<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
SEMI-ANNUAL REPORT
JUNE 30, 2000
MANAGED BY
[LOGO]
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
MANAGED BY
[LOGO]
2000 SEMI-ANNUAL REPORT
The Small Cap Portfolio (the "Portfolio") enjoyed an excellent first half,
delivering a total return of 13.3% versus 3.0% for the Russell 2000 Index (the
"Russell 2000"). The Russell 2000 is a widely followed benchmark that includes
smaller capitalization stocks. Our strong performance reflected a resurgence of
small cap value stocks in the second quarter, as well as favorable stock
selection.
During the past few months, we have implemented a two-pronged strategy:
1) increase our holdings in lower valuation sectors such as transportation, real
estate investment trusts and utilities; 2) increase the Portfolio's weighting in
the higher valuation technology sector. We believe our favorable recent results
confirm that this strategy has improved performance while reducing risk.
The Portfolio's average annual total return of 7.4% for the twelve months ended
June 30, 2000 compared with 14.3% for the Russell 2000. For the three years
ended June 30, 2000, the Portfolio's average annual total return was 2.6% versus
10.6% for the Russell 2000. For the five years ended June 30, 2000, the
Portfolio provided an average annual total return of 9.8%, compared with 14.3%
for the Russell 2000. For the 10 years ended June 30, 2000, the Portfolio's
average annual total return of 12.4%* compared with 13.6% for the Russell 2000,
and from its inception on August 1, 1988 through June 30, 2000 the Portfolio
delivered an average annual total return of 12.1%* versus 12.8% for the Russell
2000. Returns for the Portfolio take into account expenses incurred by the
Portfolio, but not separate account charges imposed by the insurance company.
* Based on results of the OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988, called Quest for Value Accumulation Trust (the "Old Trust"),
was effectively divided into two investment funds--the Old Trust and the
present OCC Accumulation Trust (the "Present Trust")--at which time the
Present Trust commenced operations. The total net assets of the Small Cap
Portfolio immediately after the transaction were $139,812,573 in the Old
Trust and $8,129,274 in the Present Trust. For the period prior to
September 16, 1994, the performance figures for the Small Cap Portfolio of
the Present Trust reflect the performance of the Small Cap Portfolio of the
Old Trust.
Our first priority in selecting stocks is to find quality management teams. When
small cap value stocks hit bottom in late February and early March 2000, we
added to our holdings of each of the five stocks that contributed most to the
Portfolio's performance in the first half of the year. In that difficult market
environment, it was easier to add to a position where we had confidence in
management. Our rationale was that these well-managed companies would lead the
market as small cap value stocks recovered, which indeed these companies did in
the second quarter.
The five top contributors to the Portfolio for the six months ended June 30,
2000 were:
- AMERISOURCE (wholesale pharmaceuticals distribution), which doubled in
price. The entire price gain occurred in the second quarter, as investor
concerns eased regarding the potential threat of the Internet and the
company's high level of variable-cost debt in a rising interest rate
environment. We reduced our position as the price rose.
- SHARED MEDICAL (information services for healthcare providers), which was
acquired in June by Siemens at a 72% premium to the market.
- MSC INDUSTRIAL (direct marketing of industrial products), which rose on
the basis of improved business growth after the company solved some
internal problems. We sold the stock on price strength.
<PAGE>
- PRECISION CASTPARTS (aerospace supplier), which rebounded on improving
earnings prospects. We maintained our position.
- TETRA TECH (management consulting and technical services), which advanced
as internal growth reaccelerated. We sold.
The five stocks that detracted most from performance during the first half of
the year were:
- DEL MONTE FOODS (consumer food products), a well-managed company that
suffered a revenue and earnings decline due to post-Year 2000 inventory
draw-downs. We added to our position on price weakness.
- WALLACE COMPUTER (business forms, labels, commercial printing and related
products and services), which experienced operational problems and top
management changes. We lost confidence and sold.
