, 1996
Assets
Investments,satovaluencial Statements
(Cost $655,947,818) $670,678,326
Cash 79,389
Receivables:
Interest 12,593,061
Investments sold 2,100,539
Shares of beneficial
interest sold 933,731
Other 37,181
------------
Total assets 686,422,227
------------
Liabilities
Payables and other liabilities:
Demand note payable to bank
(interest rate 7.60% at 12/31/96) 9,000,000
Shares of beneficial interest
redeemed 2,133,730
Dividends 183,485
Trustees' fees 9,000
Other 96,262
------------
Total liabilities 11,422,477
------------
Net Assets $674,999,750
============
Composition of Net Assets
Paid-in capital $670,144,226
Undistributed net investment income 480,101
Accumulated net realized loss on
investment transactions (10,355,085)
Net unrealized appreciation
on investments 14,730,508
-------------
Net assets $674,999,750
=============
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $634,172,056 and
194,315,367 shares of beneficial interest
outstanding) $3.26
=============
Maximum offering price per share (net asset
value plus sales charge of 2.00% of offering price) $3.33
=============
Class B Shares:
Net asset value, redemption price and offering price
per share (based on net assets of $40,827,694 and
12,491,844 shares of beneficial interest outstanding) $3.27
=============
================================================================================
Statement of Operations
For the Year Ended December 31, 1996
Investment Income:
Interest $39,801,585
------------
Expenses:
Management fees 2,715,109
Distribution and service plan fees:
Class A 1,488,992
Class B 214,619
Transfer and shareholder servicing
agent fees:
Class A 285,165
Class B 15,255
Accounting service fees 193,682
Shareholder reports 142,340
Registration and filing fees 96,603
Custodian fees and expenses 89,685
Legal and auditing fees 46,425
Trustees' fees and expenses 45,534
Organizational expenses 7,083
Other 76,093
Interest 396,316
------------
Total expenses 5,812,901
Less expenses paid indirectly (12,009)
------------
Total net expenses 5,800,892
------------
Net Investment Income 34,000,693
------------
Realized and Unrealized Loss:
Net realized loss on investments (242,301)
Net change in unrealized appreciation
or depreciation on investments (2,445,222)
------------
Net realized and unrealized loss (2,687,523)
------------
Net Increase in Net Assets
Resulting From Operations $31,313,170
============
Statements of Changes in Net Assets
Year Ended December 31, 1996 1995
---- ----
Increase in Net Assets -
Operations:
Net investment income $34,000,693 $28,678,554
Net realized loss (242,301) (2,258,016)
Net change in unrealized appreciation
or depreciation (2,445,222) 22,706,855
------------- -------------
Net increase in net assets
resulting from operations 31,313,170 49,127,393
------------- -------------
Dividends and Distributions to
Shareholders:
Dividends from net investment
income:
Class A (32,233,558) (28,615,850)
------------- -------------
Class B (1,354,963) (276,083)
------------- -------------
Beneficial Interest Transactions:
Net increase in net assets resulting
from beneficial interest
transactions (Note 2):
Class A 68,975,038 51,133,814
------------- -------------
Class B 24,348,503 16,130,704
------------- -------------
Net Assets:
Total increase 91,048,190 87,499,978
Beginning of period 583,951,560 496,451,582
------------- -------------
End of period (including undistributed
net investment income of $480,101
and $23,004, respectively) $674,999,750 $583,951,560
============= =============
See accompanying Notes to Financial Statements.
<PAGE>
Limited Term New York Municipal Fund
Financial Highlights
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------------
Year ended December 31,
1996 1995 1994 1993 1992 (a)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $3.28 $3.15 $3.33 $3.18 $3.07
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income 0.17 0.18 0.16 0.17 0.18
Net realized and unrealized gain (loss) (0.02) 0.13 (0.18) 0.15 0.11
----------- ----------- ----------- ----------- -----------
Total income (loss) from investment operations 0.15 0.31 (0.02) 0.32 0.29
----------- ----------- ----------- ----------- -----------
Dividends and distributions to shareholders:
Dividends from net investment income (0.17) (0.18) (0.16) (0.17) (0.18)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions to shareholders (0.17) (0.18) (0.16) (0.17) (0.18)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $3.26 $3.28 $3.15 $3.33 $3.18
=========== =========== =========== =========== ===========
Total Return, at Net Asset Value (b) 4.82% 10.01% (0.60% 10.06% 9.45%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $634,172 $567,537 $496,452 $457,860 $150,096
Average net assets (in thousands) $606,742 $520,990 $491,038 $309,676 $72,743
Ratios to average net assets:
Net investment income 5.37% 5.44% 5.12% 4.94% 5.33%
Expenses (c) 0.89% 0.90% 0.89% 0.89% 0.83%
Expenses (excluding interest) (c) (d) 0.83% 0.84% 0.84% 0.86% 0.78%
Portfolio turnover rate (e) 24.35% 22.34% 34.58% 17.08% 59.87%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of fees waived or reimbursed by Fielding Management Company, Inc. (the
former manager), and Rochester Fund Services, Inc. (the former shareholder
servicing, accounting and pricing agent), which amounted to $0.01 per
share. Without reimbursement, the ratios would have been 5.02%, 1.14% and
1.09%, respectively.
(b) 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.
(c) Beginning in fiscal 1995, the expense ratios reflect the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not
been adjusted.
(d) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(e) 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 December 31, 1996 were
$256,486,227 and $153,521,279, respectively.
See accompanying Notes to Financial Statements.
<PAGE>
Limited Term New York Municipal Fund
Financial Highlights
Class B
-------------------------
Year Ended Year Ended
December 31, December 31,
1996 1995(a)
------------ ------------
Per Share Operating Data:
Net asset value, beginning of period $ 3.28 $ 3.21
--------- ---------
Income (loss) from investment operations:
Net investment income 0.16 0.11
Net realized and unrealized gain (loss) (0.01) 0.07
--------- ---------
Total income from investment operations 0.15 0.18
--------- ---------
Dividends and distributions to shareholders:
Dividends from net investment income (0.16) (0.11)
--------- ---------
Total dividends and distributions to shareholders (0.10) (0.11)
--------- ---------
Net asset value, end of period $ 3.27 $ 3.28
========= =========
Total Return, at Net Asset Value (b) 4.59% 5.65%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $40,828 $16,415
Average net assets (in thousands) $28,971 $8,869
Ratios to average net assets:
Net investment income 4.85% 5.21%
Expenses (d) 1.38% 0.90%
Expenses (excluding interest) (d) (c) 1.32% 0.85%
Portfolio turnover rate (f) 24.35% 22.34%
- --------------------------------------------------------------------------------
(a) For the period from May 1, 1995 (inception of offering) to December 31,
1995.
(b) 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 period of less
than one full year.
(c) Annualized.
(d) Beginning in fiscal 1995, the expense ratios reflect the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not
been adjusted.
(e) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(f) 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 December 31, 1996 were
$256,486,227 and $153,521,279 respectively.
See accompanying Notes to Financial Statements.
<PAGE>
Limited Term New York Municipal Fund
Notes to Financial Statements
December 31, 1996
Note 1. Significant Accounting Policies:
The Limited Term New York Municipal Fund (the Fund) is a series of Rochester
Portfolio Series which is registered under the Investment Company Act of 1940,
as amended, as a non-diversified, open-end management investment company. The
investment objective of the Fund is to provide shareholders with as high a level
of income exempt from federal, New York State and New York City personal income
taxes as is consistent with its investment policies and prudent investment
management. The Fund intends to invest primarily in a portfolio of investment
grade obligations with a dollar weighted average effective maturity of five
years or less.
On January 4, 1996, Rochester Capital Advisors, L.P. (RCA, L.P.), the Fund's
investment adviser, Rochester Fund Distributors, Inc. (RFD), the Fund's
principal underwriter, and Rochester Fund Services, Inc. (RFS), the Fund's
shareholder servicing, accounting and pricing agent, consummated a transaction
with OppenheimerFunds, Inc. (the Manager), which resulted in the sale to the
Manager of certain assets of RCA, L.P., RFD and RFS, including the transfer of
the investment advisory agreement and other contracts with the Fund and the use
of the name "The Rochester Funds."
The Fund offers both Class A and Class B shares. Class A shares are sold with a
front-end sales charge. Class B shares may be subject to a contingent deferred
sales charge. Both 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 a particular class and exclusive
voting rights with respect to matters affecting a single 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 and Transactions. Portfolio securities are valued at the
close of the New York Stock Exchange on each trading day. Long-term debt
securities are valued at the mean between the bid and asked price using
information available from a portfolio pricing service approved by the Board of
Trustees, dealer-supplied valuations, provided the Manager is satisfied that the
firm rendering the quotes is reliable and that the quotes reflect current value,
or analysis of various relationships between comparable securities. Securities
for which market quotations are not readily available are valued at fair value
under consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Investment transactions are accounted for on
the date the investments are purchased or sold (trade date). Cost is determined
and realized gains and losses are based upon the specific identification method
for both financial statement and federal income tax purposes. Interest income is
recorded on the accrual basis. In computing net investment income, the Fund
amortizes premiums and accretes original issue discount. For municipal bonds
purchased after April 30, 1993 and subsequently sold at a gain, market discount
is accreted at the time of sale (to the extent of the lesser of the accrued
market discount or the disposition gain) and is treated as taxable income,
rather than capital gain.
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. At December 31, 1996,
the Fund had no outstanding when-issued or forward commitments.
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. At December 31, 1996, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $10,313,000 which expires between 1999 and 2004.
<PAGE>
Distributions to Shareholders. Income dividends are declared and recorded each
day the New York Stock Exchange is open for business based on the projected net
investment income for a period, usually one month, calculated as if earned pro
rata throughout the period on a daily basis. Such dividends are paid monthly.
Distributions from net realized gains on investments, if any, are recorded on
the ex-dividend date and paid annually.
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purpose. Also, due to timing of dividend
distributions, the fiscal year in which amounts are distributed may differ from
the year that the income or realized gain (loss) was recorded by the Fund.
During the year ended December 31, 1996, the Fund adjusted the classification of
net investment income and net realized gain (loss) to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. During the year ended December 31, 1996, amounts
have been reclassified to reflect a decrease in paid-in capital of $44,925 and
an increase in undistributed net investment income of $44,925.
Deferred Organizational Expenses. The Fund was organized under the laws of
Massachusetts in September, 1991. Deferred organizational expenses in the amount
of $50,000 were amortized on a straight-line basis over a five year period
ending September, 1996.
Concentration in New York Issuers. There are certain risks arising from
geographic concentration in any state. Certain revenue or tax related events in
a state may impair the ability of certain issuers of municipal securities to pay
principal and interest on their obligations.
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
Other. 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.
Note 2. Shares of Beneficial Interest:
The Agreement and Declaration of Trust permits the Fund to issue an unlimited
number of shares of beneficial interest of each class, par value $.01 per share.
Transactions in shares of beneficial interest were as follows:
Class A:
<TABLE>
<CAPTION>
Year Ended December 31, 1996 1995
---- ----
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 46,954,523 $152,448,902 41,287,431 $133,924,167
Dividends and distributions
reinvested 6,569,019 21,305,028 5,901,142 19,071,036
Redeemed (32,312,396) (104,778,892) (31,589,856) (101,861,389)
----------- ------------- ----------- -------------
Net increase 21,211,144 $68,975,038 15,598,717 $51,133,814
=========== ============= =========== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended Period May 1-
December 31, 1996 December 31, 1995
----------------- -----------------
Class B:
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 7,835,459 $25,456,582 5,028,893 $16,226,929
Dividends and distributions
reinvested 287,435 933,386 50,215 163,547
Redeemed (630,627) (2,041,465) (79,531) (259,772)
---------- ------------ ---------- ------------
Net increase 7,492,267 $24,348,503 4,999,577 $16,130,704
========== ============ ========== ============
</TABLE>
Note 3. Portfolio Information:
During 1996, 15.36% of interest income was derived from investments in U.S.
territories which are exempt from federal, all states and New York City income
taxes.
At December 31, 1996, net unrealized appreciation on investments of $14,730,508
was composed of gross appreciation of $15,281,182, and gross depreciation of
$550,674.
Unrealized appreciation (depreciation) at December 31, 1996 based on cost of
investments for federal income tax purposes of $655,989,982 was:
Gross unrealized appreciation $15,249,800
Gross unrealized depreciation (561,456)
------------
Net unrealized appreciation $14,688,344
============
Note 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 based on an annual
rate of 0.50% of average daily net assets up to $100 million, 0.45% of average
daily net assets on the next $150 million, 0.40% of average daily net assets in
excess of $250 million but less than $2 billion, and 0.39% of average daily net
assets in excess of $2 billion. During 1996, the Fund paid $27,896 to RCA, L.P.
(the former manager) and $2,687,213 to the Manager for management and investment
advisory services.
Accounting fees paid to the Manager were in accordance with the accounting
services agreement with the Fund which provides for an annual fee of $12,000 for
the first $30 million of net assets and $9,000 for each additional $30 million
of net assets. During 1996, the Fund paid $1,980 to RFS (the former accounting
and pricing agent) and $191,702 to the Manager for accounting and pricing
services.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund. The transfer and shareholder servicing
agent fee paid by the Fund is based on an annual maintenance fee of $24.12 for
each Class A shareholder account and $26.02 for each Class B shareholder
account. During 1996, the Fund paid a total of $3,066 to RFS (the former
shareholder servicing agent), with the remainder being paid to OFS.
For the year ended December 31, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $1,623,032, of which $290,035 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 shares totaled
$498,857, of which $7,432 was paid to an affiliated broker/dealer. During the
year ended December 31, 1996, OFDI received contingent deferred sales charges of
$31,172 upon redemption of Class B shares as reimbursement for sales commissions
advanced by OFDI at the time of sale of such shares.
<PAGE>
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a
portion of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made monthly
at an annual rate that may not exceed 0.25% of the average annual net assets of
Class A shares of the Fund. OFDI uses the service fee to reimburse brokers,
dealers, banks and other financial institutions quarterly for providing personal
service and maintenance of accounts of their customers that hold Class A shares.
During the year ended December 31, 1996, OFDI paid $7,144 to an affiliated
broker/dealer as reimbursement for Class A personal service and maintenance
expenses.
The Fund has adopted a compensation type Distribution and Service Plan for Class
B shares to compensate OFDI for its services and costs in distributing Class B
shares and servicing accounts. Under the Plan, the Fund may pay OFDI an annual
asset-based sales charge of up to 0.75% per year on Class B shares, as
compensation for sales commissions paid from its own resources at the time of
sale and associated financing costs. Currently, the Board of Trustees has
limited the asset-based sales charge to 0.50% per year on Class B shares. OFDI
also receives a service fee of 0.25% per year as compensation for costs incurred
in connection with the personal service and maintenance of accounts that hold
shares of the Fund, including amounts paid to brokers, dealers, banks and other
financial institutions. The fee is computed on the average annual net assets of
Class B shares, determined as of the close of each regular business day. During
the year ended December 31, 1996, OFDI retained $171,044 as compensation for
Class B sales commissions and service fee advances, as well as financing costs.
If the Plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to OFDI for certain
expenses it incurred before the Plan was terminated. At December 31, 1996, OFDI
had incurred unreimbursed expenses of $367,902 for Class B.
Note 5. Bank Borrowings:
The Fund may borrow up to 10% of its total assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The Fund has
entered into an agreement which enables it to participate with two other
Rochester Division funds managed by the Manager in an unsecured line of credit
with a bank, which permits borrowings up to $70 million, collectively. Interest
is charged to each fund, based on its borrowings, at a rate equal to the New
York Interbank Offer Rate (NIBOR) plus 0.75%. Borrowings are payable on demand.
The Fund had borrowings of $9,000,000 outstanding at December 31, 1996. For the
year ended December 31, 1996, the average monthly loan balance was $6,351,876 at
an average interest rate of 6.163%. The maximum amount of borrowings outstanding
at any month-end was $22,440,000.
<PAGE>
APPENDIX A
INDUSTRY CLASSIFICATIONS
<TABLE>
<CAPTION>
<S> <C>
Electric Resource Recovery
Gas
Water Higher Education
Sewer Education
Telephone
Lease Rental
Adult Living Facilities
Hospital Non Profit Organization
General Obligation Highways
Special Assessment Marine/Aviation Facilities
Sales Tax
Multi Family Housing
Manufacturing, Non Durables Single Family Housing
Manufacturing, Durables
Pollution Control
</TABLE>
A-1
<PAGE>
APPENDIX B
DESCRIPTION OF MUNICIPAL SECURITIES RATINGS
Below is a description of the two highest rating categories for Short Term Debt
and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on behalf of
the Trust. The ratings descriptions are based on information supplied by the
ratings organizations to subscribers.
Short Term Debt Ratings.
Moody's Investors Service, Inc. ("Moody's"): The following rating designations
for commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are judged by Moody's to be
investment grade, and indicate the relative repayment capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by
the following characteristics: (a) leveling market positions in well-established
industries; (b) high rates of return on funds employed; (c) conservative
capitalization structures with moderate reliance on debt and ample asset
protection; (d) broad margins in earning coverage of fixed financial charges and
high internal cash generation; and (e) well established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced by many
of the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
Moody's ratings for state and municipal short-term obligations are designated
"Moody's Investment Grade" ("MIG"). Short-term notes which have demand features
may also be designated as "VMIG".
These rating categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by established cash
flows, superior liquidity support or demonstrated broadbased access to the
market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although not so
large as in the preceding group.
Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of no more
than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
A-2: Satisfactory capacity for timely payment. However, the relative
degree of safety is not as high as for issues designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
B-1
<PAGE>
SP-1: Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand
or double feature as part of their provisions. The first rating addresses the
likelihood of repayment of principal and interest as due, and the second rating
addresses only the demand feature. With short-term demand debt, S&P's note
rating symbols are used with the commercial paper symbols (for example, "SP-
1+/A-1+").
Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term
ratings to debt obligations that are payable on demand or have original
maturities of generally up to three years, including commercial paper,
certificates of deposit, medium-term notes, and municipal and investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree of assurance for
timely payment.
F-1: Very strong credit quality; assurance of timely payment is only slightly
less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for timely payment,
but the margin of safety is not as great as for issues assigned "F-1+" or "F-1"
ratings.
Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial
paper (defined by Duff & Phelps as obligations with maturities, when issued, of
under one year), asset-backed commercial paper, and certificates of deposit (the
ratings cover all obligations of the institution with maturities, when issued,
of under one year, including bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of funds, is
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors.
Risk factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk factors are very
small.
Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
IBCA Limited or its affiliate IBCA Inc. ("IBCA"): 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.
B-2
<PAGE>
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.
Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to
commercial paper, certificates of deposit, unsecured notes, and other
securities having a maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety regarding timely
repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1".
Long Term Debt Ratings. These ratings are relevant for securities purchased by
the Trust with a remaining maturity of 397 days or less, or for rating issuers
of short-term obligations.
Moody's: Bonds (including municipal bonds) are rated as follows:
Aaa: Judged to be the best quality. They carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin, and principal is
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
positions of such issues.
Aa: Judged to be of high quality by all standards. Together with the "Aaa" group
they comprise what are generally known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuations of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks
appear somewhat larger than in "Aaa" securities.
Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the security ranks in the higher
end of its generic rating category; the modifier "2" indicates a mid-range
ranking; and the modifier "3" indicates that the issue ranks in the lower end of
its generic rating category.
Standard & Poor's: Bonds (including municipal bonds) are rated as follows:
AAA: The highest rating assigned by S&P. Capacity to pay interest and
repay principal is extremely strong.
AA: A strong capacity to pay interest and repay principal and differ
from "AAA" rated issues only in small degree.
Fitch:
AAA: Considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA".
B-3
<PAGE>
Plus (+) and minus (-) signs are used in the "AA" category to indicate the
relative position of a credit within that category.
Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated "F-1+".
Duff & Phelps:
AAA: The highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
AA: High credit quality. Protection factors are strong. Risk is modest
but may vary slightly from time to time because of economic conditions. Plus
(+) and minus (-) signs are used in the "AA" category to indicate the relative
position of a credit within that category.
IBCA: Long-term obligations (with maturities of more than 12 months) are rated
as follows:
AAA: The lowest expectation of investment risk. Capacity for timely
repayment of principal and interest is substantial such that adverse changes
in business, economic, or financial conditions are unlikely to increase
investment risk significantly.
AA: A very low expectation for investment risk. Capacity for timely
repayment of principal and interest is substantial. Adverse changes in
business, economic, or financial conditions may increase investment risk albeit
not very significantly.
A plus (+) or minus (-) sign may be appended to a long term rating to denote
relative status within a rating category.
TBW: TBW issues the following ratings for companies. These ratings assess the
likelihood of receiving payment of principal and interest on a timely basis and
incorporate TBW's opinion as to the vulnerability of the company to adverse
developments, which may impact the market's perception of the company, thereby
affecting the marketability of its securities.
A: Possesses an exceptionally strong balance sheet and earnings record,
translating into an excellent reputation and unquestioned access to its natural
money markets. If weakness or vulnerability exists in any aspect of the
company's business, it is entirely mitigated by the strengths of the
organization.
A/B: The company is financially very solid with a favorable track record and no
readily apparent weakness. Its overall risk profile, while low, is not quite as
favorable as for companies in the highest rating category.
B-4
<PAGE>
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Price Waterhouse LLP
1100 Bausch & Lomb Place
Rochester, NY 14604-2705
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036
A-5
<PAGE>
ROCHESTER PORTFOLIO SERIES
LIMITED TERM NEW YORK MUNICIPAL FUND
PART C
Other Information
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements:
(1) Financial Highlights (see Part A): Filed
herewith
(2) Report of Independent Accountants (see Part B):
Filed herewith
(3) Portfolio 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) Amended and Restated Declaration of Trust as filed
with the Common of Massachusetts on February 8, 1995,
as amended on November 7, 1995 - filed with
Registrant's Post Effective Amendment No. 7 filed
January 11, 1996 - incorporated by reference
(2) Bylaws - filed with Registrant's initial
Registration Statement filed July 1, 1991 -
C-1
<PAGE>
incorporated by reference
(3) Not applicable
(4) (i) Specimen Share Certificate representing Class A
Shares of Limited Term New York Municipal Fund, a
portfolio of the Registrant - Filed herewith
(ii) Specimen Share Certificate representing Class
B Shares of Limited Term New York Municipal Fund, a
portfolio of the Registrant - Filed herewith
(iii) Specimen Share Certificate representing Class
C Shares of Limited Term New York Municipal Fund, a
portfolio of the Registrant - Filed herewith
(iv) Specimen Share Certificate representing Class
D Shares of Limited Term New York Municipal Fund, a
portfolio of the Registrant - Filed herewith
(5) Investment Advisory Agreement dated January 4, 1996
with Oppenheimer Management Corporation - filed
with Registrant's Post Effective Amendment No. 7
filed January 11, 1996 - incorporated by reference
(6) (a) General Distributor's Agreement dated January
4, 1996 with Oppenheimer Funds Distributor, Inc. -
filed with Registrant's Post Effective Amendment
No. 7 filed January 11, 1996 - incorporated by
reference
(b) Form of Oppenheimer Funds Distributor Inc.
Dealer Agreement - Filed with Post-Effective
Amendment No. 14 of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850) filed September 30, 1994
- incorporated by reference
(c) 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) filed September 30, 1994
- incorporated by reference
(d) Form of Oppenheimer Funds Distributor Inc.
Agency Agreement - Filed with Post-Effective
C-2
<PAGE>
Amendment No. 14 of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850) filed September 30, 1994
- incorporated by reference
(7) Not Applicable
(8) Custodian Agreement dated July 5, 1996 with
Citibank, N.A.- Filed herewith
(9) Service Contract dated March 8, 1996 with
OppenheimerFunds Services - Filed herewith
(10) Consent of Counsel - incorporated by reference to
the Registrant's Rule 24f-2 Notice filed on
February 27, 1997
(11) Independent Auditor's Consent - Filed herewith
(12) Not applicable
(13) (i)Form of Investment Letter regarding Class B
shares from OppenheimerFunds, Inc.- Filed herewith
(ii)Form of Investment Letter regarding Class C
shares from OppenheimerFunds, Inc.- Filed herewith
(14) Not applicable
(15) (i) Form of Service Plan and Agreement for Class A
Shares with Oppenheimer Funds Distributor, Inc.
Dated January 4, 1996 for Class A shares - Filed
with Registrant's Post Effective Amendment No. 7
filed January 11, 1996 - Incorporated by reference
(ii) Form of Distribution and Service Plan and
Agreement for Class B Shares dated as of May 1, 1997
under Rule 12b-1 of the Investment Company Act of
1940 - Filed herewith
(iii) Form of Distribution and Service Plan and
Agreement for Class C Shares dated as of May 1, 1997
under Rule 12b-1 of the Investment Company Act of
1940 - Filed herewith
(iv) Form of Distribution and Service Plan and
C-3
<PAGE>
Agreement for Class D Shares dated as of May 1, 1997
under Rule 12b-1 of the Investment Company Act of
1940 - Filed herewith
(16) Performance Data Computation Schedule - Filed
herewith
(17) (a) Financial Data Schedule for Class A Shares -
Filed herewith
(b) Financial Data Schedule for Class D Shares -
Filed herewith
(18) Oppenheimer Fund Multiple Class Plan under Rule
18f-3 dated January 5, 1996 - filed with
Registrant's Post Effective Amendment No. 7 filed
January 11, 1996 - incorporated by reference
--- Powers of Attorney - filed with Registrant's Post
Effective Amendment No. 7 filed January 11, 1996 -
incorporated by reference
Item 25. Persons Controlled by or under Common Control with
- -------- ---------------------------------------------------
Registrant
- ----------
The Board of Trustees of the Registrant is identical to the
Boards of Trustees of Rochester Fund Municipals and Bond Fund
Series - Oppenheimer Bond Fund for Growth (collectively "The
Rochester Funds").
Item 26. Number of Holders of Securities
- -------- -------------------------------
Number of Record
Holders as of
Title of Class February 25, 1997
-------------- -----------------
Shares of beneficial 11,874
interest, Class A
Shares of beneficial
interest, Class B -0-
C-4
<PAGE>
Shares of beneficial
interest, Class C -0-
Shares of beneficial 1,021
interest, Class D
Item 27. Indemnification
- -------- ---------------
Registrant's Amended and Restated Agreement and Declaration of Trust
(the "Declaration of Trust"), which is referenced herein, (see Exhibit 1),
contains certain provisions relating to the indemnification of Registrant's
officers and trustees. Section 6.4 of Registrant's Declaration of Trust provides
that Registrant shall indemnify (from the assets of the Fund or Funds in
question) each of its trustees and officers (including persons who served at
Registrant's request as directors, officers or trustees of another organization
in which Registrant has any interest as a shareholder, creditor or otherwise
hereinafter referred to as a "Covered Person") against all liabilities,
including but not limited to, amounts paid for satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered Person in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a trustee or
officer, director or trustee, except with respect to any matter as to which it
has been determined in one of the manners described below, that such Covered
Person (i) did not act in good faith in the reasonable belief that such Covered
Person's action was in or not opposed to the best interest of Registrant or (ii)
had acted with willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct described in (i) and (ii) being
referred to hereafter as "Disabling Conduct".
Section 6.4 provides that a determination that the Covered Conduct may
be made by (i) a final decision on the merits by a court or other body before
whom the proceeding was brought that the person to be indemnified was not liable
by reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based
C-5
<PAGE>
upon a review of the facts, that the indemnity was not liable by reason of
Disabling Conduct by (a) a vote of a majority of a quorum of trustees who are
neither "interested persons" of Registrant as defined in Section 2(a)(19) of the
1940 Act nor parties to the proceeding, or (b) an independent legal counsel in a
written opinion.
In addition, Section 6.4 provides that expenses, including accountants'
and counsel fees so incurred by any such Covered Person (but excluding amounts
paid in satisfaction of judgments, in compromise or as fines or penalties), may
be paid from time to time in advance of the final disposition of any such
action, suit or proceeding, provided that the Covered Person shall have
undertaken to repay the amounts so paid to the Sub-trust in question if it is
ultimately determined that indemnification of such expenses is not authorized
under Article 6 and (i) the Covered Person shall have provided security for such
undertaking, (ii) Registrant shall be insured against losses arising by reason
of any lawful advances, or (iii) a majority of a quorum of disinterested
trustees who are not a party to the proceeding, by an independent legal counsel
in a written opinion, based upon a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the Covered
Person ultimately will be found entitled to indemnification.
Section 6.1 of Registrant's Agreement and Declaration of Trust
provides, among other things, that nothing in the Agreement and Declaration of
Trust shall protect any trustee or officer against any liability to Registrant
or the shareholders to which such trustee or officer would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of trustee or such
officer.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,
C-6
<PAGE>
officer or controlling person in connection with the securities being
registered, the 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 Act 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.
(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.
<TABLE>
<CAPTION>
Name & Current Position Other Business and Connections with
OppenheimerFunds, Inc. During the Past Two Years
- --------------------------- -------------------------------
<S> <C>
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; 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
C-7
<PAGE>
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.
Ellen Batt,
Assistant Vice President None
Kathleen Beichert,
Assistant Vice President Formerly employed by Smith Barney, Inc.
David Bernard,
Vice President Previously a Regional Sales Director
for Retirement Plan Services at Charles
Schwab & Co., Inc.
Rajeev Bhaman,
Assistant Vice President Formerly Vice President of Asian
Equities for Barclays de Zoete Wedd,
Inc.
Robert J. Bishop,
Vice President Assistant Treasurer of the Oppenheimer
Funds (listed below); previously a Fund
Controller for OppenheimerFunds, Inc.
(the "Manager").
George Bowen,
Senior Vice President & Treasurer Treasurer of the New York-based
Oppenheimer Funds; Vice President,
Assistant Secretary and Treasurer of
C-8
<PAGE>
the
Denver-based
Oppenheimer
Funds. Vice
President and
Treasurer of
OppenheimerFunds
Distributor,
Inc. (the
"Distributor")
and
HarbourView
Asset
Management
Corporation
("HarbourView"),
an investment
adviser
subsidiary of
the Manager;
Senior Vice
President,
Treasurer,
Assistant
Secretary and
a director of
Centennial
Asset
Management
Corporation
("Centennial"),
an investment
adviser
subsidiary of
the Manager;
Vice
President,
Treasurer and
Secretary of
Shareholder
Services, Inc.
("SSI") and
Shareholder
Financial
Services, Inc.
("SFSI"),
transfer agent
subsidiaries
of the
Manager;
Director,
Treasurer and
Chief
Executive
Officer of
MultiSource
Services,
Inc.; Vice
President and
Treasurer of
Oppenheimer
Real Asset
Management,
Inc.;
President,
Treasurer and
Director of
Centennial
Capital
Corporation;
Vice President
and Treasurer
of Main Street
Advisers.
Scott Brooks,
Assistant Vice President None.
Susan Burton,
Assistant Vice President Previously a Director of Educational
Services for H.D. Vest Investment
Securities, Inc.
Michael A. Carbuto,
Vice President An
officer and/or
portfolio
manager of
certain
Oppenheimer
funds; Vice
President of
Centennial.
Ruxandra Chivu,
Assistant Vice President None.
O. Leonard Darling,
Executive Vice President Formerly Co-Director of Fixed Income
for State Street Research & Management
Co.
C-9
<PAGE>
Robert A. Densen,
Senior Vice President None.
Sheri Devereux,
Assistant Vice President None.
Robert Doll, Jr.,
Executive Vice President and
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 Secretary of the New York-based
Oppenheimer Funds; Vice President and
Secretary of the Denver-based
Oppenheimer Funds; Secretary of the
Oppenheimer Quest and Oppenheimer
Rochester Funds; Executive Vice
President, Director and General Counsel
of the Distributor; President and a
Director of Centennial; Chief Legal
Officer and a Director of MultiSource
Services, Inc.; President and a
Director of Oppenheimer Real Asset
Management, Inc.; Executive Vice
President, General Counsel and Director
of SFSI and SSI; formerly Senior Vice
President and Associate General Counsel
of the Manager and the Distributor.
George Evans,
Vice President An
officer and/or
portfolio
manager of
certain
Oppenheimer
funds.
Scott Farrar,
Vice President Assistant Treasurer of the New York-
based and Denver-based Oppenheimer
funds.
C-10
<PAGE>
Leslie A. Falconio,
Assistant Vice President None.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of
OppenheimerFunds Distributor, Inc.;
Secretary of HarbourView Asset
Management Corporation, MultiSource
Services, Inc. and Centennial Asset
Management Corporation; 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.
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.
John Fortuna,
Vice President None.
Patricia Foster,
Vice President Formerly she held the following
positions: An officer of certain
Oppenheimer funds; Secretary and
General Counsel of Rochester Capital
Advisors, L.P. and Secretary of
Rochester Tax Managed Fund, Inc.
Jennifer Foxson,
Assistant Vice President None.
C-11
<PAGE>
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds; Vice President and
Counsel of OAC; formerly he held the
following positions: Vice President and
a director of HarbourView and
Centennial, a director of SFSI and SSI,
an officer of other Oppenheimer Funds.
Linda Gardner,
Assistant Vice President None.
Jill Glazerman,
Assistant Vice President None.
Ginger Gonzalez,
Vice President, Director of
Marketing Communications Formerly 1st Vice President / Director
of Graphic and Print Communications for
Shearson Lehman Brothers.
Mildred Gottlieb,
Assistant Vice President Formerly served as a Strategy
Consultant for the Private Client
Division of Merrill Lynch.
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.
Glenna Hale,
Director of Investor Marketing Formerly Vice President (1994-1997) of
Retirement Plans Services for
OppenheimerFunds Services.
C-12
<PAGE>
Thomas B. Hayes,
Assistant Vice President None.
Barbara Hennigar,
Executive Vice President and
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,
Assistant Vice President None.
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President None.
Jane Ingalls,
Assistant Vice President Formerly a Senior Associate with
Robinson, Lake/Sawyer Miller.
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.
C-13
<PAGE>
Heidi Kagan,
Assistant Vice President None.
Thomas W. Keffer,
Vice President Formerly Senior Managing Director of
Van Eck Global.
Avram Kornberg,
Vice President Formerly a Vice President with Bankers
Trust.
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,
Assistant 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 of
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March, 1996 he
was the senior bond portfolio manager
for Panorama Series Fund, Inc., other
mutual funds and pension accounts
managed by G.R. Phelps; was also
responsible for managing the public
fixed-income securities department at
Connecticut Mutual Life Insurance Co.
C-14
<PAGE>
Mitchell J. Lindauer,
Vice President None.
David Mabry,
Assistant Vice President None.
Loretta McCarthy,
Executive Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director President, Director and Trustee of the
New York-based and the Denver-based
Oppenheimer funds; President and a
Director of OAC, HarbourView and
Oppenheimer Partnership Holdings, Inc.;
Director of ORAMI; Chairman and
Director of SSI; a Director of
Oppenheimer Real Asset Management, Inc.
Timothy Martin,
Assistant Vice President Formerly Vice President, Mortgage
Trading, at S.N. Phelps & Co.,Salomon
Brothers, and Kidder Peabody.
Sally Marzouk,
Vice President None.
Michelle McCann,
Assistant Vice President Formerly Vice President, Quest for
Value Distributors, Oppenheimer Capital
Corporation.
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 with Phoenix
Securities Group.
Denis R. Molleur,
Vice President None.
C-15
<PAGE>
Linda Moore,
Vice President Formerly Marketing Manager (July, 1995
- November, 1996) for Chase Investment
Services Corp.
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.
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.
Tilghman G. Pitts III,
Executive Vice President Chairman and Director of the
Distributor.
Jane Putnam,
Vice President An
officer and/or
portfolio
manager of
certain
Oppenheimer
funds.
Formerly
Senior
Investment
Officer and
Portfolio
Manager with
Chemical Bank.
Russell Read,
Vice President Consultant for Prudential Insurance on
behalf of the General Motors Pension
Plan.
C-16
<PAGE>
Thomas Reedy,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly a
Securities Analyst for the Manager.
David Robertson,
Vice President None.
Adam Rochlin,
Vice President Formerly a Product Manager for
Metropolitan Life Insurance Company.
Michael S. Rosen
Vice President; President:
Rochester Division An officer and/or portfolio manager of
certain Oppenheimer funds. Formerly
Vice President of RFS, President and
Director of RFD, Vice President and
Director of FMC, Vice President and
director of RCAI, General Partner of
RCA, an officer and/or portfolio
manager of certain Oppenheimer funds.