- POLICY MANAGEMENT (software and electronic commerce), which suffered from
post-Year 2000 weakening of software sales and a rapid move from a
licensing to an ASP (application service provider) model. We sold.
- DELTEK SYSTEMS (software), which struggled somewhat with a post-Year 2000
slowdown of software sales and slower-than-expected adoption of new
products. We maintained our position.
- E.W. BLANCH (insurance brokerage and risk management), which experienced
an earnings disappointment and the resignation of a senior officer. We
sold.
During the second quarter, in implementing our two-pronged strategy, we
established new positions in transportation companies Alaska AirGroup
(airlines), Kirby (marine transportation) and Midwest Express (airlines); real
estate investment trusts Brandywine Realty Trust (commercial and industrial
properties), Capital Automotive REIT (ownership of auto dealer real estate) and
Gables Residential Trust (apartments); and utilities Atmos Energy, IDACORP and
Piedmont Natural Gas. New tech holdings included CTS (electronic components),
GenRad (testing equipment for electronics manufacturers) and SBS Technologies
(computer components and other technology products).
At June 30, 2000, net assets were allocated 98.9% to common stock and 2.1% to
short-term investments. Our five largest equity positions were AmeriSource
Health, a wholesale pharmaceuticals distributor, representing 4.8% of the
Portfolio's net assets; Dentsply International, which provides equipment and
consumables to dentists, 3.7% of net assets; Teleflex, which supplies engineered
products and services for the automotive, marine, industrial, medical and
aerospace markets, 3.5% of net assets; RenaissanceRe Holdings, a Bermuda-based
insurance company, 3.3% of net assets; and G&K Services, which rents uniforms,
3.3% of net assets.
Major industry positions were in the manufacturing sector, representing 9.5% of
the Portfolio's net assets; drugs & medical products, 8.4% of net assets;
electronics, 7.1% of net assets; oil/gas, 7.1% of net assets; and insurance,
6.5% of net assets.
The Portfolio is "truly small, truly value." At the end of June, the weighted
average capitalization of the companies we own was $810 million, below the
average of $930 million for the Russell 2000. Our companies trade less
expensively than the market, with an average price to trailing twelve month
earnings of 13.0x versus 26.9x for the Russell 2000. However, they have superior
business characteristics, reflected in their 18.7% five-year average return on
equity, compared with 13.9% for the Russell 2000 stocks. We believe this
combination of inexpensive valuations and superior business fundamentals helps
control risk and provides opportunities for investment profit.
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<C> <S> <C>
COMMON STOCK -- 98.9%
AEROSPACE -- 6.0%
59,200 Alliant Techsystems, Inc.*.................................. $ 3,992,300
157,800 Teleflex, Inc............................................... 5,641,350
-----------
9,633,650
-----------
AIRLINES -- 1.6%
49,500 Alaska AirGroup, Inc.*...................................... 1,342,688
58,200 Midwest Express Holdings, Inc.*............................. 1,251,300
-----------
2,593,988
-----------
BANKING -- 1.3%
49,000 Wilmington Trust Corp....................................... 2,094,750
-----------
CHEMICALS -- 2.9%
103,300 Cambrex Corp................................................ 4,648,500
-----------
COMMERCIAL SERVICES -- 2.4%
51,800 Chemed Corp................................................. 1,460,112
80,500 Prepaid Legal Services, Inc................................. 2,404,937
-----------
3,865,049
-----------
COMPUTERS/COMPUTER SERVICES -- 4.4%
202,400 Analysts International Corp................................. 1,884,850
585,700 Genrad, Inc.*............................................... 5,271,300
-----------
7,156,150
-----------
CONSULTING SERVICES -- 2.0%
143,100 MAXIMUS, Inc.*.............................................. 3,166,088
-----------
DATA PROCESSING -- 0.7%
206,300 Deltek Systems, Inc.*....................................... 1,218,459
-----------
DRUGS & MEDICAL PRODUCTS -- 8.4%
247,300 Amerisource Health Corp..................................... 7,666,300
193,000 Dentsply International, Inc................................. 5,946,813
-----------
13,613,113
-----------
ELECTRONICS -- 7.1%
176,900 Baldor Electronic, Co....................................... 3,294,763
46,100 CTS Corp.*.................................................. 2,074,500
104,200 General Semiconductor, Inc.*................................ 1,536,950
184,000 Pioneer Standard Electronics, Inc........................... 2,714,000
137,600 UCAR International, Inc.*................................... 1,797,400
-----------
11,417,613
-----------
ENERGY -- 1.4%
70,400 IDACORP, Inc................................................ 2,270,400
-----------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<C> <S> <C>
COMMON STOCK (CONTINUED)
FINANCIAL SERVICES -- 2.0%
134,400 Allied Capital Corp......................................... $ 2,284,800
60,000 American Financial Holdings, Inc............................ 952,500
-----------
3,237,300
-----------
FOOD SERVICES -- 3.5%
357,800 Del Monte Foods Co.*........................................ 2,437,513
100,800 Performance Food Group Co.*................................. 3,225,600
-----------
5,663,113
-----------
HEALTH & HOSPITALS -- 6.0%
99,800 Corvel Corp.*............................................... 2,463,813
39,300 Express Scripts, Inc.*...................................... 2,441,512
95,200 First Health Group Corp.*................................... 3,123,750
32,300 Trigon Healthcare, Inc.*.................................... 1,665,469
-----------
9,694,544
-----------
INDUSTRIAL MATERIALS -- 3.1%
122,000 SPS Technologies, Inc.*..................................... 5,009,625
-----------
INSURANCE -- 6.5%
139,600 Annuity & Life Re Holdings Ltd.............................. 3,420,200
122,700 RenaissanceRe Holdings Ltd.................................. 5,345,119
114,145 Trenwick Group, Inc. ....................................... 1,662,236
-----------
10,427,555
-----------
INVESTMENT COMPANY -- 1.7%
118,000 American Capital Strategies, Ltd............................ 2,817,250
-----------
MACHINERY/ENGINEERING -- 5.4%
92,254 Albany International Corp................................... 1,337,683
166,900 Kaydon Corp................................................. 3,504,900
193,000 Lindsay Manufacturing Co.................................... 3,787,625
-----------
8,630,208
-----------
MANUFACTURING -- 9.5%
115,900 Belden, Inc................................................. 2,969,937
82,900 Carlisle Cos., Inc.......................................... 3,730,500
93,600 Precision Castparts Corp.................................... 4,235,400
170,200 Roper Industries, Inc....................................... 4,361,375
-----------
15,297,212
-----------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED) (CONCLUDED)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<C> <S> <C>
COMMON STOCK--(CONCLUDED)
OIL/GAS -- 7.1%
205,800 Atmos Energy Corp........................................... $ 3,601,500
117,700 Cabot Oil & Gas Corp., Class A.............................. 2,493,769
82,500 Piedmont Natural Gas Company, Inc........................... 2,191,406
73,600 St. Mary Land & Exploration Co.............................. 3,095,800
-----------
11,382,475
-----------
REAL ESTATE -- 4.6%
130,800 Brandywine Realty Trust..................................... 2,501,550
171,800 Capital Automotive REIT..................................... 2,426,675
97,600 Gables Residential Trust.................................... 2,513,200
-----------
7,441,425
-----------
RETAIL -- 1.5%
65,400 Zale Corp.*................................................. 2,387,100
-----------
TECHNOLOGY -- 4.3%
45,300 Harman International Industries, Inc........................ 2,763,300
111,600 SBS Technologies, Inc.*..................................... 4,122,225
-----------
6,885,525
-----------
TEXTILES/APPAREL -- 3.3%
210,800 G & K Services, Inc......................................... 5,283,175
-----------
TRANSPORTATION -- 2.2%
211,650 Interpool, Inc.............................................. 2,063,587
68,800 Kirby Corp.*................................................ 1,462,000
-----------
3,525,587
-----------
Total Common Stock (cost-$148,379,022)...................... 159,359,854
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------------------
<C> <S> <C> <C>
$3,432 U.S. GOVERNMENT AGENCY DISCOUNT NOTES -- 2.1%
Federal Home Loan Bank, 6.57%, 7/3/00
(amortized cost-$3,430,747).......................................... 3,430,747
------------
Total Investments (cost-$151,809,769)...................... 101.0% 162,790,601
Liabilities in excess of other assets...................... (1.0) (1,615,972)
------ ------------
Net Assets................................................. 100.0% $161,174,629
====== ============
</TABLE>
------------------------------
* Non-income producing security
REIT - Real Estate Investment Trust