David Rosenberg,
Vice President An
officer and/or
portfolio
manager of
certain
Oppenheimer
funds.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly
Vice President and Portfolio
Manager/Security Analyst for
Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Assistant Vice President Formerly Vice President of Dollar Dry
Dock Bank.
James Ruff,
Executive Vice President None.
Valerie Sanders,
Vice President None.
Ellen Schoenfeld,
C-17
<PAGE>
Assistant Vice President None.
Stephanie Seminara,
Vice President Formerly Vice President of Citicorp
Investment Services.
Diane Sobin,
Vice President An
officer and/or
portfolio
manager of
certain
Oppenheimer
funds;
formerly a
Vice President
and Senior
Portfolio
Manager for
Dean Witter
InterCapital,
Inc.
Richard A. Soper, None.
Assistant Vice President
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.
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 he
C-18
<PAGE>
was 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 Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund, Oppenheimer
Global Emerging Growth Fund and
Oppenheimer Enterprise Fund. 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 A. 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.
C-19
<PAGE>
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 he
was 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.
Robert G. Zack,
Senior Vice President and
Assistant Secretary
Associate
General
Counsel of the
Manager;
Assistant
Secretary of
the
Oppenheimer
Funds;
Assistant
Secretary of
SSI, SFSI; an
officer of
other
Oppenheimer
Funds.
Arthur J. Zimmer,
Vice President An
officer and/or
portfolio
manager of
certain
Oppenheimer
funds; Vice
President of
Centennial.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer Funds,
the Denver-based Oppenheimer Funds, and the Quest/Rochester Funds,
set forth below:
C-20
<PAGE>
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
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
Daily Cash Accumulation Fund, Inc.
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 Strategic Income & Growth Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund,
Inc.
C-21
<PAGE>
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Quest/Rochester Funds
- ---------------------------------
Limited Term New York Municipal Fund
Oppenheimer Bond Fund For Growth
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer Funds, Quest funds, OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management Corp., Oppenheimer Partnership
Holdings, Inc., and Oppenheimer Acquisition Corp. is Two World
Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp., and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood,
Colorado 80112.
The address of MultiSource Services, Inc. is 1700 Lincoln
Street, Denver, Colorado 80203.
The address of Oppenheimer Bond Fund For Growth, Rochester
Fund Municipals and Limited Term New York Municipal Fund is 350
Linden Oaks, Rochester, New York 14625-2807.
Item 29. Principal Underwriter
- -------- ---------------------
(a) OppenheimerFunds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the
other registered open-end investment companies for which
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:
C-22
<PAGE>
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Vice President and
Treasurer of the
NY-based
Oppenheimer funds
/Vice President,
Secretary and
Treasurer of the
Denver-based
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* Senior Vice President - None
Director - Financial
Institution Div.
Robert Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Bill Coughlin Vice President None
3425 1/2 Irving Avenue So.
Minneapolis, MN 55408
Mary Crooks+ Senior Vice President None
E. Drew Devereaux ++ Assistant Vice President None
C-23
<PAGE>
Andrew John Donohue* Executive Vice Secretary of
President, General the New York-
Counsel and Director based Oppenheimer
funds/Vice
President of the
Denver-based
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
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding++ Vice President; Chairman:
Rochester Division None
Reed F. Finley Vice President - None
320 E. Maple, Ste. 254 Financial Institution Div.
Birmingham, MI 48009
Wendy Fishler* Vice President - None
Financial Institution Div.
Ronald R. Foster Senior Vice President None
139 Avant Lane
Cincinatti, OH 45249
Patricia Gadecki Vice President None
3906 Americana Drive
Tampa, FL 3334
C-24
<PAGE>
Luiggino Galletto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Mark D. Johnson Vice President None
7512 Cromwell Dr. Apt 1
Clayton, MO 63105
Michael Keogh* Vice President None
Richard Klein Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409
Ilene Kutno* Vice President - None
Director - Regional Sales
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
C-25
<PAGE>
John McDonough Vice President None
P.O. Box 760
50 Riverview Road
New Castle, NH 03854
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Wendy Murray Vice President None
114-B Larchmont Acres West
Larchmont, NY 10538
Joseph Norton Vice President None
2518 Fillmore Street
Apt. 1
San Francisco, CA 94115
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Kevin Parchinski Vice President None
1105 Harney St., #310
Omaha, NE 68102
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
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
C-26
<PAGE>
Bill Presutti Vice President None
1777 Larimer St. #807
Denver, CO 80202
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.,
Director -
Key Accounts
Minnie Ra Vice President - None
0895 Thirty-First Ave. Financial Institution Div.
Apt. 4
San Francisco, CA 94121
Michael Raso Vice President None
30 Hommocks Road
Apt. 30
Larchmont, NY 10538
John C. Reinhardt ++ Vice President None
Ian Robertson Vice President None
4204 Summit Way
Marietta, GA 30066
Michael S. Rosen++ Vice President, President:
Rochester Division None
Kenneth Rosenson Vice President None
3802 Knickerbocker Place
Apt. 3D
Indianapolis, IN 46240
James Ruff* President None
Timothy Schoeffler Vice President None
1717 Fox Hall Road
Washington, DC 20007
Michael Sciortino Vice President None
3114 Hickory Run
Sugarland, TX 77479
C-27
<PAGE>
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker ++ Vice President None
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
David G. Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
</TABLE>
* Two World Trade Center, New York, NY 10048-0203
+ 6803 South Tuscon Way, Englewood, CO 80112
++ 350 Linden Oaks, Rochester, NY 14625-2807 (the "Rochester
Division")
(c) Not applicable.
Item 30. Location of Accounts and Records
- -------- --------------------------------
All accounts, books or other documents required to be maintained by
Section 31(a) of the Investment Company Act and the General Rules and
Regulations promulgated thereunder, are in possession of OppenheimerFunds, Inc.
at its offices at 6803 South Tucson Way, Englewood, Colorado 80112, except that
records with regard to items covered by Registrant's Custodian Agreement, are
C-28
<PAGE>
maintained by, or under agreement with, its custodian, Citibank, N.A., 399 Park
Avenue, New York, New York 10043.
Item 31. Management Services
- -------- -------------------
There are no management-related service contracts not discussed in
Parts A and B of this Form under which services are provided to the Registrant
and, therefore, this Item 31 is not applicable.
Item 32. Undertakings
- -------- ------------
(a) Not applicable.
(b) Not applicable.
C-29
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant 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 28th day of February, 1997.
ROCHESTER PORTFOLIO SERIES
LIMITED TERM NEW YORK MUNICIPAL FUND
/s/ Bridget A. Macaskill
------------------------------*
By: 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:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Bridget A. Macaskill Chairman of the Board,
- ------------------------* President (Principal February 28, 1997
Bridget A. Macaskill Executive Officer) and
Trustee
/s/ George C. Bowen
- ------------------------* Treasurer (Principal February 28, 1997
George C. Bowen Financial and Accounting
Officer)
/s/ John Cannon
- -------------------------* Trustee February 28, 1997
John Cannon
/s/ Paul Y. Clinton
- -------------------------* Trustee February 28, 1997
Paul Y. Clinton
C-30
<PAGE>
/s/ Thomas W. Courtney
- --------------------------* Trustee February 28, 1997
Thomas W. Courtney
/s/ Lacy B. Herrmann
- --------------------------* Trustee February 28, 1997
Lacy B. Herrmann
/s/ George Loft
- -------------------------* Trustee February 28, 1997
George Loft
*By: /s/ Robert G. Zack
----------------------------------
Robert G. Zack, Attorney-in-Fact
</TABLE>
C-31
<PAGE>
FORM N-1A
ROCHESTER PORTFOLIO SERIES
LIMITED TERM NEW YORK MUNICIPAL FUND
EXHIBIT INDEX
<TABLE>
<CAPTION>
Item No. Description
- -------- -----------
<S> <C>
24(b)(4)(i) Specimen Stock Certificate for Class A shares
24(b)(4)(ii) Specimen Stock Certificate for Class B shares
24(b)(4)(iii) Specimen Stock Certificate for Class C shares
24(b)(4)(iv) Specimen Stock Certificate for Class D shares
24(b)(8) Custodian Agreement dated July 5, 1996 with
Citibank, N.A.
24(b)(9) Service Contract dated March 8, 1996 with
OppenheimerFunds Services
24(b)(11) Independent Auditor's Consent
24(b)(13)(i) Form of Investment Letter regarding Class B
shares from OppenheimerFunds, Inc.
24(b)(13)(ii) Form of Investment Letter regarding Class C
shares from OppenheimerFunds, Inc.
24(b)(15)(ii) Form of Distribution and Service Plan and
Agreement for Class B Shares dated as of May
1, 1997
24(b)(15)(iii) Form of Distribution and Service Plan and
Agreement for Class C Shares dated as of May
1, 1997
24(b)(15)(iv) Form of Distribution and Service Plan and
Agreement for Class D Shares dated as of May
1, 1997
C-32
<PAGE>
24(b)(16) Performance Data Computation Schedule
24(b)(17)(i) Financial Data Schedule for Class A Shares
24(b)(17)(ii) Financial Data Schedule for Class D Shares
</TABLE>
C-33
Exhibit 24(b)(4)(i)
Rochester Portfolio Series
Class A Share Certificate (8-1/2" x 11")
I.FRONT OF CERTIFICATE (All text and other matter lies within decorative border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS A SHARES;
(centered Rochester Portfolio Series - Limited Term New York Municipal Fund
below boxes)
A MASSACHUSETTS BUSINESS TRUST
(at left)THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP 771740107
(at left) is the owner of
(centered) FULLY PAID CLASS A SHARES OF
BENEFICIAL INTEREST OF
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
(hereinafter called the "Fund"), transferable only on
the books of the Fund by the holder hereof in person
or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate
and the shares represented hereby are issued and
shall be held subject to all of the provisions of the
Declaration of Trust of the Fund to all of which the
holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer
Agent.
WITNESS the facsimile seal of the Fund and the
signatures of its duly authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
TREASURER PRESIDENT
<PAGE>
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
SEAL
1991
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMERFUNDS SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS
NOT TC - as tenants with rights of survivorship and not as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
- -------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- -------------------------------------------------------------------------------
________________________________________________ Class A Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
-----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(ii)
Rochester Portfolio Series
Class B Share Certificate (8-1/2" x 11")
I.FRONT OF CERTIFICATE (All text and other matter lies within decorative border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS B SHARES;
(centered Rochester Portfolio Series - Limited Term New York Municipal Fund
below boxes)
A MASSACHUSETTS BUSINESS TRUST
(at left)THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP
(at left) is the owner of
(centered) FULLY PAID CLASS B SHARES OF
BENEFICIAL INTEREST OF
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
(hereinafter called the "Fund"), transferable only on
the books of the Fund by the holder hereof in person
or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate
and the shares represented hereby are issued and
shall be held subject to all of the provisions of the
Declaration of Trust of the Fund to all of which the
holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer
Agent.
WITNESS the facsimile seal of the Fund and the
signatures of its duly authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
TREASURER PRESIDENT
<PAGE>
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
SEAL
1991
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMERFUNDS SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS
NOT TC - as tenants with rights of survivorship and not as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
- ------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- ------------------------------------------------------------------------------
________________________________________________ Class B Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
-----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(iii)
Rochester Portfolio Series
Class C Share Certificate (8-1/2" x 11")
I.FRONT OF CERTIFICATE (All text and other matter lies within decorative border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS C SHARES;
(centered Rochester Portfolio Series - Limited Term New York Municipal Fund
below boxes)
A MASSACHUSETTS BUSINESS TRUST
(at left)THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP
(at left) is the owner of
(centered) FULLY PAID CLASS C SHARES OF
BENEFICIAL INTEREST OF
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
(hereinafter called the "Fund"), transferable only on
the books of the Fund by the holder hereof in person
or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate
and the shares represented hereby are issued and
shall be held subject to all of the provisions of the
Declaration of Trust of the Fund to all of which the
holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer
Agent.
WITNESS the facsimile seal of the Fund and the
signatures of its duly authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
TREASURER PRESIDENT
<PAGE>
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
SEAL
1991
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMERFUNDS SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS
NOT TC - as tenants with rights of survivorship and not as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
- ------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- ------------------------------------------------------------------------------
________________________________________________ Class C Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
-----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(iv)
Rochester Portfolio Series
Class D Share Certificate (8-1/2" x 11")
I.FRONT OF CERTIFICATE (All text and other matter lies within decorative border)
(upper left) box with heading: NUMBER (OF SHARES)
(upper right) box with heading: CLASS D SHARES;
(centered Rochester Portfolio Series - Limited Term New York Municipal Fund
below boxes)
A MASSACHUSETTS BUSINESS TRUST
(at left)THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
box with number
CUSIP
(at left) is the owner of
(centered) FULLY PAID CLASS D SHARES OF
BENEFICIAL INTEREST OF
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
(hereinafter called the "Fund"), transferable only on
the books of the Fund by the holder hereof in person
or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate
and the shares represented hereby are issued and
shall be held subject to all of the provisions of the
Declaration of Trust of the Fund to all of which the
holder by acceptance hereof assents. This certificate
is not valid until countersigned by the Transfer
Agent.
WITNESS the facsimile seal of the Fund and the
signatures of its duly authorized officers.
(at left (at right
of seal) of seal)
(signature) (signature)
Dated:
----------------------- -------------------
TREASURER PRESIDENT
<PAGE>
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND
SEAL
1991
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMERFUNDS SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (CO) Transfer Agent
By ____________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS
NOT TC - as tenants with rights of survivorship and not as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA _____________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................. hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
<PAGE>
- ------------------------------------------------------------------------------
(Please print or type name and address of assignee)
- ------------------------------------------------------------------------------
________________________________________________ Class D Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________________ Attorney to transfer the said
shares on the books of the within named Fund with full power of substitution in
the premises.
Dated: ______________________
Signed: __________________________
-----------------------------------
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: ____________________________
Signature of Officer/Title
(text printed
vertically to right NOTICE: The signature(s) to this assignment must
paragraph) correspond with the name(s) as written upon the face of
the certificate in every particular without
alteration or enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature guarantee) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this logotype
watermark:
-----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(8)
CUSTODIAN AGREEMENT
I. DESIGNATION OF CUSTODIAN
ROCHESTER PORTFOLIO SERIES, on behalf of LIMITED TERM NEW YORK
MUNICIPAL FUND (the "Fund"), an open-end management investment company organized
as a Massachusetts business trust having an office at 350 Linden Oaks,
Rochester, New York 14625, hereby designates Citibank, N.A. (the "Bank"), a
National Banking Corporation incorporated under the laws of the United States of
America and having an office at 399 Park Avenue, New York, NY 10043, as
Custodian of the Property (as defined in Section III) of the Fund. By its
acceptance, the Bank agrees to serve as such Custodian upon the terms and
conditions set forth in this Agreement.
II. DELIVERY OF DOCUMENTS
(a) Documents delivered. The Fund delivers to the Bank
herewith the following documents:
(i) Resolutions authorizing the appointment of the
Bank as the custodian of the Fund and the
execution by the Fund of this Agreement;
(ii) copies, certified by the appropriate officer or
officers, of the charter and the by-laws of the
Fund; and
(iii) incumbency and signature certificates identifying
and containing the signatures of the officers of
the Fund and/or other signatories authorized to
sign Instructions (as defined below) on behalf of
the Fund, specifying the number of signatures
required for Instructions and identifying the
trustees and the other officers, if any, of the
Fund.
(b) Changes. In case of any change or changes affecting any
of the documents described in this Section II, the Fund shall
deliver new documents to the Bank, to the extent necessary to
reflect such change or changes. Unless and until such new
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documents are delivered and an authorized signatory of the Bank has issued a
receipt for the delivery thereof, the Bank shall be under no obligation to act
(or omit to act), in accordance with any such change, nor shall the Bank be
liable for failure so to act (or omit to act), but the Bank shall act in
accordance with the documents which such new documents are to replace.
(c) Additional information. The Fund shall furnish to the Bank any
additional information and documentation relating to the Fund and the Fund's
management company (if any) which the Bank may reasonably request.
(d) "Resolutions" defined. The term "Resolutions," as used in this
Agreement, means (i) if the trustees of the Fund are authorized to transact
business of the Fund by signing an instrument setting forth such business,
resolutions signed by the number of trustees of the Fund so authorized and (ii)
in all other cases, copies of resolutions of the trustees of the Fund, certified
by the appropriate officer or officers of the Fund.
(e) "Depository" defined. The term "Depository" as used in this
Agreement means any "system" or "person" contemplated by Section 17 (f) of the
Investment Company Act of 1940 in which the Bank may, under that Section and any
rules, regulations or orders thereunder, deposit all or part of the Fund's
securities with the consent of the Fund, and to which the Fund has consented.
(f) "Receipt" of payment defined. Whenever this Agreement contemplates
receipt of payment by the Bank, such receipt shall mean receipt by the Bank of
(i) cash or check of a national securities exchange certified or issued by a
bank (which term, as used in this Agreement, shall include a trust company and a
Federal Reserve Bank), or a Depository; or (ii) written or telegraphic advice
from a bank, registered clearing agency or a Depository that funds have or will
be credited to the account of the Fund or the Bank at one or more of the
foregoing; or (iii) a bank wire from a correspondent bank of the Bank; or (iv)
payment other than the foregoing, if specified in Instructions relating to the
transaction in question.
III. THE PROPERTY
(a) Property delivered. The Fund shall deliver the Property,
or cause the Property to be delivered, to the Bank or a Depository,
subject to the provisions of this Agreement. Upon delivery, the
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<PAGE>
securities at the time included in the Property, unless held by a Depository,
shall be in bearer form or shall be registered in the name of a nominee of the
Bank (with or without indication of fiduciary status) or shall be properly
endorsed and in form for transfer satisfactory to the Bank.
(b) "Property" defined. The term "Property," as used in the
Agreement, means:
(i) any and all securities and other property which
the Fund may from time to time deposit, or cause
to be deposited, with the Bank or a Depository,
(ii) all income, including option premiums, in respect
of any of such securities or other property,
(iii) all proceeds of the sale of any such securities or
other property,
(iv) all proceeds of the sale of securities issued by
the Fund, which are received by the Bank from time
to time from the Fund or its transfer agent, and
(v) any stocks, shares, bonds, financial futures
contracts, indexes, debentures, notes, mortgages
and other obligations, and any certificates,
receipts, warrants or other financial instruments
representing absolute or conditional rights or
options to receive, purchase, subscribe for or
sell the same or evidencing or representing any
other rights or interests therein, or any other
property or assets, irrespective of their form,
the name by which they may be described, whether
considered as securities or commodities, or the
character or form of the entities by which they
are issued or created.