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost - $151,809,769)................. $162,790,601
Cash........................................................ 1,975
Receivable for investments sold............................. 402,835
Receivable for shares of beneficial interest sold........... 45,173
Dividends receivable........................................ 81,265
Prepaid expenses............................................ 2,237
------------
Total Assets.............................................. 163,324,086
------------
LIABILITIES:
Payable for investments purchased........................... 1,569,268
Payable for shares of beneficial interest redeemed.......... 413,718
Investment advisory fee payable............................. 107,583
Trustees' retirement plan payable........................... 14,583
Accrued expenses............................................ 44,305
------------
Total Liabilities......................................... 2,149,457
------------
Net Assets.............................................. $161,174,629
============
COMPOSITION OF NET ASSETS:
Beneficial interest of shares of $0.01 par value (unlimited
number authorized)........................................ $ 63,613
Paid-in-capital in excess of par............................ 151,406,879
Accumulated undistributed net investment income............. 465,283
Accumulated net realized loss on investments................ (1,741,978)
Net unrealized appreciation of investments.................. 10,980,832
------------
Net Assets.............................................. $161,174,629
============
Shares outstanding.......................................... 6,361,308
------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE..................................................... $25.34
============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................. $ 744,391
Interest.................................................. 408,922
-----------
Total investment income................................. 1,153,313
-----------
EXPENSES:
Investment advisory fees.................................. 601,437
Custodian fees............................................ 21,501
Audit and tax service fees................................ 10,875
Reports to shareholders................................... 9,550
Trustees' fees and expenses............................... 8,628
Legal fees................................................ 6,861
Transfer agent fees....................................... 6,298
Insurance expense......................................... 1,502
Miscellaneous............................................. 6,897
-----------
Total expenses.......................................... 673,549
Less: expense offset.................................... (421)
-----------
Net expenses.......................................... 673,128
-----------
Net investment income................................. 480,185
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments.......................... 4,216,673
Net change in unrealized appreciation/depreciation of
investments............................................. 14,133,938
-----------
Net realized and unrealized gain on investments....... 18,350,611
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $18,830,796
===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income....................................... $ 480,185 $ 917,419
Net realized gain (loss) on investments..................... 4,216,673 (4,521,338)
Net change in unrealized appreciation/depreciation of
investments............................................... 14,133,938 723,406
------------ ------------
Net increase (decrease) in net assets resulting from
operations............................................ 18,830,796 (2,880,513)
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income....................................... (932,313) (978,623)
------------ ------------
SHARE TRANSACTIONS:
Net proceeds from the sale of shares........................ 25,487,276 45,603,776
Reinvestment of dividends and distributions................. 932,313 978,623
Cost of shares redeemed..................................... (34,433,322) (46,939,318)
------------ ------------
Net decrease in net assets from share transactions...... (8,013,733) (356,919)
------------ ------------
Total increase (decrease) in net assets............... 9,884,750 (4,216,055)
NET ASSETS
Beginning of year........................................... 151,289,879 155,505,934
------------ ------------
End of period (including undistributed net investment income
of $465,283 and $917,411, respectively)................... $161,174,629 $151,289,879
============ ============
SHARES ISSUED AND REDEEMED
Issued...................................................... 1,098,500 2,052,691
Issued in reinvestment of dividends and distributions....... 43,998 47,049
Redeemed.................................................... (1,499,961) (2,112,375)
------------ ------------
Net decrease.............................................. (357,463) (12,635)
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 ----------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.... $22.52 $23.10 $26.37 $22.61 $19.91 $17.38
-------- -------- -------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............... 0.08 0.14 0.14 0.08 0.14 0.26
Net realized and unrealized gain
(loss)
on investments.................... 2.88 (0.57) (2.38) 4.73 3.45 2.37
-------- -------- -------- -------- ------- -------
Total income (loss) from
investment operations......... 2.96 (0.43) (2.24) 4.81 3.59 2.63
-------- -------- -------- -------- ------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (0.14) (0.15) (0.09) (0.13) (0.25) (0.05)
Net realized gains.................... -- -- (0.94) (0.92) (0.64) (0.05)
-------- -------- -------- -------- ------- -------
Total dividends and
distributions to
shareholders.................. (0.14) (0.15) (1.03) (1.05) (0.89) (0.10)
-------- -------- -------- -------- ------- -------
Net asset value, end of period........ $25.34 $22.52 $23.10 $26.37 $22.61 $19.91
======== ======== ======== ======== ======= =======
TOTAL RETURN (1)...................... 13.3% (1.8)% (9.0)% 22.2% 18.7% 15.2%
======== ======== ======== ======== ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)..... $161,175 $151,290 $155,506 $110,565 $34,257 $16,004
Ratio of expenses to average net
assets (2).......................... 0.90%(4) 0.89% 0.88% 0.97% 0.93%(3) 0.74%(3)
Ratio of net investment income to
average net assets.................. 0.64%(4) 0.61% 0.72% 0.64% 1.03%(3) 1.75%(3)
Portfolio Turnover.................... 61% 99% 51% 68% 50% 69%
</TABLE>
------------------------------
(1) Assumes reinvestment of all dividends and distributions. Total return for a
period of less than one year is not annualized.
(2) Inclusive of expenses offset by earnings credits from custodian bank (See 1G
in Notes to Financial Statements).
(3) During the fiscal years indicated above, the Adviser waived a portion or all
of its fees and assumed a portion of the Portfolio's operating expenses. If
such waivers and assumptions had not been in effect, the ratios of expenses
to average net assets and the ratios of net investment income to average net
assets would have been 1.01% and 0.95%, respectively, for the year ended
December 31, 1996, and 0.99% and 1.50%, respectively, for the year ended
December 31, 1995.
(4) Annualized
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
OCC Accumulation Trust (the "Trust") was organized May 12, 1994 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest at $0.01 par value. The Trust is comprised of: the Equity Portfolio,
the Small Cap Portfolio (the "Portfolio"), the Global Equity Portfolio, the
Managed Portfolio, the U.S. Government Income Portfolio, the Mid Cap Portfolio,
and the Science & Technology Portfolio. OpCap Advisors (the "Adviser"), a
wholly-owned subsidiary of Oppenheimer Capital, serves as the Trust's investment
adviser. The accompanying financial statement and notes thereto are those of the
Portfolio. The Trust is an investment vehicle for variable annuity and variable
life insurance contracts of various life insurance companies and qualified
pension and retirement plans.
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements:
(A) VALUATION OF INVESTMENTS
Investment securities, other than debt securities, listed on a national
securities exchange or traded in the over-the-counter National Market System are
valued each business day at the last reported sale price; if there are no such
reported sales, securities are valued at their last quoted bid price. Other
securities traded over-the-counter and not part of the National Market System
are valued at the last quoted bid price. Debt securities (other than short-term
obligations) are valued each business day by an independent pricing service
(approved by the Board of Trustees) using methods which include current market
quotations from a major market maker and trader-reviewed "matrix" prices.
Short-term debt securities having a remaining maturity of sixty days or less are
valued at amortized cost or amortized value, which approximates market value.