(c) Holding of Securities. The Bank shall hold in a separate account,
and physically segregate at all times from those of any other persons, firms or
corporations, pursuant to the provisions hereof, all securities which are part
of the Property, other than those held by a Depository. All such securities are
to be held or disposed of by the Bank, or by a Depository, subject at all times
to Instructions pursuant to the terms of this Agreement. The Bank shall have no
power or authority to (or to cause a Depository to)
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<PAGE>
assign, hypothecate, pledge, or otherwise dispose of any such securities except
pursuant to Instructions and only for the account of the Fund, as set forth in
Section VI of this Agreement.
The Bank will, upon receipt of proper Instructions, segregate
cash and/or securities of the Fund into escrow accounts in the name of a
designated broker or exchange clearing organization which is a party with the
Fund to an agreement relating to the financial futures contracts described in
paragraph (b) of this Section III. The Bank will confirm the terms of such
escrow to the broker or clearing organization and provide a copy of such
confirmation to the Fund. The Bank will not, however, make any payment or
transfer from any such escrow account except to the named broker or clearing
organization upon receipt of written notice by such broker or clearing
organization representing that the Fund is in default of a specified obligation
for which the escrow was established and setting forth the amount represented to
be due by the Fund to such broker or clearing organization.
IV. REGISTRATION OF SECURITIES:
COMMERCIAL ACCOUNTS; OVERDRAFTS; RECEIPT OF SECURITIES
(a) Registration of securities. The securities included in the Property
shall, unless held by a Depository, be held in bearer form or in the name of one
or more nominees of the Bank.
(b) Commercial accounts. The Bank shall open and maintain a commercial
account or accounts in the name of the Fund, subject only to the Bank's draft or
order after receipt of Instructions, and the Bank shall deposit in such account
or accounts all cash constituting, or which is to become, part of the Property.
The Bank shall make payments of cash to or for the account, of the Fund from
such cash accounts only pursuant to Section VI of this Agreement or as otherwise
specifically provided in this Agreement.
(c) Overdrafts. At the sole discretion of the Bank, the Bank will
permit the incurrence of cash overdrafts in any account of the Fund with the
Bank (i) in aid of the timely and orderly clearance of securities transactions
in the course of the Fund's normal business, trading and investment operations
or (ii) in connection with payments to Shareholders all or a portion of whose
shares in the Fund have been or are being Redeemed, but only upon receipt by the
Bank of Instructions to do so. The Bank shall not be obligated to incur or
permit the incurrence of any such overdraft and the
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<PAGE>
Bank shall not be liable to the Fund or any third party for any refusal, failure
or neglect on the part of the Bank to incur or permit the incurrence of any such
overdraft. As used in this Agreement, the terms "Redeem" and "Redemption" refer
to redemptions, purchases and other acquisitions by the Fund of shares in the
Fund from Shareholders, and the term "Shareholder" means a shareholder or former
shareholder of the Fund.
(d) Payment of overdrafts; interest. The Fund shall pay to the Bank,
and the Bank may deduct from the Property, the amount of each overdraft referred
to in Section IV (c), together with interest thereon at such rate as the Bank
may from time to time notify to the Fund (such rate not to exceed the rate at
such time charged by the Bank to its prime commercial borrowers by more than
1-1/2 percentage points), upon the Bank's demand therefore.
(e) "Receipt" of securities defined. Whenever this Agreement
contemplates receipt of securities by the Bank, such receipt shall mean receipt
by the Bank of (i) securities in bearer form or in form of transfer satisfactory
to the Bank; or (ii) written or telegraphic advice from a Depository that
securities have been credited to the account of the Fund or the Bank at the
Depository; or (iii) written or telegraphic advice from any bank or responsible
commercial agent doing business in the United States or any foreign country and
designated by the Bank as its agent for this purpose that such securities have
been deposited with it.
V. INSTRUCTIONS
(a) "Instructions" defined. As used in this Agreement, the term
"Instructions" means instructions, with respect to any specified transaction
(except as otherwise indicated in this Agreement), in writing or by telecopier,
tested telegram, cable or Telex or by facsimile sending device, signed in the
name of the Fund by the requisite number of Fund officers or authorized
signatories of the Fund as the Board of Trustees or executive committee of the
Fund has authorized to give the particular class of Instructions in question.
Different persons may be authorized to give Instructions for different purposes.
Instructions may be general or specific in terms.
(b) Instructions consistent with charter, etc. Although the
Bank may take cognizance of the provisions of the charter and by-
laws of the Fund as from time to time amended, the Bank may assume
that any Instructions received hereunder are not in any way
-5-
<PAGE>
inconsistent with any provision of such charter or by-laws or any vote,
resolution or proceeding of the shareholders or the trustees, or of any
committee of either thereof, of the Fund.
(c) Authority of Fund's signatories. The incumbency and signature
certificates most recently delivered to the Bank pursuant to Section II (a)
(iii) shall constitute evidence of the authority of the signatories designated
therein to act on behalf of the Fund.
VI. TRANSACTIONS REQUIRING INSTRUCTIONS
(a) Payments of cash. The Bank shall make payments of cash
to or for the account of the Fund only as follows or as otherwise
specifically provided in this Agreement:
(i) upon receipt of Instructions to do so, the Bank
shall make payment for and receive all securities
purchased for the account of the Fund (insofar as
cash is available, or insofar as the Bank is
willing to permit an overdraft or overdrafts in
the Fund's account or accounts with the Bank, for
such purpose), payment to be made only upon
receipt of the securities, provided that, if any
such securities (or any securities to be received
free for the Fund's account) are not received by
the Bank on or before the thirtieth day following
the date of the Bank's receipt of the Instructions
to receive such securities, the Bank may, but need
not, consider such Instructions cancelled unless
and until the Bank received further Instructions
reinstating such original Instructions;
(ii) upon receipt of Instructions to do so, the Bank
shall make payment to a bank of principal of or
interest on bank loans made to the Fund;
(iii) upon receipt of Instructions to do so, the Bank
shall make payments for the Redemption of shares of
the Fund (subject to the provisions of Section VIII
(a) of this Agreement);
(iv) upon receipt of Instructions to do so, the Bank
shall make payments for the payment of dividends,
taxes, management or supervisory fees or operating
expenses (including, without limitation thereto,
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<PAGE>
fees for legal, accounting and auditing services);
(v) upon receipt of Instructions to do so, the Bank
shall make payments in connection with conversion,
exchange or surrender of securities owned or
subscribed to by the Fund held by or to be received
by the Bank;
(vi) upon receipt of Instructions to do so, the Bank
will make payments pursuant to a specified
agreement for loaning the Fund's securities (which
Instructions shall identify the loan agreement
under which the payment is to be made, the date of
payment, the name of the borrower and the
securities to be received, if any in exchange for
the payment); and
(vii) upon receipt of Instructions to do so, the Bank
shall make payment for other proper corporate
purposes, but only on receipt of a Resolution
certified as set forth in the definition of that
term and countersigned by another officer of the
Fund specifying the amount of such payment,
setting forth the purpose for which such payment
is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom such payment is to be made.
(b) Transfer, Exchange or Delivery of Securities. The Bank shall
transfer, exchange or deliver securities which are part of the Property only as
follows: upon receipt of Instructions to do so, the Bank shall deliver (or cause
a Depository to deliver) securities against such payment or other consideration
or written receipt therefor as shall be specified in such Instructions, in the
following cases: (i) upon sales of such securities for the account of the Fund
and receipt by the Bank of payment therefor; (ii) for examination by a broker
selling for the account of the Fund in accordance with street delivery custom;
(iii) for payment when such Property has been called, redeemed or retired, or
has otherwise become payable at the option of the holder thereof; (iv) in
exchange for, or for conversion into, other securities and/or cash pursuant to
any plan of merger, consolidation or reorganization, recapitalization,
readjustment or other rearrangement of the issuer; (v) for deposit with a
reorganization committee or protective committee pursuant to a deposit
agreement;
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<PAGE>
(vi) for conversion into or exchange for other securities, or into or for other
securities and cash, in accordance with any conversion or exchange right or
option relating thereto; (vii) in the case of warrants, rights or other similar
securities, upon the exercise thereof; (viii) in the case of interim receipts or
temporary securities, upon the surrender thereof for definitive securities; (ix)
upon the exercise of a call written by the Fund for which the Bank (or a
Depository) has written an escrow receipt (which term, as used in this
Agreement, shall include an option guarantee letter), subject to the provisions
of Section VI(e); (x) for the deposit of securities in a Depository; (xi) for
the purpose of Redemption in kind of shares of the Fund (subject to Section
VIII(a) of this Agreement); (xii) for the purpose of loaning securities against
receipt by the Bank of collateral therefor (the Instructions as to which shall
specify the securities to be delivered, the loan agreement under which the
delivery is to be made, the date of delivery, the name of the borrower and the
amount of collateral to be received in connection therewith); and (xiii) for
other proper corporate purposes. The Bank shall make a delivery described in
Section VI(c)(xiii) only on receipt of a Resolution certified as set forth in
the definition of that term and countersigned by another officer of the Fund
specifying the securities, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper corporate purpose and naming
the person or persons to whom said delivery is to be made.
(c) Exercise of rights, etc. The Bank shall deal with rights, warrants
and similar securities received by it hereunder only in the manner and to the
extent ordered by Instructions received by the Bank.
(d) Voting. Neither the Bank nor its nominees shall vote any of the
securities included in the Property or authorize the voting of any such
securities or give any consent, approval or waiver with respect thereto, except
as directed by Instructions received by the Bank. The Bank shall promptly
deliver, or cause to be executed and delivered, to the Fund all notices, proxies
and proxy soliciting materials with relation to such securities, such proxies to
be executed by the registered holder of such securities (if registered otherwise
than in the name of the Fund) but without indicating the manner in which such
proxies are to be voted.
(e) Escrow receipts. In accordance with mutually agreed-upon
arrangements and upon receipt of Instructions to do so, the Bank
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<PAGE>
will execute, or cause a Depository to execute, an escrow receipt relating to a
call written by the Fund upon receipt of payment for the premium therefor. Such
Instructions shall contain all information necessary for the issuance of such
receipts and will authorize the deposit of the securities named in such
Instructions into an escrow account of the Fund. Securities so deposited into an
escrow account will be held by the Bank or Depository subject to the terms of
such escrow receipt. However, the Bank agrees that it will not deliver, or cause
a Depository to deliver, any securities deposited in an escrow account pursuant
to an exercise notice unless the Bank has received Instructions to do so or (i)
the Bank has duly requested the issuance of such Instructions, (ii) at least two
business days have elapsed since the receipt of such request by the Fund, and
(iii) the Fund has not advised the Bank by Instructions that it has purchased
securities that are to be delivered by the Bank or a Depository pursuant to the
exercise notice. The Fund agrees that it will not issue any Instructions to the
Bank with respect to the Property which shall conflict with the terms of any
escrow receipt executed by the Bank or any Depository in relation to the Fund
and which is then in effect. The parties understand that the Fund may write
calls on securities ("underlying securities") which are not part of the Property
and issue Instructions to the Bank to execute, or cause a Depository to execute,
an escrow receipt on securities ("convertible securities") which are, or are to
be, part of the Property and are convertible into the underlying securities. In
such event, the Fund agrees that (i) any Instructions by it as to the execution
of the escrow receipt will relate only to such convertible securities, and (ii)
any Instructions by it as to the delivery of securities relating to such call
will relate only to such convertible securities without responsibility on the
part of the Bank to effect any conversion thereof.
VII. TRANSACTIONS NOT REQUIRING INSTRUCTIONS
(a) Collection of income and other payments. In the absence
of contrary instructions, the Bank shall:
(i) collect and receive, for the account of the Fund,
all income and other payments and distributions,
including (without limitation) stock dividends,
rights, warrants and similar items, included or to
be included in the Property, and promptly advise
the Fund of such receipt;
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<PAGE>
(ii) take any action which may be necessary and proper
in connection with the collection and receipt of
such income and other payments and distributions,
including (without limitation) the execution of
ownership and exemption certificates, the
presentation of coupons and other interest items,
the presentation for payment of securities which
have become payable as a result of their being
called, redeemed or retired, or otherwise becoming
payable, otherwise than at the option of the
holder thereof, and the endorsement for collection
of checks, drafts and other negotiable
instruments; and
(iii) receive and hold for the account of the Fund all
securities received as a distribution on
securities held by the Fund as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or similar
securities issued with respect to any securities
of the Fund held by the Bank hereunder, provided
that the Bank shall not be required to transact
any item of business referred to in this Section
VII(a) with respect to a security which is not
covered by a published securities manual
reasonably available to the Custodian Services
Department of the Bank (or the successor to such
Department in the event of any administrative
rearrangement of the Bank) unless and until such
Custodian Services Department (or its successor)
has received a notice specifying (x) the item of
business in question and (y) such additional
information as will permit the Bank to transact
such item of business properly and without
unreasonable inconvenience to such Custodian
Services Department (or its successor).
(b) Cash disbursements. In the absence of contrary Instructions, the
Bank may make cash disbursements for minor expenses in handling securities and
for similar items in connection with the Bank's duties under this Agreement. The
Bank shall promptly advise the Fund of disbursements so made.
(c) Delivery of information and documents. The Bank shall
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<PAGE>
promptly deliver to the Fund all information and documents received by the Bank
and relating to the Property including (without limitation) pendency of calls
and maturities of securities and expiration of rights in connection therewith
received by the Bank from issuers of securities being held for the Fund. With
respect to tender or exchange offers, the Bank shall transmit promptly to the
Fund all written information received from issuers of the securities whose
tender or exchange is being sought and from the party (or his agents) making the
tender or exchange offer.
VIII TRANSACTIONS REQUIRING SPECIAL INSTRUCTIONS
(a) Redemptions. Upon receipt of Instructions to do so, the Bank shall
deliver Property in connection with Redemptions (insofar as monies or, in a case
referred to in clause (iii) below, other Property is available, or insofar as
the Bank is willing to permit an overdraft or overdrafts in the Fund's account
or accounts with the Bank for such purpose), provided that the Instructions
covering each Redemption shall contain (i) the number of shares Redeemed, (ii)
the net asset value (determined pursuant to the regulations of the Fund, as from
time to time amended, which govern determination of net asset value) of such
shares on the effective date of such Redemption and (iii) specification of any
Property other than cash which the Bank is to deliver pursuant thereto.
(b) Extraordinary transactions. In the case of any of the
following transactions, not in the ordinary course of the business
of the Fund:
(i) the merger or consolidation of the Fund and
another investment company,
(ii) the sale by the Fund of all or substantially all
of its assets, or
(iii) liquidation of the Fund or dissolution of the Fund
and distribution of its assets,
the Bank shall deliver Property only upon receipt of Instructions and advice of
counsel satisfactory to the Bank (who may be counsel for the Fund, at the option
of the Bank) to the effect that all necessary corporate action therefor has been
taken, or will be taken concurrently with the Bank's action.
IX. RIGHT TO RECEIVE ADVICE
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<PAGE>
(a) Advice of Fund. If the Bank shall be in doubt as to any action to
be taken or omitted by it, it may request, and shall receive, from the Fund
directions or advice, including Instructions where appropriate.
(b) Advice of counsel. If the Bank shall be in doubt as to any
questions of law involved in any action to be taken or omitted by the Bank, it
may request advice from counsel of its own choosing (who may be counsel for the
Fund, at the option of the Bank).
(c) Conflicting advice. In case of conflict between directions, advice
or Instructions received by the Bank pursuant to Section IX(a) and advice
received by the Bank pursuant to Section IX(b), the Bank shall be entitled to
rely on and follow the advice received pursuant to Section IX(b) alone.
(d) Absolute protection to Bank. The Bank shall be absolutely protected
in any action or inaction which it takes in reliance on any directions, advice
or Instructions received pursuant to Section IX(a) or (b) or which the Bank,
after receipt of any such directions, advice or Instructions, in good faith
believes to be consistent with such directions, advice or Instructions, as the
case may be. However, nothing in this Section IX shall be construed as imposing
upon the Bank any obligation (i) to seek such directions, advice or
Instructions, or (ii) to act in accordance with such directions or advice when
received, unless, under the terms of another provision of this Agreement, the
same is a condition to the Bank's properly taking or omitting to take such
action.
X. STATEMENTS
The Bank shall render to the Fund statements of the transactions in the
accounts of the Fund at the following times: the Bank shall furnish the Fund
both on a daily and a monthly basis with a statement summarizing all
transactions and entries for the account of the Fund. The Bank shall furnish the
Fund at the end of every month with a list of the portfolio securities held by
it or a Depository as custodian for the Fund, adjusted for all commitments
confirmed by the Fund as of such time, certified by a duly authorized officer of
the Bank. The books and records of the Bank pertaining to its actions under this
Agreement shall be open to inspection and audit at all times by officers of the
Fund, its auditors and officers of its investment adviser.
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<PAGE>
XI. COMPENSATION
(a) Ordinary services. The Fund shall pay to the Bank, and the Bank may
deduct from the Property, for its services under this Agreement (other than the
services referred to in Section XI(c)) compensation based on a schedule of
charges to be agreed from time to time.
(b) Expenses. The Fund shall reimburse the Bank for all expenses, taxes
and other charges (including, without limitation, interest and other items
charged by brokers in respect of debit balances and delayed deliveries) paid by
the Bank with respect to the property of the Fund, or incurred by the Bank on
behalf of the Fund in the performance of the Bank's duties hereunder, provided
that the Bank shall be entitled to reimbursement with respect to the fees and
disbursements of counsel only (i) as set forth in Sections XI(c) and XII or (ii)
when the Fund breaches or threatens to breach, or the Fund's management company
(if any) threatens to cause a breach, of this Agreement or when it would
reasonably appear to a man untrained in the law that such a breach exists or is
threatened, to the extent that the fees and disbursements of such counsel relate
to such actual or apparent breach or threatened breach. If the Bank submits to
the Fund a bill for such reimbursement and the Fund does not, within 15 days
after such submission, notify the Bank that the bill is disapproved and make a
reasonable counter-offer in writing, the bill shall be deemed approved and the
Bank may deduct such reimbursement from the Property.
(c) Extraordinary services. The Fund shall pay to the Bank, and the
Bank may deduct from the Property, for its services as the Fund's agent in
paying a Shareholder consideration, consisting wholly or partially of property
other than cash, in connection with the Redemption of all or any part of such
Shareholder's shares in the Fund compensation equal to 1/10 of 1% of the amount
computed by subtracting from the aggregate Redemption price of such shares the
cash, if any, paid to such Shareholder in respect of such Redemption. Without
limiting the generality of the provisions of Section XI(b), the Fund shall
reimburse to the Bank, and the Bank may deduct from the Property reimbursement
for, the fees and disbursements of the Bank's counsel attributable to such
counsel's services in respect of each such Redemption.
XII. INDEMNIFICATION
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The Fund, as sole owner of the Property, will indemnify the Bank and
each of the Bank's nominees, and hold the Bank and such nominees harmless, and
the Bank may deduct from the Property indemnification, against all costs,
liabilities (including, without limitation, liabilities under the Securities Act
of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940
and any state and foreign securities and blue sky laws, all as from time to time
amended) and expenses, including (without limitation) attorney's fees and
disbursements, arising directly or indirectly (i) from the fact that securities
included in the Property are registered in the name of any such nominee, or (ii)
without limiting the generality of the foregoing clause (i), from any action or
thing which the Bank takes or does or omits to take or do, (A) at the request or
on the directions or in reliance on the advice of the Fund, or of the Fund's
management company (if any), or (B) upon Instructions, provided that neither the
Bank nor any of its nominees shall be indemnified against any liability to the
Fund or to its Shareholders (or any expense incident to such liability) arising
out of (x) the Bank's or such nominee's own willful misfeasance, bad faith,
negligence or reckless disregard of its duties under this Agreement or (y) the
Bank's own negligent failure to perform its duties under Section VII(a)(ii).
XIII. RESPONSIBILITY: COLLECTIONS
(a) Responsibility of Bank. The Bank shall be under no duty to take any
action on behalf of the Fund except as specifically set forth herein or as may
be specifically agreed to by the Bank in writing. In the performance of the
Bank's duties hereunder, the Bank shall be obligated to exercise care and
diligence, but the Bank shall not be liable for any act or omission which does
not constitute gross negligence, willful misfeasance or bad faith on the part of
the Bank or reckless disregard by the Bank of its duties under this Agreement,
provided that the Bank shall be responsible for its own negligent failure to
perform any of its duties under this Agreement. Without limiting the generality
of the foregoing or of any other provisions of this Agreement, the Bank shall
not be under any duty or obligation to inquire into and shall not be liable for
or in respect of (i) the validity or invalidity or authority or lack thereof of
any Instruction, notice or other instrument which conforms to the applicable
requirements of this Agreement, if any, and which the Bank reasonably believes
to be genuine, or (ii) the validity or invalidity of the issuance of any
securities included or to be included in the Property, the
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<PAGE>
legality or illegality of the purchase of such securities, or the propriety or
impropriety of the amount paid therefor, or (iii) the legality or illegality of
the sale (or exchange) of any Property or the propriety or impropriety of the
amount for which such Property is sold (or exchanged), nor shall the Bank be
under any duty or obligation to ascertain whether any property at any time
delivered to or held by the Bank may properly be held by or for the Fund.
(b) Collections. All collections of monies or other property
in respect, or which are to become part, of the Property shall be
at the sole risk of the Fund.
(c) Depositories. In using the facilities of a Depository, the Bank
undertakes to comply with the requirements of Rule 17f- 4(d) insofar as the same
apply to a custodian, and shall be responsible for the prompt and effective
enforcement of its rights against the Depository in respect of the property
including the proper replacement of any certificated security which has been
lost, destroyed, wrongfully taken, mislaid or erroneously delivered while in the
custody of the Depository.
XIV. ADVERTISING
No printed or other matter in any language which mentions the Bank's
name other than in the context of the Bank's rights, powers or duties as the
custodian of the Fund shall be issued by the Fund or on the Fund's behalf unless
the Bank shall first have been given notice thereof.
XV. EFFECTIVE DATE; TERMINATION; SUCCESSOR; DISSOLUTION
(a) Effective date. This Agreement shall become effective as of the
date entered in the final paragraph of this Agreement and shall continue in
effect until terminated in the manner set forth below.
(b) Termination. Either party to this Agreement may terminate this
Agreement, without penalty, upon at least two weeks' prior written notice to the
other. The effective date of such notice shall be specified in such notice,
except that, at the option of the party receiving the notice of termination, the
effective date of termination may be postponed, by notice (given prior to the
effective date specified in the termination notice) to the other party, to a
date not more than sixty days from the date of the notice of termination,
provided that the Fund shall have no
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right so to postpone the effective date of termination if the Fund is at the
time in default under the provisions of Section XIV.
(c) Successor custodian. The Bank shall, in the event of such
termination, deliver the Property, or cause it to be delivered, to any new
custodian which may be designated in Instructions received by the Bank.
(d) Successor custodian not available. In the event that no new
custodian can be found by the Fund at the time of termination of this Agreement,
the Fund shall, before authorizing the delivery of the Property to anyone other
than a successor custodian, submit to its shareholders the question of whether
the Fund shall be liquidated or shall function without a custodian. The Bank
shall, pending the finding of such a new custodian, the dissolution of the Fund
or the decision of the Fund's shareholders that the Fund shall function without
a custodian, continue to hold the Property in safekeeping subject to the terms
of this Agreement, but the Bank will not carry out any transaction requiring
Instructions, the Instructions with respect to which are received by the Bank
subsequent to the effective date of the termination of this Agreement, or issue
any advice provided for by Section VII or any statement provided for by Section
X, provided that, upon its receipt of Instructions to do so, the Bank will
deliver the Property to a new custodian (which shall be a person, firm or
corporation having aggregate capital, surplus and undivided profits of at least
$2,000,000 as shown by its last published report, and meeting such other
requirements as may be imposed by applicable law), distribute the Property
(after liquidating any part of the Property which does not consist of cash, if
such Instructions so order) upon dissolution of the Fund or deliver the Property
to any other person if the Fund's shareholders have decided that the Fund shall
function without a custodian. The Bank shall not be liable to the Fund or any
third party on account of any incidents or omissions occurring during such
period of safekeeping except those arising through the Bank's own willful
misconduct or negligence.
(e) Dissolution; no successor custodian. Upon its receipt of
Instructions to do so, the Bank shall distribute the Property (after liquidating
any part of the Property which does not consist of cash, if such Instructions so
order) upon dissolution of the Fund or deliver the Property to any person who is
to take the place of the Fund's custodian if the Fund's shareholders have
decided that the Fund shall function without a custodian, provided, in either
case, that such Instructions shall be accompanied by a
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<PAGE>
certified copy of the minutes of the meeting of the Fund's
shareholders at which the same was approved.
XVI. NOTICES
All notices and other communications, including Instructions
(collectively referred to as "Notices" in this Section XVI), hereunder shall be
in writing or by tested telegram, cable or Telex. Notices shall be addressed (i)
if to the Bank, at the Bank's address set forth at the head of this Agreement,
marked for the attention of the Custodian Services Department (or its successor,
referred to in Section VII(a)), (ii) if to the Fund, at the address of the Fund
set forth at the head of this Agreement, or (iii) if to either of the foregoing,
at such other address as shall have been notified to the sender of any such
Notice or other communication. If the location of the sender of a Notice and the
address of the addressee thereof are, at the time of sending, more than 100
miles apart, the Notice shall be sent by airmail, in which case it shall be
deemed given three days after it is sent, or by tested telegram, cable or Telex,
in which case it shall be deemed given immediately, and, if the location of the
sender of a Notice and the address of the addressee thereof are, at time of
sending, not more than 100 miles apart, the Notice may be sent by first-class
mail, in which case it shall be deemed given two days after it is sent, or by
messenger, in which case it shall be deemed given on the day it is delivered, or
by tested telegram or Telex, in which case it shall be deemed given immediately,
provided that the Bank shall in no event be liable in respect of any delay in
its actual receipt of any Notice. All postage, cable, telegraph and Telex
charges arising from the Sending of a Notice hereunder shall be paid by the
sender.
XVII. DEPOSITORIES; ASTRA
The Fund authorizes the Bank, for any securities held hereunder, to use
the services of any United States central securities depository permitted to
perform such services for registered investment companies and their custodians
under Rule 17f-4 under the Act ("System"), the use of which is subject to the
terms and conditions of this Section XVII.
The terms of the use of any System under this Agreement shall be
governed by the terms and conditions of Rule 17f-4 under the Investment Company
Act of 1940, to which terms and conditions the parties hereto agree as if set
forth in full in this Agreement.
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<PAGE>
The parties also agree that such terms and conditions shall supersede any
conflicting provisions of this Agreement. Nothing herein shall be deemed to
require that the Custodian ascertain, as a condition to the use of any System,
that any required action has been taken by the Board of Trustees of the Fund.
If and to the extent that a System permits the withdrawal of a security
from that System in certificate form and the Fund requires a certificate for
making a loan or otherwise, the Bank shall take all necessary and appropriate
action to obtain such certificate upon receipt of an officer's certificate
requesting the same.
The liability of the Bank to the Fund in connection with the use of any
System shall be subject to the provisions of Section XIII of this Agreement.
The Bank agrees that it will effectively enforce such rights as it may
have against any System and will use its best efforts, and will enforce any such
rights as it may have against any System, to require that such System shall take
all appropriate and necessary steps to obtain replacement of any certificated
security in such System which has been lost, apparently destroyed, wrongfully
taken, mislaid or erroneously delivered while in the custody of the System.
The Fund can have dial-up access to its own custodian account in the
Bank's computerized accounting system (the "ASTRA System") in order to: (i)
accept or reject executed securities transactions (other than in foreign
securities) as submitted for confirmation by brokers and dealers through the
Institutional Delivery ("ID") System of Depository Trust Company ("DTC") in
which the Bank is a participant; and (ii) issue instructions for the settlement
of accepted transactions by the Bank (through the ID System of DTC or otherwise)
pursuant to the terms of this Agreement.
1. The Bank will provide such current instructions and password as may
be necessary for the Fund to have dial-up access to its own custody account in
the ASTRA System, which instructions and password, including any changed
instructions or password, will be delivered personally or by certified mail,
return receipt requested, to such officer(s) of the Fund as may, from time to
time, be designated in a written instruction given by the Fund in accordance
with Article V of this Agreement and signed by the Secretary, Assistant
Secretary or Treasurer of the Fund.
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<PAGE>
2. The Bank will change such instructions or password as
frequently as may reasonably be requested by the Fund for security
reasons.
3. The Bank is obligated and authorized to act and rely upon any
instructions received by it through the ASTRA System, as fully as in the case of
instructions given pursuant to Article V of this Agreement, regardless of
whether such instructions have been authorized by the Fund, provided that such
instructions are accompanied by the code password and account identification
information furnished, from time to time, by the Bank to the Fund as hereinabove
provided. Any such instructions received by the Bank through the ASTRA System
will be considered "Instructions" for all purposes under this Agreement,
including without limitation the indemnification provisions of Article XII
hereof.
4. Both the Fund and the Bank will keep for at least five years and
produce on request, in machine readable form, copies of any instructions sent or
received pursuant to the provisions hereof.
XVIII. MISCELLANEOUS
(a) Amendments, etc. This Agreement or any part hereof may be changed
or waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought. The headings in this Agreement
are for convenience of reference only, are not a part of this Agreement and
shall be disregarded in connection with any interpretation of all or any part of
this Agreement.
(b) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegated and/or oral Instructions.
(c) Successors and assigns; assignment. All terms of this Agreement
shall be binding upon the respective successors and assigns of the parties
hereto, the Fund's management company (if any) and the Fund's shareholders and
shall inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, provided that this Agreement shall not be
assignable in whole or in part by either party hereto without the
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written consent of the other party hereto.
(d) Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original but all of
which, taken together, shall constitute one and the same Agreement.
(e) Disclaimer of Shareholder Liability. The Bank understands that the
obligations of the Fund under this Agreement are not binding upon any trustee or
shareholder of the Fund personally, but bind only the Fund and the Fund's
property. The Bank represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder liability for acts or
obligations of the Fund.
(f) Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the hands of their signatories thereunto duly authorized on the 5th
day of July, 1996.
CITIBANK, N.A.
By: /s/Gene Fauquier
----------------------
Gene Fauquier, Vice President
(Name and Title)
ROCHESTER PORTFOLIO SERIES,
on behalf of
LIMITED TERM NEW YORK MUNICIPAL FUND
By: /s/ Andrew J.Donohue
----------------------
Andrew J. Donohue, Secretary
(Name and Title)
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Exhibit 24(b)(9)
SERVICE CONTRACT
THIS AGREEMENT is signed this 8th day of March, 1996, between ROCHESTER
PORTFOLIO SERIES - LIMITED TERM NEW YORK MUNICIPAL FUND (hereinafter referred to
as the "Fund"), a Massachusetts business trust, having its principal place of
business at 350 Linden Oaks, Rochester, New York 14625, and OPPENHEIMERFUNDS
SERVICES (hereinafter referred to as "OFS"), a division of OppenheimerFunds,
Inc., a Colorado corporation, having its principal place of business at 3410
South Galena Street, Denver, Colorado 80231.
WITNESSETH:
WHEREAS, OppenheimerFunds, Inc. (hereinafter referred to as "OFI")
doing business as OFS, a division of OFI, is a registered transfer agent under
Section 17A(c)(1) of the Securities Exchange Act of 1934 and provides registrar
and transfer agent, dividend and distribution disbursing agent, redemption
agent, clearing agent and exchange agent and service agent services to mutual
funds, and
WHEREAS, the Fund desires that OFS perform certain registrar and
transfer agency services for the Fund, as more specifically set forth in
Schedule A to this Agreement.
THEREFORE, the parties hereto agree as follows:
1. Services to be Performed by OFS
The services to be performed for the Fund by OFS are set forth
in Schedule A to this Agreement, which Schedule is incorporated as part of this
Agreement. OFS shall perform such services as registrar, transfer agent,
dividend and distribution disbursing agent, redemption agent, clearing agent and
exchange agent or as service agent for the Fund.
2. Fees and Expenses
A. For performance by OFS pursuant to this Agreement, the Fund
agrees on behalf of each of the Portfolios of the Fund to pay OFS the annual
basic charge for each shareholder account and the out-of pocket expenses
incurred by OFS as set out in Schedule B attached hereto.
B. The Fund agrees on behalf of each of the Portfolios to pay
all fees and reimbursable expenses within five days following the mailing of
the respective billing notice.
C. After the third year anniversary of this Agreement, OFS
may increase the fees and charges set forth on the attached fee schedule in
the following circumstances:
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<PAGE>
(i) At any time but no more than once in a year, OFS may, upon
at least ninety (90) days prior written notice, increase its fees or charges to
the Fund or change the manner of payment;
(ii) Irrespective of (i) above, for new Fund features that
are not consistent with OFS's current processing requirements; and
(iii) Irrespective of (i) above, if changes in existing
laws, rules or regulations: (a) require substantial system modifications or
(b) increase cost of performance hereunder.
In the event of (i) above, if the Fund does not agree to the
revised fees and charges or manner of payment, the Fund shall notify OFS thereof
in writing (the "Refusal Notice") within thirty (30) days of receipt of OFS's
notice. If the parties are unable to agree to a rate or manner within the next
thirty (30) days after OFS's receipt of the Refusal Notice, this Agreement shall
terminate ninety (90) days from the date on which OFS received the Refusal
Notice.
In the event of (ii) above, the parties shall confer,
diligently and in good faith, and agree upon a new fee to cover such new fund
feature.
In the event of (iii) above, fees shall increase by the amount
necessary, but not more than such amount, to reimburse OFS for the cost of
developing or acquiring the new software to comply with regulatory changes and
for the increased cost of operating its shareholder system.
3. Effective Date and Term.
This Agreement shall become effective on the Conversion Date,
shall supersede any prior agreements among the parties hereto relating to the
subject matter hereof, and shall continue in full force and effect until
terminated by any party upon six months' prior written notice of termination
addressed to all other parties. The Conversion Date shall be the close of
business on March 8, 1996, or such other date as the parties may agree to for
OFS to assume the functions of transfer agent for the Fund pursuant to the terms
herein.
4. Standard of Care.
OFS will make every reasonable effort and take all reasonably
available measures to assure the adequacy of its personnel and facilities as
well as the accurate performance of all services to be performed by it hereunder
within, at a minimum, the time requirements of any statute, rule or regulation
pertaining to investment companies and any time requirements set forth in the
then-current prospectus of the Fund. OFS shall promptly correct any error or
omission made by it in the performance of its duties hereunder provided that it
shall have received notice in writing of such error or omission and any
necessary substantiating data or has otherwise become aware of such error or
omission. In effecting any such corrections, OFS shall take all
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<PAGE>
reasonable steps necessary to trace and to correct any related errors or
omissions, including, without limitation, those which might cause an over-issue
of the Fund's shares and/or the excess payment of dividends or distributions.
The allocable costs of corrections shall be charged to the Fund and the
liability of OFS under this Section shall be subject to the limitations provided
in Section 9 hereof.
5. Records Retention and Confidentiality.
OFS shall keep and maintain on behalf of the Fund all records
which the Fund or its transfer agent is, or may be required, to keep and
maintain pursuant to any applicable statutes, rules and regulations relating to
the maintenance of records in connection with the services to be performed
hereunder. OFS also shall maintain, for a period of at least 6 years, all
records and documents which may be needed or required to support or document the
actions taken by OFS in its performance of services hereunder. OFS recognizes
and agrees that all such records and documents (but not the computer data
processing programs and any related documentation used or prepared by, or on
behalf of, OFS for the performance of its services hereunder) are the property
of the Fund; shall be open to audit or inspection by the Fund or its agents
during OFS's normal business hours; shall be maintained in such fashion as to
preserve the confidentiality thereof and to comply with applicable federal
and/or state laws and regulations; and shall, in whole or any specified part, be
surrendered and turned over to the Fund or its duly authorized agents at any
time upon OFS's receipt of an appropriate written request.