Any securities or other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by the Board of
Trustees. The ability of issuers of debt instruments to meet their obligations
may be affected by economic developments in a specific industry or region.
(B) FEDERAL INCOME TAXES
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to shareholders; accordingly, no federal
income tax provision is required.
(C) INVESTMENT TRANSACTIONS AND OTHER INCOME
Investment transactions are accounted for on the trade date. In determining the
gain or loss from the sale of investments, the cost of investments sold has been
determined on the basis of identified cost. Interest income is accrued as
earned. Discounts or premiums on debt securities purchased are accreted or
amortized to interest income over the lives of the respective securities using
the effective method.
(D) DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders from net investment income and net
realized capital gains, if any, are declared and paid at least annually.
The Portfolio records dividends and distributions to its shareholders on the
ex-dividend date. The amount of dividends and distributions is determined in
accordance with federal income tax regulations, which may differ from generally
accepted accounting principles. These "book-tax" differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their federal income tax treatment; temporary differences do not
require reclassification. To the extent dividends and/or distributions exceed
current and
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED) (CONTINUED)
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES --CONTINUED
accumulated earnings and profits for federal income tax purposes, they are
reported as dividends and/or distributions of paid-in-capital or as a tax return
of capital.
(E) ALLOCATION OF EXPENSES
Expenses specifically identifiable to a particular portfolio are borne by that
portfolio. Other expenses are allocated to each portfolio based on its net
assets in relation to the total net assets of all applicable portfolios of the
Trust or another reasonable basis.
(F) USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
(G) EXPENSE OFFSET
The Portfolio benefits from an expense offset arrangement with its custodian
bank whereby uninvested cash balances earn credits that reduce custodian fees.
Had these cash balances been invested in income producing securities, they would
have generated income for the Portfolio.
(H) TRUSTEES' RETIREMENT PLAN
The Trustees have adopted a Retirement Plan (the "Plan") effective January 1,
1999. The Plan provides for payments upon retirement to independent Trustees
based on the average annual compensation paid to them during their five highest
paid years of service. An independent Trustee must serve for a minimum of seven
years (or such lessor period as may be approved by the Board of Trustees) to
become eligible to receive benefits. For the six months ended June 30, 2000, the
Portfolio accrued $6,432 in connection with the Plan.
(2) INVESTMENT ADVISORY FEE
The investment advisory fee is accrued daily and payable monthly to the Adviser,
and is computed as a percentage of the Portfolio's net assets as of the close of
business each day at the annual rate of 0.80% on the first $400 million of net
assets, 0.75% on the next $400 million of net assets and 0.70% thereafter. The
Adviser is contractually obligated to waive that portion of the advisory fee and
to assume any necessary expense to limit total operating expenses of the
Portfolio to 1.00% of average net assets (net of any expense offset) on an
annual basis.
(3) INVESTMENTS IN SECURITIES
For federal income tax purposes the cost of securities owned at June 30, 2000
was $151,809,769. Accordingly, net unrealized appreciation of investments of
$10,980,832 was composed of gross appreciation of $22,243,904 for those
investments having an excess of value over cost and gross depreciation of
$11,263,072 for those investments having an excess of cost over value.
For the six months ended June 30, 2000, purchases and sales of investment
securities, other than short-term securities, aggregated $93,480,046 and
$86,131,434, respectively.
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED) (CONCLUDED)
(4) ACQUISITION OF INVESTMENT ADVISER
On May 5, 2000 the general partners of PIMCO Advisors closed the transactions
contemplated by the Implementation and Merger Agreement dated as of October 31,
1999 ("Implementation Agreement"), as amended March 3, 2000, with Allianz of
America, Inc., Pacific Asset Management LLC, PIMCO Partners LLC, PIMCO Holding
LLC, PIMCO Partners, G.P., and other parties to the Implementation Agreement. As
a result of completing these transactions, PIMCO Advisors is now majority-owned
indirectly by Allianz AG, with subsidiaries of Pacific Life Insurance Company
retaining a significant minority interest. Allianz AG is a German based insurer.