6. Clearing Accounts.
The Fund shall open and/or maintain such bank account or
accounts as shall reasonably be required by OFS for controlling payments, the
disbursement of dividends, capital gains distributions and share redemption
payments pursuant to the provisions hereof, and any other accounts deemed
necessary by OFS or the Fund to carry out the provisions of this Agreement, with
a bank or banks selected by OFS with the prior approval of the Fund's Board.
Such account may be an omnibus account used for all Funds for which OFS or one
of its subsidiaries acts as transfer agent. The Fund shall authorize officers or
employees of OFS to act as authorized signatories to disburse funds held in such
accounts. OFS shall be accountable to the Fund for the management of such
accounts by OFS (and the funds at any time on deposit therein).
7. Reports.
OFS will furnish to the Fund, at the Fund's cost, and to such
other persons or parties as are designated herein or shall be designated in
writing by an authorized officer of the Fund, such reports at such times as are
required for the performance of the services referred to in Schedule A.
8. Indemnification of OFS and OFI.
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<PAGE>
The Fund shall indemnify OFS and OFI and hold OFS and OFI and
each of their officers, directors, employees and agents harmless from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against all judgments, liabilities, losses, damages,
costs, charges, counsel fees and other expenses arising from or relating to any
action taken or omitted to be taken by it in good faith or as a result of
ordinary negligence in reliance upon:
(a) The authenticity of any letter or any other
instrument or communication reasonably believed by it
to be genuine and to have been properly made or
signed by an authorized officer or agent of the Fund
or by a shareholder or the authorized agent of a
shareholder, as the case may be and which complies
with the terms of this Agreement which pertain
thereto;
(b) The accuracy of any records or information provided
to it by the Fund except to the extent the same may
contain patently obvious errors or omissions;
(c) Any certificate by an authorized officer of the Fund
or any other person authorized by the Fund's Board as
conclusive proof of any fact or matter required to be
ascertained by OFS hereunder;
(d) Instructions at any time given by an authorized
officer of the Fund with respect to OFS's duties and
responsibilities hereunder, including, as to legal
matters pertaining to the performance of its duties
hereunder, such advice or instructions as may be
given to OFS by the Fund's general counsel or any
legal counsel appointed by such counsel or by any
authorized officer of the Fund;
(e) Instructions regarding redemptions, exchanges or
other treatment of the shares of the Fund, together
with all dividends and capital gain distributions
thereon and any reinvestment thereof, held or shown
to the credit of any shareholder account, if such
instructions satisfy the requirements of the Fund as
contained in its then current prospectus, or the
Fund's policies or as communicated in writing to OFS,
its subcontractors or agents by the Fund; or
(f) The advice or opinion of legal counsel furnished to
OFS pursuant to Section 10 hereof.
9. Limitations of OFS's and OFI's Liability.
In addition to the limitations on OFS's and OFI"s liability
stated in Sections 8 and 10 hereof, neither OFS nor OFI assumes any liability
hereunder and shall not be liable hereunder for any damage, loss of data, delay
or other loss caused by circumstances or events beyond its
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<PAGE>
control which it could not reasonably have anticipated. OFS shall not have any
liability beyond the insurance coverage it has obtained for loss or damage
arising from its own errors or omissions, except to the extent such errors or
omissions are attributable to gross negligence or purposeful fault on the part
of OFS, its officers, agents and/or employees; and in no event will OFS be
liable to the Fund for punitive damages. The Fund shall indemnify and hold OFS
and OFI harmless from and against any liabilities and defense expenses arising
by reason of claims of third parties, based on errors or omissions of OFS, which
are greater in amount than the limitations of liability described above, except
to the extent such errors or omissions are attributable to gross negligence or
purposeful fault on the part of OFS, its officers, directors, agents and/or
employees.
10. Legal Advice and Instructions.
OFS at any time may request instructions from any authorized
officer of the Fund with respect to the performance of its duties and
responsibilities hereunder and may consult with counsel for the Fund or counsel
of its own choosing, who is acceptable to the Fund, relative to any such matter
and shall not be liable hereunder for any action taken or omitted by it in good
faith in accordance with such instructions or with an opinion of such counsel or
of counsel appointed by an authorized officer of the Fund to deal with inquiries
or requests for instructions by OFS. Nothing in this section shall be construed
as imposing upon OFS any obligation to seek such instructions or counseling or
to act in accordance with such instructions or counsel.
11. Documents and Information.
As soon as feasible prior to the effective date of the
Agreement, and if not heretofore provided, the Fund will supply to OFS a
statement, certified by the treasurer of the Fund, stating the number of shares
of the Fund authorized, issued, held in treasury, outstanding and reserved as of
such date, together with copies of specimen signatures of the Fund's officers
and such other documents and information, including without limitation the
then-current prospectus of the Fund, which OFS may determine in its reasonable
discretion to be necessary or appropriate to enable it to perform the services
to be performed hereunder, and the Fund thereafter will supply all amendments or
supplemental documents with respect thereto as soon as the same shall be
effective or available for distribution. The Fund assumes full responsibility
for the preparation, accuracy, content and clearance of its prospectus under
federal and/or state securities laws and any rules or regulations thereunder. If
the Fund shall make any change in its prospectus affecting the services and
functions to be performed by OFS hereunder, such additional services and
functions shall be deemed to be incorporated in Schedule A.
12. Additional Funds.
In the event that the Fund established one or more series of
shares in addition to the Rochester Limited Term New York Municipal Fund
Portfolio with respect to which it desires to have OFS render services as
transfer agent under the terms hereof, it shall so notify OFS in
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<PAGE>
writing, and if OFS agrees in writing to provide such services, such series of
shares shall become a Portfolio hereunder.
13. Termination.
This Agreement may be terminated by any party only upon
written notice as provided in Section 3 hereof, except that the Fund may
terminate this Agreement without prior notice to preserve the integrity of its
shareholder records from material and continuing errors and omissions on the
part of OFS. In the event of any termination, OFS will provide full cooperation,
assistance and documentation within its capabilities as shall be necessary or
desirable, in the reasonable judgment of the Fund, to ensure that any transfer
of the duties and responsibilities of OFS is accomplished with maximum
efficiency and with minimum cost and disruption to the Fund's activities. Such
cooperation will include the delivery of all files, documents and records used,
kept or maintained by OFS in the performance of its services hereunder (except
records or documents destroyed when consistent with the provisions hereof or
with the approval of the Fund or which relate solely to the documentation of the
computer data processing programs of OFS) together with, in machine-readable
form, such of the Fund's records as may be maintained by OFS in a form other
than written form, as well as such summary and/or control data relating thereto
used by or available to OFS as may be requested by the Fund. The cost of all
such termination services on the part of OFS shall be paid by the Fund without
prejudice, however, to the rights of the Fund to recover any amounts so paid in
the event that OFS shall be liable to the Fund under Section 9 hereof. In the
course of its performance of the services set forth in Schedule A hereto, as
such services may from time to time be modified or amended, OFS will enter into
leases for equipment. If this Agreement is terminated by the Fund, and if, as a
result of such termination, such equipment specifically leased by OFS to perform
such services can no longer be utilized economically by OFS in its performance
of services for any other entities with which OFS has continuing transfer agency
or other service contracts, OFS may in its discretion cancel such leases.
However, the Fund shall not have any responsibility for termination penalties,
if any, which may be payable under the terms of such equipment leases, unless
otherwise agreed by the Fund prior to the time such lease is entered into.
14. Notices.
Any notice hereunder shall be sufficiently given when sent by
registered or certified mail, return receipt requested, to any party hereto at
the address of such party set forth above or at such other address as such party
may from time to time specify in writing to the other parties.
15. Construction; Governing Law.
The headings used in this Agreement are for convenience only
and shall not be deemed to constitute a part hereof. This Agreement, and the
rights and obligations of the parties hereunder, shall be governed by and
construed and interpreted under and in accordance with the laws of the State of
New York applicable to contracts made and to be performed in that state.
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<PAGE>
16. Assignment; Delegation.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their successors and assigns, including without
limitation, any successor to any party resulting by reason of corporate merger
or consolidation; provided however that this Agreement and the rights and duties
hereunder shall not be assigned by any of the parties hereto except upon the
specific prior written consent of all parties hereto.
OFS may, without further consent on the part of the Fund,
subcontract for the performance hereof with any entity which is duly registered
as a transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act
of 1934, provided, however, that OFS shall be as fully responsible to the Fund
for the acts and omissions of any subcontractors or agent as it is for its own
acts and omissions.
OFS may enter into written agreements with sub-transfer
agents, third party administrators and other similar clearing firms which permit
OFI to maintain an omnibus account in the name of the shareholder of record with
the individual beneficial owners of the account being serviced by a sub-transfer
agent, third party administrator or other similar clearing firm. Such agreements
shall comply with the criteria and parameters approved and adopted from time to
time by OFI and by the Board of the Fund.
17. Interpretive Provisions.
OFS and the Fund may agree from time to time in writing on
provisions interpretative of, or supplemental to, the provisions of this
Agreement.
18. Other Agreements.
This Agreement shall not preclude the Fund from entering into
transfer agency agreements or sub-transfer agency agreements with others.
19. Disclaimer of Liability.
OFS understands and agrees that the obligations of the Fund
under this Agreement are not binding upon any shareholder of the Fund or member
of its Board of Trustees personally, but only the Fund and the Fund's property;
OFS represents that it has notice of the provisions of the Declaration of Trust
of the Fund disclaiming liability for acts or obligations of the Fund.
20. Severability.
If any clause or provision of this Agreement is determined to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, then such clause or provision shall be
considered severed herefrom, and the remainder of this Agreement shall continue
in full force and effect.
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21. Entire Agreement.
Except as otherwise provided herein, this Agreement, including
Schedule A and Schedule B annexed hereto, constitutes the entire and complete
Agreement between the parties hereto relating to the subject matter hereof;
supersedes and merges all prior contracts and discussions between the parties
hereto; and may not be modified or amended except by written document signed by
all parties hereto against whom such modification or amendment is to be
enforced.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
OPPENHEIMERFUNDS SERVICES (a
division of OppenheimerFunds, Inc.)
ATTEST:
/s/ George C. Bowen By: /s/ Barbara Hennigar
---------------------------------------------
Barbara Hennigar, President and Chief
Executive Officer
ROCHESTER PORTFOLIO SERIES - LIMITED TERM NEW
YORK MUNICIPAL FUND
ATTEST:
/s/ George C. Bowen By: /s/ Andrew J. Donohue
----------------------------------------------
Andrew J. Donohue, Secretary
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<PAGE>
SCHEDULE A
SERVICE CONTRACT
SCHEDULE OF SERVICES
To the extent that a Fund's then-current Prospectus requires the
following services, and to the extent that such services are not, or may not
hereafter be, provided by broker-dealers or other financial institutions with
respect to accounts for which such broker-dealer or financial institution
provides services in connection with the distribution of that Fund's shares,
OppenheimerFunds Services ("OFS") shall do the following:
I. Registrar of Fund Shares
1. Register and control the issuance of full and/or fractional shares of each
Class of Shares of the Fund either for payment of applicable net asset value or
upon surrender of an equivalent number of shares for transfer, or for
reinvestment of dividends or capital gains distributions and, in connection
therewith, maintain appropriate records (which may include the shareholder
accounts referred to below) recording the issuance, transfer and redemption of
all outstanding shares of each Class of Shares of the Fund, showing all shares
of each Class of Shares of the Fund issued and represented by outstanding
certificates, and showing issuance of all uncertificated shares of the Fund;
prepare entries to transfer redeemed or repurchased shares to the Fund's
treasury share account or, if applicable, cancel such shares for retirement;
retain records of issuance of new certificates for lost or stolen certificates
or for cancellation of lost or stolen certificates, and the indemnity bonds
furnished by shareholders in connection therewith.
2. Maintain daily balance controls for the issuance and redemption of shares as
well as all cash receipts and disbursements handled on behalf of the Fund.
3. Furnish to the Fund such information as it may request for preparation of
filings with federal and state authorities.
II. Shareholder Accounts
1. Open new accounts upon receipt of properly executed instructions from a
dealer or the Fund's Distributor, a properly completed and signed account
application, exchange application or request for transfer of an existing
account, or properly authorized telephone exchange or redemption instructions,
and maintain current records for all new and existing categories of shareholder
accounts described in the then-current Prospectus of the Fund, showing as to
each registered owner (to the extent such information is available or
obtainable):
a. Name(s) and address(es), with zip code;
b. Category of account and taxpayer identification number;
c. Dealer and/or any representative affiliated with the
account;
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d. Number of shares currently registered;
e. Account transaction history, including records of
initial and additional purchases, transfers and redemptions, surrender of
certificates, dividends and other distributions, and related tax information;
f. Identification of any certificate(s) issued and the
number of shares evidenced by each such certificate;
g. Shares held in escrow against performance of any
obligation; and
h. Identification of account using the broker's
identification.
2. Maintain files containing account applications, requests or other
correspondence from or on behalf of shareholders, as well as copies of all
responses thereto.
3. Process all changes or corrections to a shareholder's registration and
address records authorized orally or in writing by or on behalf of the
shareholder.
4. Process such reinvestments of the proceeds of a redemption of Fund shares as
may properly have been elected by a shareholder pursuant to a privilege
described in the then-current Prospectus of the Fund.
5. Process investments in shares of the Fund at its then-current net asset value
as may properly be requested by a shareholder of any of the other investment
companies having such privilege as described in the then-current Prospectus of
the Fund or information supplied to OFS by the Fund.
6. Prepare and transmit by mail to the affected shareholder a
statement/confirmation of all transactions affecting the account of such
shareholder including initial and additional purchases, reinvestments of
dividends and distributions, adjustments, exchanges, transfers to and from the
account and redemptions of all kinds.
7. Maintain records when made available to OFS according to properly executed
and authorized instructions relating to rights of accumulation, letters of
intent and other special pricing provisions including, without limitation, group
purchase plans and minimum account sizes.
8. Record and maintain the amount of pre-authorized or automatic investments,
including the shareholder's bank account number and time periods for such
investments; and draw the authorized investment amount from the shareholder's
bank account at the specified time periods and issue shares with respect to such
investments.
9. Maintain records of special account instructions such as wire/telephone
redemption or exchange authorizations.
10. Retain records and amounts of payment items (including interest,
dividends, distributions and redemption proceeds) that are returned undelivered
and undeliverable from investors' addresses and
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maintain such records in accordance with applicable regulations; and invest such
amounts, in accordance with the terms of the Fund's then-current Prospectus, for
the benefit of the shareholder(s) of record.
11. Reconcile account data for account information transmitted by magnetic tape
by broker-dealers maintaining shareholder accounts in nominee name and perform
other services enumerated hereunder to the extent required for such accounts.
12. Process new and additional payments made by shareholders for investment at
their current offering price.
13. Maintain records required under Rule 17Ad-10(e) under the Securities
Exchange Act of 1934.
III. Redemptions and Automatic Withdrawals
1. Receive and ascertain the adequacy of all redemption requests on the basis of
the requirements set forth in the then-current Prospectus of the Fund and the
Fund's policies to the extent applicable from time to time and otherwise in
accordance with the generally accepted practices of transfer agents.
2. Adjust a shareholder's account to reflect the number of shares redeemed.
3. Requisition from the Fund's custodian and remit the properly-computed amount
of the proceeds of each redemption to, or as directed by, individual
shareholders pursuant to appropriately-executed written instructions or
appropriately-submitted redemption requests by wire or telephone in the case of
shareholder accounts having appropriate authorization on file (including payment
to one or more of the other investment companies with which the Fund permits
exchanges in the case of an exchange of investments).
4. On accounts for which periodic withdrawals are specified in a properly-
executed account application:
a. Redeem shares sufficient for the amounts of the
specified withdrawals at the specified time period; and
b. Receive and remit the proceeds of such redemption in
like manner to other redemptions.
IV. Payment of Interest, Dividends and Distributions
1. Upon receipt of properly-executed instructions from the Fund upon declaration
of any dividend and/or distribution, compute and credit the accounts of all
shareholders electing to reinvest dividends and/or distributions with the proper
number of whole and fractional shares, computed as of the reinvestment date and
price specified by the relevant resolution of the Fund's trustees for such
dividend or distribution; and compute for all other shareholders of record, on
the ex-dividend date specified by such resolution, the dollar amount payable in
cash in respect of such dividend or distribution.
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2. Requisition from the Fund's custodian and remit the properly-computed amounts
of dividends or distributions payable in cash to shareholders electing such
payment or as directed by individual shareholders pursuant to
appropriately-executed written instructions; and prepare and mail share
certificates for reinvested amounts to shareholders electing to receive
certificates for shares.
3. Adjust the amount of dividend or distribution payments for accounts having
unsettled investments or repurchases as of the record date with appropriate
accounting adjustments to the Fund's distribution accounts and remittances to
its custodian.
4. Reconcile dividends and distributions with the Fund.
V. Issuing and Accounting for Certificates
1. Safekeep and account for blank certificate forms.
2. Prepare, issue and mail certificates for full shares on request or according
to permanent account instructions as provided in the Fund's then-current
Prospectus, provided that sufficient deposit shares are available in the
shareholder's account and proper authorization is received.
3. Receive certificates properly endorsed for transfer which are returned for
deposit to a shareholder's account and, provided there is no stop-transfer or
cancellation order pending relative to the specific certificate, make
appropriate adjustments to the shareholder's account.
4. Physically cancel and otherwise account for certificates returned and
deposited.
5. Keep and maintain certificate transcript records reflecting the
issuance and holder of all outstanding certificates as well as all stop-
transfers, cancellations and deposits of certificates.
6. Handle the replacement of lost certificates upon applications meeting the
requirements of the Fund's then-current insurance coverage or, in the event such
insurance is not obtainable, the instructions of the officers of the Fund or its
counsel.
7. Receive and deal with stop-transfer instructions in accord with the
generally-accepted practices of transfer agents.
VI. Recapitalization or Capital Adjustment
1. In the case of any negative share split, recapitalization or other capital
adjustment requiring a change in the form of share certificates of any Class,
OFS will, in the case of accounts represented by uncertificated shares, cause
the account records to be adjusted, as necessary, to reflect the number of
shares held for the account of each such shareholder as a result of such change,
or, in the case of shares represented by certificates, will issue share
certificates in the new form in exchange for, or upon transfer of, outstanding
share certificates in the old form, in either case upon receiving:
a. A Certificate authorizing the issuance of share certificates
in the new form;
A-4
<PAGE>
b. A certified copy of any amendment to the Company's Articles
of Incorporation with respect to the change;
c. Specimen share certificates for each class of shares in the
new form approved by the Board of the Company, with a Certificate signed by the
Secretary of the Company as to such approval; and
d. An opinion of counsel for the Fund or the Company with
respect to the matters set forth in Section 13 of the Service Contract as to
such shares.
2. The Company shall furnish OFS with a sufficient supply of blank share
certificates in the new form, and from time to time will replenish such supply
upon the request of OFS. Such blank share certificates shall be properly signed
by Officers of the Company authorized by law or the By-Laws to sign share
certificates and, if required, shall bear the Company's seal or facsimile
thereof.
VII. Escrowing of Shares
1. Earmark and hold escrowed shares in a shareholder's account to secure
compliance with executed letters of intent or for other purposes as provided in
authorization instructions.
2. Pay dividends and distributions to the registered owner, or reinvest
such dividends and
distributions, on shares held in escrow.
3. Release or redeem shares held in escrow in accordance with appropriate
instructions.
VIII. Transfers
1. Respond to or process transfer instructions received by or on behalf of the
registered owners of shares in accordance with the generally-accepted practices
of transfer agents and any requirements set forth in the Fund's then-current
Prospectus.
2. Pass upon the adequacy of documents submitted, prepare any documents
required, and effect the transfer of shares to a shareholder account for the
transferee, including the establishment of the new account.
IX. Exchanges
1. Receive and process exchanges in accordance with duly-executed or telephonic
exchange authorizations which comply with the provisions of the Fund's
then-current Prospectus.
2. Establish, if necessary, a shareholder's account and register the new
shares in accordance with duly executed or telephonic exchange instructions.
X. Shareholder Communications
A-5
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1. Maintain appropriate logs and other controls of all shareholder
communications reflecting the promptness with which they are handled and the
number of unresolved questions, inquiries and complaints outstanding at any
time.
2. Receive and answer promptly all correspondence, telephone calls, or other
inquiries from or on behalf of shareholders concerning the administration of
their accounts. In the case of individual inquiries with respect to shares held
in broker "street-name" accounts for the broker's customer, refer such inquiry
to the appropriate broker for response, providing such information to such
broker as OFS may reasonably ascertain from its records with respect thereto.
3. Refer to the Company's investment adviser or Distributor questions or
matters related to their functions.
4. Prepare such reports and summaries of shareholder communications as may be
requested by the Company's officers for the preparation of reports to the
Company's Board and appropriate regulatory authorities.
5. Attempt to collect or engage other agents or attorneys to collect on behalf
of the Fund or the Company the amount of any over-payment or erroneous payment
to a shareholder or other person by the Fund.
XI. Handling of Proxies
1. In accordance with instructions by an officer of the Company, prepare proxy
cards for each shareholder of record as of the date specified by a resolution of
the Company's Board providing for a meeting of its shareholders.
2. Mail to each shareholder of record, at the address shown in the shareholder
records of the Fund kept pursuant hereto (or as directed by the respective
broker as to broker transmission accounts), a completed proxy card together with
such other written material, including notices of the meeting and proxy
statements, as may be supplied for that purpose by the Fund.
3. Furnish to the Fund a list of shareholders eligible to vote at the meeting,
showing address of record and shares held together with an affidavit or other
appropriate certificate of the mailing referred to above.
4. Receive and tabulate proxies, furnishing the Fund with a properly-
certified report of such tabulation.
XII. Annual and Other Reports
1. Process the mailing of such prospectuses and annual, semi-annual, or
quarterly reports as shall be received from the Fund for that purpose and
coordinate such mailings to appropriate categories of shareholders.
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2. Prepare and mail to shareholders appropriate periodic statements of
their accounts as contemplated by this Agreement.
3. Insert such other material with regular shareholder mailings as may be
requested and furnished by the Fund.
4. Prepare and forward to the Fund such daily, periodic or special reports
concerning shareholder records and any other functions performed pursuant to
this schedule of services as may be requested by an officer of the Fund.
XIII. Tax Matters
1. Prepare and file with the I.R.S. such Federal information returns with
respect to Fund shareholders as may be specified by the I.R.S. from time to
time and mail copies thereof to shareholders.
2. Prepare and file appropriate Federal information returns and pay
Federal income taxes withheld from distributions made to non-resident aliens.
3. Prepare magnetic tapes for brokers to determine taxable accruals as to broker
transmission accounts to enable brokers to prepare appropriate information
returns.
4. Pay Federal income taxes withheld from dividends, distributions and
redemptions made to shareholders; process and retain records of withholding
exemption certificates filed by shareholders.
5. Comply with backup withholding and taxpayer identification
requirements issued by the I.R.S. which are applicable to transfer agents.
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SCHEDULE B
SERVICE CONTRACT
FEE SCHEDULE
The Transfer Agent will provide the transfer agent services listed in the
Service Contract for the Fund at the rate set forth below:
Annual Per Account Fee*:
Class A - $22.06
Class B - $23.96
Out -of-Pocket Expenses:
Out-of-pocket expenses may be incurred by either the Fund or the Transfer Agent
and are not included in the annual Transfer Agent Fees. Those out-of-pocket
expenses directly incurred by the Transfer Agent will be billed to the Fund on a
monthly basis. These out-of-pocket expenses include, but are not limited to the
printing of forms, envelopes, postage for the shareholder mailings, equipment
and system access costs, post-conversion research on pre-conversion transactions
performed by the former transfer agent and billed to the successor transfer
agent, overnight express mail charges, extraordinary items, check signature
plates and stamps, and programmer/analyst and testing technician time beyond
that agreed to in writing. Bank charges and earnings credit will be billed
directly to the Fund by Bank of Boston (or other banks). The Transfer Agent may
require the prior payment of anticipated out-of-pocket expenses, from time to
time.
Conversion Costs:
The Transfer Agent shall be responsible for its costs and expenses relating to
the initial conversion. The Fund shall be responsible for its costs and
expenses, including but not limited to the charges of the former transfer agent.
*Based on the number of accounts in existence at the end of the month, by fund,
and payable weekly based on estimates.
B-1
Exhibit 24(b)(11)
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 9 to the registration
statement on Form N-1A (the "Registration Statement:) of our report dated
January 24,1 997, relating to the financial statements and financial highlights
of Limited Term New York Municipal Fund 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 reference to us under the heading "Financial Highlights" in such
Prospectus.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Rochester, New York
February 26, 1997
Item 24(b)(13)(i)
April , 1997
The Board of Trustees
Limited Term New York Municipal Fund
350 Linden Oaks
Rochester, NY 14625
To the Board of Trustees:
OppenheimerFunds, Inc. ("OFI") herewith purchases________ Class B of
Limited Term New York Muncipal Fund at a net asset value per share of $______,
for an aggregate purchase price of $1000.
In connection with such purchase, OFI represents that such purchase is
made for investment purposes by OFI without any present intention of redeeming
or selling such shares.
Very truly yours,
OppenheimerFunds, Inc.
Robert G. Zack
Senior Vice President
Item 24(b)(13)(ii)
April , 1997
The Board of Trustees
Limited Term New York Municipal Fund
350 Linden Oaks
Rochester, NY 14625
To the Board of Trustees:
OppenheimerFunds, Inc. ("OFI") herewith purchases________ Class C of
Limited Term New York Muncipal Fund at a net asset value per share of $______,
for an aggregate purchase price of
$---------.
In connection with such purchase, OFI represents that such purchase is
made for investment purposes by OFI without any present intention of redeeming
or selling such shares.
Very truly yours,
OppenheimerFunds, Inc.
Robert G. Zack
Senior Vice President
Exhibit 24(b)(15)(i)
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class B Shares of
Rochester Portfolio Series
Limited Term New York Municipal Fund
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the ____ day of
__________, 1997, by and between Rochester Portfolio Series, on behalf of
Limited Term New York Municipal Fund (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 Trustees" shall mean the members of the Fund's Board
of Trustees 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.
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(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 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 acquired (1) by purchase, (2) in
exchange for shares of another investment company for which the Distributor
serves as distributor or sub-distributor, or (3) 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)(ii) 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 six years or
less (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
2
<PAGE>
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; (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 and/or (2) service
fees for rendering administrative support services with respect to Accounts. 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 or to the
Distributor if such affiliated person and/or 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 Trustees.
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.
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 Trustees. 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.
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<PAGE>
(ii) Services Provided by Recipients. 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.
The distribution assistance in connection with the sale of
Shares to be rendered by the Recipients may include, but shall not be limited
to, the following: distributing sales literature and prospectuses other than
those furnished to current Shareholders, 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 Trustees 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, the Minimum
Holding Period or the Minimum Qualified Holdings. The Distributor shall notify
all Recipients of the Minimum Qualified Holdings, Maximum Holding Period and
Minimum Holding Period, if any, and the rate of payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice within thirty
(30) days after any change in these provisions. Inclusion of such provisions or
a change in such provisions in a revised current prospectus shall constitute
sufficient notice.
(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 of the NASD Conduct Rules.
(e) Under the Plan, payments may 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.
(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 Trustees 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.
4
<PAGE>
Additionally, in their discretion, a majority of the Fund's Independent Trustees
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.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall
prevent the incumbent Disinterested Trustees 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 Trustees.
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 services
rendered in connection with the distribution of the Shares, 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
Trustees 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 Trustees 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 Trustees cast in
person at a meeting called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Trustees cast in person at a
meeting called on February 4, 1997, for the purpose of voting on this Plan, and
shall take effect after being approved by Class B shareholders of the Fund.
Unless terminated as hereinafter provided, it shall continue in effect
thereafter, but only so long as such continuance is specifically approved at
least annually by a vote of the Board and its Independent Trustees 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 in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Trustees.
5
<PAGE>
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees 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 Trustees 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.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and the
Fund's property. The Distributor represents that it has notice of the provisions
of the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
Rochester Portfolio Series, on behalf of
Limited Term New York Municipal Fund
By:
---------------------------------------------
OppenheimerFunds Distributor, Inc.
By:
--------------------------------------------
6
Exhibit 24(b)(15)(ii)
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
with
OppenheimerFunds Distributor, Inc.
For Class C Shares of
Rochester Portfolio Series
Limited Term New York Municipal Fund
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the ____ day of
______, 1997, by and between Rochester Portfolio Series, on behalf of Limited
Term New York Municipal Fund (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 Trustees" shall mean the members of the Fund's Board
of Trustees 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 adminsistrative
1
<PAGE>
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 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 acquired (1) by purchase, (2) in exchange for
shares of another investment company for which the Distributor serves as
distributor or sub- distributor, or (3) 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
2
<PAGE>
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) asset-based sales charge payments for
rendering distribution assistance in connection with the sale of Shares and/or
(2) administrative support services with respect to Accounts. 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 or to the Distributor if
such affiliated person and/or 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 Trustees.
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
3
<PAGE>
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 Service 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 service 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. Such payments shall be made only to Recipients that are
registered with the SEC as a broker-dealer or are exempt from registration.
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 Trustees.
The distribution assistance in connection with the sale of Shares to be
rendered by the Recipients may include, but shall not be limited to, the
following: distributing sales literature and prospectuses other than those
furnished to current Shareholders, 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 Trustees 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 the Minimum Holding Period, the
Maximum Holding Period or the Minimum Qualified Holdings. The Distributor shall
notify all Recipients of the Minimum Qualified Holdings, Maximum Holding Period
and Minimum Holding Period, if any, and the rate of payments hereunder
applicable to Recipients, and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions. Inclusion of such
provisions or a change in such provisions in a 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 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.
4
<PAGE>
(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. 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 Trustees 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 Trustees 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.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall
prevent the incumbent Disinterested Trustees 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 Trustees.
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 services
rendered in connection with the distribution of the Shares, 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
Trustees 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 Trustees 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 Trustees cast in
person at a meeting called for the purpose of voting on such continuance.
5
<PAGE>
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Trustees cast in person at a
meeting called on February 4, 1997, for the purpose of voting on this Plan, and
shall take effect as of the date first set forth above, Unless terminated as
hereinafter provided, it shall continue in effect thereafter, but only so long
as such continuance is specifically approved at least annually by a vote of the
Board and its Independent Trustees 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 in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees 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 Trustees 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.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and the
Fund's property. The Distributor represents that it has notice of the provisions
of the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
Rochester Portfolio Series, on behalf of
Limited Term New York Municipal Fund
By:
---------------------------------
OppenheimerFunds Distributor, Inc.
By:
----------------------------------
6
Exhibit 24(b)(15)(iv)
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS D SHARES OF
ROCHESTER PORTFOLIO SERIES
LIMITED TERM NEW YORK MUNICIPAL FUND
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the
"Plan") dated the 4th day of January, 1996, by and between ROCHESTER PORTFOLIO
SERIES (the "Trust"), on behalf of LIMITED TERM NEW YORK MUNICIPAL FUND (the
"Fund"), and OPPENHEIMERFUNDS DISTRIBUTOR, INC. (the "Distributor"), as amended
and restated on May 1, 1997.
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class D shares of the Fund (the "Shares")which, prior to May 1, 1997, were
designated as Class B shares of the Fund. This plan is contemplated by Rule
12b-1 (the "Rule") under the Investment Company Act of 1940 (the "1940 Act"),
pursuant to which the Fund will compensate the Distributor for its services in
connection with the distribution of Shares, and the personal service and
maintenance of shareholder accounts that hold Shares ("Accounts"). The Fund may
act as distributor of securities of which it is the issuer, pursuant to the
Rule, according to the terms of this Plan. The Distributor is authorized under
the Plan to pay "Recipients," as hereinafter defined, for rendering (1)
distribution assistance in connection with the sale of Shares and/or (2)
administrative support services with respect to Accounts. Such Recipients are
intended to have certain rights as third-party beneficiaries under this Plan.
The terms and provisions of this Plan shall be interpreted and defined in a
manner consistent with the provisions and definitions contained in (i) the 1940
Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of Fair Practice
of the National Association of Securities Dealers, Inc., or its successor (the
"NASD Rules of Fair Practice") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution, to which the Fund is
subject under any order on which the Fund relies, issued at any time by the
Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has provided
administrative support services with respect to Shares held by
Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive
-1-
<PAGE>
payments under the Plan. Notwithstanding the foregoing, a majority of
the Trust's Board of Trustees (the "Board") who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements relating to this Plan (the "Independent Trustees") may
remove any broker, dealer, bank or other person or entity as a
Recipient, whereupon such person's or entity's rights as a third-party
beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
brokerage or other customers, or investment advisory or other clients
of such Recipient and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed owned
by more than one Recipient for purposes of this Plan. In the event that
more than one person or entity would otherwise qualify as Recipients as
to the same Shares, the Recipient which is the dealer of record on the
Fund's books as determined by the Distributor shall be deemed the
Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support Services.
(a) The Fund will make payments to the Distributor, (i) within
forty-five (45) days of the end of each calendar quarter, in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of the
Shares computed as of the close of each business day (the "Service
Fee"), plus (ii) within ten (10) days of the end of each month, in the
aggregate amount of 0.0625% (0.75% on an annual basis) of the average
during the month of the aggregate net asset value of Shares computed as
of the close of each business day (the "Asset-Based Sales Charge")
outstanding for six years or less (the "Maximum Holding Period"). Such
Service Fee payments received from the Fund will compensate the
Distributor and Recipients for providing administrative support
services with respect to Accounts. Such Asset-Based Sales Charge
payments received from the Fund will compensate the Distributor and
Recipients for providing distribution assistance in connection with the
sale of Shares.
The administrative support services in connection with the
Accounts to be rendered by Recipients may include, but shall not be
limited to, the following: answering routine inquiries concerning the
Fund, assisting in the establishment and maintenance of accounts or
sub- accounts in the Fund and processing Share redemption transactions,
making the Fund's investment plans and dividend payment options
available, and providing such other information and services in
connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably
request.
The distribution assistance in connection with the sale of
Shares to be rendered by the Distributor and Recipients may include,
but shall not be limited to, the following: distributing sales
literature and prospectuses other than those furnished to current
holders of the Fund's Shares ("Shareholders"), and providing such other
information and services in connection with the distribution of Shares
as the Distributor or the Fund may reasonably request.
-2-
<PAGE>
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for payment
under the Plan if it has Qualified Holdings of Shares to entitle it to
payments under the Plan. In the event that either the Distributor or
the Board should have reason to believe that, notwithstanding the level
of Qualified Holdings, a Recipient may not be rendering appropriate
distribution assistance in connection with the sale of Shares or
administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a
written report or other information to verify that said Recipient is
providing appropriate distribution assistance and/or services in this
regard. If the Distributor or the Board of Trustees still is not
satisfied, either may take appropriate steps to terminate the
Recipient's status as such under the Plan, whereupon such Recipient's
rights as a third-party beneficiary hereunder shall terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.0625% (0.25% on an annual basis) of
the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum
period (the "Minimum Holding Period"), if any, to be set from time to
time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make
service fee payments ("Advance Service Fee Payments") to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed (i) 0.25% of the average during the
calendar quarter of the aggregate net asset value of Shares, computed
as of the close of business on the day such Shares are sold,
constituting Qualified Holdings sold by the Recipient during that
quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of Shares
computed as of the close of each business day, constituting Qualified
Holdings owned beneficially or of record by the Recipient or by its
Customers for a period of more than one (1) year, subject to reduction
or chargeback so that the Advance Service Fee Payments do not exceed
the limits on payments to Recipients that are, or may be, imposed by
Article III, Section 26, of the NASD Rules of Fair Practice. In the
event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated and will repay to the Distributor
on demand a pro rata portion of such Advance Service Fee Payments,
based on the ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this
paragraph (b) may, at the Distributor's sole option, be made more often
than quarterly, and sooner than the end of the calendar quarter.
However, no such payments shall be made to any Recipient for any such
quarter in which its Qualified Holdings do not equal or exceed, at the
end of such quarter, the minimum amount ("Minimum Qualified Holdings"),
if any, to be set from time to time by a majority of the Independent
Trustees.