Pacific Life Insurance Company is a Newport Beach, California based insurer. For
the Portfolio, the change of control as a result of the closing of the
Implementation Agreement resulted in the automatic termination of the current
investment advisory agreement with OpCap Advisors. Prior to the closing of the
Implementation Agreement, the Board of Trustees and stockholders of the
Portfolio approved a new agreement with OpCap Advisors to become effective upon
the closing of the Implementation Agreement.
(5) SPECIAL MEETING OF SHAREHOLDERS
The Portfolio held a special meeting of shareholders on March 3, 2000.
Shareholders voted to: 1) approve a new investment advisory agreement between
OpCap Advisors and the Portfolio; 2) elect V. Lee Barnes, Paul Y. Clinton,
Thomas W. Courtney, Lacy B. Herrmann, Joseph M. La Motta and Theodore Mason as
Trustees of the Portfolio; and, 3) ratifiy the appointment of
PricewaterhouseCoopers LLP as independent accountants for the fiscal year ending
December 31, 2000.
The resulting vote count for each proposal is indicated below.
<TABLE>
<CAPTION>
WITHHHOLD
AFFIRMATIVE AGAINST AUTHORITY
----------- -------- ---------
<S> <C> <C> <C>
1. Approval of new Investment Advisory Agreement between
OpCap Advisors and the Portfolio:......................... 6,221,270 131,221 276,448
2. Election of Trustees:
V. Lee Barnes............................................. 6,390,921 -- 238,018
Paul Y. Clinton........................................... 6,387,959 -- 240,980
Thomas W. Courtney........................................ 6,389,752 -- 239,187
Lacy B. Herrmann.......................................... 6,388,764 -- 240,175
Joseph M. La Motta........................................ 6,380,221 -- 248,718
Theodore T. Mason......................................... 6,388,640 -- 240,299
</TABLE>
<TABLE>
<S> <C> <C> <C>
3. Ratification of the appointment of PricewaterhouseCoopers LLP
as the Portfolio's independent accountants for the fiscal
year
ending December 31, 2000.................................. 6,317,785 42,382 268,772
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
<TABLE>
<S> <C>
TRUSTEES AND PRINCIPAL OFFICERS
Susan A. Murphy President
Joseph M. LaMotta Trustee & Chairman
V. Lee Barnes Trustee
Paul Y. Clinton Trustee
Thomas W. Courtney Trustee
Lacy B. Herrmann Trustee
Theodore T. Mason Trustee
Steven Calabria Vice President
Bernard H. Garil Vice President
Jeffrey J. Hughes Vice President
Eric V. Retzlaff Vice President
Kenneth W. Corba Vice President and Portfolio Manager
Mark F. Degenhart Vice President and Portfolio Manager
Michael F. Gaffney Vice President and Portfolio Manager
John C. Giusio, Jr. Vice President and Portfolio Manager
Richard J. Glasebrook, II Vice President and Portfolio Manager
Colin Glinsman Vice President and Portfolio Manager
Louis Goldstein Vice President and Portfolio Manager
William Gross Vice President and Portfolio Manager
Benjamin D. Gutstein Vice President and Portfolio Manager
Vikki Hanges Vice President and Portfolio Manager
Elisa A. Mazen Vice President and Portfolio Manager
Dennis McKechnie Vice President and Portfolio Manager
Jeffrey D. Parker Vice President and Portfolio Manager
Brian S. Shlissel Treasurer
Elliot M. Weiss Secretary
</TABLE>
INVESTMENT ADVISER
OpCap Advisors
1345 Avenue of the Americas
New York, NY 10105
CUSTODIAN AND TRANSFER AGENT
State Street Corp.
P.O. Box 1978
Boston, MA 02105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
This report is authorized for distribution only
to shareholders and to others who have received
a copy of this Trust's prospectus.