A majority of the Independent Trustees may at any time or
from time to time decrease
-3-
<PAGE>
and thereafter adjust the rate of fees to be paid to the Distributor or
to any Recipient, but not to exceed the rate set forth above, and/or
direct the Distributor to increase or decrease the Minimum Holding
Period or the Minimum Qualified Holdings. The Distributor shall notify
all Recipients of the Minimum Qualified Holdings, Maximum Holding
Period and Minimum Holding Period, if any, and the rate of payments
hereunder applicable to Recipients, and shall provide each Recipient
with written notice within thirty (30) days after any change in these
provisions. Inclusion of such provisions or a change in such provisions
in a revised current prospectus shall constitute sufficient notice. The
Distributor may make Plan payments to any "affiliated person" (as
defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are
subject to reduction or elimination of such amounts under the limits to
which the Distributor is, or may become, subject under Article III,
Section 26, of the NASD Rules of Fair Practice. The distribution
assistance and administrative support services to be rendered by the
Distributor in connection with the Shares may include, but shall not be
limited to, the following: (i) paying sales commissions to any broker,
dealer, bank or other person or entity that sells Shares, and\or paying
such persons Advance Service Fee Payments in advance of, and\or greater
than, the amount provided for in Section 3(b) of this Agreement; (ii)
paying compensation to and expenses of personnel of the Distributor who
support distribution of Shares by Recipients; (iii) obtaining financing
or providing such financing from its own resources, or from an
affiliate, for the interest and other borrowing costs of the
Distributor's unreimbursed expenses incurred in rendering distribution
assistance and administrative support services to the Fund; (iv) paying
other direct distribution costs, including without limitation the costs
of sales literature, advertising and prospectuses (other than those
furnished to current Shareholders) and state "blue sky" registration
expenses; and (v) any service rendered by the Distributor that a
Recipient may render pursuant to part (a) of this Section 3. Such
services include distribution assistance and administrative support
services rendered in connection with Shares acquired (i) by purchase,
(ii) in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (ii) pursuant
to a plan of reorganization to which the Fund is a party. In the event
that the Board should have reason to believe that the Distributor may
not be rendering appropriate distribution assistance or administrative
support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with
a written report or other information to verify that the Distributor is
providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by
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 its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does
not obligate or in any way make the Fund liable to make any payment
whatsoever to any person or entity other than directly to the
Distributor. In no event shall the amounts to be paid to the
Distributor exceed the rate of fees to be paid by the Fund to the
Distributor set forth in paragraph (a) of this
-4-
<PAGE>
section 3.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of those persons to be Trustees of the Trust who are
not "interested persons" of the Trust ("Disinterested Trustees") shall be
committed to the discretion of such Disinterested Trustees. Nothing herein shall
prevent the Disinterested Trustees from soliciting the views or the involvement
of others in such selection or nomination if the final decision on any such
selection and nomination is approved by a majority of the incumbent
Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Trust shall
provide written reports to the Trust's Board for its review, detailing services
rendered in connection with the distribution of the Shares, the amount of all
payments made and the purpose for which the payments were made. The reports
shall be provided quarterly, and shall state whether all provisions of Section 3
of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Trustees cast in person at a
meeting called on October 16, 1995, for the purpose of voting on this Plan, and
by Class B shareholders of the Fund (who, as of May 1, 1997, have been
redesignated as Class D shareholders of the Fund) at a meeting held on December
20, 1995. This Plan, which became effective on January 4, 1996, replaces the
Fund's Distribution and Service Plan and Agreement for the Shares adopted May 1,
1995 and it is hereby redesignated as a Distribution and Service Plan and
Agreement for Class D shares of the Fund. Unless terminated as hereinafter
provided, it shall continue in effect from year to year from the date first set
forth above or as the Board may otherwise determine only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance. This Plan may not be amended to increase
materially the amount of payments to be made without approval of the Class D
Shareholders, in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Trustees. This Plan may
be terminated at any time by vote of a majority of the Independent Trustees or
by the vote of the holders of a "majority" (as defined in the 1940 Act) of the
Fund's outstanding voting securities of the Class. In the event of such
termination, the Board and its Independent Trustees 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
-5-
<PAGE>
of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee of the Trust or shareholder of the Fund personally, but bind only the
Fund and the Fund's property. The Distributor represents that it has notice of
the provisions of the Declaration of Trust of the Trust disclaiming shareholder
and Trustee liability for acts or obligations of the Fund.
ROCHESTER PORTFOLIO SERIES, on behalf of
LIMITED TERM NEW YORK MUNICIPAL FUND
By: _________________________________
Ronald H. Fielding, Vice President
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:________________________________________
Andrew J. Donohue, Executive Vice President
-6-
Limited Term New York Municipal Fund
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:
<TABLE>
<CAPTION>
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
<S> <C> <C> <C>
Class A Shares
11/13/91 0.0206820 0.0000000 3.040
12/13/91 0.0146270 0.0000000 3.070
12/31/91 0.0157500 0.0000000 3.070
02/13/92 0.0149873 0.0000000 3.060
03/12/92 0.0146626 0.0000000 3.070
04/13/92 0.0146625 0.0000000 3.080
05/13/92 0.0146625 0.0000000 3.110
06/11/92 0.0146625 0.0000000 3.110
07/13/92 0.0146625 0.0000000 3.160
08/13/92 0.0146625 0.0000000 3.190
09/10/92 0.0145313 0.0000000 3.190
10/13/92 0.0144000 0.0000000 3.170
11/12/92 0.0144000 0.0000000 3.150
12/11/92 0.0144000 0.0000000 3.180
12/31/92 0.0144000 0.0000000 3.180
02/12/93 0.0150000 0.0000000 3.210
03/12/93 0.0140000 0.0000000 3.250
04/12/93 0.0150000 0.0000000 3.250
05/12/93 0.0140000 0.0000000 3.260
06/11/93 0.0150000 0.0000000 3.260
07/12/93 0.0140000 0.0000000 3.290
08/12/93 0.0140000 0.0000000 3.310
09/03/93 0.0140000 0.0000000 3.330
10/13/93 0.0130000 0.0000000 3.350
11/12/93 0.0130000 0.0000000 3.320
12/13/93 0.0130000 0.0000000 3.340
12/31/93 0.0130000 0.0000000 3.330
02/11/94 0.0130000 0.0000000 3.330
03/11/94 0.0130000 0.0000000 3.270
04/04/94 0.0130000 0.0000000 3.180
05/02/94 0.0130000 0.0000000 3.220
06/01/94 0.0130000 0.0000000 3.230
07/01/94 0.0130000 0.0000000 3.220
08/01/94 0.0140000 0.0000000 3.240
09/01/94 0.0140000 0.0000000 3.250
10/03/94 0.0140000 0.0000000 3.210
11/01/94 0.0140000 0.0000000 3.170
12/01/94 0.0150000 0.0000000 3.140
12/30/94 0.0140000 0.0000000 3.150
01/24/95 0.0140000 0.0000000 3.160
02/21/95 0.0140000 0.0000000 3.190
03/28/95 0.0150000 0.0000000 3.210
04/25/95 0.0150000 0.0000000 3.220
05/23/95 0.0150000 0.0000000 3.240
06/27/95 0.0150000 0.0000000 3.240
07/25/95 0.0150000 0.0000000 3.230
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Page 2
<TABLE>
<CAPTION>
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
<S> <C> <C> <C>
Class A Shares (Continued)
08/22/95 0.0150000 0.0000000 3.220
09/26/95 0.0150000 0.0000000 3.250
10/24/95 0.0150000 0.0000000 3.270
11/21/95 0.0150000 0.0000000 3.270
12/27/95 0.0150000 0.0000000 3.270
01/23/96 0.0150000 0.0000000 3.270
02/20/96 0.0150000 0.0000000 3.260
03/26/96 0.0150000 0.0000000 3.240
04/23/96 0.0150000 0.0000000 3.230
05/28/96 0.0140000 0.0000000 3.230
06/25/96 0.0140000 0.0000000 3.210
07/23/96 0.0140000 0.0000000 3.230
08/27/96 0.0140000 0.0000000 3.240
09/24/96 0.0140000 0.0000000 3.240
10/22/96 0.0140000 0.0000000 3.240
11/26/96 0.0140000 0.0000000 3.270
12/27/96 0.0140000 0.0000000 3.260
Class B Shares
05/23/95 0.0136000 0.0000000 3.240
06/27/95 0.0136000 0.0000000 3.240
07/25/95 0.0136000 0.0000000 3.230
08/22/95 0.0136000 0.0000000 3.220
09/26/95 0.0136000 0.0000000 3.250
10/24/95 0.0136000 0.0000000 3.270
11/21/95 0.0136000 0.0000000 3.270
12/27/95 0.0136000 0.0000000 3.270
01/23/96 0.0136000 0.0000000 3.270
02/20/96 0.0136000 0.0000000 3.270
03/26/96 0.0136000 0.0000000 3.240
04/23/96 0.0136000 0.0000000 3.230
05/28/96 0.0126000 0.0000000 3.240
06/25/96 0.0126000 0.0000000 3.220
07/23/96 0.0126000 0.0000000 3.230
08/27/96 0.0126000 0.0000000 3.240
09/24/96 0.0126000 0.0000000 3.240
10/22/96 0.0126000 0.0000000 3.250
11/26/96 0.0126000 0.0000000 3.270
12/27/96 0.0126000 0.0000000 3.270
</TABLE>
<PAGE>
Limited Term New York Municipal Fund
Page 3
1. Average Annual Total Returns for the Periods Ended 12/31/96:
The formula for calculating average annual total return is as follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
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 sales charge of 3.50%:
One Year Five Year
$1,011.53 1 $1,335.80 .2
(---------) - 1 = 1.15% (---------) - 1 = 5.96%
$1,000 $1,000
Inception
$1,389.92 .1892
(---------) - 1 = 6.43%
$1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of 4.00% for the
first year, and 3.00% for the inception year:
One Year Inception
$1,006.04 1 $1,075.06 .6000
(---------) - 1 = 0.60% (---------) - 1 = 4.44%
$1,000 $1,000
<PAGE>
Limited Term New York Municipal Fund
Page 4
1. Average Annual Total Returns for the Periods Ended 12/31/96 (Continued):
Examples at NAV:
Class A Shares
One Year Five Year
$1,048.20 1 $1,384.24 .2
(---------) - 1 = 4.82% (---------) - 1 = 6.72%
$1,000 $1,000
Inception
$1,440.36 .1892
(---------) - 1 = 7.15%
$1,000
Class B Shares
One Year Inception
$1,045.92 1 $1,105.06 .6000
(---------) - 1 = 4.59% (---------) - 1 = 6.18%
$1,000 $1,000
<PAGE>
Limited Term New York Municipal Fund
Page 5
2. Cumulative Total Returns for the Periods Ended 12/31/96:
The formula for calculating cumulative total return is as follows:
(ERV - P) / P = Cumulative Total Return
Class A Shares
Examples, assuming a maximum sales charge of 3.50%:
One Year Five Year
$1,011.53 - $1,000 $1,335.80 - $1,000
------------------ = 1.15% ------------------ = 33.58%
$1,000 $1,000
Inception
$1,389.92 - $1,000
------------------ = 38.99%
$1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of 4.00% for the
first year, and 3.00% for the inception year:
One Year Inception
$1,006.04 - $1,000 $1,075.06 - $1,000
------------------ = 0.60% ------------------ = 7.51%
$1,000 $1,000
<PAGE>
Limited Term New York Municipal Fund
Page 6
2. Cumulative Total Returns for the Periods Ended 12/31/96 (Continued):
Examples at NAV:
Class A Shares
One Year Five Year
$1,048.20 - $1,000 $1,384.24 - $1,000
------------------ = 4.82% ------------------ = 38.43%
$1,000 $1,000
Inception
$1,440.36 - $1,000
------------------ = 44.03%
$1,000
Class B Shares
One Year Inception
$1,045.92 - $1,000 $1,105.06 - $1,000
------------------ = 4.59% ------------------ = 10.51%
$1,000 $1,000
<PAGE>
Limited Term New York Municipal Fund
Page 7
3. Standardized Yield for the 30-Day Period Ended 12/31/96:
The Fund's standardized yields are calculated using the following formula
set forth in the SEC rules:
a - b 6
Yield = 2 { (-------- + 1 ) - 1 }
cd or ce
The symbols above represent the following factors:
a = Dividends and interest earned during the 30-day period.
b = Expenses accrued for the period (net of any expense
reimbursements).
c = The average daily number of Fund shares outstanding during the
30-day period that were entitled to receive dividends.
d = The Fund's maximum offering price (including sales charge) per
share on the last day of the period.
e = The Fund's net asset value (excluding contingent deferred sales
charge) per share on the last day of the period.
Class A Shares
Example, assuming a maximum sales charge of 3.50%:
$3,051,055.43 - $407,294.03 6
2{(--------------------------- + 1) - 1} = 4.88%
194,312,336 x $3.38
Class B Shares
Example at NAV:
$ 191,574.52 - $ 42,857.83 6
2{(--------------------------- + 1) - 1} = 4.52%
12,184,274 x $3.27
<PAGE>
Limited Term New York Municipal Fund
Page 8
4. DIVIDEND YIELDS FOR THE 30-DAY PERIOD ENDED 12/31/96:
The Fund's dividend yields are calculated using the following formula:
Dividend Yield = { (a / 30) x 365 } / b or c
The symbols above represent the following factors:
a = The accrual dividend earned during the period.
b = The Fund's maximum offering price (including sales charge)
per share on the last day of the period.
c = The Fund's net asset value (excluding sales charge) per share on the
last day of the period.
Examples:
Class A Shares
Dividend Yield
at Maximum Offering ($.0128122/30 x 365) / $3.38 = 4.61%
Dividend Yield
at Net Asset Value ($.0128122/30 x 365) / $3.26 = 4.78%
Class B Shares
Dividend Yield
at Net Asset Value ($.0115310/30 x 365) / $3.27 = 4.29%
<PAGE>
Limited Term New York Municipal Fund
Page 9
4. TAX-EQUIVALENT YIELDS FOR THE 30-DAY PERIOD ENDED 12/31/96:
The Fund's tax-equivalent yields are calculated using the following formula:
a
----- + b = Tax-Equivalent Yield
1 - c
The symbols above represent the following factors:
a = 30-day SEC yield of tax-exempt security positions in the portfolio.
b = 30-day SEC yield of taxable security positions in the portfolio.
c = Combined stated tax rate (e.g., federal, state and New York City
income tax rates for an individual in the 39.6% federal tax bracket
filing singly).
Examples:
Class A Shares
.0488
----------- + 0 = 9.05%
1 - .4608
Class B Shares
.0452
----------- + 0 = 8.38%
1 - .4608
Combined Stated Tax Rate Formula:
1 - {(1-d)(1-(e+f))} = Combined Stated Tax Rate
The symbols above represent the following factors:
d = Stated federal tax rate (e.g., federal income tax rate for an
individual in the 39.6% federal tax bracket filing singly).
e = Stated New York State tax rate (e.g., for an individual in the 39.6%
federal and 6.850% state tax bracket filing singly).
f = Stated New York City tax rate (e.g., for an individual in the 39.6%
federal and 3.88% city tax bracket filing singly).
Example: 1 - {(1 - .3960)(1 - (.06850+.03880))} = 46.08%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000876409
<NAME> ROCHESTER PORTFOLIO SERIES, LIMITED TERM NY MUNICIPAL FUND
<SERIES>
<NUMBER> 1
<NAME> CLASS A
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 655,947,818
<INVESTMENTS-AT-VALUE> 670,678,326
<RECEIVABLES> 15,627,331
<ASSETS-OTHER> 37,181
<OTHER-ITEMS-ASSETS> 79,389
<TOTAL-ASSETS> 686,422,227
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,422,477
<TOTAL-LIABILITIES> 11,422,477
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 670,144,226
<SHARES-COMMON-STOCK> 194,315,367
<SHARES-COMMON-PRIOR> 173,104,221
<ACCUMULATED-NII-CURRENT> 480,101
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,355,085)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,730,508
<NET-ASSETS> 674,999,750
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 39,801,585
<OTHER-INCOME> 0
<EXPENSES-NET> 5,800,892
<NET-INVESTMENT-INCOME> 34,000,693
<REALIZED-GAINS-CURRENT> (242,301)
<APPREC-INCREASE-CURRENT> (2,445,222)
<NET-CHANGE-FROM-OPS> 31,313,170
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (32,233,558)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 49,954,523
<NUMBER-OF-SHARES-REDEEMED> (32,312,396)
<SHARES-REINVESTED> 6,569,019
<NET-CHANGE-IN-ASSETS> 91,048,190
<ACCUMULATED-NII-PRIOR> 23,004
<ACCUMULATED-GAINS-PRIOR> (10,112,784)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,715,109
<INTEREST-EXPENSE> 396,316
<GROSS-EXPENSE> 5,812,901
<AVERAGE-NET-ASSETS> 635,712,997
<PER-SHARE-NAV-BEGIN> 3.28
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> (.02)
<PER-SHARE-DIVIDEND> (.17)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 3.26
<EXPENSE-RATIO> .89
<AVG-DEBT-OUTSTANDING> 6,351,876
<AVG-DEBT-PER-SHARE> .03
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000876409
<NAME> ROCHESTER PORTFOLIO SERIES, LIMITED TERM NY MUNICIPAL FUND
<SERIES>
<NUMBER> 2
<NAME> CLASS B WILL BECOME CLASS D MAY 1, 1997
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 655,947,818
<INVESTMENTS-AT-VALUE> 670,678,326
<RECEIVABLES> 15,627,331
<ASSETS-OTHER> 37,181
<OTHER-ITEMS-ASSETS> 79,389
<TOTAL-ASSETS> 686,422,227
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,422,477
<TOTAL-LIABILITIES> 11,422,477
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 670,144,226
<SHARES-COMMON-STOCK> 12,491,844
<SHARES-COMMON-PRIOR> 4,999,577
<ACCUMULATED-NII-CURRENT> 480,101
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,355,085)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,730,508
<NET-ASSETS> 674,999,750
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 39,801,585
<OTHER-INCOME> 0
<EXPENSES-NET> 5,800,892
<NET-INVESTMENT-INCOME> 34,000,693
<REALIZED-GAINS-CURRENT> (242,301)
<APPREC-INCREASE-CURRENT> (2,445,222)
<NET-CHANGE-FROM-OPS> 31,313,170
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,354,963)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,835,459
<NUMBER-OF-SHARES-REDEEMED> (630,627)
<SHARES-REINVESTED> 287,435
<NET-CHANGE-IN-ASSETS> 91,048,190
<ACCUMULATED-NII-PRIOR> 23,004
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<PER-SHARE-NAV-BEGIN> 3.28
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<EXPENSE-RATIO> 1.38
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</TABLE>
